Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 07, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 0-18592 | |
Entity Registrant Name | MERIT MEDICAL SYSTEMS INC | |
Entity Central Index Key | 0000856982 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | UT | |
Entity Tax Identification Number | 87-0447695 | |
Entity Address, Address Line One | 1600 West Merit Parkway | |
Entity Address, City or Town | South Jordan | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84095 | |
City Area Code | 801 | |
Local Phone Number | 253-1600 | |
Title of 12(b) Security | Common Stock, no par | |
Trading Symbol | MMSI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 55,174,922 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 35,182 | $ 67,359 |
Trade receivables — net of allowance for uncollectible accounts — 2019 — $2,656 and 2018 — $2,355 | 156,444 | 137,174 |
Other receivables | 11,520 | 11,879 |
Inventories | 202,994 | 197,536 |
Prepaid expenses and current other assets | 12,305 | 11,326 |
Prepaid income taxes | 3,625 | 3,627 |
Income tax refund receivables | 4,876 | 933 |
Total current assets | 426,946 | 429,834 |
PROPERTY AND EQUIPMENT: | ||
Land and land improvements | 27,651 | 26,801 |
Buildings | 153,502 | 151,251 |
Manufacturing equipment | 230,315 | 221,029 |
Furniture and fixtures | 57,565 | 54,765 |
Leasehold improvements | 34,518 | 33,678 |
Construction-in-progress | 69,370 | 53,491 |
Total property and equipment | 572,921 | 541,015 |
Less accumulated depreciation | (222,402) | (209,563) |
Property and equipment — net | 350,519 | 331,452 |
OTHER ASSETS: | ||
Intangible assets | 74,419 | 79,566 |
Goodwill | 352,133 | 335,433 |
Deferred income tax assets | 3,038 | 3,001 |
Right-of-use operating lease assets | 79,309 | |
Other assets | 58,255 | 57,579 |
Total other assets | 958,805 | 858,726 |
TOTAL | 1,736,270 | 1,620,012 |
CURRENT LIABILITIES: | ||
Trade payables | 52,601 | 54,024 |
Accrued expenses | 97,176 | 96,173 |
Current portion of long-term debt | 15,000 | 22,000 |
Short-term operating lease liabilities | 11,732 | |
Income taxes payable | 42 | 3,146 |
Total current liabilities | 176,551 | 175,343 |
LONG-TERM DEBT | 385,221 | 373,152 |
DEFERRED INCOME TAX LIABILITIES | 60,932 | 56,363 |
LONG-TERM INCOME TAXES PAYABLE | 392 | 392 |
LIABILITIES RELATED TO UNRECOGNIZED TAX BENEFITS | 3,013 | 3,013 |
DEFERRED COMPENSATION PAYABLE | 12,739 | 11,219 |
DEFERRED CREDITS | 2,192 | 2,261 |
LONG-TERM OPERATING LEASE LIABILITIES | 71,272 | |
OTHER LONG-TERM OBLIGATIONS | 73,283 | 65,494 |
Total liabilities | 785,595 | 687,237 |
COMMITMENTS AND CONTINGENCIES (Notes 5, 10, 11, 14 and 15) | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock — 5,000 shares authorized as of June 30, 2019 and December 31, 2018; no shares issued | 0 | 0 |
Common stock, no par value; shares authorized — 2019 and 2018 - 100,000; issued and outstanding as of June 30, 2019 - 55,079 and December 31, 2018 - 54,893 | 579,250 | 571,383 |
Retained earnings | 376,572 | 363,425 |
Accumulated other comprehensive loss | (5,147) | (2,033) |
Total stockholders’ equity | 950,675 | 932,775 |
TOTAL | 1,736,270 | 1,620,012 |
Developed technology — net of accumulated amortization — 2019 — $125,447 and 2018 — $102,357 | ||
OTHER ASSETS: | ||
Intangible assets | 391,651 | 383,147 |
Other — net of accumulated amortization — 2019 — $56,289 and 2018 — $49,136 | ||
OTHER ASSETS: | ||
Intangible assets | $ 74,419 | $ 79,566 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Trade receivables, allowances | $ 2,656 | $ 2,355 |
OTHER ASSETS: | ||
Intangibles, accumulated amortization | $ 56,289 | $ 49,136 |
STOCKHOLDERS’ EQUITY: | ||
Preferred stock shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Common stock shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock shares issued (in shares) | 55,079,000 | 54,893,000 |
Common stock shares outstanding (in shares) | 55,079,000 | 54,893,000 |
Developed technology | ||
OTHER ASSETS: | ||
Intangibles, accumulated amortization | $ 125,447 | $ 102,357 |
Other | ||
OTHER ASSETS: | ||
Intangibles, accumulated amortization | $ 56,289 | $ 49,136 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
NET SALES | $ 255,532 | $ 224,810 | $ 493,881 | $ 427,844 |
COST OF SALES | 143,568 | 124,801 | 277,281 | 239,779 |
GROSS PROFIT | 111,964 | 100,009 | 216,600 | 188,065 |
OPERATING EXPENSES: | ||||
Selling, general and administrative | 79,977 | 69,095 | 158,247 | 134,007 |
Research and development | 16,332 | 15,316 | 32,375 | 29,638 |
Intangible asset impairment charge | 548 | 0 | 548 | 0 |
Contingent consideration expense | 2,406 | 178 | 3,181 | 219 |
Acquired in-process research and development | 500 | 306 | 525 | 306 |
Total operating expenses | 99,763 | 84,895 | 194,876 | 164,170 |
INCOME FROM OPERATIONS | 12,201 | 15,114 | 21,724 | 23,895 |
OTHER INCOME (EXPENSE): | ||||
Interest income | 342 | 342 | 698 | 487 |
Interest expense | (3,115) | (3,338) | (5,879) | (5,736) |
Other expense - net | (429) | (553) | (698) | (721) |
Total other expense — net | (3,202) | (3,549) | (5,879) | (5,970) |
INCOME BEFORE INCOME TAXES | 8,999 | 11,565 | 15,845 | 17,925 |
INCOME TAX EXPENSE | 2,140 | 624 | 2,791 | 1,715 |
NET INCOME | $ 6,859 | $ 10,941 | $ 13,054 | $ 16,210 |
EARNINGS PER COMMON SHARE: | ||||
Basic (in dollars per share) | $ 0.12 | $ 0.22 | $ 0.24 | $ 0.32 |
Diluted (in dollars per share) | $ 0.12 | $ 0.21 | $ 0.23 | $ 0.31 |
AVERAGE COMMON SHARES: | ||||
Basic (in shares) | 55,017 | 50,473 | 54,967 | 50,376 |
Diluted (in shares) | 56,555 | 52,154 | 56,523 | 52,033 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 6,859 | $ 10,941 | $ 13,054 | $ 16,210 |
Other comprehensive income (loss): | ||||
Cash flow hedges | (1,154) | 881 | (3,731) | 2,873 |
Income tax benefit (expense) | 297 | (226) | 960 | (738) |
Foreign currency translation adjustment | 274 | (4,195) | (341) | (1,603) |
Income tax benefit (expense) | (16) | 0 | (2) | 0 |
Total other comprehensive income (loss) | (599) | (3,540) | (3,114) | 532 |
Total comprehensive income | $ 6,260 | $ 7,401 | $ 9,940 | $ 16,742 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Beginning balance at Dec. 31, 2017 | $ 676,334 | $ 353,392 | $ 321,408 | $ 1,534 |
Beginning balance (in shares) at Dec. 31, 2017 | 50,248 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 5,269 | 5,269 | ||
Other comprehensive income/loss | 4,072 | 4,072 | ||
Stock-based compensation expense | 1,256 | $ 1,256 | ||
Options exercised | 1,286 | $ 1,286 | ||
Options exercised (in shares) | 91 | |||
Issuance of common stock under Employee Stock Purchase Plan | 294 | $ 294 | ||
Issuance of common stock under Employee Stock Purchase Plans (in shares) | 7 | |||
Ending balance at Mar. 31, 2018 | 688,511 | $ 356,228 | 326,677 | 5,606 |
Ending balance (in shares) at Mar. 31, 2018 | 50,346 | |||
Beginning balance at Dec. 31, 2017 | 676,334 | $ 353,392 | 321,408 | 1,534 |
Beginning balance (in shares) at Dec. 31, 2017 | 50,248 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 16,210 | |||
Other comprehensive income/loss | 532 | |||
Shares surrendered in exchange for exercise of stock options | $ (1,684) | |||
Shares surrendered in exchange for exercise of stock options (in shares) | (32) | |||
Ending balance at Jun. 30, 2018 | $ 699,254 | $ 359,570 | 337,618 | 2,066 |
Ending balance (in shares) at Jun. 30, 2018 | 50,635 | |||
Beginning balance at Mar. 31, 2018 | 688,511 | $ 356,228 | 326,677 | 5,606 |
Beginning balance (in shares) at Mar. 31, 2018 | 50,346 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 10,941 | 10,941 | ||
Other comprehensive income/loss | (3,540) | (3,540) | ||
Stock-based compensation expense | 1,565 | $ 1,565 | ||
Options exercised | 5,307 | $ 5,307 | ||
Options exercised (in shares) | 357 | |||
Issuance of common stock under Employee Stock Purchase Plan | 220 | $ 220 | ||
Issuance of common stock under Employee Stock Purchase Plans (in shares) | 4 | |||
Shares surrendered in exchange for payment of payroll tax liabilities | (2,065) | $ (2,065) | ||
Shares surrendered in exchange for payment of payroll tax liabilities (in shares) | (40) | |||
Shares surrendered in exchange for exercise of stock options | (1,685) | $ (1,685) | ||
Shares surrendered in exchange for exercise of stock options (in shares) | (32) | |||
Ending balance at Jun. 30, 2018 | 699,254 | $ 359,570 | 337,618 | 2,066 |
Ending balance (in shares) at Jun. 30, 2018 | 50,635 | |||
Beginning balance at Dec. 31, 2018 | $ 932,775 | $ 571,383 | 363,425 | (2,033) |
Beginning balance (in shares) at Dec. 31, 2018 | 54,893 | 54,893 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | $ 6,195 | 6,195 | ||
Other comprehensive income/loss | (2,515) | (2,515) | ||
Stock-based compensation expense | 1,766 | $ 1,766 | ||
Options exercised | 1,365 | $ 1,365 | ||
Options exercised (in shares) | 95 | |||
Issuance of common stock under Employee Stock Purchase Plan | 432 | $ 432 | ||
Issuance of common stock under Employee Stock Purchase Plans (in shares) | 7 | |||
Ending balance at Mar. 31, 2019 | 940,111 | $ 574,946 | 369,713 | (4,548) |
Ending balance (in shares) at Mar. 31, 2019 | 54,995 | |||
Beginning balance at Dec. 31, 2018 | $ 932,775 | $ 571,383 | 363,425 | (2,033) |
Beginning balance (in shares) at Dec. 31, 2018 | 54,893 | 54,893 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | $ 13,054 | |||
Other comprehensive income/loss | (3,114) | |||
Shares surrendered in exchange for exercise of stock options | $ 0 | |||
Shares surrendered in exchange for exercise of stock options (in shares) | 0 | |||
Ending balance at Jun. 30, 2019 | $ 950,675 | $ 579,250 | 376,572 | (5,147) |
Ending balance (in shares) at Jun. 30, 2019 | 55,079 | 55,079 | ||
Beginning balance at Mar. 31, 2019 | $ 940,111 | $ 574,946 | 369,713 | (4,548) |
Beginning balance (in shares) at Mar. 31, 2019 | 54,995 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 6,859 | 6,859 | ||
Other comprehensive income/loss | (599) | (599) | ||
Stock-based compensation expense | 2,523 | $ 2,523 | ||
Options exercised | 1,441 | $ 1,441 | ||
Options exercised (in shares) | 78 | |||
Issuance of common stock under Employee Stock Purchase Plan | 340 | $ 340 | ||
Issuance of common stock under Employee Stock Purchase Plans (in shares) | 6 | |||
Ending balance at Jun. 30, 2019 | $ 950,675 | $ 579,250 | $ 376,572 | $ (5,147) |
Ending balance (in shares) at Jun. 30, 2019 | 55,079 | 55,079 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 13,054 | $ 16,210 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 45,010 | 32,779 |
Loss on sales and/or abandonment of property and equipment | 803 | 371 |
Amortization of right-of-use operating lease assets | 5,874 | |
Write-off of patents and intangible assets | 594 | 86 |
Acquired in-process research and development | 525 | 306 |
Amortization of deferred credits | (70) | (71) |
Amortization of long-term debt issuance costs | 402 | 402 |
Stock-based compensation expense | 4,289 | 2,821 |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Trade receivables | (21,206) | (27,947) |
Other receivables | 427 | 966 |
Inventories | (5,138) | (7,189) |
Prepaid expenses and other current assets | (1,052) | (3,105) |
Prepaid income taxes | (45) | (100) |
Income tax refund receivables | (3,980) | (1,146) |
Other assets | (2,845) | (751) |
Trade payables | 1,338 | 15,767 |
Accrued expenses | 1,925 | 7,467 |
Income taxes payable | (2,059) | (2,076) |
Deferred compensation payable | 1,518 | 438 |
Operating lease liabilities | (5,882) | |
Other long-term obligations | 2,208 | (179) |
Total adjustments | 22,636 | 18,839 |
Net cash provided by operating activities | 35,690 | 35,049 |
Capital expenditures for: | ||
Property and equipment | (35,959) | (31,559) |
Intangible assets | (1,607) | (1,755) |
Proceeds from the sale of property and equipment | 22 | 4 |
Issuance of note receivable | 0 | (10,500) |
Cash paid in acquisitions, net of cash acquired | (37,256) | (118,654) |
Net cash used in investing activities | (74,800) | (162,464) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock | 3,374 | 3,251 |
Proceeds from issuance of long-term debt | 125,746 | 320,827 |
Payments on long-term debt | (120,746) | (185,827) |
Contingent payments related to acquisitions | (611) | (130) |
Net cash provided by financing activities | 7,763 | 138,121 |
EFFECT OF EXCHANGE RATES ON CASH | (830) | 470 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (32,177) | 11,176 |
CASH AND CASH EQUIVALENTS: | ||
Beginning of period | 67,359 | 32,336 |
End of period | 35,182 | 43,512 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Interest (net of capitalized interest of $540 and $314, respectively) | 5,794 | 5,714 |
Income taxes | 8,856 | 5,141 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Property and equipment purchases in accounts payable | 3,331 | 3,943 |
Acquisition purchases in accrued expenses and other long-term obligations | 8,400 | 0 |
Merit common stock surrendered (0 and 32 shares, respectively) in exchange for exercise of stock options | 0 | $ 1,684 |
Right-of-use operating lease assets obtained in exchange for operating lease liabilities | $ 2,927 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Cash Flows [Abstract] | ||
Net capitalized interest | $ 540 | $ 314 |
Shares surrendered in exchange for exercise of stock options (in shares) | 0 | 32 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2019 | |
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 six-month periods ended June 30, 2019 and 2018 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 June 30, 2019 and December 31, 2018 , and our results of operations and cash flows for the three and six-month periods ended June 30, 2019 and 2018 . The results of operations for the three and six-month periods ended June 30, 2019 and 2018 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 "2018 Form 10-K") for the year ended December 31, 2018 , which was filed with the Securities and Exchange Commission (the "SEC") on March 1, 2019 . |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories. Inventories at June 30, 2019 and December 31, 2018 , consisted of the following (in thousands): June 30, December 31, 2019 2018 Finished goods $ 116,741 $ 117,703 Work-in-process 23,419 14,380 Raw materials 62,834 65,453 Total Inventories $ 202,994 $ 197,536 |
Stock-Based Compensation Expens
