Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 03, 2020 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2020 | |
Entity File Number | 0-18592 | |
Entity Registrant Name | MERIT MEDICAL SYSTEMS INC | |
Entity Incorporation, State or Country Code | UT | |
Entity Central Index Key | 0000856982 | |
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 | 55,484,186 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 49,702 | $ 44,320 |
Trade receivables - net of allowance for uncollectible accounts - 2020 - $3,866 and 2019 - $3,108 | 138,792 | 155,365 |
Other receivables | 8,214 | 10,016 |
Inventories | 221,417 | 225,698 |
Prepaid expenses and other current assets | 13,860 | 12,497 |
Prepaid income taxes | 3,493 | 3,491 |
Income tax refund receivables | 10,467 | 3,151 |
Total current assets | 445,945 | 454,538 |
PROPERTY AND EQUIPMENT: | ||
Land and land improvements | 27,815 | 27,554 |
Buildings | 181,749 | 153,863 |
Manufacturing equipment | 257,493 | 244,368 |
Furniture and fixtures | 60,358 | 57,623 |
Leasehold improvements | 44,952 | 43,311 |
Construction-in-progress | 59,523 | 83,685 |
Total property and equipment | 631,890 | 610,404 |
Less accumulated depreciation | (248,261) | (231,619) |
Property and equipment - net | 383,629 | 378,785 |
OTHER ASSETS: | ||
Goodwill | 353,093 | 353,193 |
Deferred income tax assets | 3,748 | 3,788 |
Right-of-use operating lease assets | 79,051 | 80,244 |
Other assets | 36,413 | 41,461 |
Total other assets | 886,295 | 923,998 |
TOTAL ASSETS | 1,715,869 | 1,757,321 |
CURRENT LIABILITIES: | ||
Trade payables | 44,444 | 54,623 |
Accrued expenses | 106,934 | 105,184 |
Current portion of long-term debt | 7,500 | 7,500 |
Short-term operating lease liabilities | 12,886 | 11,550 |
Income taxes payable | 2,460 | 2,799 |
Total current liabilities | 174,224 | 181,656 |
LONG-TERM DEBT | 402,915 | 431,984 |
DEFERRED INCOME TAX LIABILITIES | 45,236 | 45,236 |
LONG-TERM INCOME TAXES PAYABLE | 347 | 347 |
LIABILITIES RELATED TO UNRECOGNIZED TAX BENEFITS | 1,990 | 1,990 |
DEFERRED COMPENSATION PAYABLE | 14,194 | 14,855 |
DEFERRED CREDITS | 2,053 | 2,122 |
LONG-TERM OPERATING LEASE LIABILITIES | 71,785 | 72,714 |
OTHER LONG-TERM OBLIGATIONS | 74,278 | 56,473 |
Total liabilities | 787,022 | 807,377 |
COMMITMENTS AND CONTINGENCIES (Notes 4, 8, 9 and 10) | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock - 5,000 shares authorized as of June 30, 2020 and December 31, 2019; no shares issued | 0 | 0 |
Common stock, no par value; shares authorized - 2020 and 2019 - 100,000; issued and outstanding as of June 30, 2020 - 55,481 and December 31, 2019 - 55,213 | 595,726 | 587,017 |
Retained earnings | 345,434 | 368,221 |
Accumulated other comprehensive loss | (12,313) | (5,294) |
Total stockholders' equity | 928,847 | 949,944 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 1,715,869 | 1,757,321 |
Developed technology | ||
OTHER ASSETS: | ||
Intangible assets | 354,273 | 379,529 |
Other | ||
OTHER ASSETS: | ||
Intangible assets | $ 59,717 | $ 65,783 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Trade receivables, allowances | $ 3,866 | $ 3,108 |
STOCKHOLDERS' EQUITY: | ||
Preferred stock shares authorized (in shares) | 5,000 | 5,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Common stock shares authorized (in shares) | 100,000 | 100,000 |
Common stock shares issued (in shares) | 55,481 | 55,213 |
Common stock shares outstanding (in shares) | 55,481 | 55,213 |
Developed technology | ||
OTHER ASSETS: | ||
Intangibles, accumulated amortization | $ 174,495 | $ 149,947 |
Other | ||
OTHER ASSETS: | ||
Intangibles, accumulated amortization | $ 59,926 | $ 65,607 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
NET SALES | $ 218,371 | $ 255,532 | $ 461,896 | $ 493,881 |
COST OF SALES | 134,155 | 143,568 | 273,896 | 277,281 |
GROSS PROFIT | 84,216 | 111,964 | 188,000 | 216,600 |
OPERATING EXPENSES: | ||||
Selling, general and administrative | 66,767 | 79,977 | 145,575 | 158,247 |
Research and development | 14,026 | 16,332 | 28,898 | 32,375 |
Legal settlement | 18,200 | 18,200 | ||
Impairment and other charges | 3,875 | 548 | 7,720 | 548 |
Contingent consideration expense | 343 | 2,406 | 5,240 | 3,181 |
Acquired in-process research and development | 500 | 525 | ||
Total operating expenses | 103,211 | 99,763 | 205,633 | 194,876 |
INCOME (LOSS) FROM OPERATIONS | (18,995) | 12,201 | (17,633) | 21,724 |
OTHER INCOME (EXPENSE): | ||||
Interest income | 88 | 342 | 167 | 698 |
Interest expense | (2,715) | (3,115) | (5,859) | (5,879) |
Other expense - net | (678) | (429) | (967) | (698) |
Total other expense - net | (3,305) | (3,202) | (6,659) | (5,879) |
INCOME (LOSS) BEFORE INCOME TAXES | (22,300) | 8,999 | (24,292) | 15,845 |
INCOME TAX (BENEFIT) EXPENSE | (3,242) | 2,140 | (2,080) | 2,791 |
NET INCOME (LOSS) | $ (19,058) | $ 6,859 | $ (22,212) | $ 13,054 |
EARNINGS (LOSS) PER COMMON SHARE: | ||||
Basic (in dollars per share) | $ (0.34) | $ 0.12 | $ (0.40) | $ 0.24 |
Diluted (in dollars per share) | $ (0.34) | $ 0.12 | $ (0.40) | $ 0.23 |
AVERAGE COMMON SHARES: | ||||
Basic (in shares) | 55,406 | 55,017 | 55,326 | 54,967 |
Diluted (in shares) | 55,406 | 56,555 | 55,326 | 56,523 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (19,058) | $ 6,859 | $ (22,212) | $ 13,054 |
Other comprehensive income (loss): | ||||
Cash flow hedges | (101) | (1,154) | (7,283) | (3,731) |
Income tax benefit (expense) | 26 | 297 | 1,875 | 960 |
Foreign currency translation adjustment | 2,524 | 274 | (1,601) | (341) |
Income tax benefit (expense) | (3) | (16) | (10) | (2) |
Total other comprehensive income (loss) | 2,446 | (599) | (7,019) | (3,114) |
Total comprehensive income (loss) | $ (16,612) | $ 6,260 | $ (29,231) | $ 9,940 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Beginning balance at Dec. 31, 2018 | $ 571,383 | $ 363,425 | $ (2,033) | $ 932,775 |
Beginning balance (in shares) at Dec. 31, 2018 | 54,893 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 6,195 | 6,195 | ||
Cumulative effect adjustment upon adoption of ASU | ASU 2016-02 | 93 | 93 | ||
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 | $ 574,946 | 369,713 | (4,548) | 940,111 |
Ending balance (in shares) at Mar. 31, 2019 | 54,995 | |||
Beginning balance at Dec. 31, 2018 | $ 571,383 | 363,425 | (2,033) | 932,775 |
Beginning balance (in shares) at Dec. 31, 2018 | 54,893 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 13,054 | |||
Other comprehensive income (loss) | (3,114) | |||
Ending balance at Jun. 30, 2019 | $ 579,250 | 376,572 | (5,147) | 950,675 |
Ending balance (in shares) at Jun. 30, 2019 | 55,079 | |||
Beginning balance at Mar. 31, 2019 | $ 574,946 | 369,713 | (4,548) | 940,111 |
Beginning balance (in shares) at Mar. 31, 2019 | 54,995 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 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 | $ 579,250 | 376,572 | (5,147) | 950,675 |
Ending balance (in shares) at Jun. 30, 2019 | 55,079 | |||
Beginning balance at Dec. 31, 2019 | $ 587,017 | 368,221 | (5,294) | $ 949,944 |
Beginning balance (in shares) at Dec. 31, 2019 | 55,213 | 55,213 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | (3,154) | $ (3,154) | ||
Cumulative effect adjustment upon adoption of ASU | ASU 2016-13 | (575) | (575) | ||
Other comprehensive income (loss) | (9,465) | (9,465) | ||
Stock-based compensation expense | $ 2,641 | 2,641 | ||
Options exercised | $ 2,369 | 2,369 | ||
Options exercised (in shares) | 174 | |||
Issuance of common stock under Employee Stock Purchase Plan | $ 371 | 371 | ||
Issuance of common stock under Employee Stock Purchase Plans (in shares) | 13 | |||
Shares surrendered in exchange for payment of payroll tax liabilities | $ (866) | (866) | ||
Shares surrendered in exchange for payment of payroll tax liabilities (in shares) | (23) | |||
Shares surrendered in exchange for exercise of stock options | $ (1,467) | (1,467) | ||
Shares surrendered in exchange for exercise of stock options (in shares) | (39) | |||
Ending balance at Mar. 31, 2020 | $ 590,065 | 364,492 | (14,759) | 939,798 |
Ending balance (in shares) at Mar. 31, 2020 | 55,338 | |||
Beginning balance at Dec. 31, 2019 | $ 587,017 | 368,221 | (5,294) | $ 949,944 |
Beginning balance (in shares) at Dec. 31, 2019 | 55,213 | 55,213 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | $ (22,212) | |||
Other comprehensive income (loss) | (7,019) | |||
Ending balance at Jun. 30, 2020 | $ 595,726 | 345,434 | (12,313) | $ 928,847 |
Ending balance (in shares) at Jun. 30, 2020 | 55,481 | 55,481 | ||
Beginning balance at Mar. 31, 2020 | $ 590,065 | 364,492 | (14,759) | $ 939,798 |
Beginning balance (in shares) at Mar. 31, 2020 | 55,338 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | (19,058) | (19,058) | ||
Other comprehensive income (loss) | 2,446 | 2,446 | ||
Stock-based compensation expense | $ 3,197 | 3,197 | ||
Options exercised | $ 2,229 | 2,229 | ||
Options exercised (in shares) | 138 | |||
Issuance of common stock under Employee Stock Purchase Plan | $ 235 | 235 | ||
Issuance of common stock under Employee Stock Purchase Plans (in shares) | 5 | |||
Ending balance at Jun. 30, 2020 | $ 595,726 | $ 345,434 | $ (12,313) | $ 928,847 |
Ending balance (in shares) at Jun. 30, 2020 | 55,481 | 55,481 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ (22,212) | $ 13,054 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 47,040 | 45,010 |
Loss on sales and/or abandonment of property and equipment | 370 | 803 |
Write-off of certain intangible assets and other long-term assets | 7,820 | 594 |
Acquired in-process research and development | 525 | |
Amortization of right-of-use operating lease assets | 6,339 | 5,874 |
Fair value adjustments to contingent consideration | 5,240 | 3,181 |
Amortization of deferred credits | (69) | (70) |
Amortization of long-term debt issuance costs | 302 | 402 |
Stock-based compensation expense | 6,205 | 4,289 |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Trade receivables | 15,292 | (21,206) |
Other receivables | 643 | 445 |
Inventories | 2,255 | (5,138) |
Prepaid expenses and other current assets | (1,349) | (1,052) |
Prepaid income taxes | (45) | |
Income tax refund receivables | (7,329) | (3,980) |
Other assets | 128 | (2,845) |
Trade payables | (3,872) | 1,338 |
Accrued expenses | 19,664 | 1,079 |
Income taxes payable | 1,572 | (2,059) |
Deferred compensation payable | (661) | 1,518 |
Operating lease liabilities | (6,177) | (5,882) |
Other long-term obligations | 2,015 | (145) |
Total adjustments | 95,428 | 22,636 |
Net cash provided by operating activities | 73,216 | 35,690 |
Capital expenditures for: | ||
Property and equipment | (25,803) | (35,959) |
Intangible assets | (1,790) | (1,607) |
Proceeds from the sale of property and equipment | 27 | 22 |
Cash received for settlement of current note receivable | 250 | |
Cash paid in acquisitions, net of cash acquired | (100) | (37,256) |
Net cash used in investing activities | (27,416) | (74,800) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock | 3,670 | 3,374 |
Proceeds from issuance of long-term debt | 38,567 | 125,746 |
Payments on long-term debt | (67,692) | (120,746) |
Contingent payments related to acquisitions | (12,861) | (611) |
Payment of taxes related to an exchange of common stock | (866) | |
Net cash provided by (used in) financing activities | (39,182) | 7,763 |
EFFECT OF EXCHANGE RATES ON CASH | (1,236) | (830) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 5,382 | (32,177) |
CASH AND CASH EQUIVALENTS: | ||
Beginning of period | 44,320 | 67,359 |
End of period | 49,702 | 35,182 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Interest (net of capitalized interest of $551 and $540, respectively) | 5,937 | 5,794 |
Income taxes | 3,808 | 8,856 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Property and equipment purchases in accounts payable | 1,970 | 3,331 |
Current note receivable converted to equity investment | 899 | |
Acquisition purchases in accrued expenses and other long-term obligations | 8,400 | |
Merit common stock surrendered (39 and 0 shares, respectively) in exchange for exercise of stock options | 1,467 | |
Right-of-use operating lease assets obtained in exchange for operating lease liabilities | $ 7,029 | $ 2,927 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Cash Flows [Abstract] | ||
Net capitalized interest | $ 551 | $ 540 |
Common stock surrendered in exchange for exercise of stock options (in shares) | 39 | 0 |
Basis of Presentation and Other
