Document and Entity Information
Document and Entity Information Document - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 21, 2017 | Jun. 30, 2016 | |
Document Information [Abstract] | |||
Entity Registrant Name | SPECTRANETICS CORP | ||
Entity Central Index Key | 789,132 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 43,475,091 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 789,573,001 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 57,237 | $ 84,594 |
Trade accounts receivable, less allowance for doubtful accounts and sales returns of $1,629 and $1,906, respectively | 43,565 | 43,359 |
Inventories, net | 27,642 | 25,155 |
Prepaid expenses and other current assets | 7,088 | 5,171 |
Total current assets | 135,532 | 158,279 |
Property and equipment, net | 44,827 | 44,719 |
Goodwill | 148,811 | 152,616 |
Other intangible assets, net | 98,229 | 110,456 |
Other assets | 2,679 | 1,929 |
Total assets | 430,078 | 467,999 |
Current liabilities: | ||
Borrowings under revolving line of credit | 24,712 | 24,232 |
Accounts payable | 6,230 | 4,150 |
Accrued liabilities | 34,381 | 33,676 |
Deferred revenue | 1,619 | 1,621 |
Total current liabilities | 66,942 | 63,679 |
Convertible senior notes, net of debt issuance costs | 225,095 | 224,076 |
Term loan, net of debt issuance costs | 59,664 | 59,601 |
Accrued liabilities, net of current portion | 1,688 | 1,759 |
Deferred income taxes | 2,366 | 1,915 |
Total liabilities | 355,755 | 351,030 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value. Authorized 5,000,000 shares; none issued | 0 | 0 |
Common stock, $0.001 par value. Authorized 120,000,000 shares; issued and outstanding 43,303,298 and 42,659,234 shares, respectively | 43 | 42 |
Additional paid-in capital | 332,701 | 313,442 |
Accumulated other comprehensive loss | (5,696) | (1,910) |
Accumulated deficit | (252,725) | (194,605) |
Total stockholders’ equity | 74,323 | 116,969 |
Total liabilities and stockholders’ equity | $ 430,078 | $ 467,999 |
Consolidated Balance Sheets Con
Consolidated Balance Sheets Consolidated Balance Sheets - (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts and sales returns | $ 1,629 | $ 1,906 |
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 120,000,000 | 120,000,000 |
Common stock, shares issued (in shares) | 43,303,298 | 42,659,234 |
Common stock, shares outstanding (in shares) | 43,303,298 | 42,659,234 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Revenue | $ 270,823 | $ 245,956 | $ 204,914 |
Cost of products sold | 68,326 | 62,883 | 51,385 |
Amortization of acquired inventory step-up | 0 | 251 | 2,074 |
Gross profit | 202,497 | 182,822 | 151,455 |
Operating expenses: | |||
Selling, general and administrative | 164,289 | 143,355 | 128,129 |
Research, development and other technology | 67,480 | 64,436 | 28,675 |
Medical device excise tax | 0 | 3,465 | 2,834 |
Acquisition transaction, integration and legal costs | 1,922 | 29,472 | 17,288 |
Intangible asset amortization | 12,227 | 13,275 | 6,335 |
Contingent consideration expense | 214 | 2,671 | 2,070 |
Reduction in fair value of contingent consideration liability | 0 | (25,819) | (1,064) |
Intangible asset impairment | 0 | 2,496 | 4,138 |
Total operating expenses | 246,132 | 233,351 | 188,405 |
Operating loss | (43,635) | (50,529) | (36,950) |
Other expense: | |||
Interest expense | (13,295) | (7,850) | (4,062) |
Foreign currency transaction loss | (403) | (369) | (211) |
Total other expense | (13,698) | (8,219) | (4,273) |
Loss before income taxes | (57,333) | (58,748) | (41,223) |
Income tax expense (benefit) | 787 | 726 | (322) |
Net loss | $ (58,120) | $ (59,474) | $ (40,901) |
Net loss per share: | |||
Net loss per share, basic and diluted (in usd per share) | $ (1.35) | $ (1.40) | $ (0.98) |
Other comprehensive loss, net of tax | |||
Foreign currency translation adjustments, net of tax | $ (3,786) | $ (630) | $ (975) |
Comprehensive loss, net of tax | $ (61,906) | $ (60,104) | $ (41,876) |
Weighted average common shares outstanding: | |||
Basic and diluted (in shares) | 42,935,442 | 42,430,221 | 41,679,369 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Balance at the beginning of the period (in shares) at Dec. 31, 2013 | 41,230,286 | ||||
Balance at the beginning of the period at Dec. 31, 2013 | $ 190,000 | $ 41 | $ 284,494 | $ (94,230) | $ (305) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Comprehensive loss, net of tax | (41,876) | (40,901) | (975) | ||
Exercise of stock options (in shares) | 672,739 | ||||
Exercise of stock options | 4,811 | $ 1 | 4,810 | ||
Shares purchased under employee stock purchase plan (in shares) | 94,432 | ||||
Shares purchased under employee stock purchase plan | 906 | 906 | |||
Issuance of restricted stock awards and vesting of restricted stock units and performance stock units (in shares) | 63,408 | ||||
Issuance of restricted stock awards and vesting of restricted stock units and performance stock units | 0 | $ 0 | 0 | ||
Paid in capital from stock-based compensation expense | 8,316 | 8,316 | |||
Balance at the end of the period (in shares) at Dec. 31, 2014 | 42,060,865 | ||||
Balance at the end of the period at Dec. 31, 2014 | 162,157 | $ 42 | 298,526 | (135,131) | (1,280) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Comprehensive loss, net of tax | (60,104) | (59,474) | (630) | ||
Exercise of stock options (in shares) | 375,046 | ||||
Exercise of stock options | 1,778 | $ 0 | 1,778 | ||
Shares purchased under employee stock purchase plan (in shares) | 153,865 | ||||
Shares purchased under employee stock purchase plan | 3,027 | 3,027 | |||
Issuance of restricted stock awards and vesting of restricted stock units and performance stock units (in shares) | 69,458 | ||||
Issuance of restricted stock awards and vesting of restricted stock units and performance stock units | 0 | $ 0 | 0 | ||
Paid in capital from stock-based compensation expense | $ 10,111 | 10,111 | |||
Balance at the end of the period (in shares) at Dec. 31, 2015 | 42,659,234 | 42,659,234 | |||
Balance at the end of the period at Dec. 31, 2015 | $ 116,969 | $ 42 | 313,442 | (194,605) | (1,910) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Comprehensive loss, net of tax | $ (61,906) | (58,120) | (3,786) | ||
Exercise of stock options (in shares) | 290,384 | 290,384 | |||
Exercise of stock options | $ 2,559 | $ 1 | 2,558 | ||
Shares purchased under employee stock purchase plan (in shares) | 211,343 | ||||
Shares purchased under employee stock purchase plan | 2,697 | 2,697 | |||
Issuance of restricted stock awards and vesting of restricted stock units and performance stock units (in shares) | 142,337 | ||||
Issuance of restricted stock awards and vesting of restricted stock units and performance stock units | 0 | $ 0 | 0 | ||
Paid in capital from stock-based compensation expense | $ 14,004 | 14,004 | |||
Balance at the end of the period (in shares) at Dec. 31, 2016 | 43,303,298 | 43,303,298 | |||
Balance at the end of the period at Dec. 31, 2016 | $ 74,323 | $ 43 | $ 332,701 | $ (252,725) | $ (5,696) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Cash flows from operating activities: | |||
Net loss | $ (58,120) | $ (59,474) | $ (40,901) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 27,422 | 26,588 | 16,813 |
Stock-based compensation expense | 14,004 | 10,111 | 8,316 |
Amortization of debt issuance costs | 1,140 | 993 | 562 |
Provision for excess and obsolete inventories | 1,051 | 981 | 426 |
Intangible asset impairment | 0 | 2,496 | 4,138 |
Contingent consideration expense | 214 | 2,671 | 2,070 |
Change in fair value of contingent consideration liability | (2,300) | (25,818) | (1,064) |
Deferred income taxes | 451 | 486 | (909) |
Changes in operating assets and liabilities: | |||
Trade accounts receivable | (398) | (2,720) | (6,369) |
Inventories | (3,678) | 497 | (2,960) |
Equipment held for rental or loan, net | (9,774) | (12,098) | (9,232) |
Prepaid expenses and other current assets | (1,440) | 2,906 | (5,028) |
Other assets | (787) | (686) | (91) |
Accounts payable and accrued liabilities | 7,778 | (6,160) | 13,650 |
Deferred revenue | 4 | (232) | 130 |
Net cash (used in) operating activities | (24,433) | (59,459) | (20,449) |
Cash flows from investing activities: | |||
Capital expenditures | (5,354) | (9,538) | (6,722) |
Payments for acquisitions | 0 | (30,000) | (233,978) |
Net cash (used in) investing activities | (5,354) | (39,538) | (240,700) |
Cash flows from financing activities: | |||
Proceeds from issuance of convertible senior notes | 0 | 0 | 230,000 |
Proceeds from issuance of term loan | 0 | 60,000 | 0 |
Proceeds from line of credit, net | 481 | 24,232 | 0 |
Debt issuance costs | 0 | (405) | (7,474) |
Proceeds from the exercise of stock options and employee stock purchase plan, net of tax withholdings on stock compensation awards | 4,679 | 4,805 | 5,717 |
Payment of contingent consideration | (2,788) | (393) | 0 |
Net cash provided by financing activities | 2,372 | 88,239 | 228,243 |
Effect of exchange rate changes on cash | 58 | (153) | 16 |
Net decrease in cash and cash equivalents | (27,357) | (10,911) | (32,890) |
Cash and cash equivalents at beginning of period | 84,594 | 95,505 | 128,395 |
Cash and cash equivalents at end of period | 57,237 | 84,594 | 95,505 |
Supplemental disclosures of non-cash financing information: | |||
Receivable for exercise of stock options | 577 | 0 | 0 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 12,107 | 6,457 | 3,031 |
Cash paid for taxes | $ 445 | $ 327 | $ 787 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization, Nature of Business, and Basis of Presentation The accompanying consolidated financial statements include the accounts of The Spectranetics Corporation, a Delaware corporation, and its wholly-owned Dutch subsidiary, Spectranetics International, B.V., including the accounts of the wholly-owned subsidiaries of Spectranetics International, B.V.: Spectranetics II B.V., Spectranetics Deutschland GmbH, Spectranetics Austria GmbH, Spectranetics France SARL, Spectranetics Switzerland GmbH, and Spectranetics Denmark ApS. The consolidated financial statements as of and for the years ended December 31, 2016 and 2015 also include the accounts of The Spectranetics Corporation’s wholly-owned subsidiary, AngioScore Inc., which was acquired on June 30, 2014. The aforementioned entities are collectively referred to as the “Company.” All intercompany balances and transactions have been eliminated in consolidation. The Company develops, manufactures, markets, and distributes medical devices and products used in minimally invasive procedures within the cardiovascular system. The Company’s devices and products are available in over 65 countries and are used to cross, prepare, and treat arterial blockages in the legs and heart and to remove pacemaker and defibrillator cardiac leads. In June 2014, the Company acquired AngioScore, a leading developer, manufacturer and marketer of cardiovascular, specialty balloon catheters. In January 2015, the Company acquired the Stellarex drug-coated balloon assets from Covidien LP. Use of Estimates Preparing the consolidated financial statements in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) requires management of the Company to make several estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include the carrying amount of property and equipment, goodwill and intangible assets; valuation allowances for receivables, inventories, sales returns and deferred income tax assets; contingent consideration liabilities for acquisitions; stock-based compensation expense; estimated clinical trial expenses; accrued costs for incurred but not reported claims under partially self-insured employee health benefit programs; and loss contingencies, including those related to litigation. Actual results could differ from those estimates. Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. Noncurrent contingent consideration liabilities have been combined into noncurrent accrued liabilities on the consolidated balance sheets for all periods presented. Additionally, amortization of debt issuance costs have been included in interest expense in Note 10, “Segment and Geographic Reporting”. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. At times, the Company maintains deposits in financial institutions in excess of federally insured limits. Financial Instruments Financial instruments included in our financial statements are comprised of cash and cash equivalents, trade accounts receivable, accounts payable, certain accrued liabilities, a line of credit facility (the “Revolving Loan Facility”), convertible senior notes (“Notes”), a term loan facility (the “Term Loan Facility”) and contingent consideration liabilities. Fair Value Measurements Fair value is defined as an exit price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Authoritative guidance establishes a three-level hierarchy for disclosure that is based on the extent and level of judgment used to estimate the fair value of assets and liabilities. • Level 1 Inputs - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. • Level 2 Inputs - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. • Level 3 Inputs - Unobservable inputs for the asset or liability. The Company’s cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are carried at amortized cost, as the fair values of these instruments approximate their carrying values due to their short-term nature. As of December 31, 2016 , cash equivalents consisted of money market accounts and U.S. treasury securities with original maturities of three months or less, which the Company classified as Level 1, given the active market for these accounts. The fair value of the Notes is influenced by interest rates, the stock price of the Company’s common stock, and stock price volatility, which is determined by market trading. As of December 31, 2016 , the estimated fair value of the Notes was $241.2 million and was determined based on quoted market prices in a secondary market, which is considered a Level 2 Input measurement. The carrying amounts of the Term Loan Facility and Revolving Loan Facility are considered reasonable estimates of fair value due to their floating-rate terms. See further discussion of these items in Note 11, “Debt.” Trade Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance for doubtful accounts based upon an aging of accounts receivable, historical experience and management judgment. Larger or past due accounts receivable balances are reviewed individually for collectibility. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is remote. Inventory Inventory is recorded at the lower of cost or market. Cost is determined using the first-in, first-out method. The Company calculates inventory reserves for estimated obsolescence or excess inventory based on historical usage and sales, and assumptions about future demand for and utilization of its products, and these reserves create a new cost basis for the subsequent accounting of the inventory. These estimates for excess and obsolete inventory are reviewed and updated on a quarterly basis. Increases in the inventory reserves result in a corresponding expense, which is recorded to cost of goods sold. Property and Equipment Property and equipment are recorded at cost. Repairs and maintenance costs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets of three to five years for manufacturing equipment, equipment held for rental or loan, computers, and furniture and fixtures. The building the Company owns is depreciated using the straight-line method over its estimated useful life of 20 years. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life of the asset. Goodwill and Other Intangible Assets Goodwill represents the excess of costs over the fair value of the identifiable net assets of businesses acquired. Goodwill and intangible assets acquired in a business combination and determined to have indefinite useful lives are not amortized, but instead are tested for impairment at least annually and whenever events or circumstances indicate the carrying amount of the asset may not be recoverable. In evaluating goodwill and indefinite-lived intangible assets, the Company performs an assessment of qualitative factors to determine if goodwill is more likely than not impaired and whether it is necessary to perform the two-step goodwill impairment test. The Company conducts its annual impairment test as of December 31 of each year. See further discussion in Note 5, “Goodwill and Other Intangible Assets.” Long-Lived Assets The Company reviews long-lived assets and certain amortizable intangibles for impairment whenever events or circumstances indicate the carrying amount of an asset may not be recoverable. The carrying value of a long-lived asset is considered impaired when the expected undiscounted cash flows from such asset are separately identifiable and are less than the carrying value. Fair value is determined by reference to quoted market prices, if available, or the utilization of certain valuation techniques such as cash flows discounted at a rate commensurate with the risk involved. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less selling costs. There were no impairment charges in 2016 and 2015 related to long-lived assets. In 2014, the Company recorded an intangible asset impairment charge for intangible assets acquired in 2013, as further discussed in Note 5, “Goodwill and Other Intangible Assets.” Intangible assets with finite lives are amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment whenever events or circumstances indicate their carrying amount may not be recoverable. Intangible assets with finite lives, which consist primarily of technology intangible assets, customer relationships, trademarks, and trade names, are amortized using the straight-line method over periods that currently range from two to twelve years. In-Process Research and Development The Company defines in process research and development (“IPR&D”) as the value of technology acquired for which the related products have not yet reached technological feasibility and have no future alternative use. The primary basis for determining the technological feasibility of these projects is obtaining regulatory approval to market the underlying products in an applicable geographic region. IPR&D acquired in a business combination requires the estimated fair value of IPR&D to be capitalized as an indefinite-lived intangible asset until completion or abandonment of the IPR&D project. Upon completion of the development project, the IPR&D is amortized over its estimated useful life. If the IPR&D projects are abandoned, the related IPR&D assets would be written off. The estimated fair value of IPR&D is determined using an income approach model. In 2015, the Company recorded an intangible asset impairment charge related to a partial impairment of the IPR&D intangible assets acquired as part of the AngioScore acquisition. At December 31, 2016 , IPR&D represented an estimate of the fair value of in-process technology acquired in the AngioScore and Stellarex acquisitions. See further discussion in Note 2, “Business Combinations.” Revenue Recognition The Company recognizes revenue when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectibility is reasonably assured. Revenue from the sale of the Company’s disposable products is recognized when products are shipped to the customer and title transfers. In general, customers do not have a right of return for credit or refund. However, the Company allows returns under certain circumstances and records an allowance for sales returns based upon an analysis of revenue transactions and historical experience of sales returns. Write-offs to customer account balances for product returns are charged against the allowance for sales returns. Revenue from the sale of CVX-300 laser systems is recognized after completion of contractual obligations, which generally include delivery and installation of the systems. The Company’s field service engineers are responsible for installation of each laser system. The Company generally provides a one-year warranty on laser sales, which includes parts, labor and replacement gas. Upon expiration of the warranty period, the Company offers similar service to its customers under annual service contracts or on a fee-for-service basis. Revenue from fee-for-service arrangements is recognized upon completion of the related service. The Company accounts for service provided during the one-year warranty or service contract period as a separate unit of accounting. As such, the fair value of this service is deferred and recognized as revenue on a straight-line basis over the related warranty or service contract term, and warranty and service costs are expensed in the period they are incurred. Revenue recognized associated with service performed during the warranty period totaled $0.7 million , $0.6 million and $0.7 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. The Company offers four laser system placement programs, which are described below, in addition to the sale of laser systems: Straight rental program. The Company offers a straight monthly rental program for laser systems, and customers pay rent of $2,500 to $3,500 per month under this program. Rental revenue is invoiced and recognized monthly. The laser system is transferred to the equipment held for rental or loan account upon shipment, and depreciation expense is included in cost of revenue based upon the five -year expected life of the laser system. Costs to maintain the equipment are expensed as incurred. Volume-based rental programs. Rental revenue under these programs varies on a sliding scale depending on the customer’s purchases of disposable products (either unit or dollar volume) each month. Rental revenue is invoiced and recognized monthly. The laser system is transferred to the equipment held for rental or loan account upon shipment, and depreciation expense is included in cost of revenue based upon the five -year expected life of the laser system. Costs to maintain the equipment are expensed as incurred. Capital included rental program. Under this program, the customer agrees to a catheter price list that includes a per-unit surcharge covering the cost of the laser system. Customers are expected, but not required, to make minimum purchases of catheters at regular intervals, and the Company reserves the right to require the customer to return the laser system if the customer does not make minimum purchases of catheters. The Company recognizes the total surcharge as rental revenue upon shipment of the catheters, believing it to be the best measurement of revenue associated with the customer’s use of the laser system. The laser system is transferred to the equipment held for rental or loan account upon shipment, and depreciation expense is included in cost of revenue based upon the five -year expected life of the laser system. Costs to maintain the equipment are expensed as incurred. Evaluation program. The Company loans laser systems to institutions for use over a short period, usually three months. The loan of the equipment is to create awareness of the Company’s products and allows users to assess their therapeutic capabilities. While no revenue is earned or recognized in connection with the placement of a loaned laser, sales of disposable products result from the laser placement. The laser system is transferred to the equipment held for rental or loan account upon shipment and depreciation expense is recorded within selling, general and administrative expense based upon the five -year expected life of the laser system. Costs to maintain the equipment are expensed as incurred. The Company sells to end-users in the U.S. and internationally as well as to certain international distributors. Sales to international distributors represented approximately 8% of the Company’s total revenue in 2016 . Distributor agreements are in place with each distributor, which outline