Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 05, 2018 | |
Document Information [Abstract] | ||
Entity Registrant Name | MERIT MEDICAL SYSTEMS INC | |
Entity Central Index Key | 856,982 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 54,833,602 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 51,955 | $ 32,336 |
Trade receivables — net of allowance for uncollectible accounts — 2018 — $1,921 and 2017 — $1,769 | 129,282 | 105,536 |
Other receivables | 8,903 | 9,429 |
Inventories | 181,439 | 155,288 |
Prepaid expenses and other assets | 11,720 | 9,096 |
Prepaid income taxes | 3,307 | 3,225 |
Income tax refund receivables | 1,043 | 1,211 |
Total current assets | 387,649 | 316,121 |
PROPERTY AND EQUIPMENT: | ||
Land and land improvements | 26,926 | 19,877 |
Buildings | 150,880 | 147,356 |
Manufacturing equipment | 211,215 | 197,651 |
Furniture and fixtures | 53,869 | 49,528 |
Leasehold improvements | 33,365 | 31,161 |
Construction-in-progress | 48,166 | 32,896 |
Total property and equipment | 524,421 | 478,469 |
Less accumulated depreciation | (204,496) | (185,649) |
Property and equipment — net | 319,925 | 292,820 |
OTHER ASSETS: | ||
Goodwill | 249,023 | 238,147 |
Deferred income tax assets | 2,254 | 2,359 |
Other assets | 61,927 | 35,040 |
Total other assets | 602,309 | 502,870 |
TOTAL | 1,309,883 | 1,111,811 |
CURRENT LIABILITIES: | ||
Trade payables | 50,697 | 34,931 |
Accrued expenses | 65,530 | 58,932 |
Current portion of long-term debt | 22,000 | 19,459 |
Income taxes payable | 1,598 | 2,298 |
Total current liabilities | 139,825 | 115,620 |
LONG-TERM DEBT | 186,867 | 259,013 |
DEFERRED INCOME TAX LIABILITIES | 23,102 | 23,289 |
LONG-TERM INCOME TAXES PAYABLE | 4,846 | 4,846 |
LIABILITIES RELATED TO UNRECOGNIZED TAX BENEFITS | 2,746 | 2,746 |
DEFERRED COMPENSATION PAYABLE | 12,176 | 11,181 |
DEFERRED CREDITS | 2,296 | 2,403 |
OTHER LONG-TERM OBLIGATIONS | 14,814 | 16,379 |
Total liabilities | 386,672 | 435,477 |
COMMITMENTS AND CONTINGENCIES (Notes 5, 10, 11, and 14) | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock — 5,000 shares authorized as of September 30, 2018 and December 31, 2017; no shares issued | 0 | 0 |
Common stock, no par value; shares authorized — 2018 and 2017 - 100,000; issued and outstanding as of September 30, 2018 - 54,802 and December 31, 2017 - 50,248 | 568,051 | 353,392 |
Retained earnings | 354,236 | 321,408 |
Accumulated other comprehensive income | 924 | 1,534 |
Total stockholders’ equity | 923,211 | 676,334 |
TOTAL | 1,309,883 | 1,111,811 |
Developed technology — net of accumulated amortization — 2018 — $93,680 and 2017 — $72,420 | ||
OTHER ASSETS: | ||
Intangible assets | 224,540 | 167,771 |
Other — net of accumulated amortization — 2018 — $46,088 and 2017 — $38,127 | ||
OTHER ASSETS: | ||
Intangible assets | $ 64,565 | $ 59,553 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
CURRENT ASSETS: | ||
Trade receivables, allowances | $ 2,011 | $ 1,769 |
STOCKHOLDERS’ EQUITY: | ||
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 dollars per share) | ||
Common stock shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock shares issued (in shares) | 54,802,000 | 50,248,000 |
Common stock shares outstanding (in shares) | 54,802,000 | 50,248,000 |
Developed technology | ||
OTHER ASSETS: | ||
Intangibles, accumulated amortization | $ 93,680 | $ 72,420 |
Other | ||
OTHER ASSETS: | ||
Intangibles, accumulated amortization | $ 46,088 | $ 38,127 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
NET SALES | $ 221,659,000 | $ 179,337,000 | $ 649,504,000 | $ 536,955,000 |
COST OF SALES | 119,620,000 | 98,823,000 | 359,400,000 | 296,358,000 |
GROSS PROFIT | 102,039,000 | 80,514,000 | 290,104,000 | 240,597,000 |
OPERATING EXPENSES: | ||||
Selling, general and administrative | 66,382,000 | 54,716,000 | 200,389,000 | 169,896,000 |
Research and development | 14,525,000 | 12,838,000 | 44,163,000 | 38,676,000 |
Intangible asset impairment charge | 657,000 | 0 | 657,000 | 0 |
Contingent consideration expense (benefit) | (661,000) | 20,000 | (442,000) | 39,000 |
Acquired in-process research and development | 75,000 | 12,061,000 | 382,000 | 12,136,000 |
Total operating expenses | 80,978,000 | 79,635,000 | 245,149,000 | 220,747,000 |
INCOME FROM OPERATIONS | 21,061,000 | 879,000 | 44,955,000 | 19,850,000 |
OTHER INCOME (EXPENSE): | ||||
Interest income | 359,000 | 94,000 | 847,000 | 266,000 |
Interest expense | (2,329,000) | (1,590,000) | (8,064,000) | (5,935,000) |
Gain on bargain purchase | 0 | (778,000) | 0 | 10,796,000 |
Other income (expense) - net | 294,000 | (810,000) | (429,000) | (376,000) |
Other income (expense) — net | (1,676,000) | (3,084,000) | (7,646,000) | 4,751,000 |
INCOME (LOSS) BEFORE INCOME TAXES | 19,385,000 | (2,205,000) | 37,309,000 | 24,601,000 |
INCOME TAX EXPENSE | 2,766,000 | 1,364,000 | 4,481,000 | 3,884,000 |
NET INCOME (LOSS) | $ 16,619,000 | $ (3,569,000) | $ 32,828,000 | $ 20,717,000 |
EARNINGS PER COMMON SHARE: | ||||
Basic (in dollars per share) | $ 0.31 | $ (0.07) | $ 0.64 | $ 0.43 |
Diluted (in dollars per share) | $ 0.30 | $ (0.07) | $ 0.62 | $ 0.42 |
AVERAGE COMMON SHARES: | ||||
Basic (in shares) | 53,431 | 50,150 | 51,434 | 48,332 |
Diluted (in shares) | 55,103 | 51,599 | 53,096 | 49,555 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 16,619 | $ (3,569) | $ 32,828 | $ 20,717 |
Other comprehensive income (loss): | ||||
Cash flow hedges | 667 | (144) | 3,541 | 166 |
Less income tax benefit (expense) | (172) | 56 | (910) | (64) |
Foreign currency translation adjustment | (1,637) | 721 | (3,241) | 2,925 |
Less income tax (expense) | 0 | 0 | 0 | (252) |
Total other comprehensive income (loss) | (1,142) | 633 | (610) | 2,775 |
Total comprehensive income (loss) | $ 15,477 | $ (2,936) | $ 32,218 | $ 23,492 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 32,828 | $ 20,717 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 50,436 | 39,388 |
Gain on bargain purchase | 0 | (10,796) |
Loss on sales and/or abandonment of property and equipment | 425 | 219 |
Write-off of patents and intangible assets | 744 | 86 |
Acquired in-process research and development | 382 | 12,136 |
Amortization of deferred credits | (106) | (111) |
Amortization of long-term debt issuance costs | 603 | 514 |
Deferred income taxes | 0 | (290) |
Stock-based compensation expense | 4,494 | 2,883 |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Trade receivables | (25,482) | (10,963) |
Other receivables | 255 | (449) |
Inventories | (19,375) | (9,922) |
Prepaid expenses and other current assets | (2,719) | (1,587) |
Prepaid income taxes | (120) | (231) |
Income tax refund receivables | 134 | 280 |
Other assets | (1,370) | (2,992) |
Trade payables | 15,936 | (876) |
Accrued expenses | 7,707 | 4,470 |
Income taxes payable | (1,528) | (764) |
Deferred compensation payable | 994 | 1,107 |
Other long-term obligations | (1,381) | 574 |
Total adjustments | 30,029 | 22,676 |
Net cash provided by operating activities | 62,857 | 43,393 |
Capital expenditures for: | ||
Property and equipment | (47,024) | (29,522) |
Intangible assets | (2,234) | (1,927) |
Proceeds from the sale of property and equipment | 7 | 9 |
Issuance of note receivable | (10,750) | 0 |
Cash paid in acquisitions, net of cash acquired | (122,770) | (103,500) |
Net cash used in investing activities | (182,771) | (134,940) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock | 213,276 | 143,069 |
Offering costs | (366) | (816) |
Proceeds from issuance of long-term debt | 380,825 | 151,462 |
Payments on long-term debt | (450,575) | (197,962) |
Contingent payments related to acquisitions | (184) | (45) |
Payment of taxes related to an exchange of common stock | (2,616) | 0 |
Net cash provided by financing activities | 140,360 | 95,708 |
EFFECT OF EXCHANGE RATES ON CASH | (827) | 30 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 19,619 | 4,191 |
CASH AND CASH EQUIVALENTS: | ||
Beginning of period | 32,336 | 19,171 |
End of period | 51,955 | 23,362 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Interest (net of capitalized interest of $468 and $371, respectively) | 8,018 | 5,953 |
Income taxes | 6,069 | 4,029 |
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | ||
Property and equipment purchases in accounts payable | 3,058 | 1,394 |
Acquisition purchases in accrued expenses and other long-term obligations | 0 | 12,000 |
Merit common stock surrendered (43 and 0 shares, respectively) in exchange for exercise of stock options | $ 2,262 | $ 0 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Cash Flows [Abstract] | ||
Net capitalized interest | $ 468 | $ 371 |
Merit common stock surrendered in exchange for exercise of stock options (in shares) | 43 | 0 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation. The interim consolidated financial statements of Merit Medical Systems, Inc. ("Merit," "we" or "us") for the three and nine-month periods ended September 30, 2018 and 2017 are not audited. Our consolidated financial statements are prepared in accordance with the requirements for unaudited interim periods and, consequently, do not include all disclosures required to be made in conformity with accounting principles generally accepted in the United States of America. In the opinion of our management, the accompanying consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of our financial position as of September 30, 2018 and December 31, 2017, and our results of operations and cash flows for the three and nine-month periods ended September 30, 2018 and 2017. The results of operations for the three and nine-month periods ended September 30, 2018 and 2017 are not necessarily indicative of the results for a full-year period. These interim consolidated financial statements should be read in conjunction with the financial statements included in our Annual Report on Form 10-K (the "2017 Form 10-K") for the year ended December 31, 2017, which was filed with the Securities and Exchange Commission (the "SEC") on March 1, 2018. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories. Inventories at September 30, 2018 and December 31, 2017, consisted of the following (in thousands): September 30, December 31, 2018 2017 Finished goods $ 103,258 $ 86,555 Work-in-process 20,546 12,799 Raw materials 57,635 55,934 Total Inventories $ 181,439 $ 155,288 |
Stock-Based Compensation Expens
Stock-Based Compensation Expense | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Expense | Stock-Based Compensation Expense. Stock-based compensation expense before income tax expense for the three and nine months ended September 30, 2018 and 2017, consisted of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Cost of sales $ 241 $ 189 $ 657 $ 453 Research and development 141 110 412 262 Selling, general and administrative 1,291 893 3,425 2,168 Stock-based compensation expense before taxes $ 1,673 $ 1,192 $ 4,494 $ 2,883 We recognize stock-based compensation expense (net of a forfeiture rate) for those awards which are expected to vest on a straight-line basis over the requisite service period. We estimate the forfeiture rate based on our historical experience and expectations about future forfeitures. As of September 30, 2018, the total remaining unrecognized compensation cost related to non-vested stock options, net of expected forfeitures, was approximately $20.7 million and is expected to be recognized over a weighted average period of 3.25 years. During the three-month period ended September 30, 2018, we did not grant any new stock-based awards. During the nine-month period ended September 30, 2018, we granted stock-based awards representing 692,002 shares of our common stock. During the three and nine-month periods ended September 30, 2017, we granted stock-based awards representing 20,000 and approximately 1.3 million shares of our common stock, respectively. We use the Black-Scholes methodology to value the stock-based compensation expense for options. In applying the Black-Scholes methodology to the option grants, the fair value of our stock-based awards granted was estimated using the following assumptions for the periods indicated below: Nine Months Ended September 30, 2018 2017 Risk-free interest rate 2.63% - 2.77% 1.77% - 1.83% Expected option life 5.0 years 5.0 years Expected dividend yield — — Expected price volatility 34.06% - 34.32% 33.81% - 34.07% |
Earnings Per Common Share (EPS)
Earnings Per Common Share (EPS) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share, Basic and Diluted [Abstract] | |
Earnings Per Common Share (EPS) | Earnings Per Common Share (EPS). The computation of weighted average shares outstanding and the basic and diluted earnings per common share for the following periods consisted of the following (in thousands, except per share amounts): Three Months Nine Months Net Income Shares Per Share Amount Net Income Shares Per Share Amount Period ended September 30, 2018: Basic EPS $ 16,619 53,431 $ 0.31 $ 32,828 51,434 $ 0.64 Effect of dilutive stock options and warrants 1,672 1,662 Diluted EPS $ 16,619 55,103 $ 0.30 $ 32,828 53,096 $ 0.62 Stock options excluded from the calculation of common stock equivalents as the impact was anti-dilutive 667 462 Period ended September 30, 2017: Basic EPS $ (3,569) 50,150 $ (0.07) $ 20,717 48,332 $ 0.43 Effect of dilutive stock options and warrants 1,449 1,223 Diluted EPS $ (3,569) 51,599 $ (0.07) $ 20,717 49,555 $ 0.42 Stock options excluded from the calculation of common stock equivalents as the impact was anti-dilutive 200 434 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions. During July 2018, we purchased 1,786,000 preferred limited liability company units of Cagent Vascular, LLC, a medical device company ("Cagent"), for approximately $2.2 million. Our investment has been accounted for as an equity investment reflected within other assets in the accompanying consolidated balance sheets because we are not able to exercise significant influence over the operations of Cagent. Our total investment in Cagent represents an ownership of approximately 19.5% of the outstanding limited liability company units.On May 23, 2018, we entered into an asset purchase agreement with DirectACCESS Medical, LLC (“DirectACCESS”) to acquire its assets, including, certain product distribution agreements for the FirstChoice™ Ultra High Pressure PTA Balloon Catheter. We accounted for this acquisition as a business combination. The purchase price for the assets was approximately $7.3 million. The sales and results of operations related to the acquisition have been included in our cardiovascular segment since the acquisition date and were not material. Acquisition-related costs associated with the DirectACCESS acquisition, which were included in selling, general and administrative expenses in our consolidated statements of income, were not material. The purchase price was preliminarily allocated as follows (in thousands): Inventories $ 971 Intangibles Developed technology 4,840 Customer list 120 Trademarks 400 Goodwill 938 Total assets acquired $ 7,269 We are amortizing the developed technology intangible asset over ten years, the related trademarks over ten years and the customer list on an accelerated basis over five years. The total weighted-average amortization period for these acquired intangible assets is approximately 9.9 years. On May 18, 2018, we paid $750,000 for a distribution agreement with QXMédical, LLC ("QXMédical") for the Q50® PLUS Stent Graft Balloon Catheter. We accounted for this acquisition as an asset purchase. We are amortizing the distribution agreement as an intangible asset over a period of ten years. On April 6, 2018, we entered into long-term agreements with NinePoint Medical, Inc. (“NinePoint”), pursuant to which, we (a) became the exclusive worldwide distributor for the NvisionVLE® Imaging System with Real-time Targeting™ using Optical Coherence Tomography (OCT) and (b) acquired an option to purchase up to 100% of the outstanding equity in NinePoint throughout a three-month period commencing 18 months subsequent to the agreement date, both in exchange for total consideration of $10.0 million. We accounted for this transaction as an asset purchase. The results of operations related to the distribution agreement have been included in our endoscopy operating segment since the acquisition date. During the three and nine months ended September 30, 2018, our net sales of NinePoint products were approximately $1.4 million and $2.5 million, respectively. We believe the NinePoint products will enhance the product offerings of our endoscopy operating segment and will be another step in our strategy to add therapy and disease-state products to our portfolio. The NinePoint products have 510(k) clearance in the United States, and NinePoint is preparing a CE mark application. We plan to launch the NinePoint products globally on a measured basis. In addition, on April 6, 2018, we made a loan to NinePoint for $10.5 million with a maturity date of April 6, 2023, at which time the loan, together with accrued interest thereon, will be due and payable. The loan bears interest at an annual rate of 9% and is collateralized by NinePoint's rights, interest and title to the NvisionVLE® Imaging System and substantially all other assets of NinePoint. This loan has been recorded as a note receivable within other long-term assets in our consolidated balance sheets. On February 14, 2018, we acquired certain divested assets from Becton, Dickinson and Company ("BD"), for an aggregate purchase price of $100.3 million. The assets acquired include the soft tissue core needle biopsy products sold under the tradenames of Achieve® Programmable Automatic Biopsy System, Temno® Biopsy System, Tru-Cut® Biopsy Needles as well as Aspira® Pleural Effusion Drainage Kits, and the Aspira® Peritoneal Drainage System. We accounted for this acquisition as a business combination. During the three and nine-month periods ended September 30, 2018, our net sales of BD products were approximately $11.8 million and $30.3 million, respectively. It is not practical to separately report earnings related to the products acquired from BD, as we cannot split out sales costs related solely to the products we acquired from BD, principally because our sales representatives sell multiple products (including the products we acquired from BD) in our cardiovascular business segment. Acquisition-related costs associated with the BD acquisition, which are included in selling, general and administrative expenses in the accompanying consolidated statements of income, were approximately $1.8 million for the nine-month period ended September 30, 2018. The following table summarizes the purchase price allocated to the assets acquired from BD (in thousands): Inventories $ 5,804 Property and equipment 748 Intangibles Developed technology 74,000 Customer list 4,200 Trademarks 4,900 Goodwill 10,613 Total assets acquired $ 100,265 We are amortizing the developed technology intangible assets over eight years, the related trademarks over nine years, and