Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2013 |
Accounting Policies [Abstract] | ' |
Reclassifications | ' |
Reclassifications |
Certain amounts in the prior year’s financial statements have been reclassified to conform to the current year’s presentation within the consolidated statements of operations. |
Management Estimates | ' |
Management Estimates |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosures at the date of the financial statements and during the reporting period. Components particularly subject to estimation include the allowance for doubtful accounts, inventory reserves, intangible assets, impairment analysis of goodwill and intangibles, deferred tax assets, liabilities and valuation allowances, fair value of stock options and investments and accrued warranties. On an ongoing basis, management evaluates its estimates. Actual results could differ from these estimates. |
Principles of Consolidation | ' |
Principles of Consolidation |
The accompanying consolidated financial statements include the accounts of Cynosure, Inc. and its wholly owned subsidiaries: Cynosure GmbH, Cynosure S.A.R.L., Cynosure UK Limited, Cynosure Spain, S.L., Cynosure KK, Suzhou Cynosure Medical Devices, Co., Cynosure Mexico, Cynosure Korea Limited, Cynosure Pty Limited, Palomar Medical Technologies GmbH, Palomar Japan KK, and Cynosure B.V. All significant intercompany balances and transactions have been eliminated. |
Cash, Cash Equivalents, Short and Long-Term Marketable Securities | ' |
Cash, Cash Equivalents, Short and Long-Term Marketable Securities |
Cynosure considers all short-term, highly liquid investments with original maturities at the time of purchase of 90 days or less to be cash equivalents. Cynosure accounts for short and long-term marketable securities as available-for-sale in accordance with Accounting Standards Codification (ASC) 320, Investments—Debt and Equity Securities Topic. Under ASC 320, securities purchased to be held for indefinite periods of time and not intended at the time of purchase to be held until maturity are classified as available-for-sale securities. ASC 320 requires Cynosure to recognize all marketable securities on the consolidated balance sheets at fair value. Cynosure’s marketable securities are stated at fair value based on quoted market prices. Adjustments to the fair value of marketable securities that are classified as available-for-sale are recorded as increases or decreases, net of income taxes, within accumulated other comprehensive loss in shareholders’ equity. The amortized cost of marketable debt securities is adjusted for amortization of premiums and discounts to maturity computed under the effective interest method. The cost of securities sold is determined by the specific identification method. Cynosure continually evaluates whether any marketable investments have been impaired and, if so, whether such impairment is temporary or other than temporary. |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments |
Cynosure’s financial instruments consist of cash, cash equivalents, short and long-term marketable securities, accounts receivable and capital leases. Cynosure’s estimate of fair value for financial instruments, other than marketable securities, approximates their carrying value at December 31, 2013 and 2012. |
ASC 820, Fair Value Measurement Topic, applies to all financial assets and financial liabilities that are being measured and reported on a fair value basis, establishes a framework for measuring fair value of assets and liabilities and expands disclosures about fair value measurements. |
Accounts Receivable and Concentration of Credit Risk | ' |
Accounts Receivable and Concentration of Credit Risk |
Cynosure’s accounts receivable balance, net of allowance for doubtful accounts, was $36.6 million as of December 31, 2013, compared with $18.0 million as of December 31, 2012. The allowance for doubtful accounts as of December 31, 2013 and 2012 was $1.8 million and $2.0 million, respectively. Cynosure maintains an allowance for doubtful accounts based upon the aging of its receivable balances, known collectibility issues and Cynosure’s historical experience with losses. Cynosure works to mitigate bad debt exposure through its credit evaluation policies, reasonably short payment terms and geographical dispersion of sales. Cynosure’s revenue includes export sales to foreign companies located principally in Europe, the Asia/Pacific region and the Middle East. Cynosure obtains letters of credit for foreign sales that the Company considers to be at risk. |
No customer accounted for 10% or greater of revenue during 2013, 2012 or 2011. No customer accounted for 10% or greater of accounts receivable as of December 31, 2013 or 2012. Accounts receivable allowance activity consisted of the following for the years ended December 31: |
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| | 2013 | | | 2012 | | | 2011 | |
| | (In thousands) | |
Balance at beginning of year | | $ | 2,043 | | | $ | 1,872 | | | $ | 2,207 | |
Additions | | | 1,058 | | | | 591 | | | | 167 | |
Deductions | | | (1,298 | ) | | | (420 | ) | | | (502 | ) |
