Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 24, 2023 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
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 value | |
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 | 57,750,462 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 58,673 | $ 58,408 |
Trade receivables - net of allowance for credit losses - 2023 - $8,721 and 2022 - $8,423 | 167,824 | 164,677 |
Other receivables | 13,576 | 12,992 |
Inventories | 303,923 | 265,991 |
Prepaid expenses and other current assets | 27,954 | 22,324 |
Prepaid income taxes | 3,936 | 3,913 |
Income tax refund receivables | 9,432 | 779 |
Total current assets | 585,318 | 529,084 |
Property and equipment: | ||
Land and land improvements | 26,017 | 25,940 |
Buildings | 190,825 | 189,148 |
Manufacturing equipment | 313,600 | 299,089 |
Furniture and fixtures | 66,451 | 61,128 |
Leasehold improvements | 53,208 | 49,673 |
Construction-in-progress | 60,492 | 61,269 |
Total property and equipment | 710,593 | 686,247 |
Less accumulated depreciation | (327,267) | (303,271) |
Property and equipment - net | 383,326 | 382,976 |
Other assets: | ||
Goodwill | 381,052 | 359,821 |
Deferred income tax assets | 6,438 | 6,599 |
Right-of-use operating lease assets | 63,633 | 65,262 |
Other assets | 48,545 | 44,352 |
Total other assets | 839,861 | 751,906 |
Total assets | 1,808,505 | 1,663,966 |
Current liabilities: | ||
Trade payables | 48,862 | 68,504 |
Accrued expenses | 119,291 | 123,189 |
Current portion of long-term debt | 3,750 | 11,250 |
Short-term operating lease liabilities | 11,688 | 11,005 |
Income taxes payable | 3,542 | 6,697 |
Total current liabilities | 187,133 | 220,645 |
Long-term debt | 282,370 | 186,759 |
Deferred income tax liabilities | 18,458 | 18,462 |
Long-term income taxes payable | 347 | 347 |
Liabilities related to unrecognized tax benefits | 1,912 | 1,912 |
Deferred compensation payable | 15,508 | 15,264 |
Deferred credits | 1,631 | 1,708 |
Long-term operating lease liabilities | 57,455 | 59,736 |
Other long-term obligations | 13,806 | 14,736 |
Total liabilities | 578,620 | 519,569 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock - 5,000 shares authorized as of September 30, 2023 and December 31, 2022; no shares issued | ||
Common stock, no par value; 100,000 shares authorized; issued and outstanding as of September 30, 2023 - 57,746 and December 31, 2022 - 57,306 | 695,181 | 675,174 |
Retained earnings | 547,555 | 480,773 |
Accumulated other comprehensive loss | (12,851) | (11,550) |
Total stockholders' equity | 1,229,885 | 1,144,397 |
Total liabilities and stockholders' equity | 1,808,505 | 1,663,966 |
Developed technology | ||
Other assets: | ||
Intangible assets | 296,349 | 237,522 |
Other | ||
Other assets: | ||
Intangible assets | $ 43,844 | $ 38,350 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Trade receivables, allowances | $ 8,721 | $ 8,423 |
Stockholders' equity: | ||
Preferred stock shares authorized (in shares) | 5,000 | 5,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock shares authorized (in shares) | 100,000 | 100,000 |
Common stock shares issued (in shares) | 57,746 | 57,306 |
Common stock shares outstanding (in shares) | 57,746 | 57,306 |
Developed technology | ||
Other assets: | ||
Intangibles, accumulated amortization | $ 308,889 | $ 274,570 |
Other | ||
Other assets: | ||
Intangibles, accumulated amortization | $ 76,909 | $ 69,780 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Net sales | $ 315,230 | $ 287,175 | $ 932,851 | $ 857,566 |
Cost of sales | 173,031 | 158,602 | 499,508 | 473,019 |
Gross profit | 142,199 | 128,573 | 433,343 | 384,547 |
Operating expenses: | ||||
Selling, general and administrative | 86,854 | 89,780 | 277,925 | 259,282 |
Research and development | 19,646 | 19,221 | 61,089 | 55,074 |
Impairment charges | 270 | 1,672 | ||
Contingent consideration expense | 562 | 915 | 2,177 | 4,702 |
Acquired in-process research and development | 1,550 | 6,671 | ||
Total operating expenses | 107,062 | 109,916 | 343,011 | 327,401 |
Income from operations | 35,137 | 18,657 | 90,332 | 57,146 |
Other income (expense): | ||||
Interest income | 181 | 116 | 533 | 316 |
Interest expense | (4,841) | (1,831) | (10,534) | (4,180) |
Other income (expense) - net | (255) | 660 | 291 | (808) |
Total other expense - net | (4,915) | (1,055) | (9,710) | (4,672) |
Income before income taxes | 30,222 | 17,602 | 80,622 | 52,474 |
Income tax expense | 4,388 | 2,330 | 13,840 | 11,359 |
Net income | $ 25,834 | $ 15,272 | $ 66,782 | $ 41,115 |
Earnings per common share | ||||
Basic (in dollars per share) | $ 0.45 | $ 0.27 | $ 1.16 | $ 0.73 |
Diluted (in dollars per share) | $ 0.44 | $ 0.27 | $ 1.14 | $ 0.71 |
Weighted average shares outstanding | ||||
Basic (in shares) | 57,682 | 56,835 | 57,525 | 56,707 |
Diluted (in shares) | 58,375 | 57,586 | 58,345 | 57,573 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 25,834 | $ 15,272 | $ 66,782 | $ 41,115 |
Other comprehensive income: | ||||
Cash flow hedges | (539) | 3,850 | 1,192 | 13,182 |
Income tax benefit (expense) | 129 | (942) | (286) | (3,226) |
Foreign currency translation adjustment | (2,914) | (9,003) | (2,190) | (18,775) |
Income tax benefit (expense) | 17 | 85 | (17) | 81 |
Total other comprehensive loss | (3,307) | (6,010) | (1,301) | (8,738) |
Total comprehensive income | $ 22,527 | $ 9,262 | $ 65,481 | $ 32,377 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total |
Beginning balance at Dec. 31, 2021 | $ 641,533 | $ 406,257 | $ (7,991) | $ 1,039,799 |
Beginning balance (in shares) at Dec. 31, 2021 | 56,570 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 10,545 | 10,545 | ||
Other comprehensive income (loss) | 1,338 | 1,338 | ||
Stock-based compensation expense | $ 4,212 | 4,212 | ||
Options exercised | $ 1,320 | 1,320 | ||
Options exercised (in shares) | 52 | |||
Issuance of common stock under Employee Stock Purchase Plan | $ 320 | 320 | ||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 5 | |||
Shares issued from time-vested restricted stock units (in shares) | 44 | |||
Shares surrendered in exchange for payment of payroll tax liabilities | $ (1,015) | (1,015) | ||
Shares surrendered in exchange for payment of payroll tax liabilities (in shares) | (16) | |||
Ending balance at Mar. 31, 2022 | $ 646,370 | 416,802 | (6,653) | 1,056,519 |
Ending balance (in shares) at Mar. 31, 2022 | 56,655 | |||
Beginning balance at Dec. 31, 2021 | $ 641,533 | 406,257 | (7,991) | 1,039,799 |
Beginning balance (in shares) at Dec. 31, 2021 | 56,570 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 41,115 | |||
Other comprehensive income (loss) | (8,738) | |||
Shares surrendered in exchange for exercise of stock options | (898) | |||
Ending balance at Sep. 30, 2022 | $ 658,198 | 447,372 | (16,729) | 1,088,841 |
Ending balance (in shares) at Sep. 30, 2022 | 56,918 | |||
Beginning balance at Mar. 31, 2022 | $ 646,370 | 416,802 | (6,653) | 1,056,519 |
Beginning balance (in shares) at Mar. 31, 2022 | 56,655 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 15,298 | 15,298 | ||
Other comprehensive income (loss) | (4,066) | (4,066) | ||
Stock-based compensation expense | $ 3,952 | 3,952 | ||
Options exercised | $ 1,303 | 1,303 | ||
Options exercised (in shares) | 58 | |||
Issuance of common stock under Employee Stock Purchase Plan | $ 301 | 301 | ||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 6 | |||
Shares issued from time-vested restricted stock units (in shares) | 26 | |||
Ending balance at Jun. 30, 2022 | $ 651,926 | 432,100 | (10,719) | 1,073,307 |
Ending balance (in shares) at Jun. 30, 2022 | 56,745 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 15,272 | 15,272 | ||
Other comprehensive income (loss) | (6,010) | (6,010) | ||
Stock-based compensation expense | $ 3,893 | 3,893 | ||
Options exercised | $ 4,141 | 4,141 | ||
Options exercised (in shares) | 201 | |||
Issuance of common stock under Employee Stock Purchase Plan | $ 246 | 246 | ||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 5 | |||
Shares surrendered in exchange for payment of payroll tax liabilities | $ (1,110) | (1,110) | ||
Shares surrendered in exchange for payment of payroll tax liabilities (in shares) | (18) | |||
Shares surrendered in exchange for exercise of stock options | $ (898) | (898) | ||
Shares surrendered in exchange for exercise of stock options (in shares) | (15) | |||
Ending balance at Sep. 30, 2022 | $ 658,198 | 447,372 | (16,729) | 1,088,841 |
Ending balance (in shares) at Sep. 30, 2022 | 56,918 | |||
Beginning balance at Dec. 31, 2022 | $ 675,174 | 480,773 | (11,550) | $ 1,144,397 |
Beginning balance (in shares) at Dec. 31, 2022 | 57,306 | 57,306 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 20,703 | $ 20,703 | ||
Other comprehensive income (loss) | 621 | 621 | ||
Stock-based compensation expense | $ 3,498 | 3,498 | ||
Options exercised | $ 3,726 | 3,726 | ||
Options exercised (in shares) | 123 | |||
Issuance of common stock under Employee Stock Purchase Plan | $ 302 | 302 | ||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 4 | |||
Shares issued from time-vested restricted stock units (in shares) | 61 | |||
Shares surrendered in exchange for payment of payroll tax liabilities | $ (1,592) | (1,592) | ||
Shares surrendered in exchange for payment of payroll tax liabilities (in shares) | (22) | |||
Ending balance at Mar. 31, 2023 | $ 681,108 | 501,476 | (10,929) | 1,171,655 |
Ending balance (in shares) at Mar. 31, 2023 | 57,472 | |||
Beginning balance at Dec. 31, 2022 | $ 675,174 | 480,773 | (11,550) | $ 1,144,397 |
Beginning balance (in shares) at Dec. 31, 2022 | 57,306 | 57,306 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | $ 66,782 | |||
Other comprehensive income (loss) | (1,301) | |||
Shares surrendered in exchange for exercise of stock options | (5,809) | |||
Ending balance at Sep. 30, 2023 | $ 695,181 | 547,555 | (12,851) | $ 1,229,885 |
Ending balance (in shares) at Sep. 30, 2023 | 57,746 | 57,746 | ||
Beginning balance at Mar. 31, 2023 | $ 681,108 | 501,476 | (10,929) | $ 1,171,655 |
Beginning balance (in shares) at Mar. 31, 2023 | 57,472 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 20,245 | 20,245 | ||
Other comprehensive income (loss) | 1,385 | 1,385 | ||
Stock-based compensation expense | $ 4,980 | 4,980 | ||
Options exercised | $ 5,154 | 5,154 | ||
Options exercised (in shares) | 128 | |||
Issuance of common stock under Employee Stock Purchase Plan | $ 281 | 281 | ||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 4 | |||
Shares issued from time-vested restricted stock units (in shares) | 30 | |||
Ending balance at Jun. 30, 2023 | $ 691,523 | 521,721 | (9,544) | 1,203,700 |
Ending balance (in shares) at Jun. 30, 2023 | 57,634 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 25,834 | 25,834 | ||
Other comprehensive income (loss) | (3,307) | (3,307) | ||
Stock-based compensation expense | $ 5,206 | 5,206 | ||
Options exercised | $ 7,555 | 7,555 | ||
Options exercised (in shares) | 247 | |||
Issuance of common stock under Employee Stock Purchase Plan | $ 237 | 237 | ||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 4 | |||
Shares surrendered in exchange for payment of payroll tax liabilities | $ (3,531) | (3,531) | ||
Shares surrendered in exchange for payment of payroll tax liabilities (in shares) | (53) | |||
Shares surrendered in exchange for exercise of stock options | $ (5,809) | (5,809) | ||
Shares surrendered in exchange for exercise of stock options (in shares) | (86) | |||
Ending balance at Sep. 30, 2023 | $ 695,181 | $ 547,555 | $ (12,851) | $ 1,229,885 |
Ending balance (in shares) at Sep. 30, 2023 | 57,746 | 57,746 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 66,782 | $ 41,115 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 66,359 | 61,312 |
Loss on disposition of business | 1,389 | |
Loss on sale or abandonment of property and equipment | 4,761 | 196 |
Write-off of certain intangible assets and other long-term assets | 461 | 1,733 |
Acquired in-process research and development | 1,550 | 6,671 |
Amortization of right-of-use operating lease assets | 8,621 | 7,819 |
Adjustments related to contingent consideration liabilities | 2,177 | 2,888 |
Amortization of deferred credits | (78) | (81) |
Amortization of long-term debt issuance costs | 744 | 453 |
Stock-based compensation expense | 15,346 | 13,691 |
Changes in operating assets and liabilities, net of acquisitions and divestitures: | ||
Trade receivables | (3,852) | (9,063) |
Other receivables | (1,040) | 5,669 |
Inventories | (34,426) | (30,735) |
Prepaid expenses and other current assets | (72) | (4,186) |
Prepaid income taxes | (24) | |
Income tax refund receivables | (8,682) | (1,713) |
Other assets | (719) | 1,848 |
Trade payables | (20,332) | 9,752 |
Accrued expenses | (599) | (8,861) |
Income taxes payable | (3,431) | (1,374) |
Deferred compensation payable | 245 | (3,325) |
Operating lease liabilities | (8,573) | (8,406) |
Other long-term obligations | (2,318) | (509) |
Total adjustments | 16,118 | 45,168 |
Net cash, cash equivalents, and restricted cash provided by operating activities | 82,900 | 86,283 |