Stock-Based Compensation Expense | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation Expense | Stock-Based Compensation Expense. The stock-based compensation expense before income tax expense for the three and six months ended June 30, 2019 and 2018 consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Cost of sales $ 355 $ 232 $ 607 $ 416 Research and development 281 147 473 271 Selling, general and administrative 1,887 1,186 3,209 2,134 Stock-based compensation expense before taxes $ 2,523 $ 1,565 $ 4,289 $ 2,821 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 June 30, 2019 , the total remaining unrecognized compensation cost related to non-vested stock options, net of expected forfeitures, was approximately $32.4 million and was expected to be recognized over a weighted average period of 3.32 years. During the three and six-month periods ended June 30, 2019 , we granted stock-based awards representing 190,000 and approximately 1.1 million shares of our common stock, respectively. During the three and six-month periods ended June 30, 2018 , we granted stock-based awards representing 200,000 and 692,002 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: Six Months Ended June 30, 2019 2018 Risk-free interest rate 1.90% - 2.56% 2.63% - 2.77% Expected option term 3.0 - 5.0 years 5.0 years Expected dividend yield — — Expected price volatility 28.66% - 33.69% 34.06% - 34.32% |
Earnings Per Common Share (EPS)
Earnings Per Common Share (EPS) | 6 Months Ended |
Jun. 30, 2019 | |
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 consisted of the following (in thousands, except per share amounts): Three Months Six Months Net Income Shares Per Share Amount Net Income Shares Per Share Amount Period ended June 30, 2019: Basic EPS $ 6,859 55,017 $ 0.12 $ 13,054 54,967 $ 0.24 Effect of dilutive stock options 1,538 1,556 Diluted EPS $ 6,859 56,555 $ 0.12 $ 13,054 56,523 $ 0.23 Stock options excluded from the calculation of common stock equivalents as the impact was anti-dilutive 1,185 1,081 Period ended June 30, 2018: Basic EPS $ 10,941 50,473 $ 0.22 $ 16,210 50,376 $ 0.32 Effect of dilutive stock options 1,681 1,657 Diluted EPS $ 10,941 52,154 $ 0.21 $ 16,210 52,033 $ 0.31 Stock options excluded from the calculation of common stock equivalents as the impact was anti-dilutive 535 359 |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions. On June 14, 2019, we consummated an acquisition transaction contemplated by a merger agreement to acquire Brightwater Medical, Inc. ("Brightwater"). The purchase consideration consisted of an upfront payment of $35 million plus an initial working capital adjustment of approximately $104,000 in cash, with potential earn-out payments of up to an additional $5 million for achievement of CE certification with respect to the Brightwater device and up to an additional $10 million for the achievement of sales milestones specified in the merger agreement. Brightwater developed and commercialized the ConvertX®, a single-use device used to replace a series of devices and procedures used to treat severe obstructions of the ureter. The ConvertX system is designed to be implanted once and converted from a nephroureteral catheter to a nephroureteral stent without requiring sedation or local anesthesia. Brightwater recently received FDA clearance for the ConvertX biliary stent system. We accounted for this acquisition as a business combination. 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 Brightwater acquisition, which were included in selling, general and administrative expenses, were not material. The purchase price was preliminarily allocated as follows (in thousands): Assets Acquired Trade receivables $ 94 Inventories 349 Property and equipment 409 Other long-term assets 30 Intangibles Developed technology 31,680 Customer lists 83 Trademarks 250 Goodwill 16,950 Total assets acquired 49,845 Liabilities Assumed Trade payables (58 ) Accrued expenses (261 ) Other long-term obligations (1,522 ) Deferred income tax liabilities (4,590 ) Total liabilities assumed (6,431 ) Total net assets acquired $ 43,414 We are amortizing the developed technology intangible asset acquired from Brightwater over 13 years , the related trademarks over five years and the customer list on an accelerated basis over one year . The total weighted-average amortization period for these acquired intangible assets is approximately 12.9 years . On March 28, 2019, we paid $2 million to acquire convertible participating preferred shares of Fluidx Medical Technology, LLC ("Fluidx"), owner of certain technology proposed to be used in the development of embolic and adhesive agents for use in arterial, venous, vascular graft and cardiovascular applications inside and outside the heart and related appendages. Our investment in Fluidx has been recorded as an equity investment accounted for at cost and reflected within other assets in our accompanying consolidated balance sheet because we are not able to exercise significant influence over the operations of Fluidx. Our total current investment in Fluidx represents an ownership of approximately 12.7% of the outstanding equity interests of Fluidx. On December 14, 2018, we consummated an acquisition transaction contemplated by an asset purchase agreement with Vascular Insights, LLC and VI Management, Inc. (combined "Vascular Insights") and acquired Vascular Insight's intellectual property rights, inventory and certain other assets, including, the ClariVein® IC system and the ClariVein OC system. The ClariVein systems are specialty infusion and occlusion catheter systems with rotating wire tips designed for the controlled 360-degree dispersion of physician-specified agents to the targeted treatment area. We accounted for this acquisition as a business combination. The purchase consideration included an upfront payment of $40 million , and we are obligated to pay up to an additional $20 million based on achieving certain revenue milestones specified in the asset purchase agreement. The sales and results of operations related to this acquisition have been included in our cardiovascular segment. During the three and six-month periods ended June 30, 2019 , net sales of products acquired from Vascular Insights were approximately $1.7 million and $3.2 million , respectively. It is not practical to separately report earnings related to the products acquired from Vascular Insights, as we cannot split out sales costs related solely to the products we acquired from Vascular Insights, principally because our sales representatives sell multiple products (including the products we acquired from Vascular Insights) in our cardiovascular business segment. Acquisition-related costs associated with the Vascular Insights acquisition, which were included in selling, general and administrative expenses during the year ended December 31, 2018, were not material. The purchase price was preliminarily allocated as follows (in thousands): Inventories $ 1,353 Intangibles Developed technology 32,750 Customer list 840 Trademarks 1,410 Goodwill 21,847 Total net assets acquired $ 58,200 We are amortizing the developed technology intangible asset acquired from Vascular Insights over 12 years , the related trademarks over nine years and the customer list on an accelerated basis over eight years . The total weighted-average amortization period for these acquired intangible assets is approximately 11.8 years . On November 13, 2018, we consummated an acquisition transaction contemplated by a merger agreement to acquire Cianna Medical, Inc. ("Cianna Medical"). The purchase consideration consisted of an upfront payment of $135 million plus a final working capital adjustment of approximately $1.2 million in cash, with potential earn-out payments of up to an additional $15 million for achievement of supply chain and scalability metrics and up to an additional $50 million for the achievement of sales milestones specified in the merger agreement. Cianna Medical developed the first non-radioactive, wire-free breast cancer localization system. Its SCOUT® and SAVI® Brachy technologies are FDA-cleared and address unmet needs in the delivery of radiation therapy, tumor localization and surgical guidance. We accounted for this acquisition as a business combination. During the three and six-month periods ended June 30, 2019 , net sales of Cianna Medical products were approximately $11.2 million and $24.1 million , respectively. It is not practical to separately report earnings related to the products acquired from Cianna Medical, as we cannot split out sales costs related solely to the products we acquired from Cianna Medical, principally because our sales representatives sell multiple products (including the products we acquired from Cianna Medical) in our cardiovascular business segment. Acquisition-related costs associated with the Cianna Medical acquisition, which were included in selling, general and administrative expenses during the year ended December 31, 2018, were approximately $3.5 million . The following table summarizes the preliminary purchase price allocated to the net assets acquired from Cianna Medical (in thousands): Assets Acquired Trade receivables $ 6,151 Inventories 5,803 Prepaid expenses and other current assets 315 Property and equipment 1,047 Other long-term assets 14 Intangibles Developed technology 134,510 Customer lists 3,330 Trademarks 7,080 Goodwill 65,802 Total assets acquired 224,052 Liabilities Assumed Trade payables (1,497 ) Accrued expenses (2,384 ) Other long-term liabilities (1,527 ) Deferred income tax liabilities (30,363 ) Total liabilities assumed (35,771 ) Total net assets acquired $ 188,281 We are amortizing the developed technology intangible assets of Cianna Medical over 11 years , the related trademarks over ten years and the customer lists on an accelerated basis over eight years . The total weighted-average amortization period for these acquired intangible assets is approximately 10.7 years . 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 during the year ended December 31, 2018, were not material. The purchase price was allocated as follows (in thousands): Inventories $ 971 Intangibles Developed technology 4,840 Customer list 120 Trademarks 400 Goodwill 938 Total net assets acquired $ 7,269 We are amortizing the developed technology intangible asset of DirectACCESS 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 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 and Tru-Cut® Biopsy Needles, as well as the Aspira® Pleural Effusion Drainage Kits, and the Aspira® Peritoneal Drainage System. We accounted for this acquisition as a business combination. During the three and six-month periods ended June 30, 2019 , our net sales of BD products were approximately $11.8 million and $23.4 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 were included in selling, general and administrative expenses during the year ended December 31, 2018, were approximately $1.8 million . 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 In-process technology 2,500 Goodwill 9,728 Total net assets acquired $ 101,880 We are amortizing the developed technology intangible assets acquired from BD 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 eight years . The following table summarizes our consolidated results of operations for the three and six-month periods ended June 30, 2018, as well as unaudited pro forma consolidated results of operations as though the acquisition of Cianna Medical and Vascular Insights had occurred on January 1, 2017 (in thousands, except per common share amounts): Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 As Reported Pro Forma As Reported Pro Forma Net sales $ 224,810 $ 238,272 $ 427,844 $ 452,451 Net income 10,941 6,842 16,210 5,016 Earnings per common share: Basic $ 0.22 $ 0.14 $ 0.32 $ 0.10 Diluted $ 0.21 $ 0.13 $ 0.31 $ 0.10 * The pro forma results for the three and six-month periods ended June 30, 2019 are not included in the table above because the operating results for the Cianna Medical and Vascular Insights acquisitions 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 and interest expense on long-term debt. The pro forma information should not be considered indicative of actual results that would have been achieved if the acquisition of Cianna Medical and Vascular Insights had occurred on January 1, 2017, 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 Brightwater or DirectACCESS 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. | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers. | Revenue from Contracts with Customers. In accordance with Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606"), we recognize revenue when a customer obtains control of promised goods. The amount of revenue recognized reflects the consideration we expect to receive in exchange for these goods. 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 13 in our 2018 Form 10-K. The following tables present revenue from contracts with customers for the three and six-month periods ended June 30, 2019 and 2018 (in thousands): Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 United States International Total United States International Total Cardiovascular Stand-alone devices $ 55,906 $ 47,616 $ 103,522 $ 50,941 $ 41,555 $ 92,496 Cianna Medical 11,230 7 11,237 — — — Custom kits and procedure trays 23,124 11,219 34,343 23,667 10,325 33,992 Inflation devices 8,347 15,968 24,315 8,160 16,145 24,305 Catheters 20,696 24,648 45,344 16,704 22,670 39,374 Embolization devices 5,274 8,734 14,008 5,094 7,630 12,724 CRM/EP 11,536 2,361 13,897 11,758 1,738 13,496 Total 136,113 110,553 246,666 116,324 100,063 216,387 Endoscopy Endoscopy devices 8,549 317 8,866 8,121 302 8,423 Total $ 144,662 $ 110,870 $ 255,532 $ 124,445 $ 100,365 $ 224,810 Six Months Ended June 30, 2019 Six Months Ended June 30, 2018 United States International Total United States International Total Cardiovascular Stand-alone devices $ 109,305 $ 89,643 $ 198,948 $ 94,953 $ 80,789 $ 175,742 Cianna Medical 24,078 7 24,085 — — — Custom kits and procedure trays 45,179 22,107 67,286 45,984 21,280 67,264 Inflation devices 16,320 30,013 46,333 15,828 30,896 46,724 Catheters 40,108 48,275 88,383 31,974 41,265 73,239 Embolization devices 9,980 15,855 25,835 10,126 15,184 25,310 CRM/EP 21,635 4,641 26,276 20,596 3,366 23,962 Total 266,605 210,541 477,146 219,461 192,780 412,241 Endoscopy Endoscopy devices 16,117 618 16,735 15,040 563 15,603 Total $ 282,722 $ 211,159 $ 493,881 $ 234,501 $ 193,343 $ 427,844 |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2019 | |