the significant terms of the transactions between the distributor and the Company. The terms and conditions of sales to the Company’s international distributors do not differ materially from the terms and conditions of sales to its domestic and international end-user customers. Sales to distributors are recognized either at shipment or a later date in accordance with the agreed upon contract terms with distributors, provided that the Company has received an order, the price is fixed or determinable, collectibility of the resulting receivable is reasonably assured, all contractual obligations have been met and the Company can reasonably estimate returns. The Company provides products to its distributors at agreed wholesale prices and typically does not provide any special right of return or exchange, discounts, significant sales incentives, price protection or stock rotation rights to any of its distributors. Deferred Revenue Deferred revenue was $1.6 million at both December 31, 2016 and 2015 , respectively. These amounts primarily relate to payments in advance for various product maintenance contracts in which revenue is initially deferred and recognized over the life of the contract, which is generally one year, and to deferred revenue associated with service provided to customers during the warranty period after the sale of laser systems. Medical Device Excise Tax The Patient Protection and Affordable Care Act of 2010 imposes a medical device excise tax on medical device manufacturers on their sales in the U.S. of certain devices, which was effective January 1, 2013. The excise tax is 2.3% of the taxable base and applies to a substantial majority of the Company’s U.S. sales. In December 2015, legislation was enacted that suspends the medical device excise tax for 2016 and 2017. As a result, the Company did not incur any excise tax for the year ended December 31, 2016 . For the years ended December 31, 2015 and 2014 the Company incurred $3.5 million , and $2.8 million of excise tax, respectively, which is recorded in the consolidated statements of operations and comprehensive loss as an operating expense under the caption “Medical device excise tax.” Stock-Based Compensation The Company measures all employee stock-based compensation awards using a fair value method and records such expense in its consolidated financial statements. The estimated value of the portion of the award that is ultimately expected to vest, taking into consideration estimated forfeitures based on the Company’s historical forfeiture rate, is recognized as expense over the requisite service periods in the Company’s consolidated statements of operations and comprehensive loss. The Company estimates the grant date fair value of stock option awards generally on the date of grant using the Black-Scholes option pricing model. For certain options, which contained vesting provisions that included a share price trigger, the Company estimated the fair value of the options using a trinomial lattice model. With respect to performance stock units (“PSUs”), the number of shares that vest and are issued to the recipient is based upon the Company’s performance as measured against specified targets over a specified time period. The fair value of the PSUs is based on the Company’s closing stock price on the grant date and its estimate of achieving such performance targets. See further discussion and disclosures in Note 7, “Stock-based Compensation and Employee Benefit Plans.” Research, Development and Other Technology Research, development and other technology costs are expensed as incurred and totaled $67.5 million , $64.4 million , and $28.7 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. In addition to product development costs, research, development and other technology costs include royalty expenses that the Company pays to license certain intellectual property incorporated in the Company’s products. Royalty expenses totaled $4.8 million , $3.6 million , and $2.7 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. Clinical trial costs. The Company sponsors clinical trials intended to obtain the necessary clinical data required to obtain approval from the U.S. Food and Drug Administration (“FDA”) and foreign regulatory agencies to market new applications of its technology. Costs associated with these clinical trials are also included within research, development and other technology costs and totaled $15.5 million , $20.0 million , and $4.1 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. The increase in clinical trial costs during the years ended December 31, 2016 and 2015 is primarily related to additional clinical trials for Stellarex. In certain cases, substantial portions of the Company’s clinical trials are performed by third-party clinical research organizations (“CROs”). These CROs generally bill monthly for services performed and also bill based upon milestone achievement. The Company accrues for services as provided, when services are performed before milestone payments are made. If the Company prepays CRO fees or milestone payments, the Company records the prepayment as a prepaid asset and amortizes the asset into research, development and other technology expense over the period of time the contracted services are performed based upon the number of patients enrolled, “patient months” incurred and the duration of the study. The Company monitors patient enrollment, the progress of clinical studies and related activities through internal reviews of data reported to the Company by the CROs and correspondence with the CROs. The Company periodically evaluates its estimates to determine if adjustments are necessary or appropriate based on information it receives. Foreign Currency The Company’s reporting currency is the U.S. dollar. Certain transactions of the Company and its subsidiaries are denominated in currencies other than the U.S. dollar. The functional currency of the Company’s foreign operations generally is the applicable local currency. Assets and liabilities of non-U.S. dollar functional currency entities are translated to U.S. dollars at period-end exchange rates, and the resulting gains and losses arising from the translation of those net assets are recorded as a cumulative translation adjustment, a component of accumulated other comprehensive loss on the consolidated balance sheets. Elements of the consolidated statements of operations and comprehensive loss are translated at the average monthly currency exchange rates in effect during the period and foreign currency transaction gains and losses are included in other income (expense). Advertising Costs The Company expenses advertising costs as incurred. Advertising costs of approximately $1.3 million , $1.6 million and $2.0 million were expensed for the years ended December 31, 2016 , 2015 and 2014 , respectively. Medical Self-insurance Costs The Company is partially self-insured for claims relating to employee medical and dental benefit programs. The medical self-insurance program is administered by a third-party and contains stop-loss provisions on both an individual claim basis and in the aggregate. The Company records claims incurred as an expense each period, including an estimate of claims incurred but not yet reported, which is revised quarterly. The Company uses claims data and historical experience, as applicable, to estimate the liability for unreported claims. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, operating losses and research and development and alternative minimum tax credit carryforwards. A valuation allowance is required to the extent it is more-likely-than-not that a deferred tax asset will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company recognizes the financial statement effects of a tax position when it is more-likely-than-not, based on technical merits, that the position will be sustained upon examination. There are no significant interest and penalties recognized in the consolidated statements of operations and comprehensive loss or on the consolidated balance sheet. See further discussion and disclosures in Note 12, “Income Taxes.” Recent Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment . The guidance removes the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance becomes effective for annual reporting periods beginning after December 15, 2019 with early adoption permitted, and applied prospectively. The Company is currently evaluating this guidance and its impact on its results of operations, financial position, and consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other than Inventory . The guidance requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. The guidance becomes effective for annual reporting periods beginning after December 15, 2017 with early adoption permitted This ASU is required to be adopted using the modified retrospective approach, with a cumulative catch-up adjustment to retained earnings in the period of adoption. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company is in the process of determining the timing of adoption and assessing the impact of ASU 2016-15 on its consolidated statements of cash flows. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . ASU 2016-09 simplifies several aspects related to the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements and classification on the statement of cash flows. For public business entities, ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The impact of adopting this standard on the Company’s consolidated financial statements is dependent upon the intrinsic value of share-based compensation awards at the time of exercise or vesting and will result in increased net operating losses which will increase our deferred tax assets and result in an offsetting valuation allowance. The Company adopted this ASU on January 1, 2017. The Company does not expect adoption of the new stock compensation standards to have a material impact on the recognition of stock compensation. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which requires a lessee to recognize on its balance sheet the assets and liabilities for the rights and obligations created by leases with a lease term of more than twelve months. Leases will continue to be classified as either financing or operating, with classification affecting the recognition, measurement and presentation of expenses and cash flows arising from a lease. Lessor accounting is largely unchanged from previous GAAP. However, changes were made to align the guidance with the lessor guidance and the new revenue recognition guidance under ASU 2014-09 referenced below. For public business entities, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and requires a modified retrospective approach to adoption for lessees related to capital and operating leases existing at, or entered into after, the earliest comparative period presented in the financial statements. Early adoption is permitted. The Company is in the process of determining the timing and method of adoption and assessing the impact of ASU 2016-02 on its results of operations, financial position, and consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which will replace most existing revenue recognition guidance in U.S. GAAP. The core principle of ASU 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled in exchange for those goods or services. To achieve this core principle, ASU 2014-09 contains a five-step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when (or as) an entity satisfies a performance obligation. ASU 2014-09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing . ASU 2016-10 provides for amendments to ASU 2014-09, reducing the complexity when applying the guidance for identifying performance obligations and improving the operability and understandability of the license implementation guidance. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients . ASU 2016-12 provides for amendments to ASU 2014-09, amending the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. ASU 2016-12 clarifies that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy U.S. GAAP. In addition, ASU 2016-12 clarifies how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. In December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers , which makes minor corrections or minor improvements to ASU 2014-09 that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Under ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , issued in August 2015, these amendments are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, and either the full retrospective method or the modified retrospective transition method is allowed. The Company will adopt the guidance for the fiscal year beginning after December 15, 2017 and apply the modified retrospective method. The modified retrospective approach requires the disclosure of the difference between revenue and costs that would have been recognized under current GAAP in the current period and the amounts that are recognized under the new standard. While a significant portion of our revenue will continue to be in scope of the leasing guidance, we are in the process of reviewing our sales contracts to identify |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Business Combinations | BUSINESS COMBINATIONS Stellarex On January 27, 2015 (“Acquisition Date”), the Company acquired certain assets related to the Stellarex over-the-wire percutaneous transluminal angioplasty balloon catheter with a drug (paclitaxel) coated balloon (“DCB Assets”), pursuant to an Asset Purchase Agreement, dated as of October 31, 2014 (“Stellarex Purchase Agreement”) with Covidien LP (“Stellarex Acquisition”). The DCB Assets include, among other things, the intellectual property, machinery and equipment, and inventories used in connection with the Stellarex catheter. The primary reasons for the Stellarex Acquisition were to broaden the Company’s existing product lines, leverage its current customers, and increase revenue. Under the terms of the Stellarex Purchase Agreement, the Company paid Covidien $30 million in cash and Covidien retained certain liabilities relating to the DCB Assets. The Company accounted for the Stellarex Acquisition as a business combination and recorded the assets acquired and liabilities assumed at their respective estimated fair values as of the Acquisition Date. The following table summarizes the allocations to the assets acquired: (in thousands) Allocation of purchase price Amortization period (in years) Inventories $ 1,337 Property and equipment, net 2,701 Total tangible assets acquired 4,038 Less: above market lease assumed 293 Net tangible assets acquired $ 3,745 Intangible assets: In-process research and development (“IPR&D”) 13,680 Technology 9,000 12 Trademark and trade names 400 12 Transition services agreement 530 0.5 Goodwill 2,645 Total purchase price $ 30,000 The Company determined the estimated fair value of the inventory based on its estimated selling price less cost to sell and normal profit margin, or in the case of inventory expected to be consumed in clinical studies, on replacement cost. The Company recorded the property and equipment at its estimated fair value at the Acquisition Date. The IPR&D asset, which is accounted for as an indefinite-lived intangible asset until completion or abandonment of the project, represents an estimate of the fair value of in-process technology related to the Stellarex products that are currently the subject of clinical studies in advance of their potential introduction to the U.S. market, as well as the below the knee applications of the Stellarex technology, which are also currently in development. The estimated fair value was determined using the income approach. The estimated fair value of the technology intangible asset, which relates to Stellarex products that have already received clearance to be made commercially available in the European market, was also determined using the income approach. The trademark and trade names were valued based on the “relief from royalty” method. The “relief from royalty” method is based on the premise that a third party would be willing to pay a royalty to use the trade name or trademark asset owned by the subject company. The projected royalties are converted into their present value equivalents through the application of a risk-adjusted discount rate. The transition services agreement was valued based on the estimated fair value of services provided by Covidien to the Company under the agreement. These fair value measurements are based on significant unobservable inputs, which are classified as Level 3 within the fair value hierarchy based on management’s estimates and assumptions. The Company recorded the excess of the aggregate purchase price over the estimated fair values of the identifiable net assets acquired as goodwill, which is deductible for tax purposes. Goodwill is primarily attributable to the benefits of the acquired workforce and future technologies, which will be developed from the current and IPR&D technologies to further expand the Company’s product offerings and applications of the technology. Goodwill was allocated to the Company’s operating segments based on the relative expected benefits as disclosed in Note 5, “Goodwill and Other Intangible Assets.” The assets and liabilities assumed in the Stellarex Acquisition were included in the Company’s consolidated balance sheet as of January 27, 2015. Beginning on January 27, 2015, revenue, costs of products sold and operating expenses related to the DCB Assets have been included in the Company’s consolidated financial statements in the Company’s U.S. Medical and International Medical reportable operating segments. Revenue from Stellarex products for the year ended December 31, 2016 and for the period from January 27, 2015 through December 31, 2015 was immaterial and is included in the Company’s consolidated statements of operations and comprehensive loss for the years ended December 31, 2016 and December 31, 2015. Losses attributable to Stellarex for the year ended December 31, 2016 and for the period from January 27, 2015 through December 31, 2015 were $35.9 million and $44.4 million , respectively, and primarily included research and development and clinical trial costs, included within the “Research, development and other technology” line of the consolidated statements of operations and comprehensive loss. Also included in the losses attributable to Stellarex above were acquisition and integration expenses that totaled $0.1 million and $8.0 million for the year ended December 31, 2016 and for the period from January 27, 2015 through December 31, 2015, respectively, and primarily included non-recurring costs associated with establishing manufacturing operations to support the Stellarex program, and investment banking and legal fees incurred in connection with the acquisition. These costs are included within the “Acquisition transaction, integration and legal costs” line of the consolidated statements of operations and comprehensive loss. AngioScore On June 30, 2014, the Company completed its acquisition of AngioScore, Inc. At the date of acquisition, the Company recorded total contingent consideration of $25.9 million . The fair value of contingent consideration liabilities was determined using a probability-weighted approach to estimate the achievement of the future revenue and regulatory approval milestones and discount rates ranging from 9% to 19% . The selection of the discount rates reflects the inherent risks related to achieving the respective milestones. These fair value measurements are based on significant unobservable inputs, which are classified as Level 3 within the fair value hierarchy, based on management’s estimates and assumptions. The fair value of the contingent milestone consideration is remeasured at the estimated fair value at each reporting period. Therefore, any changes in the fair value impacts our reported earnings in each reporting period, thereby resulting in variability in our earnings. Contingent consideration arrangements obligate us to pay former shareholders of an acquired entity if specified future events occur or conditions are met such as the achievement of certain technological milestones or the achievement of targeted revenue milestones. We measure such liabilities using Level 3 unobservable inputs, applying the income approach, such as the discounted cash flow technique, or the probability-weighted scenario method. We use various key assumptions, such as the probability of achievement of the agreed milestones and the discount rate, in our determination of the fair value of contingent consideration. We monitor the fair value of the contingent consideration and the subsequent revisions are reflected in our consolidated statements of operations. During 2015, the Company remeasured the contingent consideration liability related to the AngioScore acquisition to its fair value and reduced it by approximately $25.8 million . Of this amount, $21.5 million was a result of a decrease in future revenue estimates for the AngioSculpt products. The remaining $4.3 million was a result of an analysis performed by the Company related to the costs and efforts, including product testing, validation, coating and process testing, and regulatory requirements, remaining to complete the Drug-Coated AngioSculpt (“DCAS”) projects, which are subject to contingent regulatory milestone payments. This analysis resulted in a determination that it was unlikely the Company would meet the regulatory milestones for two of the three DCAS projects within the time frame and with the expenditure of funds set forth in the acquisition agreement. Related to the regulatory milestone assessment, the Company evaluated the IPR&D associated with the product development projects for impairment using the income approach, and determined that a portion of the IPR&D was impaired. Therefore, the Company also recorded an impairment of the IPR&D intangible asset of $2.5 million during the third quarter of 2015. The following table presents changes to the Company’s acquisition-related contingent consideration for the periods ending December 31, 2016 and 2015: 2016 2015 Beginning balance $ 5,153 $ 28,694 Purchase price contingent consideration — — Change in fair value of contingent consideration — (25,819 ) Contingent consideration payments (5,088 ) (393 ) Contingent consideration accretion expense 214 2,671 Ending balance $ 279 $ 5,153 During 2015, the Company recorded $0.3 million of amortization of the acquired inventory step-up, reflected as “Amortization of acquired inventory step-up” in the consolidated statements of operations and comprehensive loss, increasing cost of products sold. Expenses related to the acquisition of AngioScore and the subsequent integration of its operations were $1.8 million and $21.5 million for the years ended December 31, 2016 and 2015, respectively, and primarily included legal fees associated with a patent and breach of fiduciary duty matter in which AngioScore is the plaintiff. See Note 13, “Commitments and Contingencies.” These expenses are included within the “Acquisition transaction, integration and legal costs” line of the consolidated statements of operations and comprehensive loss. In addition, we made a contingent consideration payment of $5.0 million related to the acquisition of AngioScore during the year ended December 31, 2016. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES Inventories, net, consisted of the following: December 31, (in thousands) 2016 2015 Raw materials $ 11,070 $ 10,838 Work in process 4,787 2,914 Finished goods 11,785 11,403 $ 27,642 $ 25,155 At December 31, 2016 and 2015, approximately 52% and 68% , respectively, of our finished goods inventory was at customer locations pursuant to consignment arrangements. On January 27, 2015, the Company acquired approximately $1.3 million of inventories as part of the Stellarex Acquisition. As of December 31, 2016 and 2015, Stellarex inventories were approximately $3.0 million and $2.1 million , respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | PROPERTY AND EQUIPMENT Property and equipment, net, consisted of the following: December 31, (in thousands) 2016 2015 Equipment held for rental or loan $ 62,972 $ 55,774 Manufacturing equipment and computers 40,656 37,862 Leasehold improvements 10,453 8,984 Furniture and fixtures 5,099 4,840 Building and improvements 1,306 1,306 Land 270 271 Less: accumulated depreciation and amortization (75,929 ) (64,318 ) Total property and equipment, net $ 44,827 $ 44,719 Depreciation expense for the years ended December 31, 2016 , 2015 and 2014 was $14.3 million , $12.3 million and $9.5 million , respectively. In addition, software amortization expense for the years ended December 31, 2016 , 2015 and 2014 was $0.9 million , $1.0 million and $0.9 million , respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill. The Company’s goodwill relates to the acquisition of the endovascular product lines of Kensey Nash Corporation in 2008, the acquisition of certain products from Upstream Peripheral Technologies Ltd. (“Upstream”) in January 2013, the AngioScore acquisition in 2014, and the Stellarex Acquisition in 2015. The goodwill reporting units are consistent with our reporting segments which are further discussed in Note 10 “Segment and Geographic Reporting.” The change in the carrying amount of goodwill by reporting unit for the year ended December 31, 2016 was as follows: (in thousands) U.S. Medical International Medical Total Balance as of December 31, 2015 $ 130,410 $ 22,206 $ 152,616 Impact of changes in foreign currency and other — (3,805 ) (3,805 ) Balance as of December 31, 2016 $ 130,410 $ 18,401 $ 148,811 Goodwill is allocated to the Company’s operating segments based on an analysis of both the relative historical and expected benefits. Goodwill denominated in foreign currencies within International Medical is remeasured in U.S. dollars at the applicable period-end exchange rate. In 2016, management performed its annual qualitative goodwill impairment analysis and determined that the two-step impairment analysis was not necessary. As of the measurement date, a positive determination was made that it was more likely than not that the fair value of goodwill was greater than the carrying value. Therefore, the $148.8 million of goodwill on the consolidated balance sheets as of December 31, 2016 . Intangible Assets. Acquired intangible assets as of December 31, 2016 and 2015 consisted of the following: (in thousands) December 31, 2016 December 31, 2015 Acquired as part of AngioScore acquisition (Note 2): Technology $ 73,510 $ 73,510 Customer relationships 23,320 23,320 Trademark and trade names 4,380 4,380 In-process research and development 1,254 1,254 Distributor relationships 1,940 1,940 Non-compete agreements 580 580 Acquired as part of Stellarex Acquisition (Note 2): In-process research and development 13,680 13,680 Technology 9,000 9,000 Trademark and trade names 400 400 Transition services agreement 530 530 Acquired as part of Upstream acquisition Technology 2,172 2,172 Non-compete agreement 200 200 Patents 530 530 Less: accumulated amortization (33,267 ) (21,040 ) $ 98,229 $ 110,456 See further discussion of the additional goodwill and intangible assets acquired as part of the Stellarex Acquisition in Note 2 “Business Combinations.” The Company evaluates intangible assets for impairment and whenever events or circumstances indicate the carrying amount of the asset may not be recoverable. Indefinite-lived intangible assets are evaluated at least annually. During 2016, there were no indicators of impairment of intangible assets and no impairment charge was recorded for the year ended December 31, 2016. In August 2016, the Company received Conformité Européene (CE) mark approval of AngioSculptX. AngioSculptX was valued at its estimated fair value at the acquisition date and classified as IPR&D, which is accounted for as an indefinite-lived intangible asset until completion or abandonment of the project. IPR&D is not amortized until completion of the project. Upon receiving CE mark approval, which allows for commercialization of the product in Europe, the project was considered complete, and the Company capitalized the IPR&D as a finite-lived intangible asset that will be amortized over its estimated ten -year useful life. During 2015, in conjunction with the reductions of the contingent consideration liability related to the AngioScore acquisition (see Note 2), the Company also evaluated the intangible assets acquired for impairment. During 2015, the Company determined that a portion of the IPR&D intangible asset was impaired. The Company therefore recorded an impairment of the IPR&D intangible asset of $2.5 million , which is included in the U.S. Medical reporting segment. For the intangible assets other than IPR&D, the Company determined that the estimated undiscounted cash flows of the intangible assets exceeded their carrying amounts. Therefore, no impairment of these other intangible assets was required. During 2014, the Company recorded intangible asset impairment charges of approximately $4.1 million related to the intangible assets acquired as part of the Upstream acquisition, as a result of market factors associated with the access and overall retrograde interventional market and other relevant factors. Aggregate amortization expense for amortizing intangible assets was $12.2 million , $13.3 million and $6.3 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. As of December 31, 2016 , estimated future amortization expense for intangible assets subject to amortization was as follows: (in thousands) Amortization Expense Years ending December 31: 2017 $ 11,587 2018 11,322 2019 11,322 2020 10,957 2021 10,592 Thereafter 28,770 $ 84,550 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | ACCRUED LIABILITIES Accrued liabilities consisted of the following: December 31, (in thousands) 2016 2015 Accrued payroll and employee-related expenses $ 22,890 $ 15,797 Contingent consideration, current portion 279 5,154 Accrued clinical study expense 2,723 3,868 Deferred rent 1,443 1,485 Accrued sales, income and excise taxes 1,208 1,318 Accrued royalties 1,313 1,044 Accrued interest 1,016 913 Accrued legal costs 847 713 Other accrued expenses 4,350 5,143 Total accrued liabilities 36,069 35,435 Less: long-term portion (1,688 ) (1,759 ) Accrued liabilities, current portion $ 34,381 $ 33,676 |
Stock-Based Compensation and Em
Stock-Based Compensation and Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation and Employee Benefit Plans | STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS At December 31, 2016 and 2015 , the Company had two stock-based compensation plans and a 401(k) plan. These plans are described below. (a) Equity Plan The Company maintains equity plans that provide for the grant of options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”), PSUs, dividend equivalents, cash incentive awards and other stock-based awards. The plans provide that stock options may be granted with exercise prices not less than the fair market value at the date of grant. Options granted through December 31, 2016 generally vest over four years and expire ten years from the date of grant. Restricted stock awards granted to non-employee members of the Board of Directors vest over one year. RSUs granted to certain employees of the Company vest over four years. Each RSU and PSU represents the right to receive one share of the Company’s common stock upon the occurrence of certain specified events. On March 15, 2016, the Company’s Board of Directors adopted, and stockholders approved at the Company’s annual meeting of stockholders in June 2016, The Spectranetics Corporation 2016 Incentive Award Plan (the “2016 Plan”), which authorizes the issuance for award grants of 2,500,000 shares of the Company’s common stock, plus the number of shares of common stock remaining available for future grants under the Company’s Amended and Restated 2006 Incentive Award Plan (the “2006 Plan”) on the date the Company’s stockholders approved the 2016 Plan. No further awards will be made under the 2006 Plan. The Compensation Committee of the Board of Directors approved a grant of PSUs to certain of the Company’s officers in June 2014 and a grant of PSUs to the Company’s Chief Financial Officer in September 2015 upon the commencement of her employment (the “2014 PSUs”). The 2014 PSUs vest based on achieving specified performance measurements over a three -year “cliff” performance period plus an additional one year “cliff” time vesting. Earned 2014 PSUs vest 75% upon completion of the three -year performance period and 25% one year after the performance period. The 2014 PSUs have payout opportunities of between 0% and 250% . The performance targets include a compounded annual growth rate for revenue over a three-year period and Adjusted EBITDA. The three-year performance period ended as of December 31, 2016. In January 2017, the Compensation Committee determined that the 2014 PSUs have an actual payout percentage of 95% based on the Company’s level of achievement of the performance measures. In June 2016, the Board of Directors approved the grant of PSUs (the “2016 PSUs”) to the Company’s named executive officers and certain other employees pursuant to the 2016 Plan. The 2016 PSUs provide, among other things, that (i) the 2016 PSUs have an initial performance period of up to four years from the date of grant during which the target number of 2016 PSUs awarded to each recipient may be earned if approval of the Company’s Stellarex products is received from the FDA; (ii) the 2016 PSUs have a supplemental performance period of six calendar quarters following the calendar quarter in which FDA approval of the Company’s Stellarex products is received, and during which up to an additional 100% of the target number of 2016 PSUs may be earned depending on the degree to which the Company’s Stellarex products achieve specified U.S. market share goals; and (iii) no 2016 PSUs will be earned (and no supplemental performance period will occur) if the Company’s Stellarex products do not receive FDA approval during the initial four year performance period. As of December 31, 2016, the Company had not received FDA approval of the Stellarex products. At December 31, 2016 , there were 3.2 million shares available for future issuance under the Company’s incentive award plans, assuming issuance of common stock underlying all outstanding PSUs at target performance, and 1.4 million shares available, assuming issuance of common stock underlying all outstanding PSUs at maximum performance. Valuation and Expense Information The Company recognized stock-based compensation expense of $14.0 million , $10.1 million and $8.3 million for the years ended December 31, 2016 , 2015 and 2014 , respectively, which consisted of compensation expense related to (1) employee stock options based on the grant date fair value of the options that are ultimately expected to vest during the period, (2) restricted stock awards issued to certain of the Company’s directors, (3) restricted stock units and PSUs issued to certain of the Company’s officers and other employees, and (4) the fair value of shares issued under the Company’s employee stock purchase plan. Stock-based compensation expense is recognized based on awards ultimately expected to vest and is reduced for estimated forfeitures. The Company recognizes compensation expense for non-performance awards on a straight-line basis over the service period. An income tax benefit of $0.3 million , $2.4 million , and $3.0 million related to the exercise of stock options during the years ended December 31, 2016 , 2015 and 2014 , respectively, will be added to other paid-in capital if and when the tax benefit is realized. With the adoption of ASU 2016-09 in the first quarter of 2017, going forward unrealized income tax benefits will be recorded as a net operating loss deferred tax asset with a corresponding valuation allowance. With respect to the PSUs, the number of shares that vest and are issued to the recipient is based upon the Company’s performance as measured against the specified targets over a specified time period as determined by the Compensation Committee of the Board of Directors. The Company estimates the fair value of the PSUs based on its closing stock price at the time of grant and its estimates of achieving performance targets and records compensation expense on a graded vesting attribution method, which recognizes compensation cost on a straight-line basis over each separately vesting portion of the award. Over the performance period, the number of shares of common stock that will ultimately vest and be issued and the related compensation expense is adjusted based upon the Company’s estimate of achieving such performance targets. The number of shares delivered to recipients and the related compensation cost recognized as an expense will be based on the actual performance metrics as set forth in the applicable PSU award agreement. In the fourth quarter of 2015, the Company revised its estimate related to the achievement of the PSU performance targets, the cumulative effect of which resulted in an approximate $1.7 million reversal of amounts previously recorded. The fair value of each share option award is estimated on the date of grant using the Black-Scholes pricing model based on assumptions noted in the following table. The Company’s employee stock options have various restrictions including vesting provisions and restrictions on transfers and hedging, among others, and are often exercised prior to their contractual expiration. Expected volatilities used in the fair value estimate are based on the historical volatility of the Company’s common stock. The Company uses historical data to estimate share option exercises, expected term and employee post-vesting termination behavior used in the Black-Scholes pricing model. The risk-free rate for periods within the contractual term of the share option is based on the U.S. Treasury yield in effect at the time of grant. The following is a summary of the assumptions used for the stock options granted during the years ended December 31, 2016 , 2015 and 2014 using the Black-Scholes pricing model: Year Ended December 31, 2016 2015 2014 Expected life (years) 5.8 5.7 5.8 Risk-free interest rate 1.23 % 1.57 % 1.65 % Expected volatility 46.30 % 42.74 % 61.44 % Expected dividend yield — — — The weighted average grant date fair value of options granted during the years ended December 31, 2016 , 2015 and 2014 was $6.94 , $10.32 and $13.59 , respectively. The following table summarizes stock option activity during the year ended December 31, 2016 : Shares Weighted Average Exercise Price Weighted Avg. Remaining Contractual Term (In Years) Aggregate Intrinsic Value Options outstanding at January 1, 2016 2,566,088 $ 14.04 Granted 1,015,100 15.67 Exercised (290,384 ) 10.84 Forfeited (231,099 ) 17.13 Options outstanding at December 31, 2016 3,059,705 $ 14.65 6.43 $ 30,902,131 Options exercisable at December 31, 2016 1,836,448 $ 12.49 4.91 $ 22,393,987 The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value based on the Company’s closing stock price of $24.50 on December 31, 2016 that would have been received by the option holders had all option holders exercised their options as of that date. The total number of shares underlying in-the-money options exercisable as of December 31, 2016 was approximately 1.7 million . The total intrinsic value of options exercised during the years ended December 31, 2016 , 2015 and 2014 was $2.9 million , $8.3 million and $14.8 million , respectively. The following table summarizes restricted stock award activity during the year ended December 31, 2016 : Shares Weighted Average Grant Date Fair Value Restricted stock awards outstanding at January 1, 2016 26,463 $ 27.41 Awarded 48,643 18.71 Vested (26,463 ) 27.41 Awards outstanding at December 31, 2016 48,643 $ 18.71 The following table summarizes RSU activity during the year ended December 31, 2016 : Shares Weighted Average Grant Date Fair Value Restricted stock units outstanding at January 1, 2016 204,893 $ 24.08 Awarded 190,776 14.98 Vested/Released (64,759 ) 23.12 Forfeited (68,145 ) 18.73 Restricted stock units outstanding at December 31, 2016 262,765 $ 19.10 The following table summarizes PSU activity during the year ended December 31, 2016 : Shares Weighted Average Grant Date Fair Value Performance stock units outstanding at January 1, 2016 496,656 $ 22.82 Awarded (at target performance) 275,330 18.16 Vested/Released (59,799 ) 23.43 Forfeited (49,866 ) 22.70 Performance stock units outstanding at December 31, 2016 662,321 $ 20.83 As of December 31, 2016 , there was $18.0 million of total unrecognized compensation expense related to share-based compensation arrangements granted under the Company’s incentive award plans, using the Company’s current estimate of performance for the PSUs, which could be higher or lower in the future based on the actual achievement of performance targets. This expense is based on an assumed future forfeiture rate of approximately 6.63% per year for stock options and RSUs for Company employees and is expected to be recognized over a weighted-average period of approximately 2.4 years. (b) Employee Stock Purchase Plan In December 2015, the Company’s Board of Directors adopted, and stockholders approved at the Company’s annual meeting of stockholders in June 2016, an amendment to The Spectranetics Corporation 2010 Employee Stock Purchase Plan (as amended, the “ESPP”) to increase the number of shares of common stock available for sale under the ESPP by 1,000,000 shares to a total of 1,700,000 shares. The amendment was effective as of January 1, 2016, the first day of the 2016 semi-annual offering period under the ESPP. The ESPP provides for the sale of up to 1,700,000 shares of common stock to eligible employees, limited to the lesser of 2,500 shares per employee per six -month period or a fair market value of $25,000 per employee per calendar year. Stock purchased under the ESPP is restricted from sale for one year following the date of purchase. Stock can be purchased from amounts accumulated through payroll deductions during each six -month period. The purchase price is equal to 85% of the lower of the fair market value of the Company’s common stock at the beginning or end of the respective six-month offering period. This discount does not exceed the maximum discount rate permitted for plans of this type under Section 423 of the Internal Revenue Code of 1986, as amended. The ESPP is compensatory for financial reporting purposes. At December 31, 2016 , there were approximately 0.8 million shares available for future issuance under the ESPP. The fair value of the shares offered within the semi-annual purchase periods under the ESPP is determined on the date of grant using the Black-Scholes option-pricing model. The expected term of six months is based upon the offering period of the ESPP. Expected volatility is determined based on the historical volatility from daily share price observations for the Company’s stock covering a period commensurate with the expected term of the ESPP. The risk-free interest rate is based on the six-month U.S. Treasury daily yield rate. The expected dividend yield is based on the Company’s historical practice of electing not to pay dividends to its stockholders. For the years ended December 31, 2016 , 2015 and 2014 , the Company recognized $1.2 million , $0.9 million and $0.8 million of compensation expense, respectively, related to the ESPP. (c) 401(k) Plan The Company maintains a salary reduction savings plan under Section 401(k) of the Internal Revenue Code (“401(k) Plan”) that the Company administers for participating employees’ contributions. All full-time employees are covered under the 401(k) Plan after meeting minimum service requirements. The Company accrued and paid matching contributions of $2.0 million , $1.8 million , and $1.3 million to the 401(k) Plan for the years ended December 31, 2016 , 2015 and 2014 , respectively. For all years presented, Company contributions were based on a match of 50% of each employee’s contribution, with the match-eligible contribution being limited to 6% of the employee’s eligible compensation. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | NET LOSS PER SHARE Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding (excluding shares of restricted stock). Shares issued during the period and shares reacquired during the period are weighted for the portion of the period they were outstanding. Diluted net loss per share is computed in a manner consistent with that of basic net loss per share, while giving effect to all potentially dilutive common shares outstanding during the period, which include the assumed exercise of stock options and the assumed vesting of restricted stock using the treasury stock method, and the assumed conversion of shares under the Notes using the “if-converted” method. Options to purchase common stock, the vesting of restricted stock and PSUs, and shares issuable upon conversion of the Notes are considered to be potentially dilutive common shares but have been excluded from the calculation of diluted net loss per share as their effect is anti-dilutive for the years ended December 31, 2016 , 2015 and 2014 as a result of the net losses incurred for those years. Therefore, diluted net loss per share was the same as basic net loss per share for the years ended December 31, 2016 , 2015 and 2014 . Stock options, restricted stock, PSUs, and shares issuable upon the conversion of the Notes outstanding at December 31, 2016 , 2015 and 2014 , which are excluded from the computation of diluted net loss per share for those years, are shown in the table below: December 31, 2016 2015 2014 Options to purchase common stock 3,059,705 2,566,088 2,698,911 Non-vested restricted stock 311,408 231,356 208,818 Non-vested performance stock units 662,321 496,656 487,158 Shares issuable upon conversion of the Notes 7,337,459 7,337,459 7,337,459 Potentially dilutive common shares 11,370,893 10,631,559 10,732,346 A summary of the net loss per share calculation is shown below for the years indicated: 2016 2015 2014 Net loss (in thousands) $ (58,120 ) $ (59,474 ) $ (40,901 ) Common shares outstanding: Historical common shares outstanding at beginning of year (excluding shares of unvested restricted stock) 42,632,771 42,034,063 41,208,096 Weighted average common shares issued 302,671 396,158 471,273 Weighted average common shares outstanding-basic 42,935,442 42,430,221 41,679,369 Effect of dilution from stock options — — — Weighted average common shares outstanding-diluted 42,935,442 42,430,221 41,679,369 Net loss per share, basic and diluted $ (1.35 ) $ (1.40 ) $ (0.98 ) |
Concentrations of Credit Risk
Concentrations of Credit Risk | 12 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
Concentrations of Credit Risk | CONCENTRATIONS OF CREDIT RISK The Company’s investment policy is designed to limit the Company’s exposure to concentrations of credit risk. The Company’s accounts receivable are due from a variety of health care organizations and distributors throughout the United States, Europe, the Middle East, Latin America and Asia. No single customer represented more than 10% of revenue or accounts receivable for any year presented in our consolidated financial statements. The Company provides for uncollectible amounts upon recognition of revenue and when specific credit problems arise. Historically, management’s estimates for uncollectible amounts have been adequate, and management believes that all significant credit risks have been identified at December 31, 2016 . The Company has not entered into any hedging transactions nor any transactions involving financial derivatives. |
Segment and Geographic Reportin