Capital expenditures for: | ||
Property and equipment | (27,151) | (32,539) |
Intangible assets | (1,756) | (1,909) |
Proceeds from the sale of property and equipment | 181 | 63 |
Payments from disposition of business | (971) | |
Cash paid in acquisitions, net of cash acquired | (138,278) | (4,712) |
Net cash, cash equivalents, and restricted cash used in investing activities | (167,004) | (40,068) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock | 11,446 | 6,733 |
Proceeds from issuance of long-term debt | 480,499 | 172,336 |
Payments on long-term debt | (391,624) | (198,593) |
Long-term debt issuance costs | (5,240) | |
Contingent payments related to acquisitions | (3,502) | (32,862) |
Payment of taxes related to an exchange of common stock | (5,123) | (2,125) |
Net cash, cash equivalents, and restricted cash provided by (used in) financing activities | 86,456 | (54,511) |
Effect of exchange rates on cash, cash equivalents, and restricted cash | (2,181) | (5,862) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 171 | (14,158) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH: | ||
Beginning of period | 60,558 | 67,750 |
End of period | 60,729 | 53,592 |
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS: | ||
Cash and cash equivalents | 58,673 | 51,481 |
Restricted cash reported in prepaid expenses and other current assets | $ 2,056 | $ 2,111 |
Restricted Cash and Cash Equivalents, Current, Statement of Financial Position [Extensible Enumeration] | Prepaid Expense and Other Assets, Current | Prepaid Expense and Other Assets, Current |
Total cash, cash equivalents and restricted cash | $ 60,729 | $ 53,592 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Interest (net of capitalized interest of $941 and $565, respectively) | 9,572 | 4,087 |
Income taxes | 24,875 | 14,013 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Property and equipment purchases in accounts payable | 4,613 | 1,899 |
Acquisition purchases in accrued expenses and other long-term obligations | 3,674 | 4,526 |
Merit common stock surrendered (86 and 15 shares, respectively) in exchange for exercise of stock options | 5,809 | 898 |
Right-of-use operating lease assets obtained in exchange for operating lease liabilities | $ 7,560 | $ 8,948 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Cash Flows [Abstract] | ||
Net capitalized interest | $ 941 | $ 565 |
Common stock surrendered in exchange for exercise of stock options (in shares) | 86 | 15 |
Basis of Presentation and Other
Basis of Presentation and Other Items | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Other Items | 1. Basis of Presentation and Other Items. |
Recently Adopted Financial Acco
Recently Adopted Financial Accounting Standards | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Recently Adopted Financial Accounting Standards | 2. Recently Adopted Financial Accounting Standards. In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides temporary optional expedients and exceptions in accounting for modifications of contracts that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform. Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls “reference rate reform” if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Also, entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain criteria are met. In December 2022, the FASB issued ASU 2022-06, Deferral of the Sunset Date of Topic 848 , which defers the sunset date of the guidance in ASC 848 to December 31, 2024. During the quarter ended June 30, 2023, we transitioned our interest rate swap agreement to reference the Secured Overnight Financing Rate (“SOFR”) in connection with reference rate reform and adopted certain optional expedients provided in ASU 2020-04 in relation to contract modifications and hedge accounting that allowed us to continue hedge accounting for our interest rate swap cash flow hedges (see Note 9). The adoption of this guidance did not have a material impact on our consolidated financial statements. Recently Issued Accounting Standards. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2023 | |
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 1 to our consolidated financial statements in Item 8 of the 2022 Annual Report on Form 10-K. Disaggregation of Revenue Our revenue is disaggregated based on reporting segment, product category and geographical region. 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 original equipment manufacturer (“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 nine-month periods ended September 30, 2023 and 2022 (in thousands): Three Months Ended Three Months Ended September 30, 2023 September 30, 2022 United States International Total United States International Total Cardiovascular Peripheral Intervention $ 78,617 $ 49,768 $ 128,385 $ 67,200 $ 43,498 $ 110,698 Cardiac Intervention 36,593 52,513 89,106 33,194 53,654 86,848 Custom Procedural Solutions 29,602 19,022 48,624 27,078 18,614 45,692 OEM 34,207 5,762 39,969 29,425 6,286 35,711 Total 179,019 127,065 306,084 156,897 122,052 278,949 Endoscopy Endoscopy Devices 8,486 660 9,146 7,674 552 8,226 Total $ 187,505 $ 127,725 $ 315,230 $ 164,571 $ 122,604 $ 287,175 Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 United States International Total United States International Total Cardiovascular Peripheral Intervention $ 219,257 $ 148,820 $ 368,077 $ 195,095 $ 132,331 $ 327,426 Cardiac Intervention 106,588 161,621 268,209 95,652 162,257 257,909 Custom Procedural Solutions 85,556 60,153 145,709 80,951 60,096 141,047 OEM 101,341 21,999 123,340 87,269 18,904 106,173 Total 512,742 392,593 905,335 458,967 373,588 832,555 Endoscopy Endoscopy Devices 25,705 1,811 27,516 23,270 1,741 25,011 Total $ 538,447 $ 394,404 $ 932,851 $ 482,237 $ 375,329 $ 857,566 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2023 | |
Business Combinations [Abstract] | |
Acquisitions | 4. Acquisitions. On June 8, 2023, we entered into an asset purchase agreement with AngioDynamics, Inc. (“AngioDynamics”) to acquire the assets associated with a portfolio of dialysis catheter products and the BioSentry® Biopsy Tract Sealant System for a purchase price of $100 million. We accounted for this acquisition as a business combination. The sales related to the acquisition have been included in our cardiovascular segment since the acquisition date and were approximately $7.3 and $8.3 million for the three and nine-month periods ended September 30, 2023, respectively. It is not practical to separately report earnings related to the acquisition, as we cannot split out sales costs related solely to the products acquired, principally because our sales representatives sell multiple products within our cardiovascular business segment. Acquisition-related costs associated with the AngioDynamics acquisition, which are included in selling, general and administrative expenses in the accompanying consolidated statements of income, were approximately $0.1 million and $4.9 million for the three and nine-month periods ended September 30, 2023, respectively. The purchase price was preliminarily allocated as follows (in thousands): Assets Acquired Prepaid expenses $ 2,000 Inventories 5,254 Property and equipment 108 Intangible assets Developed technology 65,200 Trademarks 4,000 Customer list 5,800 Goodwill 17,638 Total net assets acquired $ 100,000 We are amortizing the AngioDynamics developed technology intangible assets over nine years, the trademark intangible assets over 11 years, and the customer list intangible asset on an accelerated basis over ten years. We have estimated the weighted average life of the intangible assets acquired from AngioDynamics to be 10.5 years. impracticable to obtain information to determine earnings associated with the acquired product lines which represent only a small portion of the product lines of a large, consolidated company without standalone financial information. On May 4, 2023, we entered into an asset purchase agreement to acquire the assets associated with the Surfacer® Inside-Out® Access Catheter System from Bluegrass Vascular Technologies, Inc. (“Bluegrass”), for a purchase price of $32.7 million. Prior to the acquisition, we held an equity investment of 1,251,878 Bluegrass common shares representing approximately 19.5% ownership in Bluegrass. The fair value of this previously-held equity investment of approximately $245,000 is included in the purchase price allocation. 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 Bluegrass acquisition, which were included in selling, general and administrative expenses in the accompanying consolidated statements of income, were not material. The purchase price was preliminarily allocated as follows (in thousands): Assets Acquired Inventories $ 175 Intangible assets Developed technology 28,000 Trademarks 900 Goodwill 3,898 Total net assets acquired $ 32,973 We are amortizing the Bluegrass developed technology intangible asset over 15 years and the related trademarks over 13 years. We have estimated the weighted average life of the intangible assets acquired from Bluegrass to be 14.9 years. On May 1, 2023, we entered into an asset purchase agreement to acquire certain assets from Advanced Radiation Therapy, LLC (“ART”), related to intellectual property rights for soft tissue markers. The total purchase price of the ART assets included an up-front payment of $750,000, a deferred payment of $750,000 payable upon the first to occur of (1) shipment and installation of two commercial production winders used to manufacture the product or (2) 30 days after delivery of the winders to Merit, and, a deferred payment of $500,000 payable upon regulatory approval from the U.S. Food and Drug Administration for Merit to commence commercialization, marketing and sale of the product in the United States. We have accounted for this transaction as an asset purchase and recorded $1.5 million of acquired in-process research and development expense associated with the upfront payment and completion of the milestone related to the installation of the commercial production winders. The payments are reported within operating expenses because the technological feasibility of the underlying research and development project has not yet been reached and such technology has no identified future alternative use as of the date of acquisition. We entered into a stock purchase agreement on January 11, 2023, and an exclusive distribution agreement on April 5, 2023, with Solo Pace Inc. ("Solo Pace”), owner and developer of a temporary external pulse generator and grounding pad with associated remote control module. Pursuant to these agreements, we paid $4.0 million to acquire (a) shares of Series Seed-1 Preferred Stock of Solo Pace, (b) an option to purchase the outstanding equity of Solo Pace within the earlier of five years after product commercialization or within 120 days after the twelve-month period wherein sales of the Solo Pace product exceed $6.0 million, and (c) exclusive rights to distribute the Solo Pace product upon commercialization. The shares of Solo Pace stock have been reflected within other assets in the accompanying consolidated balance sheets. Our investment in Solo Pace represents an ownership of approximately 19% of its outstanding capital stock and has been recorded as an equity investment accounted for at cost because the equity interest does not have a readily determinable fair value and because we are not able to exercise significant influence over the operations of Solo Pace. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. Inventories. Inventories at September 30, 2023 and December 31, 2022 consisted of the following (in thousands): September 30, 2023 December 31, 2022 Finished goods $ 156,074 $ 147,051 Work-in-process 34,092 29,534 Raw materials 113,757 89,406 Total inventories $ 303,923 $ 265,991 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 6. Goodwill and Intangible Assets. The change in the carrying amount of goodwill for the nine-month period ended September 30, 2023 is detailed as follows (in thousands): 2023 Goodwill balance at January 1 $ 359,821 Effect of foreign exchange (305) Additions and adjustments as the result of acquisitions 21,536 Goodwill balance at September 30 $ 381,052 Total accumulated goodwill impairment losses aggregated $8.3 million as of September 30, 2023 and December 31, 2022, respectively. We did not have any goodwill impairments for the nine-month periods ended September 30, 2023 or 2022. The total goodwill balances as of September 30, 2023 and December 31, 2022 were related to our cardiovascular segment. Other intangible assets at September 30, 2023 and December 31, 2022 consisted of the following (in thousands): September 30, 2023 Gross Carrying Accumulated Net Carrying Amount Amortization Amount Patents $ 30,969 $ (12,657) $ 18,312 Distribution agreements 3,250 (2,868) 382 License agreements 11,128 (8,076) 3,052 Trademarks 35,119 (19,998) 15,121 Customer lists 40,287 (33,310) 6,977 Total $ 120,753 $ (76,909) $ 43,844 December 31, 2022 Gross Carrying Accumulated Net Carrying Amount Amortization Amount Patents $ 29,445 $ (10,203) $ 19,242 Distribution agreements 3,250 (2,715) 535 License agreements 11,109 (7,250) 3,859 Trademarks 30,221 (17,863) 12,358 Customer lists 34,105 (31,749) 2,356 Total $ 108,130 $ (69,780) $ 38,350 Aggregate amortization expense for the three and nine-month periods ended September 30, 2023 was $15.4 million and $41.1 million, respectively. Aggregate amortization expense for the three and nine-month periods ended September 30, 2022 was $12.1 million and $36.3 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 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. For the nine-month period ended September 30, 2022, 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 divestiture of the STD Pharmaceutical Products Limited (“STD Pharmaceutical”) business acquired in our August 2019 acquisition of Fibrovein Holdings Limited. On April 30, 2022, we completed the divestiture of Fibrovein Holdings Limited, in exchange for the termination of our obligations arising from the acquisition and the purchaser’s agreement to make potential future payments upon a qualifying disposition of the STD Pharmaceutical business. We recorded an impairment charge for the carrying value of $1.7 million of intangible assets during the nine months ended September 30, 2022 , all of which pertained to our cardiovascular segment. Estimated amortization expense for developed technology and other intangible assets for the next five years consisted of the following as of September 30, 2023 (in thousands): Estimated Amortization Expense Remaining 2023 $ 15,764 2024 59,656 2025 57,661 2026 46,955 2027 43,774 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes. The Organization for Economic Cooperation and Development (“OECD”) Pillar 2 global minimum tax rules, which generally provide for a minimum effective tax rate of 15%, are intended to apply for tax years beginning in 2024. On February 2, 2023, the OECD issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar 2 global minimum tax. Under a transitional safe harbor released July 17, 2023, the undertaxed profits rule top-up tax in the jurisdiction of a company's ultimate parent entity will be zero for each fiscal year of the transition period, if that jurisdiction has a corporate tax rate of at least 20%. The safe harbor transition period will apply to fiscal years beginning on or before December 31, 2025 and ending before December 31, 2026. We are closely monitoring developments and evaluating the impact these new rules are anticipated to have on our tax rate, including eligibility to qualify for these safe harbor rules. |
Revolving Credit Facility and L
Revolving Credit Facility and Long-Term Debt | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023 and December 31, 2022 consisted of the following (in thousands): September 30, 2023 December 31, 2022 Term loans $ 149,063 $ 124,688 Revolving credit loans 138,000 73,500 Less unamortized debt issuance costs (943) (179) Total long-term debt 286,120 198,009 Less current portion 3,750 11,250 Long-term portion $ 282,370 $ 186,759 On June 6, 2023, we entered into a Fourth Amended and Restated Credit Agreement (the "Fourth Amended Credit Agreement"). The Fourth Amended Credit Agreement is a syndicated loan agreement with Wells Fargo Bank, National Association and other parties. The Fourth Amended Credit Agreement amended and restated in its entirety our previously outstanding Third Amended and Restated Credit Agreement and all amendments thereto. The Fourth Amended Credit Agreement provides for a term loan of $150 million and a revolving credit commitment of up to an aggregate amount of $700 million, inclusive of sub-facilities for multicurrency borrowings, standby letters of credit and swingline loans. On June 6, 2028, all principal, interest and other amounts outstanding under the Fourth 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. Term loans made under the Fourth Amended Credit Agreement bear interest, at our election, at either (i) the Base Rate (as defined in the Fourth Amended Credit Agreement) plus the Applicable Margin (as defined in the Fourth Amended Credit Agreement) or, (ii) Adjusted Term SOFR (as defined in the Fourth Amended Credit Agreement) plus the Applicable Margin (as defined in the Fourth Amended Credit Agreement). Revolving credit loans bear interest, at our election, at either (a) the Base Rate plus the Applicable Margin, (b) Adjusted Term SOFR plus the Applicable Margin, (c) Adjusted Eurocurrency Rate plus the Applicable Margin or (d) Adjusted Daily Simple SONIA (as defined in the Fourth Amended Credit Agreement) plus the Applicable Margin. Swingline loans bear interest at the Base Rate plus the Applicable Margin. Interest on each loan featuring the Base Rate and each Daily Simple SONIA Loan is due and payable on the last business day of each calendar month; interest on each loan featuring the Eurocurrency Rate and each Term SOFR 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 Fourth Amended Credit Agreement is collateralized by substantially all our assets. The Fourth 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 Fourth 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 (1) Maximum Consolidated Total Net Leverage Ratio (as defined in the Fourth Amended Credit Agreement) as of any fiscal quarter end. (2) Minimum ratio of Consolidated EBITDA (as defined in the Fourth Amended Credit Agreement and adjusted for certain expenditures) to Consolidated Interest Expense (as defined in the Fourth Amended Credit Agreement) for any period of four consecutive fiscal quarters. We believe we were in compliance with all covenants set forth in the Fourth Amended Credit Agreement as of September 30, 2023. As of September 30, 2023, we had outstanding borrowings of $287.1 million and issued letter of credit guarantees of $3.8 million under the Fourth Amended Credit Agreement, with additional available borrowings of approximately $558 million, based on the maximum net leverage ratio and the aggregate revolving credit commitment pursuant to the Fourth Amended Credit Agreement. Our interest rate as of September 30, 2023 was a fixed rate of 2.89% with respect to $75 million of the principal amount, as a result of an interest rate swap (see Note 9), and a variable floating rate of 6.67% with respect to $212.1 million of the principal amount. Our interest rate as of December 31, 2022 was a fixed rate of 2.71% on $75 million as a result of an interest rate swap and a variable floating rate of 5.38% on $123.2 million. The foregoing fixed rates do not reflect potential future changes in the applicable margin. Future minimum principal payments on our long-term debt, as of September 30, 2023, were as follows (in thousands): Years Ending Future Minimum December 31, Principal Payments Remaining 2023 $ 938 2024 3,750 2025 5,625 2026 7,500 2027 9,375 2028 259,875 Total future minimum principal payments $ 287,063 |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2023 | |
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 treatment 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 derivative instruments 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 December 23, 2019, we entered into a pay-fixed, receive-variable interest rate swap with a notional amount of $75 million with Wells Fargo. In June 2023, certain terms under the agreement were amended to reflect the transition from LIBOR to SOFR, an alternative reference rate. Under the interest rate swap agreement we fixed the one-month On September 30, 2023 and December 31, 2022, our interest rate swap qualified as a cash flow hedge. The fair value of our interest rate swap as of September 30, 2023 was an asset of $2.3 million, which was partially offset by $0.6 million in deferred taxes. The fair value of our interest rate swap as of December 31, 2022 was an asset of $3.4 million, partially offset by $0.8 million 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 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 foreign currencies. We enter into approximately 100 cash flow foreign currency hedges every month. As of September 30, 2023 and December 31, 2022, we had entered into foreign currency forward contracts, which qualified as cash flow hedges, with aggregate notional amounts of $155.7 million and $87.8 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 50 foreign currency fair value hedges every month. As of September 30, 2023 and December 31, 2022, we had entered into foreign currency forward contracts related to those balance sheet accounts with aggregate notional amounts of $96.0 million and $92.4 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 of Derivative Instruments Designated as Hedging Instruments Balance Sheet Location September 30, 2023 December 31, 2022 Assets Interest rate swaps Prepaid expenses and other assets $ 2,320 $ — Interest rate swaps Other assets (long-term) — 3,444 Foreign currency forward contracts Prepaid expenses and other assets 3,463 3,215 Foreign currency forward contracts Other assets (long-term) 698 56 (Liabilities) Foreign currency forward contracts Accrued expenses (845) (1,509) Foreign currency forward contracts Other long-term obligations (238) (531) Fair Value of Derivative Instruments Not Designated as Hedging Instruments Balance Sheet Location September 30, 2023 December 31, 2022 Assets Foreign currency forward contracts Prepaid expenses and other assets $ 1,874 $ 1,512 (Liabilities) Foreign currency forward contracts Accrued expenses (1,897) (1,946) 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 Reclassified from AOCI Three Months Ended September 30, Three Months Ended September 30, Three Months Ended September 30, Derivative instrument 2023 2022 Location in statements of income 2023 2022 2023 2022 Interest rate swaps $ 126 $ 1,504 Interest expense $ (4,841) $ (1,831) $ 685 $ 94 Foreign currency forward contracts 1,503 3,491 Revenue 315,230 287,175 866 1,491 Cost of sales (173,031) (158,602) 617 (440) Amount of Gain/(Loss) Consolidated Statements Amount of Gain/(Loss) Recognized in OCI of Income Reclassified from AOCI Nine Months Ended September 30, Nine Months Ended September 30, Nine Months Ended September 30, Derivative instrument 2023 2022 Location in statements of income 2023 2022 2023 2022 Interest rate swaps $ 726 $ 4,507 Interest expense $ (10,534) $ (4,180) $ 1,850 $ (379) Foreign currency forward contracts 6,067 8,713 Revenue 932,851 857,566 2,851 1,303 Cost of sales (499,508) (473,019) 900 (886) As of September 30, 2023, $4.0 million, or $3.0 million after taxes, was expected to be reclassified from AOCI to earnings in revenue and cost of sales over the succeeding twelve months. As of September 30, 2023, $2.3 million, or $1.8 million after taxes, was expected to be reclassified from AOCI to earnings in interest expense over the succeeding twelve months. Derivative Instruments Not Designated as Hedging Instruments The following gains/(losses) from these derivative instruments were recognized in our consolidated statements of income for the periods presented (in thousands): Three Months Ended September 30, Nine Months Ended September 30, Derivative Instrument Location in statements of income 2023 2022 2023 2022 Foreign currency forward contracts Other income (expense) — net $ (452) $ 1,034 $ 2,748 $ 1,212 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies. Litigation. SEC Inquiry We have received requests from the Division of Enforcement of the U.S. Securities and Exchange Commission (“SEC”) seeking the voluntary production of information relating to the business activities of Merit’s subsidiary in China, including interactions with hospitals and health care officials in China. We are cooperating with the requests and investigating the matter and, at this time, are unable to predict the scope, timing, significance or outcome of this matter. It is possible that the ultimate resolution of the foregoing matter, or 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 Per Common Share (EPS)
Earnings Per Common Share (EPS) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share (EPS) | 11. Earnings Per Common Share (EPS). The computation of weighted average shares outstanding and the basic and diluted earnings per common share for the three and nine-month periods ended September 30, 2023 and 2022 consisted of the following (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Net income $ 25,834 $ 15,272 $ 66,782 $ 41,115 Average common shares outstanding 57,682 56,835 57,525 56,707 Basic EPS $ 0.45 $ 0.27 $ 1.16 $ 0.73 Average common shares outstanding 57,682 56,835 57,525 56,707 Effect of dilutive stock awards 693 751 820 866 Total potential shares outstanding 58,375 57,586 58,345 57,573 Diluted EPS $ 0.44 $ 0.27 $ 1.14 $ 0.71 Equity awards excluded as the impact was anti-dilutive (1) 1,242 1,641 1,091 1,612 (1) Does not reflect the impact of incremental repurchases under the treasury stock method. |
Stock-Based Compensation Expens
Stock-Based Compensation Expense | 9 Months Ended |
Sep. 30, 2023 | |