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, interventional oncology and spine devices, and our Cianna Medical product line. Our endoscopy segment focuses on the gastroenterology, pulmonary and thoracic surgery specialties, with a portfolio consisting primarily of stents, dilation balloons, certain inflation devices, guide wires, and other disposable products. We evaluate the performance of our operating segments based on net sales and operating income. Financial information relating to our reportable operating segments and reconciliations to the consolidated totals for the three and six-month periods ended June 30, 2019 and 2018 , are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net Sales Cardiovascular $ 246,666 $ 216,387 $ 477,146 $ 412,241 Endoscopy 8,866 8,423 16,735 15,603 Total net sales 255,532 224,810 493,881 427,844 Operating Income Cardiovascular 9,855 12,663 17,474 19,060 Endoscopy 2,346 2,451 4,250 4,835 Total operating income 12,201 15,114 21,724 23,895 Total other expense - net (3,202 ) (3,549 ) (5,879 ) (5,970 ) Income tax expense 2,140 624 2,791 1,715 Net income $ 6,859 $ 10,941 $ 13,054 $ 16,210 |
Recently Issued Financial Accou
Recently Issued Financial Accounting Standards | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Recently Issued Financial Accounting Standards | Recently Issued Financial Accounting Standards. Recently Adopted In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) ("ASC 842"), which requires lessees to recognize right-of-use ("ROU") assets and related lease liabilities on the balance sheet for all leases greater than one year in duration. We adopted ASC 842 on January 1, 2019 using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach did not require any transition accounting for leases that expired before the earliest comparative period presented. The adoption of this standard resulted in the recording of ROU assets and lease liabilities for all of our lease agreements with original terms of greater than one year. The adoption of ASC 842 did not have a significant impact on our consolidated statements of operations or cash flows. See Note 14 for the required disclosures relating to our lease agreements. 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 became effective for us on January 1, 2019. The adoption of this standard did not 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 became effective for us on January 1, 2019. The adoption of this standard did not 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 became effective for us on January 1, 2019. The adoption of this standard did not have a material impact on our consolidated financial statements. Not Yet Adopted In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which 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 annual periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted. We are currently assessing the impact of this standard on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) , which removes, modifies and adds various disclosure requirements related to fair value disclosures. Disclosures related to transfers between fair value hierarchy levels will be removed and further detail around changes in unrealized gains and losses for the period and unobservable inputs used in determining level 3 fair value measurements will be added, among other changes. ASU 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. We are currently assessing the impact of this standard on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the current incurred loss impairment methodology for financial assets measured at amortized cost with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information, including forecasted information, to develop credit loss estimates. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted for annual periods beginning after December 15, 2018. We are currently assessing the impact of this standard on our consolidated financial statements. 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 | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes. Our overall effective tax rate for the three months ended June 30, 2019 and 2018 was 23.8% and 5.4% , respectively, which resulted in a provision for income taxes of approximately $2.1 million and $0.6 million , respectively. Our overall effective tax rate for the six months ended June 30, 2019 and 2018 was 17.6% and 9.6% , respectively, which resulted in a provision for income taxes of approximately $2.8 million and $1.7 million , respectively. The increase in the effective tax rate for both periods, when compared to the prior-year periods, was primarily due to a lower discrete tax benefit for share-based payment awards and a discrete expense related to the fair value adjustment of the contingent liability of a recent equity acquisition, Cianna Medical. |
Revolving Credit Facility and L
Revolving Credit Facility and Long-Term Debt | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 and December 31, 2018 , consisted of the following (in thousands): June 30, 2019 December 31, 2018 2016 Term loan $ 65,000 $ 72,500 2016 Revolving credit loans 335,500 316,000 Collateralized debt facility — 7,000 Less unamortized debt issuance costs (279 ) (348 ) Total long-term debt 400,221 395,152 Less current portion 15,000 22,000 Long-term portion $ 385,221 $ 373,152 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 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 June 30, 2019 , we believe we were in compliance with all covenants set forth in the Second Amended Credit Agreement. As of June 30, 2019 , we had outstanding borrowings of approximately $400.5 million under the Second Amended Credit Agreement, with additional available borrowings of approximately $38.7 million , based on the leverage ratio required pursuant to the Second Amended Credit Agreement. Our interest rate as of June 30, 2019 was a fixed rate of 2.37% on $175 million as a result an interest rate swap (see Note 11) and a variable floating rate of 3.65% on $225.5 million . Our interest rate as of December 31, 2018 was a fixed rate of 2.12% on $175 million as a result of an interest rate swap and a variable floating rate of 3.52% on $213.5 million . Future Payments Future minimum principal payments on our long-term debt as of June 30, 2019 , are as follows (in thousands): Years Ending Future Minimum December 31 Principal Payments Remaining 2019 $ 7,500 2020 17,500 2021 375,500 Total future minimum principal payments $ 400,500 Subsequent to June 30, 2019, the Second Amended and Restated Credit Agreement was amended and restated in its entirety. See Note 16 below. |
Derivatives
Derivatives | 6 Months Ended |
Jun. 30, 2019 | |
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 instruments 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. When the hedged transaction occurs, gains or losses are 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. 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. Derivative Instruments 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 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 June 30, 2019 and December 31, 2018 , our interest rate swap qualified as a cash flow hedge. The fair value of our interest rate swap at June 30, 2019 was an asset of approximately $1.9 million , which was partially offset by approximately $0.5 million in deferred taxes. The fair value of our interest rate swap at December 31, 2018 was an asset of approximately $5.8 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. Derivative Instruments Designated as Cash Flow Hedges 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 June 30, 2019 , 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 Australian Dollar AUD 3,430 Brazilian Real BRL 1,080 Canadian Dollar CAD 4,330 Swiss Franc CHF 1,970 Chinese Renminbi CNY 166,500 Danish Krone DKK 18,175 Euro EUR 22,600 British Pound GBP 4,820 Japanese Yen JPY 1,335,000 Korean Won KRW 4,475,000 Mexican Peso MXN 296,500 Norwegian Krone NOK 6,000 Swedish Krona SEK 29,210 Derivative Instruments 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 June 30, 2019 , 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 13,788 Brazilian Real BRL 9,000 Canadian Dollar CAD 2,652 Swiss Franc CHF 643 Chinese Renminbi CNY 85,226 Danish Krone DKK 2,544 Euro EUR 11,717 British Pound GBP 5,653 Hong Kong Dollar HKD 11,000 Japanese Yen JPY 1,445,574 Korean Won KRW 6,000,000 Mexican Peso MXN 25,000 Norwegian Krone NOK 3,180 Swedish Krona SEK 17,154 Singapore Dollar SGD 1,676 South African Rand ZAR 37,800 Balance Sheet Presentation of Derivative Instruments. As of June 30, 2019 , and December 31, 2018 , all derivative instruments, 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 was as follows on the dates indicated (in thousands): Fair Value Balance Sheet Location June 30, 2019 December 31, 2018 Derivative instruments designated as hedging instruments Assets Interest rate swap Other assets (long-term) $ 1,907 $ 5,772 Foreign currency forward contracts Prepaid expenses and other assets 960 613 Foreign currency forward contracts Other assets (long-term) 244 151 Liabilities Foreign currency forward contracts Accrued expenses (778 ) (711 ) Foreign currency forward contracts Other long-term obligations (101 ) (101 ) Derivative instruments not designated as hedging instruments Assets Foreign currency forward contracts Prepaid expenses and other assets $ 229 $ 814 Liabilities Foreign currency forward contracts Accrued expenses (1,539 ) (796 ) Income Statement Presentation of Derivative Instruments. Derivative Instruments 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 Consolidated Statements of Income Amount of Gain/(Loss) reclassified from AOCI Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, 2019 2018 2019 2018 2019 2018 Derivative instrument Location in statements of income Interest rate swaps $ (1,812 ) $ 748 Interest expense $ (3,115 ) $ (3,338 ) $ 602 $ 357 Foreign currency forward contracts 1,064 394 Revenue 255,532 224,810 (92 ) (234 ) Cost of sales (143,568 ) (124,801 ) (104 ) 138 Amount of Gain/(Loss) recognized in OCI Consolidated Statements of Income Amount of Gain/(Loss) reclassified from AOCI Six Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 2019 2018 Derivative instrument Location in statements of income Interest rate swaps (2,669 ) $ 2,868 Interest expense (5,879 ) (5,736 ) $ 1,196 $ 570 Foreign currency forward contracts 51 568 Revenue 493,881 427,844 102 (385 ) Cost of sales (277,281 ) (239,779 ) (185 ) 378 As of June 30, 2019 , approximately $6,200 , or $4,600 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 June 30, 2019 , approximately $1.3 million , or $1.0 million after taxes, was expected to be reclassified from accumulated other comprehensive income to earnings in interest expense over the succeeding twelve months. Derivative Instruments 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 June 30, Six Months Ended June 30, Derivative Instrument Location in statements of income 2019 2018 2019 2018 Foreign currency forward contracts Other expense $ (489 ) $ 3,153 $ (755 ) $ 2,038 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 and December 31, 2018 , 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 June 30, 2019 (Level 1) (Level 2) (Level 3) Interest rate contracts (1) $ 1,907 $ — $ 1,907 $ — Foreign currency contract assets, current and long-term (2) $ 1,433 $ — $ 1,433 $ — Foreign currency contract liabilities, current and long-term (3) $ (2,418 ) $ — $ (2,418 ) $ — Contingent receivable asset $ 625 $ — $ — $ 625 Contingent consideration liabilities $ (93,204 ) $ — $ — $ (93,204 ) Fair Value Measurements Using Total Fair Quoted prices in Significant other Significant Value at active markets observable inputs unobservable inputs Description December 31, 2018 (Level 1) (Level 2) (Level 3) Interest rate contracts (1) $ 5,772 $ — $ 5,772 $ — Foreign currency contract assets, current and long-term (2) $ 1,578 $ — $ 1,578 $ — Foreign currency contract liabilities, current and long-term (3) $ (1,608 ) $ — $ (1,608 ) $ — Contingent receivable asset $ 607 $ — $ — $ 607 Contingent consideration liabilities $ (82,236 ) $ — $ — $ (82,236 ) (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 at the end of each reporting period with the change in fair value recognized within operating expenses in the accompanying consolidated statements of income for such period. 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 liabilities during the three and six-month periods ended June 30, 2019 and 2018 , consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Beginning balance $ 82,457 $ 10,928 $ 82,236 $ 10,956 Contingent consideration liability recorded as the result of acquisitions (see Note 5) 8,400 — 8,380 — Fair value adjustments recorded to income 2,404 99 3,199 86 Contingent payments made (57 ) (115 ) (611 ) (130 ) Ending balance $ 93,204 $ 10,912 $ 93,204 $ 10,912 As of June 30, 2019 , approximately $68.6 million in contingent consideration liability was included in other long-term obligations and approximately $24.6 million was included in accrued expenses in our consolidated balance sheet. As of December 31, 2018 , approximately $58.5 million in contingent consideration liability was included in other long-term obligations and $23.8 million was included in accrued expenses in our consolidated balance sheet. 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 June 30, 2019 and December 31, 2018 had a value of approximately $625,000 and $607,000 , respectively, recorded as a current asset in other receivables in our consolidated balance sheets. 