Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 19, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 000-33001 | ||
Entity Registrant Name | NATUS MEDICAL INC | ||
Entity Central Index Key | 0000878526 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 77-0154833 | ||
Entity Address, Address Line One | 6701 Koll Center Parkway, Suite 120 | ||
Entity Address, City or Town | Pleasanton | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94566 | ||
City Area Code | 925 | ||
Local Phone Number | 223-6700 | ||
Title of 12(b) Security | Common Stock, $0.001 par value per share | ||
Trading Symbol | NTUS | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 739,080,996 | ||
Entity Common Stock, Shares Outstanding | 33,874,074 | ||
Documents Incorporated by Reference | Certain portions of the Registrant's Definitive Proxy Statement for the 2020 Annual Meeting of Stockholders or an amendment to this Annual Report on Form 10-K, to be filed with the Securities and Exchange Commission, are incorporated by reference into Part III of this Annual Report on Form 10-K. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 82,082 | $ 63,297 |
Accounts receivable, net of allowance for doubtful accounts of $6,213 and $7,384 | 93,133 | 115,889 |
Inventories | 75,650 | 71,368 |
Prepaid expenses and other current assets | 20,837 | 19,195 |
Total current assets | 271,702 | 269,749 |
Property and equipment, net | 24,516 | 24,702 |
Operating lease right-of-use assets | 11,669 | 15,046 |
Intangible assets, net | 92,741 | 114,799 |
Goodwill | 151,299 | 146,367 |
Deferred income tax | 27,563 | 30,355 |
Other assets | 20,904 | 21,509 |
Total assets | 600,394 | 622,527 |
Current liabilities: | ||
Accounts payable | 23,429 | 27,253 |
Current portion of long-term debt | 50,000 | 35,000 |
Current portion of operating lease liabilities | 6,779 | 5,871 |
Accrued liabilities | 44,236 | 54,451 |
Deferred revenue | 21,308 | 20,246 |
Total current liabilities | 145,752 | 142,821 |
Long-term liabilities: | ||
Other liabilities | 18,451 | 17,616 |
Long-term debt | 5,840 | 19,665 |
Operating lease liabilities | 8,959 | 12,051 |
Deferred income tax | 10,298 | 14,251 |
Total liabilities | 189,300 | 206,404 |
Commitments and contingencies (Note 21) | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value; 120,000,000 shares authorized; shares issued and outstanding 33,911,703 in 2020 and 34,148,700 in 2019 | 342,828 | 344,476 |
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding in 2020 and in 2019 | 0 | 0 |
Retained earnings | 71,309 | 87,922 |
Accumulated other comprehensive loss | (3,043) | (16,275) |
Total stockholders’ equity | 411,094 | 416,123 |
Total liabilities and stockholders’ equity | $ 600,394 | $ 622,527 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 6,213 | $ 7,384 |
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 | 33,911,703 | 34,148,700 |
Common Stock, shares outstanding | 33,911,703 | 34,148,700 |
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 Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | $ 415,684 | $ 495,175 | $ 530,891 |
Cost of revenue | 185,912 | 196,551 | 217,952 |
Intangibles amortization | 13,241 | 6,916 | 8,924 |
Gross profit | 216,531 | 291,708 | 304,015 |
Operating expenses: | |||
Marketing and selling | 107,282 | 129,109 | 136,680 |
Research and development | 61,296 | 58,733 | 61,482 |
General and administrative | 49,113 | 59,649 | 70,599 |
Intangibles amortization | 15,224 | 15,144 | 22,585 |
Restructuring | 3,809 | 44,739 | 37,231 |
Total operating expenses | 236,724 | 307,374 | 328,577 |
Loss from operations | (20,193) | (15,666) | (24,562) |
Other expense, net | (1,872) | (5,591) | (7,698) |
Loss before provision (benefit) for income tax | (22,065) | (21,257) | (32,260) |
Provision (benefit) for income tax | (5,452) | (5,586) | (9,325) |
Net loss | $ (16,613) | $ (15,671) | $ (22,935) |
Net loss per share: | |||
Basic | $ (0.49) | $ (0.47) | $ (0.69) |
Diluted (in dollars per share) | $ (0.49) | $ (0.47) | $ (0.69) |
Weighted average shares used in the calculation of net loss per share: | |||
Basic (shares) | 33,562 | 33,696 | 33,111 |
Diluted (shares) | 33,562 | 33,696 | 33,111 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) Consolidated Statement of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (16,613) | $ (15,671) | $ (22,935) |
Foreign currency translation adjustment | 13,205 | (1,576) | (14,360) |
Interest rate swap designated as a cash flow hedge | (27) | 180 | 77 |
Reclassification of stranded tax effects upon adoption of ASU 2018-02 | 0 | 1,332 | 0 |
Reclassification of deferred foreign currency related adjustments related to the sale of Medix (See FN 23) | 0 | (24,845) | 0 |
Total other comprehensive income (loss) | 13,232 | 21,757 | (14,437) |
Comprehensive income (loss) | $ (3,381) | $ 6,086 | $ (37,372) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Retained Earnings | Accumulated Other Comprehensive Loss |
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect | $ (3,919) | ||||
Beginning balance at Dec. 31, 2017 | $ 422,097 | $ 316,577 | $ 129,115 | $ (23,595) | |
Beginning balance (shares) at Dec. 31, 2017 | 33,134,101 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Vesting of restricted stock units | 0 | ||||
Vesting of restricted stock units (shares) | 266 | ||||
Net issuance of restricted stock awards | 0 | ||||
Net issuance of restricted stock awards (shares) | 272,941 | ||||
Employee stock purchase plan | 1,700 | $ 1,700 | |||
Employee stock purchase plan (shares) | 63,649 | ||||
Stock-based compensation expense | 17,003 | $ 17,003 | |||
Repurchase of company stock | (5,630) | $ (5,630) | |||
Repurchase of company stock (shares) | (173,545) | ||||
Taxes paid related to net share settlement of equity awards | (5,183) | $ (5,183) | |||
Taxes paid related to net share settlement of equity awards (shares) | (160,700) | ||||
Exercise of stock options | 9,748 | $ 9,748 | |||
Exercise of stock options (shares) | 667,667 | ||||
Other comprehensive income | (14,437) | (14,437) | |||
Net loss | (22,935) | (22,935) | |||
Ending balance at Dec. 31, 2018 | 398,444 | $ 334,215 | 102,261 | (38,032) | |
Ending balance (shares) at Dec. 31, 2018 | 33,804,379 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Vesting of restricted stock units | 0 | ||||
Vesting of restricted stock units (shares) | 42,130 | ||||
Net issuance of restricted stock awards | 0 | ||||
Net issuance of restricted stock awards (shares) | 175,833 | ||||
Employee stock purchase plan | 1,354 | $ 1,354 | |||
Employee stock purchase plan (shares) | 53,839 | ||||
Stock-based compensation expense | 8,315 | $ 8,315 | |||
Taxes paid related to net share settlement of equity awards | (1,689) | $ (1,689) | |||
Taxes paid related to net share settlement of equity awards (shares) | (51,784) | ||||
Exercise of stock options | 2,281 | $ 2,281 | |||
Exercise of stock options (shares) | 124,303 | ||||
Other comprehensive income | 21,757 | ||||
Other comprehensive income, net of ASU adoption impact | 23,089 | 23,089 | |||
Net loss | (15,671) | (15,671) | |||
Ending balance at Dec. 31, 2019 | $ 416,123 | $ 344,476 | 87,922 | (16,275) | |
Ending balance (shares) at Dec. 31, 2019 | 34,148,700 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201602Member | ||||
Vesting of restricted stock units | $ 0 | ||||
Vesting of restricted stock units (shares) | 14,033 | ||||
Net issuance of restricted stock awards | 0 | ||||
Net issuance of restricted stock awards (shares) | 204,057 | ||||
Employee stock purchase plan | 1,314 | $ 1,314 | |||
Employee stock purchase plan (shares) | 73,347 | ||||
Stock-based compensation expense | 9,527 | $ 9,527 | |||
Stock-based compensation expense (shares) | 0 | ||||
Repurchase of company stock | (10,495) | $ (10,495) | |||
Repurchase of company stock (shares) | (465,117) | ||||
Taxes paid related to net share settlement of equity awards | $ (1,994) | $ (1,994) | |||
Taxes paid related to net share settlement of equity awards (shares) | (63,317) | ||||
Exercise of stock options (shares) | 0 | ||||
Other comprehensive income | $ 13,232 | 13,232 | |||
Net loss | (16,613) | (16,613) | |||
Ending balance at Dec. 31, 2020 | $ 411,094 | $ 342,828 | $ 71,309 | $ (3,043) | |
Ending balance (shares) at Dec. 31, 2020 | 33,911,703 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities: | |||
Net loss | $ (16,613) | $ (15,671) | $ (22,935) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Provision for losses on accounts receivable | 1,190 | 4,262 | 6,909 |
Depreciation and amortization | 28,115 | 30,722 | 33,863 |
Sales-type Lease, Selling Profit (Loss) | 1,881 | 0 | 0 |
Loss on equity method investment adjustment | 133 | 0 | 0 |
Loss on disposal of property and equipment | 268 | 449 | 746 |
Impairment of intangible assets | 6,678 | 0 | 8,192 |
Impairment charge for sale of entity | 0 | 24,571 | 0 |
Goodwill impairment charge | 0 | 0 | 14,846 |
Warranty reserve | 2,009 | 2,886 | 2,168 |
Stock-based compensation | 9,566 | 8,352 | 17,051 |
Non cash lease expense | 1,353 | 0 | 0 |
Deferred taxes | (1,577) | (5,364) | (13,714) |
Changes in operating assets and liabilities, net of assets and liabilities acquired in acquisitions: | |||
Accounts receivable | 17,651 | 7,139 | (5,199) |
Inventories | 1,939 | 7,185 | (7,443) |
Other assets | (1,055) | (2,486) | (5,118) |
Accounts payable | (4,523) | (1,367) | 4,105 |
Accrued liabilities | (13,427) | (4,010) | (2,527) |
Deferred revenue | 838 | 3,392 | 2,076 |
Net cash provided by operating activities | 34,426 | 60,060 | 33,020 |
Investing activities: | |||
Acquisition of businesses, net of cash acquired | (1,997) | 0 | 151 |
Acquisition of property and equipment | (8,609) | (5,326) | (7,875) |
Acquisition of intangible assets | 0 | (13) | (665) |
Purchases of equity investments | (2,000) | 0 | 0 |
Net cash used in investing activities | (12,606) | (5,339) | (8,389) |
Financing activities: | |||
Proceeds from stock option exercises and ESPP | 1,314 | 3,635 | 11,448 |
Finance Lease, Principal Payments | (527) | (478) | 0 |
Repurchase of company stock | (10,495) | 0 | (5,630) |
Taxes paid related to net share settlement of equity awards | (1,994) | (1,689) | (5,183) |
Proceeds from long-term borrowings | 60,000 | 0 | 0 |
Deferred debt issuance costs | (1,175) | 0 | 0 |
Contingent consideration earn-out | 0 | 0 | (147) |
Payments on borrowings | (58,000) | (50,000) | (50,000) |
Net cash used in financing activities | (10,877) | (48,532) | (49,512) |
Exchange rate effect on cash and cash equivalents | 7,842 | 735 | (7,696) |
Net increase (decrease) in cash and cash equivalents | 18,785 | 6,924 | (32,577) |
Cash and cash equivalents, beginning of year | 63,297 | 56,373 | 88,950 |
Cash and cash equivalents, end of year | 82,082 | 63,297 | 56,373 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 3,110 | 4,580 | 6,169 |
Cash paid for income taxes | 6,825 | 6,445 | 9,247 |
Non-cash investing activities: | |||
Property and equipment included in accounts payable | (51) | 69 | 167 |
Inventory transferred to property and equipment | 1,303 | 300 | 1,211 |
Transfer of leased assets to sales-type leases | $ 4,107 | $ 0 | $ 0 |
Reserve for Product Warranties
Reserve for Product Warranties | 12 Months Ended |
Dec. 31, 2020 | |
Product Warranties Disclosures [Abstract] | |
Reserve for Product Warranties | RESERVE FOR PRODUCT WARRANTIES We provide a warranty for products that is generally one year in length and in some cases, regulations may require us to provide repair or remediation beyond the typical warranty period. If any of the products contain defects, we may be required to incur additional repair and remediation costs. Service, repair and calibration services are provided by a combination of our 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. We consider 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, 2020, we have accrued $5.2 million for product related warranties. The estimates we use 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. |
Organization and Significant Ac
Organization and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Organization and Significant Accounting Policies | ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Organization Natus Medical Incorporated (“we”, “our”, “us”) was incorporated in California in May 1987 and reincorporated in Delaware in August 2000. We are a leading provider of medical device solutions focused on the diagnosis and treatment of central nervous and sensory system disorders for patients of all ages. 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, software systems for managing and tracking disorders and diseases for public health laboratories, computer-based audiological, otoneurologic and vestibular instrumentation for hearing and balance care professionals. Basis of Presentation and Principles of Consolidation The accompanying Consolidated Financial Statements includes our accounts and accounts of our 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. 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, valuation of deferred income taxes, reserves for warranty obligations, and the provision for income taxes including uncertain positions. Actual results could differ from those estimates. Revenue recognition Revenue is recognized when obligations under the terms of a contract with a customer are satisfied; generally this occurs with the transfer of control of devices, supplies, or services. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. For the majority of devices and supplies, we transfer control and recognize revenue when products ship from the warehouse to the customer. We generally do not provide rights of return on devices and supplies. Freight charges billed to customers are included in revenue and freight-related expenses are charged to cost of revenue. Depending on the terms of the arrangement, we may also defer the recognition of a portion of the consideration received because we have to satisfy a future obligation (e.g. installation). Judgment is required to determine the standalone selling price for each distinct performance obligation. Our estimate of SSP is a point estimate. The estimate is calculated annually for each performance obligation that is not sold separately. In instances where SSP is not directly observable, such as when we do not sell the product or service separately, the SSP is determined using information that may include market conditions and other observable inputs. We sell separately-priced service contracts that extend maintenance coverages for both medical devices and data management systems beyond the base agreements to customers. The separately priced service contracts range from 12 months to 60 months. We receive payment at the inception of the contract and recognize revenue ratably over the service period. For products containing embedded software, we have determined that the hardware and software components function together to deliver the products' essential functionality and are considered a combined performance obligation. Revenue recognition policies for sales of these products are substantially the same as for other tangible products. Inventory Valuation Inventories are carried at the lower of cost or net realizable value, with cost being determined using the first-in, first-out method. The carrying value of our inventory is reduced for any difference between cost and estimated net realizable value of the inventory. We determine net realizable value by evaluating ending inventories for excess quantities, obsolescence, and other factors that could impact our ability to consume inventory for its intended use. Our evaluation includes an analysis of historical sales by product, projections of future demand by product, and an analysis of obsolescence by product. 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, we may sell inventory that had previously been written down. Intangible assets We amortize intangible assets with finite lives over the estimate of their useful lives. Any future changes that would limit their useful lives or any determination that these assets are carried at amounts greater than their estimated fair value could result in acceleration of amortization over a revised useful life. We review intangible assets with indefinite lives for impairment on an annual basis and finite lives for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of the finite-lived intangible assets is assessed based on the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the asset. If the undiscounted future cash flows are less than the carrying amount, the finite-lived intangible assets are considered to be impaired. The amount of the impairment loss, if any, is measured as the difference between the carrying amount of the asset and its fair value. We estimate the fair value of finite-lived intangible assets by using an income approach or, when available and appropriate, using a market approach. Goodwill 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. Goodwill is tested for impairment at the reporting unit level. In 2018 we had four reporting units for purposes of goodwill impairment testing. In early 2019 we announced the implementation of a new organizational structure which consolidated our three strategic business units, Neuro, Newborn Care and Hearing & Balance into “One Natus”. As a result of these organizational changes we have concluded we have one operating segment and one reporting unit for purposes of goodwill impairment testing in 2019 and 2020. In accordance with accounting standards we perform a qualitative assessment to test goodwill for impairment prior to the performing the first step of the goodwill impairment process. Qualitative factors considered in this assessment include industry and market considerations, overall financial performance and other relevant events and factors affecting the reporting unit. Prior to the adoption of ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) in 2019, which simplified the goodwill impairment test, if the fair value of a reporting unit was less than its carrying amount, we 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. We use 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. Based on the qualitative assessment in 2020 and 2019, we determined the fair value of goodwill was more likely than not greater than its carrying amount, and no further analysis was needed. Due to organizational changes announced in late 2018 our evaluation of our GND reporting unit, which was part of our Neuro business unit, was determined to be impaired. Prior to calculating the goodwill impairment loss, we analyzed the recoverability of GND long-lived assets (other than goodwill). As a result, we recorded a goodwill impairment charge of $14.8 million within restructuring expense on our income statement. There was no remaining goodwill in the GND reporting unit as of December 31, 2018. In 2019 we elected to early adopt ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). The adoption of this standard eliminates the second step of the two-step impairment test described above and allows a Company to expense the difference between carrying amount in excess of the fair value of the reporting unit as a reduction in goodwill. The adoption of ASU 2017-04 did not have an impact on our consolidated financial statements as we concluded based on the qualitative assessment performed in 2019 and 2020 that the fair value of the reporting unit was more likely than not to be greater than its carrying amount, and no further analysis was needed. Lessee Leases We determine if an arrangement is a lease at inception of the lease. Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term, and lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit borrowing rate, generally we use an incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at the lease commencement date. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to exclude or terminate the lease when it is reasonably certain that they will exercise that option. Lease expense for lease payments are recognized on a straight-line basis over the lease term. Operating leases are included in operating lease ROU assets, accrued liabilities, and operating lease liabilities in our consolidated balance sheet. Finance leases are included in property and equipment, accrued liabilities, and other liabilities in the consolidated balance sheet. We have lease agreements with lease and non-lease components, which are generally accounted for based on the type of asset. For real estate and telecom leases, we account for these components separately. For equipment leases, such as office equipment and vehicles, we account for the lease and non-lease components as a single lease component. Lessor Leases We determine if an arrangement is a lease at inception of the lease. We entered into a five-year non-cancelable exclusive supply agreement with a customer to provide hearing screening products which commenced on January 1, 2020. The agreement includes automatic renewal options for successive three-year periods. Notice of non-renewal must be provided to Natus at least twelve months prior to the end of the current term. The agreement does not contain any purchase options or residual value guarantees. Pricing of the exclusive supply agreement is structured on a fee per baby screened basis. The per baby fee is inclusive of all products and services to be provided under the terms of the agreement which include hearing screening hardware, consumables required to complete each screen, and related maintenance. The pricing structure also includes a guaranteed minimum payment per unit per contract year for each unit of equipment supplied. Sales-Type Leases The guaranteed minimum payment for each unit of equipment supplied represents the fixed transaction price and is allocated to separate performance obligations, consisting of hardware products, consumables, and maintenance, proportionally based on the standalone selling price of each performance obligation. Standalone selling price is best evidenced by the price we charge for the good or service when selling it separately in similar circumstances to similar customers. Other than for the renewal of annual support services contracts, our products and services are not generally sold separately. We use an amount discounted from the list price as a best estimated selling price. For sales-type leases, we recognize revenues for hearing screening hardware products at the net present value of their guaranteed minimum payment standalone selling price allocation upon delivery of the hardware. We recognize consumables and maintenance revenues associated with the sales-type leases over the term of the agreement on a weighted average as actual screens are performed. Upon commencement of a sales-type lease we derecognize the leased asset from our balance sheet and record it as cost of revenue in the condensed consolidated statements of operations. Operating Leases Under the terms of the exclusive supply agreement, hospitals where we were previously providing hearing screening services were provided the option to transition to the exclusive supply agreement. Hospitals which chose to transition continued to use their existing Natus hardware. Based on the remaining useful life of the existing hardware some of these leases were classified as operating leases. For operating leases, rental income is recognized on a straight-line basis over the term of the associated lease. Leased assets classified as operating leases are carried at amortized cost net of accumulated depreciation in property and equipment, net on the condensed consolidated balance sheet. The depreciation expense of the leased assets is recognized on a straight-line basis over the useful life of the asset, and recorded in cost of revenue in the condensed consolidated statements of operations. Based on the pricing structure and the predominance of non-lease components within the exclusive supply agreement, amounts pertaining to net investment in these leases, variable lease income, and operating lease income are immaterial to our financial statements. Long lived assets We continually monitor events and changes in circumstances that could indicate that carrying amounts of our long-lived assets, including property and equipment, intangible assets and leases, may not be recoverable. When such events or changes in circumstances occur, we will assess the recoverability by determining whether the carrying value of an asset group will be recovered through undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying amount of the asset group, we will recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. Liability for product warranties We provide a warranty for products that is generally one year in length. In some cases, regulations may require us to provide repair or remediation beyond the typical warranty period. If any products contain defects, we may be required to incur additional repair and remediation costs. Service, repair and calibration services are provided by a combination of our owned facilities and vendors on a contract basis. We accrue estimated product warranty costs at the time of sale based on historical experience. 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. We consider 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 We recognize 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 16 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. We recognize 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; 25% on each of the annual 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. We grant market stock unit (“MSU”) awards to certain employees. We estimate the fair value of MSUs at the date of grant using a Monte Carlo simulation model and amortize those fair values over the requisite service period, which is generally three years. The Monte Carlo simulation model that we use to estimate the fair value of market-based MSUs at the date of grant incorporates into the valuation the possibility that the market condition may not be satisfied. Provided that the requisite service is rendered, the total fair value of the market-based MSUs, which is determined at the date of grant, must be recognized as compensation expense even if the market condition is not achieved. However, the number of shares that ultimately vest can vary significantly with the performance of the specified market criteria. We also grant performance stock unit (“PSU”) awards to our CEO and CFO. These PSUs fully vest after a performance period and have separate performance goals than MSUs. We estimate fair value of performance stock unit awards based on the share price and other pertinent factors on the grant date. Compensation expense for performance stock unit awards are recognized on a straight-line basis over the requisite service period of the award when performance condition is probable to occur. We assess the achievement probability of the performance conditions each period and adjust compensation expense if necessary. Provided that the requisite service is rendered, the shares will become vested and payout will occur based on the outcome of the performance condition. Any unrecognized compensation cost shall be recognized when the award becomes vested. We issue new shares of common stock upon the exercise of stock options and the vesting of RSAs, RSUs, MSUs, and PSUs. 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. Cash Equivalents All highly liquid investments purchased with an original maturity or remaining maturity upon purchase of three months or less are classified as cash equivalents. Allowance for Doubtful Accounts We estimate the allowance for potentially uncollectible accounts receivable based on historical collection experience within the markets in which we operate 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 their 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 Research & Development Costs Costs incurred in research and development are charged to operations as incurred. Income Taxes We account 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 carrying value of assets and liabilities and the tax basis of those 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. We record net deferred tax assets to the extent it is more likely than not that the assets will be realized. In making such determination, we consider 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, we adjust the valuation allowance which reduces the provision for income taxes. We recognize the tax benefit of uncertain tax positions in the financial statements as defined in ASC Topic 740, Income Tax. When the tax position is deemed more likely than not of being sustained, we recognize the largest amount of tax benefit that is greater than 50 percent likely of being ultimately realized upon settlement, as defined in ASC 740-10-05. Foreign Currency The functional currency of our 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. We have recorded $13.2 million, $(1.6) million, and $(14.4) million of foreign currency translation gains (losses) for the years ended December 31, 2020, 2019 and 2018, respectively. Gains and losses from transactions denominated in currencies other than the functional currencies are included in other income and expense. In 2020, 2019, and 2018, net foreign currency transaction gains (losses) were $2.0 million, $(0.8) million, and $(0.8) million, respectively. Foreign currency gains and losses result primarily from fluctuations in the exchange rate between the U.S. dollar, Canadian dollar, Euro, British pound, and Danish kroner. Effective July 1, 2018, Argentina's economy is considered to be highly inflationary under U.S. GAAP since it has experienced a rate of general inflation in excess of 100% over the latest three-year period, based upon the cumulative inflation rates published by Center for Audit Quality (CAQ) SEC Regulations Committee and its International Practices Task Force (IPTF). As a result, beginning July 1, 2018, the U.S. dollar is the functional currency for our subsidiary in Argentina, Medix I.C.S.A. (“Medix”). Accordingly, all gains and losses resulting from the translation of our Argentinian operations are required to be recorded directly in the statement of operations. Through June 30, 2018, prior to being designated as highly inflationary, currency translation adjustments of Medix's balance sheet are reflected in shareholders' equity as part of Accumulated Other Comprehensive Income; however subsequent to July 1, 2018, such adjustments are reflected in earnings. Currency adjustments recorded in earnings for Medix subsequent to July 1, 2018 represented a gain of $0.9 million. We divested our wholly owned subsidiary, Medix, on April 2, 2019 via a stock sale. Included in the year ended December 31, 2019 is the impact of the sale of Medix, which was completed as of June 30, 2019, and the deferred foreign currency related translation adjustments previously in accumulated other comprehensive income have been released from the balance sheet along with the held for sale accrual ( See Note 23 - Sale of a Certain Subsidiary). Comprehensive Income We break out the major components and report as a single total the change in net assets during the period as defined in ASC Topic 220, Comprehensive Income. The consolidated statement of comprehensive income (loss) has been separately stated from the consolidated statements of operations. Accumulated other comprehensive loss consists of translation gains and losses on foreign subsidiary financial statements, interest rate swap designated as a cash flow hedge, reclassifications from the adoption of ASU 2018-02, and reclassification of previously recorded deferred foreign currency related translation adjustment losses upon the divestiture of Medix. Basic and Diluted Net Income per Share We compute net income per share as defined in 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, shares of restricted stock, and shares of market 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. Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This standard requires lease assets and lease liabilities arising from operating leases to be presented 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. In July 2018, FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, which affects narrow aspects of the guidance issued in the amendments in Update 2016-02. In July 2018, the FASB also issued ASU 2018-11, Targeted Improvements. The amendments in ASU 2018-11 provide additional clarification and implementation guidance on certain aspects of the previously issued ASU 2016-02 and have the same effective and transition requirements as ASU 2016-02. The new standard provides a number of optional practical expedients in transition. We have elected the package of practical expedients, which permits an entity to not reassess prior conclusions about lease identification, lease classification and initial direct costs under the new standard. We have not elected the use-of-hindsight practical expedient or the practical expedient pertaining to land easements; the latter of which is not applicable to us. We made an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. We will recognize those lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term. The new standard became effective for us on January 1, 2019. We adopted the new standard using the modified retrospective transition method with the effective date as the date of initial application. Upon adoption, we recognized additional new lease assets of approximately $19.5 million and additional lease liabilities of approximately $22.3 million as of January 1, 2019. The standard did not materially affect consolidated net earnings. By electing the effective date as the date of initial application, financial performance has not been adjusted and the disclosures required under the new standard have not been provided for periods prior to January 1, 2019. See Significant Accounting Policies and Note 8 for additional discussion and disclosure. The adoption of the new standard did not impact our liquidity or debt-covenant compliance under its previous agreements. In June 2016, the FASB issued ASU 2016-13, Credit Losses (Topic 326). This update requires financial assets measured at amortized cost, such as trade receivables and contract assets, to be presented net of expected credit losses, which may be estimated based on relevant information such as historical experience, current conditions, and future expectation for each pool of similar financial assets. The new guidance requires enhanced disclosures related to trade receivables and associated credit losses. In May 2019, the FASB issued ASU 2019-05 which provides targeted transition relief guidance intended to increase comparability of financial statement information. The guidance for both updates was effective beginning January 1, 2020. The adoption of ASU 2016-13 did not have a material impact on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). This update modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Because these amendments eliminate Step 2 from the goodwill impairment test, they should reduce the cost and complexity of evaluating goodwill for impairment. ASU 2017-04 is effective for our annual and any interim goodwill impairment tests performed on or after January 1, 2020. We elected to early adopt. The adoption of ASU 2017-04 did not have an impact on our consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220). This update permits a company to reclassify its disproportionate income tax effects of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) on items within accumulated other comprehensive income (“AOCI”) to retained earnings (termed “stranded tax effects”). Only the stranded tax effects resulting from the 2017 Act are eligible for reclassification. The ASU was effective for us on January 1, 2019. Upon adoption, we reclassified stranded tax effects resulting from the 2017 Act of $1.3 million, resulting in a decrease to AOCI and an increase to retained earnings as of January 1, 2019. In August 2018, the FASB issued ASU 2018-13 Fair Value Measurement (Topic 813), Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. This update amends Topic 820 to add, remove, and clarify disclosure requirements related to fair value measurement disclosure. For calendar year-end entities, the update was effective for a |
Revenue (Notes)
Revenue (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | REVENUE Contract assets for the periods presented primarily represent the difference between revenue recognized based on the relative selling price of the related performance obligations and the contractual billing terms in the arrangements. Deferred revenue for the periods presented was primarily related to extended service contracts, installation, and training, for which the service fees are billed up-front. The associated deferred revenue is generally recognized ratably over the extended service period or when installation and training are complete. The following table summarized the changes in the contract assets and contract liability balances for the year ended December 31, 2020 (in thousands): Unbilled AR, December 31, 2019 $ 2,667 Additions 173 Transferred to Trade Receivable (915) Unbilled AR, December 31, 2020 $ 1,925 Deferred Revenue, December 31, 2019 $ 24,808 Additions 19,763 Revenue Recognized (18,848) Deferred Revenue, December 31, 2020 $ 25,723 |
Receivables, Loans, Notes Recei
Receivables, Loans, Notes Receivable, and Others | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Allowance for Doubtful Accounts | ALLOWANCE FOR DOUBTFUL ACCOUNTS We estimate the lifetime allowance for doubtful, potentially uncollectible, accounts receivable upon their inception based on historical collection experience within the markets in which we operate, customer-specific information such as bankruptcy filings or customer liquidity problems, current conditions, and reasonable and supportable forecasts about the future. Our allowance for doubtful accounts is presented as a reduction to accounts receivable on our consolidated balance sheet. When all internal efforts have been exhausted to collect the receivable, it is written off and relieved from the reserve. The details of activity in allowance for doubtful accounts are as follows (in thousands): December 31, 2020 2019 Balance, beginning of period $ 7,384 $ 6,960 Additions charged to expense 1,190 4,262 Write-offs charged against allowance (2,361) (3,838) Balance, end of period $ 6,213 $ 7,384 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES Inventories consist of (in thousands): December 31, 2020 2019 Raw materials and subassemblies $ 22,583 $ 37,259 Work in process 2,294 1,780 Finished goods 65,695 50,521 Total Inventories 90,572 89,560 Less: Non-current Inventories (14,922) (18,192) Inventories $ 75,650 $ 71,368 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | PROPERTY AND EQUIPMENT Property and equipment consist of (in thousands): December 31, 2020 2019 Land $ 1,792 $ 1,719 Buildings 7,365 6,943 Leasehold improvements 8,050 8,664 Finance lease right-of-use assets 2,555 2,377 Office furniture and equipment 22,148 22,819 Computer software and hardware 10,246 12,610 Demonstration and loaned equipment 3,086 11,621 55,242 66,753 Accumulated depreciation (30,726) (42,051) Total $ 24,516 $ 24,702 Depreciation expense of property and equipment was $6.2 million, $6.6 million, and $6.0 million in the years ending December 31, 2020, 2019 and 2018, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 December 31, 2019 Gross Accumulated Accumulated Net Book Gross Accumulated Accumulated Net Book Intangible assets with definite lives: Technology $ 112,138 (12,480) $ (64,203) $ 35,455 $ 108,400 (6,035) $ (55,408) $ 46,957 Customer related 94,526 (50) (51,247) 43,229 90,351 (50) (40,527) 49,774 Trade names 47,058 (3,677) (31,890) 11,491 45,874 (3,237) (25,355) 17,282 Internally developed software 13,281 — (12,845) 436 13,281 — (12,606) 675 Patents 2,810 (133) (2,677) — 2,692 (133) (2,559) — Service Agreements 1,190 — (1,119) 71 1,190 — (1,079) 111 Total definite-lived intangible assets 271,003 (16,340) (163,981) 90,682 261,788 (9,455) (137,534) 114,799 Intangible assets with indefinite lives: Intellectual Property 2,059 — — 2,059 — — — — Total intangible assets 273,062 (16,340) (163,981) 92,741 261,788 (9,455) (137,534) 114,799 Finite lived intangible assets are amortized over their weighted average lives, which are 13 years for technology, 13 years for patents, 10 years for customer-related intangibles, 7 years for trade names, 6 years for internally developed software, 2 years for service agreements, and 11 years weighted average in total. Internally developed software consists of $11.1 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 fourth quarter of 2018 we recorded an impairment charge related to intangible assets of $8.2 million. These impairments relate to end of life decisions for the core technology utilized in our Bio-logic products and our GND and Neurocom product lines. We acquired Bio-logic core technology as part of the acquisition of Bio-logic Systems Corp in 2006 and have maintained the technology since its acquisition. In 2018 we partnered with one of our contract manufacturers to develop and manufacture the next generation technology to be used in its Bio-logic products. The decision to develop this new technology resulted in an impairment of the originally acquired core technology of $5.6 million, which was recorded within intangibles amortization expense on our income statement. On January 15, 2019, we announced the implementation of a new organizational structure, "One Natus." As a result of this new organizational structure, we announced we exited two of our non-core businesses, GND and Neurocom. The decision to exit these non-core businesses resulted in the impairment of intangible assets of $2.6 million as of December 31, 2018. These impairments were the result of deterioration of expected future cash flows as compared to the carrying value of the assets. Impairments were determined by performing an undiscounted cash flow analysis on intangibles assets. The impairment charge for GND and Neurocom is recorded on our income statement within restructuring expense. During the third quarter of 2020 we recorded an impairment charge related to intangible assets of $6.7 million of which $6.4 million was recorded within intangibles amortization within cost of revenue and $0.3 million was recorded within intangibles amortization within operating expense on our income statement. The impairment related to an end of life decision for an acquired tradename and technology at which time we made the decision to discontinue sales of the related product rather than continuing to invest in the product. Amortization expense related to intangible assets with finite lives, including impairment charges described above, was as follows (in thousands): Years Ended December 31, 2020 2019 2018 Technology $ 13,417 $ 6,906 $ 14,100 Customer related 8,825 8,662 12,244 Trade names 6,182 6,111 6,736 Internally developed software 239 1,438 2,123 Patents — 60 84 Service Agreements 40 322 757 Total amortization $ 28,703 $ 23,499 $ 36,044 The amortization expense amounts shown above include internally developed software not held for sale of $0.2 million, $1.3 million, and $1.9 million for the years ended 2020, 2019, and 2018, respectively. The amortization expense for internally developed software not held for sale is recorded within our income statement as a general and administrative operating expense. Expected annual amortization expense related to amortizable intangible assets is as follows (in thousands): 2021 $ 22,374 2022 18,365 2023 15,590 2024 13,599 2025 12,976 Thereafter 7,778 Total expected amortization expense $ 90,682 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2020 | |