Segment and Geographic Reporting | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment and Geographic Reporting | SEGMENT AND GEOGRAPHIC REPORTING The Company operates in one distinct line of business consisting of developing, manufacturing, marketing, and distributing disposable products and a proprietary excimer laser system to treat certain vascular and coronary conditions. Within this line of business, the Company has identified two operating segments, which were identified on a geographic basis: (1) U.S. Medical and (2) International Medical. U.S. Medical and International Medical offer substantially the same products and services but operate in different geographic regions, have different distribution networks, and different regulatory environments. The primary performance measure for the operating segments is revenue. Additional information regarding each operating segment is discussed below. (a) U.S. Medical Products offered by this segment include medical devices used in minimally invasive procedures within the cardiovascular system, including fiber-optic devices and non-fiber-optic products (disposables), an excimer laser system (equipment), and the service of the excimer laser system (service). The Company is subject to product approvals from the FDA and Health Canada. The Company’s products are used in multiple vascular procedures, including peripheral atherectomy, crossing arterial blockages, coronary atherectomy and thrombectomy, and the removal of cardiac lead wires from patients with pacemakers and cardiac defibrillators. This segment’s customers are primarily located in the United States and Canada. U.S. Medical also includes the corporate headquarters of the Company. All manufacturing, research and development, and corporate administrative functions are performed within this operating segment. As of December 31, 2016 , 2015 and 2014 , a portion of research, development and other technology expenses, and general and administrative expenses incurred in the U.S. has been allocated to International Medical based on a percentage of revenue because these expenses support the Company’s ability to generate revenue within the International Medical segment. Manufacturing activities are performed within the U.S. Medical segment. Revenue associated with intersegment product transfers to International Medical was $14.3 million , $13.9 million and $8.1 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. Revenue is based upon transfer prices, which provide for intersegment profit that is eliminated upon consolidation. (b) International Medical The International Medical segment has its headquarters in the Netherlands, and serves Europe, the Middle East, Asia Pacific, Latin America, and Puerto Rico. Products offered by this segment are substantially the same as those offered by U.S. Medical, except that the Stellarex and AngioSculptX DCB products are available for sale in Europe and certain other international markets but are not yet approved for sale in the U.S. The Company is subject to product approvals from various international regulatory bodies. The International Medical segment is engaged primarily in distribution activities, with no manufacturing or product development functions. Certain U.S.-incurred research, development and other technology expenses, and general and administrative expenses have been allocated to International Medical based on a percentage of revenue because these expenses support the Company’s ability to generate revenue within the International Medical segment. Summary financial information relating to reportable segment operations is shown below. Intersegment transfers as well as intercompany assets and liabilities are excluded from the information provided: For the Year Ended December 31, (in thousands) 2016 2015 2014 Revenue: U.S. Medical: Disposable products $ 215,023 $ 195,816 $ 155,107 Laser, service, and other 10,277 10,867 12,292 Subtotal 225,300 206,683 167,399 International Medical: Disposable products 39,844 34,563 29,703 Laser, service, and other 5,679 4,710 7,812 Subtotal 45,523 39,273 37,515 Total revenue $ 270,823 $ 245,956 $ 204,914 U.S. Medical International Medical Total 2016 Interest income $ 63 $ — $ 63 Interest expense 13,349 9 13,358 Depreciation and amortization expense 25,704 1,718 27,422 Income tax expense 560 227 787 Segment operating loss (40,416 ) (3,219 ) (43,635 ) Segment net loss (54,333 ) (3,787 ) (58,120 ) Capital expenditures 5,171 183 5,354 Total assets $ 392,776 $ 37,302 $ 430,078 U.S. Medical International Medical Total 2015 Interest income $ 25 $ 4 $ 29 Interest expense 7,878 1 7,879 Depreciation and amortization expense 24,910 1,678 26,588 Income tax (benefit) expense 563 163 726 Segment operating (loss) income (49,548 ) (981 ) (50,529 ) Segment net (loss) income (58,095 ) (1,379 ) (59,474 ) Capital expenditures 9,423 115 9,538 Total assets $ 430,956 $ 37,043 $ 467,999 U.S. Medical International Medical Total 2014 Interest income $ 44 $ 2 $ 46 Interest expense 4,098 10 4,108 Depreciation and amortization expense 15,205 1,608 16,813 Income tax expense (887 ) 565 (322 ) Segment operating (loss) income (39,267 ) 2,317 (36,950 ) Segment net (loss) income (42,628 ) 1,727 (40,901 ) Capital expenditures 6,532 190 6,722 Total assets $ 423,039 $ 34,799 $ 457,838 In 2016 , 2015 and 2014 , no individual customer represented 10% or more of consolidated revenue. There were no individual countries, other than the United States, that represented at least 10% of consolidated revenue in 2016 , 2015 or 2014 . Long-lived assets, other than financial instruments and deferred tax assets, located in foreign countries are concentrated in Europe, and totaled $23.0 million and $27.1 million as of December 31, 2016 and 2015 , respectively. Revenue by Product Line For the Year Ended December 31, (in thousands) 2016 2015 2014 Revenue Disposable products revenue: Vascular intervention $ 181,602 $ 160,480 $ 118,148 Lead management 73,265 69,899 66,662 Total disposable products 254,867 230,379 184,810 Laser, service, and other 15,956 15,577 20,104 Total revenue $ 270,823 $ 245,956 $ 204,914 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | DEBT The following table summarizes our total gross outstanding debt as of December 31, 2016 and December 31, 2015 and the significant terms of our borrowing arrangements: Year Ended December 31, Maturity Date Weighted Average Interest Rate (amounts in thousands) 2016 2015 Convertible Senior Notes $ 230,000 $ 230,000 June 1, 2034 2.625% Term Loan Facility 60,000 60,000 December 7, 2020 (1) Revolving Loan Facility 24,712 24,232 December 7, 2020 (1) 314,712 314,232 Less debt issuance cost (5,241 ) (6,323 ) Total $ 309,471 $ 307,909 (1) The interest rates on the Term Loan Facility and Revolving Loan Facility are described below. Convertible Senior Notes In June 2014, the Company sold $230 million aggregate principal amount of 2.625% Convertible Senior Notes due 2034. Interest is paid semi-annually in arrears on December 1 and June 1 of each year. The Notes will mature on June 1, 2034, unless earlier converted, redeemed, or repurchased in accordance with the terms of the Notes. The initial conversion rate of the Notes is 31.9020 shares of the Company’s common stock per $1,000 principal amount of Notes (which is equivalent to an initial conversion price of approximately $31.35 per share). The conversion rate is subject to adjustment upon the occurrence of certain events specified in the indenture governing the Notes. Holders may surrender their Notes for conversion at any time prior to the close of business on the second scheduled trading day immediately preceding the stated maturity date. On or after June 5, 2018 and prior to June 5, 2021, the Company may redeem any or all of the Notes in cash if the closing price of the Company’s common stock exceeds 130% of the conversion price then in effect for a specified number of days, and on or after June 5, 2021, the Company may redeem the Notes in cash without any such condition. The redemption price for the Notes to be redeemed as described in the immediately preceding sentence equals 100% of the principal amount of the Notes being redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Holders of the Notes may require the Company to repurchase all or a portion of their Notes on each of June 5, 2021, June 5, 2024 and June 5, 2029, or following a fundamental change (as defined in the indenture governing the Notes), in each case, at a repurchase price in cash equal to 100% of the principal amount of the Notes being repurchased plus accrued and unpaid interest to, but excluding, the date of repurchase. The Notes are subject to customary events of default, which may result in the acceleration of the maturity of the Notes. The Notes are the Company’s senior unsecured obligations and rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the Notes, rank equally in right of payment with any of the Company’s unsecured indebtedness that is not so subordinated, are effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness and are structurally subordinated to all indebtedness and other liabilities of the Company’s subsidiaries. The Company received $222.5 million from the issuance of the Notes, net of $7.5 million of debt issuance costs incurred. The debt issuance costs are being amortized over a seven -year period using the effective interest method. The Company used all of the net proceeds to fund the acquisition of AngioScore (see Note 2, “Business Combinations”). Term Loan Facility and Revolving Loan Facility On December 7, 2015, the Company entered into a term credit and security agreement (the “Term Loan Credit Agreement”) and a revolving credit and security agreement (the “Revolving Loan Credit Agreement”, and together with the Term Loan Credit Agreement, the “Credit Agreements”) with MidCap Financial Trust and the other lenders party thereto. The Credit Agreements replace the Credit and Security Agreement (the “Wells Fargo Credit Agreement”) entered into by the Company and Wells Fargo Bank, National Association on February 25, 2011. The Term Loan Credit Agreement provides for a five -year $60 million Term Loan Facility and the Revolving Loan Credit Agreement provides for a five -year $50 million Revolving Loan Facility. The Revolving Loan Facility may be increased to up to $70 million , subject to approval. The obligations of the Company under the Credit Agreements are secured by a lien on substantially all of the assets of the Company. The Term Loan Facility bears interest at the LIBOR Rate (as defined in the Term Loan Credit Agreement) plus an applicable margin of 7.50% per annum; provided that the applicable margin will be reduced to 6.50% if the Company’s EBITDA (as defined in the Term Loan Credit Agreement) is equal to or greater than $6 million for a specified prior period and no default or event of default has occurred and is occurring. The Company may prepay all or a portion of the Term Loan Facility, subject to certain conditions and a prepayment fee, as specified in the Credit Agreements. The Term Loan Facility is subject to an exit fee of 4.0% of the amount advanced under the Term Loan Facility. Interest-only payments are due during the first 24 months of the Term Loan Facility, with principal payments beginning thereafter in equal monthly installments until maturity, provided that the Company may postpone making principal payments for an additional 12 months if certain conditions are met and the Administrative Agent and lenders agree to such extension. If the Administrative Agent and lenders do not agree to such extension, the prepayment fee and unearned portion of the exit fee will be waived. The Company may borrow under the Revolving Loan Facility subject to borrowing base limitations, which allow the Company to borrow based on the value of eligible accounts receivable and inventory balances. As of December 31, 2016 , the borrowing base was $36.6 million , based on the Company’s accounts receivable and inventory balances. Amounts drawn under the Revolving Loan Facility bear interest at the LIBOR Rate (as defined in the Revolving Loan Credit Agreement) plus 4.45% per annum, while the undrawn portion is subject to an unused line fee of 0.5% per annum. The Revolving Loan Facility is subject to a minimum balance, such that the Company pays the greater of (i) interest accrued on the actual amount drawn under the Revolving Loan Facility and (ii) interest accrued on 35% of the average borrowing base prior to the first anniversary of the Revolving Loan Facility and 50% of the average borrowing base thereafter. The Company may prepay and re-borrow amounts borrowed under the revolving line of credit without penalty. The Credit Agreements require us to maintain minimum cash and cash equivalents of not less than $10 million and achieve net revenue in excess of certain specified thresholds. These agreements also contain certain restrictive covenants that limit and in some circumstances prohibit our ability to, among other things incur additional debt, sell, lease or transfer our assets, pay dividends on our common stock, make capital expenditures and investments, guarantee debt or obligations, create liens, repurchase our common stock, enter into transactions with our affiliates and enter into certain merger, consolidation or other reorganization transactions. The Credit Agreements contains customary events of default, including the failure to make required payments, the failure to comply with certain covenants or other agreements, the occurrence of a material adverse change, failure to pay certain other indebtedness and certain events of bankruptcy or insolvency. Upon the occurrence and continuation of an event of default, amounts due under the Credit Agreements may be accelerated. At closing, the Company received $60.0 million under the Term Loan Facility and drew $18.0 million under the Revolving Loan Facility for general working capital and corporate purposes, as well as for the repayment of approximately $3.0 million outstanding under the Wells Fargo Credit Agreement. During 2015, the Company recorded a write-off of $0.2 million in unamortized debt issuance costs related to the extinguishment of the Wells Fargo line of credit and incurred $0.7 million in debt issuance costs related to the Term Loan Facility and Revolving Loan Facility. As of December 31, 2016 , the Term Loan Facility and Revolving Loan Facility had outstanding balances of $60.0 million and $24.7 million , respectively. The interest rate on the Term Loan Facility was 8.12% at December 31, 2016 , and the monthly weighted average interest rate on the Revolving Loan Facility was 5.07% at December 31, 2016 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The sources of (loss) income before income taxes are as follows: (in thousands) 2016 2015 2014 United States $ (53,972 ) $ (58,252 ) $ (43,217 ) Foreign (primarily the Netherlands) (3,361 ) (496 ) 1,994 (Loss) income before income taxes $ (57,333 ) $ (58,748 ) $ (41,223 ) Income tax expense (benefit) attributable to (loss) income before income taxes consists of the following: (in thousands) 2016 2015 2014 Current: Federal $ — $ — $ — State 109 126 72 Foreign 177 114 515 286 240 587 Deferred: Federal 439 400 (874 ) State 12 36 (85 ) Foreign 50 50 50 501 486 (909 ) Income tax (benefit) expense $ 787 $ 726 $ (322 ) Income tax (benefit) expense attributable to loss before income taxes differed from the amounts computed by applying the U.S. federal income tax rate of 35% for the year ended December 31, 2016 and 34% for the years ended December 31, 2015 and 2014 to loss before income taxes as a result of the following: (in thousands) 2016 2015 2014 Computed expected tax (benefit) expense $ (20,067 ) $ (19,974 ) $ (14,016 ) Increase (reduction) in income tax (benefit) expense resulting from: State and local income taxes, net of federal impact (1,358 ) (2,270 ) (1,211 ) Stock-based compensation 1,291 1,028 46 Nondeductible expenses 284 517 2,652 Change in valuation allowance 18,501 31,037 13,540 Change in contingent consideration liability 69 (7,870 ) — Release of valuation allowance related to AngioScore acquisition — — (1,266 ) Change in deferred rate (1,450 ) (75 ) 193 Other 833 — — Foreign operations 401 616 179 Research and development credit 2,283 (2,283 ) (439 ) Income tax (benefit) expense $ 787 $ 726 $ (322 ) Included in the $0.3 million income tax benefit for the year ended December 31, 2014 is a $1.3 million tax benefit from the release of valuation allowance of the Company’s deferred tax assets (“DTAs”). In connection with the acquisition of AngioScore during the year ended December 31, 2014, deferred tax liabilities (“DTLs”) were established for the book-tax basis differences related to the non-goodwill intangible assets. These DTLs exceeded the acquired DTAs by $1.3 million . The net DTLs from this acquisition create an additional source of taxable income to realize a portion of the Company’s DTAs for which a valuation allowance is no longer needed. The impact on the Company’s DTAs and DTLs caused by the acquisition is recorded outside of acquisition accounting. Accordingly, the valuation allowance on a portion of the Company’s DTAs was released and resulted in an income tax benefit of $1.3 million . The tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) at December 31, 2016 and 2015 are as follows: (in thousands) 2016 2015 Deferred tax assets: Net operating loss carryforwards–U.S. and related states $ 87,116 $ 74,886 Net operating loss carryforwards–foreign 1,289 286 Charitable contribution carryover 204 219 Capital loss carryover — 131 Amortization of intangibles 1,295 1,146 Stock compensation expense related to nonqualified stock options 6,275 3,914 Research and experimentation tax credit 4,480 7,383 Alternative minimum tax credit 298 298 Accrued liabilities 2,144 2,110 Inventories 3,283 2,680 Deferred revenue 540 512 106,924 93,565 Less valuation allowance (79,291 ) (60,790 ) Deferred tax assets, net $ 27,633 $ 32,775 Deferred tax liabilities: Equipment $ (325 ) $ (2,152 ) Long-lived intangible assets (29,674 ) (32,538 ) Total deferred tax liabilities $ (29,999 ) $ (34,690 ) An income tax benefit of $0.3 million , $2.4 million and $3.0 million related to the exercise of stock options for the years ended December 31, 2016 , 2015 and 2014 , respectively, will be added to other paid-in capital if and when the tax benefit is realized. With the adoption of ASU 2016-09 in the first quarter of 2017, going forward unrealized income tax benefits will be recorded as a net operating loss DTA with a corresponding valuation allowance. As of December 31, 2016 , the Company has unrestricted U.S. federal net operating loss carryforwards of approximately $249.7 million and state net operating loss carryforwards of $189.4 million to reduce future taxable income, which expire primarily from 2019 through 2036. An alternative minimum tax credit carryforward of approximately $0.3 million is available to offset future regular tax liabilities and has no expiration date. For alternative minimum tax purposes, the Company has unrestricted net operating loss carryforwards for U.S. federal income tax purposes of approximately $247.3 million . The Company also has research and experimentation tax credit carryforwards for federal income tax purposes and state income tax purposes at December 31, 2016 of approximately $3.4 million and $1.1 million , respectively, which are available to reduce future federal and state income taxes, if any, and expire at varying dates through 2034. The Company intends to indefinitely reinvest earnings from subsidiaries treated as foreign corporations for U.S. tax purposes. As of December 31, 2016 and 2015 , the Company had a cumulative undistributed deficit related to its foreign subsidiaries of approximately $23.9 million and $20.5 million , respectively. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The Company’s ability to realize the benefit of its deferred tax assets in future periods will depend on the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. Due to the Company’s history of losses and its planned near-term investments in its growth, the Company continues to record a valuation allowance against substantially all of its deferred tax assets that are in excess of its deferred tax liabilities. The Company will continue to assess the need for a valuation allowance in future periods and does not expect to reduce the valuation allowance against its deferred tax assets until it has a sufficient historical trend of taxable income and can predict future income with a higher degree of certainty. In the event there is a change in circumstances in the future which would affect the utilization of the Company’s deferred tax assets, the tax provision in that period would be adjusted by the amount of the assets then deemed to be realizable. As of December 31, 2016 , the Company classified approximately $0.1 million of its tax credit carryforwards as uncertain. This amount is reported as a reduction of the Company’s deferred tax asset. The Company classifies interest and penalties expense related to income tax liabilities as an income tax expense. There are no significant interest and penalties recognized in the consolidated statements of operations and comprehensive loss or on the consolidated balance sheet. The Company files tax returns in the U.S., Puerto Rico, Canada, and in each of the European countries in which the Company has subsidiaries. The tax years 2012 through 2016 remain open to examination by the major taxing jurisdictions to which the Company is subject. The IRS completed a corporate income tax audit during 2012 for the Company’s 2009 and 2010 tax years. No adjustments were made as a result of the audit. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Litigation The Company is from time to time subject to, and is presently involved in, various pending or threatened legal actions and proceedings, including those that arise in the ordinary course of its business. Such matters are subject to many uncertainties and to outcomes the financial impacts of which are not predictable with assurance and that may not be known for extended periods of time. The Company records a liability in its consolidated financial statements for costs related to claims, settlements, and judgments where management has assessed that a loss is probable and an amount can be reasonably estimated. Otherwise, the Company expenses these costs as incurred. Under U.S. GAAP, an event is “reasonably possible” if “the chance of the future event or events occurring is more than remote but less than likely” and an event is “remote” if “the chance of the future event or events occurring is slight”. If the estimate of a probable loss is a range and no amount within the range is more likely than any other amount, then the Company accrues the minimum amount of the range. Unless included in the Company’s legal accrual or otherwise indicated below, a range of loss associated with any individual material legal proceeding cannot be reasonably estimated. The Company’s significant legal proceedings are discussed below. The costs associated with such proceedings or other legal proceedings that may be commenced could have a material adverse effect on the Company’s business, results of operations, financial position, or liquidity. TriReme Patent Infringement and Breach of Fiduciary Duty In July 2012, AngioScore sued TriReme Medical, Inc. (“TriReme”), Eitan Konstantino (“Konstantino”), Quattro Vascular Pte, Ltd. (“Quattro”), and QT Vascular Ltd. (“QT Vascular”), in the U.S. District Court for the Northern District of California (the “District Court”), alleging patent infringement. In June 2014, AngioScore amended its complaint to allege state law claims (i) that Konstantino, a former founder, officer, and director of AngioScore, breached his fiduciary duties to AngioScore by developing the Chocolate balloon catheter while serving as a director of AngioScore, and (ii) against the other defendants for aiding and abetting that breach. In July 2015, the District Court ruled in favor of AngioScore, finding that Konstantino breached his fiduciary duties to AngioScore, that TriReme and Quattro aided and abetted that breach, and that QT Vascular was liable for the acts of TriReme and Quattro. The District Court awarded AngioScore $20.034 million against all defendants plus disgorgement from Konstantino of all benefits he accrued from his breach of fiduciary duties. In September 2015, a jury found against AngioScore in the patent infringement case. Following an appeal by the defendants, in July 2016, the United States Court of Appeals for the Federal Circuit (the “Federal Circuit”) reversed the state law rulings on procedural grounds, finding that the District Court lacked jurisdiction to hear the state law claims, and affirmed the District Court’s ruling that the defendants were not entitled to attorneys’ fees in the patent infringement case. In August 2016, AngioScore filed a petition for rehearing of the order reversing the District Court’s breach of fiduciary duty rulings, which the Federal Circuit denied. The Federal Circuit remanded the matter to the District Court for dismissal of the state law claims, which the District Court did in February 2017. TriReme Inventorship In June 2014, TriReme sued AngioScore in the District Court seeking to change the inventorship of certain patents owned by AngioScore. TriReme alleged that an Israeli physician, Chaim Lotan, should be named as a co-inventor on three patents owned by AngioScore. Dr. Lotan allegedly assigned any rights he may have had in the three patents to TriReme. In March 2015, the District Court granted AngioScore’s motion to dismiss this case. TriReme appealed the District Court’s ruling, and in February 2016, an appellate court reversed the District Court’s ruling dismissing the case and remanded the case for further proceedings. In January 2017, AngioScore filed a motion for summary judgment, requesting the District Court to dismiss the case. Konstantino Indemnification and Advancement of Fees In May 2014, Konstantino sued AngioScore in the Delaware Court of Chancery seeking a ruling that AngioScore must indemnify and advance Konstantino’s attorneys’ fees and costs related to the defense of the breach of fiduciary duty claims and his pursuit in Delaware court for advancement of fees. In June 2014, AngioScore filed counter-claims against Konstantino for violating the AngioScore indemnification agreement and filed a third-party complaint against TriReme, Quattro, and QT Vascular seeking contribution from the defendant companies for amounts advanced to Konstantino. The court held in August 2014 that AngioScore was required to advance the former director’s attorneys’ fees and costs. AngioScore filed a motion for summary judgment, and in November 2015, the court granted in part AngioScore’s motion and ordered that TriReme is liable for 50% of advanced fees and costs, and must pay all fees and costs to be advanced to Konstantino moving forward until such fees and costs equal the fees and costs paid by AngioScore, and thereafter, the fees and costs must be advanced 50% by TriReme and 50% by AngioScore. The Company cannot at this time determine the likelihood of any outcome and, as of December 31, 2016 and 2015, had no amounts accrued for potential damages. During the years ended December 31, 2016 and 2015, the Company incurred $1.8 million and $19.9 million , respectively, of legal fees associated with these matters, including amounts advanced for certain of Konstantino’s attorneys’ fees and costs in 2015. These expenses are included within the “Acquisition transaction, integration and legal costs” line of the consolidated statements of operations and comprehensive loss. Shareholder Litigation In August 2015, a person purporting to represent a class of persons who purchased securities of the Company between February 19, 2015 and July 23, 2015 filed a lawsuit against the Company and certain of its officers in the United States District Court for the District of Colorado. The lawsuit asserts claims under Sections 10(b) and 20 of the Securities Exchange Act of 1934, alleging that certain of the Company’s public statements concerning its projected revenue for 2015 were false and misleading. In March 2016, plaintiffs filed an amended complaint, including additional allegations challenging certain statements in addition to those concerning the Company’s projected revenue for 2015. The class period in the amended complaint runs from February 27, 2014 to July 23, 2015. The Company believes that the lawsuit is without merit and is defending itself vigorously. In June 2016, the Company filed a motion to dismiss the amended complaint. Although the Company believes it is reasonably possible for a loss to occur, the Company cannot estimate an amount of loss or a range of loss, if any or whether the impact will be material and, as of December 31, 2016, had no amounts accrued for potential damages in this case. Other The Company is involved in other legal proceedings in the normal course of business and does not expect them to have a material adverse effect on its business. Warning Letter In May 2016, the Company received a warning letter from the FDA related to observed non-conformities with current Good Manufacturing Practice (“GMP”), as defined by the FDA, at our Colorado Springs, Colorado facility. In January 2016, following an inspection of certain of the Company’s manufacturing facilities from late 2015 to early 2016, the FDA issued the Company a Form 483 notice, identifying certain observed non-conformities with current GMP. Following the receipt of the Form 483, the Company provided written responses to the FDA detailing corrective actions underway to address the FDA’s observations. The FDA warning letter acknowledges the actions already taken by the Company to address the observations. The Company plans to continue to respond timely and fully to the FDA’s requests and the Company is working diligently to fully remediate the FDA’s observations regarding the Colorado Springs facility. Incremental expenses in connection with the matter for the year ended December 31, 2016 were approximately $3.0 million . We anticipate that we will incur incremental expenses ranging from approximately $10 million to approximately $15 million in 2017 in connection with remediating the warning letter. The Company is continuing to manufacture and ship disposable products from the Colorado Springs facility and currently does not anticipate that customer orders will be impacted while the Company works to resolve the FDA’s concerns. Until the violations are corrected, the Company may be subject to additional regulatory action by the FDA and foreign regulatory agencies, including recalls, delays, suspension or withdrawal of approvals or clearances, and fines or civil penalties. Voluntary Recall In late October 2016, the Company initiated a voluntary recall of specific lots produced since April 2016 of its ELCA Coronary Laser Atherectomy Catheter, Turbo Elite Laser Atherectomy Catheter, and Bridge Occlusion Balloon products. The recall was due to potentially compromised integrity of sterile packaging of the products caused by pinholes in the outer package, which we purchase from a third party and do not manufacture ourselves. The decision to initiate the recall was not based on any reported adverse events or customer complaints. The FDA was informed of this action and agreed to the Company’s recall plan to replace units impacted. The FDA classified the recalls as Class II. The Company also made required communications to various regulatory bodies outside of the United States. The recall has been substantially completed and the costs of the recall to date have not been material and the remaining anticipated costs are not expected to be material to the Company’s financial results. Leases The Company leases office space, furniture, vehicles and equipment under noncancelable operating leases with terms that expire at various dates through 2023. The future minimum payments under noncancelable operating leases as of December 31, 2016 were as follows: (in thousands) Operating Leases Years ending December 31: 2017 $ 3,472 2018 3,454 2019 3,151 2020 3,116 2021 2,472 Thereafter 4,877 $ 20,542 Rent expense under operating leases totaled approximately $4.1 million , $3.5 million , and $2.7 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On January 13, 2017, the Compensation Committee of the Board of Directors of the Company approved the grant of PSU awards (the “2017 PSUs”) to the Company’s named executive officers and certain other employees pursuant to the Company’s 2016 Incentive Award Plan. The award agreement for the 2017 PSUs (the “2017 PSU Grant Form”) provides, among other things, that (i) each 2017 PSU that vests represents the right to receive one share of the Company’s common stock; (ii) the 2017 PSUs vest based on the Company’s achieving specified performance measurements over a performance period of three years, beginning January 1, 2017; (iii) the performance measurements include revenue and EBITDA, each as defined in the 2017 PSU Grant Form; (iv) threshold, target and maximum payout opportunities established for the 2017 PSUs will be used to calculate the number of shares that will be issuable when the award vests, which may range from 0% to 200% of the target amount; (v) any 2017 PSUs that are earned are scheduled to vest and be settled in shares of the Company’s common stock at the end of the performance period; (vi) all or a portion of the 2017 PSUs may vest following a change of control, a termination of service without cause or for good reason or a termination of service by reason of death or disability (each as described in greater detail in the 2017 PSU Grant Form); and (vii) except as provided above, any unvested 2017 PSUs will be forfeited upon a recipient’s termination of employment with the Company. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Selected Quarterly Financial Information [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) 2016 2015 Q1 Q2 Q3 Q4 Q1(1) Q2(1)(2) Q3(1)(3) Q4(1)(4)(5) (In thousands, except per share amounts) Net sales $ 62,884 $ 67,748 $ 68,265 $ 71,926 $ 57,422 $ 61,677 $ 61,660 $ 65,197 Gross profit 46,802 50,765 51,381 53,549 42,369 45,763 45,851 48,839 Net loss (17,291 ) (14,906 ) (13,312 ) (12,611 ) (27,305 ) (7,216 ) (14,493 ) (10,460 ) Net loss per share (6): Basic and diluted $ (0.40 ) $ (0.35 ) $ (0.31 ) $ (0.29 ) $ (0.65 ) $ (0.17 ) $ (0.34 ) $ (0.25 ) (1) During the first, second, third and fourth quarters of 2015, the Company incurred $10.4 million , $11.1 million , $5.4 million and $2.4 million , respectively, in transaction, integration and legal costs related to the acquisitions of AngioScore and Stellarex. See Note 2, “Business Combinations.” (2) During the second quarter of 2015, the Company reduced its contingent consideration liability by $17.8 million as a result of a decrease in future revenue estimates for the AngioSculpt products. See Note 2, “Business Combinations.” (3) During the third quarter of 2015, the Company recorded an intangible asset impairment of $2.5 million as a partial impairment of the IPR&D intangible assets acquired as part of the AngioScore acquisition. The Company also reduced the contingent consideration liability related to regulatory milestone payments by $4.3 million . See Note 2, “Business Combinations.” (4) During the fourth quarter of 2015, the Company reduced its contingent consideration liability by $3.7 million as a result of a decrease in future revenue estimates for the AngioSculpt products. (5) In the fourth quarter of 2015, the Company revised its estimate related to the achievement of the PSU performance targets, the cumulative effect of which resulted in an approximate $1.7 million reversal of amounts previously recorded. (6) The sum of the quarterly net income per share amounts may not total to each full year amount because these computations are made independently for each quarter and for the full year, and take into account the weighted average number of common stock equivalent shares outstanding for each period. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS Additions Description Balance at Beginning of Year Charged (Credited) to Revenue, Costs or Expenses Charged Deductions (2) Balance at End of Year (In thousands) Year ended December 31, 2016: Allowance for doubtful accounts and sales returns $ 1,906 $ 2,319 $ — $ 2,596 $ 1,629 Inventory reserves 3,871 1,051 — 1,294 3,628 Valuation allowance for deferred tax assets 60,790 18,501 — — 79,291 Year ended December 31, 2015: Allowance for doubtful accounts and sales returns $ 1,615 $ 2,074 $ — $ 1,783 $ 1,906 Inventory reserves 2,419 2,867 — 1,415 3,871 Valuation allowance for deferred tax assets 29,815 30,975 — — 60,790 Year ended December 31, 2014: Allowance for doubtful accounts and sales returns $ 782 $ 2,271 $ — $ 1,438 $ 1,615 Inventory reserves 918 426 1,267 192 2,419 Valuation allowance for deferred tax assets 11,794 13,540 5,747 1,266 29,815 (1) During 2014, as part of purchase accounting at the AngioScore acquisition date, inventory reserves were established for potentially expired or obsolete AngioScore inventory, and a valuation allowance was established against a portion of AngioScore deferred tax assets related to net operating losses. (2) Deductions represent receivables written-off and credits granted for customer returns, inventory write-offs, and reductions in the valuation allowance for deferred tax assets due primarily to the use or expiration of net operating losses. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates Preparing the consolidated financial statements in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) requires management of the Company to make several estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include the carrying amount of property and equipment, goodwill and intangible assets; valuation allowances for receivables, inventories, sales returns and deferred income tax assets; contingent consideration liabilities for acquisitions; stock-based compensation expense; estimated clinical trial expenses; accrued costs for incurred but not reported claims under partially self-insured employee health benefit programs; and loss contingencies, including those related to litigation. Actual results could differ from those estimates. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. Noncurrent contingent consideration liabilities have been combined into noncurrent accrued liabilities on the consolidated balance sheets for all periods presented. Additionally, amortization of debt issuance costs have been included in interest expense in Note 10, “Segment and Geographic Reporting”. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. At times, the Company maintains deposits in financial institutions in excess of federally insured limits. |
Financial Instruments | Financial Instruments Financial instruments included in our financial statements are comprised of cash and cash equivalents, trade accounts receivable, accounts payable, certain accrued liabilities, a line of credit facility (the “Revolving Loan Facility”), convertible senior notes (“Notes”), a term loan facility (the “Term Loan Facility”) and contingent consideration liabilities. |
Fair-Value Measurements | Fair Value Measurements Fair value is defined as an exit price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Authoritative guidance establishes a three-level hierarchy for disclosure that is based on the extent and level of judgment used to estimate the fair value of assets and liabilities. • Level 1 Inputs - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. • Level 2 Inputs - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. • Level 3 Inputs - Unobservable inputs for the asset or liability. The Company’s cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are carried at amortized cost, as the fair values of these instruments approximate their carrying values due to their short-term nature. As of December 31, 2016 , cash equivalents consisted of money market accounts and U.S. treasury securities with original maturities of three months or less, which the Company classified as Level 1, given the active market for these accounts. The fair value of the Notes is influenced by interest rates, the stock price of the Company’s common stock, and stock price volatility, which is determined by market trading. As of December 31, 2016 , the estimated fair value of the Notes was $241.2 million and was determined based on quoted market prices in a secondary market, which is considered a Level 2 Input measurement. The carrying amounts of the Term Loan Facility and Revolving Loan Facility are considered reasonable estimates of fair value due to their floating-rate terms. See further discussion of these items in Note 11, “Debt.” |
Trade Accounts Receivable | Trade Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance for doubtful accounts based upon an aging of accounts receivable, historical experience and management judgment. Larger or past due accounts receivable balances are reviewed individually for collectibility. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is remote. |
Inventory | Inventory Inventory is recorded at the lower of cost or market. Cost is determined using the first-in, first-out method. The Company calculates inventory reserves for estimated obsolescence or excess inventory based on historical usage and sales, and assumptions about future demand for and utilization of its products, and these reserves create a new cost basis for the subsequent accounting of the inventory. These estimates for excess and obsolete inventory are reviewed and updated on a quarterly basis. Increases in the inventory reserves result in a corresponding expense, which is recorded to cost of goods sold. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Repairs and maintenance costs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets of three to five years for manufacturing equipment, equipment held for rental or loan, computers, and furniture and fixtures. The building the Company owns is depreciated using the straight-line method over its estimated useful life of 20 years. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life of the asset. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of costs over the fair value of the identifiable net assets of businesses acquired. Goodwill and intangible assets acquired in a business combination and determined to have indefinite useful lives are not amortized, but instead are tested for impairment at least annually and whenever events or circumstances indicate the carrying amount of the asset may not be recoverable. In evaluating goodwill and indefinite-lived intangible assets, the Company performs an assessment of qualitative factors to determine if goodwill is more likely than not impaired and whether it is necessary to perform the two-step goodwill impairment test. The Company conducts its annual impairment test as of December 31 of each year. See further discussion in Note 5, “Goodwill and Other Intangible Assets.” |
Long-Lived Assets and In Process Research and Development | Long-Lived Assets The Company reviews long-lived assets and certain amortizable intangibles for impairment whenever events or circumstances indicate the carrying amount of an asset may not be recoverable. The carrying value of a long-lived asset is considered impaired when the expected undiscounted cash flows from such asset are separately identifiable and are less than the carrying value. Fair value is determined by reference to quoted market prices, if available, or the utilization of certain valuation techniques such as cash flows discounted at a rate commensurate with the risk involved. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less selling costs. There were no impairment charges in 2016 and 2015 related to long-lived assets. In 2014, the Company recorded an intangible asset impairment charge for intangible assets acquired in 2013, as further discussed in Note 5, “Goodwill and Other Intangible Assets.” Intangible assets with finite lives are amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment whenever events or circumstances indicate their carrying amount may not be recoverable. Intangible assets with finite lives, which consist primarily of technology intangible assets, customer relationships, trademarks, and trade names, are amortized using the straight-line method over periods that currently range from two to twelve years. In-Process Research and Development The Company defines in process research and development (“IPR&D”) as the value of technology acquired for which the related products have not yet reached technological feasibility and have no future alternative use. The primary basis for determining the technological feasibility of these projects is obtaining regulatory approval to market the underlying products in an applicable geographic region. IPR&D acquired in a business combination requires the estimated fair value of IPR&D to be capitalized as an indefinite-lived intangible asset until completion or abandonment of the IPR&D project. Upon completion of the development project, the IPR&D is amortized over its estimated useful life. If the IPR&D projects are abandoned, the related IPR&D assets would be written off. The estimated fair value of IPR&D is determined using an income approach model. In 2015, the Company recorded an intangible asset impairment charge related to a partial impairment of the IPR&D intangible assets acquired as part of the AngioScore acquisition. At December 31, 2016 , IPR&D represented an estimate of the fair value of in-process technology acquired in the AngioScore and Stellarex acquisitions. See further discussion in Note 2, “Business Combinations.” |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectibility is reasonably assured. Revenue from the sale of the Company’s disposable products is recognized when products are shipped to the customer and title transfers. In general, customers do not have a right of return for credit or refund. However, the Company allows returns under certain circumstances and records an allowance for sales returns based upon an analysis of revenue transactions and historical experience of sales returns. Write-offs to customer account balances for product returns are charged against the allowance for sales returns. Revenue from the sale of CVX-300 laser systems is recognized after completion of contractual obligations, which generally include delivery and installation of the systems. The Company’s field service engineers are responsible for installation of each laser system. The Company generally provides a one-year warranty on laser sales, which includes parts, labor and replacement gas. Upon expiration of the warranty period, the Company offers similar service to its customers under annual service contracts or on a fee-for-service basis. Revenue from fee-for-service arrangements is recognized upon completion of the related service. The Company accounts for service provided during the one-year warranty or service contract period as a separate unit of accounting. As such, the fair value of this service is deferred and recognized as revenue on a straight-line basis over the related warranty or service contract term, and warranty and service costs are expensed in the period they are incurred. Revenue recognized associated with service performed during the warranty period totaled $0.7 million , $0.6 million and $0.7 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. The Company offers four laser system placement programs, which are described below, in addition to the sale of laser systems: Straight rental program. The Company offers a straight monthly rental program for laser systems, and customers pay rent of $2,500 to $3,500 per month under this program. Rental revenue is invoiced