Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 17, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | BABY | ||
Entity Registrant Name | NATUS MEDICAL INC | ||
Entity Central Index Key | 878,526 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 32,866,703 | ||
Entity Public Float | $ 1,408,062,148 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 213,551 | $ 82,469 |
Short-term investments | 34,019 | 0 |
Accounts receivable, net of allowance for doubtful accounts of $4,182 and $4,686 | 86,638 | 99,080 |
Inventories | 49,587 | 48,572 |
Prepaid expenses and other current assets | 22,004 | 11,235 |
Total current assets | 405,799 | 241,356 |
Property and equipment, net | 17,333 | 16,967 |
Intangible assets, net | 77,165 | 86,536 |
Goodwill | 113,112 | 107,466 |
Deferred income tax | 14,915 | 12,782 |
Other assets | 20,688 | 14,389 |
Total assets | 649,012 | 479,496 |
Current liabilities: | ||
Accounts payable | 18,700 | 23,660 |
Accrued liabilities | 37,895 | 42,137 |
Deferred revenue | 23,346 | 11,311 |
Total current liabilities | 79,941 | 77,108 |
Long-term liabilities: | ||
Other liabilities | 8,013 | 7,781 |
Long-term debt | 140,000 | 0 |
Deferred income tax | 3,684 | 3,897 |
Total liabilities | 231,638 | 88,786 |
Commitments and contingencies (Note 20) | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value; 120,000,000 shares authorized; shares issued and outstanding 32,920,246 in 2016 and 33,153,500 in 2015 | 312,986 | 323,745 |
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding in 2016 and in 2015 | 0 | 0 |
Retained earnings | 149,408 | 106,814 |
Accumulated other comprehensive loss | (45,020) | (39,849) |
Total stockholders’ equity | 417,374 | 390,710 |
Total liabilities and stockholders’ equity | $ 649,012 | $ 479,496 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 4,686 | $ 4,686 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 120,000,000 | 120,000,000 |
Common Stock, shares issued | 32,920,246 | 33,153,500 |
Common Stock, shares outstanding | 32,920,246 | 33,153,500 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Revenue | $ 381,892 | $ 375,865 | $ 355,834 |
Cost of revenue | 144,632 | 145,492 | 138,480 |
Intangibles amortization | 2,327 | 2,836 | 2,967 |
Gross profit | 234,933 | 227,537 | 214,387 |
Operating expenses: | |||
Marketing and selling | 84,834 | 87,675 | 85,729 |
Research and development | 33,443 | 30,434 | 30,100 |
General and administrative | 50,877 | 46,363 | 45,444 |
Intangibles amortization | 8,983 | 7,447 | 3,025 |
Restructuring | 1,536 | 2,145 | 4,238 |
Total operating expenses | 179,673 | 174,064 | 168,536 |
Income from operations | 55,260 | 53,473 | 45,851 |
Other income (expense), net | (357) | (1,064) | 158 |
Income before provision for income tax | 54,903 | 52,409 | 46,009 |
Provision for income tax | 12,309 | 14,485 | 13,531 |
Net income | $ 42,594 | $ 37,924 | $ 32,478 |
Weighted average shares used in the calculation of net income per share: | |||
Basic | $ 1.31 | $ 1.17 | $ 1.03 |
Diluted (in dollars per share) | $ 1.29 | $ 1.14 | $ 1 |
Diluted | |||
Basic (shares) | 32,460 | 32,348 | 31,499 |
Diluted (shares) | 33,056 | 33,241 | 32,568 |
Other Comprehensive income: | |||
Unrealized losses on available-for-sale investments | $ (168) | $ 0 | $ 0 |
Foreign currency translation adjustment | (5,003) | (8,378) | (11,218) |
Total other comprehensive income | (5,171) | (8,378) | (11,218) |
Basic | $ 37,423 | $ 29,546 | $ 21,260 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance at Dec. 31, 2013 | $ 308,214 | $ 292,055 | $ 36,412 | $ (20,253) |
Beginning balance (shares) at Dec. 31, 2013 | 31,401,602 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Tax benefit of options exercises | 7,525 | $ 7,525 | ||
Vesting of restricted stock units | 0 | |||
Vesting of restricted stock units (shares) | 13,121 | |||
Net issuance of restricted stock awards | 0 | |||
Net issuance of restricted stock awards (shares) | 180,665 | |||
Employee stock purchase plan | 1,197 | $ 1,197 | ||
Employee stock purchase plan (shares) | 45,625 | |||
Stock-based compensation expense | 6,062 | $ 6,062 | ||
Repurchase of company stock | (4,633) | $ (4,633) | ||
Repurchase of company stock (shares) | (161,400) | |||
Taxes paid related to net share settlement of equity awards | (1,999) | $ (1,999) | ||
Tax paid related to net share settlement of equity awards (shares) | (73,134) | |||
Exercise of stock options | 15,089 | $ 15,089 | ||
Exercise of stock options (shares) | 1,242,679 | |||
Other comprehensive income | (11,218) | (11,218) | ||
Net income | 32,478 | 32,478 | ||
Ending balance at Dec. 31, 2014 | 352,715 | $ 315,296 | 68,890 | (31,471) |
Ending balance (shares) at Dec. 31, 2014 | 32,649,158 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Tax benefit of options exercises | 7,104 | $ 7,104 | ||
Vesting of restricted stock units | 0 | |||
Vesting of restricted stock units (shares) | 21,619 | |||
Net issuance of restricted stock awards | 0 | |||
Net issuance of restricted stock awards (shares) | 199,620 | |||
Employee stock purchase plan | 1,251 | $ 1,251 | ||
Employee stock purchase plan (shares) | 35,467 | |||
Stock-based compensation expense | 6,953 | $ 6,953 | ||
Repurchase of company stock | (11,526) | $ (11,526) | ||
Repurchase of company stock (shares) | (281,915) | |||
Taxes paid related to net share settlement of equity awards | (4,341) | $ (4,341) | ||
Tax paid related to net share settlement of equity awards (shares) | (102,112) | |||
Exercise of stock options | 9,008 | $ 9,008 | ||
Exercise of stock options (shares) | 631,663 | |||
Other comprehensive income | (8,378) | (8,378) | ||
Net income | 37,924 | 37,924 | ||
Ending balance at Dec. 31, 2015 | 390,710 | $ 323,745 | 106,814 | (39,849) |
Ending balance (shares) at Dec. 31, 2015 | 33,153,500 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Vesting of restricted stock units | 0 | |||
Vesting of restricted stock units (shares) | 20,937 | |||
Net issuance of restricted stock awards | 0 | |||
Net issuance of restricted stock awards (shares) | 191,492 | |||
Employee stock purchase plan | 1,360 | $ 1,360 | ||
Employee stock purchase plan (shares) | 45,515 | |||
Stock-based compensation expense | 9,008 | $ 9,008 | ||
Stock-based compensation expense (shares) | 0 | |||
Repurchase of company stock | (19,289) | $ (19,289) | ||
Repurchase of company stock (shares) | (545,109) | |||
Taxes paid related to net share settlement of equity awards | (4,107) | $ (4,107) | ||
Tax paid related to net share settlement of equity awards (shares) | (97,231) | |||
Exercise of stock options | $ 2,269 | $ 2,269 | ||
Exercise of stock options (shares) | 151,142 | 151,142 | ||
Other comprehensive income | $ (5,171) | (5,171) | ||
Net income | 42,594 | 42,594 | ||
Ending balance at Dec. 31, 2016 | $ 417,374 | $ 312,986 | $ 149,408 | $ (45,020) |
Ending balance (shares) at Dec. 31, 2016 | 32,920,246 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities: | |||
Net income | $ 42,594 | $ 37,924 | $ 32,478 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for losses on accounts receivable | 1,123 | 1,496 | 991 |
Excess tax benefit on the exercise of stock options | 0 | (7,104) | (7,525) |
Depreciation and amortization | 16,879 | 15,987 | 11,759 |
Gain on disposal of property and equipment | (29) | (5) | 0 |
Impairment of intangible assets | 0 | 0 | 598 |
Impairment of property and equipment | 0 | 0 | 2,177 |
Warranty reserve | 2,934 | 10,729 | 2,306 |
Stock-based compensation | 9,008 | 6,953 | 6,062 |
Changes in operating assets and liabilities, net of assets and liabilities acquired in acquisitions: | |||
Accounts receivable | 19,723 | (15,272) | (2,431) |
Inventories | (7,668) | (12,232) | (2,017) |
Other assets | (11,387) | 858 | (3,667) |
Accounts payable | (4,965) | 3,270 | (7,648) |
Accrued liabilities | (6,967) | (6,177) | 6,595 |
Deferred revenue | 13,879 | (1,118) | (775) |
Deferred taxes | (2,437) | 1,543 | 3,240 |
Net cash provided by operating activities | 72,687 | 36,852 | 42,143 |
Investing activities: | |||
Acquisition of businesses, net of cash acquired | (15,849) | (14,284) | (4,925) |
Acquisition of property and equipment | (3,186) | (4,068) | (4,239) |
Acquisition of intangible assets | (210) | (1,126) | (1,481) |
Purchases of short-term investments | (34,019) | 0 | 0 |
Net cash used in investing activities | (53,264) | (19,478) | (10,645) |
Financing activities: | |||
Proceeds from stock option exercises and ESPP | 3,630 | 10,258 | 16,210 |
Excess tax benefit on the exercise of stock options | 0 | 7,104 | 7,525 |
Repurchase of company stock | (19,289) | (11,525) | (4,633) |
Taxes paid related to net share settlement of equity awards | (4,107) | (4,341) | (1,999) |
Proceeds from short-term borrowings | 16,000 | 0 | 0 |
Proceeds from long-term borrowings | 140,000 | 0 | 0 |
Deferred debt issuance costs | (533) | 0 | 0 |
Contingent consideration earn-out | (1,284) | (664) | 0 |
Payments on borrowings | (16,000) | 0 | (38,017) |
Net cash (used in)/provided by financing activities | 118,417 | 832 | (20,914) |
Exchange rate effect on cash and cash equivalents | (6,758) | (2,295) | (132) |
Net increase in cash and cash equivalents | 131,082 | 15,911 | 10,452 |
Cash and cash equivalents, beginning of year | 82,469 | 66,558 | 56,106 |
Cash and cash equivalents, end of year | 213,551 | 82,469 | 66,558 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 41 | 0 | 434 |
Cash paid for income taxes | 16,344 | 10,164 | 5,672 |
Non-cash investing activities: | |||
Property and equipment included in accounts payable | 134 | 289 | 122 |
Inventory transferred to property and equipment | $ 1,303 | $ 1,056 | $ 1,350 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Organization and Significant Accounting Policies | ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Organization Natus Medical Incorporated (“Natus”, the “Company”) was incorporated in California in May 1987 and reincorporated in Delaware in August 2000. Natus is a leading provider of newborn care and neurology healthcare products and services used for the screening, diagnosis, detection, treatment, monitoring and tracking of common medical ailments in newborn care, hearing impairment, neurological dysfunction, epilepsy, sleep disorders, neuromuscular diseases and balance and mobility disorders. Product offerings include computerized neurodiagnostic systems for audiology, neurology, polysomnography, and neonatology, as well as newborn care products such as hearing screening systems, phototherapy devices for the treatment of newborn jaundice, head-cooling products for the treatment of brain injury in newborns, incubators to control the newborn’s environment, and software systems for managing and tracking disorders and diseases for public health laboratories. Basis of Presentation and Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain reclassifications to the prior periods have been made to conform to the current period presentation. The consolidated statements of income for 2014 reflect reclassifications from Cost of revenue to Intangibles amortization, from Marketing and selling, Research and development, and General and administrative to Intangible amortization, and from General and administrative to Restructuring. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities in the Consolidated Financial Statements and the reported amount of revenue and expenses during the reporting period. Such estimates include allowances for potentially uncollectible accounts receivable, valuation of inventory, intangible assets, goodwill, share-based compensation, deferred income taxes, reserves for warranty obligations, and the provision for income taxes. Actual results could differ from those estimates. Revenue recognition Revenue, net of discounts, is recognized from sales of medical devices and supplies, including sales to distributors, when the following conditions have been met: a purchase order has been received, title has transferred, the selling price is fixed or determinable, and collection of the resulting receivable is reasonably assured. Terms of sale for most domestic sales are FOB origin, reflecting that title and risk of loss are assumed by the purchaser at the shipping point; however, terms of sale for some neurology, sleep-diagnostic, and head cooling systems are FOB destination, reflecting that title and risk of loss are assumed by the purchaser upon delivery. Terms of sales to international distributors are generally EXW, reflecting that goods are shipped “ex works,” in which title and risk of loss are assumed by the distributor at the shipping point. For products shipped under FOB origin or EXW terms, delivery is generally considered to have occurred when the product is shipped. Freight charges billed to customers are included in revenue and freight-related expenses are charged to cost of revenue. The Company generally does not provide rights of return on products. For products containing embedded software, the Company has determined that the hardware and software components function together to deliver the products’ essential functionality, and therefore, the revenue from the sale of these products does not fall within the scope of the software revenue recognition rules. The Company's revenue recognition policies for sales of these products are substantially the same as for other tangible products. Revenue from sales of certain products that remain within the scope of the software revenue recognition rules under ASC Subtopic 985-605 is not significant. Revenue from extended service and maintenance agreements, for both medical devices and data management systems, is recognized ratably over the service period. Revenue from installation or training services is deferred until such time service is provided. Hearing screening and ambulatory EEG monitoring revenue is recorded when the procedure is performed at the estimated net realizable value based on contractual agreements with payers and historical collections. Certain revenue transactions include multiple element arrangements. The Company allocates revenue in these arrangements to each unit of accounting using the relative selling price method. The selling prices used during the allocation process are based on vendor specific objective evidence (“VSOE”) if available, third party evidence (“TPE”) if VSOE is not available, or estimated selling price (“ESP”) if neither VSOE or TPE is available. Group purchasing organization (“GPOs”) negotiate volume purchase prices for member hospitals, group practices, and other clinics. The Company's agreements with GPOs typically contain preferential terms for the GPO and its members, including provisions for some, if not all, of the following: • Payment of marketing fees by Natus to the GPO, usually based on purchasing experience of group members; and • Non-recourse cancellation provisions. Natus does not sell products to GPOs. Hospitals, group practices, and other clinics that are members of a GPO purchase products directly from the Company under the terms negotiated by the GPO. Negotiated pricing and discounts are recognized as a reduction of the selling price of products at the time of the sale. Revenue from sales to members of GPOs is otherwise consistent with general revenue recognition policies as previously described. Inventory Inventories are carried at the lower of cost or market, with cost being determined using the first-in, first-out method. The carrying value of the Company's inventories is reduced for any difference between cost and estimated market value of inventories that is determined to be obsolete or unmarketable, based upon assumptions about future demand and market conditions. Adjustments to the value of inventory establish a new cost basis and are considered permanent even if circumstances later suggest that increased carrying amounts are recoverable. If demand is higher than expected, Natus may sell inventory that had previously been impaired. Carrying value of intangible assets and goodwill The Company amortizes intangible assets with finite lives over the useful lives; any future changes that would limit the useful lives or any determination that these assets are carried at amounts greater than the estimated fair value could result in additional charges. Goodwill is not amortized but is subject to an annual impairment analysis, which is performed as of October 1st; this assessment is also performed whenever there is a change in circumstances that indicates the carrying value of goodwill may be impaired. In 2016, 2015 and 2014, the Company performed a qualitative assessment to test goodwill for impairment. Qualitative factors considered in this assessment include industry and market considerations, overall financial performance and other relevant events and factors affecting each reporting unit. Based on the qualitative assessment, the Company determined that the fair value was more likely than not to be greater than its carrying amount, and no further analysis was needed. If the fair value was less than its carrying amount, the Company would perform a two-step impairment test on goodwill. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit to its carrying value, including goodwill. The Company uses a projected discounted cash flow model to determine the fair value of a reporting unit. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, and the second step of the impairment test is not required. The second step, if required, compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. The fair value of a reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the price paid to acquire the reporting unit. If the carrying amount of the reporting unit’s goodwill exceeds its implied fair value, an impairment charge is recognized in an amount equal to that excess. Prior to the assignment of definite lives to trade names in the second quarter of 2015 (See Note 6 - Intangible Assets ), the Company tested indefinite lived intangibles for impairment by comparing the carrying value of those assets to be fair value as of the assessment date. The Company used the relief from royalty method to determine the fair value of the assets. This analysis is dependent upon a number of quantitative and qualitative factors including estimates of forecasted revenue, royalty rate, and taxes. The discount rate applied also has an impact on the estimates of fair value, as use of a higher rate will result in a lower estimate of fair value. As of the October 1, 2014 testing dates, the Company determined that certain trade names were impaired and the Company recorded impairment charges of $0.6 million . Long lived assets The Company continually monitors events and changes in circumstances that could indicate that carrying amounts of its long-lived assets, including property and equipment and intangible assets, may not be recoverable. When such events or changes in circumstances occur, the Company assess the recoverability by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying amount of these assets, the Company will recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. Liability for product warranties The Company provides a warranty for products that is generally one year in length. In some cases, regulations may require the Company to provide repair or remediation beyond the typical warranty period. If any products contain defects, the Company may be required to incur additional repair and remediation costs. Service for domestic customers is provided by Company-owned service centers that perform all service, repair, and calibration services. Service for international customers is provided by a combination of Company-owned facilities and vendors on a contract basis. A warranty reserve is included in accrued liabilities for the expected future costs of servicing products. Additions to the reserve are based on management’s best estimate of probable liability. The Company considers a combination of factors including material and labor costs, regulatory requirements, and other judgments in determining the amount of the reserve. The reserve is reduced as costs are incurred to honor existing warranty and regulatory obligations. Share-based compensation The Company recognizes share-based compensation expense associated with employee stock options under the single-option straight line method over the requisite service period, which is generally a four -year vesting period and ten -year contractual term pursuant to ASC Topic 718, Compensation-Stock Compensation . See Note 14 of the Consolidated Financial Statements. For employee stock options, the value of each option is estimated on the date of grant using the Black-Scholes option pricing model, which was developed for use in estimating the value of freely traded options. Similar to other option pricing models, the Black-Scholes method requires the input of highly subjective assumptions, including stock price volatility. Changes in the subjective input assumptions can materially affect the estimated fair value of the employee stock options. The Company recognizes share-based compensation associated with Restricted Stock Awards (“RSA”) and Restricted Stock Units (“RSU”). RSAs and RSUs vest ratably over a three -year period for employees. RSAs and RSUs for executives vest over a four -year period; 50% on the second anniversary of the awarded date and 25% on each of the third and fourth anniversaries. RSAs and RSUs for non employees (Board of Directors) vest over a one -year period; 100% on the first anniversary. The value is estimated based on the market value of Natus common stock on the date of issuance pursuant to ASC Topic 718, Compensation-Stock Compensation. The Company issues new shares of common stock upon the exercise of stock options and the vesting of RSAs and RSUs. Forfeitures of employee stock options and awards are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. Share-based compensation expense is recorded net of estimated forfeitures, such that expense is recorded only for those share-based awards that are expected to vest. The Company elected to early adopt ASU 2016-09 in the first quarter of 2016. In 2015 and 2014, the cash flow from the tax benefits resulting from tax deductions in excess of the compensation cost recognized for employee options (excess tax benefits) was classified as a cash inflow from financing activities and a cash outflow from operating activities in the Statement of Cash Flows. The Company treated tax deductions from certain stock option exercises as being realized when the Company reduced taxes payable in accordance with relevant tax law. Cash Equivalents and Short-term Investments All highly liquid investments purchased with an original maturity of three months or less are classified as cash equivalents. Investments with maturities greater than one year are classified as current because management considers all investments to be available for current operations. Cash equivalents and investments are stated at amounts that approximate fair value based on quoted market prices. The Company's investments have been classified and accounted for as available-for-sale. Such investments are recorded at fair value and unrealized holding gains and losses are reported as a separate component of comprehensive income until realized. Realized gains and losses on sales of investments, if any, are determined on the specific identification method and are reclassified from accumulated other comprehensive loss to results of operations as other income (expense). Allowance for Doubtful Accounts The Company estimates the allowance for potentially uncollectible accounts receivable based on historical collection experience within the markets in which the Company operates and other customer-specific information, such as bankruptcy filings or customer liquidity problems. When all internal efforts have been exhausted to collect the receivable, it is written off and relieved from the reserve. Fair Value of Financial Instruments Financial instruments include cash and cash equivalents, investments, accounts receivable, and accounts payable. Cash is reported at its fair value on the balance sheet dates. The recorded carrying amounts of investments, accounts receivable and accounts payable approximate the fair values due to the short-term maturities. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed using the straight-line method over estimated useful lives of the respective assets, which are three to ten years for office furniture and equipment, three to five years or the length of the license for computer software and hardware, three to five years for demonstration and loaned equipment, and 30 to 40 years for buildings. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life. Land is not depreciated. Costs associated with acquiring and installing software to be used for internal purposes are capitalized and amortized on a straight-line basis over three years. Research & Development Costs Costs incurred in research and development are charged to operations as incurred. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records net deferred tax assets to the extent it is more likely than not that the assets will be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. To the extent that previously reserved deferred tax assets are estimated to be realizable, the Company adjusts the valuation allowance which reduces the provision for income taxes. The Company recognizes the tax benefit of uncertain tax positions in the financial statements in accordance with ASC Topic 740, Income Tax. When the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50 percent likely of being ultimately realized upon settlement, in accordance with ASC 740-10-05. Foreign Currency The functional currency of the Company's subsidiaries outside of North America is generally the local currency of the country where the subsidiary is located. Accordingly, foreign currency translation adjustments relating to the translation of foreign subsidiary financial statements are included as a component of accumulated other comprehensive loss. The Company recorded $5.0 million , $8.4 million , and $11.2 million of foreign currency translation losses for the years ended December 31, 2016, 2015 and 2014, respectively. Gains and losses from transactions denominated in currencies other than the functional currencies are included in other income and expense. In 2016, 2015, and 2014, net foreign currency transaction losses were $0.4 million, $1.4 million, and $0.0 million, respectively. Foreign currency gains and losses result primarily from fluctuations in the exchange rate between the U.S. Dollar, Canadian Dollar, Euro, Argentine Peso, British Pound, and Danish Kroner. Comprehensive Income The Company reports by major components and as a single total the change in net assets during the period from non-owner sources in accordance with ASC Topic 220, Comprehensive Income. The consolidated statement of comprehensive income has been included with the consolidated statements of operations. Accumulated other comprehensive income consists of translation gains and losses on foreign subsidiary financial statements as well as unrealized gains and losses on investments. Basic and Diluted Net Income per Share Natus computes net income per share in accordance with ASC Topic 260, Earnings per Share. Basic net income per share is based upon the weighted average number of common shares outstanding during the period. Diluted net income per share is based upon the weighted average number of common shares outstanding and dilutive common stock equivalents outstanding during the period. Common stock equivalents are options granted and shares of restricted stock issued under the stock awards plans and are calculated under the treasury stock method. Common equivalent shares from unexercised stock options and restricted stock are excluded from the computation when there is a loss as the effect is anti-dilutive, or if the exercise price of such options is greater than the average market price of the stock for the period. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2041-09”), which supersedes nearly all existing revenue recognition guidance. The standard's core principle is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard creates a five-step model to achieve its core principle: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction's price to the separate performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In addition, entities must disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative and quantitative disclosures are required about: (i) the entity's contracts with customers; (ii) the significant judgments, and changes in judgments, made in applying the guidance to those contracts; and (iii) any assets recognized from the costs to obtain or fulfill a contract with a customer. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 616) - Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to interim and annual periods beginning January 1, 2018. The standard allows entities to apply the standard retrospectively to each prior period presented (“full retrospective adoption”) or retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application (“modified retrospective adoption”). The Company plans to adopt this guidance on January 1, 2018, and continues to evaluate the impact of adopting under the modified retrospective adoption versus the full retrospective method. The Company is currently in the process of determining the impact of the new revenue recognition guidance on its revenue transactions, including any impacts on associated processes, systems, and internal controls. The Company's preliminary assessment indicates implementation of this standard will not have a material impact on financial results. The Company's evaluation has included determining whether the unit of account (i.e., performance obligations) will change as compared to current GAAP, as well as determining the standalone selling price of each performance obligation. Standalone selling prices under the new guidance may not be substantially different from the Company's current methodologies of establishing fair value on multiple element arrangements. The Company continues to evaluate the impact of this guidance and its subsequent amendments on the consolidated financial position, results of operations, and cash flows, and any preliminary assessments are subject to change. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330). This standard requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company plans to adopt ASU 2015-11 on January 1, 2017. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This standard requires a lessee to recognize the lease assets and lease liabilities arising from operating leases in the statement of financial position. Qualitative along with specific quantitative disclosures are required by lessees and lessors to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 including interim periods within those fiscal years. The Company is currently evaluating the impact that will result from adopting ASU 2016-02. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvement to Employee Share-Based Payment Accounting. The new standard contains several amendments that simplify the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The changes in the new standard eliminate the accounting for excess tax benefits to be recognized in additional paid-in capital and tax deficiencies recognized either in the income tax provision or in additional paid-in capital. The Company elected to early adopt ASU 2016-09 in the first quarter of 2016 which was applied using a modified retrospective approach. For the year ended December 31, 2016, the Company recognized all excess tax benefits and tax deficiencies as income tax expense or benefit as discrete items. An income tax benefit of approximately $1.6 million was recognized in the year ended December 31, 2016 as a result of the adoption of ASU 2016-09. There was no cumulative-effect adjustment required to retained earnings under the modified retrospective method as of the beginning of the year because all tax benefits had been previously recognized when the tax deductions related to stock compensation were utilized to reduce taxes payable. The Company is not recording deferred tax assets or tax losses as the result of the adoption of ASU 2016-09. The treatment of forfeitures has not changed as the Company is electing to continue the current process of estimating the number of forfeitures. With the early adoption of 2016-09, the Company has elected to present the cash flow statement on a prospective transition method and no prior periods have been adjusted. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This standard provides guidance for eight cash flow classification issues in current GAAP. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company elected to early adopt ASU 2016-15 in the first quarter of 2016 including Contingent Consideration Payments Made after a Business Combination. For the year ended December 31, 2016, the Company recognized $1.0 million as a cash outflow for investing activities on the Statement of Cash Flows. This payment was made soon after the acquisition date of a business combination to settle the contingent consideration from the Monarch acquisition. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Business Combinations | BUSINESS COMBINATIONS The assets acquired and liabilities assumed at the date of acquisition are recorded in the Consolidated Financial Statements at the respective fair values as of the acquisition date. The excess of the purchase price over the fair value of the acquired net assets is recorded as goodwill. The determination of estimated fair value of acquired assets and liabilities requires management to make significant estimates and assumptions. The Company determines the fair value by applying established valuation techniques, based on information that management believes to be relevant to this determination. The Company also utilizes independent third parties to assist in the valuation of goodwill and intangible assets. The results of operations from acquisitions are included in the Consolidated Financial Statements from the date of the acquisition. RetCam On July 6, 2016, the Company acquired the portfolio of RetCam Imaging Systems ("RetCam") from Clarity Medical Systems, Inc. for $10.6 million in cash. RetCam is an imaging system used to diagnose and monitor a range of ophthalmic maladies in premature infants. The purchase agreement also included a holdback of $2.0 million which is contingent upon completion of certain modifications to RetCam 3 no later than March 31, 2017. Subsequent to the acquisition, an additional $1.1 million was paid by the Company to Clarity Medical Systems as a result of a working capital adjustment. Results of operations for RetCam are included in the consolidated financial statements from the date of acquisition. The total purchase price was allocated $7.2 million to tangible assets, $3.3 million to intangible assets with an assigned weighted average life of 5 years being amortized on the straight line method, and $3.2 million to goodwill, offset by $2.0 million to net liabilities. Pro forma financial information for the RetCam acquisition is not presented as it is not considered material. NeuroQuest On March 2, 2016, the Company acquired NeuroQuest, LLC (“NeuroQuest”) through an asset purchase. NeuroQuest complements the Global Neuro-Diagnostics and Monarch Medical Diagnostics, LLC ("Monarch") acquisitions which offer patients a convenient way to complete routine-electroencephalography and extended video electronencephalography ("VEEG") testing. The cash consideration for NeuroQuest was $4.6 million . The purchase agreement included a consideration holdback of $0.5 million which will be held until March 2, 2017. The total purchase price was allocated to $0.5 million of tangible assets, $1.3 million of intangible assets with an assigned weighted average life of 5 years being amortized on the straight line method, and $3.5 million of goodwill, offset by $0.1 million of net liabilities. Pro forma financial information for the NeuroQuest acquisition is not presented as it is not considered material. Monarch The Company acquired Monarch Medical Diagnostics, LLC ("Monarch") through an asset purchase on November 13, 2015. Monarch's service compliments the Global Neuro-Diagnostics acquisition which offers patients a more convenient way to complete routine diagnostic electroencephalography and video electromyography testing which can be performed at the home, hospital or physician's office. The service also provides comprehensive reporting and support to the physician. The cash consideration for Monarch was $2.7 million . The purchase agreement also included contingent consideration which was paid on January 11, 2016 of $1.0 million . The total purchase price was allocated to $112,000 of tangible assets, $1.2 million of intangible assets with an assigned weighted average life of 5 years being amortized on the straight line method, and $2.4 million of goodwill. Pro forma financial information for the Monarch acquisition is not presented as it is not considered material. Global Neuro-Diagnostics The Company acquired GND through an equity purchase on January 23, 2015. GND's service offers patients a more convenient way to complete routine EEG and EMG testing which can be performed at the home, hospital or physician's office. The service also provides comprehensive reporting and support to the physician. The cash consideration for GND was $11.4 million , which consists primarily of $1.5 million of tangible assets, $4.8 million of intangible assets with an assigned weighted average life of 5 years being amortized on the straight line method, and $8.9 million of goodwill, offset by $0.5 million of net liabilities. The purchase agreement also included an earn-out condition which was originally estimated to be $3.2 million . The earn-out condition was subsequently estimated to be $0.5 million in the fourth quarter of 2016. The earn-out is contingent upon GND achieving certain revenue milestones in 2017. Pro forma financial information for the GND acquisition is not presented as it is not considered material. NicView On January 2, 2015, the Company purchased the assets of NicView. NicView provides streaming video for families with babies in the neonatal intensive care unit. The cash consideration for NicView was $1.1 million , of which $0.3 million was allocated to tangible assets and $2.7 million to goodwill, offset by $0.6 million allocated to net liabilities. The asset purchase agreement included an earn-out condition contingent upon orders received in and installed by February 28, 2016. The Company settled this earnout for $1.3 million in March 2016. Pro forma financial information for the NicView acquisition is not presented as it is not considered material. Hearing Screening as a Service In the first quarter of 2014, the Company entered into two asset purchase agreements for companies in the newborn hearing screening services market for total cash consideration of $2.6 million . The purchase agreements also included earn-out conditions contingent upon annual revenue growth through 2016. These earn-outs, originally estimated at $0.8 million , were settled during the second quarter of 2015 for $0.7 million . Both acquisitions support the entry into this market, which complements the newborn hearing screening device business. This hearing screening services business operates under the name Peloton. Pro forma financial information for these two acquisitions is not presented as it is not considered material. |