the customer lists on an accelerated basis over seven years. The total weighted-average amortization period for these acquired intangible assets is approximately eight years. On October 2, 2017, we acquired a custom procedure pack business located in Melbourne, Australia from ITL Healthcare Pty Ltd. ("ITL"), for an aggregate purchase price of $11.3 million. We accounted for this acquisition as a business combination. The following table summarizes the aggregate purchase price allocated to the assets acquired from ITL (in thousands): Assets Acquired Trade receivables $ 1,287 Other receivables 56 Inventories 1,808 Prepaid expenses and other assets 65 Property and equipment 1,053 Intangibles Customer lists 5,940 Goodwill 3,945 Total assets acquired 14,154 Liabilities Assumed Trade payables (216) Accrued expenses (747) Deferred income tax liabilities (1,901) Total liabilities assumed (2,864) Total net assets acquired $ 11,290 We are amortizing the customer list on an accelerated basis over seven years. Acquisition-related costs associated with the ITL acquisition, which were included in selling, general and administrative expenses in the consolidated statements of income in the 2017 Form 10-K, were not material. The results of operations related to this acquisition have been included in our cardiovascular operating segment since the acquisition date. During the three and nine months ended September 30, 2018, our net sales of ITL products were approximately $1.9 million and $6.1 million, respectively. It is not practical to separately report the earnings related to the ITL acquisition, as we cannot split out sales costs related solely to the products we acquired from ITL, principally because our sales representatives sell multiple products (including the products we acquired from ITL) in our cardiovascular business segment. On August 4, 2017, we acquired from Laurane Medical S.A.S. ("Laurane") and its shareholders inventories and the intellectual property rights associated with certain manual bone biopsy devices, manual bone marrow needles and muscle biopsy kits for an aggregate purchase price of $16.5 million. We also recorded a contingent consideration liability of $5.5 million related to royalties potentially payable to Laurane's shareholders pursuant to the terms of an intellectual property purchase agreement. We accounted for this acquisition as a business combination. The following table summarizes the aggregate purchase price (including contingent royalty payment liabilities) allocated to the assets acquired from Laurane (in thousands): Inventories $ 594 Intangibles Developed technology 14,920 Customer list 120 Goodwill 6,366 Total assets acquired $ 22,000 We are amortizing the developed technology intangible asset over 12 years and the customer list on an accelerated basis over one year. The total weighted-average amortization period for these acquired intangible assets is 11.9 years. The sales and results of operations related to the acquisition have been included in our cardiovascular segment since the acquisition date and were not material. Acquisition-related costs associated with the Laurane acquisition, which were included in selling, general and administrative expenses in the consolidated statements of income of our 2017 Form 10-K, were not material. On July 3, 2017, we acquired from Osseon LLC (“Osseon”) substantially all the assets related to Osseon’s vertebral augmentation products. We accounted for this acquisition as a business combination. The purchase price for the assets was approximately $6.8 million. Acquisition-related costs associated with the Osseon acquisition, which were included in selling, general and administrative expenses in the consolidated statements of income of our 2017 Form 10-K, were not material. The results of operations related to this acquisition have been included in our cardiovascular segment since the acquisition date. During the three and nine months ended September 30, 2018, our net sales of Osseon products were approximately $478,000 and $1.6 million, respectively. It is not practical to separately report the earnings related to the Osseon acquisition, as we cannot split out sales costs related solely to the products we acquired from Osseon, principally because our sales representatives sell multiple products (including the products we acquired from Osseon) in our cardiovascular business segment. The following table summarizes the purchase price allocated to the assets acquired (in thousands): Inventories $ 979 Property and equipment 58 Intangibles Developed technology 5,400 Customer list 200 Goodwill 203 Total assets acquired $ 6,840 We are amortizing the developed technology intangible asset over nine years and customer lists on an accelerated basis over eight years. The total weighted-average amortization period for these acquired intangible assets is approximately 9.0 years. On May 1, 2017, we entered into an agreement and plan of merger with Vascular Access Technologies, Inc. ("VAT"), pursuant to which we acquired the SAFECVAD™ device. We accounted for this acquisition as a business combination. The purchase price for the acquisition was $5.0 million. We also recorded $4.9 million of contingent consideration related to royalties potentially payable to VAT pursuant to the merger agreement. The following table summarizes the purchase price allocated to the net assets acquired (in thousands): Intangibles Developed technology $ 7,800 In-process technology 920 Goodwill 4,281 Deferred tax liabilities (3,101) Total net assets acquired $ 9,900 We are amortizing the developed technology intangible asset over 15 years. The sales and results of operations related to the acquisition have been included in our cardiovascular segment since the acquisition date and were not material. Acquisition-related costs associated with the VAT acquisition, which were included in selling, general and administrative expenses in the consolidated statements of income of our 2017 Form 10-K, were not material. On January 31, 2017, we acquired the critical care division of Argon Medical Devices, Inc. ("Argon"), including a manufacturing facility in Singapore, the related commercial operations in Europe and Japan, and certain inventories and intellectual property rights within the United States. We made an initial payment of approximately $10.9 million and received a subsequent reduction to the purchase price of approximately $797,000 related to a working capital adjustment according to the terms of the purchase agreement. We accounted for the acquisition as a business combination. Acquisition-related costs associated with the acquisition of the Argon critical care division during the year ended December 31, 2017, which were included in selling, general and administrative expenses in the consolidated statements of income of our 2017 Form 10-K, were approximately $2.6 million. The results of operations related to this acquisition have been included in our cardiovascular segment since the acquisition date. During the three and nine months ended September 30, 2018, our net sales of the Argon critical care products were approximately $11.0 million and $34.2 million, respectively. It is not practical to separately report the earnings related to the Argon critical care acquisition, as we cannot split out sales costs related solely to the products we acquired from Argon, principally because our sales representatives sell multiple products (including the products we acquired from Argon) in our cardiovascular business segment. The assets and liabilities in the purchase price allocation for the Argon critical care acquisition are stated at fair value based on estimates of fair value using available information and making assumptions our management believes are reasonable. The following table summarizes the purchase price allocated to the net tangible and intangible assets acquired and liabilities assumed (in thousands): Assets Acquired Cash and cash equivalents $ 1,436 Trade receivables 8,351 Inventories 11,222 Prepaid expenses and other assets 1,275 Income tax refund receivables 165 Property and equipment 2,319 Deferred income tax assets 202 Intangibles Developed technology 2,200 Customer lists 1,500 Trademarks 900 Total assets acquired 29,570 Liabilities Assumed Trade payables (2,414) Accrued expenses (5,083) Deferred income tax liabilities (934) Total liabilities assumed (8,431) Total net assets acquired 21,139 Gain on bargain purchase (1) (11,039) Total purchase price $ 10,100 (1) The total fair value of the net assets acquired from Argon exceeded the purchase price, resulting in a gain on bargain purchase which was recorded within other income (expense) in our consolidated statements of income. We believe the reason for the gain on bargain purchase was a result of the divestiture of a non-strategic, slow-growth critical care business for Argon. It is our understanding that the divestiture allows Argon to focus on its higher growth interventional portfolio. A reduction of $1.2 million was recorded since the bargain purchase gain was first presented in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, resulting from our ongoing activities, including reassessment of the assets acquired and liabilities assumed. The purchase price allocation for this acquisition is now final. With respect to the Argon critical care assets, we are amortizing developed technology over seven years and customer lists on an accelerated basis over five years. While U.S. trademarks can be renewed indefinitely, we estimate that we will generate cash flow from the acquired trademarks for a period of five years from the acquisition date. The total weighted-average amortization period for these acquired intangible assets is approximately 6.0 years. On January 31, 2017, we acquired substantially all the assets, including intellectual property covered by approximately 40 patents and pending applications, and assumed certain liabilities, of Catheter Connections, Inc. (“Catheter Connections”), in exchange for payment of $38.0 million. Catheter Connections, based in Salt Lake City, Utah, developed and marketed the DualCap® System, an innovative family of disinfecting products designed to protect patients from intravenous infections resulting from infusion therapy. We accounted for this acquisition as a business combination. Acquisition-related costs associated with the Catheter Connections acquisition during the year ended December 31, 2017, which were included in selling, general and administrative expenses were approximately $482,000. The results of operations related to this acquisition have been included in our cardiovascular operating segment since the acquisition date. During the three and nine months ended September 30, 2018, our net sales of the products acquired from Catheter Connections were approximately $3.7 million and $10.1 million, respectively. It is not practical to separately report the earnings related to the products acquired from Catheter Connections, as we cannot split out sales costs related solely to those products, principally because our sales representatives sell multiple products (including the DualCap System) in the cardiovascular business segment. The purchase price was allocated as follows (in thousands): Assets Acquired Trade receivables $ 958 Inventories 2,157 Prepaid expenses and other assets 85 Property and equipment 1,472 Intangibles Developed technology 21,100 Customer lists 700 Trademarks 2,900 Goodwill 8,989 Total assets acquired 38,361 Liabilities Assumed Trade payables (338) Accrued expenses (23) Total liabilities assumed (361) Total net assets acquired $ 38,000 We are amortizing the Catheter Connections developed technology asset over 12 years, the related trademarks over ten years, and the associated customer list on an accelerated basis over eight years. We have estimated the weighted average life of the intangible Catheter Connections assets acquired to be approximately 11.7 years. The following table summarizes our consolidated results of operations for the nine-month period ended September 30, 2017, as well as unaudited pro forma consolidated results of operations as though the acquisition of the Argon critical care division had occurred on January 1, 2016 (in thousands, except per common share amounts): Nine Months Ended September 30, 2017 As Reported Pro Forma Net sales $ 536,955 $ 539,715 Net income 20,717 10,039 Earnings per common share: Basic $ 0.43 $ 0.21 Diluted $ 0.42 $ 0.20 * The pro forma results for the three-month periods ended September 30, 2018 and 2017 and the nine-month period ended September 30, 2018 are not included in the table above because the operating results for the Argon critical care division acquisition were included in our consolidated statements of income for these periods. The unaudited pro forma information set forth above is for informational purposes only and includes adjustments related to the step-up of acquired inventories, amortization expense of acquired intangible assets, interest expense on long-term debt and changes in the timing of the recognition of the gain on bargain purchase. The pro forma information should not be considered indicative of actual results that would have been achieved if the acquisition of the Argon critical care division had occurred on January 1, 2016, or results that may be obtained in any future period. The pro forma consolidated results of operations do not include the acquisition of assets from BD because it was deemed impracticable to obtain information to determine net income associated with the acquired product lines which represent a small product line of a large, consolidated company without standalone financial information. The pro forma consolidated results of operations do not include the DirectACCESS, ITL, Laurane, Osseon, VAT or Catheter Connections acquisitions as we do not deem the pro forma effect of these transactions to be material. The goodwill arising from the acquisitions discussed above consists largely of the synergies and economies of scale we hope to achieve from combining the acquired assets and operations with our historical operations. The goodwill recognized from certain acquisitions is expected to be deductible for income tax purposes. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customers | Revenue from Contracts with Customers. We sell our medical products through a direct sales force in the U.S. and through OEM relationships, custom procedure tray manufacturers and a combination of direct sales force and independent distributors in international markets. Revenue is recognized when a customer obtains control of promised goods based on the consideration we expect to receive in exchange for these goods. This core principle is achieved through the following steps: Identify the contract with the customer . A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods to be transferred and identifies the payment terms related to these goods, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. We do not have significant costs to obtain contracts with customers. For commissions on product sales, we have elected the practical expedient to expense the costs as incurred if the amortization period would have been one year or less. Identify the performance obligations in the contract . Generally, our contracts with customers do not include multiple performance obligations to be completed over a period of time. Our performance obligations generally relate to delivering single-use medical products to a customer, subject to the shipping terms of the contract. Limited warranties are provided, under which we typically accept returns and provide either replacement parts or refunds. We do not have significant returns. We do not typically offer extended warranty or service plans. Determine the transaction price . Payment by the customer is due under customary fixed payment terms, and we evaluate if collectability is reasonably assured. None of our contracts as of September 30, 2018 contained a significant financing component. Revenue is recorded at the net sales price, which includes estimates of variable consideration such as product returns, rebates, discounts, and other adjustments. The estimates of variable consideration are based on historical payment experience, historical and projected sales data, and current contract terms. Variable consideration is included in revenue only to the extent that it is probable that a significant reversal of the revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues. Allocate the transaction price to performance obligations in the contract . We typically do not have multiple performance obligations in our contracts with customers. As such, we recognize revenue upon transfer of the product to the customer's control at contractually stated pricing. Recognize revenue when or as we satisfy a performance obligation. We satisfy performance obligations at a point in time upon either shipment or delivery of goods, in accordance with the terms of each contract with the customer. We do not have significant service revenue. Disaggregation of Revenue The disaggregation of revenue is based on type of product and geographical region. For descriptions of our product offerings and segments, see Note 12 in our 2017 Form 10-K. The following tables present revenue from contracts with customers for the three and nine-month periods ended September 30, 2018 and 2017 (in thousands): Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 United States International Total United States International Total Cardiovascular Stand-alone devices $ 52,173 $ 38,802 $ 90,975 $ 36,383 $ 32,366 $ 68,749 Custom kits and procedure trays 23,199 9,896 33,095 23,085 7,326 30,411 Inflation devices 7,819 15,074 22,893 8,241 11,792 20,033 Catheters 18,081 22,510 40,591 15,377 16,374 31,751 Embolization devices 5,145 7,250 12,395 5,414 6,838 12,252 CRM/EP 10,462 1,739 12,201 8,202 1,325 9,527 Total 116,879 95,271 212,150 96,702 76,021 172,723 Endoscopy Endoscopy devices 9,229 280 9,509 6,389 225 6,614 Total $ 126,108 $ 95,551 $ 221,659 $ 103,091 $ 76,246 $ 179,337 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 United States International Total United States International Total Cardiovascular Stand-alone devices $ 147,125 $ 119,592 $ 266,717 $ 109,750 $ 93,709 $ 203,459 Custom kits and procedure trays 69,184 31,175 100,359 68,823 22,259 91,082 Inflation devices 23,647 45,970 69,617 24,257 35,072 59,329 Catheters 50,055 63,775 113,830 46,529 47,828 94,357 Embolization devices 15,272 22,434 37,706 16,548 20,388 36,936 CRM/EP 31,058 5,105 36,163 28,212 3,765 31,977 Total 336,341 288,051 624,392 294,119 223,021 517,140 Endoscopy Endoscopy devices 24,269 843 25,112 19,195 620 19,815 Total $ 360,610 $ 288,894 $ 649,504 $ 313,314 $ 223,641 $ 536,955 |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting. We report our operations in two operating segments: cardiovascular and endoscopy. Our cardiovascular segment consists of cardiology and radiology medical device products which assist in diagnosing and treating coronary artery disease, peripheral vascular disease and other non-vascular diseases and includes embolotherapeutic, cardiac rhythm management ("CRM"), electrophysiology ("EP"), critical care, and interventional oncology and spine devices. Our endoscopy segment focuses on the gastroenterology, pulmonary and thoracic surgery specialties, with a portfolio consisting primarily of stents, dilation balloons, certain inflation devices, guidewires, and other disposable products. We evaluate the performance of our operating segments based on operating income. Financial information relating to our reportable operating segments and reconciliations to the consolidated totals for the three and nine-month periods ended September 30, 2018 and 2017, are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Net Sales Cardiovascular $ 212,150 $ 172,723 $ 624,392 $ 517,140 Endoscopy 9,509 6,614 25,112 19,815 Total net sales $ 221,659 $ 179,337 $ 649,504 $ 536,955 Operating Income (Loss) Cardiovascular $ 18,199 $ (1,207) $ 37,263 $ 14,239 Endoscopy 2,862 2,086 7,692 5,611 Total operating income $ 21,061 $ 879 $ 44,955 $ 19,850 |