and recognized monthly. The laser system is transferred to the equipment held for rental or loan account upon shipment, and depreciation expense is included in cost of revenue based upon the five -year expected life of the laser system. Costs to maintain the equipment are expensed as incurred. Volume-based rental programs. Rental revenue under these programs varies on a sliding scale depending on the customer’s purchases of disposable products (either unit or dollar volume) each month. Rental revenue is invoiced and recognized monthly. The laser system is transferred to the equipment held for rental or loan account upon shipment, and depreciation expense is included in cost of revenue based upon the five -year expected life of the laser system. Costs to maintain the equipment are expensed as incurred. Capital included rental program. Under this program, the customer agrees to a catheter price list that includes a per-unit surcharge covering the cost of the laser system. Customers are expected, but not required, to make minimum purchases of catheters at regular intervals, and the Company reserves the right to require the customer to return the laser system if the customer does not make minimum purchases of catheters. The Company recognizes the total surcharge as rental revenue upon shipment of the catheters, believing it to be the best measurement of revenue associated with the customer’s use of the laser system. The laser system is transferred to the equipment held for rental or loan account upon shipment, and depreciation expense is included in cost of revenue based upon the five -year expected life of the laser system. Costs to maintain the equipment are expensed as incurred. Evaluation program. The Company loans laser systems to institutions for use over a short period, usually three months. The loan of the equipment is to create awareness of the Company’s products and allows users to assess their therapeutic capabilities. While no revenue is earned or recognized in connection with the placement of a loaned laser, sales of disposable products result from the laser placement. The laser system is transferred to the equipment held for rental or loan account upon shipment and depreciation expense is recorded within selling, general and administrative expense based upon the five -year expected life of the laser system. Costs to maintain the equipment are expensed as incurred. The Company sells to end-users in the U.S. and internationally as well as to certain international distributors. Sales to international distributors represented approximately 8% of the Company’s total revenue in 2016 . Distributor agreements are in place with each distributor, which outline the significant terms of the transactions between the distributor and the Company. The terms and conditions of sales to the Company’s international distributors do not differ materially from the terms and conditions of sales to its domestic and international end-user customers. Sales to distributors are recognized either at shipment or a later date in accordance with the agreed upon contract terms with distributors, provided that the Company has received an order, the price is fixed or determinable, collectibility of the resulting receivable is reasonably assured, all contractual obligations have been met and the Company can reasonably estimate returns. The Company provides products to its distributors at agreed wholesale prices and typically does not provide any special right of return or exchange, discounts, significant sales incentives, price protection or stock rotation rights to any of its distributors. |
Deferred Revenue | Deferred Revenue Deferred revenue was $1.6 million at both December 31, 2016 and 2015 , respectively. These amounts primarily relate to payments in advance for various product maintenance contracts in which revenue is initially deferred and recognized over the life of the contract, which is generally one year, and to deferred revenue associated with service provided to customers during the warranty period after the sale of laser systems. |
Medical Device Excise Tax | Medical Device Excise Tax The Patient Protection and Affordable Care Act of 2010 imposes a medical device excise tax on medical device manufacturers on their sales in the U.S. of certain devices, which was effective January 1, 2013. The excise tax is 2.3% of the taxable base and applies to a substantial majority of the Company’s U.S. sales. In December 2015, legislation was enacted that suspends the medical device excise tax for 2016 and 2017. As a result, the Company did not incur any excise tax for the year ended December 31, 2016 . For the years ended December 31, 2015 and 2014 the Company incurred $3.5 million , and $2.8 million of excise tax, respectively, which is recorded in the consolidated statements of operations and comprehensive loss as an operating expense under the caption “Medical device excise tax.” |
Stock-Based Compensation | Stock-Based Compensation The Company measures all employee stock-based compensation awards using a fair value method and records such expense in its consolidated financial statements. The estimated value of the portion of the award that is ultimately expected to vest, taking into consideration estimated forfeitures based on the Company’s historical forfeiture rate, is recognized as expense over the requisite service periods in the Company’s consolidated statements of operations and comprehensive loss. The Company estimates the grant date fair value of stock option awards generally on the date of grant using the Black-Scholes option pricing model. For certain options, which contained vesting provisions that included a share price trigger, the Company estimated the fair value of the options using a trinomial lattice model. With respect to performance stock units (“PSUs”), the number of shares that vest and are issued to the recipient is based upon the Company’s performance as measured against specified targets over a specified time period. The fair value of the PSUs is based on the Company’s closing stock price on the grant date and its estimate of achieving such performance targets. See further discussion and disclosures in Note 7, “Stock-based Compensation and Employee Benefit Plans.” |
Research, Development and Other Technology | Research, Development and Other Technology Research, development and other technology costs are expensed as incurred and totaled $67.5 million , $64.4 million , and $28.7 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. In addition to product development costs, research, development and other technology costs include royalty expenses that the Company pays to license certain intellectual property incorporated in the Company’s products. Royalty expenses totaled $4.8 million , $3.6 million , and $2.7 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. Clinical trial costs. The Company sponsors clinical trials intended to obtain the necessary clinical data required to obtain approval from the U.S. Food and Drug Administration (“FDA”) and foreign regulatory agencies to market new applications of its technology. Costs associated with these clinical trials are also included within research, development and other technology costs and totaled $15.5 million , $20.0 million , and $4.1 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. The increase in clinical trial costs during the years ended December 31, 2016 and 2015 is primarily related to additional clinical trials for Stellarex. In certain cases, substantial portions of the Company’s clinical trials are performed by third-party clinical research organizations (“CROs”). These CROs generally bill monthly for services performed and also bill based upon milestone achievement. The Company accrues for services as provided, when services are performed before milestone payments are made. If the Company prepays CRO fees or milestone payments, the Company records the prepayment as a prepaid asset and amortizes the asset into research, development and other technology expense over the period of time the contracted services are performed based upon the number of patients enrolled, “patient months” incurred and the duration of the study. The Company monitors patient enrollment, the progress of clinical studies and related activities through internal reviews of data reported to the Company by the CROs and correspondence with the CROs. The Company periodically evaluates its estimates to determine if adjustments are necessary or appropriate based on information it receives. |
Foreign Currency Translation | Foreign Currency The Company’s reporting currency is the U.S. dollar. Certain transactions of the Company and its subsidiaries are denominated in currencies other than the U.S. dollar. The functional currency of the Company’s foreign operations generally is the applicable local currency. Assets and liabilities of non-U.S. dollar functional currency entities are translated to U.S. dollars at period-end exchange rates, and the resulting gains and losses arising from the translation of those net assets are recorded as a cumulative translation adjustment, a component of accumulated other comprehensive loss on the consolidated balance sheets. Elements of the consolidated statements of operations and comprehensive loss are translated at the average monthly currency exchange rates in effect during the period and foreign currency transaction gains and losses are included in other income (expense). |
Advertising Costs | Advertising Costs The Company expenses advertising costs as incurred. |
Medical Self-Insurance Costs | Medical Self-insurance Costs The Company is partially self-insured for claims relating to employee medical and dental benefit programs. The medical self-insurance program is administered by a third-party and contains stop-loss provisions on both an individual claim basis and in the aggregate. The Company records claims incurred as an expense each period, including an estimate of claims incurred but not yet reported, which is revised quarterly. The Company uses claims data and historical experience, as applicable, to estimate the liability for unreported claims. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, operating losses and research and development and alternative minimum tax credit carryforwards. A valuation allowance is required to the extent it is more-likely-than-not that a deferred tax asset will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company recognizes the financial statement effects of a tax position when it is more-likely-than-not, based on technical merits, that the position will be sustained upon examination. There are no significant interest and penalties recognized in the consolidated statements of operations and comprehensive loss or on the consolidated balance sheet. See further discussion and disclosures in Note 12, “Income Taxes.” |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment . The guidance removes the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance becomes effective for annual reporting periods beginning after December 15, 2019 with early adoption permitted, and applied prospectively. The Company is currently evaluating this guidance and its impact on its results of operations, financial position, and consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other than Inventory . The guidance requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. The guidance becomes effective for annual reporting periods beginning after December 15, 2017 with early adoption permitted This ASU is required to be adopted using the modified retrospective approach, with a cumulative catch-up adjustment to retained earnings in the period of adoption. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company is in the process of determining the timing of adoption and assessing the impact of ASU 2016-15 on its consolidated statements of cash flows. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . ASU 2016-09 simplifies several aspects related to the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements and classification on the statement of cash flows. For public business entities, ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The impact of adopting this standard on the Company’s consolidated financial statements is dependent upon the intrinsic value of share-based compensation awards at the time of exercise or vesting and will result in increased net operating losses which will increase our deferred tax assets and result in an offsetting valuation allowance. The Company adopted this ASU on January 1, 2017. The Company does not expect adoption of the new stock compensation standards to have a material impact on the recognition of stock compensation. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which requires a lessee to recognize on its balance sheet the assets and liabilities for the rights and obligations created by leases with a lease term of more than twelve months. Leases will continue to be classified as either financing or operating, with classification affecting the recognition, measurement and presentation of expenses and cash flows arising from a lease. Lessor accounting is largely unchanged from previous GAAP. However, changes were made to align the guidance with the lessor guidance and the new revenue recognition guidance under ASU 2014-09 referenced below. For public business entities, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and requires a modified retrospective approach to adoption for lessees related to capital and operating leases existing at, or entered into after, the earliest comparative period presented in the financial statements. Early adoption is permitted. The Company is in the process of determining the timing and method of adoption and assessing the impact of ASU 2016-02 on its results of operations, financial position, and consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which will replace most existing revenue recognition guidance in U.S. GAAP. The core principle of ASU 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled in exchange for those goods or services. To achieve this core principle, ASU 2014-09 contains a five-step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when (or as) an entity satisfies a performance obligation. ASU 2014-09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing . ASU 2016-10 provides for amendments to ASU 2014-09, reducing the complexity when applying the guidance for identifying performance obligations and improving the operability and understandability of the license implementation guidance. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients . ASU 2016-12 provides for amendments to ASU 2014-09, amending the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. ASU 2016-12 clarifies that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy U.S. GAAP. In addition, ASU 2016-12 clarifies how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. In December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers , which makes minor corrections or minor improvements to ASU 2014-09 that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Under ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , issued in August 2015, these amendments are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, and either the full retrospective method or the modified retrospective transition method is allowed. The Company will adopt the guidance for the fiscal year beginning after December 15, 2017 and apply the modified retrospective method. The modified retrospective approach requires the disclosure of the difference between revenue and costs that would have been recognized under current GAAP in the current period and the amounts that are recognized under the new standard. While a significant portion of our revenue will continue to be in scope of the leasing guidance, we are in the process of reviewing our sales contracts to identify any other changes as a result of the new guidance. While we do not expect significant changes, we expect to complete our analysis during the first half of 2017. The Company is not aware of other significant matters that will result from adoption of the revenue standard. The Company has considered all other recently issued accounting pronouncements and does not believe they are of significance, or potential significance, to the Company. |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the allocations to the assets acquired: (in thousands) Allocation of purchase price Amortization period (in years) Inventories $ 1,337 Property and equipment, net 2,701 Total tangible assets acquired 4,038 Less: above market lease assumed 293 Net tangible assets acquired $ 3,745 Intangible assets: In-process research and development (“IPR&D”) 13,680 Technology 9,000 12 Trademark and trade names 400 12 Transition services agreement 530 0.5 Goodwill 2,645 Total purchase price $ 30,000 |
Schedule of Changes In Contingent Consideration | The following table presents changes to the Company’s acquisition-related contingent consideration for the periods ending December 31, 2016 and 2015: 2016 2015 Beginning balance $ 5,153 $ 28,694 Purchase price contingent consideration — — Change in fair value of contingent consideration — (25,819 ) Contingent consideration payments (5,088 ) (393 ) Contingent consideration accretion expense 214 2,671 Ending balance $ 279 $ 5,153 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net | Inventories, net, consisted of the following: December 31, (in thousands) 2016 2015 Raw materials $ 11,070 $ 10,838 Work in process 4,787 2,914 Finished goods 11,785 11,403 $ 27,642 $ 25,155 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net, consisted of the following: December 31, (in thousands) 2016 2015 Equipment held for rental or loan $ 62,972 $ 55,774 Manufacturing equipment and computers 40,656 37,862 Leasehold improvements 10,453 8,984 Furniture and fixtures 5,099 4,840 Building and improvements 1,306 1,306 Land 270 271 Less: accumulated depreciation and amortization (75,929 ) (64,318 ) Total property and equipment, net $ 44,827 $ 44,719 |
Goodwill and Other Intangible27
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in the carrying amount of goodwill by reporting unit for the year ended December 31, 2016 was as follows: (in thousands) U.S. Medical International Medical Total Balance as of December 31, 2015 $ 130,410 $ 22,206 $ 152,616 Impact of changes in foreign currency and other — (3,805 ) (3,805 ) Balance as of December 31, 2016 $ 130,410 $ 18,401 $ 148,811 |
Schedule of Acquired Intangible Assets | Intangible Assets. Acquired intangible assets as of December 31, 2016 and 2015 consisted of the following: (in thousands) December 31, 2016 December 31, 2015 Acquired as part of AngioScore acquisition (Note 2): Technology $ 73,510 $ 73,510 Customer relationships 23,320 23,320 Trademark and trade names 4,380 4,380 In-process research and development 1,254 1,254 Distributor relationships 1,940 1,940 Non-compete agreements 580 580 Acquired as part of Stellarex Acquisition (Note 2): In-process research and development 13,680 13,680 Technology 9,000 9,000 Trademark and trade names 400 400 Transition services agreement 530 530 Acquired as part of Upstream acquisition Technology 2,172 2,172 Non-compete agreement 200 200 Patents 530 530 Less: accumulated amortization (33,267 ) (21,040 ) $ 98,229 $ 110,456 |
Schedule of Acquired Intangible Assets | Intangible Assets. Acquired intangible assets as of December 31, 2016 and 2015 consisted of the following: (in thousands) December 31, 2016 December 31, 2015 Acquired as part of AngioScore acquisition (Note 2): Technology $ 73,510 $ 73,510 Customer relationships 23,320 23,320 Trademark and trade names 4,380 4,380 In-process research and development 1,254 1,254 Distributor relationships 1,940 1,940 Non-compete agreements 580 580 Acquired as part of Stellarex Acquisition (Note 2): In-process research and development 13,680 13,680 Technology 9,000 9,000 Trademark and trade names 400 400 Transition services agreement 530 530 Acquired as part of Upstream acquisition Technology 2,172 2,172 Non-compete agreement 200 200 Patents 530 530 Less: accumulated amortization (33,267 ) (21,040 ) $ 98,229 $ 110,456 |
Schedule of Future Amortization Expense | As of December 31, 2016 , estimated future amortization expense for intangible assets subject to amortization was as follows: (in thousands) Amortization Expense Years ending December 31: 2017 $ 11,587 2018 11,322 2019 11,322 2020 10,957 2021 10,592 Thereafter 28,770 $ 84,550 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Liabilities [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following: December 31, (in thousands) 2016 2015 Accrued payroll and employee-related expenses $ 22,890 $ 15,797 Contingent consideration, current portion 279 5,154 Accrued clinical study expense 2,723 3,868 Deferred rent 1,443 1,485 Accrued sales, income and excise taxes 1,208 1,318 Accrued royalties 1,313 1,044 Accrued interest 1,016 913 Accrued legal costs 847 713 Other accrued expenses 4,350 5,143 Total accrued liabilities 36,069 35,435 Less: long-term portion (1,688 ) (1,759 ) Accrued liabilities, current portion $ 34,381 $ 33,676 |
Stock-Based Compensation and 29
Stock-Based Compensation and Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options, Summary of Assumptions Used | The following is a summary of the assumptions used for the stock options granted during the years ended December 31, 2016 , 2015 and 2014 using the Black-Scholes pricing model: Year Ended December 31, 2016 2015 2014 Expected life (years) 5.8 5.7 5.8 Risk-free interest rate 1.23 % 1.57 % 1.65 % Expected volatility 46.30 % 42.74 % 61.44 % Expected dividend yield — — — |
Stock Options, Schedule of Weighted Average Grant Date Fair Value | The following table summarizes stock option activity during the year ended December 31, 2016 : Shares Weighted Average Exercise Price Weighted Avg. Remaining Contractual Term (In Years) Aggregate Intrinsic Value Options outstanding at January 1, 2016 2,566,088 $ 14.04 Granted 1,015,100 15.67 Exercised (290,384 ) 10.84 Forfeited (231,099 ) 17.13 Options outstanding at December 31, 2016 3,059,705 $ 14.65 6.43 $ 30,902,131 Options exercisable at December 31, 2016 1,836,448 $ 12.49 4.91 $ 22,393,987 |
Schedule of Restricted Stock Award and Restricted Stock Unit Activity | The following table summarizes restricted stock award activity during the year ended December 31, 2016 : Shares Weighted Average Grant Date Fair Value Restricted stock awards outstanding at January 1, 2016 26,463 $ 27.41 Awarded 48,643 18.71 Vested (26,463 ) 27.41 Awards outstanding at December 31, 2016 48,643 $ 18.71 The following table summarizes RSU activity during the year ended December 31, 2016 : Shares Weighted Average Grant Date Fair Value Restricted stock units outstanding at January 1, 2016 204,893 $ 24.08 Awarded 190,776 14.98 Vested/Released (64,759 ) 23.12 Forfeited (68,145 ) 18.73 Restricted stock units outstanding at December 31, 2016 262,765 $ 19.10 |
Schedule of Performance Stock Unit Activity | The following table summarizes PSU activity during the year ended December 31, 2016 : Shares Weighted Average Grant Date Fair Value Performance stock units outstanding at January 1, 2016 496,656 $ 22.82 Awarded (at target performance) 275,330 18.16 Vested/Released (59,799 ) 23.43 Forfeited (49,866 ) 22.70 Performance stock units outstanding at December 31, 2016 662,321 $ 20.83 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities | Stock options, restricted stock, PSUs, and shares issuable upon the conversion of the Notes outstanding at December 31, 2016 , 2015 and 2014 , which are excluded from the computation of diluted net loss per share for those years, are shown in the table below: December 31, 2016 2015 2014 Options to purchase common stock 3,059,705 2,566,088 2,698,911 Non-vested restricted stock 311,408 231,356 208,818 Non-vested performance stock units 662,321 496,656 487,158 Shares issuable upon conversion of the Notes 7,337,459 7,337,459 7,337,459 Potentially dilutive common shares 11,370,893 10,631,559 10,732,346 |