Cash, Cash Equivalents, and Sho
Cash, Cash Equivalents, and Short-term Investments | 12 Months Ended |
Dec. 31, 2016 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents, and Short-term Investments | CASH, CASH EQUIVALENTS, AND SHORT-TERM INVESTMENTS The Company has invested its excess cash in highly liquid marketable securities such as corporate debt instruments, U.S. government agency securities and asset-backed securities. Investments with maturities greater than one year are classified as current because management considers all investments to be available for current operations. The Company's investments are designed to provide liquidity, preserve capital and maximize total return on invested assets with a focus on high credit-quality securities. The Company's investments have been classified and accounted for as available-for-sale. Such investments are recorded at fair value, and unrealized holding gains and losses are reported as a separate component of accumulated other comprehensive income (loss) in the stockholders' equity until realized. Realized gains and losses on sales of investments, if any, are determined on the specific identification method and are reclassified from accumulated other comprehensive income (loss) to results of operations as other income (expense). The Company, to date, has not determined that any of the unrealized losses on its investments are considered to be other-than-temporary. The Company reviews its investment portfolio to determine if any security is other-than-temporarily impaired, which would require the Company to record an impairment charge in the period any such determination is made. In making this judgment, the Company evaluates, among other things: the duration and extent to which the fair value of a security is less than its cost; the financial condition of the issuer and any changes thereto; and the Company's intent and ability to hold its investment for a period of time sufficient to allow for any anticipated recovery in market value, or whether the Company will more likely than not be required to sell the security before recovery of its aggregated cost basis. Cash, cash equivalents and short-term investments consisted of the following (in thousands): December 31, 2016 December 31, 2015 Cash and cash equivalents: Cash 213,551 82,469 Short-term investments: U.S. investment grade bonds 24,477 — Developed investment grade bonds 9,542 — Total short-term investments 34,019 — Total cash, cash equivalents and short-term investments 247,570 82,469 Short-term investments by investment type are as follows (in thousands): December 31, 2016 December 31, 2015 Aggregated Cost Basis Gross Unrealized Gains Gross Unrealized Losses Aggregated Fair Value Aggregated Cost Basis Gross Unrealized Gains Gross Unrealized Losses Aggregated Fair Value U.S. investment grade bonds 24,531 — (54 ) 24,477 — — — — Developed investment grade bonds 9,567 — (25 ) 9,542 — — — — Total short-term investments $ 34,098 $ — $ (79 ) $ 34,019 $ — $ — $ — $ — Short-term investments by contractual maturity are as follows (in thousands): December 31, 2016 December 31, 2015 Investments Investments Due in one year or less $ 21,655 $ — Due after one year through five years 12,364 — Total short-term investment $ 34,019 $ — See Note 21 to these Consolidated Financial Statements for additional discussion regarding the fair value of the Company's short-term investments. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES Inventories consist of (in thousands): December 31, 2016 2015 Raw materials and subassemblies $ 28,245 $ 19,041 Work in process 1,507 1,343 Finished goods 34,908 36,149 Total Inventories 64,660 56,533 Less: Non-current Inventories (15,073 ) (7,961 ) Inventories $ 49,587 $ 48,572 At December 31, 2016 and 2015 , the Company has classified $15.1 million and $8.0 million , respectively, of inventories as non-current. This inventory consists of service components used to repair products held by customers pursuant to warranty obligations and extended service contracts, including service components for products that the Company no longer sells, inventory purchased for lifetime buys, and inventory that will be shipped when the ship hold on the NeoBLUE ® products is released. The Company believes that these inventories will be utilized for the intended purpose. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | PROPERTY AND EQUIPMENT Property and equipment consist of (in thousands): December 31, 2016 2015 Land $ 2,856 $ 2,918 Buildings 5,219 5,662 Leasehold improvements 2,386 2,345 Office furniture and equipment 18,398 15,602 Computer software and hardware 9,100 8,752 Demonstration and loaned equipment 11,393 11,216 49,352 46,495 Accumulated depreciation (32,019 ) (29,528 ) Total $ 17,333 $ 16,967 Depreciation expense of property and equipment was $3.7 million , $4.2 million , and $4.3 million in the years ending December 31, 2016 , 2015 and 2014 , respectively. In the third quarter of 2014 the Company's manufacturing facility in Mundelein, Illinois was listed for sale. This asset was measured at fair value less cost to sell as of September 30, 2014 based on market price and Level 2 inputs and resulted in a $2.2 million impairment. The Company continues to actively market this facility. The impairment was recorded in restructuring expenses and the asset was reclassified from property and equipment, net to other current assets. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | GOODWILL The carrying amount of goodwill and the changes in those balances are as follows (in thousands): As of December 31, 2014 $ 96,316 Acquisitions/Purchase Accounting Adjustments 13,547 Foreign currency translation (2,397 ) As of December 31, 2015 $ 107,466 Acquisitions/Purchase Accounting Adjustments 6,705 Foreign currency translation (1,059 ) As of December 31, 2016 $ 113,112 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | INTANGIBLE ASSETS The following table summarizes the components of gross and net intangible asset balances (in thousands): December 31, 2016 December 31, 2015 Gross Accumulated Accumulated Net Book Gross Accumulated Accumulated Net Book Technology $ 62,563 — $ (34,683 ) $ 27,880 $ 63,668 — $ (31,600 ) $ 32,068 Customer related 38,087 — (17,610 ) 20,477 35,529 — (14,352 ) 21,177 Trade names 32,106 (3,290 ) (7,135 ) 21,681 31,837 (3,340 ) (3,052 ) 25,445 Internally developed software 16,978 — (10,220 ) 6,758 15,513 — (8,155 ) 7,358 Patents 2,620 — (2,251 ) 369 2,663 — (2,175 ) 488 Total Definite-lived intangible assets 152,354 (3,290 ) (71,899 ) 77,165 149,210 (3,340 ) (59,334 ) 86,536 Finite lived intangible assets are amortized over their weighted average lives, which are 13 years for patents, 17 years for technology, 11 years for customer-related intangibles, 7 years for trade names, and 5 years for internally developed software. Internally developed software consists of $14.8 million relating to costs incurred for development of internal use computer software and $2.2 million for development of software to be sold. During the year ended December 31, 2014 the Company recorded a charge of $0.6 million related to the impairment of the Grass trade name. This impairment was the result of deterioration of expected future cash flows. Impairments were determined by performing a discounted cash flow analysis on intangibles assets. This charge was recorded in Intangible amortization. Amortization expense related to intangible assets with finite lives was as follows (in thousands): Years Ended December 31, 2016 2015 2014 Technology $ 3,407 $ 3,916 $ 3,993 Customer related 3,452 2,938 1,892 Trade names 4,115 3,159 — Internally developed software 2,069 1,620 1,434 Patents 112 112 113 Total amortization $ 13,155 $ 11,745 $ 7,432 Expected annual amortization expense related to amortizable intangible assets is as follows (in thousands): 2017 $ 13,130 2018 12,908 2019 11,753 2020 9,558 2021 8,270 Thereafter 21,546 Total expected amortization expense $ 77,165 During the second quarter of 2015 the Company initiated a strategy to increase the brand strength of Natus by replacing acquired product trade names with Natus branded products over time. The implementation of this strategy placed definite expected future lives on the acquired trade names which previously had indefinite lives. The Company assigned these trade names lives of seven years based on the timeline of the Company's branding strategy. The Company will continue to assess the lives of these assets based on the timing and execution of this strategy. Amortization expense for trade names is recorded as a component of operating expense. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | ACCRUED LIABILITIES Accrued liabilities consist of (in thousands): December 31, 2016 2015 Compensation and related benefits $ 16,064 $ 16,752 Accrued federal, state, and local taxes 4,160 4,707 Warranty reserve 10,670 10,386 Accrued professional fees 1,191 520 Contingent consideration 3,043 6,209 Other 2,767 3,563 Total $ 37,895 $ 42,137 |
Long-Term Other Liabilities
Long-Term Other Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Long-Term Other Liabilities | LONG-TERM OTHER LIABILITIES Long-term other liabilities consist of (in thousands): December 31, 2016 2015 Contingent tax obligations $ 6,125 $ 6,376 Non-current deferred revenue 1,885 1,401 Other 3 4 Total $ 8,013 $ 7,781 |
Reserve for Product Warranties
Reserve for Product Warranties | 12 Months Ended |
Dec. 31, 2016 | |
Guarantees [Abstract] | |
Reserve for Product Warranties | RESERVE FOR PRODUCT WARRANTIES The Company provides a warranty for products that is generally one year in length and in some cases, regulations may require them to provide repair or remediation beyond the typical warranty period. If any of the products contain defects, the Company may be required to incur additional repair and remediation costs. Service for domestic customers is provided by Company-owned service centers that perform all service, repair and calibration services. Service for international customers is provided by a combination of Company-owned facilities and vendors on a contract basis. A warranty reserve is included in accrued liabilities for the expected future costs of servicing products. Additions to the reserve are based on management's best estimate of probable liability. The Company considers a combination of factors including material and labor costs, regulatory requirements, and other judgments in determining the amount of reserve. The reserve is reduced as costs are incurred to honor existing warranty and regulatory obligations. As of December 31, 2016 the Company has accrued $6.6 million to bring certain NeoBLUE ® phototherapy products into U.S. regulatory compliance. The Company's estimate of the costs associated with bringing the NeoBLUE ® phototherapy products into compliance is primarily based upon the number of units outstanding that may require the repair, costs associated with shipping and repairing the product, and the assumption that the FDA will approve the Company's plan for compliance. The Company expects that costs associated with bringing the products back into compliance will not be incurred until the second quarter of 2017. The details of activity in the warranty reserve are as follows (in thousands): Balance at Beginning of Period Assumed Through Acquisitions Additions Charged to Expense Reductions Balance at End of Period December 31, 2016 $ 10,386 $ 222 $ 2,711 $ (2,649 ) $ 10,670 December 31, 2015 $ 2,753 $ — $ 10,729 $ (3,096 ) $ 10,386 December 31, 2014 $ 3,143 $ — $ 2,306 $ (2,696 ) $ 2,753 The estimates the Company uses in projecting future product warranty costs may prove to be incorrect. Any future determination that product warranty reserves are understated could result in increases to cost of sales and reductions in operating profits and results of operations. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Common Stock —The Company has 120,000,000 shares of common stock authorized at a par value or $0.001 per share. Preferred Stock —The Company has 10,000,000 shares of preferred stock authorized at a par value of $0.001 per share. In accordance with the terms of the amended and restated certificate of incorporation, the Board of Directors is authorized to provide for the issuance of one or more series of preferred stock, including increases or decreases to the series. The Board of Directors has the authority to set the rights, preferences, and terms of such shares. As of December 31, 2016 , no shares of preferred stock were issued and outstanding. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE The components of basic and diluted EPS are as follows (in thousands, except per share amounts): December 31, 2016 2015 2014 Net income $ 42,594 $ 37,924 $ 32,478 Weighted average common shares 32,460 32,348 31,499 Dilutive effect of stock based awards 596 893 1,069 Diluted Shares 33,056 33,241 32,568 Basic earnings per share $ 1.31 $ 1.17 $ 1.03 Diluted earnings per share $ 1.29 $ 1.14 $ 1.00 Shares excluded from calculation of diluted EPS 2 — 239 |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION Share-Based Compensation Expense —The Company accounts for share-based compensation in accordance with ASC Topic 718, Compensation—Stock Compensation . Share-based compensation was recognized as follows in the consolidated statement of income (in thousands): December 31, 2016 2015 2014 Cost of revenue $ 219 $ 156 $ 143 Marketing and selling 821 808 977 Research and development 1,515 1,264 664 General and administrative 6,453 4,725 4,278 Total expense 9,008 6,953 6,062 Stock Awards Plans —Natus' 2011 Stock Awards Plan (the “Plan”) provides for the granting of the following: • Incentive stock options to employees; • Non-statutory stock options to employees, directors and consultants; • Restricted stock awards and restricted stock units; • Stock bonuses; and • Stock appreciation rights. As of December 31, 2016 , there were 1,098,514 shares available for future awards under the plan. Under the Plan, stock options may be issued at not less than the fair market value of the common stock on the date of grant, as determined by the Board of Directors. Options issued under the Plan become exercisable as determined by the Board of Directors and expire no more than six years after the date of grant. Most options vest ratably over four years. Stock Option Activity —Stock option activity under the stock awards plans for the year ended December 31, 2016 is summarized as follows: Number of Shares Weighted Average Exercise Price Outstanding, December 31, 2015 (737,032 shares exercisable at a weighted average exercise price of $14.40 per share) 1,105,182 $ 15.07 Granted — $ — Exercised (151,142 ) $ 15.01 Forfeited (18,600 ) $ 17.62 Expired (2,500 ) $ 16.78 Outstanding, December 31, 2016 (816,691 shares exercisable at a weighted average exercise price of $14.54 per share) 932,940 $ 15.02 As of December 31, 2016 , unrecognized compensation related to the unvested portion of stock options was approximately $0.6 million , which is expected to be recognized over a weighted average period of 0.8 years. The intrinsic value of options exercised, representing the difference between the closing stock price of common stock on the date of the exercise and the exercise price, in the years ended December 31, 2016 , 2015 and 2014 was $3.4 million , $17.7 million , and $20.6 million , respectively. As of December 31, 2016 , there were: (i) 930,544 options vested and expected to vest with a weighted average exercise price of $15.01 , an intrinsic value of $18.4 million , and a weighted average remaining contractual term of 2.1 years; and (ii) 816,691 options exercisable with a weighted average exercise price of $14.54 , an intrinsic value of $16.5 million , and a weighted average remaining contractual term of 2.0 years. The expected life of options is based primarily on historical share option exercise experience of the employees for options granted by the Company. All options are treated as a single group in the determination of expected life, as the Company does not currently expect substantially different exercise or post-vesting termination behavior among the employee population. The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of the awards in effect at the time of grant. Expected volatility is based primarily on historical volatility data of the Company's common stock. The Company has no history or expectation of paying dividends on common stock. Share-based compensation expense associated with options is based on awards ultimately expected to vest. At the time of an option grant, the Company estimates the expected future rate of forfeitures based on historical experience. These estimates are revised, if necessary, in subsequent periods if actual forfeiture rates differ from those estimates. If the actual forfeiture rate is lower than estimated the Company will record additional expense and if the actual forfeiture is higher than estimated the Company will record a recovery of prior expense. Restricted Stock Awards Activity —The following table summarizes the activity for restricted stock awards during the year ended December 31, 2016 : Shares Weighted Average Grant Date Fair Value Unvested at December 31, 2015 535,208 $ 24.87 Granted 205,234 $ 44.22 Vested (212,811 ) $ 19.75 Forfeited (21,242 ) $ 26.69 Unvested at December 31, 2016 506,389 $ 34.82 As of December 31, 2016 , unrecognized compensation related to the unvested portion of stock awards was $9.2 million , which is expected to be recognized over a weighted average period of 2.2 years. The fair market value of outstanding restricted stock awards at December 31, 2016 was $17.6 million . For the restricted stock awards units that vested during the years ended December 31, 2016 , 2015 , and 2014 , the total intrinsic value was $9.0 million , $10.3 million , and $6.0 million , respectively. Restricted Stock Units Activity —The following table summarizes restricted stock units activity for the year ended December 31, 2016 : Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2015 45,483 $ 24.57 Awarded 11,860 $ 45.23 Released (24,687 ) $ 21.52 Forfeited (2,753 ) $ 26.42 Outstanding at December 31, 2016 29,903 $ 34.39 As of December 31, 2016 , unrecognized compensation related to the unvested portion of stock units was $0.5 million , which is expected to be recognized over a weighted average period of 1.6 years. The aggregate intrinsic value of outstanding restricted stock units at December 31, 2016 was $1.0 million . For the restricted stock units that vested during the years ended December 31, 2016 , 2015 , and 2014 , the total intrinsic value was $0.9 million , $0.9 million , and $0.4 million , respectively. Employee Stock Purchase Plan —Under Natus' 2011 Employee Stock Purchase Plan (the “ESPP”), U.S. employees can elect to have salary withholdings of up to 15% of eligible compensation to a maximum of $10,625 per offering period, to purchase shares of common stock on April 30 and October 31 of each year. The purchase price for shares acquired under the ESPP is 85% of the fair market value on the last day of the offering period. As of December 31, 2016 , there were 165,740 shares reserved for future issuance under the ESPP. Because the ESPP does not have a “look back” feature, the compensation expense associated with the Plan is not measured by the use of the Black-Scholes pricing model, but rather by measuring the difference between the fair market value of common stock on the last day of the offering period and the purchase price for the offering period, which is 85% of the fair market value. Compensation expense associated with the ESPP for the years ended December 31, 2016 , 2015 and 2014 , respectively, was $0.2 million , $0.2 million , and $0.2 million . |