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 six-month periods ended June 30, 2019 , we recorded a gain (loss) on the contingent receivable of approximately $(2,000) and $18,000 , respectively. During the three and six-month periods ended June 30, 2018 , we recorded a loss of approximately $79,000 and $132,000 , respectively and received payments of approximately $0 and $153,000 , respectively related to the contingent receivable. The recurring Level 3 measurement of our contingent consideration liability and contingent receivable included the following significant unobservable inputs at June 30, 2019 and December 31, 2018 (amounts in thousands): Contingent consideration asset or liability Fair value at June 30, 2019 Valuation technique Unobservable inputs Range Revenue-based royalty $ 9,843 Discounted cash flow Discount rate 14% - 25% payments contingent liability Projected year of payments 2019-2034 Supply chain milestone $ 15,000 Scenario-based method Discount rate 3.9% contingent liability Probability of milestone payment 100% Projected year of payments 2019 Revenue milestones $ 65,661 Monte Carlo simulation Discount rate 3.1% - 19.5% contingent liability Projected year of payments 2019-2022 Regulatory approval $ 2,700 Scenario-based method Discount rate 5.3% contingent liability Probability of milestone payment 65% Projected year of payment 2022 Contingent receivable $ 625 Discounted cash flow Discount rate 10% asset Probability of milestone payment 54% Projected year of payments 2019 Contingent consideration asset or liability Fair value at December 31, 2018 Valuation technique Unobservable inputs Range Revenue-based royalty $ 10,661 Discounted cash flow Discount rate 9.9% - 25% payments contingent liability Projected year of payments 2018-2037 Supply chain milestone $ 13,593 Discounted cash flow Discount rate 5.3% contingent liability Probability of milestone payment 95% Projected year of payments 2019 Revenue milestones $ 57,982 Discounted cash flow Discount rate 3.3% - 13% contingent liability Projected year of payments 2019-2023 Contingent receivable $ 607 Discounted cash flow Discount rate 10% asset Probability of milestone payment 67% Projected year of payments 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 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 six-month periods ended June 30, 2019 , we had losses of approximately $594,000 and $805,000 , compared to losses of approximately $29,000 and $86,000 , respectively for the three and six-month periods ended June 30, 2018 , related to the measurement of non-financial assets at fair value on a nonrecurring basis subsequent to their initial recognition. 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 | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets. The changes in the carrying amount of goodwill for the six-month period ended June 30, 2019 were as follows (in thousands): 2019 Goodwill balance at January 1 $ 335,433 Effect of foreign exchange (181 ) Additions and adjustments as the result of acquisitions 16,881 Goodwill balance at June 30 $ 352,133 Total accumulated goodwill impairment losses aggregated to approximately $8.3 million as of June 30, 2019 and December 31, 2018 . We did not have any goodwill impairments for the six-month periods ended June 30, 2019 and 2018. The total goodwill balance as of June 30, 2019 and December 31, 2018 , was related to our cardiovascular segment. Other intangible assets at June 30, 2019 and December 31, 2018 , consisted of the following (in thousands): June 30, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents $ 20,985 $ (5,850 ) $ 15,135 Distribution agreements 8,012 (6,280 ) 1,732 License agreements 27,008 (9,016 ) 17,992 Trademarks 30,246 (8,035 ) 22,211 Covenants not to compete 1,028 (1,016 ) 12 Customer lists 40,009 (26,092 ) 13,917 In-process technology 3,420 — 3,420 Total $ 130,708 $ (56,289 ) $ 74,419 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents $ 19,378 $ (5,012 ) $ 14,366 Distribution agreements 8,012 (5,766 ) 2,246 License agreements 26,930 (7,411 ) 19,519 Trademarks 29,998 (6,586 ) 23,412 Covenants not to compete 1,028 (1,000 ) 28 Customer lists 39,936 (23,361 ) 16,575 In-process technology 3,420 — 3,420 Total $ 128,702 $ (49,136 ) $ 79,566 Aggregate amortization expense for the three and six-month periods ended June 30, 2019 was approximately $14.9 million and $29.7 million , respectively. Aggregate amortization expense for the three and six-month periods ended June 30, 2018 was approximately $10.4 million and $18.9 million , respectively. During the three months ended June 30, 2019 we recorded an impairment charge of $548,000 for the discontinuation of our product associated with the assets acquired in our June 2017 acquisition of patent rights and other intellectual property related to the Repositionable Chest Tube and related devices from Lazarus Medical Technologies, LLC. We did not record any impairment charges during the three and six months ended June 30, 2018 . Estimated amortization expense for the developed technology and other intangible assets for the next five years consists of the following as of June 30, 2019 (in thousands): Year Ending December 31 Remaining 2019 $ 30,817 2020 58,907 2021 51,550 2022 50,129 2023 48,830 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases. We adopted ASC 842 using the modified retrospective approach, electing the practical expedient that allows us not to restate our comparative periods prior to the adoption of the standard on January 1, 2019. As such, the disclosures required under ASC 842 are not presented for periods before the date of adoption. For the comparative periods prior to adoption, we present the disclosures which were required under ASC 840. We have operating leases for facilities used for manufacturing, research and development, sales and distribution, and office space, as well as leases for manufacturing and office equipment, vehicles, and land. Our leases have remaining terms of less than one year to approximately 19 years . A number of our lease agreements contain options to renew at our discretion for periods of up to 30 years and options to terminate the leases within one year . The lease term used to calculate right-of-use ("ROU") assets and lease liabilities includes renewal and termination options that are deemed reasonably certain to be exercised. Lease agreements with lease and non-lease components are generally accounted for as a single lease component. We do not have any bargain purchase options in our leases. For leases with an initial term of one year or less, we do not record a ROU asset or lease liability on our consolidated balance sheet. Substantially all of the ROU assets and lease liabilities as of June 30, 2019 recorded on our consolidated balance sheet are related to our cardiovascular segment. We sublease a portion of one of our facilities to a third party. We also lease certain hardware consoles to customers and record rental revenue as a component of net sales. Rental revenue under such console leasing arrangements for the three and six months ended June 30, 2019 and 2018 was not significant. The following was included in our consolidated balance sheet as of June 30, 2019 (in thousands): Leases As of June 30, 2019 Assets ROU operating lease assets $ 79,309 Liabilities Short-term operating lease liabilities $ 11,732 Long-term operating lease liabilities 71,272 Total operating lease liabilities $ 83,004 During the year ended December 31, 2015, we entered into sale and leaseback transactions to finance certain production equipment for approximately $2.0 million . At that time, we deferred the gain from the sale and leaseback transaction, of which approximately $93,000 remained as of December 31, 2018. As part of the adoption of ASC 842, we wrote-off the deferred gain as an adjustment to equity through retained earnings during the three months ended March 31, 2019. We recognize lease expense on a straight-line basis over the term of the lease. The components of lease costs for the three and six months ended June 30, 2019 are as follows, in thousands: Three months ended Six months ended Lease Cost Classification June 30, 2019 June 30, 2019 Operating lease cost (a) Selling, general and administrative expenses $ 4,172 $ 8,398 Sublease (income) (b) Selling, general and administrative expenses (146 ) (292 ) Net lease cost $ 4,026 $ 8,106 (a) Includes expense related to short-term leases and variable payments, which were not significant. (b) Does not include rental revenue from leases of hardware consoles to customers, which was not significant. Supplemental cash flow information for the six months ended June 30, 2019 is as follows: Six months ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities $ 7,267 Right-of-use assets obtained in exchange for lease obligations $ 2,927 Generally, our lease agreements do not specify an implicit rate. Therefore, we estimate our incremental borrowing rate, which is defined as the interest rate we would pay to borrow on a collateralized basis, considering such factors as length of lease term and the risks of the economic environment in which the leased asset operates. As of June 30, 2019 , the following disclosures for remaining lease term and incremental borrowing rates were applicable: Supplemental disclosure June 30, 2019 Weighted average remaining lease term 12 years Weighted average discount rate 3.3% As of June 30, 2019 , maturities of operating lease liabilities were as follows, in thousands: Year ended December 31, Amounts due under Operating Leases Remaining 2019 $ 7,064 2020 12,789 2021 11,762 2022 9,361 2023 7,381 Thereafter 53,588 Total lease payments 101,945 Less: Imputed interest (18,941 ) Total $ 83,004 As previously disclosed in our 2018 Form 10-K under the prior guidance of ASC 840, minimum payments under operating lease agreements as of December 31, 2018 were as follows, in thousands: Year ended December 31, Operating Leases 2019 $ 13,421 2020 11,319 2021 9,995 2022 8,053 2023 6,953 Thereafter 52,754 Total minimum lease payments $ 102,495 As of June 30, 2019, we had additional operating leases for office space that had not yet commenced. These leases will commence during 2019 and are not deemed material. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
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 addition to the foregoing matters, 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 2019. 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 six-month periods ended June 30, 2019 were approximately $1.0 million and $2.7 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. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events. We have evaluated whether any subsequent events have occurred from June 30, 2019 to the time of filing of this report that would require disclosure in the consolidated financial statements. We note the following events below. Third Amended and Restated Credit Agreement On July 31, 2019, we entered into a Third Amended and Restated Credit Agreement (as amended to date, the "Third Amended Credit Agreement"), with Wells Fargo Bank, National Association, as administrative agent, swingline lender and a lender, and Wells Fargo Securities, LLC, BOFA Securities, Inc. and HSBC Bank USA, National Association, as joint lead arrangers and joint bookrunners. In addition, Bank of America, N.A., U.S. Bank, National Association, and HSBC Bank USA, National Association, are parties to the Third Amended Credit Agreement as lenders. The Third Amended Credit Agreement amends and restates in its entirety our previously outstanding Second Amended and Restated Credit Agreement and all amendments thereto. The Third Amended Credit Agreement provides for a term loan of $150 million and a revolving credit commitment up to an aggregate amount of $600 million , inclusive of sub-facilities of $40 million for multicurrency borrowings, $40 million for standby letters of credit and $30 million for swingline loans from time to time. On July 31, 2024, all principal, interest and other amounts outstanding under the Third Amended Credit Agreement are payable in full. At any time prior to the maturity date, we may repay any amounts owing under all revolving credit loans and all swingline loans in whole or in part, without premium or penalty, other than breakage fees payable of Eurocurrency Rate Loans (as defined in the Third Amended Credit Agreement). Revolving credit loans denominated in dollars and term loans made under the Third Amended Credit Agreement bear interest, at our election, at either the Base Rate or the Eurocurrency Rate (as such terms are defined in the Third Amended Credit Agreement) plus the Applicable Margin (as defined in the Third Amended Credit Agreement). Revolving credit loans denominated in an Alternative Currency (as defined in the Third 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. Interest on each loan featuring the Base Rate is due and payable on the last business day of each calendar quarter commencing September 30, 2019; interest on each loan featuring the Eurocurrency Rate is due and payable on the last day of each interest period applicable thereto, and if such interest period extends over three months, at the end of each three-month interval during such interest period. The Third Amended Credit Agreement is collateralized by substantially all our assets. The Third Amended Credit Agreement contains affirmative and negative covenants, representations and warranties, events of default and other terms customary for loans of this nature. In particular, the Third Amended Credit Agreement requires that we maintain certain financial covenants, as follows: Covenant Requirement Consolidated Total Net Leverage Ratio (1) 4.0 to 1.0 Consolidated Interest Coverage Ratio (2) 3.0 to 1.0 Facility Capital Expenditures (3) $50,000,000 (1) Maximum Consolidated Net Total Leverage Ratio (as defined in the Third Amended Credit Agreement) as of any fiscal quarter end. (2) Minimum ratio of Consolidated EBITDA (as defined in the Third Amended Credit Agreement and adjusted for certain expenditures) to Consolidated interest expense (as defined in the Third Amended Credit Agreement) for any period of four consecutive fiscal quarters. (3) Maximum level of the aggregate amount of all Facility Capital Expenditures (as defined in the Third Amended Credit Agreement) in any fiscal year. Acquisition On August 1, 2019, we entered into a share purchase agreement to acquire Fibrovein Holdings Limited, which is the owner of 100% of the capital stock of STD Pharmaceutical Products Limited, a UK-based company engaged in the manufacture, distribution and sale of pharmaceutical sclerotherapy products. The total purchase price was approximately £11.2 million . As of the date of this report, we are currently evaluating the accounting treatment of this acquisition. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The interim consolidated financial statements of Merit Medical Systems, Inc. ("Merit," "we" or "us") for the three and six-month periods ended June 30, 2019 and 2018 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 June 30, 2019 and December 31, 2018 , and our results of operations and cash flows for the three and six-month periods ended June 30, 2019 and 2018 . The results of operations for the three and six-month periods ended June 30, 2019 and 2018 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 "2018 Form 10-K") for the year ended December 31, 2018 , which was filed with the Securities and Exchange Commission (the "SEC") on March 1, 2019 . |