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, 2018 $ 147,644 Foreign currency translation (1,277) As of December 31, 2019 $ 146,367 Purchase Accounting Adjustments 1,207 Foreign currency translation 3,725 As of December 31, 2020 $ 151,299 |
Leases (Notes)
Leases (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | LEASES Lessee Leases We have operating and finance leases for offices, warehouses, and certain equipment. The leases have remaining lease terms of one Components of lease cost were as follows (in thousands): Year Ended 2020 2019 Operating lease cost $ 6,696 $ 6,823 Finance lease cost: Amortization of right-of-use assets (principal payments) 395 466 Interest on lease liabilities 49 58 Short-term lease cost 7 51 Variable lease cost 2,541 2,836 Sublease income (61) (179) Total lease cost $ 9,627 $ 10,055 Supplemental cash flow information related to leases was as follows (in thousands): Year Ended 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 13,979 $ 13,612 Operating cash flows from finance leases 32 42 Financing cash flows from finance leases 527 478 Right-of-use assets obtained in exchange for lease obligations: Operating leases 3,290 2,697 Finance leases 337 300 Supplemental balance sheet information related to leases was as follows (in thousands): December 31, 2020 December 31, 2019 Operating Leases Operating lease right-of-use assets $ 11,669 $ 15,046 Current portion of operating lease liabilities $ 6,779 $ 5,871 Operating lease liabilities 8,959 12,051 Total operating lease liabilities $ 15,738 $ 17,922 Finance Leases Property and equipment, gross $ 2,555 $ 2,377 Accumulated amortization (1,705) (1,418) Property and equipment, net $ 850 $ 959 Accrued liabilities $ 414 $ 390 Other liabilities 446 599 Total finance lease liabilities $ 860 $ 989 Weighted Average Remaining Lease Term Operating leases 3.33 years 3.75 years Finance leases 2.68 years 2.92 years Weighted Average Discount Rate Operating leases 5.4 % 5.3 % Finance leases 5.1 % 5.1 % As of December 31, 2020, future minimum lease payments included in the measurement of lease liabilities on the consolidated balance sheet, for the following five fiscal years and thereafter, were as follows (in thousands): Year ending December 31, Operating Leases Finance Leases 2021 $ 6,206 $ 432 2022 4,096 273 2023 2,751 153 2024 1,569 48 2025 665 11 Thereafter 695 — Total lease payments 15,982 917 Less imputed interest (244) (57) Total $ 15,738 $ 860 Lessor Leases Pricing of our exclusive hearing screening supply agreement is structured on a fee per baby screened basis and includes a guaranteed minimum payment per unit per contract year for each unit of equipment supplied. We recognize revenues for the hardware products upon commencement of each lease at the net present value of their guaranteed minimum payment standalone selling price allocation. The remaining variable fees are recognized as revenue over the remaining lease term. The following table provides the profit recognized for sales-type leases at their commencement (net sales includes the initial allocation of fixed costs plus allocation of incremental variable fees and excludes the revenue associated with non-lease components associated with hearing screening supplies and maintenance that are recognized as revenue over the remaining lease term) for the year ended December 31, 2020 (in thousands): Year Ended 2020 Net Sales $ 2,226 Cost of Sales 4,107 Gross Profit $ (1,881) The following table provides lease income related to variable lease payments on our sales-type leases not included in the measurement of the lease receivable for the year ended December 31, 2020 (in thousands): Year Ended 2020 Variable lease income $ 420 The following table provides lease income on our operating leases for the year ended December 31, 2020 (in thousands): Year Ended 2020 Lease income on operating leases $ 291 The receivables as a result of our sales-type leases are collateralized by the underlying equipment leased and consist of the following components at December 31, 2020 (in thousands): Year Ended 2020 Net minimum lease payments to be received $ 1,777 Less: Unearned interest income portion — Net investment in sales-type leases $ 1,777 Less: Current portion (444) Long-term net investment in sales-type leases $ 1,333 As of December 31, 2020, future minimum lease payments and the reconciliation to net investment in sales-type leases reported on the consolidated balance sheet, for the following five fiscal years and thereafter, were as follows (in thousands): Year Ended December 31, Sales-Type Leases Operating Leases 2021 444 — 2022 444 — 2023 444 — 2024 445 — 2025 — — Thereafter — — Total future minimum lease payments 1,777 — Less: imputed interest — — Total $ 1,777 $ — |
Leases | LEASES Lessee Leases We have operating and finance leases for offices, warehouses, and certain equipment. The leases have remaining lease terms of one Components of lease cost were as follows (in thousands): Year Ended 2020 2019 Operating lease cost $ 6,696 $ 6,823 Finance lease cost: Amortization of right-of-use assets (principal payments) 395 466 Interest on lease liabilities 49 58 Short-term lease cost 7 51 Variable lease cost 2,541 2,836 Sublease income (61) (179) Total lease cost $ 9,627 $ 10,055 Supplemental cash flow information related to leases was as follows (in thousands): Year Ended 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 13,979 $ 13,612 Operating cash flows from finance leases 32 42 Financing cash flows from finance leases 527 478 Right-of-use assets obtained in exchange for lease obligations: Operating leases 3,290 2,697 Finance leases 337 300 Supplemental balance sheet information related to leases was as follows (in thousands): December 31, 2020 December 31, 2019 Operating Leases Operating lease right-of-use assets $ 11,669 $ 15,046 Current portion of operating lease liabilities $ 6,779 $ 5,871 Operating lease liabilities 8,959 12,051 Total operating lease liabilities $ 15,738 $ 17,922 Finance Leases Property and equipment, gross $ 2,555 $ 2,377 Accumulated amortization (1,705) (1,418) Property and equipment, net $ 850 $ 959 Accrued liabilities $ 414 $ 390 Other liabilities 446 599 Total finance lease liabilities $ 860 $ 989 Weighted Average Remaining Lease Term Operating leases 3.33 years 3.75 years Finance leases 2.68 years 2.92 years Weighted Average Discount Rate Operating leases 5.4 % 5.3 % Finance leases 5.1 % 5.1 % As of December 31, 2020, future minimum lease payments included in the measurement of lease liabilities on the consolidated balance sheet, for the following five fiscal years and thereafter, were as follows (in thousands): Year ending December 31, Operating Leases Finance Leases 2021 $ 6,206 $ 432 2022 4,096 273 2023 2,751 153 2024 1,569 48 2025 665 11 Thereafter 695 — Total lease payments 15,982 917 Less imputed interest (244) (57) Total $ 15,738 $ 860 Lessor Leases Pricing of our exclusive hearing screening supply agreement is structured on a fee per baby screened basis and includes a guaranteed minimum payment per unit per contract year for each unit of equipment supplied. We recognize revenues for the hardware products upon commencement of each lease at the net present value of their guaranteed minimum payment standalone selling price allocation. The remaining variable fees are recognized as revenue over the remaining lease term. The following table provides the profit recognized for sales-type leases at their commencement (net sales includes the initial allocation of fixed costs plus allocation of incremental variable fees and excludes the revenue associated with non-lease components associated with hearing screening supplies and maintenance that are recognized as revenue over the remaining lease term) for the year ended December 31, 2020 (in thousands): Year Ended 2020 Net Sales $ 2,226 Cost of Sales 4,107 Gross Profit $ (1,881) The following table provides lease income related to variable lease payments on our sales-type leases not included in the measurement of the lease receivable for the year ended December 31, 2020 (in thousands): Year Ended 2020 Variable lease income $ 420 The following table provides lease income on our operating leases for the year ended December 31, 2020 (in thousands): Year Ended 2020 Lease income on operating leases $ 291 The receivables as a result of our sales-type leases are collateralized by the underlying equipment leased and consist of the following components at December 31, 2020 (in thousands): Year Ended 2020 Net minimum lease payments to be received $ 1,777 Less: Unearned interest income portion — Net investment in sales-type leases $ 1,777 Less: Current portion (444) Long-term net investment in sales-type leases $ 1,333 As of December 31, 2020, future minimum lease payments and the reconciliation to net investment in sales-type leases reported on the consolidated balance sheet, for the following five fiscal years and thereafter, were as follows (in thousands): Year Ended December 31, Sales-Type Leases Operating Leases 2021 444 — 2022 444 — 2023 444 — 2024 445 — 2025 — — Thereafter — — Total future minimum lease payments 1,777 — Less: imputed interest — — Total $ 1,777 $ — |
Leases | LEASES Lessee Leases We have operating and finance leases for offices, warehouses, and certain equipment. The leases have remaining lease terms of one Components of lease cost were as follows (in thousands): Year Ended 2020 2019 Operating lease cost $ 6,696 $ 6,823 Finance lease cost: Amortization of right-of-use assets (principal payments) 395 466 Interest on lease liabilities 49 58 Short-term lease cost 7 51 Variable lease cost 2,541 2,836 Sublease income (61) (179) Total lease cost $ 9,627 $ 10,055 Supplemental cash flow information related to leases was as follows (in thousands): Year Ended 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 13,979 $ 13,612 Operating cash flows from finance leases 32 42 Financing cash flows from finance leases 527 478 Right-of-use assets obtained in exchange for lease obligations: Operating leases 3,290 2,697 Finance leases 337 300 Supplemental balance sheet information related to leases was as follows (in thousands): December 31, 2020 December 31, 2019 Operating Leases Operating lease right-of-use assets $ 11,669 $ 15,046 Current portion of operating lease liabilities $ 6,779 $ 5,871 Operating lease liabilities 8,959 12,051 Total operating lease liabilities $ 15,738 $ 17,922 Finance Leases Property and equipment, gross $ 2,555 $ 2,377 Accumulated amortization (1,705) (1,418) Property and equipment, net $ 850 $ 959 Accrued liabilities $ 414 $ 390 Other liabilities 446 599 Total finance lease liabilities $ 860 $ 989 Weighted Average Remaining Lease Term Operating leases 3.33 years 3.75 years Finance leases 2.68 years 2.92 years Weighted Average Discount Rate Operating leases 5.4 % 5.3 % Finance leases 5.1 % 5.1 % As of December 31, 2020, future minimum lease payments included in the measurement of lease liabilities on the consolidated balance sheet, for the following five fiscal years and thereafter, were as follows (in thousands): Year ending December 31, Operating Leases Finance Leases 2021 $ 6,206 $ 432 2022 4,096 273 2023 2,751 153 2024 1,569 48 2025 665 11 Thereafter 695 — Total lease payments 15,982 917 Less imputed interest (244) (57) Total $ 15,738 $ 860 Lessor Leases Pricing of our exclusive hearing screening supply agreement is structured on a fee per baby screened basis and includes a guaranteed minimum payment per unit per contract year for each unit of equipment supplied. We recognize revenues for the hardware products upon commencement of each lease at the net present value of their guaranteed minimum payment standalone selling price allocation. The remaining variable fees are recognized as revenue over the remaining lease term. The following table provides the profit recognized for sales-type leases at their commencement (net sales includes the initial allocation of fixed costs plus allocation of incremental variable fees and excludes the revenue associated with non-lease components associated with hearing screening supplies and maintenance that are recognized as revenue over the remaining lease term) for the year ended December 31, 2020 (in thousands): Year Ended 2020 Net Sales $ 2,226 Cost of Sales 4,107 Gross Profit $ (1,881) The following table provides lease income related to variable lease payments on our sales-type leases not included in the measurement of the lease receivable for the year ended December 31, 2020 (in thousands): Year Ended 2020 Variable lease income $ 420 The following table provides lease income on our operating leases for the year ended December 31, 2020 (in thousands): Year Ended 2020 Lease income on operating leases $ 291 The receivables as a result of our sales-type leases are collateralized by the underlying equipment leased and consist of the following components at December 31, 2020 (in thousands): Year Ended 2020 Net minimum lease payments to be received $ 1,777 Less: Unearned interest income portion — Net investment in sales-type leases $ 1,777 Less: Current portion (444) Long-term net investment in sales-type leases $ 1,333 As of December 31, 2020, future minimum lease payments and the reconciliation to net investment in sales-type leases reported on the consolidated balance sheet, for the following five fiscal years and thereafter, were as follows (in thousands): Year Ended December 31, Sales-Type Leases Operating Leases 2021 444 — 2022 444 — 2023 444 — 2024 445 — 2025 — — Thereafter — — Total future minimum lease payments 1,777 — Less: imputed interest — — Total $ 1,777 $ — |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | ACCRUED LIABILITIES Accrued liabilities consist of (in thousands): December 31, 2020 2019 Compensation and related benefits $ 20,409 $ 26,991 Warranty reserve 5,195 6,404 Accrued federal, state, and local taxes 9,118 11,156 Accrued amounts due to customers 2,743 3,008 Accrued professional fees 3,699 2,083 Accrued selling expenses 311 507 Self-funded insurance expense 911 950 Accrued travel 123 224 Other 1,727 3,128 Total $ 44,236 $ 54,451 |
Long-Term Other Liabilities
Long-Term Other Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Long-Term Other Liabilities | LONG-TERM OTHER LIABILITIES Long-term other liabilities consist of (in thousands): December 31, 2020 2019 Long-term taxes payable $ 10,949 $ 12,330 Non-current deferred revenue 4,416 4,563 CARES Act payroll tax payable 1,354 — Long-term earnout payable 1,286 — Finance lease liabilities 446 599 Other — 124 Total $ 18,451 $ 17,616 |
Debt and Credit Arrangements
Debt and Credit Arrangements | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt and Credit Arrangements | DEBT AND CREDIT ARRANGEMENTS We have a Credit Agreement with JP Morgan, Citibank and Wells Fargo. During the third quarter of 2020 we amended the terms of the Credit Agreement to extend the maturity date of the original agreement, reduce the aggregate value of the revolving facility, and amend certain covenants. The amended Credit Agreement provides for an aggregate $150 million of secured revolving credit facility. The Credit Agreement contains covenants 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 our 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. We have no other significant credit facilities. In addition to the customary restrictive covenants listed above, the Credit Agreement also contains financial covenants that require us to maintain a certain leverage ratio and fixed charge coverage ratio, each as defined in the Credit Agreement: • Leverage Ratio, as defined, to be no higher than 3.25 to 1.00. • Interest Coverage Ratio, as defined, to be at least 1.75 to 1.00 at all times. As of December 31, 2020, we were in compliance with the Leverage Ratio and the Interest Coverage Ratio covenants as defined in the Credit Agreement. As of December 31, 2020, we have $57.0 million outstanding under the Credit Agreement. 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, which ranges between 2.25% to 3.50%. The effective interest rate during the twelve months ended December 31, 2020 was 3.07%. The Credit Agreement matures on September 25, 2023, at which time all principal amounts outstanding under the Credit Agreement will be due and payable. Long-term debt consists of (in thousands): December 31, 2020 2019 Revolving credit facility $ 57,000 $ 55,000 Debt issuance costs (1,160) (335) Less: current portion of long-term debt 50,000 35,000 Total long-term debt $ 5,840 $ 19,665 Maturities of long-term debt as of December 31, 2020 are as follows (in thousands): December 31, 2020 2019 2021 $ — $ 55,000 2022 — — 2023 57,000 — Thereafter — — Total $ 57,000 $ 55,000 |
Financial Instruments and Deriv
Financial Instruments and Derivatives (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instrument [Abstract] | |