Restructuring Reserve
Restructuring Reserve | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Reserve | RESTRUCTURING RESERVE The Company has historically incurred an ongoing level of restructuring-type activities to maintain a competitive cost structure, including manufacturing and workforce optimization resulting from acquisitions. The balance of the restructuring reserve is included in accrued liabilities on the accompanying consolidated balance sheets. Employee termination benefits are included as a part of restructuring expenses. Activity in the restructuring reserves for these plans for the years ended December 31, 2016 , 2015 and 2014 is as follows (in thousands): Personnel Related Facility Related Total Balance as of December 31, 2013 $ 335 — $ 335 Additions 1,209 680 1,889 Reversals (52 ) — (52 ) Payments (1,124 ) (680 ) (1,804 ) Balance as of December 31, 2014 368 — 368 Additions 1,905 156 2,061 Reversals (124 ) — (124 ) Payments (473 ) (156 ) (629 ) Balance as of December 31, 2015 1,676 — 1,676 Additions 1,093 725 1,818 Reversals (436 ) — (436 ) Payments (1,990 ) (573 ) (2,563 ) Balance as of December 31, 2016 $ 343 152 $ 495 |
Other Income (Expense), Net
Other Income (Expense), Net | 12 Months Ended |
Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense), Net | OTHER INCOME (EXPENSE), NET Other income (expense), net consists of (in thousands): Years Ended December 31, 2016 2015 2014 Interest income $ 315 $ 27 $ 119 Interest expense (430 ) (352 ) (438 ) Foreign currency loss (359 ) (1,415 ) (37 ) Other 117 676 514 Total other income (expense), net $ (357 ) $ (1,064 ) $ 158 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Income before provision for income tax is as follows (in thousands): Years Ended December 31, 2016 2015 2014 U.S. $ 68 $ 20,507 $ 16,621 Foreign 54,835 31,902 29,388 Income before provision for income tax $ 54,903 $ 52,409 $ 46,009 The components of income tax expense for the years ended December 31, 2016 , 2015 and 2014 (in thousands): Years Ended December 31, 2016 2015 2014 Current U.S. Federal $ (1,388 ) $ 13,497 $ 6,514 U.S. State and local 692 1,984 1,082 Non-U.S. 15,069 2,239 6,874 Total current tax expense 14,373 17,720 14,470 Deferred U.S. Federal (1,534 ) (3,410 ) (728 ) U.S. State and local (378 ) (385 ) (37 ) Non-U.S. (152 ) 560 (174 ) Total deferred tax benefit (2,064 ) (3,235 ) (939 ) Total income tax expense $ 12,309 $ 14,485 $ 13,531 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of deferred tax assets and liabilities as of December 31, 2016 and 2015 are as follows (in thousands): December 31, 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 6,557 $ 5,174 Credit carryforwards 2,512 2,078 Accruals deductible in different periods 16,157 18,721 Employee benefits 2,389 2,081 Total deferred tax assets 27,615 28,054 Valuation allowance (3,706 ) (3,972 ) Total net deferred tax assets $ 23,909 $ 24,082 Deferred tax liabilities: Basis difference in fixed and intangible assets (12,678 ) (15,197 ) Total deferred tax liabilities (12,678 ) (15,197 ) Total net deferred tax assets $ 11,231 $ 8,885 The income tax expense in the accompanying statements of income differs from the provision calculated by applying the U.S. federal statutory income tax rate of 35% in 2016 , 2015 , and 2014 to income before taxes due to the following: Years Ended December 31, 2016 2015 2014 Federal statutory tax expense $ 19,216 $ 18,343 $ 16,103 State tax expense 188 1,249 892 Foreign taxes at rates less than U.S. rates (6,838 ) (1,760 ) (3,097 ) Deferred charges on sales of U.S. intellectual property 980 (5,878 ) — Equity compensation (530 ) 204 93 Tax credits (911 ) (935 ) (862 ) Uncertain tax position 485 3,897 1,163 Lapse of statute (495 ) (784 ) (652 ) Change of valuation allowance on foreign tax credit — — (491 ) Earnout adjustment (1,184 ) — — Tax audits 543 — — Other 855 149 382 Total expense $ 12,309 $ 14,485 $ 13,531 At December 31, 2016 , the Company had U.S. federal and state net operating loss carryforwards of $7.7 million and $7.9 million , respectively. These net operating loss carryforwards will begin to expire in 2036 and 2017 , respectively. As December 31, 2016 , the Company had U.S. federal and state R&D credit carryforwards of $0.5 million and $0.2 million , respectively. These R&D credit carryforwards will begin to expire in 2036 and 2021, respectively. At December 31, 2016 , the Company had $1.7 million of U.S. foreign tax credit carryforwards that can be used to offset future U.S. tax liabilities related to foreign source taxable income. The foreign tax credits will start to expire in 2022. At December 31, 2016 , certain foreign subsidiaries had deferred tax assets attributable to net operating loss carryforwards as follows: $1.9 million in France, $0.7 million in Canada, and $0.5 million in United Kingdom. These foreign net operating loss carryforwards, if not utilized to offset taxable income in future periods, will expire in various amounts beginning in 2028. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Accordingly, valuation allowances of $3.7 million and $4.0 million were recorded at December 31, 2016 and 2015 , respectively. The decrease of $0.3 million of valuation allowance was primarily due to a partial release of valuation allowance against the Company's net operating loss carryforward in the United Kingdom. The realizability of the deferred tax assets is primarily dependent on the Company's ability to generate sufficient taxable income in future periods. The Company's management weighed the aggregate effect of all positive evidence and negative evidence in determining the likelihood of realization of the deferred tax assets. The factors used by management to collect evidence included historical earnings of the applicable taxing jurisdiction, the cash refund opportunity to utilize the tax losses, and the future forecast of profitability in the jurisdiction. Weighing all the positive and negative evidence, the Company has recorded a valuation allowance related primarily to net operating losses in certain foreign jurisdictions and U.S. foreign tax credits where it is more likely than not that the tax benefit of the net operating losses and tax credits will not be realized. The Company elected to early adopt ASU 2016-09 in the first quarter of 2016 which was applied using a modified retrospective approach. For the year ended December 31, 2016 , the Company recorded all excess tax benefits and tax deficiencies as income tax expense or benefit. The Company receives tax deductions from the gains recognized by employees on the exercise of certain non-qualified stock options, vesting activities related to restricted shares and certain non-qualified disposition of shares acquired from employee stock purchase plan program. During the year to December 31, 2016 , the Company recorded a tax benefit resulting from the tax deduction of $1.9 million and $0.3 million tax expense from shortfall transactions in writing off certain deferred tax assets. The Company has not provided for U.S. federal income and foreign withholding taxes on the majority of undistributed earnings from non-U.S. operations because such earnings are intended to be reinvested indefinitely outside of the U.S. As of December 31, 2016 , the amount of undistributed earnings for which no taxes were provided was $147.0 million . The Company intends to reinvest these earnings in foreign subsidiaries in these regions for foreign acquisitions. If these earnings were distributed to the U.S. in the form of dividends or otherwise, the Company would be subject to additional U.S. income taxes and foreign withholding taxes. As of December 31, 2016 , the tax impact of undistributed earnings from non-U.S. operations has not been estimated as the determination is not practicable. The Company's foreign subsidiaries held $155.8 million of cash and short term investments out of the Company's total cash and short term investments of $248.0 million . If the foreign earnings were repatriated, the cash and short term investments available for other foreign financing activities will be reduced by the foreign withholding taxes paid on the repatriation of earnings in these regions. Uncertain Tax Positions A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest and penalties) is as follows (in thousands): Balance at January 1, 2014 $ 3,387 Increases for tax positions related to prior years 493 Increases for tax positions related to the current year 73 Lapse of statutes of limitations (558 ) Balance at January 1, 2015 $ 3,395 Increases for tax positions related to prior years 281 Increases for tax positions related to the current year 3,302 Lapse of statutes of limitations (664 ) Balance at January 1, 2016 $ 6,314 Increases for tax positions related to prior years 174 Increases for tax positions related to the current year 70 Lapse of statutes of limitations (475 ) Foreign exchange difference (185 ) Balance at December 31, 2016 $ 5,898 For the year ended December 31, 2016 , unrecognized tax benefits decreased by $0.4 million and $0.2 million of tax benefits in the income tax provision were recorded. The decrease was primarily attributable to the lapse of applicable statute of limitations in certain jurisdictions. The unrecognized tax benefits for the tax years ended December 31, 2016 , 2015 and 2014 were $5.9 million , $6.3 million and $3.4 million , respectively which include $2.5 million , $2.4 million and $2.0 million , respectively that would impact the effective tax rate if recognized. The Company expects a range from zero to $1.5 million of unrecognized tax benefit that will impact the effective tax rate in the next 12 months due to the lapse of statute of limitations provided that no taxing authority conducts a new examination. At December 31, 2016 , 2015 and 2014 , the Company had cumulatively accrued $0.6 million , $0.4 million , and $0.3 million for estimated interest and penalties related to uncertain tax positions. The Company records interest and penalties related to unrecognized tax positions as a component of income tax expense (benefit), which totaled $0.2 million , $0.1 million , and $0.0 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. The Company is currently unaware of any uncertain tax positions that could result in significant additional payments, accruals, or other material deviation in this estimate over the next 12 months . The Company's tax returns remain open to examination as follows: U.S. federal, 2013 through 2016 ; U.S. states, generally 2012 through 2016 ; and significant foreign jurisdictions, generally 2012 through 2016 . |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2016 | |
Postemployment Benefits [Abstract] | |
Employee Benefit Plan | EMPLOYEE BENEFIT PLAN The Company offers pre-tax and after-tax 401(k) savings plan options under which eligible U.S. employees may elect to have a portion of their salary deferred and contributed to the plan. Employer matching contributions are determined by management and are discretionary. Employer matching contributions were $1.5 million , $1.3 million , and $1.2 million respectively, in the years ended December 31, 2016 , 2015 , and 2014 . For new hires, employer contributions vest ratably over the first two years of employment. |
Segment, Customer and Geographi
Segment, Customer and Geographic Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment, Customer and Geographic Information | SEGMENT, CUSTOMER, AND GEOGRAPHIC INFORMATION The Company operates in one reportable segment, which is presented as the aggregation of the Neurology and Newborn Care operating segments. Through the one reportable segment the Company is organized on the basis of the healthcare products and services provided which are used for the screening, detection, treatment, monitoring and tracking of common medical ailments in newborn care, hearing impairment, neurological dysfunction, epilepsy, and sleep disorders. End-users customer base includes hospitals, clinics, laboratories, physicians, nurses, audiologists, and governmental agencies. Most of the Company's international sales are to distributors who resell products to end users or sub-distributors. The Company's foreign countries’ revenue is determined based on the customer’s billing address. Revenue and long-lived asset information by geographic region is as follows (in thousands): Years Ended December 31, 2016 2015 2014 Revenue: United States $ 250,694 $ 242,050 $ 215,543 Foreign countries 131,198 133,815 140,291 $ 381,892 $ 375,865 $ 355,834 Revenue by Operating Segment: Neurology Devices and Systems $ 168,200 $ 168,776 $ 173,006 Supplies 58,681 60,205 59,666 Services 11,641 8,320 — Total Neurology Revenue $ 238,522 $ 237,301 $ 232,672 Newborn Care Devices and Systems $ 72,562 $ 72,669 $ 67,354 Supplies 47,674 49,982 48,697 Services 23,134 15,913 7,111 Total Newborn Care Revenue $ 143,370 $ 138,564 $ 123,162 Total Revenue $ 381,892 $ 375,865 $ 355,834 Property and equipment, net: United States $ 7,024 $ 6,664 Canada 4,941 5,165 Ireland 2,530 1,651 Argentina 2,121 2,361 Other foreign countries 717 1,126 $ 17,333 $ 16,967 During the years ended December 31, 2016 , 2015 and 2014 , no single customer or foreign country contributed to more than 10% of revenue. |
Debt and Credit Arrangements
Debt and Credit Arrangements | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt and Credit Arrangements | DEBT AND CREDIT ARRANGEMENTS The Company has a Credit Agreement with JP Morgan Chase Bank ("JP Morgan") and Citibank, NA (“Citibank”). The Credit Agreement provides for an aggregate $150 million of secured revolving credit facility. The Credit Agreement contains covenants, including covenants which the Company is in compliance with, relating to maintenance of books and records, financial reporting and notification, compliance with laws, maintenance of properties and insurance, and limitations on guaranties, investments, issuance of debt, lease obligations and capital expenditures, and is secured by virtually all of the Company's assets. The Credit Agreement provides for events of default, including failure to pay any principal or interest when due, failure to perform or observe covenants, bankruptcy or insolvency events and the occurrence of a material adverse effect. The Company has no other significant credit facilities. As of December 31, 2016 , the Company had $140 million outstanding under the Credit Agreement. The Company financed a portion of Otometrics acquisition, which closed in January 2017, with borrowing under the revolving credit facility, as well as existing cash. Refer to Note 22 - Subsequent Events for further discussion of the Otometrics acquisition. Pursuant to the terms of the Credit Agreement, the outstanding principal balance will bear interest at either (a) a fluctuating rate per annum equal to the Applicable Rate, as defined in the Credit Agreement, depending on the leverage ratio plus the higher of (i) the federal funds rate plus one-half of one percent per annum; (ii) the prime rate in effect on such a day; and (iii) the LIBOR rate plus one percent, or (b) a fluctuating rate per annum of LIBOR Rate plus the Applicable Rate. The Credit Agreement matures on September 23, 2021, at which time all principal amounts outstanding under the Credit Agreement will be due and payable. Due to the execution of the Credit Agreement mentioned above, the Company terminated a previously existing credit agreement between the Company and Citibank. Under this agreement, the Company borrowed and repaid a total of $16.0 million during the year ended December 31, 2016 . Long-term debt consists of (in thousands): December 31, 2016 2015 Revolving credit facility of $140 million, interest at LIBOR plus 1.75% $ 140,000 $ — Less: current portion of long-term debt — — Total long-term debt $ 140,000 $ — Maturities of long-term debt as of December 31, 2016 are as follows (in thousands): December 31, 2016 2015 2017 $ — $ — 2018 — — 2019 — $ — Thereafter 140,000 — Total $ 140,000 $ — As of December 31, 2016 , the carrying value of total debt approximated fair market value. The fair value of the Company's debt is considered a Level 2 measurement. Refer to Note 21 - Fair Value Measurement for further discussion |
Commitments And Contingencies