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Balance at end of year | | $ | 1,803 | | | $ | 2,043 | | | $ | 1,872 | |
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Inventory | ' |
Inventory |
Cynosure states all inventories at the lower of cost or market, determined on a first-in, first-out method. Inventory includes material, labor and overhead and consists of the following: |
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| | December 31, | | | | | |
| | 2013 | | | 2012 | | | | | |
| | (In thousands) | | | | | |
Raw materials | | $ | 17,234 | | | $ | 9,076 | | | | | |
Work in process | | | 2,316 | | | | 1,134 | | | | | |
Finished goods | | | 34,548 | | | | 22,696 | | | | | |
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| | $ | 54,098 | | | $ | 32,906 | | | | | |
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Included in finished goods are lasers used for demonstration purposes. Cynosure’s policy is to include demonstration lasers as inventory for a period of up to one year after being used by the sales force at which time the demonstration lasers are either sold or transferred to fixed assets at the lower of cost or market and depreciated over their estimated useful life of three years. Similar to any other finished goods in inventory, Cynosure accounts for such demonstration inventory in accordance with the policy for excess and obsolescence review of Cynosure’s entire inventory. |
Cynosure’s excess and obsolescence reserve policy is to establish inventory reserves when conditions exist that suggest that inventory may be in excess of anticipated demand or is obsolete based upon assumptions about future demand for products and market conditions. Cynosure regularly evaluates the ability to realize the value of inventory based on a combination of factors including the following: historical usage rates, forecasted sales or usage, product end of life dates, estimated current and future market values and new product introductions. Assumptions used in determining management’s estimates of future product demand may prove to be incorrect, in which case the provision required for excess and obsolete inventory would have to be adjusted in the future. If inventory is determined to be overvalued, Cynosure recognizes such costs as cost of goods sold at the time of such determination. Although Cynosure performs a detailed review of its forecasts of future product demand, any significant unanticipated changes in demand could have a significant impact on the value of Cynosure’s inventory and reported operating results. |
Cynosure purchases raw material components as well as certain finished goods from sole source suppliers. A delay in the production capabilities of these vendors could cause a delay in Cynosure’s manufacturing, and a possible loss of revenues, which would adversely affect operating results. |
Property and Equipment | ' |
Property and Equipment |
Property and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Assets under capital leases and leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the respective lease term. Included in property and equipment are certain lasers that are used for demonstration purposes. Maintenance and repairs are charged to expense as incurred. Cynosure continually evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long-lived assets may warrant revision or that the carrying value of these assets may be impaired. Cynosure evaluates the realizability of its long-lived assets based on profitability and cash flow expectations for the related asset. Any write-downs are treated as permanent reductions in the carrying amount of the assets. Based on this evaluation, Cynosure believes that, as of each of the balance sheet dates presented, none of Cynosure’s long-lived assets were impaired. |
Intangible Assets | ' |
Intangible Assets |
Cynosure capitalizes and includes in intangible assets the costs of developed technology and patents, customer relationships, trade names and business licenses. Intangible assets are recorded at fair value and stated net of accumulated amortization and impairments. Cynosure amortizes its intangible assets that have finite lives using either the straight-line or accelerated method, based on the useful life of the asset over which it is expected to be consumed utilizing expected undiscounted future cash flows. Amortization is recorded over the estimated useful lives ranging from 5 to 23 years. Cynosure evaluates the realizability of its definite lived intangible assets whenever events or changes in circumstances or business conditions indicate that the carrying value of these assets may not be recoverable based on expectations of future undiscounted cash flows for each asset group. If the carrying value of an asset or asset group exceeds its undiscounted cash flows, Cynosure estimates the fair value of the assets, generally utilizing a discounted cash flow analysis based on the present value of estimated future cash flows to be generated by the assets using a risk-adjusted discount rate. To estimate the fair value of the assets, Cynosure uses market participant assumptions pursuant to ASC 820, Fair Value Measurements. If the estimate of an intangible asset’s remaining useful life is changed, Cynosure will amortize the remaining carrying value of the intangible asset prospectively over the revised useful life. |