Financial Instruments and Derivatives | FINANCIAL INSTRUMENTS AND DERIVATIVES We use interest rate swap derivative instruments to manage earnings and cash flow exposure resulting from changes in interest rates. These interest rate swaps apply a fixed interest rate on a portion of our expected LIBOR-indexed floating-rate borrowings. We held the following interest rate swaps as of December 31, 2020 (in thousands): Hedged Item Current Notional Amount Designation Date Effective Date Termination Date Fixed Interest Rate Floating Rate Estimated Fair Value 1-month USD LIBOR loan $ 40,000 May 31, 2018 June 1, 2018 September 23, 2021 2.611% 1-month USD LIBOR $ 277 Total interest rate derivatives designated as cash flow hedge $ 40,000 $ 277 We designated these derivative instruments as cash flow hedges. We assess the effectiveness of these derivative instruments and record the changes in the fair value of a derivative instrument designated as a cash flow hedge as unrealized gains or losses in accumulated other comprehensive income, net of tax. Once the hedged item affects earnings, the effective portion of any gain or loss will be reclassified to earnings. If the hedged cash flow does not occur, or if it becomes probable that it will not occur, we will reclassify the amount of any gain or loss on the related cash flow hedge to interest expense at that time. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Common Stock —We have 120,000,000 shares of common stock authorized at a par value or $0.001 per share. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 2018 Net loss $ (16,613) $ (15,671) $ (22,935) Weighted average common shares 33,562 33,696 33,111 Dilutive effect of stock based awards — — — Diluted Shares 33,562 33,696 33,111 Basic loss per share $ (0.49) $ (0.47) $ (0.69) Diluted loss per share $ (0.49) $ (0.47) $ (0.69) Shares excluded from calculation of diluted EPS 66 104 343 |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION Share-Based Compensation Expense —We account 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, 2020 2019 2018 Cost of revenue $ 319 $ 264 $ 218 Marketing and selling 1,938 1,024 1,039 Research and development 1,099 800 801 General and administrative 6,171 6,227 14,945 Total expense $ 9,527 $ 8,315 $ 17,003 Stock Awards Plans —Natus' 2018 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; • Market stock units; • Performance stock units; • Stock bonuses; and • Stock appreciation rights. As of December 31, 2020, there were 1,863,120 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, 2020 is summarized as follows: Number of Weighted Outstanding, December 31, 2019 (18,531 shares exercisable at a weighted average exercise price of $35.25 per share) 74,089 $ 35.25 Granted 257,496 $ 20.68 Exercised — $ — Forfeited — $ — Expired — $ — Outstanding, December 31, 2020 (37,062 shares exercisable at a weighted average exercise price of $35.25 per share) 331,585 $ — As of December 31, 2020, unrecognized compensation related to the unvested portion of stock options was approximately $1.8 million, which is expected to be recognized over a weighted average period of 3.9 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, 2020, 2019 and 2018 was $0.0 million, $1.4 million, and $13.6 million, respectively. As of December 31, 2020, there were: (i) 304,730 options vested and expected to vest with a weighted average exercise price of $24.15, an intrinsic value of $0.0 million, and a weighted average remaining contractual term of 8.4 years; and (ii) 37,062 options exercisable with a weighted average exercise price of $35.25, an intrinsic value of $0.0 million, and a weighted average remaining contractual term of 3.5 years. Black-Scholes Inputs —The fair value of option grants was estimated using the Black-Scholes option pricing model with the following weighted average assumptions: December 31, December 31, 2020 2018 Weighted-average fair value of options granted $ 6.54 $ 11.03 Expected life in years 4.5 4.0 Risk-free interest rate 0.2 % 2.7 % Expected volatility 38 % 35 % Dividend yield None None We did not grant any stock options during the years ended December 31, 2019. The expected life of options is based primarily on historical share option exercise experience of the employees for options granted. All options are treated as a single group in the determination of expected life, as we do 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 our common stock. We have 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, we estimate 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 we will record additional expense and if the actual forfeiture is higher than estimated we 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, 2020: Shares Weighted Unvested at December 31, 2019 339,762 $ 34.14 Granted 208,750 $ 29.74 Vested (163,730) $ 33.89 Forfeited (4,693) $ 33.44 Unvested at December 31, 2020 380,089 $ 31.84 As of December 31, 2020, unrecognized compensation related to the unvested portion of stock awards was $6.9 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, 2020 was $7.6 million. For the restricted stock awards granted during the years ended December 31, 2020, 2019, 2018, the weighted average grant date fair values were $29.74, $31.53, and $37.22, respectively. The total grant date fair value of restricted stock awards vested during fiscal year 2020, 2019, and 2018 was $5.5 million, $4.7 million, and $12.9 million, respectively. For the restricted stock awards that vested during the years ended December 31, 2020, 2019, and 2018, the total intrinsic value was $4.8 million, $4.0 million, and $11.2 million, respectively. Restricted Stock Units Activity —The following table summarizes restricted stock units activity for the year ended December 31, 2020: Shares Weighted Outstanding at December 31, 2019 173,096 $ 38.62 Awarded 100,682 $ 35.42 Released (14,033) $ 35.26 Forfeited (47,144) $ 38.92 Outstanding at December 31, 2020 212,601 $ 37.27 *Includes the PSUs and MSUs granted at the valuation date, which may be subject to additional awards or forfeitures depending on the outcome of the performance measures at the end of the performance period. As of December 31, 2020, unrecognized compensation related to the unvested portion of stock units was $3.7 million, which is expected to be recognized over a weighted average period of 1.8 years. The aggregate intrinsic value of outstanding restricted stock units at December 31, 2020 was $4.3 million. For the restricted stock units granted during the years December 31, 2020, 2019, 2018, the weighted average grant date fair values were $35.42, $38.62, and $36.77, respectively. The total grant date fair value of restricted stock units vested during fiscal year 2020, 2019, and 2018 was $0.5 million, $1.4 thousand, and $10.0 million, respectively. For the restricted stock units that vested during the years ended December 31, 2020, 2019, and 2018, the total intrinsic value was $0.5 million, $1.3 million, and $8.7 thousand, 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, 2020, there were 426,084 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 |
Other Income (Expense), Net
Other Income (Expense), Net | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 2018 Interest income $ 11 $ 250 $ 334 Interest expense (3,656) (4,941) (6,794) Foreign currency gain (loss) 1,988 (765) (800) Other (215) (135) (438) Total other expense, net $ (1,872) $ (5,591) $ (7,698) |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Income (loss) before provision for income tax is as follows (in thousands): Years Ended December 31, 2020 2019 2018 U.S. $ 1,908 $ (22,851) $ (54,370) Foreign (23,973) 1,594 22,110 Loss before provision for income tax $ (22,065) $ (21,257) $ (32,260) The components of income tax expense (benefit) for the years ended December 31, 2020, 2019 and 2018 (in thousands): Years Ended December 31, 2020 2019 2018 Current U.S. Federal $ (3,976) $ (948) $ (1,872) U.S. State and local 145 561 (59) Non-U.S. 1,241 8,386 5,732 Total current tax expense (benefit) (2,590) 7,999 3,801 Deferred U.S. Federal 2,049 (7,491) (8,248) U.S. State and local 533 (816) (1,751) Non-U.S. (5,444) (5,278) (3,127) Total deferred tax benefit (2,862) (13,585) (13,126) Total income tax benefit $ (5,452) $ (5,586) $ (9,325) 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, 2020 and 2019 are as follows (in thousands): December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 9,099 $ 3,035 Credit carryforwards 5,768 2,415 Accruals deductible in different periods 15,368 23,672 Employee benefits 1,016 1,554 Operating leases 3,967 4,643 Total deferred tax assets 35,218 35,319 Valuation allowance (969) (606) Total net deferred tax assets $ 34,249 $ 34,713 Deferred tax liabilities: Basis difference in fixed and intangible assets (13,214) (13,850) Operating leases (2,970) (3,959) Foreign earnings to be repatriated (800) (800) Total deferred tax liabilities (16,984) (18,609) Total net deferred tax assets $ 17,265 $ 16,104 The income tax expense (benefit) in the accompanying statements of income differs from the provision calculated by applying the U.S. federal statutory income tax rate of 21% in 2020, 2019, and 2018 to income before taxes due to the following: Years Ended December 31, 2020 2019 2018 Federal statutory tax expense $ (4,634) $ (4,464) $ (6,775) State tax expense 661 (300) (1,160) Foreign taxes at rates less than U.S. rates 1,050 (2,205) (1,071) Equity compensation 1,161 824 519 Tax credits (1,641) (1,428) (2,021) Uncertain tax position 3,002 2,910 1,311 Lapse of statute (2,718) (3,961) (1,214) Repatriation tax net of foreign tax credits — 172 — Federal NOL Carryback (1,621) — — Tax audits (224) — 658 Withholding taxes — 1,107 1,185 Global intangible low-taxed income net of foreign tax credits — 1,601 2,326 Return to provision (946) 560 (1,417) SAB 118 adjustments — — (2,676) Other 458 (402) 1,010 Total expense (benefit) $ (5,452) $ (5,586) $ (9,325) At December 31, 2020, we had U.S. federal net operating loss carryforwards of $8.3 million, which will carryforward indefinitely. At December 31, 2020, we had U.S. state net operating loss carryforwards of $31.9 million, of which immaterial portions will begin to expire in 2021 and the majority have long carryforward periods ranging primarily from 10 years to indefinite. At December 31, 2020, we had U.S. federal R&D credit carryforwards of $4.3 million, which will begin to expire in 2038 and U.S. state R&D credit carryforwards of $0.9 million, which will begin to expire in 2021. At December 31, 2020, we had $0.1 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, 2020, certain foreign subsidiaries had deferred tax assets attributable to net operating loss carryforwards as follows: $1.0 million in France, $2.4 million in Denmark, $1.3 million in Canada, $0.4 million in Ireland, and $0.7 million in Germany. These foreign net operating loss carryforwards, if not utilized to offset taxable income in future periods, will begin to expire in various amounts beginning in 2026 with the most material amounts having long carryforward periods ranging from 20 years to indefinite. 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 $1.0 million and $0.6 million were recorded at December 31, 2020 and 2019, respectively. The increase of $0.4 million in valuation allowance was primarily due to a valuation allowance recorded against certain U.S. state R&D credits and U.S. foreign tax credits, which are expected to expire before fully utilized. The realizability of the deferred tax assets is primarily dependent on our ability to generate sufficient taxable income in future periods. We record net deferred tax assets to the extent it is more likely than not that the assets will be realized. The ultimate recovery of deferred tax assets is dependent upon the amount and timing of future taxable income and other factors such as the taxing jurisdiction in which the assets are to be recovered. A high degree of judgment is required to determine if, and the extent to which, valuation allowances should be recorded against deferred tax assets. In making such determinations, we consider 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. Based on all available evidence, both positive and negative, and the weight of that evidence to the extent such evidence can be objectively verified, we determine whether it is more likely than not that all or a portion of the deferred tax assets will be realized. As of December 31, 2020, the balance sheet reflected U.S. deferred tax assets of $25.1 million, net of $0.3 million federal and state valuation allowances. These U.S. deferred tax assets consist primarily of $3.4 million of federal and state net operating loss carryforwards, $5.1 million of federal and state R&D credit carryforwards, and $16.8 million of deductible temporary differences. Detailed valuation allowance analysis was completed as required in ASC 740. After weighing all the positive and negative evidence we concluded that it is more likely than not that the U.S. deferred tax assets will be realized and there is no valuation allowance required, except for a small portion related to $0.2 million of state R&D credits and $0.1 million of U.S. foreign tax credits which we have concluded are not recoverable. The valuation allowance analysis primarily included considering the following items: • Cumulative three-year income or loss on an adjusted basis - We computed a three-year cumulative loss for Natus U.S. but have supported the conclusion no additional valuation allowance was required upon further analysis. The additional analysis resulted in three-year cumulative earnings after adjustments was made for certain one-time nonrecurring items. The one-time items were primarily driven by specific One Natus reorganization impacts which include certain product rationalizations. • Current U.S. income (loss) before provision (benefit) for income tax and historical utilization of deferred tax assets - Our ability to generate positive income before tax in 2020 following the One Natus reorganization and taking into account the impact of COVID-19 during the year was considered objectively verifiable positive evidence of the impact of One Natus reorganization on profitability. In addition, Natus U.S. has a history of using all its net operating losses and credit carryforwards. • Lengthy carryforward periods for deferred tax assets - The carryforward period for deferred tax assets, particularly U.S. federal and state net operating losses and R&D credit, in general are long (e.g. 20 years for R&D credit carryforwards) or indefinite (e.g. for federal net operating losses). • Future sources of taxable income - While more subjective and requiring an increased level of judgement, we forecasted future sources of taxable income which were determined sufficient to support the assertion that the deferred tax assets were more likely than not to be utilized in the future. Key judgments included in our forecast include the generation of a sufficient level of U.S. profit before tax on a prospective basis and the existence of reasonably predictable levels of permanent adjustments used in calculating taxable income over the forecast period. The assumptions used in our forecast of future taxable income were developed in considering the impact the One Natus reorganization has had on our trend in U.S. earnings. the generation of taxable income in the U.S. in 2020, and conservative expectations as to future results as our business recover from impacts of the COVID-19 pandemic. The analysis of foreign deferred tax assets was also completed following the same principles. As such, it was concluded that the valuation allowance of $0.6 million recorded in 2019, that relates primarily to net operating losses and capital losses in Canada, should be retained in 2020 since the benefit is not expected to be realized. No valuation allowance was booked for the remaining foreign deferred tax assets as the benefits are expected to be realized in the lengthy carryforward periods. There are no changes to the position on our permanent reinvestment of earnings from foreign operations. As of December 31, 2020, we intend to distribute all of the earnings from Excel-Tech and Natus Ireland in excess of their operational needs. We have recorded a deferred tax liability of $0.8 million accordingly for 5% Canadian withholding tax on the expected Excel-Tech distribution to Natus Ireland. Natus Ireland has 0% withholding tax under domestic exemption and therefore, no liability has been recorded. We intend to permanently reinvest the earnings of remaining foreign subsidiaries. The other remaining foreign subsidiaries have both the intent and ability to indefinitely reinvest its undistributed earnings. 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, 2018 $ 7,017 Increases for tax positions related to prior years 526 Increases for tax positions related to the current year 699 Decrease due to lapse of statutes of limitations (965) Foreign exchange difference (50) Balance at January 1, 2019 $ 7,227 Decreases for tax positions related to prior years (48) Increases for tax positions related to the current year 495 Decrease due to lapse of statutes of limitations (3,763) Foreign exchange difference 6 Balance at January 1, 2020 $ 3,917 Increases for tax positions related to prior years 2,454 Increases for tax positions related to the current year 104 Lapse of statutes of limitations (2,416) Foreign exchange difference 83 Balance at December 31, 2020 $ 4,142 For the year ended December 31, 2020, our net unrecognized tax benefits increased by $0.2 million, resulting in a corresponding $0.2 million increase in income tax expense. The increase was primarily attributable to the increase in uncertain tax positions related to the current year in certain jurisdictions. The unrecognized tax benefits for the tax years ended December 31, 2020, 2019 and 2018 were $4.1 million, $3.9 million and $7.2 million, respectively which include $3.8 million, $3.6 million and $6.5 million, respectively that would impact the effective tax rate if recognized. We expect a range from zero to $0.2 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, 2020, 2019 and 2018, we had cumulatively accrued $0.5 million, $0.4 million, and $0.5 million for estimated interest and penalties related to uncertain tax positions. We record interest and penalties related to unrecognized tax positions as a component of income tax expense (benefit), which totaled approximately $130.0 thousand, $(80.0) thousand, and $(80.0) thousand for the years ended December 31, 2020, 2019, and 2018, respectively. We are 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. Our tax returns remain open to examination as follows: U.S. federal, 2016 through 2019; U.S. states, generally 2015 through 2019; and significant foreign jurisdictions, generally 2015 through 2019. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | EMPLOYEE BENEFIT PLANWe offer 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 $3.2 million, $3.6 million, and $4.7 million respectively, in the years ended December 31, 2020, 2019, and 2018. 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, 2020 | |
Segment Reporting [Abstract] | |
Segment, Customer and Geographic Information | SEGMENT, CUSTOMER, AND GEOGRAPHIC INFORMATION We determine our reportable segments by first identifying our operating segments, and then by assessing whether any components of these segments constitute a business for which discrete financial information is available and where segment management regularly reviews the operating results of that component. Historically, our operating segments were based on its three strategic business units. In January 2019 we announced the transition of our operating structure from three strategic business units to a single, unified company with globally led operational teams in Sales and Marketing, Manufacturing, Research and Development, Quality, and General and Administrative functions. Following the reorganization, we operate as one operating segment and one reportable segment, which provides medical device solutions focused on the diagnosis and treatment of central nervous and sensory system disorders for patients of all ages. Financial information is reviewed on a consolidated basis for purposes of making operating decisions and assessing financial performance. Consolidated financial information is accompanied by disaggregated information about revenues by end market and geographic region. We do not assess the performance of our end markets or geographic regions on measures of profit or loss, or asset-based metrics. We have disclosed the revenues for each end market and geographic region to provide the reader of the financial statements transparency into our operations. The following tables present revenue and long-lived asset information by end market and geographic region. Revenue is based on the destination of the shipments and long-lived assets are based on the physical location of the assets (in thousands): Years Ended December 31, 2020 2019 2018 Consolidated Revenue: United States $ 252,496 $ 292,400 $ 300,860 Foreign countries 163,188 202,775 230,031 $ 415,684 $ 495,175 $ 530,891 Revenue by End Market: Neuro Devices and Systems $ 179,881 $ 220,306 $ 200,762 Supplies 56,275 66,059 67,025 Services — 871 12,000 Total Neuro Revenue $ 236,156 $ 287,236 $ 279,787 Newborn Care Devices and Systems $ 51,894 $ 53,465 $ 72,807 Supplies 36,174 38,264 40,669 Services 16,566 19,183 20,396 Total Newborn Care Revenue $ 104,634 $ 110,912 $ 133,872 Hearing & Balance Devices and Systems $ 70,711 $ 92,050 $ 110,597 Supplies 4,183 4,977 6,635 Total Hearing & Balance Revenue $ 74,894 $ 97,027 $ 117,232 Total Revenue $ 415,684 $ 495,175 $ 530,891 Long-lived asset information by geographic region is as follows (in thousands): Years Ended December 31, 2020 2019 Property and equipment, net: United States $ 10,998 $ 11,868 Ireland 6,716 5,732 Canada 3,775 4,140 Denmark 1,787 1,799 Other foreign countries 1,240 1,163 $ 24,516 $ 24,702 During the years ended December 31, 2020, 2019 and 2018, no single customer or foreign country contributed to more than 10% of revenue. |