Basis of Presentation and Other Items | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Other Items | 1. Basis of Presentation and Other Items. Reclassifications Certain reclassifications have been made to the 2019 periods to conform to the 2020 presentation. In the consolidated statements of cash flows for the six months ended June 30, 2020, the fair value adjustment to contingent consideration is presented as a reconciling item between net income (loss) and cash flows from operating activities. A corresponding reclassification of approximately $3.2 million has been made in the prior period for comparability, along with corresponding reclassifications to the change in certain operating assets and liabilities. COVID-19 Pandemic The global coronavirus (“COVID-19”) pandemic has created significant uncertainty in the global economy, has negatively impacted our business, results of operations and financial condition, and we anticipate that it may negatively impact our business, results of operations and financial condition for the foreseeable future. At present, it is not possible for us to predict the extent of this impact due to uncertainties regarding the duration of the pandemic, potential government mandates regarding elective procedures, and patient behavior, among other factors. In response to the COVID-19 pandemic, we implemented certain cost reduction and operating efficiency initiatives, including decreased discretionary spending, delayed product launches, deferred capital spending and reduced the number of research and development projects, among other initiatives. In April 2020, due to the significant impact of the COVID-19 pandemic on our business, results of operations and financial condition, and uncertainty regarding the scope and duration of that impact, we reduced headcount, implemented targeted furloughs and reduced salaries for a number of groups, including all executive positions. We also implemented processes to encourage the safety of our employees, including formal policies restricting travel, temperature screenings at most of our manufacturing locations, and mandatory telecommuting for certain positions. As the impact of the COVID-19 pandemic evolves, we will continue to assess the impact on our business and respond accordingly. Sustained adverse impacts to our business, our suppliers, and our customers may also affect our future valuation of certain assets and therefore may increase the likelihood of an impairment charge, write-off, or reserve associated with such assets, including goodwill, intangible assets, property and equipment, inventories, accounts receivable, tax assets, and other assets. Estimates may change as new events occur and additional information is obtained, and actual results will likely differ, and may differ materially, from our estimates under different assumptions, circumstances or conditions. |
Recently Issued Financial Accou
Recently Issued Financial Accounting Standards | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Recently Issued Financial Accounting Standards | 2. Recently Issued Financial Accounting Standards. Recently Adopted In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“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, In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments We currently believe that all other issued and not yet effective accounting standards are not materially relevant to our financial statements. |
Revenues from Contracts with Cu
Revenues from Contracts with Customers | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | 3. Revenue from Contracts with Customers. 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. Our revenue recognition policies have not changed from those disclosed in Note 2 to our consolidated financial statements in Item 8 of the Annual Report on Form 10-K. Disaggregation of Revenue The disaggregation of revenue is based on reporting segment, product category and geographical region. Beginning in the first quarter of 2020, we revised our product categories to more clearly reflect how we sell our products to our customers. We presented historical information under the new revised product categories in a Current Report on Form 8-K, filed with the SEC on April 3, 2020. We design, develop, manufacture and market medical products for interventional and diagnostic procedures. For financial reporting purposes, we report our operations in two operating segments: cardiovascular and endoscopy. Our cardiovascular segment consists of four product categories: peripheral intervention, cardiac intervention, custom procedural solutions, and OEM. Within these product categories, we sell a variety of products, including cardiology and radiology devices (which assist in diagnosing and treating coronary arterial disease, peripheral vascular disease and other non-vascular diseases), as well as embolotherapeutic, cardiac rhythm management, electrophysiology, critical care, breast cancer localization and guidance, biopsy, and interventional oncology and spine devices. Our endoscopy segment consists of gastroenterology and pulmonology devices which assist in the palliative treatment of expanding esophageal, tracheobronchial and biliary strictures caused by malignant tumors. The following tables present revenue from contracts with customers by reporting segment, product category and geographical region for the three and six-month periods ended June 30, 2020 and 2019 (in thousands): Three Months Ended Three Months Ended June 30, 2020 June 30, 2019 United States International Total United States International Total Cardiovascular Peripheral Intervention $ 42,614 $ 30,021 $ 72,635 $ 55,975 $ 32,873 $ 88,848 Cardiac Intervention 22,698 43,307 66,005 29,145 50,498 79,643 Custom Procedural Solutions 23,383 21,936 45,319 25,150 22,066 47,216 OEM 23,607 4,611 28,218 25,843 5,116 30,959 Total 112,302 99,875 212,177 136,113 110,553 246,666 Endoscopy Endoscopy devices 5,838 356 6,194 8,549 317 8,866 Total $ 118,140 $ 100,231 $ 218,371 $ 144,662 $ 110,870 $ 255,532 Six Months Ended Six Months Ended June 30, 2020 June 30, 2019 United States International Total United States International Total Cardiovascular Peripheral Intervention $ 98,416 $ 61,294 $ 159,710 $ 111,575 $ 61,906 $ 173,481 Cardiac Intervention 51,293 87,303 138,596 56,161 96,022 152,183 Custom Procedural Solutions 48,797 44,143 92,940 48,965 44,112 93,077 OEM 47,274 9,201 56,475 49,904 8,501 58,405 Total 245,780 201,941 447,721 266,605 210,541 477,146 Endoscopy Endoscopy devices 13,416 759 14,175 16,117 618 16,735 Total $ 259,196 $ 202,700 $ 461,896 $ 282,722 $ 211,159 $ 493,881 |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | 4. Acquisitions. 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 private company engaged in the manufacture, distribution and sale of pharmaceutical sclerotherapy products (“STD Pharmaceutical”). The purchase consideration consisted of an upfront payment of approximately $13.7 million, net of cash acquired. We also recorded a contingent consideration liability of approximately $934,000 related to royalties potentially payable pursuant to the terms of the share purchase agreement. 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 STD Pharmaceutical 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 $ 277 Inventories 843 Prepaid expenses and other assets 49 Intangible assets Developed technology 10,428 Goodwill 4,975 Total assets acquired 16,572 Liabilities Assumed Trade payables (53) Accrued expenses (29) Deferred income tax liabilities (1,890) Total liabilities assumed (1,972) Total net assets acquired $ 14,600 We are amortizing the developed technology intangible asset acquired in the STD Pharmaceutical acquisition over 12 years. The goodwill consists largely of the synergies we hope to achieve from combining operations and is not expected to be deductible for income tax purposes. 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 a final working capital adjustment of approximately $39,000, net of cash acquired, with potential earn-out payments of up to an additional $5 million for achievement of CE certification with respect to the Brightwater ConvertX®, a single-use device used to replace a series of devices and procedures used to treat severe obstructions of the ureter, and up to an additional $10 million for the achievement of sales milestones specified in the merger agreement. The ConvertX device 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 device. 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. During the three-month period ended June 30, 2020, certain non-significant measurement period adjustments were recorded resulting from our ongoing activities with respect to finalizing our purchase price allocation, including reassessment of the tax assets and liabilities for this acquisition. The following table summarizes the purchase price allocated to the net assets acquired as follows (in thousands): Assets Acquired Trade receivables $ 55 Inventories 349 Property and equipment 409 Other long-term assets 30 Intangible assets Developed technology 31,960 Customer lists 83 Trademarks 250 Goodwill 17,607 Total assets acquired 50,743 Liabilities Assumed Trade payables (58) Accrued expenses (261) Other long-term obligations (1,522) Deferred income tax liabilities (4,263) Total liabilities assumed (6,104) Total net assets acquired $ 44,639 We are amortizing the developed technology intangible asset acquired in the Brightwater acquisition 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. The goodwill consists largely of the synergies and economies of scale we hope to achieve from combining the acquired assets and operations with our historical operations and is not expected to be deductible for income tax purposes. The pro forma impact of these acquisitions was not significant, either individually or in the aggregate, on our financial results for the three and six-month periods ended June 30, 2019. Operating results attributable to the STD Pharmaceutical and Brightwater acquisitions were included in our consolidated statements of income (loss) for the three and six-month periods ended June 30, 2020. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. Inventories. Inventories at June 30, 2020 and December 31, 2019 consisted of the following (in thousands): June 30, 2020 December 31, 2019 Finished goods $ 122,747 $ 134,467 Work-in-process 20,154 17,602 Raw materials 78,516 73,629 Total inventories $ 221,417 $ 225,698 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 6. Goodwill and Intangible Assets. The changes in the carrying amount of goodwill for the six-month period ended June 30, 2020 were as follows (in thousands): 2020 Goodwill balance at January 1 $ 353,193 Effect of foreign exchange (215) Additions and adjustments as the result of acquisitions 115 Goodwill balance at June 30 $ 353,093 Total accumulated goodwill impairment losses aggregated to approximately $8.3 million as of June 30, 2020 and December 31, 2019. We did not have any goodwill impairments for the six-month periods ended June 30, 2020 and 2019. The total goodwill balance as of June 30, 2020 and December 31, 2019 was related to our cardiovascular segment. Other intangible assets at June 30, 2020 and December 31, 2019 consisted of the following (in thousands): June 30, 2020 Gross Carrying Accumulated Net Carrying Amount Amortization Amount Patents $ 24,492 $ (7,863) $ 16,629 Distribution agreements 5,754 (4,723) 1,031 License agreements 21,957 (8,698) 13,259 Trademarks 30,242 (10,936) 19,306 Customer lists 34,698 (27,706) 6,992 In-process technology 2,500 — 2,500 Total $ 119,643 $ (59,926) $ 59,717 December 31, 2019 Gross Carrying Accumulated Net Carrying Amount Amortization Amount Patents $ 22,703 $ (6,863) $ 15,840 Distribution agreements 8,012 (6,794) 1,218 License agreements 26,987 (12,746) 14,241 Trademarks 30,240 (9,477) 20,763 Covenants not to compete 964 (964) — Customer lists 39,984 (28,763) 11,221 In-process technology 2,500 — 2,500 Total $ 131,390 $ (65,607) $ 65,783 Aggregate amortization expense the three and six-month periods ended June 30, 2020 was approximately $14.8 million and $29.8 million, respectively. Aggregate amortization expense for the three and six-month periods ended June 30, 2019 was approximately $14.9 million and $29.7 million, respectively. We evaluate long-lived assets, including amortizing intangible assets, for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. We perform the impairment analysis at the asset group for which the lowest level of identifiable cash flows is largely independent of the cash flows of other assets and liabilities. We compare the carrying value of the amortizing intangible assets acquired to the undiscounted cash flows expected to result from the asset group and determine whether the carrying amount is recoverable. We determine the fair value of our amortizing assets based on estimated future cash flows discounted back to their present value using a discount rate that reflects the risk profiles of the underlying activities. During the three-month period ended June 30, 2020, we identified indicators of impairment associated with certain acquired intangible assets based on our qualitative assessment, which led us to complete an interim quantitative impairment assessment. The primary indicator of impairment was our planned closure of our procedural pack business in Australia acquired in Estimated amortization expense for the developed technology and other intangible assets for the next five years consists of the following as of June 30, 2020 (in thousands): Year Ending December 31, Estimated Amortization Expense Remaining 2020 $ 29,180 2021 51,348 2022 50,225 2023 49,090 2024 46,276 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes. |
Revolving Credit Facility and L