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 nine-month periods ended September 30, 2023 and 2022 consisted of the following (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Cost of sales Nonqualified stock options $ 367 $ 150 $ 1,240 $ 1,247 Research and development Nonqualified stock options 488 476 1,329 1,412 Selling, general and administrative Nonqualified stock options 2,083 2,166 5,304 5,297 Performance-based restricted stock units 1,838 647 4,470 2,719 Restricted stock units 430 454 1,341 1,382 Cash-settled performance-based share-based awards ("Liability Awards") 591 705 1,662 1,634 Total selling, general and administrative 4,942 3,972 12,777 11,032 Stock-based compensation expense before taxes $ 5,797 $ 4,598 $ 15,346 $ 13,691 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. Nonqualified Stock Options During the nine-month periods ended September 30, 2023 and 2022, we granted stock options representing 401,535 and 203,606 shares of our common stock, respectively. We use the Black-Scholes methodology to value the stock-based compensation expense for options. In applying the Black-Scholes methodology to the option grants, the fair value of our stock-based awards granted was estimated using the following assumptions for the periods indicated below: Nine Months Ended September 30, 2023 2022 Risk-free interest rate 3.6% - 4.6% 1.4% - 3.4% Expected option term 4.0 years 4.0 years Expected dividend yield — — Expected price volatility 44.6% - 47.1% 46.2% - 47.4% 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 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. As of September 30, 2023, the total remaining unrecognized compensation cost related to non-vested stock options was $22.5 million, which was expected to be recognized over a weighted average period of 2.3 years. Stock-Settled Performance-Based Restricted Stock Units (“Performance Stock Units”) During the nine-month periods ended September 30, 2023 and 2022, we granted performance stock units which represent up to 286,863 and 120,710 shares of our common stock, respectively. Conversion of the performance stock units occurs at the end of the relevant performance periods, or one year after the agreement date, whichever is later. The number of shares delivered upon vesting at the end of the performance periods are based upon performance against specified financial performance metrics and relative total shareholder return as compared to the Russell 2000 Index (“rTSR”), as defined in the award agreements. 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: Nine Months Ended September 30, 2023 2022 Risk-free interest rate 3.9% - 4.6% 1.6% - 2.7% Performance period 2.8 years 2.6 - 2.8 years Expected dividend yield — — Expected price volatility 31.4% - 32.6% 38.5% - 46.2% The risk-free interest rate of return was determined using the U.S. Treasury rate at the time of grant with a term equal to the expected term of the award. The expected volatility was based on the weighted average volatility of our stock price and the average volatility of our compensation peer group's stock price. 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 metrics. Each reporting period, this probability assessment is updated, and cumulative adjustments are recorded based on the financial performance metrics expected to be achieved. At the end of the performance period, cumulative expense is calculated based on the actual performance metrics achieved. As of September 30, 2023, the total remaining unrecognized compensation cost related to stock-settled performance stock units was $12.3 million, which is expected to be recognized over a weighted average period of 2.0 years. Liability Awards During the nine-month periods ended September 30, 2023 and 2022, we granted liability awards to our Chief Executive Officer with total target cash incentives in the amount of $1.3 million and $1.0 million, respectively. These awards entitle him to a target cash payment based upon our relative shareholder return as compared to the rTSR and achievement of specified performance metrics, as defined in the award agreements. During the nine-month period ended September 30, 2023, we granted additional performance stock units to certain employees that provide for settlement in cash upon our achievement of specified financial metrics. The cash payable upon vesting at the end of the service period is based upon performance against specified financial performance metrics and relative total shareholder return as compared to the rTSR, as defined in the award agreements. Compensation expense is recognized for the cash payment probable of being awarded based on the performance metrics. The fair value of these liability awards is measured at each reporting period until the awards are settled. These awards are classified as liabilities and reported in accrued expenses and other long-term obligations within our consolidated balance sheet. As of September 30, 2023, the total remaining unrecognized compensation cost related to cash-settled performance-based share-based awards was $3.6 million, which is expected to be recognized over a weighted average period of 2.0 years. Restricted Stock Units During the nine-month periods ended September 30, 2023 and 2022, we granted restricted stock units to our non-employee directors representing 20,358 and 30,500 shares of our common stock, respectively. 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 granted to each director are subject to such director’s continued service through the vesting date, which is one year from the date of grant. As of September 30, 2023, the total remaining unrecognized compensation cost related to restricted stock units was $1.1 million, which will be recognized over the remaining vesting period. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2023 | |
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 income from operations. Financial information relating to our reportable operating segments and reconciliations to the consolidated totals for the three and nine-month periods ended September 30, 2023 and 2022, were as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Net sales Cardiovascular $ 306,084 $ 278,949 $ 905,335 $ 832,555 Endoscopy 9,146 8,226 27,516 25,011 Total net sales 315,230 287,175 932,851 857,566 Income from operations Cardiovascular 32,622 17,435 82,966 51,836 Endoscopy 2,515 1,222 7,366 5,310 Total income from operations 35,137 18,657 90,332 57,146 Total other expense — net (4,915) (1,055) (9,710) (4,672) Income tax expense 4,388 2,330 13,840 11,359 Net income $ 25,834 $ 15,272 $ 66,782 $ 41,115 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023 and December 31, 2022 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 September 30, 2023 (Level 1) (Level 2) (Level 3) Marketable securities (1) $ 73 $ 73 $ — $ — Interest rate contract asset, current (2) $ 2,320 $ — $ 2,320 $ — Foreign currency contract assets, current and long-term (3) $ 6,035 $ — $ 6,035 $ — Foreign currency contract liabilities, current and long-term (4) $ (2,980) $ — $ (2,980) $ — Contingent consideration liabilities $ (4,022) $ — $ — $ (4,022) Fair Value Measurements Using Total Fair Quoted prices in Significant other Significant Value at active markets observable inputs unobservable inputs December 31, 2022 (Level 1) (Level 2) (Level 3) Marketable securities (1) $ 138 $ 138 $ — — Interest rate contract asset, long-term (2) $ 3,444 $ — $ 3,444 $ — Foreign currency contract assets, current and long-term (3) $ 4,783 $ — $ 4,783 $ — Foreign currency contract liabilities, current and long-term (4) $ (3,986) $ — $ (3,986) $ — Contingent consideration liabilities $ (18,073) $ — $ — $ (18,073) (1) Our marketable securities, which consist entirely of available-for-sale equity securities, are valued using market prices in active markets. Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. (2) The fair value of the interest rate contract is determined using Level 2 fair value inputs and is reported within prepaid expenses and other current assets as of September 30, 2023 and other long-term assets as of December 31, 2022 in the consolidated balance sheets. (3) 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. (4) 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 past 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 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 nine-month periods ended September 30, 2023 and 2022 consisted of the following (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Beginning balance $ 3,581 $ 17,426 $ 18,073 $ 48,234 Contingent consideration expense 563 915 2,177 4,702 Contingent payments made (122) (91) (16,228) (34,676) Effect of foreign exchange — — — (10) Ending balance $ 4,022 $ 18,250 $ 4,022 $ 18,250 As of September 30, 2023, $3.6 million in contingent consideration liability was included in other long-term obligations and $0.4 million in contingent consideration liability was included in accrued expenses in our consolidated balance sheet. As of December 31, 2022, $2.3 million in contingent consideration liability was included in other long-term obligations and $15.8 million in contingent consideration liability was included in accrued expenses in our consolidated balance sheet. Payments related to the settlement of the contingent consideration liability recognized at fair value as of the applicable acquisition date of $3.5 million and $32.9 million for the nine-month periods ended September 30, 2023 and 2022, respectively, have been reflected as a cash outflow from financing activities in the accompanying consolidated statements of cash flows. Payments related to increases in the contingent consideration liability subsequent to the date of acquisition of $12.7 million and $1.8 million for the nine-month period ended September 30, 2023 and 2022, respectively, are reflected as operating cash flows. The recurring Level 3 measurement of our contingent consideration liabilities included the following significant unobservable inputs at September 30, 2023 and December 31, 2022 (amounts in thousands): Fair value at September 30, Valuation Weighted Contingent consideration liability 2023 technique Unobservable inputs Range Average (1) Revenue-based royalty payments contingent liability $ 3,534 Discounted cash flow Discount rate 12% - 16% 14.9% Projected year of payments 2023-2034 2028 Revenue milestones contingent liability $ 88 Monte Carlo simulation Discount rate 13.0% Projected year of payments 2023-2039 2039 Regulatory approval contingent liability $ 400 Scenario-based method Discount rate 5.7% Probability of milestone payment 50.0% Projected year of payment 2023-2030 2030 Fair value at December 31, Valuation Weighted Contingent consideration liability 2022 technique Unobservable inputs Range Average (1) Revenue-based royalty payments contingent liability $ 2,097 Discounted cash flow Discount rate 14% - 17% 15.7% Projected year of payments 2023-2034 2026 Revenue milestones contingent liability $ 13,064 Monte Carlo simulation Discount rate 5.1% - 14.0% 5.2% Projected year of payments 2023-2033 2023 Regulatory approval contingent liability $ 2,912 Scenario-based method Discount rate 5.7% Probability of milestone payment 90% Projected year of payment 2023-2030 2024 (1) Unobservable inputs were weighted by the relative fair value of the instruments. No weighted average is reported for contingent consideration liabilities without a range of unobservable inputs. 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 As a former shareholder of Cianna Medical Inc. (“Cianna Medical”), a former Merit director was eligible for payments for the achievement of sales milestones specified in our merger agreement with Cianna Medical completed 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 Merit director. During the nine-month period ended September 30, 2023, we made the final contingent payment to Cianna Medical shareholders, including $0.9 million paid to the former Merit director who is a former Cianna Medical shareholder. During the nine-month period ended September 30, 2022, we made aggregate contingent payments of $1.6 million to the former Merit director as a former shareholder of Cianna Medical. Fair Value of Other Assets (Liabilities) 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. 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 company in which we have invested. 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. Impairment 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, equity investments, intangible assets and goodwill in connection with impairment evaluations. Such assets are reported at carrying value and are not subject to recurring fair value measurements. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Fair value is generally determined based on discounted future cash flow. All our nonrecurring valuations use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy. Equity Investments. Intangible Assets. September 30, 2022 Current Expected Credit Losses Our outstanding long-term notes receivable, including accrued interest and an allowance for current expected credit losses, were $2.4 million and $2.4 million as of September 30, 2023 and December 31, 2022, respectively. As of September 30, 2023 and December 31, 2022, we had an allowance for current expected credit losses of $328,000 and $281,000, respectively, associated with these notes receivable. 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, and other security specific factors. The table below presents a rollforward of the allowance for current expected credit losses on our notes receivable for the three and nine-month periods ended September 30, 2023 and 2022 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Beginning balance $ 296 $ 192 $ 281 $ 199 Provision for credit loss expense 32 (6) 47 (13) Ending balance $ 328 $ 186 $ 328 $ 186 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2023 | |