Commitments And Contingencies
Commitments And Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | COMMITMENTS AND CONTINGENCIES Purchase commitments —We have various purchase obligations for goods or services totaling $39.6 million at December 31, 2020, which are expected to be paid $39.1 million in 2021 and $0.5 million thereafter. Legal matters —We currently are, and may from time to time become, a party to various legal proceedings or claims that arise in the ordinary course of business. Our managements reviews these matters if and when they arise and believes that the resolution of any such matters currently known will not have a material effect on our results of operations or financial position. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
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. On April 1, 2019, as part of the sale of our Argentinian subsidiary, Medix, we provided a loan to Medix for $2.2 million. This asset was measured at fair value less costs to sell as of December 31, 2019 and is classified as Level 3 asset. The loan is classified within other assets on our consolidated balance sheet. Subsequent changes in the fair value of the loan receivable are recorded within our income statement as an operating expense. December 31, 2019 Additions Payments Adjustments December 31, 2020 Other assets: Loan receivable $ 1,906 $ — $ — $ (1,180) $ 726 Total $ 1,906 $ — $ — $ (1,180) $ 726 The derivative financial instruments described in Note 12 are measured at fair value on a recurring basis and are presented on the consolidated balance sheets at fair value. The table below presents the fair value of the derivative financial instruments as well as the classification on the consolidated balance sheet (in thousands): December 31, 2019 Additions Payments Adjustments December 31, 2020 Liabilities: Interest Rate Swap $ 313 $ — $ — $ (36) $ 277 Total $ 313 $ — $ — $ (36) $ 277 We estimate the fair value of the interest rate swaps by calculating the present value of the expected future cash flows of each swap. The calculation incorporated the contractual terms of the derivatives, observable market interest rates which are considered to be Level 2 inputs, and credit risk adjustments, if any, to reflect the counterpart's as well as our nonperformance risk. As of December 31, 2020, there have been no events of default under the interest rate swap agreement. The following financial instruments are not measured at fair value on the consolidated balance sheet as of December 31, 2020 and 2019, 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. The carrying amount of our short-term and long-term debt approximates fair value based on Level 2 inputs since the debt carries a variable interest rate that is tied to the current LIBOR rate plus a spread. |
Sale of Certain Subsidiary Asse
Sale of Certain Subsidiary Assets Sale of Certain Subsidiary Assets | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Sale of Certain Subsidiary Assets | SALE OF CERTAIN SUBSIDIARY We divested our wholly owned subsidiary, Medix, on April 2, 2019 via a stock sale to the local managing director, a related party. In exchange for the stock, we received $2.5 thousand in cash and provided Medix with a $2.2 million limited-recourse loan. The loan is secured by a real estate assets of Medix and repayment is conditional upon the sale of the real estate asset. The fair market value of the loan is assessed quarterly and adjusted as necessary to reflect any changes in market environment or the value of the building. See Note 22 to the Condensed Consolidated Financial Statements for fair market value of the loan receivable. The held for sale criteria under GAAP was met in the first quarter of 2019. As such, we completed an asset impairment analysis which resulted in the full impairment of all assets held for sale. We recognized an impairment loss of $24.6 million which included an accrual for the anticipated realization of deferred foreign currency related translation adjustments in accumulated other comprehensive income of $24.8 million, net of tax, and an adjustment of $4.6 million for assets with a book value in excess of their fair market value. Included in the year ended December 31, 2019 is the impact of the sale of Medix, which was completed as of June 30, 2019, and the deferred foreign currency related translation adjustments previously in accumulated other comprehensive income have been released from the balance sheet along with the held for sale accrual. |
Schedule II_ Valuation And Qual
Schedule II: Valuation And Qualifying Accounts | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II: of Valuation and Qualifying Accounts | SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS For the years ended December 31, 2020, 2019 and 2018 (In thousands) Balance at Additions Deductions Balance Year ended December 31, 2020 Allowance for doubtful accounts $ 7,384 $ 1,190 $ (2,361) $ 6,213 Valuation allowance 606 363 — 969 Warranty reserve 6,404 2,009 (3,218) 5,195 Year ended December 31, 2019 Allowance for doubtful accounts $ 6,960 $ 4,262 $ (3,838) $ 7,384 Valuation allowance 637 — (31) 606 Warranty reserve 9,391 3,949 (6,936) 6,404 Year ended December 31, 2018 Allowance for doubtful accounts $ 8,978 $ 6,423 $ (8,441) $ 6,960 Valuation allowance 5,862 — (5,225) 637 Warranty reserve 10,995 4,487 (6,091) 9,391 |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Principles of Consolidation | Basis of Presentation and Principles of ConsolidationThe accompanying Consolidated Financial Statements includes our accounts and accounts of our 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. | |
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, valuation of deferred income taxes, reserves for warranty obligations, and the provision for income taxes including uncertain positions. Actual results could differ from those estimates. | |
Revenue recognition | Revenue recognition Revenue is recognized when obligations under the terms of a contract with a customer are satisfied; generally this occurs with the transfer of control of devices, supplies, or services. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. For the majority of devices and supplies, we transfer control and recognize revenue when products ship from the warehouse to the customer. We generally do not provide rights of return on devices and supplies. Freight charges billed to customers are included in revenue and freight-related expenses are charged to cost of revenue. Depending on the terms of the arrangement, we may also defer the recognition of a portion of the consideration received because we have to satisfy a future obligation (e.g. installation). Judgment is required to determine the standalone selling price for each distinct performance obligation. Our estimate of SSP is a point estimate. The estimate is calculated annually for each performance obligation that is not sold separately. In instances where SSP is not directly observable, such as when we do not sell the product or service separately, the SSP is determined using information that may include market conditions and other observable inputs. We sell separately-priced service contracts that extend maintenance coverages for both medical devices and data management systems beyond the base agreements to customers. The separately priced service contracts range from 12 months to 60 months. We receive payment at the inception of the contract and recognize revenue ratably over the service period. | |
Inventory | Inventory Valuation Inventories are carried at the lower of cost or net realizable value, with cost being determined using the first-in, first-out method. The carrying value of our inventory is reduced for any difference between cost and estimated net realizable value of the inventory. We determine net realizable value by evaluating ending inventories for excess quantities, obsolescence, and other factors that could impact our ability to consume inventory for its intended use. Our evaluation includes an analysis of historical sales by product, projections of future demand by product, and an analysis of obsolescence by product. Adjustments to the | |
Intangible Assets | Intangible assets We amortize intangible assets with finite lives over the estimate of their useful lives. Any future changes that would limit their useful lives or any determination that these assets are carried at amounts greater than their estimated fair value could result in acceleration of amortization over a revised useful life. | |
Goodwill | Goodwill 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. Goodwill is tested for impairment at the reporting unit level. In 2018 we had four reporting units for purposes of goodwill impairment testing. In early 2019 we announced the implementation of a new organizational structure which consolidated our three strategic business units, Neuro, Newborn Care and Hearing & Balance into “One Natus”. As a result of these organizational changes we have concluded we have one operating segment and one reporting unit for purposes of goodwill impairment testing in 2019 and 2020. In accordance with accounting standards we perform a qualitative assessment to test goodwill for impairment prior to the performing the first step of the goodwill impairment process. Qualitative factors considered in this assessment include industry and market considerations, overall financial performance and other relevant events and factors affecting the reporting unit. Prior to the adoption of ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) in 2019, which simplified the goodwill impairment test, if the fair value of a reporting unit was less than its carrying amount, we 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. We use 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. Based on the qualitative assessment in 2020 and 2019, we determined the fair value of goodwill was more likely than not greater than its carrying amount, and no further analysis was needed. Due to organizational changes announced in late 2018 our evaluation of our GND reporting unit, which was part of our Neuro business unit, was determined to be impaired. Prior to calculating the goodwill impairment loss, we analyzed the recoverability of GND long-lived assets (other than goodwill). As a result, we recorded a goodwill impairment charge of $14.8 million within restructuring expense on our income statement. There was no remaining goodwill in the GND reporting unit as of December 31, 2018. In 2019 we elected to early adopt ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). The adoption of this standard eliminates the second step of the two-step impairment test described above and allows a Company to expense the difference between carrying amount in excess of the fair value of the reporting unit as a reduction in goodwill. The adoption of ASU 2017-04 did not have an impact on our consolidated financial statements as we concluded based on the qualitative assessment performed in 2019 and 2020 that the fair value of the reporting unit was more likely than not to be greater than its carrying amount, and no further analysis was needed. | |
Long lived assets | Long lived assets We continually monitor events and changes in circumstances that could indicate that carrying amounts of our long-lived assets, including property and equipment, intangible assets and leases, may not be recoverable. When such events or changes in circumstances occur, we will assess the recoverability by determining whether the carrying value of an asset group will be recovered through undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying amount of the asset group, we will recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. | |
Leases | Lessee Leases We determine if an arrangement is a lease at inception of the lease. Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term, and lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit borrowing rate, generally we use an incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at the lease commencement date. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to exclude or terminate the lease when it is reasonably certain that they will exercise that option. Lease expense for lease payments are recognized on a straight-line basis over the lease term. Operating leases are included in operating lease ROU assets, accrued liabilities, and operating lease liabilities in our consolidated balance sheet. Finance leases are included in property and equipment, accrued liabilities, and other liabilities in the consolidated balance sheet. We have lease agreements with lease and non-lease components, which are generally accounted for based on the type of asset. For real estate and telecom leases, we account for these components separately. For equipment leases, such as office equipment and vehicles, we account for the lease and non-lease components as a single lease component. | |
Leases | Lessor Leases We determine if an arrangement is a lease at inception of the lease. We entered into a five-year non-cancelable exclusive supply agreement with a customer to provide hearing screening products which commenced on January 1, 2020. The agreement includes automatic renewal options for successive three-year periods. Notice of non-renewal must be provided to Natus at least twelve months prior to the end of the current term. The agreement does not contain any purchase options or residual value guarantees. Pricing of the exclusive supply agreement is structured on a fee per baby screened basis. The per baby fee is inclusive of all products and services to be provided under the terms of the agreement which include hearing screening hardware, consumables required to complete each screen, and related maintenance. The pricing structure also includes a guaranteed minimum payment per unit per contract year for each unit of equipment supplied. Sales-Type Leases The guaranteed minimum payment for each unit of equipment supplied represents the fixed transaction price and is allocated to separate performance obligations, consisting of hardware products, consumables, and maintenance, proportionally based on the standalone selling price of each performance obligation. Standalone selling price is best evidenced by the price we charge for the good or service when selling it separately in similar circumstances to similar customers. Other than for the renewal of annual support services contracts, our products and services are not generally sold separately. We use an amount discounted from the list price as a best estimated selling price. For sales-type leases, we recognize revenues for hearing screening hardware products at the net present value of their guaranteed minimum payment standalone selling price allocation upon delivery of the hardware. We recognize consumables and maintenance revenues associated with the sales-type leases over the term of the agreement on a weighted average as actual screens are performed. Upon commencement of a sales-type lease we derecognize the leased asset from our balance sheet and record it as cost of revenue in the condensed consolidated statements of operations. Operating Leases Under the terms of the exclusive supply agreement, hospitals where we were previously providing hearing screening services were provided the option to transition to the exclusive supply agreement. Hospitals which chose to transition continued to use their existing Natus hardware. Based on the remaining useful life of the existing hardware some of these leases were classified as operating leases. For operating leases, rental income is recognized on a straight-line basis over the term of the associated lease. Leased assets classified as operating leases are carried at amortized cost net of accumulated depreciation in property and equipment, net on the condensed consolidated balance sheet. The depreciation expense of the leased assets is recognized on a straight-line basis over the useful life of the asset, and recorded in cost of revenue in the condensed consolidated statements of operations. | |
Liability for product warranties | Liability for product warranties We provide a warranty for products that is generally one year in length. In some cases, regulations may require us to provide repair or remediation beyond the typical warranty period. If any products contain defects, we may be required to incur additional repair and remediation costs. Service, repair and calibration services are provided by a combination of our owned facilities and vendors on a contract basis. We accrue estimated product warranty costs at the time of sale based on historical experience. 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. We consider 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 We recognize 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 16 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. We recognize 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; 25% on each of the annual 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. We grant market stock unit (“MSU”) awards to certain employees. We estimate the fair value of MSUs at the date of grant using a Monte Carlo simulation model and amortize those fair values over the requisite service period, which is generally three years. The Monte Carlo simulation model that we use to estimate the fair value of market-based MSUs at the date of grant incorporates into the valuation the possibility that the market condition may not be satisfied. Provided that the requisite service is rendered, the total fair value of the market-based MSUs, which is determined at the date of grant, must be recognized as compensation expense even if the market condition is not achieved. However, the number of shares that ultimately vest can vary significantly with the performance of the specified market criteria. We also grant performance stock unit (“PSU”) awards to our CEO and CFO. These PSUs fully vest after a performance period and have separate performance goals than MSUs. We estimate fair value of performance stock unit awards based on the share price and other pertinent factors on the grant date. Compensation expense for performance stock unit awards are recognized on a straight-line basis over the requisite service period of the award when performance condition is probable to occur. We assess the achievement probability of the performance conditions each period and adjust compensation expense if necessary. Provided that the requisite service is rendered, the shares will become vested and payout will occur based on the outcome of the performance condition. Any unrecognized compensation cost shall be recognized when the award becomes vested. We issue new shares of common stock upon the exercise of stock options and the vesting of RSAs, RSUs, MSUs, and PSUs. 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. | |
Cash Equivalents | Cash EquivalentsAll highly liquid investments purchased with an original maturity or remaining maturity upon purchase of three months or less are classified as cash equivalents. | |
Short-term Investments | Cash EquivalentsAll highly liquid investments purchased with an original maturity or remaining maturity upon purchase of three months or less are classified as cash equivalents. | |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts We estimate the allowance for potentially uncollectible accounts receivable based on historical collection experience within the markets in which we operate 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 their fair values due to the short-term maturities. | |
Property and Equipment | Property and EquipmentProperty 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 | |
Research & Development Costs | Research & Development CostsCosts incurred in research and development are charged to operations as incurred. | |
Income Taxes | Income Taxes We account 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 carrying value of assets and liabilities and the tax basis of those 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. We record net deferred tax assets to the extent it is more likely than not that the assets will be realized. In making such determination, we consider 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, we adjust the valuation allowance which reduces the provision for income taxes. | |