Revolving Credit Facility and Long-Term Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facility and Long-Term Debt | 8. Revolving Credit Facility and Long-Term Debt. Principal balances outstanding under our long-term debt obligations as of June 30, 2020 and December 31, 2019 consisted of the following (in thousands): June 30, 2020 December 31, 2019 Term loans $ 144,375 $ 148,125 Revolving credit loans 266,500 291,875 Less unamortized debt issuance costs (460) (516) Total long-term debt 410,415 439,484 Less current portion 7,500 7,500 Long-term portion $ 402,915 $ 431,984 Third Amended and Restated Credit Agreement On July 31, 2019, we entered into a Third Amended and Restated Credit Agreement (the "Third Amended Credit Agreement"). The Third Amended Credit Agreement is a syndicated loan agreement with Wells Fargo Bank, National Association and other parties. 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 for multicurrency borrowings, standby letters of credit and swingline loans. 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 term loans and revolving credit loans in whole or in part, without premium or penalty, other than breakage fees (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 (as defined in the Third Amended Credit Agreement). Interest on each Base Rate loan is due and payable on the last business day of each calendar quarter; interest on each Eurocurrency Rate loan 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 Leverage Ratio (1) 4.0 to 1.0 Consolidated Interest Coverage Ratio (2) 3.0 to 1.0 Facility Capital Expenditures (3) $50 million (1) Maximum Consolidated Total Net 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. We believe we were in compliance with all covenants set forth in the Third Amended Credit Agreement as of June 30, 2020. As of June 30, 2020, we had outstanding borrowings of approximately $410.9 million under the Third Amended Credit Agreement, with additional available borrowings of approximately $183.3 million, based on the net leverage ratio required pursuant to the Third Amended Credit Agreement. Our interest rate as of June 30, 2020 was a fixed rate of 2.62% on $175 million as a result of an interest rate swap (see Note 9) and a variable floating rate of 1.68% on $235.9 million. Our interest rate as of December 31, 2019 was a fixed rate of 2.62% on $175 million as a result of an interest rate swap and a variable floating rate of 3.30% on $265 million. The foregoing fixed rates are exclusive of potential future changes in the applicable margin and changes in the notional amount and fixed rate associated with our interest rate swaps beginning July 6, 2021 as described in Note 9. Future minimum principal payments on our long-term debt as of June 30, 2020, were as follows (in thousands): Years Ending Future Minimum December 31, Principal Payments Remaining 2020 $ 3,750 2021 7,500 2022 8,438 2023 11,250 2024 379,937 Total future minimum principal payments $ 410,875 |
Derivatives
Derivatives | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | 9. Derivatives. General. We formally document, designate and assess the effectiveness of transactions that receive hedge accounting initially and on an ongoing basis. For qualifying hedges, the change in fair value is deferred in accumulated other comprehensive income, a component of stockholders’ equity in the accompanying consolidated balance sheets, and recognized in earnings at the same time the hedged item 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. 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. On December 23, 2019, we entered into a pay-fixed, receive-variable interest rate swap with a notional amount of $75 million with Wells Fargo to fix the one-month LIBOR rate at 1.71% for the period from July 6, 2021 to July 31, 2024. 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 will reset, the swap will be settled with the counterparty, and interest will be paid. At June 30, 2020 and December 31, 2019, our interest rate swaps qualified as cash flow hedges. The fair value of our interest rate swaps at June 30, 2020 was a liability of approximately $5.3 million, which was partially offset by approximately $1.4 million in deferred taxes. The fair value of our interest rate swaps at December 31, 2019 was an asset of approximately $1.2 million, partially offset by approximately $307,000 in deferred taxes, and a liability of $(290,000), partially offset by approximately $(75,000) in deferred taxes. Foreign Currency Risk. Derivative Instruments Designated as Cash Flow Hedges For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the derivative instrument is temporarily reported as a component of other comprehensive income (loss) and then 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. We entered 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, 2020 and December 31, 2019, we had entered into foreign currency forward contracts, which qualified as cash flow hedges, with aggregate notional amounts of approximately $129.9 million and $212.5 million, respectively. 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, 2020 and December 31, 2019, we had entered into foreign currency forward contracts related to those balance sheet accounts with aggregate notional amounts of $74.2 million and $65.0 million, respectively. Balance Sheet Presentation of Derivative Instruments. 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, 2020 December 31, 2019 Derivative instruments designated as hedging instruments Assets Interest rate swaps Other assets (long-term) $ — $ 1,192 Foreign currency forward contracts Prepaid expenses and other assets 1,251 1,663 Foreign currency forward contracts Other assets (long-term) 173 466 (Liabilities) Interest rate swaps Other long-term obligations (5,310) (290) Foreign currency forward contracts Accrued expenses (2,308) (1,813) Foreign currency forward contracts Other long-term obligations (431) (764) Derivative instruments not designated as hedging instruments Assets Foreign currency forward contracts Prepaid expenses and other assets $ 562 $ 318 (Liabilities) Foreign currency forward contracts Accrued expenses (1,174) (1,678) 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 (“OCI”), accumulated other comprehensive income (“AOCI”), and net earnings in our consolidated statements of income, consolidated statements of comprehensive income and consolidated balance sheets (in thousands): Amount of Gain/(Loss) Consolidated Statements Amount of Gain/(Loss) Recognized in OCI of Income (Loss) Reclassified from AOCI Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, 2020 2019 2020 2019 2020 2019 Derivative instrument Location in statements of income Interest rate swaps $ (763) $ (1,812) Interest expense $ (2,715) $ (3,115) $ (265) $ 602 Foreign currency forward contracts 222 1,064 Revenue 218,371 255,532 431 (92) Cost of sales (134,155) (143,568) (606) (104) Amount of Gain/(Loss) Consolidated Statements Amount of Gain/(Loss) Recognized in OCI of Income (Loss) Reclassified from AOCI Six Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 2020 2019 Derivative instrument Location in statements of income Interest rate swaps $ (6,226) $ (2,669) Interest expense $ (5,859) $ (5,879) $ (14) $ 1,196 Foreign currency forward contracts (1,272) 51 Revenue 461,896 493,881 509 102 Cost of sales (273,896) (277,281) (710) (185) As of June 30, 2020, approximately $(1.2) million, or $(0.9) million after taxes, was expected to be reclassified from accumulated other comprehensive income (loss) to earnings in revenue and cost of sales over the succeeding twelve months. As of June 30, 2020, approximately $(1.7) million, or $(1.3) million after taxes, was expected to be reclassified from accumulated other comprehensive income (loss) 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 (loss) for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, Derivative Instrument Location in statements of income (loss) 2020 2019 2020 2019 Foreign currency forward contracts Other income (expense) $ (1,073) $ (489) $ 2,345 $ (755) |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies. Loan Commitment. Litigation: Securities Litigation On December 3, 2019, the Bucks County Employees Retirement Fund filed a complaint against Merit, our Chief Executive Officer and our Chief Financial Officer in the United States District Court for the Central District of California, individually and on behalf of all purchasers of our common stock between February 26, 2019 and October 30, 2019. On February 24, 2020, the court appointed the City of Atlanta Police Pension Fund, the Atlanta Firefighters’ Pension Fund, and the Employees’ Retirement System of the City of Baton Rouge and Parish of East Baton Rouge as Lead Plaintiffs. This action is now captioned In re Merit Medical Systems, Inc. Securities Litigation (Master File No. 8:19-cv-02326-DOC-ADS). On June 30, 2020, Lead Plaintiffs filed a consolidated class action complaint for violations of federal securities laws against Merit, our Chief Executive Officer and our Chief Financial Officer in the United States District Court for the Central District of California, individually and on behalf of all purchasers of our common stock between February 26, 2019 and October 30, 2019. The consolidated class action complaint alleges that defendants violated Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder, and seeks unspecified damages, costs and attorneys’ fees, and equitable relief. We intend to vigorously defend against the lawsuit and intend to file a motion to dismiss the consolidated class action on or before August 14, 2020. We have not recorded an expense related to this matter because any potential loss is not currently probable or reasonably estimable. Additionally, we cannot presently estimate the range of loss, if any, that may result from the matter. Department of Justice Investigation In October 2016, we received a subpoena from the U.S. Department of Justice (the “DOJ”) seeking information related to its investigation of certain of our marketing and promotional practices. We responded to the subpoena, as well as additional related requests. Recently, we reached an agreement in principle with the DOJ to fully resolve the DOJ’s investigation. In addition to the substantial expense we have incurred in connection with the matter, we currently anticipate that we will pay approximately $18.2 million to resolve the matter; however, we deny the DOJ’s allegations. If we are unable to reach a final resolution of the investigation, we anticipate that we would continue to incur substantial costs in connection with the matter, and continuation of the investigation could 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 DOJ investigation for the three and six-month periods ended June 30, 2020 were approximately $1.7 million and $3.2 million, respectively. Based upon the agreement in principle we reached with the DOJ, we recorded a legal settlement in the first six months of 2020 of $18.2 million. 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. |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share (EPS) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share, Basic and Diluted [Abstract] | |
Earnings (Loss) Per Common Share (EPS) | 11. Earnings (Loss) Per Common Share (EPS). The computation of weighted average shares outstanding and the basic and diluted earnings (loss) per common share consisted of the following (in thousands, except per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Net income (loss) $ (19,058) $ 6,859 $ (22,212) $ 13,054 Average common shares outstanding 55,406 55,017 55,326 54,967 Basic EPS $ (0.34) $ 0.12 $ (0.40) $ 0.24 Average common shares outstanding 55,406 55,017 55,326 54,967 Effect of dilutive stock options (1) — 1,538 — 1,556 Total potential shares outstanding 55,406 56,555 55,326 56,523 Diluted EPS $ (0.34) $ 0.12 $ (0.40) $ 0.23 Stock options excluded as the impact was anti-dilutive (1) 4,224 1,185 4,282 1,081 (1) For the three and six-month periods ended June 30, 2020, 2,271 and 2,256 outstanding stock options, respectively, were considered antidilutive due to the net loss in each period. Independent of the net loss incurred, the potentially dilutive effect of these options would have been 844 and 807 shares, respectively. |
Stock-Based Compensation Expens
Stock-Based Compensation Expense | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation Expense | 12. Stock-Based Compensation Expense. Stock-based compensation expense before income tax expense for the three and six-month periods ended June 30, 2020 and 2019 consisted of the following (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Cost of sales $ 347 $ 355 $ 686 $ 607 Research and development 262 281 547 473 Selling, general and administrative 2,819 1,887 4,972 3,209 Stock-based compensation expense before taxes $ 3,428 $ 2,523 $ 6,205 $ 4,289 Nonqualified Stock Options During the three and six-month periods ended June 30, 2020, we granted stock options representing 0 and 216,494 shares of our common stock, respectively. During the three and six-month periods ended June 30, 2019, we granted stock options representing 190,000 and 1.1 million shares of our common stock, respectively. We use the Black-Scholes methodology to value the stock-based compensation expense for options. In applying the Black-Scholes methodology to the option grants, the fair value of our stock-based awards granted was estimated using the following assumptions for the periods indicated below: Six Months Ended June 30, 2020 2019 Risk-free interest rate 0.52% - 1.67% 1.90% - 2.56% Expected option term 4.0 - 5.0 years 3.0 - 5.0 years Expected dividend yield — — Expected price volatility 38.65% - 43.24% 28.66% - 33.69% The average risk-free interest rate is determined using the U.S. Treasury rate in effect as of the date of grant, based on the expected term of the stock award. We determine the expected term of the stock options using the historical exercise behavior of employees. The expected price volatility was determined using a weighted average of daily historical volatility of our stock price over the corresponding expected option term and implied volatility based on recent trends of the daily historical volatility. For awards with a vesting period, compensation expense is recognized on a straight-line basis over the service period, which corresponds to the vesting period. 