Revenue from Contracts with Customers | Revenue from Contracts with Customers. In accordance with Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606"), we recognize revenue when a customer obtains control of promised goods. The amount of revenue recognized reflects the consideration we expect to receive in exchange for these goods. |
Recently Issued Financial Accounting Standards | Recently Issued Financial Accounting Standards. Recently Adopted In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) ("ASC 842"), which requires lessees to recognize right-of-use ("ROU") assets and related lease liabilities on the balance sheet for all leases greater than one year in duration. We adopted ASC 842 on January 1, 2019 using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach did not require any transition accounting for leases that expired before the earliest comparative period presented. The adoption of this standard resulted in the recording of ROU assets and lease liabilities for all of our lease agreements with original terms of greater than one year. The adoption of ASC 842 did not have a significant impact on our consolidated statements of operations or cash flows. See Note 14 for the required disclosures relating to our lease agreements. 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 became effective for us on January 1, 2019. The adoption of this standard did not 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 became effective for us on January 1, 2019. The adoption of this standard did not 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 became effective for us on January 1, 2019. The adoption of this standard did not have a material impact on our consolidated financial statements. Not Yet Adopted In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which 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 annual periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted. We are currently assessing the impact of this standard on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) , which removes, modifies and adds various disclosure requirements related to fair value disclosures. Disclosures related to transfers between fair value hierarchy levels will be removed and further detail around changes in unrealized gains and losses for the period and unobservable inputs used in determining level 3 fair value measurements will be added, among other changes. ASU 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. We are currently assessing the impact of this standard on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the current incurred loss impairment methodology for financial assets measured at amortized cost with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information, including forecasted information, to develop credit loss estimates. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted for annual periods beginning after December 15, 2018. We are currently assessing the impact of this standard on our consolidated financial statements. We do not believe any other issued and not yet effective accounting standards will be relevant to our consolidated financial statements. |
Derivatives | Derivative Instruments Not Designated as Cash Flow Hedges 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. Derivative Instruments Designated as Cash Flow Hedges Balance Sheet Presentation of Derivative Instruments. As of June 30, 2019 , and December 31, 2018 , all derivative instruments, 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. 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 instruments 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. When the hedged transaction occurs, gains or losses are 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. 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. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories at June 30, 2019 and December 31, 2018 , consisted of the following (in thousands): June 30, December 31, 2019 2018 Finished goods $ 116,741 $ 117,703 Work-in-process 23,419 14,380 Raw materials 62,834 65,453 Total Inventories $ 202,994 $ 197,536 |
Stock-Based Compensation Expe_2
Stock-Based Compensation Expense (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The stock-based compensation expense before income tax expense for the three and six months ended June 30, 2019 and 2018 consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Cost of sales $ 355 $ 232 $ 607 $ 416 Research and development 281 147 473 271 Selling, general and administrative 1,887 1,186 3,209 2,134 Stock-based compensation expense before taxes $ 2,523 $ 1,565 $ 4,289 $ 2,821 |
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: Six Months Ended June 30, 2019 2018 Risk-free interest rate 1.90% - 2.56% 2.63% - 2.77% Expected option term 3.0 - 5.0 years 5.0 years Expected dividend yield — — Expected price volatility 28.66% - 33.69% 34.06% - 34.32% |
Earnings Per Common Share (EP_2
Earnings Per Common Share (EPS) (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 consisted of the following (in thousands, except per share amounts): Three Months Six Months Net Income Shares Per Share Amount Net Income Shares Per Share Amount Period ended June 30, 2019: Basic EPS $ 6,859 55,017 $ 0.12 $ 13,054 54,967 $ 0.24 Effect of dilutive stock options 1,538 1,556 Diluted EPS $ 6,859 56,555 $ 0.12 $ 13,054 56,523 $ 0.23 Stock options excluded from the calculation of common stock equivalents as the impact was anti-dilutive 1,185 1,081 Period ended June 30, 2018: Basic EPS $ 10,941 50,473 $ 0.22 $ 16,210 50,376 $ 0.32 Effect of dilutive stock options 1,681 1,657 Diluted EPS $ 10,941 52,154 $ 0.21 $ 16,210 52,033 $ 0.31 Stock options excluded from the calculation of common stock equivalents as the impact was anti-dilutive 535 359 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The purchase price was allocated as follows (in thousands): Inventories $ 971 Intangibles Developed technology 4,840 Customer list 120 Trademarks 400 Goodwill 938 Total net assets acquired $ 7,269 Inventories $ 5,804 Property and equipment 748 Intangibles Developed technology 74,000 Customer list 4,200 Trademarks 4,900 In-process technology 2,500 Goodwill 9,728 Total net assets acquired $ 101,880 Assets Acquired Trade receivables $ 6,151 Inventories 5,803 Prepaid expenses and other current assets 315 Property and equipment 1,047 Other long-term assets 14 Intangibles Developed technology 134,510 Customer lists 3,330 Trademarks 7,080 Goodwill 65,802 Total assets acquired 224,052 Liabilities Assumed Trade payables (1,497 ) Accrued expenses (2,384 ) Other long-term liabilities (1,527 ) Deferred income tax liabilities (30,363 ) Total liabilities assumed (35,771 ) Total net assets acquired $ 188,281 Assets Acquired Trade receivables $ 94 Inventories 349 Property and equipment 409 Other long-term assets 30 Intangibles Developed technology 31,680 Customer lists 83 Trademarks 250 Goodwill 16,950 Total assets acquired 49,845 Liabilities Assumed Trade payables (58 ) Accrued expenses (261 ) Other long-term obligations (1,522 ) Deferred income tax liabilities (4,590 ) Total liabilities assumed (6,431 ) Total net assets acquired $ 43,414 Inventories $ 1,353 Intangibles Developed technology 32,750 Customer list 840 Trademarks 1,410 Goodwill 21,847 Total net assets acquired $ 58,200 |
Business Acquisition, Pro Forma Information | The following table summarizes our consolidated results of operations for the three and six-month periods ended June 30, 2018, as well as unaudited pro forma consolidated results of operations as though the acquisition of Cianna Medical and Vascular Insights had occurred on January 1, 2017 (in thousands, except per common share amounts): Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 As Reported Pro Forma As Reported Pro Forma Net sales $ 224,810 $ 238,272 $ 427,844 $ 452,451 Net income 10,941 6,842 16,210 5,016 Earnings per common share: Basic $ 0.22 $ 0.14 $ 0.32 $ 0.10 Diluted $ 0.21 $ 0.13 $ 0.31 $ 0.10 * The pro forma results for the three and six-month periods ended June 30, 2019 are not included in the table above because the operating results for the Cianna Medical and Vascular Insights acquisitions were included in our consolidated statements of income for these periods. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers. (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following tables present revenue from contracts with customers for the three and six-month periods ended June 30, 2019 and 2018 (in thousands): Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 United States International Total United States International Total Cardiovascular Stand-alone devices $ 55,906 $ 47,616 $ 103,522 $ 50,941 $ 41,555 $ 92,496 Cianna Medical 11,230 7 11,237 — — — Custom kits and procedure trays 23,124 11,219 34,343 23,667 10,325 33,992 Inflation devices 8,347 15,968 24,315 8,160 16,145 24,305 Catheters 20,696 24,648 45,344 16,704 22,670 39,374 Embolization devices 5,274 8,734 14,008 5,094 7,630 12,724 CRM/EP 11,536 2,361 13,897 11,758 1,738 13,496 Total 136,113 110,553 246,666 116,324 100,063 216,387 Endoscopy Endoscopy devices 8,549 317 8,866 8,121 302 8,423 Total $ 144,662 $ 110,870 $ 255,532 $ 124,445 $ 100,365 $ 224,810 Six Months Ended June 30, 2019 Six Months Ended June 30, 2018 United States International Total United States International Total Cardiovascular Stand-alone devices $ 109,305 $ 89,643 $ 198,948 $ 94,953 $ 80,789 $ 175,742 Cianna Medical 24,078 7 24,085 — — — Custom kits and procedure trays 45,179 22,107 67,286 45,984 21,280 67,264 Inflation devices 16,320 30,013 46,333 15,828 30,896 46,724 Catheters 40,108 48,275 88,383 31,974 41,265 73,239 Embolization devices 9,980 15,855 25,835 10,126 15,184 25,310 CRM/EP 21,635 4,641 26,276 20,596 3,366 23,962 Total 266,605 210,541 477,146 219,461 192,780 412,241 Endoscopy Endoscopy devices 16,117 618 16,735 15,040 563 15,603 Total $ 282,722 $ 211,159 $ 493,881 $ 234,501 $ 193,343 $ 427,844 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 six-month periods ended June 30, 2019 and 2018 , are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net Sales Cardiovascular $ 246,666 $ 216,387 $ 477,146 $ 412,241 Endoscopy 8,866 8,423 16,735 15,603 Total net sales 255,532 224,810 493,881 427,844 Operating Income Cardiovascular 9,855 12,663 17,474 19,060 Endoscopy 2,346 2,451 4,250 4,835 Total operating income 12,201 15,114 21,724 23,895 Total other expense - net (3,202 ) (3,549 ) (5,879 ) (5,970 ) Income tax expense 2,140 624 2,791 1,715 Net income $ 6,859 $ 10,941 $ 13,054 $ 16,210 |
Revolving Credit Facility and_2
Revolving Credit Facility and Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Principal balances outstanding under our long-term debt obligations as of June 30, 2019 and December 31, 2018 , consisted of the following (in thousands): June 30, 2019 December 31, 2018 2016 Term loan $ 65,000 $ 72,500 2016 Revolving credit loans 335,500 316,000 Collateralized debt facility — 7,000 Less unamortized debt issuance costs (279 ) (348 ) Total long-term debt 400,221 395,152 Less current portion 15,000 22,000 Long-term portion $ 385,221 $ 373,152 |
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. Covenant Requirement Consolidated Total Net Leverage Ratio (1) 4.0 to 1.0 Consolidated Interest Coverage Ratio (2) 3.0 to 1.0 Facility Capital Expenditures (3) $50,000,000 (1) Maximum Consolidated Net Total Leverage Ratio (as defined in the Third Amended Credit Agreement) as of any fiscal quarter end. (2) Minimum ratio of Consolidated EBITDA (as defined in the Third Amended Credit Agreement and adjusted for certain expenditures) to Consolidated interest expense (as defined in the Third Amended Credit Agreement) for any period of four consecutive fiscal quarters. (3) Maximum level of the aggregate amount of all Facility Capital Expenditures (as defined in the Third 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 June 30, 2019 , are as follows (in thousands): Years Ending Future Minimum December 31 Principal Payments Remaining 2019 $ 7,500 2020 17,500 2021 375,500 Total future minimum principal payments $ 400,500 |
Derivatives (Tables)
Derivatives (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | We enter into approximately 150 cash flow foreign currency hedges every month. As of June 30, 2019 , 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 Australian Dollar AUD 3,430 Brazilian Real BRL 1,080 Canadian Dollar CAD 4,330 Swiss Franc CHF 1,970 Chinese Renminbi CNY 166,500 Danish Krone DKK 18,175 Euro EUR 22,600 British Pound GBP 4,820 Japanese Yen JPY 1,335,000 Korean Won KRW 4,475,000 Mexican Peso MXN 296,500 Norwegian Krone NOK 6,000 Swedish Krona SEK 29,210 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 June 30, 2019 , 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 13,788 Brazilian Real BRL 9,000 Canadian Dollar CAD 2,652 Swiss Franc CHF 643 Chinese Renminbi CNY 85,226 Danish Krone DKK 2,544 Euro EUR 11,717 British Pound GBP 5,653 Hong Kong Dollar HKD 11,000 Japanese Yen JPY 1,445,574 Korean Won KRW 6,000,000 Mexican Peso MXN 25,000 Norwegian Krone NOK 3,180 Swedish Krona SEK 17,154 Singapore Dollar SGD 1,676 South African Rand ZAR 37,800 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair value of derivative instruments on a gross basis was as follows on the dates indicated (in thousands): Fair Value Balance Sheet Location June 30, 2019 December 31, 2018 Derivative instruments designated as hedging instruments Assets Interest rate swap Other assets (long-term) $ 1,907 $ 5,772 Foreign currency forward contracts Prepaid expenses and other assets 960 613 Foreign currency forward contracts Other assets (long-term) 244 151 Liabilities Foreign currency forward contracts Accrued expenses (778 ) (711 ) Foreign currency forward contracts Other long-term obligations (101 ) (101 ) Derivative instruments not designated as hedging instruments Assets Foreign currency forward contracts Prepaid expenses and other assets $ 229 $ 814 Liabilities Foreign currency forward contracts Accrued expenses (1,539 ) (796 ) |