Foreign Currency | Foreign Currency The functional currency of our 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. We have recorded $13.2 million, $(1.6) million, and $(14.4) million of foreign currency translation gains (losses) for the years ended December 31, 2020, 2019 and 2018, respectively. Gains and losses from transactions denominated in currencies other than the functional currencies are included in other income and expense. In 2020, 2019, and 2018, net foreign currency transaction gains (losses) were $2.0 million, $(0.8) million, and $(0.8) million, respectively. Foreign currency gains and losses result primarily from fluctuations in the exchange rate between the U.S. dollar, Canadian dollar, Euro, British pound, and Danish kroner. Effective July 1, 2018, Argentina's economy is considered to be highly inflationary under U.S. GAAP since it has experienced a rate of general inflation in excess of 100% over the latest three-year period, based upon the cumulative inflation rates published by Center for Audit Quality (CAQ) SEC Regulations Committee and its International Practices Task Force | |
Comprehensive Income | Comprehensive Income We break out the major components and report as a single total the change in net assets during the period as defined in ASC Topic 220, Comprehensive Income. The consolidated statement of comprehensive income (loss) has been separately stated from the consolidated statements of operations. Accumulated other comprehensive loss consists of translation gains and losses on foreign subsidiary financial statements, interest rate swap designated as a cash flow hedge, reclassifications from the adoption of ASU 2018-02, and reclassification of previously recorded deferred foreign currency related translation adjustment losses upon the divestiture of Medix. | |
Basic and Diluted Net Income per Share | Basic and Diluted Net Income per Share We compute net income per share as defined in 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, shares of restricted stock, and shares of market 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 | Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This standard requires lease assets and lease liabilities arising from operating leases to be presented 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. In July 2018, FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, which affects narrow aspects of the guidance issued in the amendments in Update 2016-02. In July 2018, the FASB also issued ASU 2018-11, Targeted Improvements. The amendments in ASU 2018-11 provide additional clarification and implementation guidance on certain aspects of the previously issued ASU 2016-02 and have the same effective and transition requirements as ASU 2016-02. The new standard provides a number of optional practical expedients in transition. We have elected the package of practical expedients, which permits an entity to not reassess prior conclusions about lease identification, lease classification and initial direct costs under the new standard. We have not elected the use-of-hindsight practical expedient or the practical expedient pertaining to land easements; the latter of which is not applicable to us. We made an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. We will recognize those lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term. The new standard became effective for us on January 1, 2019. We adopted the new standard using the modified retrospective transition method with the effective date as the date of initial application. Upon adoption, we recognized additional new lease assets of approximately $19.5 million and additional lease liabilities of approximately $22.3 million as of January 1, 2019. The standard did not materially affect consolidated net earnings. By electing the effective date as the date of initial application, financial performance has not been adjusted and the disclosures required under the new standard have not been provided for periods prior to January 1, 2019. See Significant Accounting Policies and Note 8 for additional discussion and disclosure. The adoption of the new standard did not impact our liquidity or debt-covenant compliance under its previous agreements. In June 2016, the FASB issued ASU 2016-13, Credit Losses (Topic 326). This update requires financial assets measured at amortized cost, such as trade receivables and contract assets, to be presented net of expected credit losses, which may be estimated based on relevant information such as historical experience, current conditions, and future expectation for each pool of similar financial assets. The new guidance requires enhanced disclosures related to trade receivables and associated credit losses. In May 2019, the FASB issued ASU 2019-05 which provides targeted transition relief guidance intended to increase comparability of financial statement information. The guidance for both updates was effective beginning January 1, 2020. The adoption of ASU 2016-13 did not have a material impact on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). This update modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Because these amendments eliminate Step 2 from the goodwill impairment test, they should reduce the cost and complexity of evaluating goodwill for impairment. ASU 2017-04 is effective for our annual and any interim goodwill impairment tests performed on or after January 1, 2020. We elected to early adopt. The adoption of ASU 2017-04 did not have an impact on our consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220). This update permits a company to reclassify its disproportionate income tax effects of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) on items within accumulated other comprehensive income (“AOCI”) to retained earnings (termed “stranded tax effects”). Only the stranded tax effects resulting from the 2017 Act are eligible for reclassification. The ASU was effective for us on January 1, 2019. Upon adoption, we reclassified stranded tax effects resulting from the 2017 Act of $1.3 million, resulting in a decrease to AOCI and an increase to retained earnings as of January 1, 2019. In August 2018, the FASB issued ASU 2018-13 Fair Value Measurement (Topic 813), Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. This update amends Topic 820 to add, remove, and clarify disclosure requirements related to fair value measurement disclosure. For calendar year-end entities, the update was effective for annual periods beginning January 1, 2020, and interim periods within those fiscal years. The adoption of ASU 2018-13 did not have an impact on our consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Tax. This update includes removal of certain exceptions to the general principles of ASC 740, Income taxes, and simplification in several other areas such as accounting for franchise tax (or similar tax) that is partially based on income. We early adopted the ASU in the second quarter of 2020. Upon adoption, we recorded an additional income tax benefit of $0.9 million due to the elimination of the year-to-date loss limitation rules that limited the interim tax period tax benefit. |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability [Table Text Block] | The following table summarized the changes in the contract assets and contract liability balances for the year ended December 31, 2020 (in thousands): Unbilled AR, December 31, 2019 $ 2,667 Additions 173 Transferred to Trade Receivable (915) Unbilled AR, December 31, 2020 $ 1,925 Deferred Revenue, December 31, 2019 $ 24,808 Additions 19,763 Revenue Recognized (18,848) Deferred Revenue, December 31, 2020 $ 25,723 |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Schedule of Activity in Allowance for Doubtful Accounts | The details of activity in allowance for doubtful accounts are as follows (in thousands): December 31, 2020 2019 Balance, beginning of period $ 7,384 $ 6,960 Additions charged to expense 1,190 4,262 Write-offs charged against allowance (2,361) (3,838) Balance, end of period $ 6,213 $ 7,384 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consist of (in thousands): December 31, 2020 2019 Raw materials and subassemblies $ 22,583 $ 37,259 Work in process 2,294 1,780 Finished goods 65,695 50,521 Total Inventories 90,572 89,560 Less: Non-current Inventories (14,922) (18,192) Inventories $ 75,650 $ 71,368 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consist of (in thousands): December 31, 2020 2019 Land $ 1,792 $ 1,719 Buildings 7,365 6,943 Leasehold improvements 8,050 8,664 Finance lease right-of-use assets 2,555 2,377 Office furniture and equipment 22,148 22,819 Computer software and hardware 10,246 12,610 Demonstration and loaned equipment 3,086 11,621 55,242 66,753 Accumulated depreciation (30,726) (42,051) Total $ 24,516 $ 24,702 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 December 31, 2019 Gross Accumulated Accumulated Net Book Gross Accumulated Accumulated Net Book Intangible assets with definite lives: Technology $ 112,138 (12,480) $ (64,203) $ 35,455 $ 108,400 (6,035) $ (55,408) $ 46,957 Customer related 94,526 (50) (51,247) 43,229 90,351 (50) (40,527) 49,774 Trade names 47,058 (3,677) (31,890) 11,491 45,874 (3,237) (25,355) 17,282 Internally developed software 13,281 — (12,845) 436 13,281 — (12,606) 675 Patents 2,810 (133) (2,677) — 2,692 (133) (2,559) — Service Agreements 1,190 — (1,119) 71 1,190 — (1,079) 111 Total definite-lived intangible assets 271,003 (16,340) (163,981) 90,682 261,788 (9,455) (137,534) 114,799 Intangible assets with indefinite lives: Intellectual Property 2,059 — — 2,059 — — — — Total intangible assets 273,062 (16,340) (163,981) 92,741 261,788 (9,455) (137,534) 114,799 |
Amortization expense related to intangible assets with definite lives | Amortization expense related to intangible assets with finite lives, including impairment charges described above, was as follows (in thousands): Years Ended December 31, 2020 2019 2018 Technology $ 13,417 $ 6,906 $ 14,100 Customer related 8,825 8,662 12,244 Trade names 6,182 6,111 6,736 Internally developed software 239 1,438 2,123 Patents — 60 84 Service Agreements 40 322 757 Total amortization $ 28,703 $ 23,499 $ 36,044 |
Expected annual amortization expense related to amortizable intangible assets | Expected annual amortization expense related to amortizable intangible assets is as follows (in thousands): 2021 $ 22,374 2022 18,365 2023 15,590 2024 13,599 2025 12,976 Thereafter 7,778 Total expected amortization expense $ 90,682 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2018 $ 147,644 Foreign currency translation (1,277) As of December 31, 2019 $ 146,367 Purchase Accounting Adjustments 1,207 Foreign currency translation 3,725 As of December 31, 2020 $ 151,299 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Lease, Cost | Components of lease cost were as follows (in thousands): Year Ended 2020 2019 Operating lease cost $ 6,696 $ 6,823 Finance lease cost: Amortization of right-of-use assets (principal payments) 395 466 Interest on lease liabilities 49 58 Short-term lease cost 7 51 Variable lease cost 2,541 2,836 Sublease income (61) (179) Total lease cost $ 9,627 $ 10,055 Supplemental cash flow information related to leases was as follows (in thousands): Year Ended 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 13,979 $ 13,612 Operating cash flows from finance leases 32 42 Financing cash flows from finance leases 527 478 Right-of-use assets obtained in exchange for lease obligations: Operating leases 3,290 2,697 Finance leases 337 300 |
Assets and Liabilities, Lessee | Supplemental balance sheet information related to leases was as follows (in thousands): December 31, 2020 December 31, 2019 Operating Leases Operating lease right-of-use assets $ 11,669 $ 15,046 Current portion of operating lease liabilities $ 6,779 $ 5,871 Operating lease liabilities 8,959 12,051 Total operating lease liabilities $ 15,738 $ 17,922 Finance Leases Property and equipment, gross $ 2,555 $ 2,377 Accumulated amortization (1,705) (1,418) Property and equipment, net $ 850 $ 959 Accrued liabilities $ 414 $ 390 Other liabilities 446 599 Total finance lease liabilities $ 860 $ 989 Weighted Average Remaining Lease Term Operating leases 3.33 years 3.75 years Finance leases 2.68 years 2.92 years Weighted Average Discount Rate Operating leases 5.4 % 5.3 % Finance leases 5.1 % 5.1 % |
Finance Lease, Liability, Maturity | As of December 31, 2020, future minimum lease payments included in the measurement of lease liabilities on the consolidated balance sheet, for the following five fiscal years and thereafter, were as follows (in thousands): Year ending December 31, Operating Leases Finance Leases 2021 $ 6,206 $ 432 2022 4,096 273 2023 2,751 153 2024 1,569 48 2025 665 11 Thereafter 695 — Total lease payments 15,982 917 Less imputed interest (244) (57) Total $ 15,738 $ 860 |
Lessee, Operating Lease, Liability, Maturity | As of December 31, 2020, future minimum lease payments included in the measurement of lease liabilities on the consolidated balance sheet, for the following five fiscal years and thereafter, were as follows (in thousands): Year ending December 31, Operating Leases Finance Leases 2021 $ 6,206 $ 432 2022 4,096 273 2023 2,751 153 2024 1,569 48 2025 665 11 Thereafter 695 — Total lease payments 15,982 917 Less imputed interest (244) (57) Total $ 15,738 $ 860 |
Sales-type Lease, Lease Income | The following table provides the profit recognized for sales-type leases at their commencement (net sales includes the initial allocation of fixed costs plus allocation of incremental variable fees and excludes the revenue associated with non-lease components associated with hearing screening supplies and maintenance that are recognized as revenue over the remaining lease term) for the year ended December 31, 2020 (in thousands): Year Ended 2020 Net Sales $ 2,226 Cost of Sales 4,107 Gross Profit $ (1,881) The following table provides lease income related to variable lease payments on our sales-type leases not included in the measurement of the lease receivable for the year ended December 31, 2020 (in thousands): Year Ended 2020 Variable lease income $ 420 |
Operating Lease, Lease Income | The following table provides lease income on our operating leases for the year ended December 31, 2020 (in thousands): Year Ended 2020 Lease income on operating leases $ 291 |
Sales Type Lease, Net Investment In Lease | The receivables as a result of our sales-type leases are collateralized by the underlying equipment leased and consist of the following components at December 31, 2020 (in thousands): Year Ended 2020 Net minimum lease payments to be received $ 1,777 Less: Unearned interest income portion — Net investment in sales-type leases $ 1,777 Less: Current portion (444) Long-term net investment in sales-type leases $ 1,333 |
Sales-type Lease Receivable, Maturity | As of December 31, 2020, future minimum lease payments and the reconciliation to net investment in sales-type leases reported on the consolidated balance sheet, for the following five fiscal years and thereafter, were as follows (in thousands): Year Ended December 31, Sales-Type Leases Operating Leases 2021 444 — 2022 444 — 2023 444 — 2024 445 — 2025 — — Thereafter — — Total future minimum lease payments 1,777 — Less: imputed interest — — Total $ 1,777 $ — |
Operating Lease Receivable, Maturity | As of December 31, 2020, future minimum lease payments and the reconciliation to net investment in sales-type leases reported on the consolidated balance sheet, for the following five fiscal years and thereafter, were as follows (in thousands): Year Ended December 31, Sales-Type Leases Operating Leases 2021 444 — 2022 444 — 2023 444 — 2024 445 — 2025 — — Thereafter — — Total future minimum lease payments 1,777 — Less: imputed interest — — Total $ 1,777 $ — |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued liabilities consist of (in thousands): December 31, 2020 2019 Compensation and related benefits $ 20,409 $ 26,991 Warranty reserve 5,195 6,404 Accrued federal, state, and local taxes 9,118 11,156 Accrued amounts due to customers 2,743 3,008 Accrued professional fees 3,699 2,083 Accrued selling expenses 311 507 Self-funded insurance expense 911 950 Accrued travel 123 224 Other 1,727 3,128 Total $ 44,236 $ 54,451 |
Long-Term Other Liabilities (Ta
Long-Term Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Long-Term Other Liabilities | Long-term other liabilities consist of (in thousands): December 31, 2020 2019 Long-term taxes payable $ 10,949 $ 12,330 Non-current deferred revenue 4,416 4,563 CARES Act payroll tax payable 1,354 — Long-term earnout payable 1,286 — Finance lease liabilities 446 599 Other — 124 Total $ 18,451 $ 17,616 |
Debt and Credit Arrangements (T
Debt and Credit Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consists of (in thousands): December 31, 2020 2019 Revolving credit facility $ 57,000 $ 55,000 Debt issuance costs (1,160) (335) Less: current portion of long-term debt 50,000 35,000 Total long-term debt $ 5,840 $ 19,665 |
Schedule of Maturities of Long-term Debt | Maturities of long-term debt as of December 31, 2020 are as follows (in thousands): December 31, 2020 2019 2021 $ — $ 55,000 2022 — — 2023 57,000 — Thereafter — — Total $ 57,000 $ 55,000 |
Financial Instruments and Der_2
Financial Instruments and Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instrument [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | held the following interest rate swaps as of December 31, 2020 (in thousands): Hedged Item Current Notional Amount Designation Date Effective Date Termination Date Fixed Interest Rate Floating Rate Estimated Fair Value 1-month USD LIBOR loan $ 40,000 May 31, 2018 June 1, 2018 September 23, 2021 2.611% 1-month USD LIBOR $ 277 Total interest rate derivatives designated as cash flow hedge $ 40,000 $ 277 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 2018 Net loss $ (16,613) $ (15,671) $ (22,935) Weighted average common shares 33,562 33,696 33,111 Dilutive effect of stock based awards — — — Diluted Shares 33,562 33,696 33,111 Basic loss per share $ (0.49) $ (0.47) $ (0.69) Diluted loss per share $ (0.49) $ (0.47) $ (0.69) Shares excluded from calculation of diluted EPS 66 104 343 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of option grants was estimated using the Black-Scholes option pricing model with the following weighted average assumptions: December 31, December 31, 2020 2018 Weighted-average fair value of options granted $ 6.54 $ 11.03 Expected life in years 4.5 4.0 Risk-free interest rate 0.2 % 2.7 % Expected volatility 38 % 35 % Dividend yield None None |
Share-Based Compensation Expense | Share-based compensation was recognized as follows in the consolidated statement of income (in thousands): December 31, 2020 2019 2018 Cost of revenue $ 319 $ 264 $ 218 Marketing and selling 1,938 1,024 1,039 Research and development 1,099 800 801 General and administrative 6,171 6,227 14,945 Total expense $ 9,527 $ 8,315 $ 17,003 |
Stock Options Activity | Stock Option Activity —Stock option activity under the stock awards plans for the year ended December 31, 2020 is summarized as follows: Number of Weighted Outstanding, December 31, 2019 (18,531 shares exercisable at a weighted average exercise price of $35.25 per share) 74,089 $ 35.25 Granted 257,496 $ 20.68 Exercised — $ — Forfeited — $ — Expired — $ — Outstanding, December 31, 2020 (37,062 shares exercisable at a weighted average exercise price of $35.25 per share) 331,585 $ — |
Restricted Stock Awards Activity | The following table summarizes the activity for restricted stock awards during the year ended December 31, 2020: Shares Weighted Unvested at December 31, 2019 339,762 $ 34.14 Granted 208,750 $ 29.74 Vested (163,730) $ 33.89 Forfeited (4,693) $ 33.44 Unvested at December 31, 2020 380,089 $ 31.84 |
Restricted Stock Units Activity | The following table summarizes restricted stock units activity for the year ended December 31, 2020: Shares Weighted Outstanding at December 31, 2019 173,096 $ 38.62 Awarded 100,682 $ 35.42 Released (14,033) $ 35.26 Forfeited (47,144) $ 38.92 Outstanding at December 31, 2020 212,601 $ 37.27 |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Other income (expense), net | Other income (expense), net consists of (in thousands): Years Ended December 31, 2020 2019 2018 Interest income $ 11 $ 250 $ 334 Interest expense (3,656) (4,941) (6,794) Foreign currency gain (loss) 1,988 (765) (800) Other (215) (135) (438) Total other expense, net $ (1,872) $ (5,591) $ (7,698) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income (loss) before provision (benefit) for income tax | Income (loss) before provision for income tax is as follows (in thousands): Years Ended December 31, 2020 2019 2018 U.S. $ 1,908 $ (22,851) $ (54,370) Foreign (23,973) 1,594 22,110 Loss before provision for income tax $ (22,065) $ (21,257) $ (32,260) |