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, 2020, the total remaining unrecognized compensation cost related to non-vested stock options was approximately $25.9 million, which was expected to be recognized over a weighted average period of 2.9 years. Stock-Settled Performance-Based Restricted Stock Units (“Performance Stock Units”) During the six-month period ended June 30, 2020, we granted performance stock units to certain of our executive officers which, as amended, represent up to 127,060 shares of our common stock. Conversion of the performance stock units occurs at the end of one two The payout for each performance stock unit is equal to one share of common stock multiplied by a FCF multiplier (between 0% and 100% in the case of the one-year awards, as amended, or 0% and 200% in the case of the two three-year the two We use Monte-Carlo simulations to estimate the grant-date fair value of the performance stock units linked to total shareholder return. The fair value of each performance stock unit was estimated as of the grant date using the following assumptions for awards granted in the periods indicated below: Six Months Ended June 30, 2020 Risk-free interest rate 1.1% - 1.3% Performance period 0.8 - 2.8 years Expected dividend yield — Expected price volatility 40.2% - 56.1% The risk-free interest rate of return was determined using the U.S. Treasury rate at the time of grant with a remaining term equal to the expected term of the award. The expected volatility was based on a weighted average volatility of our stock price and the average volatility of our compensation peer group's volatilities. The expected dividend yield was assumed to be zero because, at the time of the grant, we had no plans to declare a dividend. Compensation expense is recognized using the grant-date fair value for the number of shares that are probable of being awarded based on the performance conditions. Each reporting period, this probability assessment is updated, and cumulative catchups are recorded based on the level of FCF that is expected to be achieved. At the end of the performance period, cumulative expense is calculated based on the actual level of FCF achieved. For the three and six-month periods ended June 30, 2020, we recognized stock-based compensation expense associated with the performance stock units of approximately $0.8 million and $1.1 million. As of June 30, 2020, the total remaining unrecognized compensation cost related to performance stock units was approximately $4.2 million, which is expected to be recognized over a weighted average period of 1.6 years. Cash-Settled Performance-Based Share-Based Awards (“Liability Awards”) During the six-month period ended June 30, 2020, we granted liability awards to our Chief Executive Officer. These awards entitle him to a cash payment equal to a target cash incentive multiplied by rTSR and FCF multipliers, as defined in the award agreements. During the three-month period ended June 30, 2020, after reviewing the anticipated impact of the COVID-19 pandemic on our ongoing and forecasted operations and financial performance, our Board of Directors amended the liability awards with a one-year performance period in an effort to more closely align our Chief Executive Officer’s compensation with the interests of our shareholders. The two and three-year liability awards were not amended. The potential maximum payout is 125% of the target cash incentive for one-year awards, and 250% of the target cash incentive for two one two For the three and six-month periods ended June 30, 2020, we recognized expense associated with these liability awards of approximately $0.2 million and $0.4 million within selling, general and administrative expenses in our consolidated statement of income (loss). The fair value of these awards will be remeasured at each reporting period until the awards are settled. These awards are classified as liabilities and reported in accrued expenses and other long-term liabilities within our consolidated balance sheet. As of June 30, 2020, the total remaining unrecognized compensation cost related to cash-settled performance-based share-based awards was approximately $1.6 million, which is expected to be recognized over a weighted average period of 1.8 years. Restricted Stock Units On June 22, 2020 we granted restricted stock units to our non-employee directors representing 33,504 shares of our common stock. The expense recognized for restricted stock units is equal to the closing stock price on the date of grant, which is recognized over the vesting period. Restricted stock units are subject to continued service through the vesting date, which is one year from the date of grant. For the three-month period ended June 30, 2020, we recognized expense associated with these restricted stock units of approximately $31,000 within selling, general and administrative expenses in our consolidated statement of income (loss). As of June 30, 2020, the total remaining unrecognized compensation cost related to restricted stock units was approximately $1.4 million, which is expected to be recognized over a weighted average period of 0.5 years. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting | 13. Segment Reporting. We report our operations in two operating segments: cardiovascular and endoscopy. Our cardiovascular segment consists of four product categories: peripheral intervention, cardiac intervention, custom procedural solutions, and OEM. Within these product categories, we sell a variety of products, including cardiology and radiology devices (which assist in diagnosing and treating coronary arterial disease, peripheral vascular disease and other non-vascular diseases), as well as embolotherapeutic, cardiac rhythm management, electrophysiology, critical care, breast cancer localization and guidance, biopsy, and interventional oncology and spine devices. Our endoscopy segment consists of gastroenterology and pulmonology devices which assist in the palliative treatment of expanding esophageal, tracheobronchial and biliary strictures caused by malignant tumors. 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, 2020 and 2019, were as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Net Sales Cardiovascular $ 212,177 $ 246,666 $ 447,721 $ 477,146 Endoscopy 6,194 8,866 14,175 16,735 Total net sales 218,371 255,532 461,896 493,881 Operating Income (Loss) Cardiovascular (20,462) 9,855 (18,960) 17,474 Endoscopy 1,467 2,346 1,327 4,250 Total operating income (loss) (18,995) 12,201 (17,633) 21,724 Total other expense - net (3,305) (3,202) (6,659) (5,879) Income tax (benefit) expense (3,242) 2,140 (2,080) 2,791 Net income (loss) $ (19,058) $ 6,859 $ (22,212) $ 13,054 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 14. Fair Value Measurements. Assets (Liabilities) Measured at Fair Value on a Recurring Basis Our financial assets and (liabilities) carried at fair value and measured on a recurring basis as of June 30, 2020 and December 31, 2019 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 June 30, 2020 (Level 1) (Level 2) (Level 3) Interest rate contracts (1) $ (5,310) $ — $ (5,310) $ — Foreign currency contract assets, current and long-term (2) $ 1,986 $ — $ 1,986 $ — Foreign currency contract liabilities, current and long-term (3) $ (3,913) $ — $ (3,913) $ — Contingent consideration liabilities $ (69,100) $ — $ — $ (69,100) Fair Value Measurements Using Total Fair Quoted prices in Significant other Significant Value at active markets observable inputs unobservable inputs December 31, 2019 (Level 1) (Level 2) (Level 3) Interest rate contract (1) $ 1,192 $ — $ 1,192 $ — Interest rate contract (1) $ (290) $ — $ (290) $ — Foreign currency contract assets, current and long-term (2) $ 2,447 $ — $ 2,447 $ — Foreign currency contract liabilities, current and long-term (3) $ (4,255) $ — $ (4,255) $ — Contingent consideration liabilities $ (76,709) $ — $ — $ (76,709) (1) The fair value of the interest rate contracts is determined using Level 2 fair value inputs and is recorded as other long-term 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 current 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 or other milestones. 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 (loss) 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, 2020 and 2019 consisted of the following (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Beginning balance $ 68,869 $ 82,457 $ 76,709 $ 82,236 Contingent consideration liability recorded as the result of acquisitions — 8,400 — 8,380 Contingent consideration expense 343 2,404 5,240 3,199 Contingent payments made (107) (57) (12,861) (611) Effect of foreign exchange (5) — 12 — Ending balance $ 69,100 $ 93,204 $ 69,100 $ 93,204 As of June 30, 2020, approximately $59.0 million in contingent consideration liability was included in other long-term obligations and approximately $10.1 million in contingent consideration liability was included in accrued expenses in our consolidated balance sheet. As of December 31, 2019, approximately $48.1 million in contingent consideration liability was included in other long-term obligations and approximately $28.6 million in contingent consideration liability 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 applicable 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 an equity 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. 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. As of December 31, 2019, the contingent receivable was settled in full and there was no balance remaining to collect. The recurring Level 3 measurement of our contingent consideration liabilities included the following significant unobservable inputs at June 30, 2020 and December 31, 2019 (amounts in thousands): Fair value at June 30, Valuation Contingent consideration liability 2020 technique Unobservable inputs Range Weighted Average (1) Revenue-based royalty payments contingent liability $ 7,930 Discounted cash flow Discount rate 12% - 24% 16.0% Projected year of payments 2020-2034 2026 Revenue milestones contingent liability $ 58,170 Monte Carlo simulation Discount rate 11% - 15% 12.6% Projected year of payments 2020-2023 2022 Regulatory approval contingent liability $ 3,000 Scenario-based method Discount rate 2.7% Probability of milestone payment 65% Projected year of payment 2022 (1) Fair value at December 31, Valuation Contingent consideration liability 2019 technique Unobservable inputs Range Revenue-based royalty payments contingent liability $ 7,710 Discounted cash flow Discount rate 13% - 24% Projected year of payments 2020-2034 Revenue milestones contingent liability $ 66,114 Monte Carlo simulation Discount rate 9% - 13.5% Projected year of payments 2020-2023 Regulatory approval contingent liability $ 2,885 Scenario-based method Discount rate 2.4% Probability of milestone payment 65% Projected year of payment 2022 The contingent consideration liability is re-measured to fair value each reporting period. Significant increases or decreases in projected revenues, based on our most recent internal operational budgets and long-range strategic plans, discount rates or the time until payment is made would have resulted in a significantly lower or higher fair value measurement. Contingent Payments to Related Parties During the six-month period ended June 30, 2020, we made contingent payments of approximately $800,000 to a current director of Merit and former shareholder of Cianna Medical, Inc. (“Cianna Medical”), which was acquired by Merit in 2018. The terms of the acquisition, including contingent consideration payments, were determined prior to the appointment of the former Cianna Medical shareholder as a director of Merit. As a former shareholder of Cianna Medical, the Merit director may be eligible for additional Fair Value of Other Financial Instruments 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 use Level 1 inputs. Impairment and Other Charges We recognize or disclose the fair value of certain assets, such as non-financial assets, primarily property and equipment, right-of-use operating lease assets, intangible assets and goodwill in connection with impairment evaluations. All our nonrecurring valuations use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy. During the three-month periods ended June 30, 2020 and 2019, we recorded impairment charges of approximately $2.4 million and $548,000, respectively, related to certain acquired intangible assets (see Note 6). During the three and six-month periods ended June 30, 2020, we had losses of approximately $88,000 and $529,000, compared to losses of approximately $46,000 and $257,000, respectively, for the three and six-month periods ended June 30, 2019, related to the measurement of other non-financial assets, property and equipment and patents, at fair value on a nonrecurring basis subsequent to their initial recognition. During the three-month period ended June 30, 2020, we identified changes in events and circumstances relating to a certain right-of-use (“ROU”) operating lease asset. We compared the anticipated undiscounted cash flows generated by a sublease to the carrying value of the ROU operating lease and related long-lived assets and determined that the carrying value was not recoverable. Consequently, we recorded an impairment loss of approximately $1.5 million, which is equal to the excess of the carrying value of the assets over their estimated fair value. The impairment loss was driven by site consolidation decisions and changes in our projected cash flows for the ROU operating lease asset and related long-lived assets, due to changes in the real estate market as a result of the COVID-19 pandemic. These changes include an increase in the anticipated time to identify a lessee, an increase in anticipated lease concessions, and a decrease in the expected lease rates for the property. During the six-month period ended June 30, 2020 we recorded a charge of $3.5 million due to our write-off of our purchase option to acquire Bluegrass Vascular Technologies, Inc. (“Bluegrass Vascular”) due to our decision not to exercise our option to purchase the company. Equity Investments Our equity investments in privately held companies, including