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 July 1, 2023 $ 5,682 $ (15,226) $ (9,544) Other comprehensive income (loss) 1,629 (2,914) (1,285) Income taxes 129 17 146 Reclassifications to: Revenue (866) (866) Cost of sales (617) (617) Interest expense (685) (685) Net other comprehensive loss (410) (2,897) (3,307) Balance as of September 30, 2023 $ 5,272 $ (18,123) $ (12,851) Cash Flow Hedges Foreign Currency Translation Total Balance as of July 1, 2022 $ 4,584 $ (15,303) $ (10,719) Other comprehensive income (loss) 4,995 (9,003) (4,008) Income taxes (942) 85 (857) Reclassifications to: Revenue (1,491) (1,491) Cost of sales 440 440 Interest expense (94) (94) Net other comprehensive income (loss) 2,908 (8,918) (6,010) Balance as of September 30, 2022 $ 7,492 $ (24,221) $ (16,729) Cash Flow Hedges Foreign Currency Translation Total Balance as of January 1, 2023 $ 4,366 $ (15,916) $ (11,550) Other comprehensive income (loss) 6,793 (2,190) 4,603 Income taxes (286) (17) (303) Reclassifications to: Revenue (2,851) (2,851) Cost of sales (900) (900) Interest expense (1,850) (1,850) Net other comprehensive income (loss) 906 (2,207) (1,301) Balance as of September 30, 2023 $ 5,272 $ (18,123) $ (12,851) Cash Flow Hedges Foreign Currency Translation Total Balance as of January 1, 2022 $ (2,464) $ (5,527) $ (7,991) Other comprehensive income (loss) 13,220 (17,739) (4,519) Income taxes (3,226) 81 (3,145) Reclassifications to: Revenue (1,303) (1,303) Cost of sales 886 886 Interest expense 379 379 Other expense - net (1,036) (1,036) Net other comprehensive income (loss) 9,956 (18,694) (8,738) Balance as of September 30, 2022 $ 7,492 $ (24,221) $ (16,729) |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Other Items | 1. Basis of Presentation and Other Items. |
Recently Adopted Financial Accounting Standards | Recently Issued Accounting Standards. |
Revenue from Contracts with Customers | 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 1 to our consolidated financial statements in Item 8 of the 2022 Annual Report on Form 10-K. |
Derivatives | Derivatives. General. We formally document, designate and assess the effectiveness of transactions that receive hedge accounting treatment 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 derivative instruments 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 December 23, 2019, we entered into a pay-fixed, receive-variable interest rate swap with a notional amount of $75 million with Wells Fargo. In June 2023, certain terms under the agreement were amended to reflect the transition from LIBOR to SOFR, an alternative reference rate. Under the interest rate swap agreement we fixed the one-month On September 30, 2023 and December 31, 2022, our interest rate swap qualified as a cash flow hedge. The fair value of our interest rate swap as of September 30, 2023 was an asset of $2.3 million, which was partially offset by $0.6 million in deferred taxes. The fair value of our interest rate swap as of December 31, 2022 was an asset of $3.4 million, partially offset by $0.8 million 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 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 foreign currencies. Derivative Instruments Not Designated as Cash Flow Hedges Balance Sheet Presentation of Derivative Instruments. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 nine-month periods ended September 30, 2023 and 2022 (in thousands): Three Months Ended Three Months Ended September 30, 2023 September 30, 2022 United States International Total United States International Total Cardiovascular Peripheral Intervention $ 78,617 $ 49,768 $ 128,385 $ 67,200 $ 43,498 $ 110,698 Cardiac Intervention 36,593 52,513 89,106 33,194 53,654 86,848 Custom Procedural Solutions 29,602 19,022 48,624 27,078 18,614 45,692 OEM 34,207 5,762 39,969 29,425 6,286 35,711 Total 179,019 127,065 306,084 156,897 122,052 278,949 Endoscopy Endoscopy Devices 8,486 660 9,146 7,674 552 8,226 Total $ 187,505 $ 127,725 $ 315,230 $ 164,571 $ 122,604 $ 287,175 Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 United States International Total United States International Total Cardiovascular Peripheral Intervention $ 219,257 $ 148,820 $ 368,077 $ 195,095 $ 132,331 $ 327,426 Cardiac Intervention 106,588 161,621 268,209 95,652 162,257 257,909 Custom Procedural Solutions 85,556 60,153 145,709 80,951 60,096 141,047 OEM 101,341 21,999 123,340 87,269 18,904 106,173 Total 512,742 392,593 905,335 458,967 373,588 832,555 Endoscopy Endoscopy Devices 25,705 1,811 27,516 23,270 1,741 25,011 Total $ 538,447 $ 394,404 $ 932,851 $ 482,237 $ 375,329 $ 857,566 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Angio Dynamics, Inc | |
Business Acquisition [Line Items] | |
Schedule of Purchase price allocation | The purchase price was preliminarily allocated as follows (in thousands): Assets Acquired Prepaid expenses $ 2,000 Inventories 5,254 Property and equipment 108 Intangible assets Developed technology 65,200 Trademarks 4,000 Customer list 5,800 Goodwill 17,638 Total net assets acquired $ 100,000 |
Bluegrass Vascular Technologies, Inc | |
Business Acquisition [Line Items] | |
Schedule of Purchase price allocation | The purchase price was preliminarily allocated as follows (in thousands): Assets Acquired Inventories $ 175 Intangible assets Developed technology 28,000 Trademarks 900 Goodwill 3,898 Total net assets acquired $ 32,973 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories at September 30, 2023 and December 31, 2022 consisted of the following (in thousands): September 30, 2023 December 31, 2022 Finished goods $ 156,074 $ 147,051 Work-in-process 34,092 29,534 Raw materials 113,757 89,406 Total inventories $ 303,923 $ 265,991 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in carrying amount of goodwill | The change in the carrying amount of goodwill for the nine-month period ended September 30, 2023 is detailed as follows (in thousands): 2023 Goodwill balance at January 1 $ 359,821 Effect of foreign exchange (305) Additions and adjustments as the result of acquisitions 21,536 Goodwill balance at September 30 $ 381,052 |
Other intangible assets | Other intangible assets at September 30, 2023 and December 31, 2022 consisted of the following (in thousands): September 30, 2023 Gross Carrying Accumulated Net Carrying Amount Amortization Amount Patents $ 30,969 $ (12,657) $ 18,312 Distribution agreements 3,250 (2,868) 382 License agreements 11,128 (8,076) 3,052 Trademarks 35,119 (19,998) 15,121 Customer lists 40,287 (33,310) 6,977 Total $ 120,753 $ (76,909) $ 43,844 December 31, 2022 Gross Carrying Accumulated Net Carrying Amount Amortization Amount Patents $ 29,445 $ (10,203) $ 19,242 Distribution agreements 3,250 (2,715) 535 License agreements 11,109 (7,250) 3,859 Trademarks 30,221 (17,863) 12,358 Customer lists 34,105 (31,749) 2,356 Total $ 108,130 $ (69,780) $ 38,350 |
Estimated amortization expense | Estimated amortization expense for developed technology and other intangible assets for the next five years consisted of the following as of September 30, 2023 (in thousands): Estimated Amortization Expense Remaining 2023 $ 15,764 2024 59,656 2025 57,661 2026 46,955 2027 43,774 |
Revolving Credit Facility and_2
Revolving Credit Facility and Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Principal balances outstanding under our long-term debt obligations as of September 30, 2023 and December 31, 2022 consisted of the following (in thousands): September 30, 2023 December 31, 2022 Term loans $ 149,063 $ 124,688 Revolving credit loans 138,000 73,500 Less unamortized debt issuance costs (943) (179) Total long-term debt 286,120 198,009 Less current portion 3,750 11,250 Long-term portion $ 282,370 $ 186,759 |
Schedule of Long-term Debt Covenants | The Fourth Amended Credit Agreement is collateralized by substantially all our assets. The Fourth 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 Fourth 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 (1) Maximum Consolidated Total Net Leverage Ratio (as defined in the Fourth Amended Credit Agreement) as of any fiscal quarter end. (2) Minimum ratio of Consolidated EBITDA (as defined in the Fourth Amended Credit Agreement and adjusted for certain expenditures) to Consolidated Interest Expense (as defined in the Fourth Amended Credit Agreement) for any period of four consecutive fiscal quarters. |
Schedule of Maturities of Long-term Debt | Future minimum principal payments on our long-term debt, as of September 30, 2023, were as follows (in thousands): Years Ending Future Minimum December 31, Principal Payments Remaining 2023 $ 938 2024 3,750 2025 5,625 2026 7,500 2027 9,375 2028 259,875 Total future minimum principal payments $ 287,063 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 of Derivative Instruments Designated as Hedging Instruments Balance Sheet Location September 30, 2023 December 31, 2022 Assets Interest rate swaps Prepaid expenses and other assets $ 2,320 $ — Interest rate swaps Other assets (long-term) — 3,444 Foreign currency forward contracts Prepaid expenses and other assets 3,463 3,215 Foreign currency forward contracts Other assets (long-term) 698 56 (Liabilities) Foreign currency forward contracts Accrued expenses (845) (1,509) Foreign currency forward contracts Other long-term obligations (238) (531) Fair Value of Derivative Instruments Not Designated as Hedging Instruments Balance Sheet Location September 30, 2023 December 31, 2022 Assets Foreign currency forward contracts Prepaid expenses and other assets $ 1,874 $ 1,512 (Liabilities) Foreign currency forward contracts Accrued expenses (1,897) (1,946) |
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 Reclassified from AOCI Three Months Ended September 30, Three Months Ended September 30, Three Months Ended September 30, Derivative instrument 2023 2022 Location in statements of income 2023 2022 2023 2022 Interest rate swaps $ 126 $ 1,504 Interest expense $ (4,841) $ (1,831) $ 685 $ 94 Foreign currency forward contracts 1,503 3,491 Revenue 315,230 287,175 866 1,491 Cost of sales (173,031) (158,602) 617 (440) Amount of Gain/(Loss) Consolidated Statements Amount of Gain/(Loss) Recognized in OCI of Income Reclassified from AOCI Nine Months Ended September 30, Nine Months Ended September 30, Nine Months Ended September 30, Derivative instrument 2023 2022 Location in statements of income 2023 2022 2023 2022 Interest rate swaps $ 726 $ 4,507 Interest expense $ (10,534) $ (4,180) $ 1,850 $ (379) Foreign currency forward contracts 6,067 8,713 Revenue 932,851 857,566 2,851 1,303 Cost of sales (499,508) (473,019) 900 (886) |
Derivative Instruments, Gain (Loss) | The following gains/(losses) from these derivative instruments were recognized in our consolidated statements of income for the periods presented (in thousands): Three Months Ended September 30, Nine Months Ended September 30, Derivative Instrument Location in statements of income 2023 2022 2023 2022 Foreign currency forward contracts Other income (expense) — net $ (452) $ 1,034 $ 2,748 $ 1,212 |
Earnings Per Common Share (EP_2
Earnings Per Common Share (EPS) (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings (Loss) Per Share, Basic and Diluted | The computation of weighted average shares outstanding and the basic and diluted earnings per common share for the three and nine-month periods ended September 30, 2023 and 2022 consisted of the following (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Net income $ 25,834 $ 15,272 $ 66,782 $ 41,115 Average common shares outstanding 57,682 56,835 57,525 56,707 Basic EPS $ 0.45 $ 0.27 $ 1.16 $ 0.73 Average common shares outstanding 57,682 56,835 57,525 56,707 Effect of dilutive stock awards 693 751 820 866 Total potential shares outstanding 58,375 57,586 58,345 57,573 Diluted EPS $ 0.44 $ 0.27 $ 1.14 $ 0.71 Equity awards excluded as the impact was anti-dilutive (1) 1,242 1,641 1,091 1,612 (1) Does not reflect the impact of incremental repurchases under the treasury stock method. |
Stock-Based Compensation Expe_2