Goodwill | ' |
Goodwill |
Goodwill represents the excess of the purchase price over the fair value of assets acquired and liabilities assumed in a business combination. Cynosure does not amortize its goodwill, but instead tests for impairment at least annually and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than its carrying value of the asset. Cynosure’s annual test for impairment occurs on the first day of its fourth quarter. |
Cynosure has adopted ASU 2011-08 Intangibles—Goodwill and Other, an amendment to ASC 350, which updates how an entity will evaluate its goodwill for impairment. The guidance provides entities an option to perform a “qualitative” assessment to determine whether further impairment testing is necessary. If further testing is required, the test for impairment continues with the two step process. The first step compares the carrying amount of the reporting unit to its estimated fair value (Step 1). To the extent that the carrying value of the reporting unit exceeds its estimated fair value, a second step is performed, wherein the reporting unit’s carrying value is compared to the implied fair value (Step 2). To the extent that the carrying value exceeds the implied fair value, impairment exists and must be recognized. |
Cynosure has one reporting unit for goodwill impairment testing and has performed a qualitative assessment on that reporting unit. As a result of this assessment, the Company determined that goodwill is not impaired as of December 31, 2013. |
Revenue Recognition and Deferred Revenue | ' |
Revenue Recognition and Deferred Revenue |
Cynosure generates revenue from the sale of aesthetic treatment systems that are used by physicians and other practitioners to perform various non-invasive and minimally invasive aesthetic procedures. These systems incorporate a broad range of laser and other light-based energy sources. Cynosure offers service and warranty contracts in connection with these sales. |
Cynosure recognizes revenue from sales of aesthetic treatment systems and parts and accessories in accordance with the Revenue Recognition Topic ASC 605-10-S99. Cynosure recognizes revenue from sales of its treatment systems and parts and accessories upon delivery, provided there are no uncertainties regarding customer acceptance, there is persuasive evidence of an arrangement, the fee is fixed or determinable, and collectibility of the related receivable is reasonably assured. Revenues from the sales of service and warranty contracts are deferred and recognized on a straight-line basis over the contract period as services are provided. Payments received by Cynosure in advance of product delivery or performance of services are deferred until earned. |
Cynosure recognizes royalty revenues when it can reliably estimate such amounts and collectability is reasonably assured. As such, Cynosure recognizes royalty revenues in the quarter reported to the Company by its licensees, or one quarter following the quarter in which sales by Cynosure’s licensees occurred. Royalty revenues also include amounts due from settlements with licensees for back-owed royalties from prior periods. These settlement amounts are considered revenue, when collectability is reasonably assured, because they constitute Cynosure’s ongoing major or central operations. |
In December 2013, Cynosure completed a comprehensive settlement agreement with Tria Beauty, Inc. (“Tria”) which ended the patent infringement litigation between Tria and Palomar Medical Technologies, Inc. (“Palomar”). Under the agreement, Cynosure is entitled to receive $10.0 million plus future royalty payments. Cynosure will pay approximately $2.0 million of this revenue to Massachusetts General Hospital (“MGH”) under an exclusive license agreement between Palomar and MGH, which will be recorded as cost of revenues within Cynosure’s consolidated statement of operations. Cynosure recognized $4.0 million of this revenue in the year ended December 31, 2013, which is recorded as royalty revenues within Cynosure’s consolidated statement of operations. Cynosure recognized $1.0 million in cost of revenues in the year ended December 31, 2013 for legal and license fees related to this settlement. |
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Multiple-element arrangements are evaluated in accordance with the principles of Accounting Standards Update (“ASU”) 2009-13, Revenue Recognition Topic—Multiple Element Arrangements and Cynosure allocates revenue among the elements based upon each element’s relative fair value. |
In accordance with the provisions of ASC 605-45, Revenue Recognitions Topic—Principal Agent Considerations, Cynosure records shipping and handling costs billed to its customers as a component of revenue, and the underlying expense as a component of cost of revenue. Shipping and handling costs included as a component of revenue totaled approximately $0.6 million, $0.4 million, and $0.4 million for the years ended December 31, 2013, 2012 and 2011, respectively. Shipping and handling costs included as a component of cost of revenue totaled $0.6 million, $0.5 million and $0.5 million for the years ended December 31, 2013, 2012 and 2011, respectively. |