Commitments And Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | COMMITMENTS AND CONTINGENCIES Leases —The Company has entered into noncancelable operating leases for some of the facilities including related office equipment located in the U.S. and Europe through 2024. Minimum lease payments under noncancelable operating leases as of December 31, 2016 are as follows (in thousands): Operating Leases Year Ending December 31, 2017 $ 3,985 2018 3,186 2019 2,996 2020 2,590 2021 2,250 Thereafter 2,838 Total minimum lease payments $ 17,845 Rent expense, which is recorded on the straight-line method from commencement over the period of the lease, totaled $5.3 million , $4.4 million and $4.3 million in 2016 , 2015 , and 2014 , respectively. Purchase commitments —The Company has various purchase obligations for goods or services totaling $48.8 million at December 31, 2016 , which are expected to be paid within the next year. Indemnifications —Under the bylaws, the Company has agreed to indemnify the officers and directors for certain events or occurrences arising as a result of the officer or director serving in such capacity. The Company has a director and officer liability insurance policy that limits the exposure under these indemnifications and enables them to recover a portion of any future loss arising out of them. In addition, the Company entered into indemnification agreements with other parties in the ordinary course of business. The Company has determined that these agreements fall within the scope of ASC 460, Guarantees . In some cases liability insurance is obtained to provide coverage that limits its exposure for these other indemnified matters. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. The Company believes the estimated fair value of these indemnification agreements is minimal and have not recorded a liability for these agreements as of December 31, 2016 . Legal matters —The Company may from time to time become a party to various legal proceedings or claims that arise in the ordinary course of business. The Company does not believe that any current legal or administrative proceedings are likely to have a material effect on business, financial condition, or results of operations. On January 30, 2017, an alleged class action entitled Badger v. Natus Medical Incorporated, et al. , No. 3:17-cv-00458-JSW, was filed in the United States District Court for the Northern District of California against the Company and two of our officers. The suit asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 for allegedly misleading statements regarding our business (including a contract entered into by a subsidiary of the Company), guidance and financial results. The suit is purportedly brought on behalf of purchasers of our common stock between October 16, 2015 and April 3, 2016, and seeks compensatory damages, fees and costs. The Company believes the claims are without merit and intend to defend them vigorously. Due to the inherent uncertainties of litigation, the Company cannot accurately predict the ultimate outcome of this manner. The Company is unable at this time to determine whether the outcome of the litigation would have a material impact on results of operations, financial condition or cash flow. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined under ASC 820 as the exit price associated with the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes the following three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value: Level 1 —Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2— Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 —Unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. The Company does not have any financial assets or liabilities measured at fair value on a recurring basis. The following financial instruments are not measured at fair value on the consolidated balance sheet as of December 31, 2016 and 2015 , but require disclosure of fair values: cash and cash equivalents, accounts receivable, and accounts payable. The carrying value of these financial instruments approximates fair values because of the relatively short maturity. During the third quarter of 2014, the Company listed the facility in Mundelein, Illinois for sale. This asset was measured at fair value less cost to sell as of September 30, 2014 based on market price and Level 2 inputs. The book value of this asset on June 30, 2014 was $3.6 million . The Company expensed $2.2 million during the third quarter of 2014 for this impairment. As of December 31, 2016 the Company is carrying the asset as held for sale its fair value of $1.4 million . For the year ended December 31, 2014 the Company recorded a charge of $0.6 million , related to impairment of trademarks and trade names. The Company measures these non-financial assets at fair value on a nonrecurring basis subsequent to the initial recognition. The fair value of these non-financial assets was measured using Level 3 inputs. See Note 6— Intangible Assets . The Company also has contingent consideration associated with earnouts from acquisitions. Contingent consideration liabilities are classified as Level 3 liabilities, as the Company use unobservable inputs to value them, which is a probability-based income approach. Contingent considerations are classified as accrued liabilities on the consolidated balance sheets. Subsequent changes in the fair value of contingent consideration liabilities are recorded within the income statement as an operating expense. Contingent consideration associated with earnouts from acquisitions is as follows (in thousands): December 31, 2015 Additions Payments Adjustments December 31, 2016 Liabilities: Contingent consideration $ 6,209 $ 2,500 $ (2,284 ) $ (3,382 ) $ 3,043 Total $ 6,209 $ 2,500 $ (2,284 ) $ (3,382 ) $ 3,043 The significant unobservable inputs used in the fair value measurement of contingent consideration related to the acquisitions are annualized revenue forecasts developed by the Company considering the probability of achievement of those revenue forecasts. Significant increases (decreases) in these unobservable inputs in isolation would result in a significantly lower (higher) fair value measurement. The Company's Level 2 securities are valued using third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spread, benchmark securities, prepayment/default projections based on historical data and other observable inputs. The Company validates the prices provided by its third-party pricing services by understanding the models used, obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming those securities traded in active markets. See Note 4 to these Consolidated Financial Statements for further information regarding the Company's financial instruments. Short term investments are as follows (in thousands): December 31, 2016 Level I Level II Level III Total Short term investments U.S. Treasury Bills — 7,688 — 7,688 U.S. investment grade bonds — 16,789 — 16,789 Developed investment grade bonds — 9,542 — 9,542 Total short term investments — 34,019 — 34,019 |
Schedule II_ Valuation And Qual
Schedule II: Valuation And Qualifying Accounts | 12 Months Ended |
Dec. 31, 2015 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II: of Valuation and Qualifying Accounts | SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS For the years ended December 31, 2016 , 2015 and 2014 (In thousands) Balance at Additions Deductions Balance Year ended December 31, 2016 Allowance for doubtful accounts $ 4,686 $ 1,123 $ (1,627 ) $ 4,182 Valuation allowance 3,972 — (266 ) 3,706 Year ended December 31, 2015 Allowance for doubtful accounts $ 4,324 $ 1,496 $ (1,134 ) $ 4,686 Valuation allowance 3,151 821 — 3,972 Year ended December 31, 2014 Allowance for doubtful accounts $ 2,962 $ 1,221 $ 141 $ 4,324 Valuation allowance 5,043 — (1,892 ) 3,151 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Pursuant to a Purchase Agreement that was entered into on September 26, 2016, the Company completed the acquisition of the Otometrics business from GN Store Nord A/S on January 3, 2017 for a cash purchase price of $149.2 million , including $4.2 million of net working capital adjustment. Otometrics is a manufacturer of hearing diagnostics and balance assessment equipment, disposables & software. Otometrics provides computer-based audiological, otoneurologic and vestibular instrumentation and sound rooms to hearing and balance care professionals worldwide. Otometrics has a complete product and brand portfolio known for its sophisticated design technology in the hearing and balance assessment markets. The Company will account for the acquisition under the acquisition method of accounting for business combinations. The results of Otometrics will be included in the Company’s results of operations beginning on January 3, 2017. Upon receipt of the Otometrics opening balance sheet as of January 3, 2017, the Company, with assistance from independent valuation specialists, will allocate the purchase price to acquired tangible assets and assumed liabilities, and identified intangible assets based on their respective fair values. Approximately $1.5 million of direct costs associated with the Otometrics acquisition were charged to general and administrative expense during the year ended December 31, 2016. Purchase price allocation is currently being determined at this time. The Company funded the Otometrics acquisition with a combination of existing cash and borrowings under the revolving credit facility. |
Organization and Significant 30
Organization and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities in the Consolidated Financial Statements and the reported amount of revenue and expenses during the reporting period. Such estimates include allowances for potentially uncollectible accounts receivable, valuation of inventory, intangible assets, goodwill, share-based compensation, deferred income taxes, reserves for warranty obligations, and the provision for income taxes. Actual results could differ from those estimates. |
Revenue recognition | Revenue recognition Revenue, net of discounts, is recognized from sales of medical devices and supplies, including sales to distributors, when the following conditions have been met: a purchase order has been received, title has transferred, the selling price is fixed or determinable, and collection of the resulting receivable is reasonably assured. Terms of sale for most domestic sales are FOB origin, reflecting that title and risk of loss are assumed by the purchaser at the shipping point; however, terms of sale for some neurology, sleep-diagnostic, and head cooling systems are FOB destination, reflecting that title and risk of loss are assumed by the purchaser upon delivery. Terms of sales to international distributors are generally EXW, reflecting that goods are shipped “ex works,” in which title and risk of loss are assumed by the distributor at the shipping point. For products shipped under FOB origin or EXW terms, delivery is generally considered to have occurred when the product is shipped. Freight charges billed to customers are included in revenue and freight-related expenses are charged to cost of revenue. The Company generally does not provide rights of return on products. For products containing embedded software, the Company has determined that the hardware and software components function together to deliver the products’ essential functionality, and therefore, the revenue from the sale of these products does not fall within the scope of the software revenue recognition rules. The Company's revenue recognition policies for sales of these products are substantially the same as for other tangible products. Revenue from sales of certain products that remain within the scope of the software revenue recognition rules under ASC Subtopic 985-605 is not significant. Revenue from extended service and maintenance agreements, for both medical devices and data management systems, is recognized ratably over the service period. Revenue from installation or training services is deferred until such time service is provided. Hearing screening and ambulatory EEG monitoring revenue is recorded when the procedure is performed at the estimated net realizable value based on contractual agreements with payers and historical collections. Certain revenue transactions include multiple element arrangements. The Company allocates revenue in these arrangements to each unit of accounting using the relative selling price method. The selling prices used during the allocation process are based on vendor specific objective evidence (“VSOE”) if available, third party evidence (“TPE”) if VSOE is not available, or estimated selling price (“ESP”) if neither VSOE or TPE is available. Group purchasing organization (“GPOs”) negotiate volume purchase prices for member hospitals, group practices, and other clinics. The Company's agreements with GPOs typically contain preferential terms for the GPO and its members, including provisions for some, if not all, of the following: • Payment of marketing fees by Natus to the GPO, usually based on purchasing experience of group members; and • Non-recourse cancellation provisions. Natus does not sell products to GPOs. Hospitals, group practices, and other clinics that are members of a GPO purchase products directly from the Company under the terms negotiated by the GPO. Negotiated pricing and discounts are recognized as a reduction of the selling price of products at the time of the sale. Revenue from sales to members of GPOs is otherwise consistent with general revenue recognition policies as previously described. |
Inventory | Inventory Inventories are carried at the lower of cost or market, with cost being determined using the first-in, first-out method. The carrying value of the Company's inventories is reduced for any difference between cost and estimated market value of inventories that is determined to be obsolete or unmarketable, based upon assumptions about future demand and market conditions. Adjustments to the value of inventory establish a new cost basis and are considered permanent even if circumstances later suggest that increased carrying amounts are recoverable. If demand is higher than expected, Natus may sell inventory that had previously been impaired. |
Carrying value of intangible assets and goodwill | Carrying value of intangible assets and goodwill The Company amortizes intangible assets with finite lives over the useful lives; any future changes that would limit the useful lives or any determination that these assets are carried at amounts greater than the estimated fair value could result in additional charges. Goodwill is not amortized but is subject to an annual impairment analysis, which is performed as of October 1st; this assessment is also performed whenever there is a change in circumstances that indicates the carrying value of goodwill may be impaired. In 2016, 2015 and 2014, the Company performed a qualitative assessment to test goodwill for impairment. Qualitative factors considered in this assessment include industry and market considerations, overall financial performance and other relevant events and factors affecting each reporting unit. Based on the qualitative assessment, the Company determined that the fair value was more likely than not to be greater than its carrying amount, and no further analysis was needed. If the fair value was less than its carrying amount, the Company would perform a two-step impairment test on goodwill. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit to its carrying value, including goodwill. The Company uses a projected discounted cash flow model to determine the fair value of a reporting unit. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, and the second step of the impairment test is not required. The second step, if required, compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. The fair value of a reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the price paid to acquire the reporting unit. If the carrying amount of the reporting unit’s goodwill exceeds its implied fair value, an impairment charge is recognized in an amount equal to that excess. Prior to the assignment of definite lives to trade names in the second quarter of 2015 (See Note 6 - Intangible Assets ), the Company tested indefinite lived intangibles for impairment by comparing the carrying value of those assets to be fair value as of the assessment date. The Company used the relief from royalty method to determine the fair value of the assets. This analysis is dependent upon a number of quantitative and qualitative factors including estimates of forecasted revenue, royalty rate, and taxes. The discount rate applied also has an impact on the estimates of fair value, as use of a higher rate will result in a lower estimate of fair value. |
Long lived assets | Long lived assets The Company continually monitors events and changes in circumstances that could indicate that carrying amounts of its long-lived assets, including property and equipment and intangible assets, may not be recoverable. When such events or changes in circumstances occur, the Company assess the recoverability by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying amount of these assets, the Company will recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. |
Liability for product warranties | Liability for product warranties The Company provides a warranty for products that is generally one year in length. In some cases, regulations may require the Company to provide repair or remediation beyond the typical warranty period. If any products contain defects, the Company may be required to incur additional repair and remediation costs. Service for domestic customers is provided by Company-owned service centers that perform all service, repair, and calibration services. Service for international customers is provided by a combination of Company-owned facilities and vendors on a contract basis. A warranty reserve is included in accrued liabilities for the expected future costs of servicing products. Additions to the reserve are based on management’s best estimate of probable liability. The Company considers a combination of factors including material and labor costs, regulatory requirements, and other judgments in determining the amount of the reserve. The reserve is reduced as costs are incurred to honor existing warranty and regulatory obligations. |
Share-based compensation | Share-based compensation The Company recognizes share-based compensation expense associated with employee stock options under the single-option straight line method over the requisite service period, which is generally a four -year vesting period and ten -year contractual term pursuant to ASC Topic 718, Compensation-Stock Compensation . See Note 14 of the Consolidated Financial Statements. For employee stock options, the value of each option is estimated on the date of grant using the Black-Scholes option pricing model, which was developed for use in estimating the value of freely traded options. Similar to other option pricing models, the Black-Scholes method requires the input of highly subjective assumptions, including stock price volatility. Changes in the subjective input assumptions can materially affect the estimated fair value of the employee stock options. The Company recognizes share-based compensation associated with Restricted Stock Awards (“RSA”) and Restricted Stock Units (“RSU”). RSAs and RSUs vest ratably over a three -year period for employees. RSAs and RSUs for executives vest over a four -year period; 50% on the second anniversary of the awarded date and 25% on each of the third and fourth anniversaries. RSAs and RSUs for non employees (Board of Directors) vest over a one -year period; 100% on the first anniversary. The value is estimated based on the market value of Natus common stock on the date of issuance pursuant to ASC Topic 718, Compensation-Stock Compensation. The Company issues new shares of common stock upon the exercise of stock options and the vesting of RSAs and RSUs. Forfeitures of employee stock options and awards are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. Share-based compensation expense is recorded net of estimated forfeitures, such that expense is recorded only for those share-based awards that are expected to vest. The Company elected to early adopt ASU 2016-09 in the first quarter of 2016. In 2015 and 2014, the cash flow from the tax benefits resulting from tax deductions in excess of the compensation cost recognized for employee options (excess tax benefits) was classified as a cash inflow from financing activities and a cash outflow from operating activities in the Statement of Cash Flows. The Company treated tax deductions from certain stock option exercises as being realized when the Company reduced taxes payable in accordance with relevant tax law. |
Cash Equivalents | Cash Equivalents and Short-term Investments All highly liquid investments purchased with an original maturity of three months or less are classified as cash equivalents. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company estimates the allowance for potentially uncollectible accounts receivable based on historical collection experience within the markets in which the Company operates and other customer-specific information, such as bankruptcy filings or customer liquidity problems. When all internal efforts have been exhausted to collect the receivable, it is written off and relieved from the reserve. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial instruments include cash and cash equivalents, investments, accounts receivable, and accounts payable. Cash is reported at its fair value on the balance sheet dates. The recorded carrying amounts of investments, accounts receivable and accounts payable approximate the fair values due to the short-term maturities. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed using the straight-line method over estimated useful lives of the respective assets, which are three to ten years for office furniture and equipment, three to five years or the length of the license for computer software and hardware, three to five years for demonstration and loaned equipment, and 30 to 40 years for buildings. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life. Land is not depreciated. Costs associated with acquiring and installing software to be used for internal purposes are capitalized and amortized on a straight-line basis over three years. |