Recently Issued Financial Accou
Recently Issued Financial Accounting Standards | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Recently Issued Financial Accounting Standards | Recently Issued Financial Accounting Standards Recently Adopted In October 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory , which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 became effective for us as of January 1, 2018. The adoption of ASU 2016-16 did not have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. We adopted ASU 2016-15 on January 1, 2018. The adoption of ASU 2016-15 did not have a material impact on our consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities , which amends the guidance regarding the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, ASU 2016-01 clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. We adopted ASU 2016-01 on January 1, 2018. The adoption of ASU 2016-01 did not have a material impact on our consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. We adopted this ASU (and all subsequent ASUs that modified Topic 606) effective January 1, 2018 on a modified retrospective basis. Adoption of this standard did not result in significant changes to our accounting policies, business processes, systems or controls, or have a material impact on our financial position, results of operations or cash flows. As such, prior period amounts are not adjusted and continue to be reported under accounting standards then in effect, and we did not record a cumulative adjustment to the opening equity balance of retained earnings as of January 1, 2018. However, additional disclosures have been added in accordance with the requirements of Topic 606 and are reflected in Note 6. Not Yet Adopted In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) . The new guidance reduces complexity for the accounting for costs of implementing a cloud computing service arrangement and aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). ASU 2018-15 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. Implementation may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We are currently evaluating the anticipated impact of adopting ASU 2018-15 on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820)—Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement , which modifies disclosure requirements related to fair value measurements. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Implementation on a prospective or retrospective basis varies by specific disclosure requirement. The standard allows for early adoption of any removed or modified disclosures upon issuance of this ASU while delaying adoption of the additional disclosures until their effective date. We are currently evaluating the anticipated impact of adopting ASU 2018-13 on our consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , which simplifies the accounting for nonemployee share-based payment transactions by expanding the scope of ASC Topic 718, Compensation - Stock Compensation , to include share-based payment transactions for acquiring goods and services from nonemployees. Under the new standard, most of the guidance on stock compensation payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. This standard is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. While we continue to assess the potential impact of this standard, we do not expect the adoption of this standard to have a material impact on our consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from U.S. federal tax legislation commonly referred to as the Tax Cuts and Jobs Act, which was enacted in December 2017 (the "2017 Tax Act"). ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. While we continue to assess our adoption policy for this standard, we do not expect adoption to have a material impact on our consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , which expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the anticipated impact of adopting ASU 2017-12 on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which eliminates the current tests for lease classification under U.S. GAAP and requires lessees to recognize the right-of-use assets and related lease liabilities on the balance sheet for all leases greater than one year in duration. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of ASU 2016-02 is permitted. In July 2018, the FASB issued ASU 2018-11 to provide a transition practical expedient by allowing entities to initially apply the new leases standard at the adoption date, recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, and not restate prior periods. We expect to adopt this as well as certain other practical expedients available to us under the new guidance. We have implemented processes and information technology tools to assist in our ongoing lease data collection and analysis. We are currently finalizing our lease portfolio analysis to determine the impact to our consolidated financial statements, and currently expect that most of our operating lease commitments will be recognized as lease liabilities and right-of-use assets upon our adoption of ASU 2016-02. We are updating our accounting policies and internal controls that will be impacted by the new guidance to ensure readiness for adoption in the first quarter of 2019. We do not believe any other issued and not yet effective accounting standards will be relevant to our consolidated financial statements. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes. On December 22, 2017, the 2017 Tax Act was signed into law. At December 31, 2017, we recorded a provisional net tax benefit related to the remeasurement of deferred taxes and a one-time tax expense for the transition tax. In accordance with SEC Staff Accounting Bulletin 118, income tax effects of the 2017 Tax Act may be refined upon obtaining, preparing, and/or analyzing additional information during the measurement period and such changes could be material. During the measurement period, provisional amounts may also be adjusted for the effects, if any, of interpretative guidance issued after December 31, 2017 by U.S. regulatory and standard-setting bodies. As of September 30, 2018, the amounts recorded for the 2017 Tax Act remain provisional and may be impacted by further analysis and subsequently issued guidance. For tax years beginning after December 31, 2017, the 2017 Tax Act introduces new provisions of U.S. taxation of certain Global Intangible Low-Taxed Income (“GILTI”). We have not yet determined our policy election with respect to whether to record deferred taxes for temporary basis differences expected to reverse as GILTI in future periods, or account for taxes on GILTI using the period cost method. We have, however, included an estimate of the current GILTI impact in our tax provision for the three and nine months ended September 30, 2018. Our non-U.S. earnings are currently considered as indefinitely reinvested overseas. Previously, any repatriation by way of a dividend may have been subject to both U.S. federal and state income taxes, as adjusted for any non-U.S. tax credits. Under the 2017 Tax Act, such dividends should no longer be subject to U.S. federal tax. We are still analyzing how the 2017 Tax Act impacts our existing accounting position to indefinitely reinvest foreign earnings and have yet to determine whether we plan to change our position. We will record the tax effects of any change to our existing assertion in the period that we complete our analysis. If such earnings were to be distributed, any foreign withholding taxes could be material. Our provision for income taxes for the three months ended September 30, 2018 and 2017 was a tax expense of approximately $2.8 million and $1.4 million, respectively, which resulted in an effective tax rate of 14.3% and (61.9)%, respectively. The change in the effective tax rate for the third quarter of 2018 compared to the third quarter of 2017 is primarily due to the discrete tax impact of the in-process research and development charge attributable to the IntelliMedical acquisition completed in the third quarter of 2017, which is not deductible for tax purposes. Our provision for income taxes for the nine months ended September 30, 2018 and 2017 was a tax expense of approximately $4.5 million and $3.9 million, respectively, which resulted in an effective tax rate of 12.0% and 15.8%, respectively. The decrease in the effective income tax rate for the nine months ended September 30, 2018 compared to the corresponding period of 2017 was primarily due to a discrete tax benefit related to share-based payment awards. |
Revolving Credit Facility and L
Revolving Credit Facility and Long-Term Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facility and Long-Term Debt | Revolving Credit Facility and Long-Term Debt. Principal balances outstanding under our long-term debt obligations as of September 30, 2018 and December 31, 2017, consisted of the following (in thousands): September 30, 2018 December 31, 2017 2016 Term loan $ 76,250 $ 85,000 2016 Revolving credit loans 126,000 187,000 Collateralized debt facility 7,000 6,959 Less unamortized debt issuance costs (383) (487) Total long-term debt 208,867 278,472 Less current portion 22,000 19,459 Long-term portion $ 186,867 $ 259,013 2016 Term Loan and Revolving Credit Loans On July 6, 2016, we entered into a Second Amended and Restated Credit Agreement (as amended to date, the “Second Amended Credit Agreement”), with Wells Fargo Bank, National Association, as administrative agent, swingline lender and a lender, and Wells Fargo Securities, LLC, as sole lead arranger and sole bookrunner. In addition to Wells Fargo Bank, National Association, Bank of America, N.A., U.S. Bank, National Association, and HSBC Bank USA, National Association, are parties to the Second Amended Credit Agreement as lenders. The Second Amended Credit Agreement amends and restates in its entirety our previously outstanding Amended and Restated Credit Agreement and all amendments thereto. The Second Amended Credit Agreement was amended on September 28, 2016 to allow for a new revolving credit loan to our wholly-owned subsidiary, on March 20, 2017 to allow flexibility in how we apply net proceeds received from equity issuances to prepay outstanding indebtedness, on December 13, 2017 to increase the revolving credit commitment by $100 million up to $375 million, and on March 28, 2018 to amend certain debt covenants. The Second Amended Credit Agreement provides for a term loan of $150 million and a revolving credit commitment up to an aggregate amount of $375 million, which includes a reserve of $25 million to make swingline loans from time to time. The term loan is payable in quarterly installments in the amounts provided in the Second Amended Credit Agreement until the maturity date of July 6, 2021, at which time the term and revolving credit loans, together with accrued interest thereon, will be due and payable. At any time prior to the maturity date, we may repay any amounts owing under all revolving credit loans, term loans, and all swingline loans in whole or in part, subject to certain minimum thresholds, without premium or penalty, other than breakage costs. Revolving credit loans denominated in dollars and term loans made under the Second Amended Credit Agreement bear interest, at our election, at either a Base Rate or Eurocurrency Base Rate (as such terms are defined in the Second Amended Credit Agreement) plus the applicable margin, which increases as our Consolidated Total Leverage Ratio (as defined in the Second Amended Credit Agreement) increases. Revolving credit loans denominated in an Alternative Currency (as defined in the Second Amended Credit Agreement) bear interest at the Eurocurrency rate plus the applicable margin. Swingline loans bear interest at the Base Rate plus the applicable margin. Upon an event of default, the interest rate may be increased by 2.0%. The revolving credit commitment also carries a commitment fee of 0.15% to 0.40% per annum on the unused portion. The Second Amended Credit Agreement is collateralized by substantially all our assets. The Second Amended Credit Agreement contains covenants, representations and warranties, and other terms customary for loans of this nature. The Second Amended Credit Agreement requires that we maintain certain financial covenants, as follows: Covenant Requirement Consolidated Total Leverage Ratio (1) January 1, 2018 and thereafter 3.5 to 1.0 Consolidated EBITDA (2) 1.25 to 1.0 Consolidated Net Income (3) $0 Facility Capital Expenditures (4) $30 million (1) Maximum Consolidated Total Leverage Ratio (as defined in the Second Amended Credit Agreement) as of any fiscal quarter end. (2) Minimum ratio of Consolidated EBITDA (as defined in the Second Amended Credit Agreement and adjusted for certain expenditures) to Consolidated Fixed Charges (as defined in the Second Amended Credit Agreement) for any period of four consecutive fiscal quarters. (3) Minimum level of Consolidated Net Income (as defined in the Second Amended Credit Agreement) for certain periods, and subject to certain adjustments. (4) Maximum level of the aggregate amount of all Facility Capital Expenditures (as defined in the Second Amended Credit Agreement) in any fiscal year. Additionally, the Second Amended Credit Agreement contains customary events of default and affirmative and negative covenants for transactions of this type. As of September 30, 2018, we believe we were in compliance with all covenants set forth in the Second Amended Credit Agreement. As of September 30, 2018, we had outstanding borrowings of approximately $202.3 million under the Second Amended Credit Agreement, with available borrowings of approximately $248.4 million, based on the leverage ratio required pursuant to the Second Amended Credit Agreement. Our interest rate as of September 30, 2018 was a fixed rate of 2.87% on $175.0 million as a result an interest rate swap (see Note 11) and a variable floating rate of 3.99% on $27.3 million. Our interest rate as of December 31, 2017 was a fixed rate of 2.68% on $175 million as a result of an interest rate swap and a variable floating rate of 2.82% on $97 million. Collateralized Debt Facility On September 3, 2018, we renewed our loan agreement with HSBC Bank whereby HSBC Bank agreed to provide us with a loan in the amount of approximately $7.0 million. The loan matures on January 10, 2019, with an extension available at our option, subject to certain conditions. The loan agreement bears interest at the six-month London Inter-Bank Offered Rate (“LIBOR”) plus 1.0%. The loan is secured by assets having a value not less than the currently outstanding loan balance. The loan contains covenants, representations and warranties and other terms customary for loans of this nature. As of September 30, 2018, our interest rate on the loan was a variable rate of 3.12%. Future Payments Future minimum principal payments on our long-term debt as of September 30, 2018, are as follows (in thousands): Years Ending Future Minimum December 31 Principal Payments Remaining 2018 $ 3,750 2019 22,000 2020 17,500 2021 166,000 Total future minimum principal payments $ 209,250 |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives General. Our earnings and cash flows are subject to fluctuations due to changes in interest rates and foreign currency exchange rates, and we seek to mitigate a portion of these risks by entering into derivative contracts. The derivatives we use are interest rate swaps and foreign currency forward contracts. We recognize derivatives as either assets or liabilities at fair value in the accompanying consolidated balance sheets, regardless of whether or not hedge accounting is applied. We report cash flows arising from our hedging instruments consistent with the classification of cash flows from the underlying hedged items. Accordingly, cash flows associated with our derivative programs are classified as operating activities in the accompanying consolidated statements of cash flows. We formally document, designate and assess the effectiveness of transactions that receive hedge accounting initially and on an ongoing basis. Changes in the fair value of derivatives that qualify for hedge accounting treatment are recorded, net of applicable taxes, in accumulated other comprehensive income (loss), a component of stockholders’ equity in the accompanying consolidated balance sheets. For the ineffective portions of qualifying hedges, the change in fair value is recorded through earnings in the period of change. Changes in the fair value of derivatives not designated as hedging instruments are recorded in earnings throughout the term of the derivative. Interest Rate Risk. A portion of our debt bears interest at variable interest rates and, therefore, we are subject to variability in the cash paid for interest expense. In order to mitigate a portion of this risk, we use a hedging strategy to reduce the variability of cash flows in the interest payments associated with a portion of the variable-rate debt outstanding under our Second Amended Credit Agreement that is solely due to changes in the benchmark interest rate. Derivatives Designated as Cash Flow Hedges On August 5, 2016, we entered into a pay-fixed, receive-variable interest rate swap with a current notional amount of $175.0 million with Wells Fargo to fix the one-month LIBOR rate at 1.12%. The variable portion of the interest rate swap is tied to the one-month LIBOR rate (the benchmark interest rate). On a monthly basis, the interest rates under both the interest rate swap and the underlying debt reset, the swap is settled with the counterparty, and interest is paid. The interest rate swap is scheduled to expire on July 6, 2021. At September 30, 2018 and December 31, 2017, our interest rate swap qualified as a cash flow