Stock-Based Compensation Expense (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | Stock-based compensation expense before income tax expense for the three and nine-month periods ended September 30, 2023 and 2022 consisted of the following (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Cost of sales Nonqualified stock options $ 367 $ 150 $ 1,240 $ 1,247 Research and development Nonqualified stock options 488 476 1,329 1,412 Selling, general and administrative Nonqualified stock options 2,083 2,166 5,304 5,297 Performance-based restricted stock units 1,838 647 4,470 2,719 Restricted stock units 430 454 1,341 1,382 Cash-settled performance-based share-based awards ("Liability Awards") 591 705 1,662 1,634 Total selling, general and administrative 4,942 3,972 12,777 11,032 Stock-based compensation expense before taxes $ 5,797 $ 4,598 $ 15,346 $ 13,691 |
Employee Stock Option [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Nine Months Ended September 30, 2023 2022 Risk-free interest rate 3.6% - 4.6% 1.4% - 3.4% Expected option term 4.0 years 4.0 years Expected dividend yield — — Expected price volatility 44.6% - 47.1% 46.2% - 47.4% |
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 | Nine Months Ended September 30, 2023 2022 Risk-free interest rate 3.9% - 4.6% 1.6% - 2.7% Performance period 2.8 years 2.6 - 2.8 years Expected dividend yield — — Expected price volatility 31.4% - 32.6% 38.5% - 46.2% |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Financial information relating to our reportable operating segments and reconciliations to the consolidated totals for the three and nine-month periods ended September 30, 2023 and 2022, were as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Net sales Cardiovascular $ 306,084 $ 278,949 $ 905,335 $ 832,555 Endoscopy 9,146 8,226 27,516 25,011 Total net sales 315,230 287,175 932,851 857,566 Income from operations Cardiovascular 32,622 17,435 82,966 51,836 Endoscopy 2,515 1,222 7,366 5,310 Total income from operations 35,137 18,657 90,332 57,146 Total other expense — net (4,915) (1,055) (9,710) (4,672) Income tax expense 4,388 2,330 13,840 11,359 Net income $ 25,834 $ 15,272 $ 66,782 $ 41,115 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023 and December 31, 2022 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 September 30, 2023 (Level 1) (Level 2) (Level 3) Marketable securities (1) $ 73 $ 73 $ — $ — Interest rate contract asset, current (2) $ 2,320 $ — $ 2,320 $ — Foreign currency contract assets, current and long-term (3) $ 6,035 $ — $ 6,035 $ — Foreign currency contract liabilities, current and long-term (4) $ (2,980) $ — $ (2,980) $ — Contingent consideration liabilities $ (4,022) $ — $ — $ (4,022) Fair Value Measurements Using Total Fair Quoted prices in Significant other Significant Value at active markets observable inputs unobservable inputs December 31, 2022 (Level 1) (Level 2) (Level 3) Marketable securities (1) $ 138 $ 138 $ — — Interest rate contract asset, long-term (2) $ 3,444 $ — $ 3,444 $ — Foreign currency contract assets, current and long-term (3) $ 4,783 $ — $ 4,783 $ — Foreign currency contract liabilities, current and long-term (4) $ (3,986) $ — $ (3,986) $ — Contingent consideration liabilities $ (18,073) $ — $ — $ (18,073) (1) Our marketable securities, which consist entirely of available-for-sale equity securities, are valued using market prices in active markets. Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. (2) The fair value of the interest rate contract is determined using Level 2 fair value inputs and is reported within prepaid expenses and other current assets as of September 30, 2023 and other long-term assets as of December 31, 2022 in the consolidated balance sheets. (3) 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. (4) The fair value of the foreign currency contract liabilities (including those designated as hedging instruments and those not designated as hedging instruments) is determined using Level 2 fair value inputs and is recorded as accrued expenses or other long-term obligations in the consolidated balance sheets. |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | Changes in the fair value of our contingent consideration liabilities during the three and nine-month periods ended September 30, 2023 and 2022 consisted of the following (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Beginning balance $ 3,581 $ 17,426 $ 18,073 $ 48,234 Contingent consideration expense 563 915 2,177 4,702 Contingent payments made (122) (91) (16,228) (34,676) Effect of foreign exchange — — — (10) Ending balance $ 4,022 $ 18,250 $ 4,022 $ 18,250 |
Fair Value Inputs, Liabilities, Quantitative Information | The recurring Level 3 measurement of our contingent consideration liabilities included the following significant unobservable inputs at September 30, 2023 and December 31, 2022 (amounts in thousands): Fair value at September 30, Valuation Weighted Contingent consideration liability 2023 technique Unobservable inputs Range Average (1) Revenue-based royalty payments contingent liability $ 3,534 Discounted cash flow Discount rate 12% - 16% 14.9% Projected year of payments 2023-2034 2028 Revenue milestones contingent liability $ 88 Monte Carlo simulation Discount rate 13.0% Projected year of payments 2023-2039 2039 Regulatory approval contingent liability $ 400 Scenario-based method Discount rate 5.7% Probability of milestone payment 50.0% Projected year of payment 2023-2030 2030 Fair value at December 31, Valuation Weighted Contingent consideration liability 2022 technique Unobservable inputs Range Average (1) Revenue-based royalty payments contingent liability $ 2,097 Discounted cash flow Discount rate 14% - 17% 15.7% Projected year of payments 2023-2034 2026 Revenue milestones contingent liability $ 13,064 Monte Carlo simulation Discount rate 5.1% - 14.0% 5.2% Projected year of payments 2023-2033 2023 Regulatory approval contingent liability $ 2,912 Scenario-based method Discount rate 5.7% Probability of milestone payment 90% Projected year of payment 2023-2030 2024 (1) Unobservable inputs were weighted by the relative fair value of the instruments. No weighted average is reported for contingent consideration liabilities without a range of unobservable inputs. |
Schedule of Rollforward of Allowance for Credit Losses | The table below presents a rollforward of the allowance for current expected credit losses on our notes receivable for the three and nine-month periods ended September 30, 2023 and 2022 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Beginning balance $ 296 $ 192 $ 281 $ 199 Provision for credit loss expense 32 (6) 47 (13) Ending balance $ 328 $ 186 $ 328 $ 186 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |
Schedule of Components of Accumulated Other Comprehensive Income (Loss) | The changes in each component of accumulated other comprehensive income (loss) for the three and nine-month periods ended September 30, 2023 and 2022 were as follows: Cash Flow Hedges Foreign Currency Translation Total Balance as of July 1, 2023 $ 5,682 $ (15,226) $ (9,544) Other comprehensive income (loss) 1,629 (2,914) (1,285) Income taxes 129 17 146 Reclassifications to: Revenue (866) (866) Cost of sales (617) (617) Interest expense (685) (685) Net other comprehensive loss (410) (2,897) (3,307) Balance as of September 30, 2023 $ 5,272 $ (18,123) $ (12,851) Cash Flow Hedges Foreign Currency Translation Total Balance as of July 1, 2022 $ 4,584 $ (15,303) $ (10,719) Other comprehensive income (loss) 4,995 (9,003) (4,008) Income taxes (942) 85 (857) Reclassifications to: Revenue (1,491) (1,491) Cost of sales 440 440 Interest expense (94) (94) Net other comprehensive income (loss) 2,908 (8,918) (6,010) Balance as of September 30, 2022 $ 7,492 $ (24,221) $ (16,729) Cash Flow Hedges Foreign Currency Translation Total Balance as of January 1, 2023 $ 4,366 $ (15,916) $ (11,550) Other comprehensive income (loss) 6,793 (2,190) 4,603 Income taxes (286) (17) (303) Reclassifications to: Revenue (2,851) (2,851) Cost of sales (900) (900) Interest expense (1,850) (1,850) Net other comprehensive income (loss) 906 (2,207) (1,301) Balance as of September 30, 2023 $ 5,272 $ (18,123) $ (12,851) Cash Flow Hedges Foreign Currency Translation Total Balance as of January 1, 2022 $ (2,464) $ (5,527) $ (7,991) Other comprehensive income (loss) 13,220 (17,739) (4,519) Income taxes (3,226) 81 (3,145) Reclassifications to: Revenue (1,303) (1,303) Cost of sales 886 886 Interest expense 379 379 Other expense - net (1,036) (1,036) Net other comprehensive income (loss) 9,956 (18,694) (8,738) Balance as of September 30, 2022 $ 7,492 $ (24,221) $ (16,729) |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) item segment | Sep. 30, 2022 USD ($) | |
Disaggregation of Revenue [Line Items] | ||||
Number of operating segments | segment | 2 | |||
Net sales | $ 315,230 | $ 287,175 | $ 932,851 | $ 857,566 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 187,505 | 164,571 | 538,447 | 482,237 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 127,725 | 122,604 | $ 394,404 | 375,329 |
Cardiovascular | ||||
Disaggregation of Revenue [Line Items] | ||||
Number of product categories | item | 4 | |||
Net sales | 306,084 | 278,949 | $ 905,335 | 832,555 |
Cardiovascular | Peripheral Intervention | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 128,385 | 110,698 | 368,077 | 327,426 |
Cardiovascular | Cardiac Intervention | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 89,106 | 86,848 | 268,209 | 257,909 |
Cardiovascular | Custom Procedural Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 48,624 | 45,692 | 145,709 | 141,047 |
Cardiovascular | OEM | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 39,969 | 35,711 | 123,340 | 106,173 |
Cardiovascular | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 179,019 | 156,897 | 512,742 | 458,967 |
Cardiovascular | United States | Peripheral Intervention | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 78,617 | 67,200 | 219,257 | 195,095 |
Cardiovascular | United States | Cardiac Intervention | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 36,593 | 33,194 | 106,588 | 95,652 |
Cardiovascular | United States | Custom Procedural Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 29,602 | 27,078 | 85,556 | 80,951 |
Cardiovascular | United States | OEM | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 34,207 | 29,425 | 101,341 | 87,269 |
Cardiovascular | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 127,065 | 122,052 | 392,593 | 373,588 |
Cardiovascular | International | Peripheral Intervention | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 49,768 | 43,498 | 148,820 | 132,331 |
Cardiovascular | International | Cardiac Intervention | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 52,513 | 53,654 | 161,621 | 162,257 |
Cardiovascular | International | Custom Procedural Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 19,022 | 18,614 | 60,153 | 60,096 |
Cardiovascular | International | OEM | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 5,762 | 6,286 | 21,999 | 18,904 |
Endoscopy | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 9,146 | 8,226 | 27,516 | 25,011 |
Endoscopy | Endoscopy Devices | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 9,146 | 8,226 | 27,516 | 25,011 |
Endoscopy | United States | Endoscopy Devices | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 8,486 | 7,674 | 25,705 | 23,270 |
Endoscopy | International | Endoscopy Devices | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 660 | $ 552 | $ 1,811 | $ 1,741 |
Acquisitions - Angio Dynamics,
Acquisitions - Angio Dynamics, Inc (Details) - Angio Dynamics Inc - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Jun. 08, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | |
Asset Acquisition [Line Items] | |||
Total purchase price | $ 100 | ||
Net sales related to acquisition | $ 7.3 | $ 8.3 | |
Acquisition-related costs | $ 0.1 | $ 4.9 | |
Weighted Average | |||
Asset Acquisition [Line Items] | |||
Amortization period | 10 years 6 months | ||
Developed technology | |||
Asset Acquisition [Line Items] | |||
Amortization period | 9 years | ||
Trade Names | |||
Asset Acquisition [Line Items] | |||
Amortization period | 11 years | ||
Customer Lists | |||
Asset Acquisition [Line Items] | |||
Amortization period | 10 years |
Acquisitions - Bluegrass Vascul
Acquisitions - Bluegrass Vascular Technologies (Details) - USD ($) $ in Thousands | May 04, 2023 | May 03, 2023 |
Bluegrass Vascular Technologies, Inc | ||
Business Acquisition [Line Items] | ||
Total purchase price | $ 32,700 | |
Bluegrass Vascular Technologies, Inc | Weighted Average | ||
Business Acquisition [Line Items] | ||
Amortization period | 14 years 10 months 24 days | |
Bluegrass Vascular Technologies, Inc | Developed technology | ||
Business Acquisition [Line Items] | ||
Amortization period | 15 years | |
Bluegrass Vascular Technologies, Inc | Trademarks | ||
Business Acquisition [Line Items] | ||
Amortization period | 13 years | |
Bluegrass Vascular Technologies, Inc | ||
Business Acquisition [Line Items] | ||
Ownership percentage | 19.50% | |
Investment of common shares | 1,251,878 | |
Equity method investment | $ 245 |
Acquisitions - Advanced Radiati
Acquisitions - Advanced Radiation Therapy (Details) - Advanced Radiation Therapy, LLC | May 01, 2023 USD ($) |
Asset Acquisition [Line Items] | |
Purchase price | $ 750,000 |
Payment period | 30 days |
Acquired in-process research and development expense | $ 1,500,000 |
First Payment | |