options to acquire these companies, were $14.5 million and $17.1 million as of June 30, 2020 and December 31, 2019, respectively. We analyze our investments in privately held companies to determine if they should be accounted for using the equity method based on our ability to exercise significant influence over operating and financial policies of the investment. Investments not accounted for under the equity method of accounting are accounted for at cost minus impairment, if applicable, plus or minus changes in valuation resulting from observable transactions for identical or similar investments. Notes Receivable Our outstanding long-term notes receivable, including accrued interest, were approximately $2.8 million and $2.7 million as of June 30, 2020 and December 31, 2019, respectively. As of June 30, 2020, we had an allowance for current expected credit losses of $757,000 associated with these notes receivable and our contractual obligation to extend credit to Selio. We assess the allowance for current expected credit losses on an individual security basis, due to the limited number of securities, using a probability of default model, which is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the expected collectability of securities. During the three and six-month periods ended June 30, 2020, we adjusted the probability of default for all securities for a period of one year due to changes in current macroeconomic conditions and our expectations of collectability as a result of the COVID-19 pandemic. The table below presents a rollforward of the allowance for current expected credit losses on our notes receivable for the three and six-month periods ended June 30, 2020 (in thousands): Three Months Ended Six Months Ended June 30, 2020 June 30, 2020 Beginning balance $ 670 $ — Cumulative effect adjustment upon adoption of ASU 2016-13, Credit Losses — 575 Provision for credit loss expense 87 182 Ending balance $ 757 $ 757 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2020 | |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 15. Accumulated Other Comprehensive Income (Loss). Cash Flow Hedges Foreign Currency Translation Total Balance as of March 31, 2020 $ (5,115) $ (9,644) $ (14,759) Other comprehensive income (loss) (541) 2,524 1,983 Income taxes 26 (3) 23 Reclassifications to: Revenue (431) (431) Cost of sales 606 606 Interest expense 265 265 Net other comprehensive income (loss) (75) 2,521 2,446 Balance as of June 30, 2020 $ (5,190) $ (7,123) $ (12,313) Cash Flow Hedges Foreign Currency Translation Total Balance as of March 31, 2019 $ 1,608 $ (6,156) $ (4,548) Other comprehensive income (loss) (748) 274 (474) Income taxes 297 (16) 281 Reclassifications to: Revenue 92 92 Cost of sales 104 104 Interest expense (602) (602) Net other comprehensive income (loss) (857) 258 (599) Balance as of June 30, 2019 $ 751 $ (5,898) $ (5,147) Cash Flow Hedges Foreign Currency Translation Total Balance as of December 31, 2019 $ 218 $ (5,512) $ (5,294) Other comprehensive loss (7,498) (1,601) (9,099) Income taxes 1,875 (10) 1,865 Reclassifications to: Revenue (509) (509) Cost of sales 710 710 Interest expense 14 14 Net other comprehensive loss (5,408) (1,611) (7,019) Balance as of June 30, 2020 $ (5,190) $ (7,123) $ (12,313) Cash Flow Hedges Foreign Currency Translation Total Balance as of December 31, 2018 $ 3,522 $ (5,555) $ (2,033) Other comprehensive loss (2,618) (341) (2,959) Income taxes 960 (2) 958 Reclassifications to: Revenue (102) (102) Cost of sales 185 185 Interest expense (1,196) (1,196) Net other comprehensive loss (2,771) (343) (3,114) Balance as of June 30, 2019 $ 751 $ (5,898) $ (5,147) |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Other Items | 1. Basis of Presentation and Other Items. |
Recently Issued Financial Accounting Standards | Recently Adopted In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“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, In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments We currently believe that all other issued and not yet effective accounting standards are not materially relevant to our financial statements. |
Revenue Recognition | Revenue from Contracts with Customers. 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. Our revenue recognition policies have not changed from those disclosed in Note 2 to our consolidated financial statements in Item 8 of the Annual Report on Form 10-K. |
Derivatives | Derivatives. General. We formally document, designate and assess the effectiveness of transactions that receive hedge accounting initially and on an ongoing basis. For qualifying hedges, the change in fair value is deferred in accumulated other comprehensive income, a component of stockholders’ equity in the accompanying consolidated balance sheets, and recognized in earnings at the same time the hedged item 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. Foreign Currency Risk. Derivative Instruments Designated as Cash Flow Hedges For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the derivative instrument is temporarily reported as a component of other comprehensive income (loss) and then 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. We entered 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. Derivative Instruments Not Designated as Cash Flow Hedges Balance Sheet Presentation of Derivative Instruments. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following tables present revenue from contracts with customers by reporting segment, product category and geographical region for the three and six-month periods ended June 30, 2020 and 2019 (in thousands): Three Months Ended Three Months Ended June 30, 2020 June 30, 2019 United States International Total United States International Total Cardiovascular Peripheral Intervention $ 42,614 $ 30,021 $ 72,635 $ 55,975 $ 32,873 $ 88,848 Cardiac Intervention 22,698 43,307 66,005 29,145 50,498 79,643 Custom Procedural Solutions 23,383 21,936 45,319 25,150 22,066 47,216 OEM 23,607 4,611 28,218 25,843 5,116 30,959 Total 112,302 99,875 212,177 136,113 110,553 246,666 Endoscopy Endoscopy devices 5,838 356 6,194 8,549 317 8,866 Total $ 118,140 $ 100,231 $ 218,371 $ 144,662 $ 110,870 $ 255,532 Six Months Ended Six Months Ended June 30, 2020 June 30, 2019 United States International Total United States International Total Cardiovascular Peripheral Intervention $ 98,416 $ 61,294 $ 159,710 $ 111,575 $ 61,906 $ 173,481 Cardiac Intervention 51,293 87,303 138,596 56,161 96,022 152,183 Custom Procedural Solutions 48,797 44,143 92,940 48,965 44,112 93,077 OEM 47,274 9,201 56,475 49,904 8,501 58,405 Total 245,780 201,941 447,721 266,605 210,541 477,146 Endoscopy Endoscopy devices 13,416 759 14,175 16,117 618 16,735 Total $ 259,196 $ 202,700 $ 461,896 $ 282,722 $ 211,159 $ 493,881 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fibrovein Holdings Limited | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Assets Acquired Trade receivables $ 277 Inventories 843 Prepaid expenses and other assets 49 Intangible assets Developed technology 10,428 Goodwill 4,975 Total assets acquired 16,572 Liabilities Assumed Trade payables (53) Accrued expenses (29) Deferred income tax liabilities (1,890) Total liabilities assumed (1,972) Total net assets acquired $ 14,600 |
Brightwater | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Assets Acquired Trade receivables $ 55 Inventories 349 Property and equipment 409 Other long-term assets 30 Intangible assets Developed technology 31,960 Customer lists 83 Trademarks 250 Goodwill 17,607 Total assets acquired 50,743 Liabilities Assumed Trade payables (58) Accrued expenses (261) Other long-term obligations (1,522) Deferred income tax liabilities (4,263) Total liabilities assumed (6,104) Total net assets acquired $ 44,639 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | June 30, 2020 December 31, 2019 Finished goods $ 122,747 $ 134,467 Work-in-process 20,154 17,602 Raw materials 78,516 73,629 Total inventories $ 221,417 $ 225,698 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in carrying amount of goodwill | 2020 Goodwill balance at January 1 $ 353,193 Effect of foreign exchange (215) Additions and adjustments as the result of acquisitions 115 Goodwill balance at June 30 $ 353,093 |
Other intangible assets | Other intangible assets at June 30, 2020 and December 31, 2019 consisted of the following (in thousands): June 30, 2020 Gross Carrying Accumulated Net Carrying Amount Amortization Amount Patents $ 24,492 $ (7,863) $ 16,629 Distribution agreements 5,754 (4,723) 1,031 License agreements 21,957 (8,698) 13,259 Trademarks 30,242 (10,936) 19,306 Customer lists 34,698 (27,706) 6,992 In-process technology 2,500 — 2,500 Total $ 119,643 $ (59,926) $ 59,717 December 31, 2019 Gross Carrying Accumulated Net Carrying Amount Amortization Amount Patents $ 22,703 $ (6,863) $ 15,840 Distribution agreements 8,012 (6,794) 1,218 License agreements 26,987 (12,746) 14,241 Trademarks 30,240 (9,477) 20,763 Covenants not to compete 964 (964) — Customer lists 39,984 (28,763) 11,221 In-process technology 2,500 — 2,500 Total $ 131,390 $ (65,607) $ 65,783 |
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, 2020 (in thousands): Year Ending December 31, Estimated Amortization Expense Remaining 2020 $ 29,180 2021 51,348 2022 50,225 2023 49,090 2024 46,276 |
Revolving Credit Facility and_2
Revolving Credit Facility and Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | June 30, 2020 December 31, 2019 Term loans $ 144,375 $ 148,125 Revolving credit loans 266,500 291,875 Less unamortized debt issuance costs (460) (516) Total long-term debt 410,415 439,484 Less current portion 7,500 7,500 Long-term portion $ 402,915 $ 431,984 |
Schedule of Long-term Debt Covenants | Covenant Requirement Consolidated Total Leverage Ratio (1) 4.0 to 1.0 Consolidated Interest Coverage Ratio (2) 3.0 to 1.0 Facility Capital Expenditures (3) $50 million (1) Maximum Consolidated Total Net 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, 2020, were as follows (in thousands): Years Ending Future Minimum December 31, Principal Payments Remaining 2020 $ 3,750 2021 7,500 2022 8,438 2023 11,250 2024 379,937 Total future minimum principal payments $ 410,875 |
Derivatives (Tables)
Derivatives (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
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, 2020 December 31, 2019 Derivative instruments designated as hedging instruments Assets Interest rate swaps Other assets (long-term) $ — $ 1,192 Foreign currency forward contracts Prepaid expenses and other assets 1,251 1,663 Foreign currency forward contracts Other assets (long-term) 173 466 (Liabilities) Interest rate swaps Other long-term obligations (5,310) (290) Foreign currency forward contracts Accrued expenses (2,308) (1,813) Foreign currency forward contracts Other long-term obligations (431) (764) Derivative instruments not designated as hedging instruments Assets Foreign currency forward contracts Prepaid expenses and other assets $ 562 $ 318 (Liabilities) Foreign currency forward contracts Accrued expenses (1,174) (1,678) |
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 (“OCI”), accumulated other comprehensive income (“AOCI”), and net earnings in our consolidated statements of income, consolidated statements of comprehensive income and consolidated balance sheets (in thousands): Amount of Gain/(Loss) Consolidated Statements Amount of Gain/(Loss) Recognized in OCI of Income (Loss) Reclassified from AOCI Three Months Ended June 30, Three Months Ended June 30, Three Months Ended June 30, 2020 2019 2020 2019 2020 2019 Derivative instrument Location in statements of income Interest rate swaps $ (763) $ (1,812) Interest expense $ (2,715) $ (3,115) $ (265) $ 602 Foreign currency forward contracts 222 1,064 Revenue 218,371 255,532 431 (92) Cost of sales (134,155) (143,568) (606) (104) Amount of Gain/(Loss) Consolidated Statements Amount of Gain/(Loss) Recognized in OCI of Income (Loss) Reclassified from AOCI Six Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 2020 2019 Derivative instrument Location in statements of income Interest rate swaps $ (6,226) $ (2,669) Interest expense $ (5,859) $ (5,879) $ (14) $ 1,196 Foreign currency forward contracts (1,272) 51 Revenue 461,896 493,881 509 102 Cost of sales (273,896) (277,281) (710) (185) |
Derivative Instruments, Gain (Loss) | The following gains/(losses) from these derivative instruments were recognized in our consolidated statements of income (loss) for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, Derivative Instrument Location in statements of income (loss) 2020 2019 2020 2019 Foreign currency forward contracts Other income (expense) $ (1,073) $ (489) $ 2,345 $ (755) |
Earnings (Loss) Per Common Sh_2
Earnings (Loss) Per Common Share (EPS) (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share, Basic and Diluted [Abstract] | |
Schedule of Earnings (Loss) Per Share, Basic and Diluted | Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Net income (loss) $ (19,058) $ 6,859 $ (22,212) $ 13,054 Average common shares outstanding 55,406 55,017 55,326 54,967 Basic EPS $ (0.34) $ 0.12 $ (0.40) $ 0.24 Average common shares outstanding 55,406 55,017 55,326 54,967 Effect of dilutive stock options (1) — 1,538 — 1,556 Total potential shares outstanding 55,406 56,555 55,326 56,523 Diluted EPS $ (0.34) $ 0.12 $ (0.40) $ 0.23 Stock options excluded as the impact was anti-dilutive (1) 4,224 1,185 4,282 1,081 (1) For the three and six-month periods ended June 30, 2020, 2,271 and 2,256 outstanding stock options, respectively, were considered antidilutive due to the net loss in each period. Independent of the net loss incurred, the potentially dilutive effect of these options would have been 844 and 807 shares, respectively. |