Cynosure collects sales tax from its customers on product sales for which the customer is not tax exempt and remits such taxes to the appropriate governmental authorities. Cynosure presents its sales taxes on a net basis; therefore, these taxes are excluded from revenues. |
In 2013, most of the products and systems that Cynosure sells became subject to a new excise tax on sales of certain medical devices in the United States by the manufacturer, producer or importer in an amount equal to 2.3% of the sale price. These taxes are included within revenue and cost of revenues in Cynosure’s consolidated statement of operations. |
Cost of Revenues | ' |
Cost of Revenues |
Cynosure’s cost of revenues consist primarily of material, labor and manufacturing overhead expenses and includes the cost of components and subassemblies supplied by third party suppliers. Cost of revenues also includes royalties incurred on certain products sold by Cynosure and its licensees, costs incurred in connection with Cynosure’s efforts to litigate or settle additional third party license agreements, service and warranty expenses, as well as salaries and personnel-related expenses, including stock-based compensation, for Cynosure’s operations management team, purchasing and quality control. |
Product Warranty Costs | ' |
Product Warranty Costs |
Cynosure typically provides a one-year parts and labor warranty on end-user sales of lasers. Distributor sales generally include a one-year warranty on parts only. Estimated future costs for initial product warranties are provided for at the time of revenue recognition. The following table sets forth activity in the accrued warranty account, which is a component of accrued expenses in the consolidated balance sheets: |
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| | Years Ended December 31, | |
| | 2013 | | | 2012 | | | 2011 | |
| | (In thousands) | |
Balance at beginning of year | | $ | 3,415 | | | $ | 3,171 | | | $ | 2,112 | |
Warranty provision related to new sales | | | 9,114 | | | | 4,641 | | | | 4,729 | |
Warranty provision assumed from acquisitions | | | 1,422 | | | | — | | | | 342 | |
Costs incurred | | | (7,300 | ) | | | (4,397 | ) | | | (4,012 | ) |
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Balance at end of year | | $ | 6,651 | | | $ | 3,415 | | | $ | 3,171 | |
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Research and Development | ' |
Research and Development |
Research and development costs consist of salaries and other personnel-related expenses, including stock-based compensation, of employees primarily engaged in research, development and engineering activities and materials used and other overhead expenses incurred in connection with the design and development of Cynosure’s products and from time to time expenses associated with collaborative research agreements that the Company may enter into. These costs are expensed as incurred. |
In June 2009, Cynosure entered into a cooperative development agreement (“Agreement”) with Unilever Ltd. (“Unilever”) to develop and commercialize light-based devices for the emerging home use personal care market. Under the terms of this Agreement, Cynosure performs certain research and development activities to assist in the advancement of the commercialization of these devices, the cost of which is partially funded by Unilever. Cynosure incurred $0.5 million, $0.9 million, and $1.8 million of research and development costs in connection with this Agreement during fiscal 2013, 2012 and 2011, respectively, and recorded $0 million, $0.5 million, and $1.7 million of reimbursements from Unilever as a reduction to research and development expenses in the respective fiscal periods. In July 2012, Cynosure received FDA clearance in the United States to market the product in the United States. Unilever expects to launch the product commercially in the first half of 2014. Once the product is commercialized, Cynosure will be entitled to future royalty payments from Unilever. |
Advertising Costs | ' |
Advertising Costs |
Cynosure expenses advertising costs as incurred. Advertising costs totaled $1.1 million, $0.6 million and $0.5 million for the years ended December 31, 2013, 2012 and 2011, respectively. |
Foreign Currency Translation | ' |
Foreign Currency Translation |
The financial statements of Cynosure’s foreign subsidiaries are translated from local currency into U.S. dollars using the current exchange rate at the balance sheet date for assets and liabilities, and the average exchange rate prevailing during the period for revenue and expenses. The functional currency for Cynosure’s foreign subsidiaries is considered to be the local currency for each entity and, accordingly, translation adjustments for these subsidiaries are included in accumulated other comprehensive loss within stockholders’ equity. Certain intercompany and third party foreign currency-denominated transactions generated foreign currency remeasurement gains (losses) of approximately $334,000, $360,000 and $(318,000) during 2013, 2012 and 2011, respectively, which are included in other income (expense), net, in the consolidated statements of operations. |