hedge. The fair value of our interest rate swap at September 30, 2018 was an asset of approximately $8.3 million, which was partially offset by approximately $2.1 million in deferred taxes. The fair value of our interest rate swap at December 31, 2017 was an asset of approximately $5.7 million, which was offset by approximately $1.5 million in deferred taxes. Foreign Currency Risk . We operate on a global basis and are exposed to the risk that our financial condition, results of operations, and cash flows could be adversely affected by changes in foreign currency exchange rates. To reduce the potential effects of foreign currency exchange rate movements on net earnings, we enter into derivative financial instruments in the form of foreign currency exchange forward contracts with major financial institutions. Our policy is to enter into foreign currency derivative contracts with maturities of up to two years. We are primarily exposed to foreign currency exchange rate risk with respect to transactions and balances denominated in Euros, British Pounds, Chinese Renminbi, Mexican Pesos, Brazilian Reals, Australian Dollars, Hong Kong Dollars, Swiss Francs, Swedish Krona, Canadian Dollars, Danish Krone, Japanese Yen, Korean Won, and Singapore Dollars. We do not use derivative financial instruments for trading or speculative purposes. We are not subject to any credit risk contingent features related to our derivative contracts, and counterparty risk is managed by allocating derivative contracts among several major financial institutions. Derivatives Designated as Cash Flow Hedges For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any (i.e., the ineffective portion) or hedge components excluded from the assessment of effectiveness, are recognized in earnings during the current period. We enter into forward contracts on various foreign currencies to manage the risk associated with forecasted exchange rates which impact revenues, cost of sales, and operating expenses in various international markets. The objective of the hedges is to reduce the variability of cash flows associated with the forecasted purchase or sale of the associated foreign currencies. We enter into approximately 150 cash flow foreign currency hedges every month. As of September 30, 2018, we had entered into foreign currency forward contracts, which qualified as cash flow hedges, with the following notional amounts (in thousands and in local currencies): Currency Symbol Forward Notional Amount Canadian Dollar CAD 2,460 Swiss Franc CHF 1,215 Chinese Renminbi CNY 60,000 Danish Krone DKK 10,835 Euro EUR 12,270 British Pound GBP 3,355 Japanese Yen JPY 330,000 Mexican Peso MXN 93,575 Swedish Krona SEK 12,780 Derivatives Not Designated as Cash Flow Hedges We forecast our net exposure in various receivables and payables to fluctuations in the value of various currencies, and we enter into foreign currency forward contracts to mitigate that exposure. We enter into approximately 20 foreign currency fair value hedges every month. As of September 30, 2018, we had entered into foreign currency forward contracts related to those balance sheet accounts, with the following notional amounts (in thousands and in local currencies): Currency Symbol Forward Notional Amount Australian Dollar AUD 11,150 Brazilian Real BRL 8,500 Canadian Dollar CAD 3,098 Swiss Franc CHF 255 Chinese Renminbi CNY 95,228 Danish Krone DKK 2,885 Euro EUR 25,861 British Pound GBP 1,584 Hong Kong Dollar HKD 11,000 Japanese Yen JPY 260,000 Korean Won KRW 2,700,000 Mexican Peso MXN 18,700 Swedish Krona SEK 10,536 Singapore Dollar SGD 6,900 Balance Sheet Presentation of Derivatives. As of September 30, 2018, and December 31, 2017, all derivatives, both those designated as hedging instruments and those that were not designated as hedging instruments, were recorded gross at fair value on our consolidated balance sheets. We are not subject to any master netting agreements. The fair value of derivative instruments on a gross basis is as follows (in thousands): Fair Value Balance Sheet Location September 30, 2018 December 31, 2017 Derivatives designated as hedging instruments Assets Interest rate swap Other assets (long-term) $ 8,284 $ 5,749 Foreign currency forward contracts Prepaid expenses and other assets 813 363 Foreign currency forward contracts Other assets (long-term) 161 35 Liabilities Foreign currency forward contracts Accrued expenses (240) (468) Foreign currency forward contracts Other long-term obligations (56) (82) Derivatives not designated as hedging instruments Assets Foreign currency forward contracts Prepaid expenses and other assets $ 360 $ 223 Liabilities Foreign currency forward contracts Accrued expenses (475) (841) Income Statement Presentation of Derivatives. Derivatives Designated as Cash Flow Hedges Derivative instruments designated as cash flow hedges had the following effects, before income taxes, on other comprehensive income and net earnings in our consolidated statements of income, consolidated statements of comprehensive income and consolidated balance sheets (in thousands): Amount of Gain/(Loss) Recognized in OCI Amount of Gain/(Loss) Reclassified from AOCI Three Months Ended September 30, Three Months Ended September 30, 2018 2017 2018 2017 Derivative instrument Location in statements of income Interest rate swaps $ 664 $ 1 Interest Expense $ 428 $ 96 Foreign currency forward contracts 543 100 Revenue 86 (101) Cost of sales 26 250 Amount of Gain/(Loss) Recognized in OCI Amount of Gain/(Loss) Reclassified from AOCI Nine Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Derivative instrument Location in statements of income Interest rate swaps $ 3,532 $ (611) Interest Expense $ 998 $ (8) Foreign currency forward contracts 1,112 841 Revenue (299) (141) Cost of sales 404 213 The net amount recognized in earnings during the three and nine months ended September 30, 2018 and 2017 due to ineffectiveness and amounts excluded from the assessment of hedge effectiveness were not significant. As of September 30, 2018, approximately $858,000, or $637,000 after taxes, was expected to be reclassified from accumulated other comprehensive income to earnings in revenue and cost of sales over the succeeding twelve months. As of September 30, 2018, approximately $2.6 million, or $2.0 million after taxes, was expected to be reclassified from accumulated other comprehensive income to earnings in interest expense over the succeeding twelve months. Derivatives Not Designated as Hedging Instruments The following gains/(losses) from these derivative instruments were recognized in our consolidated statements of income for the periods presented (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Derivative Instrument Location in statements of income Foreign currency forward contracts Other expense $ 1,143 $ (1,459) $ 3,181 $ (4,150) |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements. Our financial assets and (liabilities) carried at fair value measured on a recurring basis as of September 30, 2018 and December 31, 2017, consisted of the following (in thousands): Fair Value Measurements Using Total Fair Quoted prices in Significant other Significant Value at active markets observable inputs unobservable inputs Description September 30, 2018 (Level 1) (Level 2) (Level 3) Interest rate contracts (1) $ 8,284 $ — $ 8,284 $ — Foreign currency contract assets, current and long-term (2) $ 1,334 $ — $ 1,334 $ — Foreign currency contract liabilities, current and long-term (3) $ (771) $ — $ (771) $ — Fair Value Measurements Using Total Fair Quoted prices in Significant other Significant Value at active markets observable inputs unobservable inputs Description December 31, 2017 (Level 1) (Level 2) (Level 3) Interest rate contracts (1) $ 5,749 $ — $ 5,749 $ — Foreign currency contract assets, current and long-term (2) $ 621 $ — $ 621 $ — Foreign currency contract liabilities, current and long-term (3) $ (1,391) $ — $ (1,391) $ — (1) The fair value of the interest rate contracts is determined using Level 2 fair value inputs and is recorded as other assets or other long-term obligations in the consolidated balance sheets. (2) The fair value of the foreign currency contract assets (including those designated as hedging instruments and those not designated as hedging instruments) is determined using Level 2 fair value inputs and is recorded as prepaid expenses and other assets or other long-term assets in the consolidated balance sheets. (3) The fair value of the foreign currency contract liabilities (including those designated as hedging instruments and those not designated as hedging instruments) is determined using Level 2 fair value inputs and is recorded as accrued expenses or other long-term obligations in the consolidated balance sheets. Certain of our business combinations involve the potential for the payment of future contingent consideration, generally based on a percentage of future product sales or upon attaining specified future revenue milestones. See Note 5 for further information regarding these acquisitions. The contingent consideration liability is re-measured at the estimated fair value each reporting period with the change in fair value recognized within operating expenses in the accompanying consolidated statements of income. We measure the initial liability and re-measure the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements. Changes in the fair value of our contingent consideration liability during the three and nine-month periods ended September 30, 2018 and 2017, consisted of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Beginning balance $ 10,912 $ 5,572 $ 10,956 $ 683 Contingent consideration liability recorded as the result of acquisitions (see Note 5) — 5,500 — 10,400 Fair value adjustments recorded to income during the period (828) 20 (741) 39 Contingent payments made (53) (15) (184) (45) Ending balance $ 10,031 $ 11,077 $ 10,031 $ 11,077 As of September 30, 2018, approximately $9.8 million in contingent consideration liability was included in other long-term obligations and approximately $280,000 was included in accrued expenses in our consolidated balance sheet. As of December 31, 2017, approximately $10.7 million in contingent consideration liability was included in other long-term obligations and $289,000 was included in accrued expenses in our consolidated balance sheet. The cash paid to settle the contingent consideration liability recognized at fair value as of the acquisition date (including measurement-period adjustments) has been reflected as a cash outflow from financing activities in the accompanying consolidated statements of cash flows. During the year ended December 31, 2016, we sold a cost method investment for cash and for the right to receive additional payments based on various contingent milestones. We determined the fair value of the contingent payments using Level 3 inputs defined under authoritative guidance for fair value measurements, and we recorded a contingent receivable asset, which as of September 30, 2018 and December 31, 2017 had a value of approximately $308,000 and $760,000, respectively. We record any changes in fair value to operating expenses as part of our cardiovascular segment in our consolidated statements of income. During the three and nine months ended September 30, 2018, we recorded a loss on the contingent receivable asset of approximately $167,000 and $299,000, respectively and received payments of approximately $0 and $153,000, respectively. As of September 30, 2018, the contingent receivable asset was included in other receivables as a current asset in our consolidated balance sheet. As of December 31, 2017, approximately $319,000 was included in other long-term assets and approximately $441,000 was included in other receivables as a current asset in our consolidated balance sheet. The recurring Level 3 measurement of our contingent consideration liability and contingent receivable includes the following significant unobservable inputs at September 30, 2018 and December 31, 2017 (amounts in thousands): Contingent consideration asset or liability Fair Value at Valuation technique Unobservable inputs Range Revenue-based payments $ 10,031 Discounted cash flow Discount rate 9.9% - 15% contingent liability Projected year of payments 2018-2037 Contingent receivable $ 308 Discounted cash flow Discount rate 10% asset Weighted-average probability of milestone payment 35% Projected year of payments 2018-2019 Contingent consideration asset or liability Fair Value at December 31, 2017 Valuation technique Unobservable inputs Range Revenue-based payments $ 10,956 Discounted cash flow Discount rate 9.9% - 15% contingent liability Probability of milestone payment 100% Projected year of payments 2018-2037 Contingent receivable $ 760 Discounted cash flow Discount rate 10% asset Weighted-average probability of milestone payment 75% Projected year of payments 2018-2019 The contingent consideration liability and contingent receivable are re-measured to fair value each reporting period using projected revenues, discount rates, probabilities of payment, and projected payment dates. Projected contingent payment amounts are discounted back to the current period using a discounted cash flow model. Projected revenues are based on our most recent internal operational budgets and long-range strategic plans. An increase (decrease) in either the discount rate or the time to payment, in isolation, may result in a significantly lower (higher) fair value measurement. A decrease in the probability of any milestone payment may result in lower fair value measurements. Our determination of the fair value of the contingent consideration liability and contingent receivable could change in future periods based upon our ongoing evaluation of these significant unobservable inputs. We intend to record any such change in fair value to operating expenses in our consolidated statements of income. During the three and nine-month periods ended September 30, 2018, we had losses of approximately $0 and $86,000, respectively, compared to losses of approximately $67,000 and $86,000 for the three and nine-month periods ended September 30, 2017, respectively, related to the measurement of non-financial assets at fair value on a nonrecurring basis subsequent to their initial recognition (see Note 13). We believe the carrying amount of cash and cash equivalents, receivables, and trade payables approximate fair value because of the immediate, short-term maturity of these financial instruments. Our long-term debt re-prices frequently due to variable rates and entails no significant changes in credit risk and, as a result, we believe the fair value of long-term debt approximates carrying value. The fair value of assets and liabilities whose carrying value approximates fair value is determined using Level 2 inputs, with the exception of cash and cash equivalents, which are Level 1 inputs. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets. The changes in the carrying amount of goodwill for the nine-month period ended September 30, 2018 were as follows (in thousands): 2018 Goodwill balance at January 1 $ 238,147 Effect of foreign exchange (881) Additions as the result of acquisitions 11,757 Goodwill balance at September 30 $ 249,023 As of September 30, 2018, we had recorded $8.3 million of accumulated goodwill impairment charges. All of the goodwill balance as of September 30, 2018 and December 31, 2017, is related to our cardiovascular segment. Other intangible assets at September 30, 2018 and December 31, 2017, consisted of the following (in thousands): September 30, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents $ 18,676 $ (4,665) $ 14,011 Distribution agreements 8,012 (5,509) 2,503 License agreements 24,913 (6,895) 18,018 Trademarks 21,514 (6,039) 15,475 Covenants not to compete 1,028 (993) 35 Customer lists 35,590 (21,987) 13,603 In-process technology 920 — 920 Total $ 110,653 $ (46,088) $ 64,565 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents $ 16,528 $ (3,737) $ 12,791 Distribution agreements 7,262 (4,686) 2,576 License agreements 23,783 (5,568) 18,215 Trademarks 16,224 (4,686) 11,538 Covenants not to compete 1,028 (968) 60 Customer lists 31,935 (18,482) 13,453 In-process technology 920 — 920 Total $ 97,680 $ (38,127) $ 59,553 Aggregate amortization expense for the three and nine-month periods ended September 30, 2018 was approximately $10.5 million and $29.4 million, respectively. Aggregate amortization expense for the three and nine-month periods ended September 30, 2017 was approximately $7.0 million and $19.4 million, respectively. We evaluate long-lived assets, including amortizing intangible assets, for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. We perform the impairment analysis at the asset group for which the lowest level of identifiable cash flows are largely independent of the cash flows of other assets and liabilities. During the three months ended September 30, 2018, we compared the carrying value of the amortizing intangible assets acquired in our July 2015 acquisition of certain assets from Quellent, LLC, all of which pertained to our cardiovascular segment, to the undiscounted cash flows expected to result from the asset group and determined that the carrying amount was not recoverable. We then determined the fair value of the amortizing assets related to the Quellent acquisition based on estimated future cash flows discounted back to their present value using a discount rate that reflects the risk profiles of the underlying activities. Some of the factors that influenced our estimated cash flows were slower than anticipated sales growth in the products acquired from our Quellent acquisition and uncertainty about future sales growth. The excess of the carrying value compared to the fair value was recognized as an intangible asset impairment charge. We recorded an impairment charge for Quellent of approximately $657,000. We did not record any impairment charges during the three and nine months ended September 30, 2017. Estimated amortization expense for the developed technology and other intangible assets for the next five years consists of the following as of September 30, 2018 (in thousands): Year Ending December 31 Remaining 2018 $ 10,140 2019 39,647 2020 38,386 2021 31,025 2022 29,141 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies. In the ordinary course of business, we are involved in various claims and litigation matters. These claims and litigation matters may include actions involving product liability, intellectual property, contract disputes, and employment or other matters that are significant to our business. Based upon our review of currently available information, we do not believe any such actions are likely to be, individually or in the aggregate, materially adverse to our business, financial condition, results of operations or liquidity.In October 2016, we received a subpoena from the U.S. Department of Justice seeking information on certain of our marketing and promotional practices. We are in the process of responding to the subpoena, which we anticipate will continue during 2018. We have incurred, and anticipate that we will continue to incur, substantial costs in connection with the matter. The investigation is ongoing and at this stage we are unable to predict its scope, duration or outcome. Investigations such as this may result in the imposition of, among other things, significant damages, injunctions, fines or civil or criminal claims or penalties against our company or individuals. Legal expenses we incurred in responding to the U.S. Department of Justice subpoena for the three and nine-month periods ended September 30, 2018 were approximately $946,000 and $4.3 million, respectively.In the event of unexpected further developments, it is possible that the ultimate resolution of any of the foregoing matters, or other similar matters, if resolved in a manner unfavorable to us, may be materially adverse to our business, financial condition, results of operations or liquidity. Legal costs for these matters, such as outside counsel fees and expenses, are charged to expense in the period incurred. |