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 Consolidated Statements of Income Amount of Gain/(Loss) reclassified from AOCI Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, 2019 2018 2019 2018 2019 2018 Derivative instrument Location in statements of income Interest rate swaps $ (1,812 ) $ 748 Interest expense $ (3,115 ) $ (3,338 ) $ 602 $ 357 Foreign currency forward contracts 1,064 394 Revenue 255,532 224,810 (92 ) (234 ) Cost of sales (143,568 ) (124,801 ) (104 ) 138 Amount of Gain/(Loss) recognized in OCI Consolidated Statements of Income Amount of Gain/(Loss) reclassified from AOCI Six Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 2019 2018 Derivative instrument Location in statements of income Interest rate swaps (2,669 ) $ 2,868 Interest expense (5,879 ) (5,736 ) $ 1,196 $ 570 Foreign currency forward contracts 51 568 Revenue 493,881 427,844 102 (385 ) Cost of sales (277,281 ) (239,779 ) (185 ) 378 |
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 June 30, Six Months Ended June 30, Derivative Instrument Location in statements of income 2019 2018 2019 2018 Foreign currency forward contracts Other expense $ (489 ) $ 3,153 $ (755 ) $ 2,038 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 and December 31, 2018 , 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 June 30, 2019 (Level 1) (Level 2) (Level 3) Interest rate contracts (1) $ 1,907 $ — $ 1,907 $ — Foreign currency contract assets, current and long-term (2) $ 1,433 $ — $ 1,433 $ — Foreign currency contract liabilities, current and long-term (3) $ (2,418 ) $ — $ (2,418 ) $ — Contingent receivable asset $ 625 $ — $ — $ 625 Contingent consideration liabilities $ (93,204 ) $ — $ — $ (93,204 ) Fair Value Measurements Using Total Fair Quoted prices in Significant other Significant Value at active markets observable inputs unobservable inputs Description December 31, 2018 (Level 1) (Level 2) (Level 3) Interest rate contracts (1) $ 5,772 $ — $ 5,772 $ — Foreign currency contract assets, current and long-term (2) $ 1,578 $ — $ 1,578 $ — Foreign currency contract liabilities, current and long-term (3) $ (1,608 ) $ — $ (1,608 ) $ — Contingent receivable asset $ 607 $ — $ — $ 607 Contingent consideration liabilities $ (82,236 ) $ — $ — $ (82,236 ) (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 liabilities during the three and six-month periods ended June 30, 2019 and 2018 , consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Beginning balance $ 82,457 $ 10,928 $ 82,236 $ 10,956 Contingent consideration liability recorded as the result of acquisitions (see Note 5) 8,400 — 8,380 — Fair value adjustments recorded to income 2,404 99 3,199 86 Contingent payments made (57 ) (115 ) (611 ) (130 ) Ending balance $ 93,204 $ 10,912 $ 93,204 $ 10,912 |
Fair Value Inputs, Liabilities, Quantitative Information | The recurring Level 3 measurement of our contingent consideration liability and contingent receivable included the following significant unobservable inputs at June 30, 2019 and December 31, 2018 (amounts in thousands): Contingent consideration asset or liability Fair value at June 30, 2019 Valuation technique Unobservable inputs Range Revenue-based royalty $ 9,843 Discounted cash flow Discount rate 14% - 25% payments contingent liability Projected year of payments 2019-2034 Supply chain milestone $ 15,000 Scenario-based method Discount rate 3.9% contingent liability Probability of milestone payment 100% Projected year of payments 2019 Revenue milestones $ 65,661 Monte Carlo simulation Discount rate 3.1% - 19.5% contingent liability Projected year of payments 2019-2022 Regulatory approval $ 2,700 Scenario-based method Discount rate 5.3% contingent liability Probability of milestone payment 65% Projected year of payment 2022 Contingent receivable $ 625 Discounted cash flow Discount rate 10% asset Probability of milestone payment 54% Projected year of payments 2019 Contingent consideration asset or liability Fair value at December 31, 2018 Valuation technique Unobservable inputs Range Revenue-based royalty $ 10,661 Discounted cash flow Discount rate 9.9% - 25% payments contingent liability Projected year of payments 2018-2037 Supply chain milestone $ 13,593 Discounted cash flow Discount rate 5.3% contingent liability Probability of milestone payment 95% Projected year of payments 2019 Revenue milestones $ 57,982 Discounted cash flow Discount rate 3.3% - 13% contingent liability Projected year of payments 2019-2023 Contingent receivable $ 607 Discounted cash flow Discount rate 10% asset Probability of milestone payment 67% Projected year of payments 2019 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in carrying amount of goodwill | The changes in the carrying amount of goodwill for the six-month period ended June 30, 2019 were as follows (in thousands): 2019 Goodwill balance at January 1 $ 335,433 Effect of foreign exchange (181 ) Additions and adjustments as the result of acquisitions 16,881 Goodwill balance at June 30 $ 352,133 |
Other intangible assets | Other intangible assets at June 30, 2019 and December 31, 2018 , consisted of the following (in thousands): June 30, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents $ 20,985 $ (5,850 ) $ 15,135 Distribution agreements 8,012 (6,280 ) 1,732 License agreements 27,008 (9,016 ) 17,992 Trademarks 30,246 (8,035 ) 22,211 Covenants not to compete 1,028 (1,016 ) 12 Customer lists 40,009 (26,092 ) 13,917 In-process technology 3,420 — 3,420 Total $ 130,708 $ (56,289 ) $ 74,419 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents $ 19,378 $ (5,012 ) $ 14,366 Distribution agreements 8,012 (5,766 ) 2,246 License agreements 26,930 (7,411 ) 19,519 Trademarks 29,998 (6,586 ) 23,412 Covenants not to compete 1,028 (1,000 ) 28 Customer lists 39,936 (23,361 ) 16,575 In-process technology 3,420 — 3,420 Total $ 128,702 $ (49,136 ) $ 79,566 |
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 June 30, 2019 (in thousands): Year Ending December 31 Remaining 2019 $ 30,817 2020 58,907 2021 51,550 2022 50,129 2023 48,830 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of Consolidated Balance Sheet Information and Supplemental Information | As of June 30, 2019 , the following disclosures for remaining lease term and incremental borrowing rates were applicable: Supplemental disclosure June 30, 2019 Weighted average remaining lease term 12 years Weighted average discount rate 3.3% The following was included in our consolidated balance sheet as of June 30, 2019 (in thousands): Leases As of June 30, 2019 Assets ROU operating lease assets $ 79,309 Liabilities Short-term operating lease liabilities $ 11,732 Long-term operating lease liabilities 71,272 Total operating lease liabilities $ 83,004 |
Components of Lease Costs | We recognize lease expense on a straight-line basis over the term of the lease. The components of lease costs for the three and six months ended June 30, 2019 are as follows, in thousands: Three months ended Six months ended Lease Cost Classification June 30, 2019 June 30, 2019 Operating lease cost (a) Selling, general and administrative expenses $ 4,172 $ 8,398 Sublease (income) (b) Selling, general and administrative expenses (146 ) (292 ) Net lease cost $ 4,026 $ 8,106 (a) Includes expense related to short-term leases and variable payments, which were not significant. (b) Does not include rental revenue from leases of hardware consoles to customers, which was not significant. Supplemental cash flow information for the six months ended June 30, 2019 is as follows: Six months ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities $ 7,267 Right-of-use assets obtained in exchange for lease obligations $ 2,927 |
Maturities of Operating Lease Liabilities | As of June 30, 2019 , maturities of operating lease liabilities were as follows, in thousands: Year ended December 31, Amounts due under Operating Leases Remaining 2019 $ 7,064 2020 12,789 2021 11,762 2022 9,361 2023 7,381 Thereafter 53,588 Total lease payments 101,945 Less: Imputed interest (18,941 ) Total $ 83,004 |
Schedule of Minimum Payments Under Operating Lease Agreements | As previously disclosed in our 2018 Form 10-K under the prior guidance of ASC 840, minimum payments under operating lease agreements as of December 31, 2018 were as follows, in thousands: Year ended December 31, Operating Leases 2019 $ 13,421 2020 11,319 2021 9,995 2022 8,053 2023 6,953 Thereafter 52,754 Total minimum lease payments $ 102,495 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
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. Covenant Requirement Consolidated Total Net Leverage Ratio (1) 4.0 to 1.0 Consolidated Interest Coverage Ratio (2) 3.0 to 1.0 Facility Capital Expenditures (3) $50,000,000 (1) Maximum Consolidated Net Total Leverage Ratio (as defined in the Third Amended Credit Agreement) as of any fiscal quarter end. (2) Minimum ratio of Consolidated EBITDA (as defined in the Third Amended Credit Agreement and adjusted for certain expenditures) to Consolidated interest expense (as defined in the Third Amended Credit Agreement) for any period of four consecutive fiscal quarters. (3) Maximum level of the aggregate amount of all Facility Capital Expenditures (as defined in the Third Amended Credit Agreement) in any fiscal year. |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 116,741 | $ 117,703 |
Work-in-process | 23,419 | 14,380 |
Raw materials | 62,834 | 65,453 |
Total Inventories | $ 202,994 | $ 197,536 |
Stock-Based Compensation Expe_3
Stock-Based Compensation Expense - Allocation of Recognized Period Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share-based compensation | $ 2,523 | $ 1,565 | $ 4,289 | $ 2,821 |
Cost of sales | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share-based compensation | 355 | 232 | 607 | 416 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share-based compensation | 281 | 147 | 473 | 271 |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share-based compensation | $ 1,887 | $ 1,186 | $ 3,209 | $ 2,134 |
Stock-Based Compensation Expe_4
Stock-Based Compensation Expense - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | ||||
Compensation cost not yet recognized | $ 32.4 | $ 32.4 | ||
Compensation cost not yet recognized, period of recognition | 3 years 3 months 26 days | |||
Options granted in period (in shares) | 190,000 | 200,000 | 1,100,000 | 692,002 |
Stock-Based Compensation Expe_5
Stock-Based Compensation Expense - Fair Value Calculation Assumptions (Details) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 5 years | |
Expected option term | 0.00% | 0.00% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.90% | 2.63% |
Risk-free interest rate | 3 years | |
Expected price volatility | 28.66% | 34.06% |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 2.56% | 2.77% |
Risk-free interest rate | 5 years | |
Expected price volatility | 33.69% | 34.32% |
Earnings Per Common Share (EP_3
Earnings Per Common Share (EPS) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Net income, Basic EPS | $ 6,859 | $ 10,941 | $ 16,210 | |
Basic EPS (in shares) | 55,017 | 50,473 | 54,967 | 50,376 |
Basic EPS (in dollars per share) | $ 0.12 | $ 0.22 | $ 0.24 | $ 0.32 |
Effect of dilutive stock options (in shares) | 1,538 | 1,681 | 1,556 | 1,657 |
Net income, Diluted EPS | $ 6,859 | $ 10,941 | $ 13,054 | $ 16,210 |
Diluted EPS (in shares) | 56,555 | 52,154 | 56,523 | 52,033 |
Diluted EPS (in dollars per share) | $ 0.12 | $ 0.21 | $ 0.23 | $ 0.31 |
Stock options excluded from the calculation of common stock equivalents as the impact was anti-dilutive (in shares) | 1,185 | 535 | 1,081 | 359 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | Jun. 14, 2019 | Mar. 28, 2019 | Dec. 14, 2018 | Nov. 13, 2018 | May 23, 2018 | Feb. 14, 2018 | Jun. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Fluidx | |||||||||
Business Acquisition [Line Items] | |||||||||
Payments to acquire shares | $ 2,000 | ||||||||
Ownership percentage | 12.70% | 12.70% | |||||||
Brightwater | |||||||||
Business Acquisition [Line Items] | |||||||||
Purchase consideration, upfront payment | $ 35,000 | ||||||||
Working capital adjustment | $ 104 | ||||||||
Weighted average useful life | 12 years 10 months 24 days | ||||||||
Brightwater | Achievement of CE Certification | |||||||||
Business Acquisition [Line Items] | |||||||||
Earn-out payments | $ 5,000 | ||||||||
Brightwater | Achievement of Sales Milestones | |||||||||
Business Acquisition [Line Items] | |||||||||
Earn-out payments | $ 10,000 | ||||||||
Brightwater | Developed technology | |||||||||
Business Acquisition [Line Items] | |||||||||
Useful life | 13 years | ||||||||
Brightwater | Trademarks | |||||||||
Business Acquisition [Line Items] | |||||||||
Useful life | 5 years | ||||||||
Brightwater | Customer Lists | |||||||||
Business Acquisition [Line Items] | |||||||||
Useful life | 1 year | ||||||||
Vascular Insights | |||||||||
Business Acquisition [Line Items] | |||||||||
Purchase consideration, upfront payment | $ 40,000 | ||||||||
Weighted average useful life | 11 years 9 months 18 days | ||||||||
Contingent liability | $ 20,000 | ||||||||
Net sales related to acquisition | $ 1,700 | $ 3,200 | |||||||
Vascular Insights | Developed technology | |||||||||
Business Acquisition [Line Items] | |||||||||
Useful life | 12 years | ||||||||
Vascular Insights | Trademarks | |||||||||
Business Acquisition [Line Items] | |||||||||
Useful life | 9 years | ||||||||
Vascular Insights | Customer Lists | |||||||||
Business Acquisition [Line Items] | |||||||||
Useful life | 8 years | ||||||||
Cianna Medical | |||||||||
Business Acquisition [Line Items] | |||||||||
Purchase consideration, upfront payment | $ 135,000 | ||||||||
Working capital adjustment | $ 1,200 | ||||||||
Weighted average useful life | 10 years 8 months 12 days | ||||||||
Net sales related to acquisition | 11,200 | 24,100 | |||||||
Acquisition-related costs | $ 3,500 | ||||||||
Cianna Medical | Achievement of Supply Chain and Scalability Metrics | |||||||||
Business Acquisition [Line Items] | |||||||||
Earn-out payments | $ 15,000 | ||||||||
Cianna Medical | Annual Net Sales Milestone | |||||||||
Business Acquisition [Line Items] | |||||||||
Earn-out payments | $ 50,000 | ||||||||
Cianna Medical | Developed technology | |||||||||
Business Acquisition [Line Items] | |||||||||
Useful life | 11 years | ||||||||
Cianna Medical | Trademarks | |||||||||
Business Acquisition [Line Items] | |||||||||
Useful life | 10 years | ||||||||
Cianna Medical | Customer Lists | |||||||||
Business Acquisition [Line Items] | |||||||||
Useful life | 8 years | ||||||||
DirectACCESS Medical, LLC | |||||||||