Asset Acquisition [Line Items] | |
Deferred payment | 500,000 |
Second Payment | |
Asset Acquisition [Line Items] | |
Deferred payment | $ 750,000 |
Acquisitions - Solo Pace, Inc (
Acquisitions - Solo Pace, Inc (Details) - Solo Pace $ in Millions | Jan. 11, 2023 USD ($) |
Business Acquisition [Line Items] | |
Payments to acquire shares | $ 4 |
Option to purchase business | 5 years |
Sales threshold | $ 6 |
Ownership percentage | 19% |
Acquisitions - Purchase Price A
Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 08, 2023 | May 04, 2023 | Dec. 31, 2022 |
Assets Acquired | ||||
Goodwill | $ 381,052 | $ 359,821 | ||
Angio Dynamics Inc | ||||
Assets Acquired | ||||
Prepaid expenses | $ 2,000 | |||
Inventories | 5,254 | |||
Property and equipment | 108 | |||
Goodwill | 17,638 | |||
Total net assets acquired | 100,000 | |||
Angio Dynamics Inc | Developed technology | ||||
Assets Acquired | ||||
Intangible assets | 65,200 | |||
Angio Dynamics Inc | Trade Names | ||||
Assets Acquired | ||||
Intangible assets | 4,000 | |||
Angio Dynamics Inc | Customer Lists | ||||
Assets Acquired | ||||
Intangible assets | $ 5,800 | |||
Bluegrass Vascular Technologies, Inc | ||||
Assets Acquired | ||||
Inventories | $ 175 | |||
Goodwill | 3,898 | |||
Total net assets acquired | 32,973 | |||
Bluegrass Vascular Technologies, Inc | Developed technology | ||||
Assets Acquired | ||||
Intangible assets | 28,000 | |||
Bluegrass Vascular Technologies, Inc | Trade Names | ||||
Assets Acquired | ||||
Intangible assets | $ 900 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 156,074 | $ 147,051 |
Work-in-process | 34,092 | 29,534 |
Raw materials | 113,757 | 89,406 |
Total Inventories | $ 303,923 | $ 265,991 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill balance at beginning of period | $ 359,821 |
Effect of foreign exchange | 305 |
Additions and adjustments as the result of acquisitions | 21,536 |
Goodwill balance at end of period | $ 381,052 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 120,753 | $ 108,130 |
Accumulated Amortization | (76,909) | (69,780) |
Net Carrying Amount | 43,844 | 38,350 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 30,969 | 29,445 |
Accumulated Amortization | (12,657) | (10,203) |
Net Carrying Amount | 18,312 | 19,242 |
Distribution agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,250 | 3,250 |
Accumulated Amortization | (2,868) | (2,715) |
Net Carrying Amount | 382 | 535 |
License agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 11,128 | 11,109 |
Accumulated Amortization | (8,076) | (7,250) |
Net Carrying Amount | 3,052 | 3,859 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 35,119 | 30,221 |
Accumulated Amortization | (19,998) | (17,863) |
Net Carrying Amount | 15,121 | 12,358 |
Customer Lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 40,287 | 34,105 |
Accumulated Amortization | (33,310) | (31,749) |
Net Carrying Amount | $ 6,977 | $ 2,356 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Accumulated goodwill impairment losses | $ 8.3 | $ 8.3 | $ 8.3 | ||
Goodwill impairment loss | 0 | $ 0 | |||
Aggregate amortization expense | $ 15.4 | $ 12.1 | 41.1 | 36.3 | |
Impairment of intangible assets | $ 0 | ||||
STD Pharmaceutical Products Limited | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of intangible assets | $ 1.7 | ||||
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Asset Impairment Charges |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Future Amortization Expense (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remaining 2023 | $ 15,764 |
2024 | 59,656 |
2025 | 57,661 |
2026 | 46,955 |
2027 | $ 43,774 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 4,388 | $ 2,330 | $ 13,840 | $ 11,359 |
Effective tax rate | 14.50% | 13.20% | 17.20% | 21.60% |
Revolving Credit Facility and_3
Revolving Credit Facility and Long-Term Debt - Principal Balances under Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 287,063 | |
Less unamortized debt issuance costs | (943) | $ (179) |
Total long-term debt | 286,120 | 198,009 |
Less current portion | 3,750 | 11,250 |
Long-term portion | 282,370 | 186,759 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt | 149,063 | 124,688 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 138,000 | $ 73,500 |
Revolving Credit Facility and_4
Revolving Credit Facility and Long-Term Debt - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 06, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | |||
Outstanding borrowings | $ 287,063 | ||
Credit Agreement | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | 287,100 | ||
Letter of credit guarantees | 3,800 | ||
Available borrowing capacity | $ 558,000 | ||
Fixed interest rate percent | 2.89% | 2.71% | |
Debt subject to fixed interest rate | $ 75,000 | $ 75,000 | |
Variable interest rate percent | 6.67% | 5.38% | |
Debt subject to variable interest rate | $ 212,100 | $ 123,200 | |
Term Loan | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | 149,063 | 124,688 | |
Term Loan | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 150,000 | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | $ 138,000 | $ 73,500 | |
Revolving Credit Facility | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 700,000 |
Revolving Credit Facility and_5
Revolving Credit Facility and Long-Term Debt - Financial Covenants (Details) - Credit Agreement | 9 Months Ended |
Sep. 30, 2023 | |
Debt Instrument [Line Items] | |
Consolidated Total Leverage Ratio | 4 |
Consolidated Interest Coverage Ratio | 3 |
Revolving Credit Facility and_6
Revolving Credit Facility and Long-Term Debt - Future Minimum Payments on Long-term Debt (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Debt Disclosure [Abstract] | |
Remaining 2023 | $ 938 |
2024 | 3,750 |
2025 | 5,625 |
2026 | 7,500 |
2027 | 9,375 |
2028 | 259,875 |
Total future minimum principal payments | $ 287,063 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2023 | Dec. 31, 2022 | Dec. 23, 2019 | |
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 | $ 4 | ||
Amount expected to be reclassified from accumulated other comprehensive income to earnings (loss) in next twelve months, net of tax | 3 | ||
Interest expense | |||
Derivative [Line Items] | |||
Amount expected to be reclassified from accumulated other comprehensive income (loss) to earnings in next twelve months, gross | 2.3 | ||
Amount expected to be reclassified from accumulated other comprehensive income to earnings (loss) in next twelve months, net of tax | 1.8 | ||
Interest rate swap | Designated as hedging instrument | |||
Derivative [Line Items] | |||
Fair value of derivative asset | 2.3 | $ 3.4 | |
Deferred tax liability used to offset fair value of interest rate swap | $ (0.6) | $ (0.8) | |
Interest rate swap | Wells Fargo 1.71% one-month LIBOR | Designated as hedging instrument | |||
Derivative [Line Items] | |||
Notional amount of derivative | $ 75 | ||
Fixed rate | 1.64% | ||
Investment, Variable Interest Rate, Type [Extensible Enumeration] | us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember | ||
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 | Sep. 30, 2023 USD ($) DerivativeInstrument | Dec. 31, 2022 USD ($) |
Designated as hedging instrument | Derivatives designated as cash flow hedges | ||
Derivative [Line Items] | ||
Average number of contracts entered into per month | DerivativeInstrument | 100 | |
Aggregate notional amount of derivative | $ | $ 155.7 | $ 87.8 |
Not designated as hedging instrument | Fair Value Hedging | ||
Derivative [Line Items] | ||
Average number of contracts entered into per month | DerivativeInstrument | 50 | |
Aggregate notional amount of derivative | $ | $ 96 | $ 92.4 |
Derivatives - Fair Value of Der
Derivatives - Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Designated as hedging instrument | Interest rate swap | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative asset | $ 2,300 | $ 3,400 |
Designated as hedging instrument | Interest rate swap | Prepaid expenses and other assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative asset | 2,320 | |
Designated as hedging instrument | Interest rate swap | Other assets (long-term) | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative asset | 3,444 | |
Designated as hedging instrument | Foreign currency forward contracts | Prepaid expenses and other assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative asset | 3,463 | 3,215 |
Designated as hedging instrument | Foreign currency forward contracts | Other assets (long-term) | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative asset | 698 | 56 |
Designated as hedging instrument | Foreign currency forward contracts | Accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Total Liability Derivatives | (845) | (1,509) |
Designated as hedging instrument | Foreign currency forward contracts | Other long-term obligations | ||
Derivatives, Fair Value [Line Items] | ||
Total Liability Derivatives | (238) | (531) |
Not designated as hedging instrument | Foreign currency forward contracts | Prepaid expenses and other assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative asset | 1,874 | 1,512 |
Not designated as hedging instrument | Foreign currency forward contracts | Accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Total Liability Derivatives | $ (1,897) | $ (1,946) |
Derivatives - Amount of Gain (L
Derivatives - Amount of Gain (Loss) Recognized in OCI and Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) recognized in OCI | $ (539) | $ 3,850 | $ 1,192 | $ 13,182 |
Interest expense | (4,841) | (1,831) | (10,534) | (4,180) |
Net sales | 315,230 | 287,175 | 932,851 | 857,566 |
Cost of sales | (173,031) | (158,602) | (499,508) | (473,019) |
Derivatives designated as cash flow hedges | Interest rate swap | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) recognized in OCI | 126 | 1,504 | 726 | 4,507 |
Derivatives designated as cash flow hedges | Interest rate swap | Interest expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) reclassified from AOCI | 685 | 94 | 1,850 | (379) |
Derivatives designated as cash flow hedges | Foreign currency forward contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) recognized in OCI | 1,503 | 3,491 | 6,067 | 8,713 |
Derivatives designated as cash flow hedges | Foreign currency forward contracts | Revenue | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) reclassified from AOCI | 866 | 1,491 | 2,851 | 1,303 |
Derivatives designated as cash flow hedges | Foreign currency forward contracts | Cost of sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) reclassified from AOCI | $ 617 | $ (440) | $ 900 | $ (886) |
Derivatives - Gain (Loss) in th
Derivatives - Gain (Loss) in the Consolidated Statements of Income (Details) - Not designated as hedging instrument - Foreign currency forward contracts - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Derivative [Line Items] | ||||
Gain (loss) on derivative | $ (452) | $ 1,034 | $ 2,748 | $ 1,212 |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Earnings Per Common Share (EP_3
Earnings Per Common Share (EPS) - Basic EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||||||
Net income | $ 25,834 | $ 20,245 | $ 20,703 | $ 15,272 | $ 15,298 | $ 10,545 | $ 66,782 | $ 41,115 |
Average common shares outstanding (in shares) | 57,682 | 56,835 | 57,525 | 56,707 | ||||
Basic EPS (in dollars per share) | $ 0.45 | $ 0.27 | $ 1.16 | $ 0.73 |
Earnings Per Common Share (EP_4
Earnings Per Common Share (EPS) - Diluted EPS (Details) - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Average common shares outstanding (in shares) | 57,682 | 56,835 | 57,525 | 56,707 |
Effect of dilutive stock awards (in shares) | 693 | 751 | 820 | 866 |
Total potential shares outstanding (in shares) | 58,375 | 57,586 | 58,345 | 57,573 |
Diluted EPS (in dollars per share) | $ 0.44 | $ 0.27 | $ 1.14 | $ 0.71 |
Equity awards excluded as the impact was anti-dilutive (in shares) | 1,242 | 1,641 | 1,091 | 1,612 |
Stock-Based Compensation Expe_3
Stock-Based Compensation Expense - Allocation of Recognized Period Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share-based compensation | $ 5,797 | $ 4,598 | $ 15,346 | $ 13,691 |
Cost of sales | Employee Stock Option [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share-based compensation | 367 | 150 | 1,240 | 1,247 |
Research and development | Employee Stock Option [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share-based compensation | 488 | 476 | 1,329 | 1,412 |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share-based compensation | 4,942 | 3,972 | 12,777 | 11,032 |
Selling, general and administrative | Employee Stock Option [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share-based compensation | 2,083 | 2,166 | 5,304 | 5,297 |
Selling, general and administrative | Stock-Settled Performance-Based Restricted Stock Units | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share-based compensation | 1,838 | 647 | 4,470 | 2,719 |
Selling, general and administrative | Restricted Stock Units | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share-based compensation | 430 | 454 | 1,341 | 1,382 |