Summary of components of income tax expense | The components of income tax expense (benefit) for the years ended December 31, 2020, 2019 and 2018 (in thousands): Years Ended December 31, 2020 2019 2018 Current U.S. Federal $ (3,976) $ (948) $ (1,872) U.S. State and local 145 561 (59) Non-U.S. 1,241 8,386 5,732 Total current tax expense (benefit) (2,590) 7,999 3,801 Deferred U.S. Federal 2,049 (7,491) (8,248) U.S. State and local 533 (816) (1,751) Non-U.S. (5,444) (5,278) (3,127) Total deferred tax benefit (2,862) (13,585) (13,126) Total income tax benefit $ (5,452) $ (5,586) $ (9,325) |
Deferred tax assets and liabilities | Significant components of deferred tax assets and liabilities as of December 31, 2020 and 2019 are as follows (in thousands): December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 9,099 $ 3,035 Credit carryforwards 5,768 2,415 Accruals deductible in different periods 15,368 23,672 Employee benefits 1,016 1,554 Operating leases 3,967 4,643 Total deferred tax assets 35,218 35,319 Valuation allowance (969) (606) Total net deferred tax assets $ 34,249 $ 34,713 Deferred tax liabilities: Basis difference in fixed and intangible assets (13,214) (13,850) Operating leases (2,970) (3,959) Foreign earnings to be repatriated (800) (800) Total deferred tax liabilities (16,984) (18,609) Total net deferred tax assets $ 17,265 $ 16,104 |
Reconciliation of effective income tax rate | The income tax expense (benefit) in the accompanying statements of income differs from the provision calculated by applying the U.S. federal statutory income tax rate of 21% in 2020, 2019, and 2018 to income before taxes due to the following: Years Ended December 31, 2020 2019 2018 Federal statutory tax expense $ (4,634) $ (4,464) $ (6,775) State tax expense 661 (300) (1,160) Foreign taxes at rates less than U.S. rates 1,050 (2,205) (1,071) Equity compensation 1,161 824 519 Tax credits (1,641) (1,428) (2,021) Uncertain tax position 3,002 2,910 1,311 Lapse of statute (2,718) (3,961) (1,214) Repatriation tax net of foreign tax credits — 172 — Federal NOL Carryback (1,621) — — Tax audits (224) — 658 Withholding taxes — 1,107 1,185 Global intangible low-taxed income net of foreign tax credits — 1,601 2,326 Return to provision (946) 560 (1,417) SAB 118 adjustments — — (2,676) Other 458 (402) 1,010 Total expense (benefit) $ (5,452) $ (5,586) $ (9,325) |
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, 2018 $ 7,017 Increases for tax positions related to prior years 526 Increases for tax positions related to the current year 699 Decrease due to lapse of statutes of limitations (965) Foreign exchange difference (50) Balance at January 1, 2019 $ 7,227 Decreases for tax positions related to prior years (48) Increases for tax positions related to the current year 495 Decrease due to lapse of statutes of limitations (3,763) Foreign exchange difference 6 Balance at January 1, 2020 $ 3,917 Increases for tax positions related to prior years 2,454 Increases for tax positions related to the current year 104 Lapse of statutes of limitations (2,416) Foreign exchange difference 83 Balance at December 31, 2020 $ 4,142 |
Segment, Customer and Geograp_2
Segment, Customer and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Revenue and long-lived asset information by geographic region | The following tables present revenue and long-lived asset information by end market |
Organization and Significant _3
Organization and Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2020 | Jan. 01, 2019 | Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||||||||
Intangible asset impairment | $ 8,200 | ||||||||
Goodwill impairment charge | $ 0 | $ 0 | $ 14,846 | ||||||
Lessor, lease term | 5 years | ||||||||
Lessor, renewal term | 3 years | ||||||||
Undiscounted future minimum operating lease commitments | 244 | ||||||||
Recorded foreign currency translation gains (losses) | 13,200 | (1,600) | (14,400) | ||||||
Net foreign currency transaction gains (losses) | $ 900 | 1,988 | (765) | (800) | |||||
Operating lease right-of-use assets | 11,669 | 15,046 | |||||||
Total | 15,738 | 17,922 | |||||||
Stockholders' Equity Attributable to Parent | (398,444) | (398,444) | (411,094) | (416,123) | (398,444) | $ (422,097) | |||
Provision (benefit) for income tax | $ 5,452 | 5,586 | 9,325 | ||||||
Cumulative Effect, Period of Adoption, Adjustment | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||||||||
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect | (3,919) | ||||||||
Stockholders' Equity Attributable to Parent | $ 0 | ||||||||
Provision (benefit) for income tax | $ 900 | ||||||||
Minimum | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||||||||
Contract With Customer, Service Period | 12 months | ||||||||
Maximum | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||||||||
Contract With Customer, Service Period | 60 months | ||||||||
Office furniture and equipment [Member] | Minimum | |||||||||
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 | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||||||||
Estimated useful lives of property and equipment | 5 years | ||||||||
Computer software and hardware [Member] | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||||||||
Estimated useful lives of property and equipment | 3 years | ||||||||
Buildings [Member] | Minimum | |||||||||
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 | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||||||||
Estimated useful lives of property and equipment | 40 years | ||||||||
Share-based Payment Arrangement, Option [Member] | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||||||||
Vesting period | 4 years | ||||||||
Share based compensation, expiration period | 10 years | ||||||||
Share-based Payment Arrangement, Option [Member] | Director [Member] | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||||||||
Vesting period | 4 years | ||||||||
Share based compensation, expiration period | 6 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] | 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% | ||||||||
Market Stock Unit | Employees [Member] | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||||||||
Vesting period | 3 years | ||||||||
Accounting Standards Update 2016-02 [Member] | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||||||||
Operating lease right-of-use assets | 19,500 | ||||||||
Total | 22,300 | ||||||||
Retained Earnings | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||||||||
Stockholders' Equity Attributable to Parent | (102,261) | (102,261) | $ (71,309) | (87,922) | (102,261) | (129,115) | |||
Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||||||||
Stockholders' Equity Attributable to Parent | (1,332) | ||||||||
Accumulated Other Comprehensive Loss | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||||||||
Stockholders' Equity Attributable to Parent | $ 38,032 | $ 38,032 | $ 3,043 | $ 16,275 | $ 38,032 | $ 23,595 | |||
Accumulated Other Comprehensive Loss | Cumulative Effect, Period of Adoption, Adjustment | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||||||||
Stockholders' Equity Attributable to Parent | $ 1,332 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) $ in Millions | Dec. 31, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Liability, Current | $ 21.3 |
Contract with Customer, Liability, Noncurrent | 4.4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 21.3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 2.3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 1.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 3 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 0.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 4 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 0.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period |
Revenue - Unbilled AR and Defer
Revenue - Unbilled AR and Deferred Revenue (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Movement in Deferred Revenue [Roll Forward] | |
Deferred Revenue, December 31, 2019 | $ 24,808 |
Additions | 19,763 |
Revenue Recognized | (18,848) |
Deferred Revenue, December 31, 2020 | 25,723 |
Unbilled Revenues [Member] | |
Movement in Unbilled AR [Roll Forward] | |
Unbilled AR, December 31, 2019 | 2,667 |
Additions | 173 |
Transferred to Trade Receivable | (915) |
Unbilled AR, December 31, 2020 | $ 1,925 |
Allowance for Doubtful Accoun_2
Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance, beginning of period | $ 7,384 | $ 6,960 | |
Additions charged to expense | 1,190 | 4,262 | $ 6,909 |
Write-offs charged against allowance | (2,361) | (3,838) | |
Balance, end of period | $ 6,213 | $ 7,384 | $ 6,960 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials and subassemblies | $ 22,583 | $ 37,259 |
Work in process | 2,294 | 1,780 |
Finished goods | 65,695 | 50,521 |
Total Inventories | 90,572 | 89,560 |
Less: Non-current Inventories | (14,922) | (18,192) |
Inventories | $ 75,650 | $ 71,368 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Non-current Inventories | $ 14,922 | $ 18,192 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | $ 55,242 | $ 66,753 |
Finance Lease, Right-of-Use Asset | 2,555 | 2,377 |
Accumulated depreciation | (30,726) | (42,051) |
Total | 24,516 | 24,702 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 1,792 | 1,719 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 7,365 | 6,943 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 8,050 | 8,664 |
Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 22,148 | 22,819 |
Computer software and hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 10,246 | 12,610 |
Demonstration and loaned equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | $ 3,086 | $ 11,621 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment, Net [Abstract] | |||
Depreciation expense | $ 6.2 | $ 6.6 | $ 6 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total amortization | $ 28,703 | $ 23,499 | $ 36,044 | ||
Weighted average life of intangible assets | 11 years | ||||
Costs incurred for development of internal use computer software | $ 11,100 | ||||
Costs incurred for development of software to be sold | 2,200 | ||||
Intangible asset impairment | $ 8,200 | ||||
Impairment of intangible assets | $ 6,700 | 6,678 | 0 | 8,192 | |
Core [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset impairment | 5,600 | ||||
Non-core [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset impairment | 2,600 | ||||
Patents | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total amortization | $ 0 | 60 | 84 | ||
Weighted average life of intangible assets | 13 years | ||||
Technology | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total amortization | $ 13,417 | 6,906 | 14,100 | ||
Weighted average life of intangible assets | 13 years | ||||
Customer related | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total amortization | $ 8,825 | 8,662 | 12,244 | ||
Weighted average life of intangible assets | 10 years | ||||
Trade names [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total amortization | $ 6,182 | 6,111 | 6,736 | ||
Weighted average life of intangible assets | 7 years | ||||
Internally developed software [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average life of intangible assets | 6 years | ||||
Service Agreements | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total amortization | $ 40 | 322 | 757 | ||
Weighted average life of intangible assets | 2 years | ||||
Cost of revenue | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of intangible assets | 6,400 | ||||
Operating Expense | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of intangible assets | $ 300 | ||||
General and administrative | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Total amortization | $ 200 | $ 1,300 | $ 1,900 |
Intangible Assets - Components
Intangible Assets - Components of Gross and Net Intangible Asset Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | $ 271,003 | $ 261,788 |
Accumulated Impairment | (16,340) | (9,455) |
Accumulated Amortization | (163,981) | (137,534) |
Total expected amortization expense | 90,682 | 114,799 |
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | 273,062 | 261,788 |
Accumulated Impairment | (16,340) | (9,455) |
Intangible assets, net | 92,741 | 114,799 |
Intellectual Property | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | 2,059 | 0 |
Accumulated Impairment | 0 | 0 |
Net Book Value | 2,059 | 0 |
Technology | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 112,138 | 108,400 |
Accumulated Impairment | (12,480) | (6,035) |
Accumulated Amortization | (64,203) | (55,408) |
Total expected amortization expense | 35,455 | 46,957 |
Customer related | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 94,526 | 90,351 |
Accumulated Impairment | (50) | (50) |
Accumulated Amortization | (51,247) | (40,527) |
Total expected amortization expense | 43,229 | 49,774 |
Trade names | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 47,058 | 45,874 |
Accumulated Impairment | (3,677) | (3,237) |
Accumulated Amortization | (31,890) | (25,355) |
Total expected amortization expense | 11,491 | 17,282 |
Internally developed software | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 13,281 | 13,281 |
Accumulated Impairment | 0 | 0 |
Accumulated Amortization | (12,845) | (12,606) |
Total expected amortization expense | 436 | 675 |
Patents | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 2,810 | 2,692 |
Accumulated Impairment | (133) | (133) |
Accumulated Amortization | (2,677) | (2,559) |
Total expected amortization expense | 0 | 0 |
Service Agreements | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 1,190 | 1,190 |
Accumulated Impairment | 0 | 0 |
Accumulated Amortization | (1,119) | (1,079) |
Total expected amortization expense | $ 71 | $ 111 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | $ 28,703 | $ 23,499 | $ 36,044 |
Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | 13,417 | 6,906 | 14,100 |
Customer related | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | 8,825 | 8,662 | 12,244 |
Trade names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | 6,182 | 6,111 | 6,736 |
Internally developed software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | 239 | 1,438 | 2,123 |
Patents | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | 0 | 60 | 84 |
Service Agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | $ 40 | $ 322 | $ 757 |
Intangible Assets - Expected An
Intangible Assets - Expected Annual Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2019 | $ 22,374 | |
2020 | 18,365 | |
2021 | 15,590 | |
2022 | 13,599 | |
2023 | 12,976 | |
Thereafter | 7,778 | |
Total expected amortization expense | $ 90,682 | $ 114,799 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill [Roll Forward] | ||
Beginning Balance | $ 146,367 | $ 147,644 |
Foreign currency translation | 3,725 | (1,277) |
Purchase Accounting Adjustments | 1,207 | |
Ending Balance | $ 151,299 | $ 146,367 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Dec. 31, 2020 |
Operating Leased Assets [Line Items] | |
Lease renewal term | 10 years |
Minimum | |
Operating Leased Assets [Line Items] | |
Remaining lease term | 1 year |
Maximum | |
Operating Leased Assets [Line Items] | |
Remaining lease term | 8 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 6,696 | $ 6,823 |
Amortization of right-of-use assets (principal payments) | 395 | 466 |
Interest on lease liabilities | 49 | 58 |
Short-term lease cost | 7 | 51 |
Variable lease cost | 2,541 | 2,836 |
Sublease income | (61) | (179) |
Total lease cost | $ 9,627 | $ 10,055 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | |||
Operating cash flows from operating leases | $ 13,979 | $ 13,612 | |
Operating cash flows from finance leases | 32 | 42 | |
Financing cash flows from finance leases | 527 | 478 | $ 0 |
Right-of-use assets obtained in exchange for lease obligations: operating leases | 3,290 | 2,697 | |
Right-of-use assets obtained in exchange for lease obligations: finance leases | $ 337 | $ 300 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 11,669 | $ 15,046 |
Current portion of operating lease liabilities | 6,779 | 5,871 |
Operating lease liabilities | 8,959 | 12,051 |
Total operating lease liabilities | 15,738 | 17,922 |
Finance Leases, property and equipment | 2,555 | 2,377 |
Finance leases, accumulated amortization | (1,705) | (1,418) |
Finance leases, property and equipment, net | 850 | 959 |
Finance leases, accrued liabilities | 414 | 390 |
Finance leases, other liabilities | 446 | 599 |
Total finance lease liabilities | $ 860 | $ 989 |
Weighted average remaining lease term, operating leases | 3 years 3 months 29 days | 3 years 9 months |
Weighted average remaining lease term, finance leases | 2 years 8 months 4 days | 2 years 11 months 1 day |
Weighted average discount rate, operating leases | 5.40% | 5.30% |
Weighted average discount rate, finance leases | 5.10% | 5.10% |
Leases - Lease Maturities (Deta
Leases - Lease Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Operating Leases | ||
2020 | $ 6,206 | |
2021 | 4,096 | |
2022 | 2,751 | |
2023 | 1,569 | |
2024 | 665 | |
Thereafter | 695 | |
Total lease payments | 15,982 | |
Less imputed interest | (244) | |
Total | 15,738 | $ 17,922 |
Finance Leases | ||
2020 | 432 | |
2021 | 273 | |
2022 | 153 | |
2023 | 48 | |
2024 | 11 | |
Thereafter | 0 | |
Total lease payments | 917 | |
Less imputed interest | (57) | |
Total | $ 860 | $ 989 |
Leases - Lease Income (Details)
Leases - Lease Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | |||
Net Sales | $ 2,226 | ||
Cost of Sales | 4,107 | ||
Gross Profit | (1,881) | $ 0 | $ 0 |
Variable lease income | 420 | ||
Lease income on operating leases | $ 291 |
Leases - Sales Type Lease Recei
Leases - Sales Type Lease Receivable (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Leases [Abstract] | |
Net minimum lease payments to be received | $ 1,777 |
Less: Unearned interest income portion | 0 |
Net investment in sales-type leases | 1,777 |
Less: Current portion | (444) |
Long-term net investment in sales-type leases | $ 1,333 |
Leases - Lease Payments Receiva
Leases - Lease Payments Receivable Maturity (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Sales-type and Direct Financing Leases, Lease Receivable, Fiscal Year Maturity [Abstract] | |
2021 | $ 444 |
2022 | 444 |
2023 | 444 |
2024 | 445 |
2025 | 0 |
Thereafter | 0 |
Net minimum lease payments to be received | 1,777 |
Less: Unearned interest income portion | 0 |
Total | 1,777 |
Lessor, Operating Lease, Payments, Fiscal Year Maturity [Abstract] | |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
Thereafter | 0 |
Total future minimum lease payments | 0 |
Less: imputed interest | 0 |
Total | $ 0 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Compensation and related benefits | $ 20,409 | $ 26,991 |
Warranty reserve | 5,195 | 6,404 |
Accrued federal, state, and local taxes | 9,118 | 11,156 |
Accrued amounts due to customers | 2,743 | 3,008 |
Accrued professional fees | 3,699 | 2,083 |
Accrued selling expenses | 311 | 507 |
Self-funded insurance expense | 911 | 950 |
Accrued travel | 123 | 224 |
Other | 1,727 | 3,128 |
Total | $ 44,236 | $ 54,451 |
Long-Term Other Liabilities (De
Long-Term Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Other Liabilities Disclosure [Abstract] | ||
Long-term taxes payable | $ 10,949 | $ 12,330 |
Non-current deferred revenue | 4,416 | 4,563 |
CARES Act payroll tax payable | 1,354 | 0 |
Long-term earnout payable | 1,286 | 0 |
Finance lease liabilities | 446 | 599 |
Other | 0 | 124 |
Total | $ 18,451 | $ 17,616 |
Debt and Credit Arrangements -
Debt and Credit Arrangements - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2020USD ($) | Dec. 31, 2018USD ($) | |
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 | $ 57 | |
Credit Agreement [Member] | Citibank, National Association [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Effective Percentage | 3.07% | |
Maximum | Credit Agreement [Member] | Citibank, National Association [Member] | ||
Debt Instrument [Line Items] | ||
Ratio of Indebtedness to Net Capital | 3.25 | |