Accumulated Other Comprehensive Loss | ' |
Accumulated Other Comprehensive Loss |
Changes to accumulated other comprehensive loss during the year ended December 31, 2013 were as follows (in thousands): |
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| | Unrealized | | | Translation | | | Accumulated | |
Gain on | Adjustment | Other |
Marketable | | Comprehensive |
Securities, net | | Loss |
of taxes | | |
Balance—December 31, 2012 | | $ | 13 | | | $ | (1,612 | ) | | $ | (1,599 | ) |
Current period other comprehensive gain | | | 23 | | | | 77 | | | | 100 | |
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Balance—December 31, 2013 | | $ | 36 | | | $ | (1,535 | ) | | $ | (1,499 | ) |
Stock-Based Compensation | ' |
Stock-Based Compensation |
Cynosure follows the fair value recognition provisions of ASC 718, Stock Compensation Topic (ASC 718). Cynosure expenses the fair value of stock options over the service period. ASC 718 requires companies to utilize an estimated forfeiture rate when calculating the expense for the period. Accordingly, Cynosure reviews its actual forfeiture rates and periodically aligns its stock compensation expense with the options that are vesting. |
Cynosure recorded stock-based compensation expense of $3.7 million, $2.9 million and $2.6 million for the years ended December 31, 2013, 2012 and 2011, respectively. As of December 31, 2013 and 2012, respectively, Cynosure had $23,000 and $18,000 of stock-based compensation expense capitalized as a part of inventory. |
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Total stock-based compensation expense was recorded to cost of revenues and operating expenses based upon the functional responsibilities of the individual holding the respective options, as follows: |
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| | Years Ended December 31, | |
| | 2013 | | | 2012 | | | 2011 | |
| | (In thousands) | |
Cost of revenues | | $ | 174 | | | $ | 127 | | | $ | 134 | |
Sales and marketing | | | 1,090 | | | | 857 | | | | 829 | |
Research and development | | | 594 | | | | 495 | | | | 446 | |
General and administrative | | | 1,830 | | | | 1,431 | | | | 1,152 | |
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Total stock-based compensation expense | | $ | 3,688 | | | $ | 2,910 | | | $ | 2,561 | |
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As of December 31, 2013, there was $6.7 million of unrecognized compensation expense related to non-vested share awards that is expected to be recognized on a straight-line basis over a weighted average period of 1.37 years. Cash received from option exercises was $2.7 million, $7.2 million and $0.2 million during the years ended December 31, 2013, 2012 and 2011, respectively. |
Cynosure granted 617,510, 405,790 and 411,104 stock options during the years ended December 31, 2013, 2012 and 2011, respectively. Cynosure uses the Black-Scholes option pricing model to determine the weighted average fair value of options. The weighted average fair value of the options granted during the years ended December 31, 2013, 2012 and 2011 was $10.25, $9.23 and $7.26, respectively, using the following assumptions: |
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| | Years Ended December 31, | | | | | | |
| | 2013 | | 2012 | | 2011 | | | | | | |
Risk-free interest rate | | 0.33% - 1.49% | | 0.61% - 0.86% | | 0.87% - 2.37% | | | | | | |
Expected dividend yield | | — | | — | | — | | | | | | |
Expected term | | 2 years - 4.8 years | | 5.8 years | | 5.8 years | | | | | | |
Expected volatility | | 44% - 56% | | 56% - 57% | | 55% - 57% | | | | | | |
Option-pricing models require the input of various subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. Cynosure’s estimated expected stock price volatility is based on its own historical volatility for the 2013, 2012 and 2011 periods. Cynosure’s expected term of options granted during the year ended December 31, 2013 represents the weighted average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and Cynosure’s historical exercise patterns. Cynosure’s expected term of options granted during the years ended December 31, 2012 and 2011 was derived from the simplified method described in ASC 718-10-S99. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield of zero is based on the fact that Cynosure has never paid cash dividends and has no present intention to pay cash dividends. |
Interest (Expense) Income, Net | ' |
Interest (Expense) Income, net |
Interest (expense) income consists primarily of interest charges on capital lease obligations, and interest earned on Cynosure’s short and long-term marketable securities consisting of state and municipal bonds, U.S. government agencies and treasuries, corporate obligations and commercial paper. Cynosure expects interest expense to increase in 2014 as a result of interest charges incurred on the buildings portion of its U.S. operating facility. |
Income Taxes | ' |
Income Taxes |
Cynosure provides for income taxes in accordance with ASC 740, Accounting for Income Taxes (ASC 740). ASC 740 recognizes tax assets and liabilities for the cumulative effect of all temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities, and are measured using the enacted tax rates that will be in effect when these differences are expected to reverse. Valuation allowances are provided if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. |