Selling, general and administrative | Cash-Settled Performance-Based Share-Based Awards (Liability Awards) | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share-based compensation | $ 591 | $ 705 | $ 1,662 | $ 1,634 |
Stock-Based Compensation Expe_4
Stock-Based Compensation Expense - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options granted in period (in shares) | 401,535 | 203,606 |
Compensation cost not yet recognized | $ 22.5 | |
Compensation cost not yet recognized, period of recognition | 2 years 3 months 18 days | |
Stock-Settled Performance-Based Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation cost not yet recognized | $ 12.3 | |
Compensation cost not yet recognized, period of recognition | 2 years | |
Award vesting period | 1 year | |
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) | 286,863 | 120,710 |
Cash-Settled Performance-Based Share-Based Awards (Liability Awards) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Target cash incentive | $ 1.3 | $ 1 |
Compensation cost not yet recognized | $ 3.6 | |
Compensation cost not yet recognized, period of recognition | 2 years | |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units granted (in shares) | 20,358 | 30,500 |
Compensation cost not yet recognized | $ 1.1 | |
Award vesting period | 1 year |
Stock-Based Compensation Expe_5
Stock-Based Compensation Expense - Option Granted Fair Value Calculation Assumptions (Details) - Employee Stock Option [Member] | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 3.60% | 1.40% |
Risk-free interest rate, maximum | 4.60% | 3.40% |
Expected option term / Performance Period | 4 years | 4 years |
Expected price volatility, minimum | 44.60% | 46.20% |
Expected price volatility, maximum | 47.10% | 47.40% |
Stock-Based Compensation Expe_6
Stock-Based Compensation Expense - PSUs Fair Value Calculation Assumptions (Details) - Stock-Settled Performance-Based Restricted Stock Units | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 3.90% | 1.60% |
Risk-free interest rate, maximum | 4.60% | 2.70% |
Expected option term / Performance Period | 2 years 9 months 18 days | |
Expected price volatility, minimum | 31.40% | 38.50% |
Expected price volatility, maximum | 32.60% | 46.20% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected option term / Performance Period | 2 years 7 months 6 days | |
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) | 9 Months Ended |
Sep. 30, 2023 item segment | |
Segment Reporting Information [Line Items] | |
Number of operating segments | segment | 2 |
Cardiovascular | |
Segment Reporting Information [Line Items] | |
Number of Product Categories | item | 4 |
Segment Reporting - Operating I
Segment Reporting - Operating Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||||||
Net sales | $ 315,230 | $ 287,175 | $ 932,851 | $ 857,566 | ||||
Income from operations | 35,137 | 18,657 | 90,332 | 57,146 | ||||
Total other expense - net | (4,915) | (1,055) | (9,710) | (4,672) | ||||
Income tax expense | 4,388 | 2,330 | 13,840 | 11,359 | ||||
Net income | 25,834 | $ 20,245 | $ 20,703 | 15,272 | $ 15,298 | $ 10,545 | 66,782 | 41,115 |
Cardiovascular | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 306,084 | 278,949 | 905,335 | 832,555 | ||||
Income from operations | 32,622 | 17,435 | 82,966 | 51,836 | ||||
Endoscopy | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 9,146 | 8,226 | 27,516 | 25,011 | ||||
Income from operations | $ 2,515 | $ 1,222 | $ 7,366 | $ 5,310 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and (Liabilities) Carried at Fair Value (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 73 | $ 138 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate contract asset, current and long-term | 2,320 | 3,444 |
Foreign currency contract assets, current and long-term | 6,035 | 4,783 |
Foreign currency contract liabilities, current and long-term | (2,980) | (3,986) |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liabilities | (4,022) | (18,073) |
Estimate of Fair Value, Fair Value Disclosure | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 73 | 138 |
Interest rate contract asset, current and long-term | 2,320 | 3,444 |
Foreign currency contract assets, current and long-term | 6,035 | 4,783 |
Foreign currency contract liabilities, current and long-term | (2,980) | (3,986) |
Contingent consideration liabilities | $ (4,022) | $ (18,073) |
Fair Value Measurements - Liabi
Fair Value Measurements - Liability Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - Contingent Consideration - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | $ 3,581 | $ 17,426 | $ 18,073 | $ 48,234 |
Contingent consideration expense | $ 563 | $ 915 | $ 2,177 | $ 4,702 |
Fair Value, Recurring Basis, Unobservable Input Reconciliation, Liability, Gain (Loss), Statement of Income [Extensible List] | Business Combination, Contingent Consideration Arrangements, Contingent Consideration Benefit | Business Combination, Contingent Consideration Arrangements, Contingent Consideration Benefit | Business Combination, Contingent Consideration Arrangements, Contingent Consideration Benefit | Business Combination, Contingent Consideration Arrangements, Contingent Consideration Benefit |
Contingent payments made | $ (122) | $ (91) | $ (16,228) | $ (34,676) |
Effect of foreign exchange | (10) | |||
Ending balance | $ 4,022 | $ 18,250 | $ 4,022 | $ 18,250 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | May 03, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Payments related to the settlement of the contingent consideration liability, Financing activities | $ 3,502 | $ 32,862 | |||||||
Payments related to the settlement of the contingent consideration liability, Operating activities | 12,700 | 1,800 | |||||||
Impairment of intangible assets | 0 | ||||||||
Loss on disposition of business | 1,389 | ||||||||
Interest income | $ 181 | $ 116 | 533 | 316 | |||||
Allowance for expected credit losses | 328 | $ 186 | $ 192 | 328 | 186 | $ 296 | $ 281 | $ 199 | |
Fibrovein Holdings Limited | Disposal Group, Not Discontinued Operations [Member] | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Loss on disposition of business | 1,300 | ||||||||
Cash | 1,000 | ||||||||
Inventory | 1,200 | ||||||||
Reclassification of foreign currency translation gains | $ 1,000 | ||||||||
Bluegrass Vascular Technologies, Inc | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Impairment of equity method investment | 270 | ||||||||
Ownership percentage | 19.50% | ||||||||
Equity method investment | $ 245 | ||||||||
STD Pharmaceutical Products Limited | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Impairment of intangible assets | $ 1,700 | ||||||||
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Asset Impairment Charges | ||||||||
Selio | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Long-term notes receivable, net | 2,400 | 2,400 | 2,400 | ||||||
Allowance for expected credit losses | 328 | 328 | 281 | ||||||
Director | Cianna Medical | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Contingent payments related to acquisition | 900 | $ 1,600 | |||||||
Other long-term obligations | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Contingent consideration liability, noncurrent | 3,600 | 3,600 | 2,300 | ||||||
Accrued expenses | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Contingent consideration liability, current | $ 400 | $ 400 | $ 15,800 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Inputs, Liabilities, Quantitative Information (Details) - Fair Value, Inputs, Level 3 $ in Thousands | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Revenue-based royalty | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Contingent consideration liabilities | $ 3,534 | $ 2,097 |
Revenue milestones | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Contingent consideration liabilities | 88 | 13,064 |
Regulatory approval | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Contingent consideration liabilities | $ 400 | $ 2,912 |
Discount rate | Revenue-based royalty | Minimum | Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Unobservable inputs, contingent liability | 0.12 | 0.14 |
Discount rate | Revenue-based royalty | Maximum | Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Unobservable inputs, contingent liability | 0.16 | 0.17 |
Discount rate | Revenue-based royalty | Weighted Average | Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Unobservable inputs, contingent liability | 0.149 | 0.157 |
Discount rate | Revenue milestones | Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Unobservable inputs, contingent liability | 0.130 | |
Discount rate | Revenue milestones | Minimum | Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Unobservable inputs, contingent liability | 0.051 | |
Discount rate | Revenue milestones | Maximum | Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Unobservable inputs, contingent liability | 0.140 | |
Discount rate | Revenue milestones | Weighted Average | Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Unobservable inputs, contingent liability | 0.052 | |
Discount rate | Regulatory approval | Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Unobservable inputs, contingent liability | 0.057 | 0.057 |
Probability of milestone payment | Regulatory approval | Discounted Cash Flow | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Unobservable inputs, contingent liability | 0.500 | 0.90 |
Fair Value Measurements - Allow
Fair Value Measurements - Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | $ 296 | $ 192 | $ 281 | $ 199 |
Provision for credit loss expense | 32 | (6) | 47 | (13) |
Ending balance | $ 328 | $ 186 | $ 328 | $ 186 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Changes in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accumulated other comprehensive income (loss) | ||||
Beginning balance | $ 1,203,700 | $ 1,073,307 | $ 1,144,397 | $ 1,039,799 |
Reclassifications to: | ||||
Cost of sales | (173,031) | (158,602) | (499,508) | (473,019) |
Interest expense | (4,841) | (1,831) | (10,534) | (4,180) |
Other expense - net | (255) | 660 | 291 | (808) |
Ending balance | 1,229,885 | 1,088,841 | 1,229,885 | 1,088,841 |
Accumulated Other Comprehensive Loss | ||||
Accumulated other comprehensive income (loss) | ||||
Beginning balance | (9,544) | (10,719) | (11,550) | (7,991) |
Other comprehensive income (loss) | (1,285) | (4,008) | 4,603 | (4,519) |
Income taxes | 146 | (857) | (303) | (3,145) |
Reclassifications to: | ||||
Net other comprehensive income (loss) | (3,307) | (6,010) | (1,301) | (8,738) |
Ending balance | (12,851) | (16,729) | (12,851) | (16,729) |
Accumulated Other Comprehensive Loss | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassifications to: | ||||
Revenue | (866) | (1,491) | (2,851) | (1,303) |
Cost of sales | (617) | 440 | (900) | 886 |
Interest expense | (685) | (94) | (1,850) | 379 |
Other expense - net | (1,036) | |||
Cash Flow Hedges | ||||
Accumulated other comprehensive income (loss) | ||||
Beginning balance | 5,682 | 4,584 | 4,366 | (2,464) |
Other comprehensive income (loss) | 1,629 | 4,995 | 6,793 | 13,220 |
Income taxes | 129 | (942) | (286) | (3,226) |
Reclassifications to: | ||||
Net other comprehensive income (loss) | (410) | 2,908 | 906 | 9,956 |
Ending balance | 5,272 | 7,492 | 5,272 | 7,492 |
Cash Flow Hedges | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassifications to: | ||||
Revenue | (866) | (1,491) | (2,851) | (1,303) |
Cost of sales | (617) | 440 | (900) | 886 |
Interest expense | (685) | (94) | (1,850) | 379 |
Foreign Currency Translation | ||||
Accumulated other comprehensive income (loss) | ||||
Beginning balance | (15,226) | (15,303) | (15,916) | (5,527) |
Other comprehensive income (loss) | (2,914) | (9,003) | (2,190) | (17,739) |
Income taxes | 17 | 85 | (17) | 81 |
Reclassifications to: | ||||
Net other comprehensive income (loss) | (2,897) | (8,918) | (2,207) | (18,694) |
Ending balance | $ (18,123) | $ (24,221) | $ (18,123) | (24,221) |
Foreign Currency Translation | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassifications to: | ||||
Other expense - net | $ (1,036) |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||||||
Net Income (Loss) | $ 25,834 | $ 20,245 | $ 20,703 | $ 15,272 | $ 15,298 | $ 10,545 | $ 66,782 | $ 41,115 |
Insider Trading Arrangements
Insider Trading Arrangements - F. Ann Millner, Ed.D. | 3 Months Ended |
Sep. 30, 2023 shares | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | On August 7, 2023, F. Ann Millner, Ed.D., one of our directors, adopted a trading arrangement for the sale of shares of our common stock (a “Rule 10b5-1 Trading Plan”) that is intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c). Dr. Millner’s Rule 10b5-1 Trading Plan, which has a term of two years, provides for sales of up to 66,250 shares of common stock pursuant to the terms of the plan. |
Name | F. Ann Millner, Ed.D |
Title | directors |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | August 7, 2023 |
Arrangement Duration | 2 years |
Aggregate Available | 66,250 |