Stock-Based Compensation Expe_2
Stock-Based Compensation Expense (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Cost of sales $ 347 $ 355 $ 686 $ 607 Research and development 262 281 547 473 Selling, general and administrative 2,819 1,887 4,972 3,209 Stock-based compensation expense before taxes $ 3,428 $ 2,523 $ 6,205 $ 4,289 |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Six Months Ended June 30, 2020 2019 Risk-free interest rate 0.52% - 1.67% 1.90% - 2.56% Expected option term 4.0 - 5.0 years 3.0 - 5.0 years Expected dividend yield — — Expected price volatility 38.65% - 43.24% 28.66% - 33.69% |
Stock-Settled Performance-Based Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Six Months Ended June 30, 2020 Risk-free interest rate 1.1% - 1.3% Performance period 0.8 - 2.8 years Expected dividend yield — Expected price volatility 40.2% - 56.1% |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 and 2019, were as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Net Sales Cardiovascular $ 212,177 $ 246,666 $ 447,721 $ 477,146 Endoscopy 6,194 8,866 14,175 16,735 Total net sales 218,371 255,532 461,896 493,881 Operating Income (Loss) Cardiovascular (20,462) 9,855 (18,960) 17,474 Endoscopy 1,467 2,346 1,327 4,250 Total operating income (loss) (18,995) 12,201 (17,633) 21,724 Total other expense - net (3,305) (3,202) (6,659) (5,879) Income tax (benefit) expense (3,242) 2,140 (2,080) 2,791 Net income (loss) $ (19,058) $ 6,859 $ (22,212) $ 13,054 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Our financial assets and (liabilities) carried at fair value and measured on a recurring basis as of June 30, 2020 and December 31, 2019 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 June 30, 2020 (Level 1) (Level 2) (Level 3) Interest rate contracts (1) $ (5,310) $ — $ (5,310) $ — Foreign currency contract assets, current and long-term (2) $ 1,986 $ — $ 1,986 $ — Foreign currency contract liabilities, current and long-term (3) $ (3,913) $ — $ (3,913) $ — Contingent consideration liabilities $ (69,100) $ — $ — $ (69,100) Fair Value Measurements Using Total Fair Quoted prices in Significant other Significant Value at active markets observable inputs unobservable inputs December 31, 2019 (Level 1) (Level 2) (Level 3) Interest rate contract (1) $ 1,192 $ — $ 1,192 $ — Interest rate contract (1) $ (290) $ — $ (290) $ — Foreign currency contract assets, current and long-term (2) $ 2,447 $ — $ 2,447 $ — Foreign currency contract liabilities, current and long-term (3) $ (4,255) $ — $ (4,255) $ — Contingent consideration liabilities $ (76,709) $ — $ — $ (76,709) (1) The fair value of the interest rate contracts is determined using Level 2 fair value inputs and is recorded as other long-term 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 current 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 | Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Beginning balance $ 68,869 $ 82,457 $ 76,709 $ 82,236 Contingent consideration liability recorded as the result of acquisitions — 8,400 — 8,380 Contingent consideration expense 343 2,404 5,240 3,199 Contingent payments made (107) (57) (12,861) (611) Effect of foreign exchange (5) — 12 — Ending balance $ 69,100 $ 93,204 $ 69,100 $ 93,204 |
Fair Value Inputs, Liabilities, Quantitative Information | The recurring Level 3 measurement of our contingent consideration liabilities included the following significant unobservable inputs at June 30, 2020 and December 31, 2019 (amounts in thousands): Fair value at June 30, Valuation Contingent consideration liability 2020 technique Unobservable inputs Range Weighted Average (1) Revenue-based royalty payments contingent liability $ 7,930 Discounted cash flow Discount rate 12% - 24% 16.0% Projected year of payments 2020-2034 2026 Revenue milestones contingent liability $ 58,170 Monte Carlo simulation Discount rate 11% - 15% 12.6% Projected year of payments 2020-2023 2022 Regulatory approval contingent liability $ 3,000 Scenario-based method Discount rate 2.7% Probability of milestone payment 65% Projected year of payment 2022 (1) Fair value at December 31, Valuation Contingent consideration liability 2019 technique Unobservable inputs Range Revenue-based royalty payments contingent liability $ 7,710 Discounted cash flow Discount rate 13% - 24% Projected year of payments 2020-2034 Revenue milestones contingent liability $ 66,114 Monte Carlo simulation Discount rate 9% - 13.5% Projected year of payments 2020-2023 Regulatory approval contingent liability $ 2,885 Scenario-based method Discount rate 2.4% Probability of milestone payment 65% Projected year of payment 2022 |
Schedule of Rollforward of Allowance for Credit Losses | Three Months Ended Six Months Ended June 30, 2020 June 30, 2020 Beginning balance $ 670 $ — Cumulative effect adjustment upon adoption of ASU 2016-13, Credit Losses — 575 Provision for credit loss expense 87 182 Ending balance $ 757 $ 757 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |
Schedule of Components of Accumulated Other Comprehensive Income (Loss) | Cash Flow Hedges Foreign Currency Translation Total Balance as of March 31, 2020 $ (5,115) $ (9,644) $ (14,759) Other comprehensive income (loss) (541) 2,524 1,983 Income taxes 26 (3) 23 Reclassifications to: Revenue (431) (431) Cost of sales 606 606 Interest expense 265 265 Net other comprehensive income (loss) (75) 2,521 2,446 Balance as of June 30, 2020 $ (5,190) $ (7,123) $ (12,313) Cash Flow Hedges Foreign Currency Translation Total Balance as of March 31, 2019 $ 1,608 $ (6,156) $ (4,548) Other comprehensive income (loss) (748) 274 (474) Income taxes 297 (16) 281 Reclassifications to: Revenue 92 92 Cost of sales 104 104 Interest expense (602) (602) Net other comprehensive income (loss) (857) 258 (599) Balance as of June 30, 2019 $ 751 $ (5,898) $ (5,147) Cash Flow Hedges Foreign Currency Translation Total Balance as of December 31, 2019 $ 218 $ (5,512) $ (5,294) Other comprehensive loss (7,498) (1,601) (9,099) Income taxes 1,875 (10) 1,865 Reclassifications to: Revenue (509) (509) Cost of sales 710 710 Interest expense 14 14 Net other comprehensive loss (5,408) (1,611) (7,019) Balance as of June 30, 2020 $ (5,190) $ (7,123) $ (12,313) Cash Flow Hedges Foreign Currency Translation Total Balance as of December 31, 2018 $ 3,522 $ (5,555) $ (2,033) Other comprehensive loss (2,618) (341) (2,959) Income taxes 960 (2) 958 Reclassifications to: Revenue (102) (102) Cost of sales 185 185 Interest expense (1,196) (1,196) Net other comprehensive loss (2,771) (343) (3,114) Balance as of June 30, 2019 $ 751 $ (5,898) $ (5,147) |
Basis of Presentation and Oth_2
Basis of Presentation and Other Items (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Reclassifications | ||
Fair value adjustments to contingent consideration | $ 5,240 | $ 3,181 |
Recently Issued Financial Acc_2
Recently Issued Financial Accounting Standards (Details) - ASU 2016-13 $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
New Financial Accounting Standards | |
Cumulative effect on retained earnings, net of tax | $ (575) |
Retained Earnings | |
New Financial Accounting Standards | |
Cumulative effect on retained earnings, net of tax | $ (575) |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)itemsegment | Jun. 30, 2019USD ($) | |
Disaggregation of Revenue [Line Items] | ||||
Number of operating segments | segment | 2 | |||
Net sales | $ 218,371 | $ 255,532 | $ 461,896 | $ 493,881 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 118,140 | 144,662 | 259,196 | 282,722 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 100,231 | 110,870 | $ 202,700 | 211,159 |
Cardiovascular | ||||
Disaggregation of Revenue [Line Items] | ||||
Number of product categories | item | 4 | |||
Net sales | 212,177 | 246,666 | $ 447,721 | 477,146 |
Cardiovascular | Peripheral Intervention | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 72,635 | 88,848 | 159,710 | 173,481 |
Cardiovascular | Cardiac Intervention | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 66,005 | 79,643 | 138,596 | 152,183 |
Cardiovascular | Custom Procedural Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 45,319 | 47,216 | 92,940 | 93,077 |
Cardiovascular | OEM | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 28,218 | 30,959 | 56,475 | 58,405 |
Cardiovascular | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 112,302 | 136,113 | 245,780 | 266,605 |
Cardiovascular | United States | Peripheral Intervention | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 42,614 | 55,975 | 98,416 | 111,575 |
Cardiovascular | United States | Cardiac Intervention | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 22,698 | 29,145 | 51,293 | 56,161 |
Cardiovascular | United States | Custom Procedural Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 23,383 | 25,150 | 48,797 | 48,965 |
Cardiovascular | United States | OEM | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 23,607 | 25,843 | 47,274 | 49,904 |
Cardiovascular | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 99,875 | 110,553 | 201,941 | 210,541 |
Cardiovascular | International | Peripheral Intervention | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 30,021 | 32,873 | 61,294 | 61,906 |
Cardiovascular | International | Cardiac Intervention | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 43,307 | 50,498 | 87,303 | 96,022 |
Cardiovascular | International | Custom Procedural Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 21,936 | 22,066 | 44,143 | 44,112 |
Cardiovascular | International | OEM | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 4,611 | 5,116 | 9,201 | 8,501 |
Endoscopy | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 6,194 | 8,866 | 14,175 | 16,735 |
Endoscopy | Endoscopy Devices | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 6,194 | 8,866 | 14,175 | 16,735 |
Endoscopy | United States | Endoscopy Devices | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 5,838 | 8,549 | 13,416 | 16,117 |
Endoscopy | International | Endoscopy Devices | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 356 | $ 317 | $ 759 | $ 618 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Thousands, € in Millions | Aug. 01, 2019USD ($) | Jun. 14, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020EUR (€) |
Business Acquisition [Line Items] | |||||||
Payments to acquire intangible assets | $ 1,790 | $ 1,607 | |||||
Impairment and other charges | $ 3,875 | $ 548 | 7,720 | $ 548 | |||
Selio | |||||||
Business Acquisition [Line Items] | |||||||
Loan from acquisition | $ 250 | $ 250 | |||||
Interest rate on loan | 5.00% | 5.00% | 5.00% | ||||
Selio | Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Loan commitment from acquisition | € | € 2 | ||||||
Fibrovein Holdings Limited | |||||||
Business Acquisition [Line Items] | |||||||
Purchase consideration, upfront payment | $ 13,700 | ||||||
Contingent liability | $ 934 | ||||||
Fibrovein Holdings Limited | Developed technology | |||||||
Business Acquisition [Line Items] | |||||||
Weighted average useful life | 12 years | ||||||
Fibrovein Holdings Limited | STD Pharmaceutical Products Limited | |||||||
Business Acquisition [Line Items] | |||||||
Ownership percentage | 100.00% | ||||||
Brightwater | |||||||
Business Acquisition [Line Items] | |||||||
Purchase consideration, upfront payment | $ 35,000 | ||||||
Working capital adjustment | $ 39 | ||||||
Weighted average useful life | 12 years 10 months 24 days | ||||||
Brightwater | Developed technology | |||||||
Business Acquisition [Line Items] | |||||||
Weighted average useful life | 13 years | ||||||
Brightwater | Trademarks | |||||||
Business Acquisition [Line Items] | |||||||
Weighted average useful life | 5 years | ||||||
Brightwater | Customer Lists | |||||||
Business Acquisition [Line Items] | |||||||
Weighted average useful life | 1 year | ||||||
Brightwater | Maximum | Achievement of CE Certification | |||||||
Business Acquisition [Line Items] | |||||||
Earn-out payments | $ 5,000 | ||||||
Brightwater | Maximum | Achievement of Sales Milestones | |||||||
Business Acquisition [Line Items] | |||||||
Earn-out payments | $ 10,000 |
Acquisitions - Purchase Price A
Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Aug. 01, 2019 | Jun. 14, 2019 |
Assets Acquired | ||||
Goodwill | $ 353,093 | $ 353,193 | ||
Fibrovein Holdings Limited | ||||
Assets Acquired | ||||
Trade receivables | $ 277 | |||
Inventories | 843 | |||
Prepaid expenses and other assets | 49 | |||
Goodwill | 4,975 | |||
Total assets acquired | 16,572 | |||
Liabilities Assumed | ||||
Trade payables | (53) | |||
Accrued expenses | (29) | |||
Deferred income tax liabilities | (1,890) | |||
Total liabilities assumed | (1,972) | |||
Total net assets acquired | 14,600 | |||
Fibrovein Holdings Limited | Developed technology | ||||
Assets Acquired | ||||
Intangible assets | $ 10,428 | |||
Brightwater | ||||
Assets Acquired | ||||
Trade receivables | $ 55 | |||
Inventories | 349 | |||
Property and equipment | 409 | |||
Other long-term assets | 30 | |||
Goodwill | 17,607 | |||
Total assets acquired | 50,743 | |||
Liabilities Assumed | ||||
Trade payables | (58) | |||
Accrued expenses | (261) | |||
Other long-term liabilities | (1,522) | |||
Deferred income tax liabilities | (4,263) | |||
Total liabilities assumed | (6,104) | |||
Total net assets acquired | 44,639 | |||
Brightwater | Developed technology | ||||
Assets Acquired | ||||
Intangible assets | 31,960 | |||
Brightwater | Customer Lists | ||||
Assets Acquired | ||||
Intangible assets | 83 | |||
Brightwater | Trademarks | ||||
Assets Acquired | ||||
Intangible assets | $ 250 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 122,747 | $ 134,467 |