Research & Development Costs | Research & Development Costs Costs incurred in research and development are charged to operations as incurred. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records net deferred tax assets to the extent it is more likely than not that the assets will be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. To the extent that previously reserved deferred tax assets are estimated to be realizable, the Company adjusts the valuation allowance which reduces the provision for income taxes. The Company recognizes the tax benefit of uncertain tax positions in the financial statements in accordance with ASC Topic 740, Income Tax. When the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50 percent likely of being ultimately realized upon settlement, in accordance with ASC 740-10-05. |
Foreign Currency | Foreign Currency The functional currency of the Company's subsidiaries outside of North America is generally the local currency of the country where the subsidiary is located. Accordingly, foreign currency translation adjustments relating to the translation of foreign subsidiary financial statements are included as a component of accumulated other comprehensive loss. The Company recorded $5.0 million , $8.4 million , and $11.2 million of foreign currency translation losses for the years ended December 31, 2016, 2015 and 2014, respectively. Gains and losses from transactions denominated in currencies other than the functional currencies are included in other income and expense. In 2016, 2015, and 2014, net foreign currency transaction losses were $0.4 million, $1.4 million, and $0.0 million, respectively. Foreign currency gains and losses result primarily from fluctuations in the exchange rate between the U.S. Dollar, Canadian Dollar, Euro, Argentine Peso, British Pound, and Danish Kroner. |
Comprehensive Income | Comprehensive Income The Company reports by major components and as a single total the change in net assets during the period from non-owner sources in accordance with ASC Topic 220, Comprehensive Income. The consolidated statement of comprehensive income has been included with the consolidated statements of operations. Accumulated other comprehensive income consists of translation gains and losses on foreign subsidiary financial statements as well as unrealized gains and losses on investments. |
Basic and Diluted Net Income per Share | Basic and Diluted Net Income per Share Natus computes net income per share in accordance with ASC Topic 260, Earnings per Share. Basic net income per share is based upon the weighted average number of common shares outstanding during the period. Diluted net income per share is based upon the weighted average number of common shares outstanding and dilutive common stock equivalents outstanding during the period. Common stock equivalents are options granted and shares of restricted stock issued under the stock awards plans and are calculated under the treasury stock method. Common equivalent shares from unexercised stock options and restricted stock are excluded from the computation when there is a loss as the effect is anti-dilutive, or if the exercise price of such options is greater than the average market price of the stock for the period. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2041-09”), which supersedes nearly all existing revenue recognition guidance. The standard's core principle is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard creates a five-step model to achieve its core principle: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction's price to the separate performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In addition, entities must disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative and quantitative disclosures are required about: (i) the entity's contracts with customers; (ii) the significant judgments, and changes in judgments, made in applying the guidance to those contracts; and (iii) any assets recognized from the costs to obtain or fulfill a contract with a customer. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 616) - Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to interim and annual periods beginning January 1, 2018. The standard allows entities to apply the standard retrospectively to each prior period presented (“full retrospective adoption”) or retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application (“modified retrospective adoption”). The Company plans to adopt this guidance on January 1, 2018, and continues to evaluate the impact of adopting under the modified retrospective adoption versus the full retrospective method. The Company is currently in the process of determining the impact of the new revenue recognition guidance on its revenue transactions, including any impacts on associated processes, systems, and internal controls. The Company's preliminary assessment indicates implementation of this standard will not have a material impact on financial results. The Company's evaluation has included determining whether the unit of account (i.e., performance obligations) will change as compared to current GAAP, as well as determining the standalone selling price of each performance obligation. Standalone selling prices under the new guidance may not be substantially different from the Company's current methodologies of establishing fair value on multiple element arrangements. The Company continues to evaluate the impact of this guidance and its subsequent amendments on the consolidated financial position, results of operations, and cash flows, and any preliminary assessments are subject to change. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330). This standard requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company plans to adopt ASU 2015-11 on January 1, 2017. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This standard requires a lessee to recognize the lease assets and lease liabilities arising from operating leases in the statement of financial position. Qualitative along with specific quantitative disclosures are required by lessees and lessors to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 including interim periods within those fiscal years. The Company is currently evaluating the impact that will result from adopting ASU 2016-02. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvement to Employee Share-Based Payment Accounting. The new standard contains several amendments that simplify the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The changes in the new standard eliminate the accounting for excess tax benefits to be recognized in additional paid-in capital and tax deficiencies recognized either in the income tax provision or in additional paid-in capital. The Company elected to early adopt ASU 2016-09 in the first quarter of 2016 which was applied using a modified retrospective approach. For the year ended December 31, 2016, the Company recognized all excess tax benefits and tax deficiencies as income tax expense or benefit as discrete items. An income tax benefit of approximately $1.6 million was recognized in the year ended December 31, 2016 as a result of the adoption of ASU 2016-09. There was no cumulative-effect adjustment required to retained earnings under the modified retrospective method as of the beginning of the year because all tax benefits had been previously recognized when the tax deductions related to stock compensation were utilized to reduce taxes payable. The Company is not recording deferred tax assets or tax losses as the result of the adoption of ASU 2016-09. The treatment of forfeitures has not changed as the Company is electing to continue the current process of estimating the number of forfeitures. With the early adoption of 2016-09, the Company has elected to present the cash flow statement on a prospective transition method and no prior periods have been adjusted. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This standard provides guidance for eight cash flow classification issues in current GAAP. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company elected to early adopt ASU 2016-15 in the first quarter of 2016 including Contingent Consideration Payments Made after a Business Combination. For the year ended December 31, 2016, the Company recognized $1.0 million as a cash outflow for investing activities on the Statement of Cash Flows. This payment was made soon after the acquisition date of a business combination to settle the contingent consideration from the Monarch acquisition. |
Cash, Cash Equivalents, and S31
Cash, Cash Equivalents, and Short-term Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Short-term Investments | Cash, cash equivalents and short-term investments consisted of the following (in thousands): December 31, 2016 December 31, 2015 Cash and cash equivalents: Cash 213,551 82,469 Short-term investments: U.S. investment grade bonds 24,477 — Developed investment grade bonds 9,542 — Total short-term investments 34,019 — Total cash, cash equivalents and short-term investments 247,570 82,469 |
Unrealized Gain (Loss) on Investments | Short-term investments by investment type are as follows (in thousands): December 31, 2016 December 31, 2015 Aggregated Cost Basis Gross Unrealized Gains Gross Unrealized Losses Aggregated Fair Value Aggregated Cost Basis Gross Unrealized Gains Gross Unrealized Losses Aggregated Fair Value U.S. investment grade bonds 24,531 — (54 ) 24,477 — — — — Developed investment grade bonds 9,567 — (25 ) 9,542 — — — — Total short-term investments $ 34,098 $ — $ (79 ) $ 34,019 $ — $ — $ — $ — |
Investments Classified by Contractual Maturity Date | Short-term investments by contractual maturity are as follows (in thousands): December 31, 2016 December 31, 2015 Investments Investments Due in one year or less $ 21,655 $ — Due after one year through five years 12,364 — Total short-term investment $ 34,019 $ — |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consist of (in thousands): December 31, 2016 2015 Raw materials and subassemblies $ 28,245 $ 19,041 Work in process 1,507 1,343 Finished goods 34,908 36,149 Total Inventories 64,660 56,533 Less: Non-current Inventories (15,073 ) (7,961 ) Inventories $ 49,587 $ 48,572 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consist of (in thousands): December 31, 2016 2015 Land $ 2,856 $ 2,918 Buildings 5,219 5,662 Leasehold improvements 2,386 2,345 Office furniture and equipment 18,398 15,602 Computer software and hardware 9,100 8,752 Demonstration and loaned equipment 11,393 11,216 49,352 46,495 Accumulated depreciation (32,019 ) (29,528 ) Total $ 17,333 $ 16,967 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | The carrying amount of goodwill and the changes in those balances are as follows (in thousands): As of December 31, 2014 $ 96,316 Acquisitions/Purchase Accounting Adjustments 13,547 Foreign currency translation (2,397 ) As of December 31, 2015 $ 107,466 Acquisitions/Purchase Accounting Adjustments 6,705 Foreign currency translation (1,059 ) As of December 31, 2016 $ 113,112 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Components of Gross and Net Intangible Asset Balances | The following table summarizes the components of gross and net intangible asset balances (in thousands): December 31, 2016 December 31, 2015 Gross Accumulated Accumulated Net Book Gross Accumulated Accumulated Net Book Technology $ 62,563 — $ (34,683 ) $ 27,880 $ 63,668 — $ (31,600 ) $ 32,068 Customer related 38,087 — (17,610 ) 20,477 35,529 — (14,352 ) 21,177 Trade names 32,106 (3,290 ) (7,135 ) 21,681 31,837 (3,340 ) (3,052 ) 25,445 Internally developed software 16,978 — (10,220 ) 6,758 15,513 — (8,155 ) 7,358 Patents 2,620 — (2,251 ) 369 2,663 — (2,175 ) 488 Total Definite-lived intangible assets 152,354 (3,290 ) (71,899 ) 77,165 149,210 (3,340 ) (59,334 ) 86,536 |
Amortization expense related to intangible assets with definite lives | Amortization expense related to intangible assets with finite lives was as follows (in thousands): Years Ended December 31, 2016 2015 2014 Technology $ 3,407 $ 3,916 $ 3,993 Customer related 3,452 2,938 1,892 Trade names 4,115 3,159 — Internally developed software 2,069 1,620 1,434 Patents 112 112 113 Total amortization $ 13,155 $ 11,745 $ 7,432 |
Expected annual amortization expense related to amortizable intangible assets | Expected annual amortization expense related to amortizable intangible assets is as follows (in thousands): 2017 $ 13,130 2018 12,908 2019 11,753 2020 9,558 2021 8,270 Thereafter 21,546 Total expected amortization expense $ 77,165 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued liabilities consist of (in thousands): December 31, 2016 2015 Compensation and related benefits $ 16,064 $ 16,752 Accrued federal, state, and local taxes 4,160 4,707 Warranty reserve 10,670 10,386 Accrued professional fees 1,191 520 Contingent consideration 3,043 6,209 Other 2,767 3,563 Total $ 37,895 $ 42,137 |
Long-Term Other Liabilities (Ta
Long-Term Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Long-Term Other Liabilities | Long-term other liabilities consist of (in thousands): December 31, 2016 2015 Contingent tax obligations $ 6,125 $ 6,376 Non-current deferred revenue 1,885 1,401 Other 3 4 Total $ 8,013 $ 7,781 |
Reserve for Product Warranties
Reserve for Product Warranties (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Guarantees [Abstract] | |
Reserves for Product Warranties | The details of activity in the warranty reserve are as follows (in thousands): Balance at Beginning of Period Assumed Through Acquisitions Additions Charged to Expense Reductions Balance at End of Period December 31, 2016 $ 10,386 $ 222 $ 2,711 $ (2,649 ) $ 10,670 December 31, 2015 $ 2,753 $ — $ 10,729 $ (3,096 ) $ 10,386 December 31, 2014 $ 3,143 $ — $ 2,306 $ (2,696 ) $ 2,753 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Components of Basic and Diluted EPS | The components of basic and diluted EPS are as follows (in thousands, except per share amounts): December 31, 2016 2015 2014 Net income $ 42,594 $ 37,924 $ 32,478 Weighted average common shares 32,460 32,348 31,499 Dilutive effect of stock based awards 596 893 1,069 Diluted Shares 33,056 33,241 32,568 Basic earnings per share $ 1.31 $ 1.17 $ 1.03 Diluted earnings per share $ 1.29 $ 1.14 $ 1.00 Shares excluded from calculation of diluted EPS 2 — 239 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation Expense | Share-based compensation was recognized as follows in the consolidated statement of income (in thousands): December 31, 2016 2015 2014 Cost of revenue $ 219 $ 156 $ 143 Marketing and selling 821 808 977 Research and development 1,515 1,264 664 General and administrative 6,453 4,725 4,278 Total expense 9,008 6,953 6,062 |
Stock Options Activity | Stock Option Activity —Stock option activity under the stock awards plans for the year ended December 31, 2016 is summarized as follows: Number of Shares Weighted Average Exercise Price Outstanding, December 31, 2015 (737,032 shares exercisable at a weighted average exercise price of $14.40 per share) 1,105,182 $ 15.07 Granted — $ — Exercised (151,142 ) $ 15.01 Forfeited (18,600 ) $ 17.62 Expired (2,500 ) $ 16.78 Outstanding, December 31, 2016 (816,691 shares exercisable at a weighted average exercise price of $14.54 per share) 932,940 $ 15.02 |
Restricted Stock Awards Activity | Restricted Stock Awards Activity —The following table summarizes the activity for restricted stock awards during the year ended December 31, 2016 : Shares Weighted Average Grant Date Fair Value Unvested at December 31, 2015 535,208 $ 24.87 Granted 205,234 $ 44.22 Vested (212,811 ) $ 19.75 Forfeited (21,242 ) $ 26.69 Unvested at December 31, 2016 506,389 $ 34.82 |
Restricted Stock Units Activity | Restricted Stock Units Activity —The following table summarizes restricted stock units activity for the year ended December 31, 2016 : Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2015 45,483 $ 24.57 Awarded 11,860 $ 45.23 Released (24,687 ) $ 21.52 Forfeited (2,753 ) $ 26.42 Outstanding at December 31, 2016 29,903 $ 34.39 |
Restructuring Reserve (Tables)
Restructuring Reserve (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Detail of Activity in the Restructuring Reserve | Activity in the restructuring reserves for these plans for the years ended December 31, 2016 , 2015 and 2014 is as follows (in thousands): Personnel Related Facility Related Total Balance as of December 31, 2013 $ 335 — $ 335 Additions 1,209 680 1,889 Reversals (52 ) — (52 ) Payments (1,124 ) (680 ) (1,804 ) Balance as of December 31, 2014 368 — 368 Additions 1,905 156 2,061 Reversals (124 ) — (124 ) Payments (473 ) (156 ) (629 ) Balance as of December 31, 2015 1,676 — 1,676 Additions 1,093 725 1,818 Reversals (436 ) — (436 ) Payments (1,990 ) (573 ) (2,563 ) Balance as of December 31, 2016 $ 343 152 $ 495 |
Other Income (expense), net (Ta
Other Income (expense), net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |
Other income (expense), net | Other income (expense), net consists of (in thousands): Years Ended December 31, 2016 2015 2014 Interest income $ 315 $ 27 $ 119 Interest expense (430 ) (352 ) (438 ) Foreign currency loss (359 ) (1,415 ) (37 ) Other 117 676 514 Total other income (expense), net $ (357 ) $ (1,064 ) $ 158 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income (loss) before provision (benefit) for income tax | Income before provision for income tax is as follows (in thousands): Years Ended December 31, 2016 2015 2014 U.S. $ 68 $ 20,507 $ 16,621 Foreign 54,835 31,902 29,388 Income before provision for income tax $ 54,903 $ 52,409 $ 46,009 |
Summary of components of income tax expense | The components of income tax expense for the years ended December 31, 2016 , 2015 and 2014 (in thousands): Years Ended December 31, 2016 2015 2014 Current U.S. Federal $ (1,388 ) $ 13,497 $ 6,514 U.S. State and local 692 1,984 1,082 Non-U.S. 15,069 2,239 6,874 Total current tax expense 14,373 17,720 14,470 Deferred U.S. Federal (1,534 ) (3,410 ) (728 ) U.S. State and local (378 ) (385 ) (37 ) Non-U.S. (152 ) 560 (174 ) Total deferred tax benefit (2,064 ) (3,235 ) (939 ) Total income tax expense $ 12,309 $ 14,485 $ 13,531 |
Deferred tax assets and liabilities | Significant components of deferred tax assets and liabilities as of December 31, 2016 and 2015 are as follows (in thousands): December 31, 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 6,557 $ 5,174 Credit carryforwards 2,512 2,078 Accruals deductible in different periods 16,157 18,721 Employee benefits 2,389 2,081 Total deferred tax assets 27,615 28,054 Valuation allowance (3,706 ) (3,972 ) Total net deferred tax assets $ 23,909 $ 24,082 Deferred tax liabilities: Basis difference in fixed and intangible assets (12,678 ) (15,197 ) Total deferred tax liabilities (12,678 ) (15,197 ) Total net deferred tax assets $ 11,231 $ 8,885 |