Issuance of Common Stock
Issuance of Common Stock | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Issuance of Common Stock | Issuance of Common Stock. On July 30, 2018, we closed a public offering of 4,025,000 shares of common stock and received proceeds of approximately $205.4 million, which is net of approximately $12.0 million in underwriting discounts and commissions, and we paid approximately $366,000 in other direct costs incurred in connection with this equity offering. The net proceeds from the offering were used primarily to repay outstanding borrowings (principally revolving credit loans) under our Second Amended Credit Agreement. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events. On October 1, 2018, we signed a definitive merger agreement (the "Cianna Merger Agreement") to acquire Cianna Medical, Inc. ("Cianna"). The transaction is subject to the satisfaction or waiver (in accordance with the provisions of the Cianna Merger Agreement) of certain closing conditions, including the approval of Cianna stockholders, clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. We anticipate that the transaction will close during the fourth quarter of 2018. Subject to the terms and conditions of the Cianna Merger Agreement, we propose to pay up to $200 million in connection with the acquisition of Cianna, as follows: • $135 million in cash at closing, subject to standard adjustments for working capital and other matters; • an earn-out payment of $15 million payable upon the achievement by Cianna of certain manufacturing capacity and manufacturing cost milestones on or before June 30, 2019; and • earn-out payments of up to $50 million in the aggregate, payable at the rate of 175% of the amount which annual net sales of Cianna products in each of 2019, 2020, 2021 and 2022 exceed annual net sales of Cianna products in the applicable preceding fiscal year. Cianna claims to have developed the first non-radioactive, wire-free breast localization system. Its SCOUT® and SAVI® Brachy technologies are FDA-cleared and address what we believe are unmet needs in the delivery of radiation therapy, tumor localization and surgical guidance. We are currently evaluating the accounting treatment of the proposed transaction contemplated by the Cianna Merger Agreement. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | The interim consolidated financial statements of Merit Medical Systems, Inc. ("Merit," "we" or "us") for the three and nine-month periods ended September 30, 2018 and 2017 are not audited. Our consolidated financial statements are prepared in accordance with the requirements for unaudited interim periods and, consequently, do not include all disclosures required to be made in conformity with accounting principles generally accepted in the United States of America. In the opinion of our management, the accompanying consolidated financial statements contain all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of our financial position as of September 30, 2018 and December 31, 2017, and our results of operations and cash flows for the three and nine-month periods ended September 30, 2018 and 2017. The results of operations for the three and nine-month periods ended September 30, 2018 and 2017 are not necessarily indicative of the results for a full-year period. These interim consolidated financial statements should be read in conjunction with the financial statements included in our Annual Report on Form 10-K (the "2017 Form 10-K") for the year ended December 31, 2017, which was filed with the Securities and Exchange Commission (the "SEC") on March 1, 2018. |
Revenue from Contracts with Customers | Revenue from Contracts with Customers. We sell our medical products through a direct sales force in the U.S. and through OEM relationships, custom procedure tray manufacturers and a combination of direct sales force and independent distributors in international markets. Revenue is recognized when a customer obtains control of promised goods based on the consideration we expect to receive in exchange for these goods. This core principle is achieved through the following steps: Identify the contract with the customer . A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods to be transferred and identifies the payment terms related to these goods, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. We do not have significant costs to obtain contracts with customers. For commissions on product sales, we have elected the practical expedient to expense the costs as incurred if the amortization period would have been one year or less. Identify the performance obligations in the contract . Generally, our contracts with customers do not include multiple performance obligations to be completed over a period of time. Our performance obligations generally relate to delivering single-use medical products to a customer, subject to the shipping terms of the contract. Limited warranties are provided, under which we typically accept returns and provide either replacement parts or refunds. We do not have significant returns. We do not typically offer extended warranty or service plans. Determine the transaction price . Payment by the customer is due under customary fixed payment terms, and we evaluate if collectability is reasonably assured. None of our contracts as of September 30, 2018 contained a significant financing component. Revenue is recorded at the net sales price, which includes estimates of variable consideration such as product returns, rebates, discounts, and other adjustments. The estimates of variable consideration are based on historical payment experience, historical and projected sales data, and current contract terms. Variable consideration is included in revenue only to the extent that it is probable that a significant reversal of the revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues. Allocate the transaction price to performance obligations in the contract . We typically do not have multiple performance obligations in our contracts with customers. As such, we recognize revenue upon transfer of the product to the customer's control at contractually stated pricing. |
Recently Issued Financial Accounting Standards | Recently Issued Financial Accounting Standards Recently Adopted In October 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory , which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 became effective for us as of January 1, 2018. The adoption of ASU 2016-16 did not have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. We adopted ASU 2016-15 on January 1, 2018. The adoption of ASU 2016-15 did not have a material impact on our consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities , which amends the guidance regarding the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, ASU 2016-01 clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. We adopted ASU 2016-01 on January 1, 2018. The adoption of ASU 2016-01 did not have a material impact on our consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. We adopted this ASU (and all subsequent ASUs that modified Topic 606) effective January 1, 2018 on a modified retrospective basis. Adoption of this standard did not result in significant changes to our accounting policies, business processes, systems or controls, or have a material impact on our financial position, results of operations or cash flows. As such, prior period amounts are not adjusted and continue to be reported under accounting standards then in effect, and we did not record a cumulative adjustment to the opening equity balance of retained earnings as of January 1, 2018. However, additional disclosures have been added in accordance with the requirements of Topic 606 and are reflected in Note 6. Not Yet Adopted In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) . The new guidance reduces complexity for the accounting for costs of implementing a cloud computing service arrangement and aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). ASU 2018-15 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. Implementation may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We are currently evaluating the anticipated impact of adopting ASU 2018-15 on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820)—Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement , which modifies disclosure requirements related to fair value measurements. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Implementation on a prospective or retrospective basis varies by specific disclosure requirement. The standard allows for early adoption of any removed or modified disclosures upon issuance of this ASU while delaying adoption of the additional disclosures until their effective date. We are currently evaluating the anticipated impact of adopting ASU 2018-13 on our consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , which simplifies the accounting for nonemployee share-based payment transactions by expanding the scope of ASC Topic 718, Compensation - Stock Compensation , to include share-based payment transactions for acquiring goods and services from nonemployees. Under the new standard, most of the guidance on stock compensation payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. This standard is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. While we continue to assess the potential impact of this standard, we do not expect the adoption of this standard to have a material impact on our consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from U.S. federal tax legislation commonly referred to as the Tax Cuts and Jobs Act, which was enacted in December 2017 (the "2017 Tax Act"). ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. While we continue to assess our adoption policy for this standard, we do not expect adoption to have a material impact on our consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , which expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the anticipated impact of adopting ASU 2017-12 on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which eliminates the current tests for lease classification under U.S. GAAP and requires lessees to recognize the right-of-use assets and related lease liabilities on the balance sheet for all leases greater than one year in duration. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of ASU 2016-02 is permitted. In July 2018, the FASB issued ASU 2018-11 to provide a transition practical expedient by allowing entities to initially apply the new leases standard at the adoption date, recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, and not restate prior periods. We expect to adopt this as well as certain other practical expedients available to us under the new guidance. We have implemented processes and information technology tools to assist in our ongoing lease data collection and analysis. We are currently finalizing our lease portfolio analysis to determine the impact to our consolidated financial statements, and currently expect that most of our operating lease commitments will be recognized as lease liabilities and right-of-use assets upon our adoption of ASU 2016-02. We are updating our accounting policies and internal controls that will be impacted by the new guidance to ensure readiness for adoption in the first quarter of 2019. We do not believe any other issued and not yet effective accounting standards will be relevant to our consolidated financial statements. |
Derivatives | Derivatives General. Our earnings and cash flows are subject to fluctuations due to changes in interest rates and foreign currency exchange rates, and we seek to mitigate a portion of these risks by entering into derivative contracts. The derivatives we use are interest rate swaps and foreign currency forward contracts. We recognize derivatives as either assets or liabilities at fair value in the accompanying consolidated balance sheets, regardless of whether or not hedge accounting is applied. We report cash flows arising from our hedging instruments consistent with the classification of cash flows from the underlying hedged items. Accordingly, cash flows associated with our derivative programs are classified as operating activities in the accompanying consolidated statements of cash flows. We formally document, designate and assess the effectiveness of transactions that receive hedge accounting initially and on an ongoing basis. Changes in the fair value of derivatives that qualify for hedge accounting treatment are recorded, net of applicable taxes, in accumulated other comprehensive income (loss), a component of stockholders’ equity in the accompanying consolidated balance sheets. For the ineffective portions of qualifying hedges, the change in fair value is recorded through earnings in the period of change. Changes in the fair value of derivatives not designated as hedging instruments are recorded in earnings throughout the term of the derivative. Interest Rate Risk. A portion of our debt bears interest at variable interest rates and, therefore, we are subject to variability in the cash paid for interest expense. In order to mitigate a portion of this risk, we use a hedging strategy to reduce the variability of cash flows in the interest payments associated with a portion of the variable-rate debt outstanding under our Second Amended Credit Agreement that is solely due to changes in the benchmark interest rate. Derivatives Designated as Cash Flow Hedges On August 5, 2016, we entered into a pay-fixed, receive-variable interest rate swap with a current notional amount of $175.0 million with Wells Fargo to fix the one-month LIBOR rate at 1.12%. The variable portion of the interest rate swap is tied to the one-month LIBOR rate (the benchmark interest rate). On a monthly basis, the interest rates under both the interest rate swap and the underlying debt reset, the swap is settled with the counterparty, and interest is paid. The interest rate swap is scheduled to expire on July 6, 2021. At September 30, 2018 and December 31, 2017, our interest rate swap qualified as a cash flow hedge. The fair value of our interest rate swap at September 30, 2018 was an asset of approximately $8.3 million, which was partially offset by approximately $2.1 million in deferred taxes. The fair value of our interest rate swap at December 31, 2017 was an asset of approximately $5.7 million, which was offset by approximately $1.5 million in deferred taxes. Foreign Currency Risk . We operate on a global basis and are exposed to the risk that our financial condition, results of operations, and cash flows could be adversely affected by changes in foreign currency exchange rates. To reduce the potential effects of foreign currency exchange rate movements on net earnings, we enter into derivative financial instruments in the form of foreign currency exchange forward contracts with major financial institutions. Our policy is to enter into foreign currency derivative contracts with maturities of up to two years. We are primarily exposed to foreign currency exchange rate risk with respect to transactions and balances denominated in Euros, British Pounds, Chinese Renminbi, Mexican Pesos, Brazilian Reals, Australian Dollars, Hong Kong Dollars, Swiss Francs, Swedish Krona, Canadian Dollars, Danish Krone, Japanese Yen, Korean Won, and Singapore Dollars. We do not use derivative financial instruments for trading or speculative purposes. We are not subject to any credit risk contingent features related to our derivative contracts, and counterparty risk is managed by allocating derivative contracts among several major financial institutions. Derivatives Designated as Cash Flow Hedges For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any (i.e., the ineffective portion) or hedge components excluded from the assessment of effectiveness, are recognized in earnings during the current period. We enter into forward contracts on various foreign currencies to manage the risk associated with forecasted exchange rates which impact revenues, cost of sales, and operating |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories at September 30, 2018 and December 31, 2017, consisted of the following (in thousands): September 30, December 31, 2018 2017 Finished goods $ 103,258 $ 86,555 Work-in-process 20,546 12,799 Raw materials 57,635 55,934 Total Inventories $ 181,439 $ 155,288 |
Stock-Based Compensation Expe_2
Stock-Based Compensation Expense (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | Stock-based compensation expense before income tax expense for the three and nine months ended September 30, 2018 and 2017, consisted of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Cost of sales $ 241 $ 189 $ 657 $ 453 Research and development 141 110 412 262 Selling, general and administrative 1,291 893 3,425 2,168 Stock-based compensation expense before taxes $ 1,673 $ 1,192 $ 4,494 $ 2,883 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | In applying the Black-Scholes methodology to the option grants, the fair value of our stock-based awards granted was estimated using the following assumptions for the periods indicated below: Nine Months Ended September 30, 2018 2017 Risk-free interest rate 2.63% - 2.77% 1.77% - 1.83% Expected option life 5.0 years 5.0 years Expected dividend yield — — Expected price volatility 34.06% - 34.32% 33.81% - 34.07% |
Earnings Per Common Share (EP_2