Work-in-process | 20,154 | 17,602 |
Raw materials | 78,516 | 73,629 |
Total Inventories | $ 221,417 | $ 225,698 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Goodwill [Roll Forward] | |
Goodwill balance at beginning of period | $ 353,193 |
Effect of foreign exchange | 215 |
Additions and adjustments as the result of acquisitions | 115 |
Goodwill balance at end of period | $ 353,093 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 119,643 | $ 131,390 |
Accumulated Amortization | (59,926) | (65,607) |
Net Carrying Amount | 59,717 | 65,783 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 24,492 | 22,703 |
Accumulated Amortization | (7,863) | (6,863) |
Net Carrying Amount | 16,629 | 15,840 |
Distribution agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 5,754 | 8,012 |
Accumulated Amortization | (4,723) | (6,794) |
Net Carrying Amount | 1,031 | 1,218 |
License agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 21,957 | 26,987 |
Accumulated Amortization | (8,698) | (12,746) |
Net Carrying Amount | 13,259 | 14,241 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 30,242 | 30,240 |
Accumulated Amortization | (10,936) | (9,477) |
Net Carrying Amount | 19,306 | 20,763 |
Covenants not to compete | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 964 | |
Accumulated Amortization | (964) | |
Customer Lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 34,698 | 39,984 |
Accumulated Amortization | (27,706) | (28,763) |
Net Carrying Amount | 6,992 | 11,221 |
In-process technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,500 | 2,500 |
Net Carrying Amount | $ 2,500 | $ 2,500 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Accumulated goodwill impairment losses | $ 8,300 | $ 8,300 | $ 8,300 | ||
Goodwill impairment loss | 0 | $ 0 | |||
Aggregate amortization expense | 14,800 | $ 14,900 | $ 29,800 | $ 29,700 | |
Impairment of intangible assets | 2,400 | 548 | |||
ITL Healthcare Pty Ltd | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of intangible assets | $ 2,400 | ||||
Lazarus Medical Technologies, LLC | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of intangible assets | $ 548 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Future Amortization Expense (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remaining 2020 | $ 29,180 |
2021 | 51,348 |
2022 | 50,225 |
2023 | 49,090 |
2024 | $ 46,276 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income tax (benefit) expense | $ (3,242) | $ 2,140 | $ (2,080) | $ 2,791 |
Effective tax rate | 14.50% | 23.80% | 8.60% | 17.60% |
Revolving Credit Facility and_3
Revolving Credit Facility and Long-Term Debt - Principal Balances under Long-term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 410,875 | |
Less unamortized debt issuance costs | (460) | $ (516) |
Total long-term debt | 410,415 | 439,484 |
Less current portion | 7,500 | 7,500 |
Long-term portion | 402,915 | 431,984 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt | 144,375 | 148,125 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 266,500 | $ 291,875 |
Revolving Credit Facility and_4
Revolving Credit Facility and Long-Term Debt - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Outstanding borrowings | $ 410,875 | |
Credit Agreement | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings | 410,900 | |
Available borrowing capacity | $ 183,300 | |
Fixed interest rate percent | 2.62% | 2.62% |
Debt subject to fixed interest rate | $ 175,000 | $ 175,000 |
Variable interest rate percent | 1.68% | 3.30% |
Debt subject to variable interest rate | $ 235,900 | $ 265,000 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings | 144,375 | 148,125 |
Term Loan | Credit Agreement | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | 150,000 | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings | 266,500 | $ 291,875 |
Revolving Credit Facility | Credit Agreement | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 600,000 |
Revolving Credit Facility and_5
Revolving Credit Facility and Long-Term Debt - Financial Covenants (Details) - Credit Agreement $ in Millions | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Debt Instrument [Line Items] | |
Consolidated Total Leverage Ratio | 4 |
Consolidated Interest Coverage Ratio | 3 |
Facility Capital Expenditures | $ 50 |
Revolving Credit Facility and_6
Revolving Credit Facility and Long-Term Debt - Future Minimum Payments on Long-term Debt (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Debt Disclosure [Abstract] | |
Remaining 2020 | $ 3,750 |
2021 | 7,500 |
2022 | 8,438 |
2023 | 11,250 |
2024 | 379,937 |
Total future minimum principal payments | $ 410,875 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 23, 2019 | Aug. 05, 2016 | |
Revenue and cost of sales | ||||
Derivative [Line Items] | ||||
Amount expected to be reclassified from accumulated other comprehensive income (loss) to earnings in next twelve months, gross | $ (1,200) | |||
Amount expected to be reclassified from accumulated other comprehensive income to earnings (loss) in next twelve months, net of tax | (900) | |||
Interest expense | ||||
Derivative [Line Items] | ||||
Amount expected to be reclassified from accumulated other comprehensive income (loss) to earnings in next twelve months, gross | (1,700) | |||
Amount expected to be reclassified from accumulated other comprehensive income to earnings (loss) in next twelve months, net of tax | (1,300) | |||
Interest rate swap | Wells Fargo 1.12% one-month LIBOR | Designated as hedging instrument | ||||
Derivative [Line Items] | ||||
Notional amount of derivative | $ 175,000 | |||
Fair value of derivative asset | $ 1,200 | |||
Fair value of derivative liability | 5,300 | |||
Deferred tax liability used to offset fair value of interest rate swap | $ 1,400 | 307 | ||
Interest rate swap | Wells Fargo 1.12% one-month LIBOR | LIBOR Swap Rate | Designated as hedging instrument | ||||
Derivative [Line Items] | ||||
Fixed rate | 1.12% | |||
Interest rate swap | Wells Fargo 1.71% one-month LIBOR | Designated as hedging instrument | ||||
Derivative [Line Items] | ||||
Notional amount of derivative | $ 75,000 | |||
Fair value of derivative liability | 290 | |||
Deferred tax asset used to offset fair value of interest rate swap | $ (75) | |||
Interest rate swap | Wells Fargo 1.71% one-month LIBOR | LIBOR Swap Rate | Designated as hedging instrument | ||||
Derivative [Line Items] | ||||
Fixed rate | 1.71% | |||
Foreign currency forward contracts | ||||
Derivative [Line Items] | ||||
Maturity of derivative contract (up to) | 2 years |
Derivatives - Forward Notional
Derivatives - Forward Notional Contracts (Details) - Foreign currency forward contracts $ in Millions | Jun. 30, 2020USD ($)DerivativeInstrument | Dec. 31, 2019USD ($) |
Designated as hedging instrument | Derivatives designated as cash flow hedges | ||
Derivative [Line Items] | ||
Average number of contracts entered into per month | DerivativeInstrument | 150 | |
Aggregate notional amount of derivative | $ | $ 129.9 | $ 212.5 |
Not designated as hedging instrument | Fair Value Hedging | ||
Derivative [Line Items] | ||
Average number of contracts entered into per month | DerivativeInstrument | 20 | |
Aggregate notional amount of derivative | $ | $ 74.2 | $ 65 |
Derivatives - Fair Value of Der
Derivatives - Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Designated as hedging instrument | Interest rate swap | Other assets (long-term) | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative asset | $ 1,192 | |
Designated as hedging instrument | Interest rate swap | Other long-term obligations | ||
Derivatives, Fair Value [Line Items] | ||
Total Liability Derivatives | $ (5,310) | (290) |
Designated as hedging instrument | Foreign currency forward contracts | Other assets (long-term) | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative asset | 173 | 466 |
Designated as hedging instrument | Foreign currency forward contracts | Prepaid expenses and other assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative asset | 1,251 | 1,663 |
Designated as hedging instrument | Foreign currency forward contracts | Accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Total Liability Derivatives | (2,308) | (1,813) |
Designated as hedging instrument | Foreign currency forward contracts | Other long-term obligations | ||
Derivatives, Fair Value [Line Items] | ||
Total Liability Derivatives | (431) | (764) |
Not designated as hedging instrument | Foreign currency forward contracts | Prepaid expenses and other assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative asset | 562 | 318 |
Not designated as hedging instrument | Foreign currency forward contracts | Accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Total Liability Derivatives | $ (1,174) | $ (1,678) |
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) recognized in OCI | $ (101) | $ (1,154) | $ (7,283) | $ (3,731) |
Derivatives designated as cash flow hedges | Cost of sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) recognized in income | (134,155) | (143,568) | (273,896) | (277,281) |
Amount of Gain/(Loss) reclassified from AOCI | (606) | (104) | (710) | (185) |
Derivatives designated as cash flow hedges | Interest rate swap | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) recognized in OCI | (763) | (1,812) | (6,226) | (2,669) |
Derivatives designated as cash flow hedges | Interest rate swap | Interest expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) recognized in income | (2,715) | (3,115) | (5,859) | (5,879) |
Amount of Gain/(Loss) reclassified from AOCI | (265) | 602 | (14) | 1,196 |
Derivatives designated as cash flow hedges | Foreign currency forward contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) recognized in OCI | 222 | 1,064 | (1,272) | 51 |
Derivatives designated as cash flow hedges | Foreign currency forward contracts | Revenue | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) recognized in income | 218,371 | 255,532 | 461,896 | 493,881 |
Amount of Gain/(Loss) reclassified from AOCI | $ 431 | $ (92) | $ 509 | $ 102 |
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Not designated as hedging instrument | Foreign currency forward contracts | Other income (expense) | ||||
Derivative [Line Items] | ||||
Gain (loss) on derivative | $ (1,073) | $ (489) | $ 2,345 | $ (755) |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands, € in Millions | Oct. 11, 2019 | Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2020EUR (€) |
Loss Contingencies [Line Items] | ||||
Legal expenses | $ 18,200 | $ 18,200 | ||
U.S. Department of Justice Matter | ||||
Loss Contingencies [Line Items] | ||||
Legal settlement | 18,200 | |||
Legal expenses | 1,700 | 3,200 | ||
Selio | ||||
Loss Contingencies [Line Items] | ||||
Ownership percentage | 19.50% | |||
Option to purchase all ordinary shares period | 45 days | |||
Loan from acquisition | $ 250 | $ 250 | ||
Interest rate on loan | 5.00% | 5.00% | 5.00% | |
Selio | Maximum | ||||
Loss Contingencies [Line Items] | ||||
Loan commitment from acquisition | € | € 2 |
Earnings (Loss) Per Common Sh_3
Earnings (Loss) Per Common Share (EPS) - Basic EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||||||
Net income (loss) | $ (19,058) | $ (3,154) | $ 6,859 | $ 6,195 | $ (22,212) | $ 13,054 |
Average common shares outstanding (in shares) | 55,406 | 55,017 | 55,326 | 54,967 | ||
Basic EPS (in dollars per share) | $ (0.34) | $ 0.12 | $ (0.40) | $ 0.24 |
Earnings (Loss) Per Common Sh_4
Earnings (Loss) Per Common Share (EPS) - Diluted EPS (Details) - $ / shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Average common shares outstanding (in shares) | 55,406 | 55,017 | 55,326 | 54,967 |
Effect of dilutive stock options (in shares) | 1,538 | 1,556 | ||
Total potential shares outstanding (in shares) | 55,406 | 56,555 | 55,326 | 56,523 |
Diluted EPS (in dollars per share) | $ (0.34) | $ 0.12 | $ (0.40) | $ 0.23 |
Stock options excluded as the impact was anti-dilutive (in shares) | 4,224 | 1,185 | 4,282 | 1,081 |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock options excluded as the impact was anti-dilutive (in shares) | 2,271 | 2,256 | ||
Net loss incurred, the potentially dilutive effect of these options | 844 | 807 |
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share-based compensation | $ 3,428 | $ 2,523 | $ 6,205 | $ 4,289 |
Cost of sales | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share-based compensation | 347 | 355 | 686 | 607 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share-based compensation | 262 | 281 | 547 | 473 |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share-based compensation | $ 2,819 | $ 1,887 | $ 4,972 | $ 3,209 |
Stock-Based Compensation Expe_4
Stock-Based Compensation Expense - Narrative (Details) - USD ($) $ in Thousands | Jun. 22, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Allocated share-based compensation | $ 3,428 | $ 2,523 | $ 6,205 | $ 4,289 | |
Selling, general and administrative | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Allocated share-based compensation | $ 2,819 | $ 1,887 | $ 4,972 | $ 3,209 | |
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted in period (in shares) | 0 | 190,000 | 216,494 | 1,100,000 | |
Compensation cost not yet recognized | $ 25,900 | $ 25,900 | |||
Compensation cost not yet recognized, period of recognition | 2 years 10 months 24 days | ||||
Stock-Settled Performance-Based Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Allocated share-based compensation | 800 | $ 1,100 | |||
Compensation cost not yet recognized | $ 4,200 | $ 4,200 | |||
Compensation cost not yet recognized, period of recognition | 1 year 7 months 6 days | ||||
Award vesting period | 1 year | ||||