Reconciliation of effective income tax rate | The income tax expense in the accompanying statements of income differs from the provision calculated by applying the U.S. federal statutory income tax rate of 35% in 2016 , 2015 , and 2014 to income before taxes due to the following: Years Ended December 31, 2016 2015 2014 Federal statutory tax expense $ 19,216 $ 18,343 $ 16,103 State tax expense 188 1,249 892 Foreign taxes at rates less than U.S. rates (6,838 ) (1,760 ) (3,097 ) Deferred charges on sales of U.S. intellectual property 980 (5,878 ) — Equity compensation (530 ) 204 93 Tax credits (911 ) (935 ) (862 ) Uncertain tax position 485 3,897 1,163 Lapse of statute (495 ) (784 ) (652 ) Change of valuation allowance on foreign tax credit — — (491 ) Earnout adjustment (1,184 ) — — Tax audits 543 — — Other 855 149 382 Total expense $ 12,309 $ 14,485 $ 13,531 |
Uncertain Tax Positions | A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest and penalties) is as follows (in thousands): Balance at January 1, 2014 $ 3,387 Increases for tax positions related to prior years 493 Increases for tax positions related to the current year 73 Lapse of statutes of limitations (558 ) Balance at January 1, 2015 $ 3,395 Increases for tax positions related to prior years 281 Increases for tax positions related to the current year 3,302 Lapse of statutes of limitations (664 ) Balance at January 1, 2016 $ 6,314 Increases for tax positions related to prior years 174 Increases for tax positions related to the current year 70 Lapse of statutes of limitations (475 ) Foreign exchange difference (185 ) Balance at December 31, 2016 $ 5,898 |
Segment, Customer and Geograp44
Segment, Customer and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Revenue and long-lived asset information by geographic region | Revenue and long-lived asset information by geographic region is as follows (in thousands): Years Ended December 31, 2016 2015 2014 Revenue: United States $ 250,694 $ 242,050 $ 215,543 Foreign countries 131,198 133,815 140,291 $ 381,892 $ 375,865 $ 355,834 Revenue by Operating Segment: Neurology Devices and Systems $ 168,200 $ 168,776 $ 173,006 Supplies 58,681 60,205 59,666 Services 11,641 8,320 — Total Neurology Revenue $ 238,522 $ 237,301 $ 232,672 Newborn Care Devices and Systems $ 72,562 $ 72,669 $ 67,354 Supplies 47,674 49,982 48,697 Services 23,134 15,913 7,111 Total Newborn Care Revenue $ 143,370 $ 138,564 $ 123,162 Total Revenue $ 381,892 $ 375,865 $ 355,834 Property and equipment, net: United States $ 7,024 $ 6,664 Canada 4,941 5,165 Ireland 2,530 1,651 Argentina 2,121 2,361 Other foreign countries 717 1,126 $ 17,333 $ 16,967 |
Debt and Credit Arrangements De
Debt and Credit Arrangements Debt and Credit Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consists of (in thousands): December 31, 2016 2015 Revolving credit facility of $140 million, interest at LIBOR plus 1.75% $ 140,000 $ — Less: current portion of long-term debt — — Total long-term debt $ 140,000 $ — |
Schedule of Maturities of Long-term Debt | Maturities of long-term debt as of December 31, 2016 are as follows (in thousands): December 31, 2016 2015 2017 $ — $ — 2018 — — 2019 — $ — Thereafter 140,000 — Total $ 140,000 $ — |
Commitments And Contingencies (
Commitments And Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Minimum Future Leases Payments Receivable | Minimum lease payments under noncancelable operating leases as of December 31, 2016 are as follows (in thousands): Operating Leases Year Ending December 31, 2017 $ 3,985 2018 3,186 2019 2,996 2020 2,590 2021 2,250 Thereafter 2,838 Total minimum lease payments $ 17,845 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Changes in fair value of contingent consideration | also has contingent consideration associated with earnouts from acquisitions. Contingent consideration liabilities are classified as Level 3 liabilities, as the Company use unobservable inputs to value them, which is a probability-based income approach. Contingent considerations are classified as accrued liabilities on the consolidated balance sheets. Subsequent changes in the fair value of contingent consideration liabilities are recorded within the income statement as an operating expense. Contingent consideration associated with earnouts from acquisitions is as follows (in thousands): December 31, 2015 Additions Payments Adjustments December 31, 2016 Liabilities: Contingent consideration $ 6,209 $ 2,500 $ (2,284 ) $ (3,382 ) $ 3,043 Total $ 6,209 $ 2,500 $ (2,284 ) $ (3,382 ) $ 3,043 |
Organization and Significant 48
Organization and Significant Accounting Policies (Textual) (Detail) - USD ($) $ in Thousands | Oct. 01, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Impairment of certain indefinite live intangible assets | $ 0 | $ 0 | $ 598 | |
Recorded foreign currency translation adjustments | 5,003 | 8,378 | 11,218 | |
Net foreign currency transactions losses | 359 | 1,415 | $ 37 | |
Non-current deferred tax assets | 14,915 | $ 12,782 | ||
Trade names [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Impairment of certain indefinite live intangible assets | $ 600 | |||
Accounting Standards Update 2016-15 [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Payment for Contingent Consideration Liability, Investing Activities | 1,000 | |||
Adjustments for New Accounting Principle, Early Adoption [Member] | Accounting Standards Update 2016-09 [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Non-current deferred tax assets | $ 1,600 | |||
Office furniture and equipment [Member] | Minimum [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of property and equipment | 3 years | |||
Office furniture and equipment [Member] | Maximum [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of property and equipment | 10 years | |||
Computer software and hardware [Member] | Minimum [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of property and equipment | 3 years | |||
Computer software and hardware [Member] | Maximum [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of property and equipment | 5 years | |||
Demonstration and loaned equipment [Member] | Maximum [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of property and equipment | 5 years | |||
Buildings [Member] | Minimum [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of property and equipment | 30 years | |||
Buildings [Member] | Maximum [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of property and equipment | 40 years | |||
Software for internal purposes [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of property and equipment | 3 years | |||
Employee Stock Option [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | 10 years | |||
Vesting period | 4 years | |||
Restricted Stock Awards [Member] | Employees [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Vesting period | 3 years | |||
Restricted Stock Awards [Member] | Executives RSAs and RSUs [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Vesting period | 4 years | |||
Restricted Stock Awards [Member] | Executives RSAs and RSUs [Member] | Vest on second anniversary of the vesting start date [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Vesting percentage | 50.00% | |||
Restricted Stock Awards [Member] | Executives RSAs and RSUs [Member] | On each of the third and fourth anniversaries of the vesting date[Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Vesting percentage | 25.00% | |||
Restricted Stock Awards [Member] | Director [Member] | On each of the third and fourth anniversaries of the vesting date[Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Vesting period | 1 year | |||
Vesting percentage | 100.00% |
Business Combinations (Textual)
Business Combinations (Textual) (Detail) $ in Thousands | Jul. 06, 2016USD ($) | Mar. 02, 2016USD ($) | Jan. 11, 2016USD ($) | Nov. 13, 2015USD ($) | Jan. 23, 2015USD ($) | Jan. 02, 2015USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2014USD ($)agreement | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Business Acquisition [Line Items] | |||||||||||||
Goodwill | $ 107,466 | $ 113,112 | $ 107,466 | $ 96,316 | |||||||||
Contingent consideration | 6,209 | 3,043 | 6,209 | ||||||||||
Contingent consideration earn-out | (1,284) | (664) | 0 | ||||||||||
Impairment of intangible assets | 0 | 0 | 598 | ||||||||||
General and administrative | $ 50,877 | $ 46,363 | 45,444 | ||||||||||
Trademarks and trade names [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Impairment of intangible assets | $ 600 | ||||||||||||
RetCam [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Purchase price paid in cash to acquire entity | $ 10,600 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 3,300 | ||||||||||||
Goodwill | 3,200 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | $ 2,000 | ||||||||||||
Identifiable intangible assets, average useful life | 5 years | ||||||||||||
Contingent consideration | $ 2,000 | ||||||||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Consideration Transferred | $ 1,100 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Tangible Assets | $ 7,200 | ||||||||||||
NeuroQuest [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Purchase price paid in cash to acquire entity | $ 4,600 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 1,300 | ||||||||||||
Goodwill | 3,500 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | $ 100 | ||||||||||||
Identifiable intangible assets, average useful life | 5 years | ||||||||||||
Contingent consideration | $ 500 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Tangible Assets | $ 500 | ||||||||||||
Monarch Medical Diagnostics, LLC [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Purchase price paid in cash to acquire entity | $ 2,700 | ||||||||||||
Contingent consideration | $ 1,000 | ||||||||||||
Tangible assets | 112 | ||||||||||||
Monarch [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 1,200 | ||||||||||||
Goodwill | $ 2,400 | ||||||||||||
Identifiable intangible assets, average useful life | 5 years | ||||||||||||
Global Neuro-Diagnostics [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Purchase price paid in cash to acquire entity | $ 11,400 | ||||||||||||
Contingent consideration | 3,200 | $ 500 | |||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 4,800 | ||||||||||||
Goodwill | $ 8,900 | ||||||||||||
Identifiable intangible assets, average useful life | 5 years | ||||||||||||
Net liabilities | $ 500 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Tangible Assets | $ 1,500 | ||||||||||||
NicView [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Purchase price paid in cash to acquire entity | $ 1,100 | ||||||||||||
Tangible assets | 300 | ||||||||||||
Goodwill | 2,700 | ||||||||||||
Net liabilities | 600 | ||||||||||||
Contingent consideration | $ 1,300 | ||||||||||||
Newborn Hearing Screening Services [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Purchase price paid in cash to acquire entity | $ 2,600 | ||||||||||||
Contingent consideration | $ 800 | ||||||||||||
Number of asset purchase agreements | agreement | 2 | ||||||||||||
Contingent consideration earn-out | $ 700 |
Business Combinations - Summary
Business Combinations - Summary of Purchase Price Allocation of Fair Value of Assets Acquired and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Jul. 06, 2016 | Mar. 02, 2016 | Jan. 11, 2016 | Dec. 31, 2015 | Jan. 23, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 113,112 | $ 107,466 | $ 96,316 | ||||
RetCam [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 3,300 | ||||||
Goodwill | 3,200 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | $ 2,000 | ||||||
Monarch [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 1,200 | ||||||
Goodwill | $ 2,400 | ||||||
NeuroQuest [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 1,300 | ||||||
Goodwill | 3,500 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | $ 100 | ||||||
Global Neuro-Diagnostics [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 4,800 | ||||||
Goodwill | $ 8,900 |
Cash, Cash Equivalents, and S51
Cash, Cash Equivalents, and Short-term Investments - Schedule of cash, cash equivalents and short-term investments (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Cash and cash equivalents: | ||||
Cash and Cash Equivalents, at Carrying Value | $ 213,551 | $ 82,469 | $ 66,558 | $ 56,106 |
Short-term investments: | ||||
Total short-term investment | 34,019 | 0 | ||
Total cash, cash equivalents and short-term investments | 247,570 | 82,469 | ||
U.S. investment grade bonds | ||||
Short-term investments: | ||||
Total short-term investment | 24,477 | 0 | ||
Developed investment grade bonds | ||||
Short-term investments: | ||||
Total short-term investment | $ 9,542 | $ 0 |
Cash, Cash Equivalents, and S52
Cash, Cash Equivalents, and Short-term Investments - Unrealized Gain (Loss) on Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Aggregated Cost Basis | $ 34,098 | $ 0 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (79) | 0 |
Aggregated Fair Value | 34,019 | 0 |
U.S. investment grade bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Aggregated Cost Basis | 24,531 | 0 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (54) | 0 |
Aggregated Fair Value | 24,477 | 0 |
Developed investment grade bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Aggregated Cost Basis | 9,567 | 0 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (25) | 0 |
Aggregated Fair Value | $ 9,542 | $ 0 |
Cash, Cash Equivalents, and S53
Cash, Cash Equivalents, and Short-term Investments - Investments Classified by Contractual Maturity Date (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Cash and Cash Equivalents [Abstract] | ||
Due in one year or less | $ 21,655 | $ 0 |
Due after one year through five years | 12,364 | 0 |
Total short-term investment | $ 34,019 | $ 0 |
Inventories (Detail)
Inventories (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials and subassemblies | $ 28,245 | $ 19,041 |
Work in process | 1,507 | 1,343 |
Finished goods | 34,908 | 36,149 |
Total Inventories | 64,660 | 56,533 |
Less: Non-current Inventories | (15,073) | (7,961) |
Inventories | $ 49,587 | $ 48,572 |
Inventories (Textual) (Detail)
Inventories (Textual) (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Non-current Inventories | $ 15,073 | $ 7,961 |
Property and Equipment (Detail)
Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | $ 49,352 | $ 46,495 |
Accumulated depreciation | (32,019) | (29,528) |
Total | 17,333 | 16,967 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 2,856 | 2,918 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 5,219 | 5,662 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 2,386 | 2,345 |
Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 18,398 | 15,602 |
Computer software and hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 9,100 | 8,752 |
Demonstration and loaned equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | $ 11,393 | $ 11,216 |
Property and Equipment (Textual
Property and Equipment (Textual) (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment, Net [Abstract] | ||||
Depreciation expense | $ 3.7 | $ 4.2 | $ 4.3 | |
Asset held for sale, impairment | $ 2.2 |
Goodwill (Detail)
Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Roll Forward] | ||
Beginning Balance | $ 107,466 | $ 96,316 |
Acquisitions/Purchase Accounting Adjustments | 6,705 | 13,547 |
Foreign currency translation | (1,059) | (2,397) |
Ending Balance | $ 113,112 | $ 107,466 |
Intangible Assets (Textual) (De
Intangible Assets (Textual) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Costs incurred for development of internal use computer software | $ 14,800 | ||
Costs incurred for development of software to be sold | 2,200 | ||
Impairment of certain indefinite live intangible assets | $ 0 | $ 0 | $ 598 |
Patents [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted average life of intangible assets | 13 years | ||
Technology [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted average life of intangible assets | 17 years | ||
Customer related [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted average life of intangible assets | 11 years | ||
Trade names [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted average life of intangible assets | 7 years | ||
Trade names [Member] | Grass Technologies [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Impairment of certain indefinite live intangible assets | $ 600 | ||
Internally developed software [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted average life of intangible assets | 5 years |
Intangible Assets - Components
Intangible Assets - Components of Gross and Net Intangible Asset Balances (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 152,354 | $ 149,210 |
Impairment of Intangible Assets Defined Lived (excluding Goodwill) | (3,290) | (3,340) |
Accumulated Amortization | (71,899) | (59,334) |
Total expected amortization expense | 77,165 | 86,536 |
Technology [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 62,563 | 63,668 |
Accumulated Amortization | (34,683) | (31,600) |
Total expected amortization expense | 27,880 | 32,068 |
Customer related [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 38,087 | 35,529 |
Accumulated Amortization | (17,610) | (14,352) |
Total expected amortization expense | 20,477 | 21,177 |
Trade Names [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 32,106 | 31,837 |
Impairment of Intangible Assets Defined Lived (excluding Goodwill) | (3,290) | (3,340) |
Accumulated Amortization | (7,135) | (3,052) |
Total expected amortization expense | 21,681 | 25,445 |
Internally Developed Software [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 16,978 | 15,513 |
Accumulated Amortization | (10,220) | (8,155) |
Total expected amortization expense | 6,758 | 7,358 |
Patents [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,620 | 2,663 |
Accumulated Amortization | (2,251) | (2,175) |
Total expected amortization expense | $ 369 | $ 488 |
Intangible Assets - Amortizatio
Intangible Assets - Amortization Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | $ 13,155 | $ 11,745 | $ 7,432 |
Technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | 3,407 | 3,916 | 3,993 |
Customer related [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | 3,452 | 2,938 | 1,892 |
Trade names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | 4,115 | 3,159 | 0 |
Internally Developed Software [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | 2,069 | 1,620 | 1,434 |
Patents [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | $ 112 | $ 112 | $ 113 |
Intangible Assets - Expected An
Intangible Assets - Expected Annual Amortization Expense (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2,017 | $ 13,130 | |
2,018 | 12,908 | |
2,019 | 11,753 | |
2,020 | 9,558 | |
2,021 | 8,270 | |
Thereafter | 21,546 | |
Total expected amortization expense | $ 77,165 | $ 86,536 |
Accrued Liabilities (Detail)
Accrued Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Compensation and related benefits | $ 16,064 | $ 16,752 |
Accrued federal, state, and local taxes | 4,160 | 4,707 |
Warranty reserve | 10,670 | 10,386 |
Accrued professional fees | 1,191 | 520 |
Contingent consideration | 3,043 | 6,209 |
Other | 2,767 | 3,563 |
Total | $ 37,895 | $ 42,137 |
Long-Term Other Liabilities (De
Long-Term Other Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Other Liabilities Disclosure [Abstract] | ||
Contingent tax obligations | $ 6,125 | $ 6,376 |
Non-current deferred revenue | 1,885 | 1,401 |
Other | 3 | 4 |
Total | $ 8,013 | $ 7,781 |
Reserve for Product Warrantie65
Reserve for Product Warranties (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Product Warranties Disclosures [Abstract] | |||