Earnings Per Common Share (EPS) (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share, Basic and Diluted [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The computation of weighted average shares outstanding and the basic and diluted earnings per common share for the following periods consisted of the following (in thousands, except per share amounts): Three Months Nine Months Net Income Shares Per Share Amount Net Income Shares Per Share Amount Period ended September 30, 2018: Basic EPS $ 16,619 53,431 $ 0.31 $ 32,828 51,434 $ 0.64 Effect of dilutive stock options and warrants 1,672 1,662 Diluted EPS $ 16,619 55,103 $ 0.30 $ 32,828 53,096 $ 0.62 Stock options excluded from the calculation of common stock equivalents as the impact was anti-dilutive 667 462 Period ended September 30, 2017: Basic EPS $ (3,569) 50,150 $ (0.07) $ 20,717 48,332 $ 0.43 Effect of dilutive stock options and warrants 1,449 1,223 Diluted EPS $ (3,569) 51,599 $ (0.07) $ 20,717 49,555 $ 0.42 Stock options excluded from the calculation of common stock equivalents as the impact was anti-dilutive 200 434 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Acquisition [Line Items] | |
Business Acquisition, Pro Forma Information | The following table summarizes our consolidated results of operations for the nine-month period ended September 30, 2017, as well as unaudited pro forma consolidated results of operations as though the acquisition of the Argon critical care division had occurred on January 1, 2016 (in thousands, except per common share amounts): Nine Months Ended September 30, 2017 As Reported Pro Forma Net sales $ 536,955 $ 539,715 Net income 20,717 10,039 Earnings per common share: Basic $ 0.43 $ 0.21 Diluted $ 0.42 $ 0.20 * The pro forma results for the three-month periods ended September 30, 2018 and 2017 and the nine-month period ended September 30, 2018 are not included in the table above because the operating results for the Argon critical care division acquisition were included in our consolidated statements of income for these periods. |
DirectACCESS Medical, LLC | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The purchase price was preliminarily allocated as follows (in thousands): Inventories $ 971 Intangibles Developed technology 4,840 Customer list 120 Trademarks 400 Goodwill 938 Total assets acquired $ 7,269 |
Becton, Dickinson and Company | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the purchase price allocated to the assets acquired from BD (in thousands): Inventories $ 5,804 Property and equipment 748 Intangibles Developed technology 74,000 Customer list 4,200 Trademarks 4,900 Goodwill 10,613 Total assets acquired $ 100,265 |
ITL Healthcare Pty Ltd | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the aggregate purchase price allocated to the assets acquired from ITL (in thousands): Assets Acquired Trade receivables $ 1,287 Other receivables 56 Inventories 1,808 Prepaid expenses and other assets 65 Property and equipment 1,053 Intangibles Customer lists 5,940 Goodwill 3,945 Total assets acquired 14,154 Liabilities Assumed Trade payables (216) Accrued expenses (747) Deferred income tax liabilities (1,901) Total liabilities assumed (2,864) Total net assets acquired $ 11,290 |
Laurane Medical S.A.S. | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the aggregate purchase price (including contingent royalty payment liabilities) allocated to the assets acquired from Laurane (in thousands): Inventories $ 594 Intangibles Developed technology 14,920 Customer list 120 Goodwill 6,366 Total assets acquired $ 22,000 |
Osseon LLC | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the purchase price allocated to the assets acquired (in thousands): Inventories $ 979 Property and equipment 58 Intangibles Developed technology 5,400 Customer list 200 Goodwill 203 Total assets acquired $ 6,840 |
Vascular Access Technologies, Inc. | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the purchase price allocated to the net assets acquired (in thousands): Intangibles Developed technology $ 7,800 In-process technology 920 Goodwill 4,281 Deferred tax liabilities (3,101) Total net assets acquired $ 9,900 |
Argon Medical Devices, Inc. | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the purchase price allocated to the net tangible and intangible assets acquired and liabilities assumed (in thousands): Assets Acquired Cash and cash equivalents $ 1,436 Trade receivables 8,351 Inventories 11,222 Prepaid expenses and other assets 1,275 Income tax refund receivables 165 Property and equipment 2,319 Deferred income tax assets 202 Intangibles Developed technology 2,200 Customer lists 1,500 Trademarks 900 Total assets acquired 29,570 Liabilities Assumed Trade payables (2,414) Accrued expenses (5,083) Deferred income tax liabilities (934) Total liabilities assumed (8,431) Total net assets acquired 21,139 Gain on bargain purchase (1) (11,039) Total purchase price $ 10,100 (1) The total fair value of the net assets acquired from Argon exceeded the purchase price, resulting in a gain on bargain purchase which was recorded within other income (expense) in our consolidated statements of income. We believe the reason for the gain on bargain purchase was a result of the divestiture of a non-strategic, slow-growth critical care business for Argon. It is our understanding that the divestiture allows Argon to focus on its higher growth interventional portfolio. A reduction of $1.2 million was recorded since the bargain purchase gain was first presented in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, resulting from our ongoing activities, including reassessment of the assets acquired and liabilities assumed. The purchase price allocation for this acquisition is now final. |
Catheter Connections, Inc. | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The purchase price was allocated as follows (in thousands): Assets Acquired Trade receivables $ 958 Inventories 2,157 Prepaid expenses and other assets 85 Property and equipment 1,472 Intangibles Developed technology 21,100 Customer lists 700 Trademarks 2,900 Goodwill 8,989 Total assets acquired 38,361 Liabilities Assumed Trade payables (338) Accrued expenses (23) Total liabilities assumed (361) Total net assets acquired $ 38,000 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following tables present revenue from contracts with customers for the three and nine-month periods ended September 30, 2018 and 2017 (in thousands): Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 United States International Total United States International Total Cardiovascular Stand-alone devices $ 52,173 $ 38,802 $ 90,975 $ 36,383 $ 32,366 $ 68,749 Custom kits and procedure trays 23,199 9,896 33,095 23,085 7,326 30,411 Inflation devices 7,819 15,074 22,893 8,241 11,792 20,033 Catheters 18,081 22,510 40,591 15,377 16,374 31,751 Embolization devices 5,145 7,250 12,395 5,414 6,838 12,252 CRM/EP 10,462 1,739 12,201 8,202 1,325 9,527 Total 116,879 95,271 212,150 96,702 76,021 172,723 Endoscopy Endoscopy devices 9,229 280 9,509 6,389 225 6,614 Total $ 126,108 $ 95,551 $ 221,659 $ 103,091 $ 76,246 $ 179,337 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 United States International Total United States International Total Cardiovascular Stand-alone devices $ 147,125 $ 119,592 $ 266,717 $ 109,750 $ 93,709 $ 203,459 Custom kits and procedure trays 69,184 31,175 100,359 68,823 22,259 91,082 Inflation devices 23,647 45,970 69,617 24,257 35,072 59,329 Catheters 50,055 63,775 113,830 46,529 47,828 94,357 Embolization devices 15,272 22,434 37,706 16,548 20,388 36,936 CRM/EP 31,058 5,105 36,163 28,212 3,765 31,977 Total 336,341 288,051 624,392 294,119 223,021 517,140 Endoscopy Endoscopy devices 24,269 843 25,112 19,195 620 19,815 Total $ 360,610 $ 288,894 $ 649,504 $ 313,314 $ 223,641 $ 536,955 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Financial information relating to our reportable operating segments and reconciliations to the consolidated totals for the three and nine-month periods ended September 30, 2018 and 2017, are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Net Sales Cardiovascular $ 212,150 $ 172,723 $ 624,392 $ 517,140 Endoscopy 9,509 6,614 25,112 19,815 Total net sales $ 221,659 $ 179,337 $ 649,504 $ 536,955 Operating Income (Loss) Cardiovascular $ 18,199 $ (1,207) $ 37,263 $ 14,239 Endoscopy 2,862 2,086 7,692 5,611 Total operating income $ 21,061 $ 879 $ 44,955 $ 19,850 |
Revolving Credit Facility and_2
Revolving Credit Facility and Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Principal balances outstanding under our long-term debt obligations as of September 30, 2018 and December 31, 2017, consisted of the following (in thousands): September 30, 2018 December 31, 2017 2016 Term loan $ 76,250 $ 85,000 2016 Revolving credit loans 126,000 187,000 Collateralized debt facility 7,000 6,959 Less unamortized debt issuance costs (383) (487) Total long-term debt 208,867 278,472 Less current portion 22,000 19,459 Long-term portion $ 186,867 $ 259,013 |
Schedule of Long-term Debt Covenants | The Second Amended Credit Agreement requires that we maintain certain financial covenants, as follows: Covenant Requirement Consolidated Total Leverage Ratio (1) January 1, 2018 and thereafter 3.5 to 1.0 Consolidated EBITDA (2) 1.25 to 1.0 Consolidated Net Income (3) $0 Facility Capital Expenditures (4) $30 million (1) Maximum Consolidated Total Leverage Ratio (as defined in the Second Amended Credit Agreement) as of any fiscal quarter end. (2) Minimum ratio of Consolidated EBITDA (as defined in the Second Amended Credit Agreement and adjusted for certain expenditures) to Consolidated Fixed Charges (as defined in the Second Amended Credit Agreement) for any period of four consecutive fiscal quarters. (3) Minimum level of Consolidated Net Income (as defined in the Second Amended Credit Agreement) for certain periods, and subject to certain adjustments. (4) Maximum level of the aggregate amount of all Facility Capital Expenditures (as defined in the Second Amended Credit Agreement) in any fiscal year. |
Schedule of Maturities of Long-term Debt | Future minimum principal payments on our long-term debt as of September 30, 2018, are as follows (in thousands): Years Ending Future Minimum December 31 Principal Payments Remaining 2018 $ 3,750 2019 22,000 2020 17,500 2021 166,000 Total future minimum principal payments $ 209,250 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative [Line Items] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair value of derivative instruments on a gross basis is as follows (in thousands): Fair Value Balance Sheet Location September 30, 2018 December 31, 2017 Derivatives designated as hedging instruments Assets Interest rate swap Other assets (long-term) $ 8,284 $ 5,749 Foreign currency forward contracts Prepaid expenses and other assets 813 363 Foreign currency forward contracts Other assets (long-term) 161 35 Liabilities Foreign currency forward contracts Accrued expenses (240) (468) Foreign currency forward contracts Other long-term obligations (56) (82) Derivatives not designated as hedging instruments Assets Foreign currency forward contracts Prepaid expenses and other assets $ 360 $ 223 Liabilities Foreign currency forward contracts Accrued expenses (475) (841) |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | Derivative instruments designated as cash flow hedges had the following effects, before income taxes, on other comprehensive income and net earnings in our consolidated statements of income, consolidated statements of comprehensive income and consolidated balance sheets (in thousands): Amount of Gain/(Loss) Recognized in OCI Amount of Gain/(Loss) Reclassified from AOCI Three Months Ended September 30, Three Months Ended September 30, 2018 2017 2018 2017 Derivative instrument Location in statements of income Interest rate swaps $ 664 $ 1 Interest Expense $ 428 $ 96 Foreign currency forward contracts 543 100 Revenue 86 (101) Cost of sales 26 250 Amount of Gain/(Loss) Recognized in OCI Amount of Gain/(Loss) Reclassified from AOCI Nine Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Derivative instrument Location in statements of income Interest rate swaps $ 3,532 $ (611) Interest Expense $ 998 $ (8) Foreign currency forward contracts 1,112 841 Revenue (299) (141) Cost of sales 404 213 |
Derivative Instruments, Gain (Loss) | The following gains/(losses) from these derivative instruments were recognized in our consolidated statements of income for the periods presented (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Derivative Instrument Location in statements of income Foreign currency forward contracts Other expense $ 1,143 $ (1,459) $ 3,181 $ (4,150) |
Designated as hedging instrument | |
Derivative [Line Items] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | We enter into approximately 150 cash flow foreign currency hedges every month. As of September 30, 2018, we had entered into foreign currency forward contracts, which qualified as cash flow hedges, with the following notional amounts (in thousands and in local currencies): Currency Symbol Forward Notional Amount Canadian Dollar CAD 2,460 Swiss Franc CHF 1,215 Chinese Renminbi CNY 60,000 Danish Krone DKK 10,835 Euro EUR 12,270 British Pound GBP 3,355 Japanese Yen JPY 330,000 Mexican Peso MXN 93,575 Swedish Krona SEK 12,780 |
Not designated as hedging instrument | |
Derivative [Line Items] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | As of September 30, 2018, we had entered into foreign currency forward contracts related to those balance sheet accounts, with the following notional amounts (in thousands and in local currencies): Currency Symbol Forward Notional Amount Australian Dollar AUD 11,150 Brazilian Real BRL 8,500 Canadian Dollar CAD 3,098 Swiss Franc CHF 255 Chinese Renminbi CNY 95,228 Danish Krone DKK 2,885 Euro EUR 25,861 British Pound GBP 1,584 Hong Kong Dollar HKD 11,000 Japanese Yen JPY 260,000 Korean Won KRW 2,700,000 Mexican Peso MXN 18,700 Swedish Krona SEK 10,536 Singapore Dollar SGD 6,900 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Our financial assets and (liabilities) carried at fair value measured on a recurring basis as of September 30, 2018 and December 31, 2017, consisted of the following (in thousands): Fair Value Measurements Using Total Fair Quoted prices in Significant other Significant Value at active markets observable inputs unobservable inputs Description September 30, 2018 (Level 1) (Level 2) (Level 3) Interest rate contracts (1) $ 8,284 $ — $ 8,284 $ — Foreign currency contract assets, current and long-term (2) $ 1,334 $ — $ 1,334 $ — Foreign currency contract liabilities, current and long-term (3) $ (771) $ — $ (771) $ — Fair Value Measurements Using Total Fair Quoted prices in Significant other Significant Value at active markets observable inputs unobservable inputs Description December 31, 2017 (Level 1) (Level 2) (Level 3) Interest rate contracts (1) $ 5,749 $ — $ 5,749 $ — Foreign currency contract assets, current and long-term (2) $ 621 $ — $ 621 $ — Foreign currency contract liabilities, current and long-term (3) $ (1,391) $ — $ (1,391) $ — (1) The fair value of the interest rate contracts is determined using Level 2 fair value inputs and is recorded as other assets or other long-term obligations in the consolidated balance sheets. (2) The fair value of the foreign currency contract assets (including those designated as hedging instruments and those not designated as hedging instruments) is determined using Level 2 fair value inputs and is recorded as prepaid expenses and other assets or other long-term assets in the consolidated balance sheets. (3) The fair value of the foreign currency contract liabilities (including those designated as hedging instruments and those not designated as hedging instruments) is determined using Level 2 fair value inputs and is recorded as accrued expenses or other long-term obligations in the consolidated balance sheets. |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | Changes in the fair value of our contingent consideration liability during the three and nine-month periods ended September 30, 2018 and 2017, consisted of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Beginning balance $ 10,912 $ 5,572 $ 10,956 $ 683 Contingent consideration liability recorded as the result of acquisitions (see Note 5) — 5,500 — 10,400 Fair value adjustments recorded to income during the period (828) 20 (741) 39 Contingent payments made (53) (15) (184) (45) Ending balance $ 10,031 $ 11,077 $ 10,031 $ 11,077 |
Fair Value Inputs, Liabilities, Quantitative Information | The recurring Level 3 measurement of our contingent consideration liability and contingent receivable includes the following significant unobservable inputs at September 30, 2018 and December 31, 2017 (amounts in thousands): Contingent consideration asset or liability Fair Value at Valuation technique Unobservable inputs Range Revenue-based payments $ 10,031 Discounted cash flow Discount rate 9.9% - 15% contingent liability Projected year of payments 2018-2037 Contingent receivable $ 308 Discounted cash flow Discount rate 10% asset Weighted-average probability of milestone payment 35% Projected year of payments 2018-2019 Contingent consideration asset or liability Fair Value at December 31, 2017 Valuation technique Unobservable inputs Range Revenue-based payments $ 10,956 Discounted cash flow Discount rate 9.9% - 15% contingent liability Probability of milestone payment 100% Projected year of payments 2018-2037 Contingent receivable $ 760 Discounted cash flow Discount rate 10% asset Weighted-average probability of milestone payment 75% Projected year of payments 2018-2019 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in carrying amount of goodwill | The changes in the carrying amount of goodwill for the nine-month period ended September 30, 2018 were as follows (in thousands): 2018 Goodwill balance at January 1 $ 238,147 Effect of foreign exchange (881) Additions as the result of acquisitions 11,757 Goodwill balance at September 30 $ 249,023 |
Other intangible assets | Other intangible assets at September 30, 2018 and December 31, 2017, consisted of the following (in thousands): September 30, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents $ 18,676 $ (4,665) $ 14,011 Distribution agreements 8,012 (5,509) 2,503 License agreements 24,913 (6,895) 18,018 Trademarks 21,514 (6,039) 15,475 Covenants not to compete 1,028 (993) 35 Customer lists 35,590 (21,987) 13,603 In-process technology 920 — 920 Total $ 110,653 $ (46,088) $ 64,565 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents $ 16,528 $ (3,737) $ 12,791 Distribution agreements 7,262 (4,686) 2,576 License agreements 23,783 (5,568) 18,215 Trademarks 16,224 (4,686) 11,538 Covenants not to compete 1,028 (968) 60 Customer lists 31,935 (18,482) 13,453 In-process technology 920 — 920 Total $ 97,680 $ (38,127) $ 59,553 |
Estimated amortization expense | Estimated amortization expense for the developed technology and other intangible assets for the next five years consists of the following as of September 30, 2018 (in thousands): Year Ending December 31 Remaining 2018 $ 10,140 2019 39,647 2020 38,386 2021 31,025 2022 29,141 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 103,258 | $ 86,555 |
Work-in-process | 20,546 | 12,799 |
Raw materials | 57,635 | 55,934 |
Total Inventories | $ 181,439 | $ 155,288 |
Stock-Based Compensation Expe_3