Cynosure accounts for uncertain tax positions following the provisions of ASC 740. ASC 740 clarifies the accounting for income taxes, by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. ASC 740 also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. |
Net (Loss) Income Per Common Share | ' |
Net (Loss) Income per Common Share |
Basic net (loss) income per share is determined by dividing net (loss) income by the weighted average common shares outstanding during the period. Diluted net (loss) income per share is determined by dividing net (loss) income by the diluted weighted average shares outstanding during the period. Diluted weighted average shares reflect the dilutive effect, if any, of common stock options based on the treasury stock method. For the year ended December 31, 2013 and 2012, there are no outstanding Class B shares, and Cynosure may not issue Class B shares in the future. For the years ended December 31, 2011, common shares outstanding include both Class A and Class B as each share participated equally in earnings. Class B shares were convertible at any time into shares of Class A on a one-for-one basis at the option of the holder. |
The reconciliation of basic and diluted weighted average shares outstanding for the years ended December 31, 2013, 2012 and 2011 is as follows (in thousands, except per share data): |
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| | Years Ended December 31, | |
| | 2013 | | | 2012 | | | 2011 | |
Net (loss) income | | $ | (1,647 | ) | | $ | 10,961 | | | $ | (2,905 | ) |
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Basic weighted average common shares outstanding | | | 19,325 | | | | 13,189 | | | | 12,585 | |
Weighted average common stock equivalents | | | — | | | | 603 | | | | — | |
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Diluted weighted average common shares outstanding | | | 19,325 | | | | 13,792 | | | | 12,585 | |
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Basic net (loss) income per share | | $ | (0.09 | ) | | $ | 0.83 | | | $ | (0.23 | ) |
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Diluted net (loss) income per share | | $ | (0.09 | ) | | $ | 0.79 | | | $ | (0.23 | ) |
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For the year ended December 31, 2013, the number of basic and diluted weighted average shares outstanding was the same because any increase in the number of shares of common stock equivalents for that period would be antidilutive based on the net loss for the period. During the year ended December 31, 2013, outstanding options to purchase 1.3 million shares were excluded from the computation of diluted earnings per share because their inclusion would have been antidilutive. |
For the year ended December 31, 2012, options to purchase approximately 0.7 million shares of Cynosure’s Class A common stock were excluded from the calculation of diluted weighted average common shares outstanding as their effect was antidilutive. |
For the year ended December 31, 2011, the number of basic and diluted weighted average shares outstanding was the same because any increase in the number of shares of common stock equivalents for that period would be antidilutive based on the net loss for the period. During the year ended December 31, 2011, outstanding options to purchase 2.0 million shares were excluded from the computation of diluted earnings per share because their inclusion would have been antidilutive. |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements |
In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. Under this ASU, an entity is required to provide information about the amounts reclassified out of Accumulated Other Comprehensive Income (AOCI) by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in the financial statements. ASU 2013-02 is effective for interim and annual periods beginning after December 15, 2012. The adoption of this guidance did not materially impact Cynosure’s financial statements or disclosures. |
Lease Commitments | ' |
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ASC 840, Leases, establishes the framework for accounting for the Amendment. In accordance with ASC 840, Cynosure is accounting for the land portion of the leased premises as an operating lease. The buildings at 5 Carlisle Road and 3 Carlisle Road have met the criteria for capital lease accounting under ASC 840-10-25-1, and thus Cynosure is accounting for the buildings portion of the leased premises as capital leases and incurring interest charges accordingly. The interest rates used for the 5 Carlisle Road and 3 Carlisle Road capital leases are 10.8% and 8.8%, respectively. The expansion of the leased premises, as well as improvements to the leased premises, are recorded on the balance sheet as leasehold improvements within property, plant and equipment. Assets under capital leases and leasehold improvements related to the Amendment are amortized using the straight-line method over the respective lease term. |