Minimum | Credit Agreement [Member] | Citibank, National Association [Member] | ||
Debt Instrument [Line Items] | ||
Ratio of Interest Coverage | 1.75 | |
London Interbank Offered Rate (LIBOR) [Member] | Maximum | Credit Agreement [Member] | Citibank, National Association [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 3.50% | |
London Interbank Offered Rate (LIBOR) [Member] | Minimum | Credit Agreement [Member] | Citibank, National Association [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 2.25% |
Debt and Credit Arrangements _2
Debt and Credit Arrangements - Schedule of Long Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Revolving credit facility | $ 57,000 | $ 55,000 |
Debt Issuance Costs, Net | (1,160) | (335) |
Less: current portion of long-term debt | 50,000 | 35,000 |
Total long-term debt | $ 5,840 | $ 19,665 |
Debt and Credit Arrangements _3
Debt and Credit Arrangements - Schedule of Maturities of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
2019 | $ 0 | $ 55,000 |
2020 | 0 | 0 |
2021 | 57,000 | 0 |
Thereafter | 0 | 0 |
Long-term Debt | $ 57,000 | $ 55,000 |
Financial Instruments and Der_3
Financial Instruments and Derivatives (Details) | Dec. 31, 2020USD ($) |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net | $ (212,000) |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Derivative Liability, Notional Amount | $ 40,000,000 |
Derivative, Fixed Interest Rate | 2.611% |
Derivative Liability | $ 277,000 |
Reserve for Product Warranties
Reserve for Product Warranties (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Product Warranties Disclosures [Abstract] | |
Product warranty period | 1 year |
Product reserve warranty | $ 5.2 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Equity [Abstract] | ||
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 |
Earnings Per Share - Components
Earnings Per Share - Components of Basic and Diluted EPS (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |||
Net loss | $ (16,613) | $ (15,671) | $ (22,935) |
Weighted average common shares | 33,562 | 33,696 | 33,111 |
Dilutive effect of stock based awards | 0 | 0 | 0 |
Diluted Shares (in dollars per share) | 33,562 | 33,696 | 33,111 |
Basic earnings per share (in dollars per share) | $ (0.49) | $ (0.47) | $ (0.69) |
Diluted earnings per share (in dollars per share) | $ (0.49) | $ (0.47) | $ (0.69) |
Shares excluded from calculations of diluted EPS | 66 | 104 | 343 |
Share-Based Compensation - Shar
Share-Based Compensation - Share-based Compensation Expense Allocation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total expense | $ 9,527 | $ 8,315 | $ 17,003 |
Cost of revenue | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total expense | 319 | 264 | 218 |
Marketing and sales [Member] | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total expense | 1,938 | 1,024 | 1,039 |
Research and development [Member] | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total expense | 1,099 | 800 | 801 |
General and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total expense | $ 6,171 | $ 6,227 | $ 14,945 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for future awards | 1,863,120 | ||
Unrecognized compensation expense related to unvested portion of stock options | $ 1,800,000 | ||
Intrinsic value of options exercised | $ 0 | $ 1,400,000 | $ 13,600,000 |
Weighted average vested options | 304,730 | ||
Weighted average exercise price of vested stock | $ 24.15 | ||
Weighted average remaining contractual term | 8 years 4 months 24 days | ||
Weighted average exercise price (in dollars per share) | $ 35.25 | ||
Intrinsic value of options exercisable | $ 0 | ||
Weighted average remaining contractual term, exercisable | 3 years 6 months | ||
Weighted average period of recognition of unrecognized compensation expense | 3 years 10 months 24 days | ||
Compensation expense associated with the ESPP | $ 200,000 | 200,000 | 300,000 |
Share-based Payment Arrangement, Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation, expiration period | 10 years | ||
Share based compensation, vesting period | 4 years | ||
Intrinsic value of options vested and expected to vest | $ 0 | ||
Restricted Stock Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value, vested in period | 5,500,000 | 4,700,000 | 12,900,000 |
Intrinsic value of options vested and expected to vest | $ 4,800,000 | $ 4,000,000 | $ 11,200,000 |
Weighted average shares exercisable | 37,062 | ||
Unrecognized compensation of unvested awards | $ 6,900,000 | ||
Weighted average period of recognition of unrecognized compensation expense | 2 years 2 months 12 days | ||
Fair market value of outstanding awards | $ 7,600,000 | ||
Granted, Weighted - average grant date fair value | $ 29.74 | $ 31.53 | $ 37.22 |
Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value, vested in period | $ 500,000 | $ 1,400 | $ 10,000,000 |
Intrinsic value of options vested and expected to vest | 500,000 | $ 1,300,000 | $ 8,700 |
Unrecognized compensation of unvested awards | $ 3,700,000 | ||
Weighted average period of recognition of unrecognized compensation expense | 1 year 9 months 18 days | ||
Granted, Weighted - average grant date fair value | $ 35.42 | $ 38.62 | $ 36.77 |
Aggregate intrinsic value of outstanding restricted stock units | $ 4,300,000 | ||
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 | 426,084 | ||
Offering price, percentage of fair market value | 85.00% | ||
Director [Member] | Share-based Payment Arrangement, 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 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Option Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Shares | ||
Outstanding, beginning of period (shares) | 74,089 | |
Granted (shares) | 257,496 | |
Exercised (shares) | 0 | |
Cancelled (shares) | 0 | |
Expired (shares) | 0 | |
Outstanding, end of period (shares) | 331,585 | 74,089 |
Shares exercisable (in shares) | 37,062 | 18,531 |
Weighted Average Exercise Price | ||
Outstanding, beginning of period (in dollars per share) | $ 35.25 | |
Granted (in dollars per share) | 20.68 | |
Exercised (in dollars per share) | 0 | |
Cancelled (in dollars per share) | 0 | |
Expired (in dollars per share) | 0 | |
Outstanding, end of period (in dollars per share) | 0 | $ 35.25 |
Exercisable, weighted average price (in dollars per share) | $ 35.25 | $ 35.25 |
Share-Based Compensation - Valu
Share-Based Compensation - Valuation Inputs (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Weighted-average fair value of options granted | $ 6.54 | $ 11.03 |
Expected life in years | 4 years 6 months | 4 years |
Risk-free interest rate | 0.20% | 2.70% |
Expected volatility | 38.00% | 35.00% |
Dividend yield | 0.00% | 0.00% |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Award Activity (Details) - Restricted Stock Awards [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Shares | |||
Unvested, beginning of period, Shares | 339,762 | ||
Granted, Shares | 208,750 | ||
Vested, Shares | (163,730) | ||
Forfeited, Shares | (4,693) | ||
Unvested, end of period, Shares | 380,089 | 339,762 | |
Weighted Average Grant Date Fair Value | |||
Unvested, beginning of period, Weighted - average grant date fair value | $ 34.14 | ||
Granted, Weighted - average grant date fair value | 29.74 | $ 31.53 | $ 37.22 |
Vested, Weighted - average grant date fair value | 33.89 | ||
Forfeited, Weighted - average grant date fair value | 33.44 | ||
Unvested, end of period, Weighted - average grant date fair value | $ 31.84 | $ 34.14 |
Share-Based Compensation - Re_2
Share-Based Compensation - Restricted Unit Activity (Details) - Restricted Stock Units [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Shares | |||
Unvested, beginning of period, Shares | 173,096 | ||
Awarded, units | 100,682 | ||
Release, units | (14,033) | ||
Forfeited, units | (47,144) | ||
Unvested, end of period, Shares | 212,601 | ||
Weighted Average Grant Date Fair Value | |||
Unvested, beginning of period, Weighted - average grant date fair value | $ 38.62 | ||
Granted, Weighted - average grant date fair value | 35.42 | $ 38.62 | $ 36.77 |
Vested, Weighted - average grant date fair value | 35.26 | ||
Forfeited, Weighted - average grant date fair value | 38.92 | ||
Unvested, end of period, Weighted - average grant date fair value | $ 37.27 | $ 38.62 |
Other Income (Expense), Net (De
Other Income (Expense), Net (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other expense, net | ||||
Interest income | $ 11 | $ 250 | $ 334 | |
Interest expense | (3,656) | (4,941) | (6,794) | |
Foreign currency gain (loss) | $ 900 | 1,988 | (765) | (800) |
Other | (215) | (135) | (438) | |
Total other expense, net | $ (1,872) | $ (5,591) | $ (7,698) |
Income Taxes - Income Loss befo
Income Taxes - Income Loss before Provision (Benefit) for Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ 1,908 | $ (22,851) | $ (54,370) |
Foreign | (23,973) | 1,594 | 22,110 |
Loss before provision (benefit) for income tax | $ (22,065) | $ (21,257) | $ (32,260) |
Income Taxes - Component of Inc
Income Taxes - Component of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current | |||
U.S. Federal | $ (3,976) | $ (948) | $ (1,872) |
U.S. State and local | 145 | 561 | (59) |
Non-U.S. | 1,241 | 8,386 | 5,732 |
Total current tax expense | (2,590) | 7,999 | 3,801 |
Deferred | |||
U.S. Federal | 2,049 | (7,491) | (8,248) |
U.S. State and local | 533 | (816) | (1,751) |
Non-U.S. | (5,444) | (5,278) | (3,127) |
Total deferred tax expense (benefit) | (2,862) | (13,585) | (13,126) |
Total expense (benefit) | $ (5,452) | $ (5,586) | $ (9,325) |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Asset and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 9,099 | $ 3,035 |
Credit carryforwards | 5,768 | 2,415 |
Accruals deductible in different periods | 15,368 | 23,672 |
Employee benefits | 1,016 | 1,554 |
Operating leases | 3,967 | 4,643 |
Total deferred tax assets | 35,218 | 35,319 |
Valuation allowance | (969) | (606) |
Total net deferred tax assets | 34,249 | 34,713 |
Deferred tax liabilities: | ||
Basis difference in fixed and intangible assets | (13,214) | (13,850) |
Operating leases | (2,970) | (3,959) |
Foreign earnings to be repatriated | (800) | (800) |
Total deferred tax liabilities | (16,984) | (18,609) |
Deferred Tax Assets, Net | $ 17,265 | $ 16,104 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule Of Income Taxes [Line Items] | ||||
Statutory tax rate | 21.00% | 21.00% | 21.00% | |
Net operating loss expiration period | 10 years | |||
Valuation allowances | $ 969,000 | $ 606,000 | ||
Increase in valuation allowance | 400,000 | |||
Deferred Tax Assets, Net | 17,265,000 | 16,104,000 | ||
Net operating loss carryforwards | 9,099,000 | 3,035,000 | ||
Deferred tax liabilities related to foreign earnings | 800,000 | 800,000 | ||
Increase in unrecognized tax benefits | 200,000 | |||
Increases for tax positions related to the current year | 104,000 | 495,000 | $ 699,000 | |
Unrecognized tax benefits | 4,142,000 | 3,917,000 | 7,227,000 | $ 7,017,000 |
Unrecognized tax would impact effective tax rate | 3,800,000 | 3,600,000 | 6,500,000 | |
Lapse of statutes of limitations | 2,416,000 | 3,763,000 | 965,000 | |
Interest and penalties related to uncertain tax positions | 500,000 | 400,000 | 500,000 | |
Total Interest and penalties related to uncertain tax positions | 130,000 | (80,000) | $ (80,000) | |
Income Tax Provision | ||||
Schedule Of Income Taxes [Line Items] | ||||
Increases for tax positions related to the current year | 200,000 | |||
Minimum | ||||
Schedule Of Income Taxes [Line Items] | ||||
Lapse of statutes of limitations | 0 | |||
Maximum | ||||
Schedule Of Income Taxes [Line Items] | ||||
Lapse of statutes of limitations | 200,000 | |||
France | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax net operating loss carryforwards | 1,000,000 | |||
Denmark | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax net operating loss carryforwards | 2,400,000 | |||
Canada | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax net operating loss carryforwards | 1,300,000 | |||
Canada | Foreign Tax Credit | ||||
Schedule Of Income Taxes [Line Items] | ||||
Valuation allowances | $ 600,000 | |||
Ireland | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax net operating loss carryforwards | 400,000 | |||
Germany | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax net operating loss carryforwards | 700,000 | |||
Domestic Tax Authority | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax net operating loss carryforwards | 8,300,000 | |||
State and Local Jurisdiction | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax net operating loss carryforwards | 31,900,000 | |||
Significant foreign jurisdictions | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax credits carryforwards | 100,000 | |||
U.S. Federal And State Tax Authority | ||||
Schedule Of Income Taxes [Line Items] | ||||
Valuation allowances | 300,000 | |||
Deferred Tax Assets, Net | 25,100,000 | |||
Net operating loss carryforwards | 3,400,000 | |||
Deferred tax asset, deductible temporary difference | 16,800,000 | |||
U.S. Federal And State Tax Authority | Research Tax Credit Carryforward | ||||
Schedule Of Income Taxes [Line Items] | ||||
Valuation allowances | 200,000 | |||
U.S. Federal And State Tax Authority | Foreign Tax Credit | ||||
Schedule Of Income Taxes [Line Items] | ||||
Valuation allowances | $ 100,000 | |||
Canada | ||||
Schedule Of Income Taxes [Line Items] | ||||
Withholding tax, percent | 5.00% | |||
Ireland | ||||
Schedule Of Income Taxes [Line Items] | ||||
Withholding tax, percent | 0.00% | |||
Research Tax Credit Carryforward | Domestic Tax Authority | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax credits carryforwards | $ 4,300,000 | |||
Research Tax Credit Carryforward | State and Local Jurisdiction | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax credits carryforwards | 900,000 | |||
Research Tax Credit Carryforward | U.S. Federal And State Tax Authority | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax credits carryforwards | $ 5,100,000 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income tax Expense from Continuous Operation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory tax expense | $ (4,634) | $ (4,464) | $ (6,775) |
State tax expense | 661 | (300) | (1,160) |
Foreign taxes at rates less than U.S. rates | 1,050 | (2,205) | (1,071) |
Equity compensation | 1,161 | 824 | 519 |
Tax credits | (1,641) | (1,428) | (2,021) |
Uncertain tax position | 3,002 | 2,910 | 1,311 |
Lapse of statute | (2,718) | (3,961) | (1,214) |
Repatriation tax net of foreign tax credits | 0 | 172 | 0 |
Federal NOL Carryback | (1,621) | 0 | 0 |
Tax audits | (224) | 0 | 658 |
Withholding taxes | 0 | 1,107 | 1,185 |
Global intangible low-taxed income net of foreign tax credits | 0 | 1,601 | 2,326 |
Return to provision | (946) | 560 | (1,417) |
SAB 118 adjustments | 0 | 0 | (2,676) |
Other | 458 | (402) | 1,010 |
Total expense (benefit) | $ (5,452) | $ (5,586) | $ (9,325) |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning-Unrecognized Tax Benefits | $ 3,917 | $ 7,227 | $ 7,017 |
Increases for tax positions related to prior years | 2,454 | 526 | |
Increases for tax positions related to the current year | 104 | 495 | 699 |
Lapse of statutes of limitations | (2,416) | (3,763) | (965) |
Foreign exchange difference | (83) | (50) | |
Foreign exchange difference | 6 | ||
Ending-Unrecognized Tax Benefits | $ 4,142 | 3,917 | $ 7,227 |
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions | $ (48) |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |||
Employer matching contributions | $ 3.2 | $ 3.6 | $ 4.7 |
Segment, Customer and Geograp_3
Segment, Customer and Geographic Information - Narrative (Details) | 12 Months Ended |
Dec. 31, 2020Segment | |
Segment Reporting [Abstract] | |
Number of reporting segments | 1 |
Segment, Customer and Geograp_4
Segment, Customer and Geographic Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 415,684 | $ 495,175 | $ 530,891 |
Long-lived assets | 24,516 | 24,702 | |
Neurology Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 236,156 | 287,236 | 279,787 |
Neurology Products [Member] | Devices and Systems [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 179,881 | 220,306 | 200,762 |
Neurology Products [Member] | Supplies [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 56,275 | 66,059 | 67,025 |
Neurology Products [Member] | Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 0 | 871 | 12,000 |
Newborn Care Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 104,634 | 110,912 | 133,872 |
Newborn Care Products [Member] | Devices and Systems [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 51,894 | 53,465 | 72,807 |
Newborn Care Products [Member] | Supplies [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 36,174 | 38,264 | 40,669 |
Newborn Care Products [Member] | Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 16,566 | 19,183 | 20,396 |
OtometricsProducts [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 74,894 | 97,027 | 117,232 |
OtometricsProducts [Member] | Devices and Systems [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 70,711 | 92,050 | 110,597 |
OtometricsProducts [Member] | Supplies [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 4,183 | 4,977 | 6,635 |
United States | |||
Segment Reporting Information [Line Items] | |||
Revenue | 252,496 | 292,400 | 300,860 |
Long-lived assets | 10,998 | 11,868 | |
Foreign countries [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 163,188 | 202,775 | $ 230,031 |
Canada | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | 3,775 | 4,140 | |
Ireland | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | 6,716 | 5,732 | |
Denmark | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | 1,787 | 1,799 | |
Other Foreign countries [Member] | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | $ 1,240 | $ 1,163 |
Commitments And Contingencies -
Commitments And Contingencies - Narrative (Details) $ in Millions | Dec. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase obligation | $ 39.6 |
Purchase obligation, to be paid, year one | 39.1 |
Purchase Obligation, To Be Paid, After Year One | $ 0.5 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Apr. 02, 2019 | Apr. 01, 2019 | |
Medix Medical Devices, SRL [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Notes Receivable, Related Parties | $ 2,200 | $ 2,200 | ||
Medix Medical Devices, SRL [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Notes Receivable, Related Parties | $ 726 | $ 1,906 | ||
Loans and Leases Receivable, Related Parties, Additions | 0 | |||
Loans and Leases Receivable, Related Parties, Proceeds | 0 | |||
Loans and Leases Receivable, Related Parties, Period Increase (Decrease) | (1,180) | |||
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Liability | 277 | $ 313 | ||
Derivative Liability, Additions | 0 | |||
Derivative Liability, Payments | 0 | |||
Derivative Liability, Adjustments | $ (36) |
Sale of Certain Subsidiary (Det
Sale of Certain Subsidiary (Details) - USD ($) | Apr. 02, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Aug. 02, 2019 | Apr. 01, 2019 |
Related Party Transaction [Line Items] | |||||
Accumulated other comprehensive loss | $ (3,043,000) | $ (16,275,000) | |||
Medix Medical Devices, SRL [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Amounts of Transaction | $ 2,500 | ||||
Notes Receivable, Related Parties | 2,200,000 | $ 2,200,000 | |||
Gain (Loss) on Sale of Assets and Asset Impairment Charges | 24,600,000 | ||||
Accumulated other comprehensive loss | $ 24,800,000 | ||||
Assets, Fair Value Adjustment | $ 4,600,000 |
Schedule II_ Valuation And Qu_2
Schedule II: Valuation And Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-09, Allowance, Credit Loss [Member] | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 7,384 | $ 6,960 | $ 8,978 |
Additions Charged to Expense | 1,190 | 4,262 | 6,423 |
Deductions | (2,361) | (3,838) | (8,441) |
Balance at End of Period | 6,213 | 7,384 | 6,960 |
SEC Schedule, 12-09, Valuation Allowance, Deferred Tax Asset [Member] | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 606 | 637 | 5,862 |
Additions Charged to Expense | 363 | 0 | 0 |
Deductions | 0 | (31) | (5,225) |
Balance at End of Period | 969 | 606 | 637 |
SEC Schedule, 12-09, Reserve, Warranty [Member] | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 6,404 | 9,391 | 10,995 |
Additions Charged to Expense | 2,009 | 3,949 | 4,487 |
Deductions | (3,218) | (6,936) | (6,091) |
Balance at End of Period | $ 5,195 | $ 6,404 | $ 9,391 |