Stock-Based Compensation Expense - Allocation of Recognized Period Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense before taxes | $ 1,673 | $ 1,192 | $ 4,494 | $ 2,883 |
Cost of sales | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense before taxes | 241 | 189 | 657 | 453 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense before taxes | 141 | 110 | 412 | 262 |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense before taxes | $ 1,291 | $ 893 | $ 3,425 | $ 2,168 |
Stock-Based Compensation Expe_4
Stock-Based Compensation Expense - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Compensation cost not yet recognized | $ 20.7 | ||
Compensation cost not yet recognized, period of recognition | 3 years 3 months | ||
Options granted in period (in shares) | 20,000,000 | 692,002 | 1,300,000 |
Stock-Based Compensation Expe_5
Stock-Based Compensation Expense - Fair Value Calculation Assumptions (Details) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected option life | 5 years | 5 years |
Expected dividend yield | 0.00% | 0.00% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 2.63% | 1.77% |
Expected price volatility | 34.06% | 33.81% |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 2.77% | 1.83% |
Expected price volatility | 34.32% | 34.07% |
Earnings Per Common Share (EP_3
Earnings Per Common Share (EPS) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Net income, basic EPS | $ 16,619 | $ (3,569) | $ 32,828 | $ 20,717 |
Basic EPS (in shares) | 53,431 | 50,150 | 51,434 | 48,332 |
Basic EPS (in dollars per share) | $ 0.31 | $ (0.07) | $ 0.64 | $ 0.43 |
Effect of dilutive stock options and warrants (in shares) | 1,672 | 1,449 | 1,662 | 1,223 |
Net income, diluted EPS | $ 16,619 | $ (3,569) | $ 32,828 | $ 20,717 |
Diluted EPS (in shares) | 55,103 | 51,599 | 53,096 | 49,555 |
Diluted EPS (in dollars per share) | $ 0.30 | $ (0.07) | $ 0.62 | $ 0.42 |
Stock options excluded from the calculation of common stock equivalents as the impact was anti-dilutive (in shares) | 667 | 200 | 462 | 434 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) shares in Thousands, $ in Thousands | May 23, 2018USD ($) | May 18, 2018USD ($) | Apr. 06, 2018USD ($) | Feb. 14, 2018USD ($) | Oct. 02, 2017USD ($) | Aug. 04, 2017USD ($) | Jul. 03, 2017USD ($) | May 01, 2017USD ($) | Jan. 31, 2017USD ($)patents | Jul. 31, 2018USD ($)shares | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | ||||||||||||||
Payments to acquire intangible assets | $ 2,234 | $ 1,927 | ||||||||||||
Loan for long-term agreement | 10,750 | $ 0 | ||||||||||||
QX Medical, LLC | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Payments to acquire intangible assets | $ 750 | |||||||||||||
NinePoint | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Option to purchase outstanding equity, up to | 100.00% | |||||||||||||
Consideration received, option to purchase remaining equity | $ 10,000 | |||||||||||||
Net sales related to acquisition | $ 1,400 | $ 2,500 | ||||||||||||
Loan for long-term agreement | $ 10,500 | |||||||||||||
Interest rate on loan | 9.00% | |||||||||||||
Distribution agreements | QX Medical, LLC | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life | 10 years | |||||||||||||
DirectACCESS Medical, LLC | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Total purchase price | $ 7,300 | |||||||||||||
Weighted average useful life | 9 years 10 months 24 days | |||||||||||||
DirectACCESS Medical, LLC | Developed technology | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life | 10 years | |||||||||||||
DirectACCESS Medical, LLC | Trademarks | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life | 10 years | |||||||||||||
DirectACCESS Medical, LLC | Customer Lists | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life | 5 years | |||||||||||||
Becton, Dickinson and Company | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Total purchase price | $ 100,300 | |||||||||||||
Weighted average useful life | 8 years | |||||||||||||
Net sales related to acquisition | 11,800 | $ 30,300 | ||||||||||||
Acquisition-related costs | $ 1,800 | |||||||||||||
Becton, Dickinson and Company | Developed technology | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life | 8 years | |||||||||||||
Becton, Dickinson and Company | Trademarks | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life | 9 years | |||||||||||||
Becton, Dickinson and Company | Customer Lists | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life | 7 years | |||||||||||||
ITL Healthcare Pty Ltd | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Total purchase price | $ 11,300 | |||||||||||||
Net sales related to acquisition | 1,900 | $ 6,100 | ||||||||||||
ITL Healthcare Pty Ltd | Customer Lists | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life | 7 years | |||||||||||||
Laurane Medical S.A.S. | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Total purchase price | $ 16,500 | |||||||||||||
Weighted average useful life | 11 years 10 months 24 days | |||||||||||||
Contingent liability | $ 5,500 | |||||||||||||
Laurane Medical S.A.S. | Developed technology | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life | 12 years | |||||||||||||
Laurane Medical S.A.S. | Customer Lists | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life | 1 year | |||||||||||||
Osseon LLC | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Total purchase price | $ 6,800 | |||||||||||||
Weighted average useful life | 9 years | |||||||||||||
Net sales related to acquisition | 478 | 1,600 | ||||||||||||
Osseon LLC | Developed technology | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life | 9 years | |||||||||||||
Osseon LLC | Customer Lists | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life | 8 years | |||||||||||||
Vascular Access Technologies, Inc. | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Total purchase price | $ 5,000 | |||||||||||||
Contingent liability | $ 4,900 | |||||||||||||
Vascular Access Technologies, Inc. | Developed technology | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life | 15 years | |||||||||||||
Argon Medical Devices, Inc. | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Total purchase price | $ 10,100 | |||||||||||||
Weighted average useful life | 6 years | |||||||||||||
Net sales related to acquisition | 11,000 | 34,200 | ||||||||||||
Initial payment, before working capital adjustment | $ 10,900 | |||||||||||||
Working capital adjustment | $ (797) | |||||||||||||
Argon Medical Devices, Inc. | Cardiovascular Segment | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquisition-related costs | $ 2,600 | |||||||||||||
Argon Medical Devices, Inc. | Developed technology | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life | 7 years | |||||||||||||
Argon Medical Devices, Inc. | Trademarks | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life | 5 years | |||||||||||||
Argon Medical Devices, Inc. | Customer Lists | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life | 5 years | |||||||||||||
Catheter Connections, Inc. | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Total purchase price | $ 38,000 | |||||||||||||
Weighted average useful life | 11 years 8 months 12 days | |||||||||||||
Net sales related to acquisition | $ 3,700 | $ 10,100 | ||||||||||||
Number of patents acquired | patents | 40 | |||||||||||||
Catheter Connections, Inc. | Cardiovascular Segment | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquisition-related costs | $ 482 | |||||||||||||
Catheter Connections, Inc. | Developed technology | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life | 12 years | |||||||||||||
Catheter Connections, Inc. | Trademarks | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life | 10 years | |||||||||||||
Catheter Connections, Inc. | Customer Lists | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life | 8 years | |||||||||||||
Cagent Vacsular, LLC | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Preferred limited liability company units (in units) | shares | 1,786 | |||||||||||||
Payments to purchase preferred limited liability company units | $ 2,200 | |||||||||||||
Equity method investment, ownership percentage | 19.50% |
Acquisitions - Purchase Price A
Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Thousands | May 23, 2018 | Feb. 14, 2018 | Oct. 02, 2017 | Aug. 04, 2017 | Jul. 03, 2017 | May 01, 2017 | Jan. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Assets Acquired | |||||||||||||
Goodwill | $ 249,023 | $ 249,023 | $ 238,147 | ||||||||||
Liabilities Assumed | |||||||||||||
Gain on bargain purchase | 0 | $ 778 | 0 | $ (10,796) | |||||||||
DirectACCESS Medical, LLC | |||||||||||||
Assets Acquired | |||||||||||||
Inventories | $ 971 | ||||||||||||
Goodwill | 938 | ||||||||||||
Total assets acquired | 7,269 | ||||||||||||
Liabilities Assumed | |||||||||||||
Total purchase price | 7,300 | ||||||||||||
DirectACCESS Medical, LLC | Developed technology | |||||||||||||
Assets Acquired | |||||||||||||
Intangibles | 4,840 | ||||||||||||
DirectACCESS Medical, LLC | Customer lists | |||||||||||||
Assets Acquired | |||||||||||||
Intangibles | 120 | ||||||||||||
DirectACCESS Medical, LLC | Trademarks | |||||||||||||
Assets Acquired | |||||||||||||
Intangibles | $ 400 | ||||||||||||
Becton, Dickinson and Company | |||||||||||||
Assets Acquired | |||||||||||||
Inventories | 5,804 | 5,804 | |||||||||||
Property and equipment | 748 | 748 | |||||||||||
Goodwill | 10,613 | 10,613 | |||||||||||
Total assets acquired | 100,265 | 100,265 | |||||||||||
Liabilities Assumed | |||||||||||||
Total purchase price | $ 100,300 | ||||||||||||
Becton, Dickinson and Company | Developed technology | |||||||||||||
Assets Acquired | |||||||||||||
Intangibles | 74,000 | 74,000 | |||||||||||
Becton, Dickinson and Company | Customer lists | |||||||||||||
Assets Acquired | |||||||||||||
Intangibles | 4,200 | 4,200 | |||||||||||
Becton, Dickinson and Company | Trademarks | |||||||||||||
Assets Acquired | |||||||||||||
Intangibles | $ 4,900 | $ 4,900 | |||||||||||
ITL Healthcare Pty Ltd | |||||||||||||
Assets Acquired | |||||||||||||
Trade receivables | $ 1,287 | ||||||||||||
Other receivables | 56 | ||||||||||||
Inventories | 1,808 | ||||||||||||
Prepaid expenses and other assets | 65 | ||||||||||||
Property and equipment | 1,053 | ||||||||||||
Goodwill | 3,945 | ||||||||||||
Total assets acquired | 14,154 | ||||||||||||
Liabilities Assumed | |||||||||||||
Trade payables | (216) | ||||||||||||
Accrued expenses | (747) | ||||||||||||
Deferred income tax liabilities | (1,901) | ||||||||||||
Total liabilities assumed | (2,864) | ||||||||||||
Total net assets acquired | 11,290 | ||||||||||||
Total purchase price | 11,300 | ||||||||||||
ITL Healthcare Pty Ltd | Customer lists | |||||||||||||
Assets Acquired | |||||||||||||
Intangibles | $ 5,940 | ||||||||||||
Laurane Medical S.A.S. | |||||||||||||
Assets Acquired | |||||||||||||
Inventories | $ 594 | ||||||||||||
Goodwill | 6,366 | ||||||||||||
Total assets acquired | 22,000 | ||||||||||||
Liabilities Assumed | |||||||||||||
Total purchase price | 16,500 | ||||||||||||
Laurane Medical S.A.S. | Developed technology | |||||||||||||
Assets Acquired | |||||||||||||
Intangibles | 14,920 | ||||||||||||
Laurane Medical S.A.S. | Customer lists | |||||||||||||
Assets Acquired | |||||||||||||
Intangibles | $ 120 | ||||||||||||
Osseon LLC | |||||||||||||
Assets Acquired | |||||||||||||
Inventories | $ 979 | ||||||||||||
Property and equipment | 58 | ||||||||||||
Goodwill | 203 | ||||||||||||
Total assets acquired | 6,840 | ||||||||||||
Liabilities Assumed | |||||||||||||
Total purchase price | 6,800 | ||||||||||||
Osseon LLC | Developed technology | |||||||||||||
Assets Acquired | |||||||||||||
Intangibles | 5,400 | ||||||||||||
Osseon LLC | Customer lists | |||||||||||||
Assets Acquired | |||||||||||||
Intangibles | $ 200 | ||||||||||||
Vascular Access Technologies, Inc. | |||||||||||||
Assets Acquired | |||||||||||||
Goodwill | $ 4,281 | ||||||||||||
Liabilities Assumed | |||||||||||||
Deferred income tax liabilities | (3,101) | ||||||||||||
Total net assets acquired | 9,900 | ||||||||||||
Total purchase price | 5,000 | ||||||||||||
Vascular Access Technologies, Inc. | Developed technology | |||||||||||||
Assets Acquired | |||||||||||||
Intangibles | 7,800 | ||||||||||||
Vascular Access Technologies, Inc. | In-process technology | |||||||||||||
Assets Acquired | |||||||||||||
Intangibles | $ 920 | ||||||||||||
Argon Medical Devices, Inc. | |||||||||||||
Assets Acquired | |||||||||||||
Cash and cash equivalents | $ 1,436 | ||||||||||||
Trade receivables | 8,351 | ||||||||||||
Inventories | 11,222 | ||||||||||||
Prepaid expenses and other assets | 1,275 | ||||||||||||
Income tax refund receivables | 165 | ||||||||||||
Property and equipment | 2,319 | ||||||||||||
Deferred income tax assets | 202 | ||||||||||||
Total assets acquired | 29,570 | ||||||||||||
Liabilities Assumed | |||||||||||||
Trade payables | (2,414) | ||||||||||||
Accrued expenses | (5,083) | ||||||||||||
Deferred income tax liabilities | (934) | ||||||||||||
Total liabilities assumed | (8,431) | ||||||||||||
Total net assets acquired | 21,139 | ||||||||||||
Gain on bargain purchase | (11,039) | ||||||||||||
Total purchase price | 10,100 | ||||||||||||
Negative adjustment (Argon Medical Devices, Inc.) | $ 1,200 | ||||||||||||
Argon Medical Devices, Inc. | Developed technology | |||||||||||||
Assets Acquired | |||||||||||||
Intangibles | 2,200 | ||||||||||||
Argon Medical Devices, Inc. | Customer lists | |||||||||||||
Assets Acquired | |||||||||||||
Intangibles | 1,500 | ||||||||||||
Argon Medical Devices, Inc. | Trademarks | |||||||||||||
Assets Acquired | |||||||||||||
Intangibles | 900 | ||||||||||||
Catheter Connections, Inc. | |||||||||||||
Assets Acquired | |||||||||||||
Trade receivables | 958 | ||||||||||||
Inventories | 2,157 | ||||||||||||
Prepaid expenses and other assets | 85 | ||||||||||||
Property and equipment | 1,472 | ||||||||||||
Goodwill | 8,989 | ||||||||||||
Total assets acquired | 38,361 | ||||||||||||
Liabilities Assumed | |||||||||||||
Trade payables | (338) | ||||||||||||
Accrued expenses | (23) | ||||||||||||
Total liabilities assumed | (361) | ||||||||||||
Total net assets acquired | 38,000 | ||||||||||||
Total purchase price | 38,000 | ||||||||||||
Catheter Connections, Inc. | Developed technology | |||||||||||||
Assets Acquired | |||||||||||||
Intangibles | 21,100 | ||||||||||||
Catheter Connections, Inc. | Customer lists | |||||||||||||
Assets Acquired | |||||||||||||
Intangibles | 700 | ||||||||||||
Catheter Connections, Inc. | Trademarks | |||||||||||||
Assets Acquired | |||||||||||||
Intangibles | $ 2,900 |
Acquisitions - Summary of Unaud
Acquisitions - Summary of Unaudited Consolidated Results of Operations, Including Proforma Results (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
As Reported | ||||
Net sales | $ 221,659 | $ 179,337 | $ 649,504 | $ 536,955 |
Net income | $ 16,619 | $ (3,569) | $ 32,828 | $ 20,717 |
Basic (in dollars per share) | $ 0.31 | $ (0.07) | $ 0.64 | $ 0.43 |
Diluted (in dollars per share) | $ 0.30 | $ (0.07) | $ 0.62 | $ 0.42 |
Pro Forma | ||||
Net sales | $ 539,715 | |||
Net income | $ 10,039 | |||
Basic (in dollars per share) | $ 0.21 | |||
Diluted (in dollars per share) | $ 0.20 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 221,659 | $ 179,337 | $ 649,504 | $ 536,955 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 126,108 | 103,091 | 360,610 | 313,314 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 95,551 | 76,246 | 288,894 | 223,641 |
Cardiovascular | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 212,150 | 172,723 | 624,392 | 517,140 |
Cardiovascular | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 116,879 | 96,702 | 336,341 | 294,119 |
Cardiovascular | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 95,271 | 76,021 | 288,051 | 223,021 |
Endoscopy | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 9,509 | 6,614 | 25,112 | 19,815 |
Stand-alone devices | Cardiovascular | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 90,975 | 68,749 | 266,717 | 203,459 |
Stand-alone devices | Cardiovascular | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 52,173 | 36,383 | 147,125 | 109,750 |
Stand-alone devices | Cardiovascular | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 38,802 | 32,366 | 119,592 | 93,709 |
Custom kits and procedure trays | Cardiovascular | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 33,095 | 30,411 | 100,359 | 91,082 |
Custom kits and procedure trays | Cardiovascular | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 23,199 | 23,085 | 69,184 | 68,823 |
Custom kits and procedure trays | Cardiovascular | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 9,896 | 7,326 | 31,175 | 22,259 |
Inflation devices | Cardiovascular | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 22,893 | 20,033 | 69,617 | 59,329 |
Inflation devices | Cardiovascular | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 7,819 | 8,241 | 23,647 | 24,257 |
Inflation devices | Cardiovascular | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 15,074 | 11,792 | 45,970 | 35,072 |
Catheters | Cardiovascular | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 40,591 | 31,751 | 113,830 | 94,357 |
Catheters | Cardiovascular | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 18,081 | 15,377 | 50,055 | 46,529 |
Catheters | Cardiovascular | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 22,510 | 16,374 | 63,775 | 47,828 |
Embolization devices | Cardiovascular | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 12,395 | 12,252 | 37,706 | 36,936 |
Embolization devices | Cardiovascular | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 5,145 | 5,414 | 15,272 | 16,548 |
Embolization devices | Cardiovascular | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 7,250 | 6,838 | 22,434 | 20,388 |
CRM/EP | Cardiovascular | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 12,201 | 9,527 | 36,163 | 31,977 |
CRM/EP | Cardiovascular | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 10,462 | 8,202 | 31,058 | 28,212 |
CRM/EP | Cardiovascular | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,739 | 1,325 | 5,105 | 3,765 |
Endoscopy devices | Endoscopy | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 9,509 | 6,614 | 25,112 | 19,815 |
Endoscopy devices | Endoscopy | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 9,229 | 6,389 | 24,269 | 19,195 |
Endoscopy devices | Endoscopy | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 280 | $ 225 | $ 843 | $ 620 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 9 Months Ended |
Sep. 30, 2018segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Reporting - Operating I
Segment Reporting - Operating Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 221,659 | $ 179,337 | $ 649,504 | $ 536,955 |
Operating income | 21,061 | 879 | 44,955 | 19,850 |
Cardiovascular | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 212,150 | 172,723 | 624,392 | 517,140 |