Business Acquisition [Line Items] | |||||||||
Weighted average useful life | 9 years 10 months 24 days | ||||||||
Total purchase price | $ 7,300 | ||||||||
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] | |||||||||
Weighted average useful life | 8 years | ||||||||
Net sales related to acquisition | $ 11,800 | $ 23,400 | |||||||
Acquisition-related costs | $ 1,800 | ||||||||
Total purchase price | $ 100,300 | ||||||||
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 |
Acquisitions - Purchase Price A
Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 14, 2019 | Dec. 31, 2018 | Dec. 14, 2018 | Nov. 13, 2018 | May 23, 2018 | Feb. 14, 2018 |
Assets Acquired | |||||||
Goodwill | $ 352,133 | $ 335,433 | |||||
Brightwater | |||||||
Assets Acquired | |||||||
Trade receivables | $ 94 | ||||||
Inventories | 349 | ||||||
Property and equipment | 409 | ||||||
Other long-term assets | 30 | ||||||
Goodwill | 16,950 | ||||||
Total assets acquired | 49,845 | ||||||
Liabilities Assumed | |||||||
Trade payables | (58) | ||||||
Accrued expenses | (261) | ||||||
Other long-term liabilities | (1,522) | ||||||
Deferred income tax liabilities | (4,590) | ||||||
Total liabilities assumed | (6,431) | ||||||
Total net assets acquired | 43,414 | ||||||
Brightwater | Developed technology | |||||||
Assets Acquired | |||||||
Intangibles | 31,680 | ||||||
Brightwater | Customer lists | |||||||
Assets Acquired | |||||||
Intangibles | 83 | ||||||
Brightwater | Trademarks | |||||||
Assets Acquired | |||||||
Intangibles | $ 250 | ||||||
Vascular Insights | |||||||
Assets Acquired | |||||||
Inventories | $ 1,353 | ||||||
Goodwill | 21,847 | ||||||
Total assets acquired | 58,200 | ||||||
Vascular Insights | Developed technology | |||||||
Assets Acquired | |||||||
Intangibles | 32,750 | ||||||
Vascular Insights | Customer lists | |||||||
Assets Acquired | |||||||
Intangibles | 840 | ||||||
Vascular Insights | Trademarks | |||||||
Assets Acquired | |||||||
Intangibles | $ 1,410 | ||||||
Cianna Medical | |||||||
Assets Acquired | |||||||
Trade receivables | $ 6,151 | ||||||
Inventories | 5,803 | ||||||
Prepaid expenses and other assets | 315 | ||||||
Property and equipment | 1,047 | ||||||
Other long-term assets | 14 | ||||||
Goodwill | 65,802 | ||||||
Total assets acquired | 224,052 | ||||||
Liabilities Assumed | |||||||
Trade payables | (1,497) | ||||||
Accrued expenses | (2,384) | ||||||
Other long-term liabilities | (1,527) | ||||||
Deferred income tax liabilities | (30,363) | ||||||
Total liabilities assumed | (35,771) | ||||||
Total net assets acquired | 188,281 | ||||||
Cianna Medical | Developed technology | |||||||
Assets Acquired | |||||||
Intangibles | 134,510 | ||||||
Cianna Medical | Customer lists | |||||||
Assets Acquired | |||||||
Intangibles | 3,330 | ||||||
Cianna Medical | Trademarks | |||||||
Assets Acquired | |||||||
Intangibles | $ 7,080 | ||||||
DirectACCESS Medical, LLC | |||||||
Assets Acquired | |||||||
Inventories | $ 971 | ||||||
Goodwill | 938 | ||||||
Total assets acquired | 7,269 | ||||||
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 | ||||||
Property and equipment | 748 | ||||||
Goodwill | 9,728 | ||||||
Total assets acquired | 101,880 | ||||||
Becton, Dickinson and Company | Developed technology | |||||||
Assets Acquired | |||||||
Intangibles | 74,000 | ||||||
Becton, Dickinson and Company | Customer lists | |||||||
Assets Acquired | |||||||
Intangibles | 4,200 | ||||||
Becton, Dickinson and Company | Trademarks | |||||||
Assets Acquired | |||||||
Intangibles | 4,900 | ||||||
Becton, Dickinson and Company | In-process technology | |||||||
Assets Acquired | |||||||
Intangibles | $ 2,500 |
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 | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
As Reported | ||||||
Net sales | $ 255,532 | $ 224,810 | $ 493,881 | $ 427,844 | ||
Net income | $ 6,859 | $ 6,195 | $ 10,941 | $ 5,269 | $ 13,054 | $ 16,210 |
Basic (in dollars per share) | $ 0.12 | $ 0.22 | $ 0.24 | $ 0.32 | ||
Diluted (in dollars per share) | $ 0.12 | $ 0.21 | $ 0.23 | $ 0.31 | ||
Pro Forma | ||||||
Net sales | $ 238,272 | $ 452,451 | ||||
Net income | $ 6,842 | $ 5,016 | ||||
Basic, Pro Forma (in dollars per share) | $ 0.14 | $ 0.10 | ||||
Diluted, Pro Forma (in dollars per share) | $ 0.13 | $ 0.10 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers. - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 255,532 | $ 224,810 | $ 493,881 | $ 427,844 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 144,662 | 124,445 | 282,722 | 234,501 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 110,870 | 100,365 | 211,159 | 193,343 |
Cardiovascular | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 246,666 | 216,387 | 477,146 | 412,241 |
Cardiovascular | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 136,113 | 116,324 | 266,605 | 219,461 |
Cardiovascular | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 110,553 | 100,063 | 210,541 | 192,780 |
Endoscopy | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 8,866 | 8,423 | 16,735 | 15,603 |
Stand-alone devices | Cardiovascular | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 103,522 | 92,496 | 198,948 | 175,742 |
Stand-alone devices | Cardiovascular | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 55,906 | 50,941 | 109,305 | 94,953 |
Stand-alone devices | Cardiovascular | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 47,616 | 41,555 | 89,643 | 80,789 |
Cianna Medical | Cardiovascular | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 11,237 | 0 | 24,085 | 0 |
Cianna Medical | Cardiovascular | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 11,230 | 0 | 24,078 | 0 |
Cianna Medical | Cardiovascular | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 7 | 0 | 7 | 0 |
Custom kits and procedure trays | Cardiovascular | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 34,343 | 33,992 | 67,286 | 67,264 |
Custom kits and procedure trays | Cardiovascular | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 23,124 | 23,667 | 45,179 | 45,984 |
Custom kits and procedure trays | Cardiovascular | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 11,219 | 10,325 | 22,107 | 21,280 |
Inflation devices | Cardiovascular | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 24,315 | 24,305 | 46,333 | 46,724 |
Inflation devices | Cardiovascular | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 8,347 | 8,160 | 16,320 | 15,828 |
Inflation devices | Cardiovascular | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 15,968 | 16,145 | 30,013 | 30,896 |
Catheters | Cardiovascular | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 45,344 | 39,374 | 88,383 | 73,239 |
Catheters | Cardiovascular | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 20,696 | 16,704 | 40,108 | 31,974 |
Catheters | Cardiovascular | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 24,648 | 22,670 | 48,275 | 41,265 |
Embolization devices | Cardiovascular | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 14,008 | 12,724 | 25,835 | 25,310 |
Embolization devices | Cardiovascular | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 5,274 | 5,094 | 9,980 | 10,126 |
Embolization devices | Cardiovascular | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 8,734 | 7,630 | 15,855 | 15,184 |
CRM/EP | Cardiovascular | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 13,897 | 13,496 | 26,276 | 23,962 |
CRM/EP | Cardiovascular | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 11,536 | 11,758 | 21,635 | 20,596 |
CRM/EP | Cardiovascular | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 2,361 | 1,738 | 4,641 | 3,366 |
Endoscopy devices | Endoscopy | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 8,866 | 8,423 | 16,735 | 15,603 |
Endoscopy devices | Endoscopy | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 8,549 | 8,121 | 16,117 | 15,040 |
Endoscopy devices | Endoscopy | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 317 | $ 302 | $ 618 | $ 563 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 6 Months Ended |
Jun. 30, 2019segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Reporting - Operating I
Segment Reporting - Operating Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||||
Net sales | $ 255,532 | $ 224,810 | $ 493,881 | $ 427,844 | ||
Operating income | 12,201 | 15,114 | 21,724 | 23,895 | ||
Total other expense - net | (3,202) | (3,549) | (5,879) | (5,970) | ||
Income tax expense | 2,140 | 624 | 2,791 | 1,715 | ||
Net income | 6,859 | $ 6,195 | 10,941 | $ 5,269 | 13,054 | 16,210 |
Cardiovascular | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 246,666 | 216,387 | 477,146 | 412,241 | ||
Operating income | 9,855 | 12,663 | 17,474 | 19,060 | ||
Endoscopy | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 8,866 | 8,423 | 16,735 | 15,603 | ||
Operating income | $ 2,346 | $ 2,451 | $ 4,250 | $ 4,835 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 2,140 | $ 624 | $ 2,791 | $ 1,715 |
Effective tax rate | 23.80% | 5.40% | 17.60% | 9.60% |
Revolving Credit Facility and_3
Revolving Credit Facility and Long-Term Debt - Principal Balances under Long-term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Line of Credit Facility [Line Items] | ||
Total long-term debt | $ 400,221 | $ 395,152 |
Collateralized debt facility | 0 | 7,000 |
Less unamortized debt issuance costs | (279) | (348) |
Less current portion | 15,000 | 22,000 |
Long-term portion | 385,221 | 373,152 |
Term Loan | ||
Line of Credit Facility [Line Items] | ||
Total long-term debt | 65,000 | 72,500 |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Total long-term debt | $ 335,500 | $ 316,000 |
Revolving Credit Facility and_4
Revolving Credit Facility and Long-Term Debt - Narrative (Details) - USD ($) | 6 Months Ended | |||
Jun. 30, 2019 | Dec. 31, 2018 | Dec. 13, 2017 | Jul. 06, 2016 | |
Line of Credit Facility [Line Items] | ||||
Outstanding borrowings | $ 400,500,000 | |||
Collateralized debt facility | 0 | $ 7,000,000 | ||
Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Outstanding borrowings | 400,500,000 | |||
Remaining borrowing capacity on line of credit | $ 38,700,000 | |||
Fixed interest rate percent | 2.12% | |||
Debt subject to fixed interest rate | $ 175,000,000 | |||
Credit Agreement | Variable Rate 1 | ||||
Line of Credit Facility [Line Items] | ||||
Variable interest rate percent | 3.65% | 3.52% | ||
Debt subject to variable interest rate | $ 225,500,000 | $ 213,500,000 | ||
Credit Agreement | Interest Rate Swap 2 | ||||
Line of Credit Facility [Line Items] | ||||
Fixed interest rate percent | 2.37% | |||
Debt subject to fixed interest rate | $ 175,000,000 | |||
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 | 6 Months Ended |
Jun. 30, 2019USD ($) | |
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 | 3.5 |
Revolving Credit Facility and_6
Revolving Credit Facility and Long-Term Debt - Future Minimum Payments on Long-term Debt (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Debt Disclosure [Abstract] | |
Remaining 2019 | $ 7,500 |
2020 | 17,500 |
2021 | 375,500 |
Total future minimum principal payments | $ 400,500 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) € in Thousands, ₩ in Thousands, ¥ in Thousands, ¥ in Thousands, £ in Thousands, kr in Thousands, kr in Thousands, kr in Thousands, SFr in Thousands, R$ in Thousands, R in Thousands, $ in Thousands, $ in Thousands, $ in Thousands, $ in Thousands, $ in Thousands | 6 Months Ended | ||||||||||||||||||
Jun. 30, 2019USD ($)derivative_instrument | Jun. 30, 2019CNY (¥)derivative_instrument | Jun. 30, 2019CHF (SFr)derivative_instrument | Jun. 30, 2019NOK (kr)derivative_instrument | Jun. 30, 2019DKK (kr)derivative_instrument | Jun. 30, 2019MXN ($)derivative_instrument | Jun. 30, 2019HKD ($)derivative_instrument | Jun. 30, 2019KRW (₩)derivative_instrument | Jun. 30, 2019CAD ($)derivative_instrument | Jun. 30, 2019ZAR (R)derivative_instrument | Jun. 30, 2019GBP (£)derivative_instrument | Jun. 30, 2019JPY (¥)derivative_instrument | Jun. 30, 2019SGD ($)derivative_instrument | Jun. 30, 2019SEK (kr)derivative_instrument | Jun. 30, 2019EUR (€)derivative_instrument | Jun. 30, 2019BRL (R$)derivative_instrument | Jun. 30, 2019AUD ($)derivative_instrument | Dec. 31, 2018USD ($) | Aug. 05, 2016USD ($) | |
Derivative [Line Items] | |||||||||||||||||||
Deferred taxes used to offset fair value of interest rate swap | $ 500,000 | $ 1,500,000 | |||||||||||||||||
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 | $ 6,200 | ||||||||||||||||||
Amount expected to be reclassified from accumulated other comprehensive income to earnings in next twelve months, net of tax | 4,600 | ||||||||||||||||||
Interest expense | |||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||
Amount expected to be reclassified from accumulated other comprehensive income to earnings in next twelve months, gross | 1,300,000 | ||||||||||||||||||
Amount expected to be reclassified from accumulated other comprehensive income to earnings in next twelve months, net of tax | $ 1,000,000 | ||||||||||||||||||
Interest rate swap | |||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||
Notional amount of derivative | $ 175,000,000 | ||||||||||||||||||
Fixed rate | 1.12% | ||||||||||||||||||
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 | 150 | 150 | ||
Foreign currency forward contracts | Not designated as hedging instrument | |||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||
Notional amount of derivative | ¥ 85,226 | SFr 643 | kr 3,180 | kr 2,544 | $ 25,000 | $ 11,000 | ₩ 6,000,000 | $ 2,652 | R 37,800 | £ 5,653 | ¥ 1,445,574 | $ 1,676 | kr 17,154 | € 11,717 | R$ 9000 | $ 13,788 | |||
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 | 20 | 20 | ||
Other assets (long-term) | Interest rate swap | Designated as hedging instrument | |||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||
Total Asset Derivatives | $ 1,907,000 | 5,772,000 | |||||||||||||||||
Other assets (long-term) | Foreign currency forward contracts | Designated as hedging instrument | |||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||
Total Asset Derivatives | $ 244,000 | $ 151,000 |
Derivatives - Forward Notional
Derivatives - Forward Notional Contracts (Details) - Jun. 30, 2019 - Foreign currency forward contracts € in Thousands, ₩ in Thousands, ¥ in Thousands, ¥ in Thousands, £ in Thousands, kr in Thousands, kr in Thousands, kr in Thousands, SFr in Thousands, R$ in Thousands, R in Thousands, $ in Thousands, $ in Thousands, $ in Thousands, $ in Thousands, $ in Thousands | CNY (¥) | CHF (SFr) | NOK (kr) | DKK (kr) | MXN ($) | HKD ($) | KRW (₩) | CAD ($) | ZAR (R) | GBP (£) | JPY (¥) | SGD ($) | SEK (kr) | EUR (€) | BRL (R$) | AUD ($) |