Product warranty period | 1 year | ||
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | |||
Balance at Beginning of Period | $ 10,386 | $ 2,753 | $ 3,143 |
Assumed Through Acquisitions | 222 | 0 | 0 |
Additions Charged to Expense | 2,711 | 10,729 | 2,306 |
Reductions | (2,649) | (3,096) | (2,696) |
Balance at End of Period | 10,670 | $ 10,386 | $ 2,753 |
Certain NeoBLUE Phototherapy Products [Member] | |||
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | |||
Balance at End of Period | $ 6,600 |
Stockholders' Equity (Detail)
Stockholders' Equity (Detail) - USD ($) $ / shares in Units, $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Class of Stock [Line Items] | ||
Common Stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock issued | 0 | 0 |
Preferred stock outstanding | 0 | 0 |
Restricted Stock Awards [Member] | ||
Class of Stock [Line Items] | ||
Unrecognized compensation of unvested awards | $ 9.2 |
Earnings Per Share Components o
Earnings Per Share Components of Basic and Diluted EPS (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | |||
Net income | $ 42,594 | $ 37,924 | $ 32,478 |
Weighted average common shares | 32,460 | 32,348 | 31,499 |
Dilutive effect of stock based awards | 596 | 893 | 1,069 |
Diluted Shares (in dollars per share) | 33,056 | 33,241 | 32,568 |
Basic earnings per share (in dollars per share) | $ 1.31 | $ 1.17 | $ 1.03 |
Diluted earnings per share (in dollars per share) | $ 1.29 | $ 1.14 | $ 1 |
Shares excluded from calculations of diluted EPS | 2 | 0 | 239 |
Share-Based Compensation - Allo
Share-Based Compensation - Allocation (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total expense | $ 9,008 | $ 6,953 | $ 6,062 |
Cost of revenue [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total expense | 219 | 156 | 143 |
Marketing and sales [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total expense | 821 | 808 | 977 |
Research and development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total expense | 1,515 | 1,264 | 664 |
General and administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total expense | $ 6,453 | $ 4,725 | $ 4,278 |
Share-Based Compensation (Textu
Share-Based Compensation (Textual) (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for future awards | 1,098,514 | ||
Unrecognized compensation expense related to unvested portion of stock options | $ 600,000 | ||
Weighted average period of recognition of unrecognized compensation expense | 10 months | ||
Intrinsic value of options exercised | $ 3,400,000 | $ 17,700,000 | $ 20,600,000 |
Weighted average vested options | 930,544 | ||
Weighted average exercise price of vested stock | $ 15.01 | ||
Intrinsic value of options vested and expected to vest | $ 9,000,000 | ||
Weighted average remaining contractual term | 2 years 1 month | ||
Weighted average shares exercisable | 816,691 | 737,032 | 1,051,616 |
Weighted average exercise price (in dollars per share) | $ 14.54 | $ 14.40 | $ 14.13 |
Intrinsic value of options exercisable | $ 16,500,000 | ||
Weighted average remaining contractual term, exercisable | 2 years | ||
Compensation expense associated with the ESPP | $ 200,000 | $ 200,000 | $ 200,000 |
Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation, expiration period | 6 years | ||
Share based compensation, vesting period | 4 years | ||
Intrinsic value of options vested and expected to vest | $ 18,400,000 | ||
Restricted Stock Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average period of recognition of unrecognized compensation expense | 2 years 2 months | ||
Intrinsic value of options vested and expected to vest | 10,300,000 | 6,000,000 | |
Weighted average shares exercisable | 816,691 | ||
Unrecognized compensation of unvested awards | $ 9,200,000 | ||
Fair market value of outstanding awards | $ 17,600,000 | ||
Employee Stock Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee maximum withholding rate (percent) | 15.00% | ||
Eligible compensation of employees | $ 10,625 | ||
Purchase price for shares acquired | 85.00% | ||
Shares reserved for future issuance | 165,740 | ||
Offering price, percentage of fair market value | 85.00% | ||
Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average period of recognition of unrecognized compensation expense | 1 year 7 months | ||
Intrinsic value of options vested and expected to vest | $ 900,000 | $ 900,000 | $ 400,000 |
Unrecognized compensation of unvested awards | 500,000 | ||
Aggregate intrinsic value of outstanding restricted stock units | $ 1,000,000 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Option Activity (Detail) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Number of Shares | |
Outstanding, beginning of period (shares) | shares | 1,105,182 |
Granted (shares) | shares | 0 |
Exercised (shares) | shares | (151,142) |
Cancelled (shares) | shares | (18,600) |
Expired (shares) | shares | 2,500 |
Outstanding, end of period (shares) | shares | 932,940 |
Weighted Average Exercise Price | |
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 15.07 |
Granted (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 15.01 |
Cancelled (in dollars per share) | $ / shares | 17.62 |
Expired (in dollars per share) | $ / shares | 16.78 |
Outstanding, end of period (in dollars per share) | $ / shares | $ 15.02 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Award Activity (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of options vested and expected to vest | $ 9 | ||
Restricted Stock Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of options vested and expected to vest | $ 10.3 | $ 6 | |
Shares | |||
Unvested, beginning of period, Shares | 535,208 | ||
Granted, Shares | 205,234 | ||
Vested, Shares | (212,811) | ||
Forfeited, Shares | (21,242) | ||
Unvested, end of period, Shares | 506,389 | ||
Weighted Average Grant Date Fair Value | |||
Unvested, beginning of period, Weighted - average grant date fair value | $ 24.87 | ||
Granted, Weighted - average grant date fair value | 44.22 | ||
Vested, Weighted - average grant date fair value | 19.75 | ||
Forfeited, Weighted - average grant date fair value | 26.69 | ||
Unvested, end of period, Weighted - average grant date fair value | $ 34.82 | ||
Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of options vested and expected to vest | $ 0.9 | $ 0.9 | $ 0.4 |
Share-Based Compensation - Re72
Share-Based Compensation - Restricted Unit Activity (Detail) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of options vested and expected to vest | $ 9 | ||
Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of options vested and expected to vest | $ 0.9 | $ 0.9 | $ 0.4 |
Restructuring Reserves (Detail)
Restructuring Reserves (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restructuring Reserve [Roll Forward] | |||
Beginning balance | $ 1,676 | $ 368 | $ 335 |
Restructuring | 1,536 | 2,145 | 4,238 |
Additions | 1,818 | 2,061 | 1,889 |
Reversals | (436) | (124) | (52) |
Payments | (2,563) | (629) | (1,804) |
Ending balance | 495 | 1,676 | 368 |
Personnel Related [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 1,676 | 368 | 335 |
Additions | 1,093 | 1,905 | 1,209 |
Reversals | (436) | (124) | (52) |
Payments | (1,990) | (473) | (1,124) |
Ending balance | 343 | 1,676 | 368 |
Facility Closing [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 0 | 0 | 0 |
Restructuring | 725 | 156 | 680 |
Reversals | 0 | 0 | 0 |
Payments | (573) | (156) | (680) |
Ending balance | $ 152 | $ 0 | $ 0 |
Other Income (Expense), net (De
Other Income (Expense), net (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other expense, net | |||
Interest income | $ 315 | $ 27 | $ 119 |
Interest expense | (430) | (352) | (438) |
Foreign currency loss | (359) | (1,415) | (37) |
Other | 117 | 676 | 514 |
Total other income (expense), net | $ (357) | $ (1,064) | $ 158 |
Income Taxes - Income Loss befo
Income Taxes - Income Loss before Provision (Benefit) for Income Tax (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ 68 | $ 20,507 | $ 16,621 |
Foreign | 54,835 | 31,902 | 29,388 |
Income before provision for income tax | $ 54,903 | $ 52,409 | $ 46,009 |
Income Taxes (Detail)
Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current | |||
U.S. Federal | $ (1,388) | $ 13,497 | $ 6,514 |
U.S. State and local | 692 | 1,984 | 1,082 |
Non-U.S. | 15,069 | 2,239 | 6,874 |
Total current tax expense | 14,373 | 17,720 | 14,470 |
Deferred | |||
U.S. Federal | (1,534) | (3,410) | (728) |
U.S. State and local | (378) | (385) | (37) |
Non-U.S. | (152) | 560 | (174) |
Total deferred tax expense (benefit) | (2,064) | (3,235) | (939) |
Total expense | $ 12,309 | $ 14,485 | $ 13,531 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Asset and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 6,557 | $ 5,174 |
Credit carryforwards | 2,512 | 2,078 |
Accruals deductible in different periods | 16,157 | 18,721 |
Employee benefits | 2,389 | 2,081 |
Total deferred tax assets | 27,615 | 28,054 |
Valuation allowance | (3,706) | (3,972) |
Total net deferred tax assets | 23,909 | 24,082 |
Deferred tax liabilities: | ||
Basis difference in fixed and intangible assets | (12,678) | (15,197) |
Total deferred tax liabilities | (12,678) | (15,197) |
Total net deferred tax assets | $ 11,231 | $ 8,885 |
Income Taxes (Textual) (Detail)
Income Taxes (Textual) (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule Of Income Taxes [Line Items] | ||||
Change of valuation allowance on foreign tax credit | $ 0 | $ 0 | $ (491,000) | |
Effective tax rate | 35.00% | 35.00% | 35.00% | |
Valuation allowances | $ 3,706,000 | $ 3,972,000 | ||
Increase in valuation allowance | 300,000 | |||
Tax benefit of options exercises | 1,900,000 | |||
Addition to paid-in capital related to the cancellation of stock windfall pool | 300,000 | |||
Undistributed earnings | 147,000,000 | |||
Cash and short term investments | 248,000,000 | |||
Decrease in unrecognized tax benefits | 400,000 | |||
Lapse of statutes of limitations | 475,000 | 664,000 | $ 558,000 | |
Increase in tax position related to prior year | 174,000 | 281,000 | 493,000 | |
Increases for tax positions related to the current year | 70,000 | 3,302,000 | 73,000 | |
Unrecognized Tax Benefits | 5,898,000 | 6,314,000 | 3,395,000 | $ 3,387,000 |
Unrecognized tax would impact effective tax rate | 2,500,000 | 2,400,000 | 2,000,000 | |
Interest and penalties related to uncertain tax positions | 600,000 | 400,000 | 300,000 | |
Total Interest and penalties related to uncertain tax positions | 200,000 | $ 100,000 | $ 0 | |
Income Tax Provision [Member] | ||||
Schedule Of Income Taxes [Line Items] | ||||
Lapse of statutes of limitations | 200,000 | |||
Minimum [Member] | ||||
Schedule Of Income Taxes [Line Items] | ||||
Lapse of statutes of limitations | 0 | |||
Maximum [Member] | ||||
Schedule Of Income Taxes [Line Items] | ||||
Lapse of statutes of limitations | 1,500,000 | |||
Foreign Subsidiaries [Member] | ||||
Schedule Of Income Taxes [Line Items] | ||||
Cash and short term investments | 155,800,000 | |||
France [Member] | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax net operating loss carryforwards | 1,900,000 | |||
Canada [Member] | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax net operating loss carryforwards | 700,000 | |||
United Kingdom [Member] | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax net operating loss carryforwards | 500,000 | |||
United States [Member] | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax net operating loss carryforwards | 7,700,000 | |||
State and Local Jurisdiction [Member] | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax net operating loss carryforwards | 7,900,000 | |||
US Government Agencies Short-term Debt Securities [Member] | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax credits carryforwards | 500,000 | |||
Significant foreign jurisdictions [Member] | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax credits carryforwards | 1,700,000 | |||
Research Tax Credit Carryforward [Member] | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax credits carryforwards | $ 200,000 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income tax Expense from Continuous Operation (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory tax expense | $ 19,216 | $ 18,343 | $ 16,103 |
State tax expense | 188 | 1,249 | 892 |
Foreign taxes at rates less than U.S. rates | (6,838) | (1,760) | (3,097) |
Deferred charges on sales of U.S. intellectual property | 980 | (5,878) | 0 |
Stock compensation expense on incentive stock options | (530) | 204 | 93 |
Tax credits | (911) | (935) | (862) |
Uncertain tax position | 485 | 3,897 | 1,163 |
Lapse of statute | (495) | (784) | (652) |
Change of valuation allowance on foreign tax credit | 0 | 0 | (491) |
Earnout adjustment | (1,184) | 0 | 0 |
Tax audits | 543 | 0 | 0 |
Other | 855 | 149 | 382 |
Total expense | $ 12,309 | $ 14,485 | $ 13,531 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning-Unrecognized Tax Benefits | $ 6,314 | $ 3,395 | $ 3,387 |
Increases for tax positions related to prior years | 174 | 281 | 493 |
Increases for tax positions related to the current year | 70 | 3,302 | 73 |
Lapse of statutes of limitations | (475) | (664) | (558) |
Ending-Unrecognized Tax Benefits | 5,898 | $ 6,314 | $ 3,395 |
Unrecognized Tax Benefits, Decrease Resulting from Foreign Currency Translation | $ 185 |
Employee Benefit Plan (Detail)
Employee Benefit Plan (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract] | |||
Employer matching contributions | $ 1.5 | $ 1.3 | $ 1.2 |
Segment, Customer and Geograp82
Segment, Customer and Geographic Information (Textual) (Detail) - Segment | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||
Number of reporting segments | 1 | ||
Revenue [Member] | |||
Segment Reporting Information [Line Items] | |||
Percentage of revenue represented by major customers | 10.00% | 10.00% | 10.00% |
Revenue from Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Percentage of revenue represented by major customers | 10.00% | 10.00% | 10.00% |
Segment, Customer and Geograp83
Segment, Customer and Geographic Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 381,892 | $ 375,865 | $ 355,834 |
Long-lived assets | 17,333 | 16,967 | |
Neurology Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 238,522 | 237,301 | 232,672 |
Neurology Products [Member] | Devices and Systems [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 168,200 | 168,776 | 173,006 |
Neurology Products [Member] | Supplies [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 58,681 | 60,205 | 59,666 |
Neurology Products [Member] | Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 11,641 | 8,320 | 0 |
Newborn Care Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 143,370 | 138,564 | 123,162 |
Newborn Care Products [Member] | Devices and Systems [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 72,562 | 72,669 | 67,354 |
Newborn Care Products [Member] | Supplies [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 47,674 | 49,982 | 48,697 |
Newborn Care Products [Member] | Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 23,134 | 15,913 | 7,111 |
United States [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 250,694 | 242,050 | 215,543 |
Long-lived assets | 7,024 | 6,664 | |
Foreign countries [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 131,198 | 133,815 | 140,291 |
Canada [Member] | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | 4,941 | 5,165 | |
Ireland [Member] | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | 2,530 | 1,651 | |
Argentina [Member] | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | 2,121 | 2,361 | |
Other Foreign countries [Member] | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | $ 717 | $ 1,126 |
Debt and Credit Arrangements (T
Debt and Credit Arrangements (Textual) (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Revolving credit facility [Member] | Line of Credit [Member] | |
Debt Instrument [Line Items] | |
Revolving credit facility with Wells Fargo Bank | $ 150 |
Available amount under credit facility | 140 |
Credit Agreement [Member] | Citibank, National Association [Member] | |
Debt Instrument [Line Items] | |
Proceeds from Lines of Credit | $ 16 |
Debt and Credit Arrangements -
Debt and Credit Arrangements - Schedule of Long Term Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||
Revolving credit facility of $140 million, interest at LIBOR plus 1.75% | $ 140,000 | $ 0 |
Less: current portion of long-term debt | 0 | 0 |
Total long-term debt | 140,000 | 0 |
Revolving credit facility [Member] | Line of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Revolving credit facility of $140 million, interest at LIBOR plus 1.75% | 140,000 | $ 0 |
Face amount of debt | $ 140,000 | |
Revolving credit facility [Member] | Line of Credit [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Interest at LIBOR (rate) | 1.75% |
Debt and Credit Arrangements 86
Debt and Credit Arrangements - Schedule of Maturities of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
2,017 | $ 0 | $ 0 |
2,018 | 0 | 0 |
2,019 | 0 | 0 |
Thereafter | 140,000 | 0 |
Long-term Debt | $ 140,000 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Minimum Lease Payment under Non Cancelable Operating Lease (Detail) $ in Thousands | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,016 | $ 3,985 |
2,017 | 3,186 |
2,018 | 2,996 |
2,019 | 2,590 |
2,020 | 2,250 |
Thereafter | 2,838 |
Total minimum lease payments | $ 17,845 |
Commitment and Contingencies (T
Commitment and Contingencies (Textual) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense | $ 5.3 | $ 4.4 | $ 4.3 |
Purchase commitments for inventory, total | $ 48.8 |
Fair Value Measurements (Textua
Fair Value Measurements (Textual) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Impairment of asset | $ 2,200 | |||||
Impairment of certain indefinite live intangible assets | $ 0 | $ 0 | $ 598 | |||
Trademarks and trade names [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Impairment of certain indefinite live intangible assets | $ 600 | |||||
Mundelein Facility [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Book value of asset | $ 3,600 | |||||
Impairment of asset | $ 2,200 | |||||
Asset held-for-sale at fair value | $ 1,400 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Contingent consideration, beginning balance | $ 6,209 | |
Additions | 2,500 | |
Payments | (2,284) | |
Adjustments | (3,382) | |
Contingent consideration, ending balance | 3,043 | $ 6,209 |
Contingent Consideration [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Contingent consideration, beginning balance | 6,209 | |
Additions | 2,500 | |
Payments | 2,284 | |
Adjustments | 3,382 | |
Contingent consideration, ending balance | $ 3,043 | $ 6,209 |
Schedule II_ Valuation And Qu91
Schedule II: Valuation And Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 3,972 | $ 3,151 | $ 5,043 |
Additions Charged to Expense | 0 | 821 | 0 |
Deductions | (266) | 0 | (1,892) |
Balance at End of Period | 3,706 | 3,972 | 3,151 |
Allowance for Doubtful Accounts [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 4,686 | 4,324 | 2,962 |
Additions Charged to Expense | 1,123 | 1,496 | 1,221 |
Deductions | (1,627) | (1,134) | 141 |
Balance at End of Period | $ 4,182 | $ 4,686 | $ 4,324 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent event [Member] - Otometrics [Member] $ in Millions | Jan. 03, 2017USD ($) |
Subsequent Event [Line Items] | |
Purchase price paid in cash to acquire entity | $ 149.2 |
Inventory purchase commitment | 4.2 |
Direct costs | $ 1.5 |