Operating income | 18,199 | (1,207) | 37,263 | 14,239 |
Endoscopy | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 9,509 | 6,614 | 25,112 | 19,815 |
Operating income | $ 2,862 | $ 2,086 | $ 7,692 | $ 5,611 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 2,766 | $ 1,364 | $ 4,481 | $ 3,884 |
Effective tax rate | 14.30% | (61.90%) | 12.00% | 15.80% |
Revolving Credit Facility and_3
Revolving Credit Facility and Long-Term Debt - Principal Balances under Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 03, 2018 | Dec. 31, 2017 |
Line of Credit Facility [Line Items] | |||
Total long-term debt | $ 208,867 | $ 278,472 | |
Collateralized debt facility | 7,000 | $ 7,000 | 6,959 |
Less unamortized debt issuance costs | (383) | (487) | |
Less current portion | 22,000 | 19,459 | |
Long-term portion | 186,867 | 259,013 | |
Term Loan | |||
Line of Credit Facility [Line Items] | |||
Total long-term debt | 76,250 | 85,000 | |
Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Total long-term debt | $ 126,000 | $ 187,000 |
Revolving Credit Facility and_4
Revolving Credit Facility and Long-Term Debt - Narrative (Details) - USD ($) | Sep. 03, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 13, 2017 | Jul. 06, 2016 |
Line of Credit Facility [Line Items] | |||||
Outstanding borrowings | $ 209,250,000 | ||||
Collateralized debt facility | $ 7,000,000 | $ 7,000,000 | $ 6,959,000 | ||
Variable rate on loan | 3.12% | ||||
LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, basis spread on variable rate | 1.00% | ||||
Credit Agreement | |||||
Line of Credit Facility [Line Items] | |||||
Outstanding borrowings | $ 202,300,000 | ||||
Remaining borrowing capacity on line of credit | 248,400,000 | ||||
Fixed interest rate percent | 2.68% | ||||
Debt subject to fixed interest rate | $ 175,000,000 | $ 175,000,000 | |||
Credit Agreement | Variable Rate | |||||
Line of Credit Facility [Line Items] | |||||
Variable interest rate percent | 3.99% | 2.82% | |||
Debt subject to variable interest rate | $ 27,300,000 | $ 97,000,000 | |||
Credit Agreement | Interest Rate Swap | |||||
Line of Credit Facility [Line Items] | |||||
Fixed interest rate percent | 2.87% | ||||
Credit Agreement | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Increase to revolving credit commitment | $ 100,000,000 | ||||
Maximum borrowing capacity | $ 375,000,000 | ||||
Interest rate increase if in event of default | 2.00% | ||||
Credit Agreement | Revolving Credit Facility | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Commitment fee percentage | 0.15% | ||||
Credit Agreement | Revolving Credit Facility | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Commitment fee percentage | 0.40% | ||||
Credit Agreement | Term Loan | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, face amount | $ 150,000,000 | ||||
Credit Agreement | Bridge Loan | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | $ 25,000,000 |
Revolving Credit Facility and_5
Revolving Credit Facility and Long-Term Debt - Financial Covenants (Details) - Credit Agreement | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Debt Instrument [Line Items] | |
Consolidated EBITDA | 1.25 |
Consolidated Net Income | $ 0 |
Facility Capital Expenditures | $ 30,000,000 |
January 1, 2018 and thereafter | |
Debt Instrument [Line Items] | |
Consolidated Total Leverage Ratio | 3.50 |
Revolving Credit Facility and_6
Revolving Credit Facility and Long-Term Debt - Future Minimum Payments on Long-term Debt (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Debt Disclosure [Abstract] | |
Remaining 2,018 | $ 3,750 |
2,019 | 22,000 |
2,020 | 17,500 |
2,021 | 166,000 |
Total future minimum principal payments | $ 209,250 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) € in Thousands, ₩ in Thousands, ¥ in Thousands, ¥ in Thousands, £ in Thousands, kr in Thousands, kr in Thousands, SFr in Thousands, R$ in Thousands, $ in Thousands, $ in Thousands, $ in Thousands, $ in Thousands, $ in Thousands, $ in Thousands | 9 Months Ended | |||||||||||||||||
Sep. 30, 2018USD ($) | Sep. 30, 2018CNY (¥)derivative_instrument | Sep. 30, 2018SGD ($)derivative_instrument | Sep. 30, 2018EUR (€)derivative_instrument | Sep. 30, 2018SEK (kr)derivative_instrument | Sep. 30, 2018GBP (£)derivative_instrument | Sep. 30, 2018KRW (₩)derivative_instrument | Sep. 30, 2018JPY (¥)derivative_instrument | Sep. 30, 2018AUD ($)derivative_instrument | Sep. 30, 2018DKK (kr)derivative_instrument | Sep. 30, 2018USD ($)derivative_instrument | Sep. 30, 2018HKD ($)derivative_instrument | Sep. 30, 2018CAD ($)derivative_instrument | Sep. 30, 2018MXN ($)derivative_instrument | Sep. 30, 2018BRL (R$)derivative_instrument | Sep. 30, 2018CHF (SFr)derivative_instrument | Dec. 31, 2017USD ($) | Aug. 05, 2016USD ($) | |
Derivative [Line Items] | ||||||||||||||||||
Deferred taxes used to offset fair value of interest rate swap | $ (2,100) | $ (1,500) | ||||||||||||||||
Maturity of derivative contract (up to) | 2 years | |||||||||||||||||
Revenue and cost of sales | ||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||
Amount expected to be reclassified from accumulated other comprehensive income to earnings in next twelve months, gross | $ 858 | |||||||||||||||||
Amount expected to be reclassified from accumulated other comprehensive income to earnings in next twelve months, net of tax | 637 | |||||||||||||||||
Interest expense | ||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||
Amount expected to be reclassified from accumulated other comprehensive income to earnings in next twelve months, gross | 2,600 | |||||||||||||||||
Amount expected to be reclassified from accumulated other comprehensive income to earnings in next twelve months, net of tax | $ 2,000 | |||||||||||||||||
Interest rate swap | ||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||
Notional amount of derivative | $ 175,000 | |||||||||||||||||
Fixed rate | 1.12% | |||||||||||||||||
Deferred taxes used to offset fair value of interest rate swap | $ (2,100) | |||||||||||||||||
Foreign currency forward contracts | Designated as hedging instrument | ||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||
Average number of contracts entered into per month | derivative_instrument | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | 150 | |||
Foreign currency forward contracts | Not designated as hedging instrument | ||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||
Notional amount of derivative | ¥ 95,228 | $ 6,900 | € 25,861 | kr 10,536 | £ 1,584 | ₩ 2,700,000 | ¥ 260,000 | $ 11,150 | kr 2,885 | $ 11,000 | $ 3,098 | $ 18,700 | R$ 8500 | SFr 255 | ||||
Average number of contracts entered into per month | derivative_instrument | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | |||
Other assets (long-term) | Interest rate swap | Designated as hedging instrument | ||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||
Total Asset Derivatives | $ 8,284 | 5,749 | ||||||||||||||||
Other assets (long-term) | Foreign currency forward contracts | Designated as hedging instrument | ||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||
Total Asset Derivatives | $ 161 | $ 35 |
Derivatives - Forward Notional
Derivatives - Forward Notional Contracts (Details) - Sep. 30, 2018 - Foreign currency forward contracts € in Thousands, ₩ in Thousands, ¥ in Thousands, ¥ in Thousands, £ in Thousands, kr in Thousands, kr in Thousands, SFr in Thousands, R$ in Thousands, $ in Thousands, $ in Thousands, $ in Thousands, $ in Thousands, $ in Thousands | SGD ($) | EUR (€) | SEK (kr) | GBP (£) | KRW (₩) | JPY (¥) | AUD ($) | CNY (¥) | DKK (kr) | HKD ($) | CAD ($) | MXN ($) | BRL (R$) | CHF (SFr) |
Designated as hedging instrument | Derivatives designated as cash flow hedges | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Notional amount of derivative | € 12,270 | kr 12,780 | £ 3,355 | ¥ 330,000 | ¥ 60,000 | kr 10,835 | $ 2,460 | $ 93,575 | SFr 1,215 | |||||
Not designated as hedging instrument | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Notional amount of derivative | $ 6,900 | € 25,861 | kr 10,536 | £ 1,584 | ₩ 2,700,000 | ¥ 260,000 | $ 11,150 | ¥ 95,228 | kr 2,885 | $ 11,000 | $ 3,098 | $ 18,700 | R$ 8500 | SFr 255 |
Derivatives - Fair Value of Der
Derivatives - Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Designated as hedging instrument | Interest rate swap | Other assets (long-term) | ||
Derivatives, Fair Value [Line Items] | ||
Total Asset Derivatives | $ 8,284 | $ 5,749 |
Designated as hedging instrument | Foreign currency forward contracts | Other assets (long-term) | ||
Derivatives, Fair Value [Line Items] | ||
Total Asset Derivatives | 161 | 35 |
Designated as hedging instrument | Foreign currency forward contracts | Prepaid expenses and other assets | ||
Derivatives, Fair Value [Line Items] | ||
Total Asset Derivatives | 813 | 363 |
Designated as hedging instrument | Foreign currency forward contracts | Accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Total Liability Derivatives | (240) | (468) |
Designated as hedging instrument | Foreign currency forward contracts | Other long-term obligations | ||
Derivatives, Fair Value [Line Items] | ||
Total Liability Derivatives | (56) | (82) |
Not designated as hedging instrument | Foreign currency forward contracts | Prepaid expenses and other assets | ||
Derivatives, Fair Value [Line Items] | ||
Total Asset Derivatives | 360 | 223 |
Not designated as hedging instrument | Foreign currency forward contracts | Accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Total Liability Derivatives | $ (475) | $ (841) |
Derivatives - Amount of Gain (L
Derivatives - Amount of Gain (Loss) Recognized in OCI and Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Recognized in OCI | $ 667 | $ (144) | $ 3,541 | $ 166 |
Derivatives designated as cash flow hedges | Interest rate swap | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Recognized in OCI | 664 | 1 | 3,532 | (611) |
Derivatives designated as cash flow hedges | Interest rate swap | Interest Expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Reclassified from AOCI | 428 | 96 | 998 | (8) |
Derivatives designated as cash flow hedges | Foreign currency forward contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Recognized in OCI | 100 | 841 | ||
Derivatives designated as cash flow hedges | Foreign currency forward contracts | Revenue | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Recognized in OCI | 543 | 1,112 | ||
Amount of Gain/(Loss) Reclassified from AOCI | 86 | (101) | (299) | (141) |
Derivatives designated as cash flow hedges | Foreign currency forward contracts | Cost of sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Reclassified from AOCI | $ 26 | $ 250 | $ 404 | $ 213 |
Derivatives - Gain (Loss) in th
Derivatives - Gain (Loss) in the Consolidated Statements of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Not designated as hedging instrument | Foreign currency forward contracts | Other expense | ||||
Derivative [Line Items] | ||||
Gain (loss) on derivative | $ 1,143 | $ (1,459) | $ 3,181 | $ (4,150) |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and (Liabilities) Carried at Fair Value (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate contracts | $ 0 | $ 0 |
Foreign currency contract assets, current and long-term | 0 | 0 |
Foreign currency contract liabilities, current and long-term | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate contracts | 8,284 | 5,749 |
Foreign currency contract assets, current and long-term | 1,334 | 621 |
Foreign currency contract liabilities, current and long-term | (771) | (1,391) |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate contracts | 0 | 0 |
Foreign currency contract assets, current and long-term | 0 | 0 |
Foreign currency contract liabilities, current and long-term | 0 | 0 |
Estimate of Fair Value, Fair Value Disclosure | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate contracts | 8,284 | 5,749 |
Foreign currency contract assets, current and long-term | 1,334 | 621 |
Foreign currency contract liabilities, current and long-term | $ (771) | $ (1,391) |
Fair Value Measurements - Liabi
Fair Value Measurements - Liability Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - Contingent Consideration - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | $ 10,912 | $ 5,572 | $ 10,956 | $ 683 |
Contingent consideration liability recorded as the result of acquisitions (see Note 5) | 0 | 5,500 | 0 | 10,400 |
Fair value adjustments recorded to income during the period | (828) | 20 | (741) | 39 |
Contingent payments made | (53) | (15) | (184) | (45) |
Ending balance | $ 10,031 | $ 11,077 | $ 10,031 | $ 11,077 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Inputs, Liabilities, Quantitative Information (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Contingent Consideration | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Contingent consideration liability | $ 10,031 | $ 10,912 | $ 10,956 | $ 11,077 | $ 5,572 | $ 683 |
Revenue-based Payments | Contingent Consideration | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Contingent consideration liability | $ 10,031 | $ 10,956 | ||||
Measurement Input, Discount Rate | Revenue-based Payments | Contingent Consideration | Minimum | Discounted Cash Flow | Fair Value, Inputs, Level 3 | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Unobservable inputs, contingent liability | 9.90% | 9.90% | ||||
Measurement Input, Discount Rate | Revenue-based Payments | Contingent Consideration | Maximum | Discounted Cash Flow | Fair Value, Inputs, Level 3 | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Unobservable inputs, contingent liability | 15.00% | 15.00% | ||||
Milestone Payment Probability | Revenue-based Payments | Contingent Consideration | Discounted Cash Flow | Fair Value, Inputs, Level 3 | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Unobservable inputs, contingent liability | 100.00% | |||||
Contingent Receivable | Other Payments | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Contingent consideration asset | $ 308 | $ 760 | ||||
Contingent Receivable | Measurement Input, Discount Rate | Other Payments | Discounted Cash Flow | Fair Value, Inputs, Level 3 | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Unobservable inputs, contingent receivable asset | 10.00% | 10.00% | ||||
Contingent Receivable | Milestone Payment Probability | Other Payments | Discounted Cash Flow | Fair Value, Inputs, Level 3 | ||||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||||
Unobservable inputs, contingent receivable asset | 35.00% | 75.00% |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment of other assets | $ 0 | $ 67 | $ 86 | $ 86 | |
Other Payments | Contingent Receivable | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Remaining contingent receivable asset | 308 | 308 | $ 760 | ||
Contingent Receivable | Contingent Consideration | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Gain (loss) on contingent receivable | 167 | 299 | |||
Payment received on contingent receivable | 0 | 153 | |||
Other long-term obligations | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Contingent consideration liability, noncurrent | 9,800 | 9,800 | 10,700 | ||
Accrued expenses | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Contingent consideration liability, current | $ 280 | $ 280 | 289 | ||
Other assets (long-term) | Contingent Receivable | Contingent Consideration | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Remaining contingent receivable asset | 319 | ||||
Other current assets | Contingent Receivable | Contingent Consideration | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Remaining contingent receivable asset | $ 441 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Goodwill balance at January 1 | $ 238,147 |
Effect of foreign exchange | (881) |
Additions as the result of acquisitions | 11,757 |
Goodwill balance at September 30 | $ 249,023 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 110,653 | $ 97,680 |
Accumulated Amortization | (46,088) | (38,127) |
Net Carrying Amount | 64,565 | 59,553 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 18,676 | 16,528 |
Accumulated Amortization | (4,665) | (3,737) |
Net Carrying Amount | 14,011 | 12,791 |
Distribution agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 8,012 | 7,262 |
Accumulated Amortization | (5,509) | (4,686) |
Net Carrying Amount | 2,503 | 2,576 |
License agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 24,913 | 23,783 |
Accumulated Amortization | (6,895) | (5,568) |
Net Carrying Amount | 18,018 | 18,215 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 21,514 | 16,224 |
Accumulated Amortization | (6,039) | (4,686) |
Net Carrying Amount | 15,475 | 11,538 |
Covenants not to compete | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,028 | 1,028 |
Accumulated Amortization | (993) | (968) |
Net Carrying Amount | 35 | 60 |
Customer lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 35,590 | 31,935 |
Accumulated Amortization | (21,987) | (18,482) |
Net Carrying Amount | 13,603 | 13,453 |
In-process technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 920 | 920 |
Accumulated Amortization | 0 | 0 |
Net Carrying Amount | $ 920 | $ 920 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Accumulated impairment loss | $ 8,300,000 | $ 8,300,000 | ||
Aggregate amortization expense | 10,500,000 | $ 7,000,000 | 29,400,000 | $ 19,400,000 |
Intangible asset impairment charge | 657,000 | $ 0 | $ 657,000 | $ 0 |
Quellent, LLC | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible asset impairment charge | $ 657,000 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Future Amortization Expense (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remaining 2,018 | $ 10,140 |
2,019 | 39,647 |
2,020 | 38,386 |
2,021 | 31,025 |
2,022 | $ 29,141 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
U.S. Department of Justice Matter | ||
Loss Contingencies [Line Items] | ||
Legal expenses | $ 946 | $ 4,300 |
Issuance of Common Stock (Detai
Issuance of Common Stock (Details) - USD ($) $ in Thousands | Jul. 30, 2018 | Mar. 28, 2017 |
Equity [Abstract] | ||
Common stock issued in transaction (in shares) | 4,025,000 | 5,175,000 |
Net proceeds from issuance of common stock | $ 205,400 | $ 136,600 |
Underwriting discounts and commissions | 12,000 | 8,800 |
Other direct costs incurred | $ 366 | $ 816 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - Subsequent Event - Cianna Medical, Inc. - Scenario, Plan | Oct. 01, 2018USD ($) |
Subsequent Event [Line Items] | |
Total purchase price | $ 200,000,000 |
Cash paid for merger at closing | 135 |
Certain Manufacturing Capacity and Manufacturing Cost Milestone | |
Subsequent Event [Line Items] | |
Earn-out payment payable upon certain milestones | 15,000,000 |
Annual Net Sales Milestone | |
Subsequent Event [Line Items] | |
Earn-out payment payable upon certain milestones | $ 50,000,000 |
Aggregate earn-out payment rate | 175.00% |