Number of shares of common stock for each unit | 1 | ||||
Stock-Settled Performance-Based Restricted Stock Units | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock units granted in period (in shares) | 127,060 | ||||
Stock-Settled Performance-Based Restricted Stock Units | rTSR | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Multiplying factor | 75.00% | ||||
Stock-Settled Performance-Based Restricted Stock Units | rTSR | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Multiplying factor | 125.00% | ||||
Stock-Settled Performance-Based Restricted Stock Units | Performance period 1 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 1 year | ||||
Decrease in the potential shares of common stock to be granted | 25,415 | ||||
Stock-Settled Performance-Based Restricted Stock Units | Performance period 1 | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Multiplying factor | 125.00% | ||||
Stock-Settled Performance-Based Restricted Stock Units | Performance period 1 | FCF | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Multiplying factor | 0.00% | ||||
Stock-Settled Performance-Based Restricted Stock Units | Performance period 1 | FCF | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Multiplying factor | 100.00% | 100.00% | |||
Stock-Settled Performance-Based Restricted Stock Units | Performance period 2 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 2 years | ||||
Stock-Settled Performance-Based Restricted Stock Units | Performance period 2 | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Multiplying factor | 250.00% | ||||
Stock-Settled Performance-Based Restricted Stock Units | Performance period 2 | FCF | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Multiplying factor | 0.00% | ||||
Stock-Settled Performance-Based Restricted Stock Units | Performance period 2 | FCF | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Multiplying factor | 200.00% | ||||
Stock-Settled Performance-Based Restricted Stock Units | Performance period 3 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Stock-Settled Performance-Based Restricted Stock Units | Performance period 3 | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Multiplying factor | 250.00% | ||||
Stock-Settled Performance-Based Restricted Stock Units | Performance period 3 | FCF | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Multiplying factor | 0.00% | ||||
Stock-Settled Performance-Based Restricted Stock Units | Performance period 3 | FCF | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Multiplying factor | 200.00% | ||||
Cash-Settled Performance-Based Share-Based Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Allocated share-based compensation | $ 200 | $ 400 | |||
Compensation cost not yet recognized | 1,600 | $ 1,600 | |||
Compensation cost not yet recognized, period of recognition | 1 year 9 months 18 days | ||||
Cash-Settled Performance-Based Share-Based Awards | Performance period 1 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 1 year | ||||
Cash-Settled Performance-Based Share-Based Awards | Performance period 1 | rTSR | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Multiplying factor | 125.00% | ||||
Cash-Settled Performance-Based Share-Based Awards | Performance period 2 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 2 years | ||||
Cash-Settled Performance-Based Share-Based Awards | Performance period 2 | rTSR | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Multiplying factor | 250.00% | ||||
Cash-Settled Performance-Based Share-Based Awards | Performance period 3 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Cash-Settled Performance-Based Share-Based Awards | Performance period 3 | rTSR | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Multiplying factor | 250.00% | ||||
Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expiration period | 1 year | ||||
Compensation cost not yet recognized | 1,400 | $ 1,400 | |||
Compensation cost not yet recognized, period of recognition | 6 months | ||||
Restricted Stock Units | Selling, general and administrative | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Allocated share-based compensation | $ 31 | ||||
Restricted Stock Units | Non-employee members | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted stock units granted | 33,504 |
Stock-Based Compensation Expe_5
Stock-Based Compensation Expense - Fair Value Calculation Assumptions (Details) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 0.52% | 1.90% |
Risk-free interest rate, maximum | 1.67% | 2.56% |
Expected price volatility, minimum | 38.65% | 28.66% |
Expected price volatility, maximum | 43.24% | 33.69% |
Stock Options | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected option term / Performance Period | 4 years | 3 years |
Stock Options | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected option term / Performance Period | 5 years | 5 years |
Stock-Settled Performance-Based Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 1.10% | |
Risk-free interest rate, maximum | 1.30% | |
Expected price volatility, minimum | 40.20% | |
Expected price volatility, maximum | 56.10% | |
Stock-Settled Performance-Based Restricted Stock Units | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected option term / Performance Period | 9 months 18 days | |
Stock-Settled Performance-Based Restricted Stock Units | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected option term / Performance Period | 2 years 9 months 18 days |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 6 Months Ended |
Jun. 30, 2020segment | |
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, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||||
Net sales | $ 218,371 | $ 255,532 | $ 461,896 | $ 493,881 | ||
Operating income (loss) | (18,995) | 12,201 | (17,633) | 21,724 | ||
Total other expense - net | (3,305) | (3,202) | (6,659) | (5,879) | ||
Income tax (benefit) expense | (3,242) | 2,140 | (2,080) | 2,791 | ||
Net income (loss) | (19,058) | $ (3,154) | 6,859 | $ 6,195 | (22,212) | 13,054 |
Cardiovascular | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 212,177 | 246,666 | 447,721 | 477,146 | ||
Operating income (loss) | (20,462) | 9,855 | (18,960) | 17,474 | ||
Endoscopy | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 6,194 | 8,866 | 14,175 | 16,735 | ||
Operating income (loss) | $ 1,467 | $ 2,346 | $ 1,327 | $ 4,250 |
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, 2020 | Dec. 31, 2019 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate contracts, Assets | $ 1,192 | |
Interest rate contract, Liability | $ (5,310) | (290) |
Foreign currency contract assets, current and long-term | 1,986 | 2,447 |
Foreign currency contract liabilities, current and long-term | (3,913) | (4,255) |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liabilities | (69,100) | (76,709) |
Estimate of Fair Value, Fair Value Disclosure | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate contracts, Assets | 1,192 | |
Interest rate contract, Liability | (5,310) | (290) |
Foreign currency contract assets, current and long-term | 1,986 | 2,447 |
Foreign currency contract liabilities, current and long-term | (3,913) | (4,255) |
Contingent consideration liabilities | $ (69,100) | $ (76,709) |
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | $ 68,869 | $ 82,457 | $ 76,709 | $ 82,236 |
Contingent consideration liability recorded as the result of acquisitions | 8,400 | 8,380 | ||
Contingent consideration expense | $ 343 | $ 2,404 | $ 5,240 | $ 3,199 |
Fair Value, Recurring Basis, Unobservable Input Reconciliation, Liability, Gain (Loss), Statement of Income [Extensible List] | us-gaap:BusinessCombinationContingentConsiderationArrangementsContingentConsiderationBenefit | us-gaap:BusinessCombinationContingentConsiderationArrangementsContingentConsiderationBenefit | us-gaap:BusinessCombinationContingentConsiderationArrangementsContingentConsiderationBenefit | us-gaap:BusinessCombinationContingentConsiderationArrangementsContingentConsiderationBenefit |
Contingent payments made | $ (107) | $ (57) | $ (12,861) | $ (611) |
Effect of foreign exchange | (5) | 12 | ||
Ending balance | $ 69,100 | $ 93,204 | $ 69,100 | $ 93,204 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Impairment of intangible assets | $ 2,400 | $ 548 | ||||
Impairment of other assets | 88 | 46 | $ 529 | $ 257 | ||
Impairment loss | 1,500 | |||||
Investments in privately held companies | 14,500 | 14,500 | $ 17,100 | |||
Impairment and other charges | 3,875 | 548 | 7,720 | 548 | ||
Long-term notes receivable | 2,800 | 2,800 | 2,700 | |||
Allowance for expected credit losses | 757 | 757 | $ 670 | |||
Bluegrass Vascular Technologies, Inc | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Impairment and other charges | 3,500 | |||||
Contingent Receivable | Contingent Consideration | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Gain (loss) on contingent receivable | $ (2) | $ 18 | ||||
Director | Cianna Medical | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Contingent payments related to acquisition | 800 | |||||
Other long-term obligations | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Contingent consideration liability, noncurrent | 59,000 | 59,000 | 48,100 | |||
Accrued expenses | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Contingent consideration liability, current | $ 10,100 | $ 10,100 | $ 28,600 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Inputs, Liabilities, Quantitative Information (Details) - Fair Value, Inputs, Level 3 | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Revenue-based royalty | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Contingent consideration liabilities | $ 7,930,000 | $ 7,710,000 |
Revenue milestones | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Contingent consideration liabilities | 58,170,000 | 66,114,000 |
Regulatory approval | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Contingent consideration liabilities | $ 3,000,000 | $ 2,885,000 |
Discount rate | Revenue-based royalty | Minimum | Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Unobservable inputs, contingent liability | 0.12 | 0.13 |
Discount rate | Revenue-based royalty | Maximum | Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Unobservable inputs, contingent liability | 0.24 | 0.24 |
Discount rate | Revenue-based royalty | Weighted Average | Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Unobservable inputs, contingent liability | 0.160 | |
Discount rate | Revenue milestones | Minimum | Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Unobservable inputs, contingent liability | 0.11 | 0.09 |
Discount rate | Revenue milestones | Maximum | Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Unobservable inputs, contingent liability | 0.15 | 0.135 |
Discount rate | Revenue milestones | Weighted Average | Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Unobservable inputs, contingent liability | 0.126 | |
Discount rate | Regulatory approval | Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Unobservable inputs, contingent liability | 0.027 | 0.024 |
Probability of milestone payment | Regulatory approval | Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Unobservable inputs, contingent liability | 0.65 | 0.65 |
Fair Value Measurements - Allow
Fair Value Measurements - Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||
Beginning balance | $ 670 | |
Cumulative effect adjustment upon adoption of ASU 2016-13, Credit Losses | $ 575 | |
Provision for credit loss expense | 87 | 182 |
Ending balance | $ 757 | $ 757 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Changes in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accumulated other comprehensive income (loss) | ||||
Beginning balance | $ 939,798 | $ 940,111 | $ 949,944 | $ 932,775 |
Reclassifications to: | ||||
Cost of sales | (134,155) | (143,568) | (273,896) | (277,281) |
Interest expense | (2,715) | (3,115) | (5,859) | (5,879) |
Ending balance | 928,847 | 950,675 | 928,847 | 950,675 |
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated other comprehensive income (loss) | ||||
Beginning balance | (14,759) | (4,548) | (5,294) | (2,033) |
Other comprehensive income (loss) | 1,983 | (474) | (9,099) | (2,959) |
Income taxes | 23 | 281 | 1,865 | 958 |
Reclassifications to: | ||||
Net other comprehensive income (loss) | 2,446 | (599) | (7,019) | (3,114) |
Ending balance | (12,313) | (5,147) | (12,313) | (5,147) |
Accumulated Other Comprehensive Income (Loss) | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassifications to: | ||||
Revenue | (431) | 92 | (509) | (102) |
Cost of sales | 606 | 104 | 710 | 185 |
Interest expense | 265 | (602) | 14 | (1,196) |
Cash Flow Hedges | ||||
Accumulated other comprehensive income (loss) | ||||
Beginning balance | (5,115) | 1,608 | 218 | 3,522 |
Other comprehensive income (loss) | (541) | (748) | (7,498) | (2,618) |
Income taxes | 26 | 297 | 1,875 | 960 |
Reclassifications to: | ||||
Net other comprehensive income (loss) | (75) | (857) | (5,408) | (2,771) |
Ending balance | (5,190) | 751 | (5,190) | 751 |
Cash Flow Hedges | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassifications to: | ||||
Revenue | (431) | 92 | (509) | (102) |
Cost of sales | 606 | 104 | 710 | 185 |
Interest expense | 265 | (602) | 14 | (1,196) |
Foreign Currency Translation | ||||
Accumulated other comprehensive income (loss) | ||||
Beginning balance | (9,644) | (6,156) | (5,512) | (5,555) |
Other comprehensive income (loss) | 2,524 | 274 | (1,601) | (341) |
Income taxes | (3) | (16) | (10) | (2) |
Reclassifications to: | ||||
Net other comprehensive income (loss) | 2,521 | 258 | (1,611) | (343) |
Ending balance | $ (7,123) | $ (5,898) | $ (7,123) | $ (5,898) |