Designated as hedging instrument | Derivatives designated as cash flow hedges | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Notional amount of derivative | ¥ 166,500 | SFr 1,970 | kr 6,000 | kr 18,175 | $ 296,500 | ₩ 4,475,000 | $ 4,330 | £ 4,820 | ¥ 1,335,000 | kr 29,210 | € 22,600 | R$ 1080 | $ 3,430 | |||
Not designated as hedging instrument | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Notional amount of derivative | ¥ 85,226 | SFr 643 | kr 3,180 | kr 2,544 | $ 25,000 | $ 11,000 | ₩ 6,000,000 | $ 2,652 | R 37,800 | £ 5,653 | ¥ 1,445,574 | $ 1,676 | kr 17,154 | € 11,717 | R$ 9000 | $ 13,788 |
Derivatives - Fair Value of Der
Derivatives - Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Designated as hedging instrument | Interest rate swap | Other assets (long-term) | ||
Derivatives, Fair Value [Line Items] | ||
Total Asset Derivatives | $ 1,907 | $ 5,772 |
Designated as hedging instrument | Foreign currency forward contracts | Other assets (long-term) | ||
Derivatives, Fair Value [Line Items] | ||
Total Asset Derivatives | 244 | 151 |
Designated as hedging instrument | Foreign currency forward contracts | Prepaid expenses and other assets | ||
Derivatives, Fair Value [Line Items] | ||
Total Asset Derivatives | 960 | 613 |
Designated as hedging instrument | Foreign currency forward contracts | Accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Total Liability Derivatives | (778) | (711) |
Designated as hedging instrument | Foreign currency forward contracts | Other long-term obligations | ||
Derivatives, Fair Value [Line Items] | ||
Total Liability Derivatives | (101) | (101) |
Not designated as hedging instrument | Foreign currency forward contracts | Prepaid expenses and other assets | ||
Derivatives, Fair Value [Line Items] | ||
Total Asset Derivatives | 229 | 814 |
Not designated as hedging instrument | Foreign currency forward contracts | Accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Total Liability Derivatives | $ (1,539) | $ (796) |
Derivatives - Amount of Gain (L
Derivatives - Amount of Gain (Loss) Recognized in OCI and Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) recognized in OCI | $ (1,154) | $ 881 | $ (3,731) | $ 2,873 |
Derivatives designated as cash flow hedges | Interest rate swap | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) recognized in OCI | (1,812) | 748 | (2,669) | 2,868 |
Derivatives designated as cash flow hedges | Interest rate swap | Interest expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) recognized in income | (3,115) | (3,338) | (5,879) | (5,736) |
Amount of Gain/(Loss) reclassified from AOCI | 602 | 1,196 | ||
Amount of Gain/(Loss) reclassified from AOCI | 357 | 570 | ||
Derivatives designated as cash flow hedges | Foreign currency forward contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) recognized in OCI | 1,064 | 394 | 51 | 568 |
Derivatives designated as cash flow hedges | Foreign currency forward contracts | Revenue | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) recognized in income | 255,532 | 224,810 | 493,881 | 427,844 |
Amount of Gain/(Loss) reclassified from AOCI | (92) | 102 | ||
Amount of Gain/(Loss) reclassified from AOCI | (234) | (385) | ||
Derivatives designated as cash flow hedges | Foreign currency forward contracts | Cost of sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) recognized in income | (143,568) | (124,801) | (277,281) | (239,779) |
Amount of Gain/(Loss) reclassified from AOCI | $ (104) | $ (185) | ||
Amount of Gain/(Loss) reclassified from AOCI | $ 138 | $ 378 |
Derivatives - Gain (Loss) in th
Derivatives - Gain (Loss) in the Consolidated Statements of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Not designated as hedging instrument | Foreign currency forward contracts | Other expense | ||||
Derivative [Line Items] | ||||
Gain (loss) on derivative | $ (489) | $ 3,153 | $ (755) | $ 2,038 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and (Liabilities) Carried at Fair Value (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
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 liabilities, current and long-term | 0 | 0 |
Foreign currency contract liabilities, current and long-term | 0 | 0 |
Contingent receivable asset | 0 | 0 |
Contingent consideration liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate contracts | 1,907 | 5,772 |
Foreign currency contract liabilities, current and long-term | 1,433 | 1,578 |
Foreign currency contract liabilities, current and long-term | (2,418) | (1,608) |
Contingent receivable asset | 0 | 0 |
Contingent consideration liabilities | 0 | 0 |
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 liabilities, current and long-term | 0 | 0 |
Foreign currency contract liabilities, current and long-term | 0 | 0 |
Contingent receivable asset | 625 | 607 |
Contingent consideration liabilities | (93,204) | (82,236) |
Estimate of Fair Value, Fair Value Disclosure | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate contracts | 1,907 | 5,772 |
Foreign currency contract liabilities, current and long-term | 1,433 | 1,578 |
Foreign currency contract liabilities, current and long-term | (2,418) | (1,608) |
Contingent receivable asset | 625 | 607 |
Contingent consideration liabilities | $ (93,204) | $ (82,236) |
Fair Value Measurements - Liabi
Fair Value Measurements - Liability Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - Contingent Consideration - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | $ 82,457 | $ 10,928 | $ 82,236 | $ 10,956 |
Contingent consideration liability recorded as the result of acquisitions | 8,400 | 0 | 8,380 | 0 |
Fair value adjustments recorded to income | 2,404 | 99 | 3,199 | 86 |
Contingent payments made | (57) | (115) | (611) | (130) |
Ending balance | $ 93,204 | $ 10,912 | $ 93,204 | $ 10,912 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment of other assets | $ 594 | $ 29 | $ 805 | $ 86 | |
Contingent Receivable | Contingent Consideration | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Gain (loss) on contingent receivable | (2) | (79) | 18 | (132) | |
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 | 68,600 | 68,600 | $ 58,500 | ||
Accrued expenses | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Contingent consideration liability, current | $ 24,600 | $ 24,600 | $ 23,800 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Inputs, Liabilities, Quantitative Information (Details) - Fair Value, Inputs, Level 3 $ in Thousands | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) |
Revenue-based royalty | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Contingent consideration liabilities | $ 9,843 | $ 10,661 |
Supply chain milestone | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Contingent consideration liabilities | 15,000 | 13,593 |
Revenue milestones | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Contingent consideration liabilities | 65,661 | 57,982 |
Regulatory approval | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Contingent consideration liabilities | 2,700 | |
Contingent receivable | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Contingent consideration asset | $ 625 | $ 607 |
Discount rate | Revenue-based royalty | Minimum | Discounted Cash Flow | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Unobservable inputs, contingent liability | 0.14 | 0.099 |
Discount rate | Revenue-based royalty | Maximum | Discounted Cash Flow | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Unobservable inputs, contingent liability | 0.25 | 0.25 |
Discount rate | Supply chain milestone | Discounted Cash Flow | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Unobservable inputs, contingent liability | 0.039 | 0.053 |
Discount rate | Revenue milestones | Minimum | Discounted Cash Flow | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Unobservable inputs, contingent liability | 0.031 | 0.033 |
Discount rate | Revenue milestones | Maximum | Discounted Cash Flow | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Unobservable inputs, contingent liability | 0.195 | 0.13 |
Discount rate | Regulatory approval | Discounted Cash Flow | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Unobservable inputs, contingent liability | 0.053 | |
Discount rate | Contingent receivable | Discounted Cash Flow | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Unobservable inputs, contingent receivable asset | 0.10 | 0.10 |
Probability of milestone payment | Supply chain milestone | Discounted Cash Flow | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Unobservable inputs, contingent liability | 1 | 0.95 |
Probability of milestone payment | Regulatory approval | Discounted Cash Flow | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Unobservable inputs, contingent liability | 0.65 | |
Probability of milestone payment | Contingent receivable | Discounted Cash Flow | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Unobservable inputs, contingent receivable asset | 0.54 | 0.67 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Goodwill [Roll Forward] | |
Goodwill balance at January 1 | $ 335,433 |
Effect of foreign exchange | (181) |
Additions and adjustments as the result of acquisitions | 16,881 |
Goodwill balance at June 30 | $ 352,133 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 130,708 | $ 128,702 |
Accumulated Amortization | (56,289) | (49,136) |
Net Carrying Amount | 74,419 | 79,566 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 20,985 | 19,378 |
Accumulated Amortization | (5,850) | (5,012) |
Net Carrying Amount | 15,135 | 14,366 |
Distribution agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 8,012 | 8,012 |
Accumulated Amortization | (6,280) | (5,766) |
Net Carrying Amount | 1,732 | 2,246 |
License agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 27,008 | 26,930 |
Accumulated Amortization | (9,016) | (7,411) |
Net Carrying Amount | 17,992 | 19,519 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 30,246 | 29,998 |
Accumulated Amortization | (8,035) | (6,586) |
Net Carrying Amount | 22,211 | 23,412 |
Covenants not to compete | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,028 | 1,028 |
Accumulated Amortization | (1,016) | (1,000) |
Net Carrying Amount | 12 | 28 |
Customer lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 40,009 | 39,936 |
Accumulated Amortization | (26,092) | (23,361) |
Net Carrying Amount | 13,917 | 16,575 |
In-process technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,420 | 3,420 |
Accumulated Amortization | 0 | 0 |
Net Carrying Amount | $ 3,420 | $ 3,420 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Accumulated impairment loss | $ 8,300 | $ 8,300 | $ 8,300 | ||
Aggregate amortization expense | 14,900 | $ 10,400 | 29,700 | $ 18,900 | |
Intangible asset impairment charge | $ 548 | $ 0 | $ 548 | $ 0 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Future Amortization Expense (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remaining 2019 | $ 30,817 |
2020 | 58,907 |
2021 | 51,550 |
2022 | 50,129 |
2023 | $ 48,830 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2015 | |
Lessee, Lease, Description [Line Items] | |||
Renewal term (up to) | 30 years | ||
Termination option (within) | 1 year | ||
Sale and leaseback transaction | $ 2,000 | ||
Deferred gain from sale and leaseback transaction | $ 93 | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 19 years |
Leases - Schedule of Consolidat
Leases - Schedule of Consolidated Balance Sheet Information (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
ROU operating lease assets | $ 79,309 |
Short-term operating lease liabilities | 11,732 |
Long-term operating lease liabilities | 71,272 |
Total operating lease liabilities | $ 83,004 |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 4,172 | $ 8,398 |
Sublease (income) | (146) | (292) |
Net lease cost | $ 4,026 | $ 8,106 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of lease liabilities | $ 7,267 |
Right-of-use operating lease assets obtained in exchange for operating lease liabilities | $ 2,927 |
Leases - Supplemental Disclosur
Leases - Supplemental Disclosure (Details) | Jun. 30, 2019 |
Leases [Abstract] | |
Weighted average remaining lease term | 12 years |
Weighted average discount rate | 3.30% |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
Remaining 2019 | $ 7,064 |
2020 | 12,789 |
2021 | 11,762 |
2022 | 9,361 |
2023 | 7,381 |
Thereafter | 53,588 |
Total lease payments | 101,945 |
Less: Imputed interest | (18,941) |
Less: Imputed interest | $ 83,004 |
Leases - Schedule of Minimum Pa
Leases - Schedule of Minimum Payments Under Operating Lease Agreements (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 13,421 |
2020 | 11,319 |
2021 | 9,995 |
2022 | 8,053 |
2023 | 6,953 |
Thereafter | 52,754 |
Total minimum lease payments | $ 102,495 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
U.S. Department of Justice Matter | ||
Loss Contingencies [Line Items] | ||
Legal expenses | $ 1 | $ 2.7 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event £ in Millions | Aug. 01, 2019GBP (£) | Jul. 31, 2019USD ($) |
Fibrovein Holdings Limited | ||
Subsequent Event [Line Items] | ||
Total purchase price | £ | £ 11.2 | |
Third Amended Credit Agreement | ||
Subsequent Event [Line Items] | ||
Consolidated Total Leverage Ratio | 4 | |
Consolidated Interest Coverage Ratio | 3 | |
Facility Capital Expenditures | $ 50,000,000 | |
Third Amended Credit Agreement | Term Loan | ||
Subsequent Event [Line Items] | ||
Debt instrument, face amount | 150,000,000 | |
Third Amended Credit Agreement | Revolving Credit Facility | ||
Subsequent Event [Line Items] | ||
Maximum borrowing capacity | 600,000,000 | |
Third Amended Credit Agreement | Multicurrency Borrowings | ||
Subsequent Event [Line Items] | ||
Maximum borrowing capacity | 40,000,000 | |
Third Amended Credit Agreement | Standby Letters of Credit | ||
Subsequent Event [Line Items] | ||
Maximum borrowing capacity | 40,000,000 | |
Third Amended Credit Agreement | Bridge Loan | ||
Subsequent Event [Line Items] | ||
Maximum borrowing capacity | $ 30,000,000 |
Uncategorized Items - mmsi-6302
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 93,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 93,000 |