Schedule of Earnings Per Share, Basic and Diluted | A summary of the net loss per share calculation is shown below for the years indicated: 2016 2015 2014 Net loss (in thousands) $ (58,120 ) $ (59,474 ) $ (40,901 ) Common shares outstanding: Historical common shares outstanding at beginning of year (excluding shares of unvested restricted stock) 42,632,771 42,034,063 41,208,096 Weighted average common shares issued 302,671 396,158 471,273 Weighted average common shares outstanding-basic 42,935,442 42,430,221 41,679,369 Effect of dilution from stock options — — — Weighted average common shares outstanding-diluted 42,935,442 42,430,221 41,679,369 Net loss per share, basic and diluted $ (1.35 ) $ (1.40 ) $ (0.98 ) |
Segment and Geographic Report31
Segment and Geographic Reporting (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Reporting Segments | Summary financial information relating to reportable segment operations is shown below. Intersegment transfers as well as intercompany assets and liabilities are excluded from the information provided: For the Year Ended December 31, (in thousands) 2016 2015 2014 Revenue: U.S. Medical: Disposable products $ 215,023 $ 195,816 $ 155,107 Laser, service, and other 10,277 10,867 12,292 Subtotal 225,300 206,683 167,399 International Medical: Disposable products 39,844 34,563 29,703 Laser, service, and other 5,679 4,710 7,812 Subtotal 45,523 39,273 37,515 Total revenue $ 270,823 $ 245,956 $ 204,914 |
Schedule of Segment Reporting Information, by Segment | U.S. Medical International Medical Total 2016 Interest income $ 63 $ — $ 63 Interest expense 13,349 9 13,358 Depreciation and amortization expense 25,704 1,718 27,422 Income tax expense 560 227 787 Segment operating loss (40,416 ) (3,219 ) (43,635 ) Segment net loss (54,333 ) (3,787 ) (58,120 ) Capital expenditures 5,171 183 5,354 Total assets $ 392,776 $ 37,302 $ 430,078 U.S. Medical International Medical Total 2015 Interest income $ 25 $ 4 $ 29 Interest expense 7,878 1 7,879 Depreciation and amortization expense 24,910 1,678 26,588 Income tax (benefit) expense 563 163 726 Segment operating (loss) income (49,548 ) (981 ) (50,529 ) Segment net (loss) income (58,095 ) (1,379 ) (59,474 ) Capital expenditures 9,423 115 9,538 Total assets $ 430,956 $ 37,043 $ 467,999 U.S. Medical International Medical Total 2014 Interest income $ 44 $ 2 $ 46 Interest expense 4,098 10 4,108 Depreciation and amortization expense 15,205 1,608 16,813 Income tax expense (887 ) 565 (322 ) Segment operating (loss) income (39,267 ) 2,317 (36,950 ) Segment net (loss) income (42,628 ) 1,727 (40,901 ) Capital expenditures 6,532 190 6,722 Total assets $ 423,039 $ 34,799 $ 457,838 |
Schedule of Revenue by Product Line | Revenue by Product Line For the Year Ended December 31, (in thousands) 2016 2015 2014 Revenue Disposable products revenue: Vascular intervention $ 181,602 $ 160,480 $ 118,148 Lead management 73,265 69,899 66,662 Total disposable products 254,867 230,379 184,810 Laser, service, and other 15,956 15,577 20,104 Total revenue $ 270,823 $ 245,956 $ 204,914 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | The following table summarizes our total gross outstanding debt as of December 31, 2016 and December 31, 2015 and the significant terms of our borrowing arrangements: Year Ended December 31, Maturity Date Weighted Average Interest Rate (amounts in thousands) 2016 2015 Convertible Senior Notes $ 230,000 $ 230,000 June 1, 2034 2.625% Term Loan Facility 60,000 60,000 December 7, 2020 (1) Revolving Loan Facility 24,712 24,232 December 7, 2020 (1) 314,712 314,232 Less debt issuance cost (5,241 ) (6,323 ) Total $ 309,471 $ 307,909 (1) The interest rates on the Term Loan Facility and Revolving Loan Facility are described below. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Sources of Income (Loss) Before Income Taxes | The sources of (loss) income before income taxes are as follows: (in thousands) 2016 2015 2014 United States $ (53,972 ) $ (58,252 ) $ (43,217 ) Foreign (primarily the Netherlands) (3,361 ) (496 ) 1,994 (Loss) income before income taxes $ (57,333 ) $ (58,748 ) $ (41,223 ) |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense (benefit) attributable to (loss) income before income taxes consists of the following: (in thousands) 2016 2015 2014 Current: Federal $ — $ — $ — State 109 126 72 Foreign 177 114 515 286 240 587 Deferred: Federal 439 400 (874 ) State 12 36 (85 ) Foreign 50 50 50 501 486 (909 ) Income tax (benefit) expense $ 787 $ 726 $ (322 ) |
Schedule of Effective Income Tax Rate Reconciliation | Income tax (benefit) expense attributable to loss before income taxes differed from the amounts computed by applying the U.S. federal income tax rate of 35% for the year ended December 31, 2016 and 34% for the years ended December 31, 2015 and 2014 to loss before income taxes as a result of the following: (in thousands) 2016 2015 2014 Computed expected tax (benefit) expense $ (20,067 ) $ (19,974 ) $ (14,016 ) Increase (reduction) in income tax (benefit) expense resulting from: State and local income taxes, net of federal impact (1,358 ) (2,270 ) (1,211 ) Stock-based compensation 1,291 1,028 46 Nondeductible expenses 284 517 2,652 Change in valuation allowance 18,501 31,037 13,540 Change in contingent consideration liability 69 (7,870 ) — Release of valuation allowance related to AngioScore acquisition — — (1,266 ) Change in deferred rate (1,450 ) (75 ) 193 Other 833 — — Foreign operations 401 616 179 Research and development credit 2,283 (2,283 ) (439 ) Income tax (benefit) expense $ 787 $ 726 $ (322 ) |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) at December 31, 2016 and 2015 are as follows: (in thousands) 2016 2015 Deferred tax assets: Net operating loss carryforwards–U.S. and related states $ 87,116 $ 74,886 Net operating loss carryforwards–foreign 1,289 286 Charitable contribution carryover 204 219 Capital loss carryover — 131 Amortization of intangibles 1,295 1,146 Stock compensation expense related to nonqualified stock options 6,275 3,914 Research and experimentation tax credit 4,480 7,383 Alternative minimum tax credit 298 298 Accrued liabilities 2,144 2,110 Inventories 3,283 2,680 Deferred revenue 540 512 106,924 93,565 Less valuation allowance (79,291 ) (60,790 ) Deferred tax assets, net $ 27,633 $ 32,775 Deferred tax liabilities: Equipment $ (325 ) $ (2,152 ) Long-lived intangible assets (29,674 ) (32,538 ) Total deferred tax liabilities $ (29,999 ) $ (34,690 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | The future minimum payments under noncancelable operating leases as of December 31, 2016 were as follows: (in thousands) Operating Leases Years ending December 31: 2017 $ 3,472 2018 3,454 2019 3,151 2020 3,116 2021 2,472 Thereafter 4,877 $ 20,542 |
Selected Quarterly Financial 35
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Selected Quarterly Financial Information [Abstract] | |
Quarterly Financial Information | 2016 2015 Q1 Q2 Q3 Q4 Q1(1) Q2(1)(2) Q3(1)(3) Q4(1)(4)(5) (In thousands, except per share amounts) Net sales $ 62,884 $ 67,748 $ 68,265 $ 71,926 $ 57,422 $ 61,677 $ 61,660 $ 65,197 Gross profit 46,802 50,765 51,381 53,549 42,369 45,763 45,851 48,839 Net loss (17,291 ) (14,906 ) (13,312 ) (12,611 ) (27,305 ) (7,216 ) (14,493 ) (10,460 ) Net loss per share (6): Basic and diluted $ (0.40 ) $ (0.35 ) $ (0.31 ) $ (0.29 ) $ (0.65 ) $ (0.17 ) $ (0.34 ) $ (0.25 ) (1) During the first, second, third and fourth quarters of 2015, the Company incurred $10.4 million , $11.1 million , $5.4 million and $2.4 million , respectively, in transaction, integration and legal costs related to the acquisitions of AngioScore and Stellarex. See Note 2, “Business Combinations.” (2) During the second quarter of 2015, the Company reduced its contingent consideration liability by $17.8 million as a result of a decrease in future revenue estimates for the AngioSculpt products. See Note 2, “Business Combinations.” (3) During the third quarter of 2015, the Company recorded an intangible asset impairment of $2.5 million as a partial impairment of the IPR&D intangible assets acquired as part of the AngioScore acquisition. The Company also reduced the contingent consideration liability related to regulatory milestone payments by $4.3 million . See Note 2, “Business Combinations.” (4) During the fourth quarter of 2015, the Company reduced its contingent consideration liability by $3.7 million as a result of a decrease in future revenue estimates for the AngioSculpt products. (5) In the fourth quarter of 2015, the Company revised its estimate related to the achievement of the PSU performance targets, the cumulative effect of which resulted in an approximate $1.7 million reversal of amounts previously recorded. (6) The sum of the quarterly net income per share amounts may not total to each full year amount because these computations are made independently for each quarter and for the full year, and take into account the weighted average number of common stock equivalent shares outstanding for each period. |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Narrative) (Details) | 12 Months Ended | ||
Dec. 31, 2016USD ($)program | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Estimated fair value of the Notes | $ 241,200,000 | ||
Intangible asset impairment | 0 | $ 0 | |
Recognition of deferred revenue | $ 700,000 | 600,000 | $ 700,000 |
Number of placement programs | program | 4 | ||
Expected life of laser systems | 5 years | ||
Revenue from international distributors, percentage | 8.00% | ||
Deferred revenue | $ 1,619,000 | 1,621,000 | |
Medical device excise tax, percent of taxable base | 2.30% | ||
Medical device excise tax | $ 0 | 3,465,000 | 2,834,000 |
Research, development and other technology | 67,480,000 | 64,436,000 | 28,675,000 |
Royalty expense | 4,800,000 | 3,600,000 | 2,700,000 |
Clinical trial costs | 15,500,000 | 20,000,000 | 4,100,000 |
Advertising expense | $ 1,300,000 | $ 1,600,000 | $ 2,000,000 |
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Intangible assets, straight-line method, amortization period | 2 years | ||
Minimum | Straight Rental Program | |||
Property, Plant and Equipment [Line Items] | |||
Rental revenue | $ 2,500 | ||
Minimum | Evaluation Program | |||
Property, Plant and Equipment [Line Items] | |||
Loan period of laser systems | 3 months | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Intangible assets, straight-line method, amortization period | 12 years | ||
Maximum | Straight Rental Program | |||
Property, Plant and Equipment [Line Items] | |||
Rental revenue | $ 3,500 | ||
Manufacturing Equipment, Equipment Held for Rental or Loan, Computers, and Furniture and Fixtures | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 3 years | ||
Manufacturing Equipment, Equipment Held for Rental or Loan, Computers, and Furniture and Fixtures | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 5 years | ||
Building | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 20 years |
Business Combinations (Narrativ
Business Combinations (Narrative) (Details) - USD ($) $ in Thousands | Jan. 27, 2015 | Jun. 30, 2014 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||||||||
Acquisition transaction, integration and legal costs | $ 2,400 | $ 5,400 | $ 11,100 | $ 10,400 | $ 1,922 | $ 29,472 | $ 17,288 | ||||
Purchase price contingent consideration | 0 | 0 | |||||||||
Reduction in fair value of contingent consideration liability | $ (3,700) | (4,300) | $ (17,800) | 0 | (25,819) | (1,064) | |||||
Intangible asset impairment | $ 2,500 | $ 2,500 | 0 | 2,496 | 4,138 | ||||||
Amortization of acquired inventory step-up | 0 | 251 | $ 2,074 | ||||||||
Contingent consideration payments | 5,088 | 393 | |||||||||
Stellarex | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash paid to acquire business | $ 30,000 | ||||||||||
Losses of Stellarex since acquisition date | $ 44,400 | 35,900 | |||||||||
Acquisition transaction, integration and legal costs | $ 8,000 | 100 | |||||||||
AngioScore | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquisition transaction, integration and legal costs | 1,800 | 21,500 | |||||||||
Purchase price contingent consideration | $ 25,900 | ||||||||||
Contingent consideration payments | $ 5,000 | ||||||||||
Minimum | AngioScore | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Discount rate | 9.00% | ||||||||||
Maximum | AngioScore | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Discount rate | 19.00% | ||||||||||
Revenue Milestone | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Reduction in fair value of contingent consideration liability | 21,500 | ||||||||||
Project Completion | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Reduction in fair value of contingent consideration liability | $ 4,300 |
Business Combinations (Schedule
Business Combinations (Schedule of Recognized Identified Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands | Jan. 27, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||
Goodwill | $ 148,811 | $ 152,616 | |
Stellarex | |||
Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||
Inventories | $ 1,337 | ||
Property and equipment, net | 2,701 | ||
Total tangible assets acquired | 4,038 | ||
Less: liabilities assumed | 293 | ||
Net tangible assets acquired | 3,745 | ||
Goodwill | 2,645 | ||
Total purchase price | 30,000 | ||
Stellarex | IPR&D | |||
Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||
Intangible assets, indefinite lived | 13,680 | 13,680 | 13,680 |
Stellarex | Technology | |||
Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||
Amortizable intangible assets | $ 9,000 | 9,000 | 9,000 |
Amortization period (in years) | 12 years | ||
Stellarex | Trademark and trade names | |||
Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||
Amortizable intangible assets | $ 400 | 400 | 400 |
Amortization period (in years) | 12 years | ||
Stellarex | Transition services agreement | |||
Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||
Amortizable intangible assets | $ 530 | $ 530 | $ 530 |
Amortization period (in years) | 6 months |
Business Combinations (Schedu39
Business Combinations (Schedule of Changes In Contingent Consideration) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Business Combination, Contingent Consideration [Roll Forward] | ||||||
Beginning balance | $ 5,153 | $ 28,694 | ||||
Purchase price contingent consideration | 0 | 0 | ||||
Reduction in fair value of contingent consideration liability | $ (3,700) | $ (4,300) | $ (17,800) | 0 | (25,819) | $ (1,064) |
Contingent consideration payments | (5,088) | (393) | ||||
Contingent consideration accretion expense | 214 | 2,671 | 2,070 | |||
Ending balance | $ 5,153 | $ 279 | $ 5,153 | $ 28,694 |
Inventories (Schedule of Invent
Inventories (Schedule of Inventories, Net) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 11,070 | $ 10,838 |
Work in process | 4,787 | 2,914 |
Finished goods | 11,785 | 11,403 |
Total inventories, net | $ 27,642 | $ 25,155 |
Inventories (Narrative) (Detail
Inventories (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 27, 2015 |
Business Acquisition [Line Items] | |||
Finished goods inventory, consignment arrangements, percent | 52.00% | 68.00% | |
Inventories, net | $ 27,642 | $ 25,155 | |
Stellarex | |||
Business Acquisition [Line Items] | |||
Inventory acquired in acquisition | $ 1,337 | ||
Inventories, net | $ 3,000 | $ 2,100 |
Property and Equipment (Schedul
Property and Equipment (Schedule of Property and Equipment, Net) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation and amortization | $ (75,929) | $ (64,318) |
Total property and equipment, net | 44,827 | 44,719 |
Equipment held for rental or loan | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 62,972 | 55,774 |
Manufacturing equipment and computers | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 40,656 | 37,862 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 10,453 | 8,984 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 5,099 | 4,840 |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,306 | 1,306 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 270 | $ 271 |
Property and Equipment (Narrati
Property and Equipment (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 14.3 | $ 12.3 | $ 9.5 |
Software amortization expense | $ 0.9 | $ 1 | $ 0.9 |
Goodwill and Other Intangible44
Goodwill and Other Intangible Assets (Schedule of Goodwill) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2015 | $ 152,616 |
Impact of changes in foreign currency and other | (3,805) |
Balance as of December 31, 2016 | 148,811 |
U.S. Medical | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2015 | 130,410 |
Impact of changes in foreign currency and other | 0 |
Balance as of December 31, 2016 | 130,410 |
International Medical | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2015 | 22,206 |
Impact of changes in foreign currency and other | (3,805) |
Balance as of December 31, 2016 | $ 18,401 |
Goodwill and Other Intangible45
Goodwill and Other Intangible Assets (Schedule of Acquired Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 27, 2015 |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Accumulated amortization | $ (33,267) | $ (21,040) | |
Other intangible assets, net | 98,229 | 110,456 | |
Patents | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Patents | 530 | 530 | |
AngioScore | Technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Acquired amortizable intangible assets | 73,510 | 73,510 | |
AngioScore | Customer relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Acquired amortizable intangible assets | 23,320 | 23,320 | |
AngioScore | Trademark and trade names | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Acquired amortizable intangible assets | 4,380 | 4,380 | |
AngioScore | IPR&D | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, indefinite lived | 1,254 | 1,254 | |
AngioScore | Distributor relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Acquired amortizable intangible assets | 1,940 | 1,940 | |
AngioScore | Non-compete agreements | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Acquired amortizable intangible assets | 580 | 580 | |
Stellarex | Technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Acquired amortizable intangible assets | 9,000 | 9,000 | $ 9,000 |
Stellarex | Trademark and trade names | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Acquired amortizable intangible assets | 400 | 400 | 400 |
Stellarex | IPR&D | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, indefinite lived | 13,680 | 13,680 | 13,680 |
Stellarex | Transition services agreement | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Acquired amortizable intangible assets | 530 | 530 | $ 530 |
Upstream | Technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Acquired amortizable intangible assets | 2,172 | 2,172 | |
Upstream | Non-compete agreements | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Acquired amortizable intangible assets | $ 200 | $ 200 |
Goodwill and Other Intangible46
Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 148,811 | $ 152,616 | |||
Intangible asset impairment | $ 2,500 | $ 2,500 | 0 | 2,496 | $ 4,138 |
Intangible asset amortization | $ 12,227 | $ 13,275 | $ 6,335 | ||
IPR&D | AngioScore | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-Lived Intangible Asset, Useful Life | 10 years |
Goodwill and Other Intangible47
Goodwill and Other Intangible Assets (Schedule of Future Amortization Expense) (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,017 | $ 11,587 |
2,018 | 11,322 |
2,019 | 11,322 |
2,020 | 10,957 |
2,021 | 10,592 |
Thereafter | 28,770 |
Total future amortization expense | $ 84,550 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accrued Liabilities [Abstract] | ||
Accrued payroll and employee-related expenses | $ 22,890 | $ 15,797 |
Contingent consideration, current portion | 279 | 5,154 |
Accrued clinical study expense | 2,723 | 3,868 |
Deferred rent | 1,443 | 1,485 |
Accrued sales, income and excise taxes | 1,208 | 1,318 |
Accrued royalties | 1,313 | 1,044 |
Accrued interest | 1,016 | 913 |
Accrued legal costs | 847 | 713 |
Other accrued expenses | 4,350 | 5,143 |
Total accrued liabilities | 36,069 | 35,435 |
Less: long-term portion | (1,688) | (1,759) |
Accrued liabilities, current portion | $ 34,381 | $ 33,676 |
Stock-Based Compensation and 49
Stock-Based Compensation and Employee Benefit Plans (Narrative) (Details) - USD ($) | Jan. 13, 2017 | Jan. 01, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 31, 2017 | Jun. 30, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares authorized | 2,500,000 | |||||||
Shares available for future issuance (in shares) | 3,200,000 | |||||||
Stock-based compensation expense | $ 14,004,000 | $ 10,111,000 | $ 8,316,000 | |||||
Tax benefit from stock options exercised | $ 300,000 | 2,400,000 | 3,000,000 | |||||
Increase (decrease) in stock-based compensation expense accrual | $ (1,700,000) | |||||||
Closing stock price (in usd per share) | $ 24.5 | |||||||
Unrecognized compensation expense | $ 18,000,000 | |||||||
Estimated forfeiture rate | 6.63% | |||||||
Weighted-average recognition period | 2 years 4 months 24 days | |||||||
Employer discretionary contribution amount | $ 2,000,000 | $ 1,800,000 | $ 1,300,000 | |||||
Employer matching contribution, percent | 50.00% | |||||||
Maximum annual contribution per employee, percent | 6.00% | |||||||
Employee Stock Option | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Psu, vesting period | 4 years | |||||||
PSU, expiration period | 10 years | |||||||
Weighted average grant date fair value (in usd per share) | $ 6.94 | $ 10.32 | $ 13.59 | |||||
In-the-money options exercisable, amount (in shares) | 1,700,000 | |||||||
Total intrinsic value of options exercised | $ 2,900,000 | $ 8,300,000 | $ 14,800,000 | |||||
Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Psu, vesting period | 4 years | |||||||
Employee Stock Purchase Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares authorized | 1,700,000 | |||||||
Shares available for future issuance (in shares) | 800,000 | |||||||
Stock-based compensation expense | $ 1,200,000 | $ 900,000 | ||||||
Number of additional shares authorized | 1,000,000 | |||||||
Maximum number of shares per employee | 2,500 | |||||||
Stock purchase period | 6 months | |||||||
Maximum fair value per employee | $ 25,000 | |||||||
Option purchase holding period | 1 year | |||||||
Purchase price of common stock, percent | 85.00% | |||||||
Employee Stock Purchase Plan | Common Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | $ 800,000 | |||||||
Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares available for future issuance (in shares) | 1,400,000 | |||||||
Minimum | Performance Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Target payout opportunities, percent | 0.00% | |||||||
Maximum | Performance Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Target payout opportunities, percent | 250.00% | |||||||
Share-based Compensation Award, Tranche One | Performance Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Psu, vesting period | 3 years | |||||||
Award vesting rights, percentage | 75.00% | |||||||
Share-based Compensation Award, Tranche Two | Performance Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Psu, vesting period | 1 year | |||||||
Award vesting rights, percentage | 25.00% | |||||||
Subsequent Event | Performance Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Psu, vesting period | 3 years | |||||||
Actual payout percentage | 95.00% | |||||||
Subsequent Event | Minimum | Performance Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Target payout opportunities, percent | 0.00% | |||||||
Subsequent Event | Maximum | Performance Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Target payout opportunities, percent | 200.00% |
Stock-Based Compensation and 50
Stock-Based Compensation and Employee Benefit Plans (Stock Options, Summary of Assumptions Used) (Details) - Stock Options | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life (years) | 5 years 9 months 18 days | 5 years 8 months 12 days | 5 years 9 months 18 days |
Risk-free interest rate | 1.23% | 1.57% | 1.65% |
Expected volatility | 46.30% | 42.74% | 61.44% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Stock-Based Compensation and 51
Stock-Based Compensation and Employee Benefit Plans (Stock Options, Schedule of Weighted Average Grant Date Fair Value) (Details) | 12 Months Ended |
Dec. 31, 2016USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Options outstanding at January 1, 2015 (in shares) | shares | 2,566,088 |
Granted (in shares) | shares | 1,015,100 |
Exercised (in shares) | shares | (290,384) |
Forfeited (in shares) | shares | (231,099) |
Options outstanding at December 31, 2016 (in shares) | shares | 3,059,705 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Options outstanding at January 1, 2015, weighted average exercise price (in usd per share) | $ / shares | $ 14.04 |
Granted, weighted average exercise price (in usd per share) | $ / shares | 15.67 |
Exercised, weighted average exercise price (in usd per share) | $ / shares | 10.84 |
Forfeited, weighted average exercise price (in usd per share) | $ / shares | 17.13 |
Options outstanding at December 31, 2015, weighted average exercise price (in usd per share) | $ / shares | $ 14.65 |
Options exercisable at December 31, 2016 (in shares) | shares | 1,836,448 |
Options exercisable at December 31, 2016, weighted average exercise price (in usd per share) | $ / shares | $ 12.49 |
Options outstanding at December 31, 2016, weighted average remaining contractual term | 6 years 5 months 5 days |
Options exercisable at December 31, 2016, weighted average remaining contractual term | 4 years 10 months 28 days |
Options outstanding at December 31, 2016, aggregate intrinsic value | $ | $ 30,902,131 |
Options exercisable at December 31, 2016,aggregate intrinsic value | $ | $ 22,393,987 |
Stock-Based Compensation and 52
Stock-Based Compensation and Employee Benefit Plans (Schedule of Restricted Stock Award and Restricted Stock Unit Activity and Schedule of Performance Stock Unit Activity) (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Non-vested restricted stock | |
Awards/Unit, Number of Shares [Roll Forward] | |
Awards/units outstanding at January 1, 2015 (in shares) | shares | 26,463 |
Awarded (In shares) | shares | 48,643 |
Vested (in shares) | shares | (26,463) |
Awards/units outstanding at December 31, 2016 (in shares) | shares | 48,643 |
Awards/Unit Weighted Average Grant Date Fair Value [Abstract] | |
Awards/units outstanding at January 1, 2015, weighted average grant date fair value (in usd per share) | $ / shares | $ 27.41 |
Awarded, weighted average grant date fair value (in usd per share) | $ / shares | 18.71 |
Vested, weighted average grant date fair value (in usd per share) | $ / shares | 27.41 |
Awards/units outstanding at December 31, 2016, weighted average grant date fair value (in usd per share) | $ / shares | $ 18.71 |
Restricted Stock Units | |
Awards/Unit, Number of Shares [Roll Forward] | |
Awards/units outstanding at January 1, 2015 (in shares) | shares | 204,893 |
Awarded (In shares) | shares | 190,776 |
Vested (in shares) | shares | (64,759) |
Forfeited (in shares) | shares | (68,145) |
Awards/units outstanding at December 31, 2016 (in shares) | shares | 262,765 |
Awards/Unit Weighted Average Grant Date Fair Value [Abstract] | |
Awards/units outstanding at January 1, 2015, weighted average grant date fair value (in usd per share) | $ / shares | $ 24.08 |
Awarded, weighted average grant date fair value (in usd per share) | $ / shares | 14.98 |
Vested, weighted average grant date fair value (in usd per share) | $ / shares | 23.12 |
Forfeited, weighted average grant date fair value (in usd per share) | $ / shares | 18.73 |
Awards/units outstanding at December 31, 2016, weighted average grant date fair value (in usd per share) | $ / shares | $ 19.10 |
Performance Stock Units | |
Awards/Unit, Number of Shares [Roll Forward] | |
Awards/units outstanding at January 1, 2015 (in shares) | shares | 496,656 |
Awarded (In shares) | shares | 275,330 |
Vested (in shares) | shares | (59,799) |
Forfeited (in shares) | shares | (49,866) |
Awards/units outstanding at December 31, 2016 (in shares) | shares | 662,321 |
Awards/Unit Weighted Average Grant Date Fair Value [Abstract] | |
Awards/units outstanding at January 1, 2015, weighted average grant date fair value (in usd per share) | $ / shares | $ 22.82 |
Awarded, weighted average grant date fair value (in usd per share) | $ / shares | 18.16 |
Vested, weighted average grant date fair value (in usd per share) | $ / shares | 23.43 |
Forfeited, weighted average grant date fair value (in usd per share) | $ / shares | 22.70 |
Awards/units outstanding at December 31, 2016, weighted average grant date fair value (in usd per share) | $ / shares | $ 20.83 |
Net Loss Per Share (Schedule of
Net Loss Per Share (Schedule of Antidilutive Securities) (Details) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 11,370,893 | 10,631,559 | 10,732,346 |
Options to purchase common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 3,059,705 | 2,566,088 | 2,698,911 |
Non-vested restricted stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 311,408 | 231,356 | 208,818 |
Non-vested performance stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 662,321 | 496,656 | 487,158 |
Shares issuable upon conversion of the Notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 7,337,459 | 7,337,459 | 7,337,459 |
Net Loss Per Share (Schedule 54
Net Loss Per Share (Schedule of Earnings Per Share, Basic and Diluted) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | |||||||||||
Net loss | $ (12,611) | $ (13,312) | $ (14,906) | $ (17,291) | $ (10,460) | $ (14,493) | $ (7,216) | $ (27,305) | $ (58,120) | $ (59,474) | $ (40,901) |
Historical common shares outstanding at beginning of year (excluding shares of unvested restricted stock) | 42,632,771 | 42,034,063 | 42,632,771 | 42,034,063 | 41,208,096 | ||||||
Weighted average common shares issued (in shares) | 302,671 | 396,158 | 471,273 | ||||||||
Weighted average common shares outstanding-basic (in shares) | 42,935,442 | 42,430,221 | 41,679,369 | ||||||||
Effect of dilution from stock options (in shares) | 0 | 0 | 0 | ||||||||
Weighted average common shares outstanding-diluted (in shares) | 42,935,442 | 42,430,221 | 41,679,369 | ||||||||
Net loss per share, basic and diluted (in usd per share) | $ (0.29) | $ (0.31) | $ (0.35) | $ (0.40) | $ (0.25) | $ (0.34) | $ (0.17) | $ (0.65) | $ (1.35) | $ (1.40) | $ (0.98) |
Concentrations of Credit Risk (
Concentrations of Credit Risk (Details) | 12 Months Ended |
Dec. 31, 2016customer | |
Revenue or Accounts Receivable | Customer Concentration Risk | |
Concentration Risk [Line Items] | |
Number of customers | 0 |
Segment and Geographic Report56
Segment and Geographic Reporting (Narrative) (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)Line_of_Businesscustomersegment | Dec. 31, 2015USD ($)customer | Dec. 31, 2014USD ($)customer | |
Segment Reporting Information [Line Items] | |||
Number of lines of business | Line_of_Business | 1 | ||
Number of reportable segments | segment | 2 | ||
U.S. Medical | |||
Segment Reporting Information [Line Items] | |||
Revenue associated with intersegment product transfers to International Medical | $ | $ 14.3 | $ 13.9 | $ 8.1 |
International Medical | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | $ | $ 23 | $ 27.1 | |
Customer Concentration Risk | Sales Revenue | |||
Segment Reporting Information [Line Items] | |||
Number of customers representing 10% or more of consolidated revenue | customer | 0 | 0 | 0 |
Geographic Concentration Risk | Sales Revenue | |||
Segment Reporting Information [Line Items] | |||
Number of countries representing 10% or more of consolidated revenue | customer | 0 | 0 | 0 |
Segment and Geographic Report57
Segment and Geographic Reporting (Schedule of Revenue by Reporting Segments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segments, Geographical Areas [Abstract] | |||||||||||
Revenue | $ 71,926 | $ 68,265 | $ 67,748 | $ 62,884 | $ 65,197 | $ 61,660 | $ 61,677 | $ 57,422 | $ 270,823 | $ 245,956 | $ 204,914 |
U.S. Medical | |||||||||||
Segments, Geographical Areas [Abstract] | |||||||||||
Revenue | 225,300 | 206,683 | 167,399 | ||||||||
International Medical | |||||||||||
Segments, Geographical Areas [Abstract] | |||||||||||
Revenue | 45,523 | 39,273 | 37,515 | ||||||||
Disposable products | |||||||||||
Segments, Geographical Areas [Abstract] | |||||||||||
Revenue | 254,867 | 230,379 | 184,810 | ||||||||
Disposable products | U.S. Medical | |||||||||||
Segments, Geographical Areas [Abstract] | |||||||||||
Revenue | 215,023 | 195,816 | 155,107 | ||||||||
Disposable products | International Medical | |||||||||||
Segments, Geographical Areas [Abstract] | |||||||||||
Revenue | 39,844 | 34,563 | 29,703 | ||||||||
Laser, service, and other | |||||||||||
Segments, Geographical Areas [Abstract] | |||||||||||
Revenue | 15,956 | 15,577 | 20,104 | ||||||||
Laser, service, and other | U.S. Medical | |||||||||||
Segments, Geographical Areas [Abstract] | |||||||||||
Revenue | 10,277 | 10,867 | 12,292 | ||||||||
Laser, service, and other | International Medical | |||||||||||
Segments, Geographical Areas [Abstract] | |||||||||||
Revenue | $ 5,679 | $ 4,710 | $ 7,812 |
Segment and Geographic Report58
Segment and Geographic Reporting (Schedule of Segment Reporting Information, by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||||||||||
Interest income | $ 63 | $ 29 | $ 46 | ||||||||
Interest expense | 13,358 | 7,879 | 4,108 | ||||||||
Depreciation and amortization expense | 27,422 | 26,588 | 16,813 | ||||||||
Income tax expense (benefit) | 787 | 726 | (322) | ||||||||
Segment operating (loss) income | (43,635) | (50,529) | (36,950) | ||||||||
Segment net (loss) income | $ (12,611) | $ (13,312) | $ (14,906) | $ (17,291) | $ (10,460) | $ (14,493) | $ (7,216) | $ (27,305) | (58,120) | (59,474) | (40,901) |
Capital expenditures | 5,354 | 9,538 | 6,722 | ||||||||
Total assets | 430,078 | 467,999 | 430,078 | 467,999 | 457,838 | ||||||
U.S. Medical | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Interest income | 63 | 25 | 44 | ||||||||
Interest expense | 13,349 | 7,878 | 4,098 | ||||||||
Depreciation and amortization expense | 25,704 | 24,910 | 15,205 | ||||||||
Income tax expense (benefit) | 560 | 563 | (887) | ||||||||
Segment operating (loss) income | (40,416) | (49,548) | (39,267) | ||||||||
Segment net (loss) income | (54,333) | (58,095) | (42,628) | ||||||||
Capital expenditures | 5,171 | 9,423 | 6,532 | ||||||||
Total assets | 392,776 | 430,956 | 392,776 | 430,956 | 423,039 | ||||||
International Medical | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Interest income | 0 | 4 | 2 | ||||||||
Interest expense | 9 | 1 | 10 | ||||||||
Depreciation and amortization expense | 1,718 | 1,678 | 1,608 | ||||||||
Income tax expense (benefit) | 227 | 163 | 565 | ||||||||
Segment operating (loss) income | (3,219) | (981) | 2,317 | ||||||||
Segment net (loss) income | (3,787) | (1,379) | 1,727 | ||||||||
Capital expenditures | 183 | 115 | 190 | ||||||||
Total assets | $ 37,302 | $ 37,043 | $ 37,302 | $ 37,043 | $ 34,799 |
Segment and Geographic Report59
Segment and Geographic Reporting (Schedule of Revenue by Product Line) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue from External Customer [Line Items] | |||||||||||
Revenue | $ 71,926 | $ 68,265 | $ 67,748 | $ 62,884 | $ 65,197 | $ 61,660 | $ 61,677 | $ 57,422 | $ 270,823 | $ 245,956 | $ 204,914 |
Disposable products | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 254,867 | 230,379 | 184,810 | ||||||||
Laser, service, and other | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 15,956 | 15,577 | 20,104 | ||||||||
Vascular intervention | Disposable products | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 181,602 | 160,480 | 118,148 | ||||||||
Lead management | Disposable products | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | $ 73,265 | $ 69,899 | $ 66,662 |
Debt (Schedule of Outstanding D
Debt (Schedule of Outstanding Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 07, 2015 | Jun. 30, 2014 |
Debt Instrument [Line Items] | ||||
Revolving Loan Facility | $ 24,712 | $ 24,232 | $ 18,000 | |
Total | 314,712 | 314,232 | ||
Less debt issuance cost | (5,241) | (6,323) | ||
Total | 309,471 | 307,909 | $ 60,000 | |
Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Term Loan Facility | $ 230,000 | 230,000 | ||
Interest rate | 2.625% | 2.625% | ||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Term Loan Facility | $ 60,000 | 60,000 | ||
Interest rate | 8.12% | |||
Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Revolving Loan Facility | $ 24,712 | $ 24,232 | ||
Interest rate | 5.07% |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) | Dec. 07, 2015 | Jun. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||||
Line of credit, borrowing capacity | $ 36,600,000 | |||
Revolving Loan Facility, minimum cash and cash equivalents required | 10,000,000 | |||
Term loan facility | $ 60,000,000 | 309,471,000 | $ 307,909,000 | |
Revolving Loan Facility | 18,000,000 | 24,712,000 | 24,232,000 | |
Extinguishment of debt, amount | $ 3,000,000 | |||
Write-off of unamortized debt issuance costs related to debt extinguishment | $ 200,000 | |||
Debt issuance costs | 700,000 | |||
Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Convertible senior notes | $ 230,000,000 | |||
Stated interest rate | 2.625% | 2.625% | ||
Conversion ratio | 31.9020 | |||
Conversion price (in usd per share) | $ 31.35 | |||
Threshold percentage of stock price trigger | 130.00% | |||
Percent of principal amount redeemed | 100.00% | |||
Proceeds from debt, net of issuance costs | $ 222,500,000 | |||
Discount amortization period | 7 years | |||
Debt issuance costs | $ 7,500,000 | |||
Long term debt | $ 230,000,000 | 230,000,000 | ||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 8.12% | |||
Debt instrument, term | 5 years | |||
Debt instrument, face amount | $ 60,000,000 | |||
Debt Instrument, exit fee | 4.00% | |||
Long term debt | $ 60,000,000 | 60,000,000 | ||
Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 5.07% | |||
Debt instrument, term | 5 years | |||
Line of credit, maximum availability | $ 70,000,000 | |||
Line of credit, borrowing capacity | 50,000,000 | |||
Line of credit, fee percentage on unused portion | 0.50% | |||
Borrowings under revolving line of credit | 35.00% | |||
Percentage of average borrowing base after first anniversary | 50.00% | |||
Revolving Loan Facility | $ 24,712,000 | $ 24,232,000 | ||
Minimum | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, EBITDA required to reduce LIBOR margin rate | $ 6,000,000 | |||
Minimum | Term Loan | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Line of credit, interest rate spread | 6.50% | |||
Maximum | Term Loan | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Line of credit, interest rate spread | 7.50% | |||
Maximum | Line of Credit | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Line of credit, interest rate spread | 4.45% |
Income Taxes (Schedule of Sourc
Income Taxes (Schedule of Sources of Income (Loss) Before Income Tax) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (53,972) | $ (58,252) | $ (43,217) |
Foreign (primarily the Netherlands) | (3,361) | (496) | 1,994 |
Loss before income taxes | $ (57,333) | $ (58,748) | $ (41,223) |
Income Taxes (Schedule of Compo
Income Taxes (Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 109 | 126 | 72 |
Foreign | 177 | 114 | 515 |
Current Income Tax Expense (Benefit) | 286 | 240 | 587 |
Deferred: | |||
Federal | 439 | 400 | (874) |
State | 12 | 36 | (85) |
Foreign | 50 | 50 | 50 |
Deferred Income Tax Expense (Benefit) | 501 | 486 | (909) |
Income tax (benefit) expense | $ 787 | $ 726 | $ (322) |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Line Items] | |||
U.S. federal income tax rate | 35.00% | 34.00% | 34.00% |
Income tax expense (benefit) | $ 787 | $ 726 | $ (322) |
Release of valuation allowance related to AngioScore acquisition | 0 | 0 | (1,266) |
Tax benefit from stock options exercised | 300 | 2,400 | $ 3,000 |
Undistributed earnings of foreign subsidiaries | (23,900) | (20,500) | |
Unrecognized tax benefits | 100 | ||
Alternative minimum tax carryforward | |||
Income Tax Disclosure [Line Items] | |||
Operating loss carryforwards | 247,300 | ||
Tax credit carryforwards | 300 | ||
Research Tax Credit Carryforward | |||
Income Tax Disclosure [Line Items] | |||
Tax credit carryforwards | 3,400 | $ 1,100 | |
Domestic Tax Authority | |||
Income Tax Disclosure [Line Items] | |||
Operating loss carryforwards | 249,700 | ||
State and Local Jurisdiction | |||
Income Tax Disclosure [Line Items] | |||
Operating loss carryforwards | $ 189,400 |
Income Taxes (Schedule of Effec
Income Taxes (Schedule of Effective Income Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Computed expected tax (benefit) expense | $ (20,067) | $ (19,974) | $ (14,016) |
Increase (reduction) in income tax (benefit) expense resulting from: | |||
State and local income taxes, net of federal impact | (1,358) | (2,270) | (1,211) |
Stock-based compensation | 1,291 | 1,028 | 46 |
Nondeductible expenses | 284 | 517 | 2,652 |
Change in valuation allowance | 18,501 | 31,037 | 13,540 |
Change in contingent consideration liability | 69 | (7,870) | 0 |
Release of valuation allowance related to AngioScore acquisition | 0 | 0 | (1,266) |
Change in deferred rate | (1,450) | (75) | 193 |
Other | 833 | 0 | 0 |
Foreign operations | 401 | 616 | 179 |
Research and development credit | 2,283 | (2,283) | (439) |
Income tax (benefit) expense | $ 787 | $ 726 | $ (322) |
Income Taxes (Schedule of Defer
Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Net operating loss carryforwards–U.S. and related states | $ 87,116 | $ 74,886 |
Net operating loss carryforwards–foreign | 1,289 | 286 |
Charitable contribution carryover | 204 | 219 |
Capital loss carryover | 0 | 131 |
Amortization of intangibles | 1,295 | 1,146 |
Stock compensation expense related to nonqualified stock options | 6,275 | 3,914 |
Research and experimentation tax credit | 4,480 | 7,383 |
Alternative minimum tax credit | 298 | 298 |
Accrued liabilities | 2,144 | 2,110 |
Inventories | 3,283 | 2,680 |
Deferred revenue | 540 | 512 |
Deferred tax assets | 106,924 | 93,565 |
Less valuation allowance | (79,291) | (60,790) |
Deferred tax assets, net | 27,633 | 32,775 |
Deferred tax liabilities: | ||
Equipment | (325) | (2,152) |
Long-lived intangible assets | (29,674) | (32,538) |
Total deferred tax liabilities | $ (29,999) | $ (34,690) |
Commitments and Contingencies67
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Jul. 31, 2015 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2017 | Nov. 30, 2015 | |
Loss Contingencies [Line Items] | ||||||||||
Acquisition transaction, integration and legal costs | $ 2,400 | $ 5,400 | $ 11,100 | $ 10,400 | $ 1,922 | $ 29,472 | $ 17,288 | |||
Rent expense | 4,100 | 3,500 | $ 2,700 | |||||||
Trireme Litigation | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Litigation settlement, amount | $ 20,034 | |||||||||
Acquisition transaction, integration and legal costs | 1,800 | $ 19,900 | ||||||||
Trireme | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Litigation liability, percentage | 50.00% | |||||||||
AngioScore | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Litigation liability, percentage | 50.00% | |||||||||
Unfavorable Regulatory Action | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Incremental expenses | $ 3,000 | |||||||||
Scenario, Forecast | Minimum | Unfavorable Regulatory Action | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Estimate of possible loss | $ 10,000 | |||||||||
Scenario, Forecast | Maximum | Unfavorable Regulatory Action | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Estimate of possible loss | $ 15,000 |
Commitments and Contingencies68
Commitments and Contingencies (Schedule of Future Minimum Rental Payments for Operating Leases) (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 3,472 |
2,018 | 3,454 |
2,019 | 3,151 |
2,020 | 3,116 |
2,021 | 2,472 |
Thereafter | 4,877 |
Total minimum lease payments | $ 20,542 |
Subsequent Events (Details)
Subsequent Events (Details) - Performance Stock Units - shares | Jan. 13, 2017 | Dec. 31, 2016 |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Psu, vesting period | 3 years | |
Minimum | ||
Subsequent Event [Line Items] | ||
Target payout opportunities, percent | 0.00% | |
Minimum | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Target payout opportunities, percent | 0.00% | |
Maximum | ||
Subsequent Event [Line Items] | ||
Target payout opportunities, percent | 250.00% | |
Maximum | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Psu, vesting rights (in shares) | 1 | |
Target payout opportunities, percent | 200.00% |
Selected Quarterly Financial 70
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Selected Quarterly Financial Information [Abstract] | |||||||||||
Net sales | $ 71,926 | $ 68,265 | $ 67,748 | $ 62,884 | $ 65,197 | $ 61,660 | $ 61,677 | $ 57,422 | $ 270,823 | $ 245,956 | $ 204,914 |
Gross profit | 53,549 | 51,381 | 50,765 | 46,802 | 48,839 | 45,851 | 45,763 | 42,369 | 202,497 | 182,822 | 151,455 |
Net loss | $ (12,611) | $ (13,312) | $ (14,906) | $ (17,291) | $ (10,460) | $ (14,493) | $ (7,216) | $ (27,305) | $ (58,120) | $ (59,474) | $ (40,901) |
Net Income (Loss) Per Share [Abstract] | |||||||||||
Net loss per share, basic and diluted (in usd per share) | $ (0.29) | $ (0.31) | $ (0.35) | $ (0.40) | $ (0.25) | $ (0.34) | $ (0.17) | $ (0.65) | $ (1.35) | $ (1.40) | $ (0.98) |
Selected Quarterly Financial 71
Selected Quarterly Financial Data (Unaudited) (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | |||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | |||||||||
Acquisition transaction, integration and legal costs | $ 2,400 | $ 5,400 | $ 11,100 | $ 10,400 | $ 1,922 | $ 29,472 | $ 17,288 | ||
Release of valuation allowance related to AngioScore acquisition | 0 | 0 | (1,266) | ||||||
Reduction in fair value of contingent consideration liability | 3,700 | 4,300 | $ 17,800 | 0 | 25,819 | 1,064 | |||
Intangible asset impairment | $ 2,500 | $ 2,500 | 0 | 2,496 | $ 4,138 | ||||
Increase (decrease) in stock-based compensation expense accrual | $ (1,700) | ||||||||
AngioScore | |||||||||
Business Acquisition [Line Items] | |||||||||
Acquisition transaction, integration and legal costs | 1,800 | $ 21,500 | |||||||
Stellarex | |||||||||
Business Acquisition [Line Items] | |||||||||
Acquisition transaction, integration and legal costs | $ 8,000 | $ 100 |
Schedule II - Valuation and Q72
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for doubtful accounts and sales returns | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | $ 1,906 | $ 1,615 | $ 782 |
Charged (Credited) to Revenue, Costs or Expenses | 2,319 | 2,074 | 2,271 |
Charged (Credited) to Other Accounts - describe | 0 | 0 | 0 |
Deductions | 2,596 | 1,783 | 1,438 |
Balance at End of Year | 1,629 | 1,906 | 1,615 |
Inventory reserves | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | 3,871 | 2,419 | 918 |
Charged (Credited) to Revenue, Costs or Expenses | 1,051 | 2,867 | 426 |
Charged (Credited) to Other Accounts - describe | 0 | 0 | 1,267 |
Deductions | 1,294 | 1,415 | 192 |
Balance at End of Year | 3,628 | 3,871 | 2,419 |
Valuation allowance for deferred tax assets | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | 60,790 | 29,815 | 11,794 |
Charged (Credited) to Revenue, Costs or Expenses | 18,501 | 30,975 | 13,540 |
Charged (Credited) to Other Accounts - describe | 0 | 0 | 5,747 |
Deductions | 0 | 0 | 1,266 |
Balance at End of Year | $ 79,291 | $ 60,790 | $ 29,815 |