Anika Therapeutics (ANIK) 10-Q 1 Aug 16 2016 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 28, 2016
Document Information [Line Items]
Entity Registrant Name	Anika Therapeutics, Inc.
Entity Central Index Key	898,437
Trading Symbol	anik
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		14,777,663
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 89,125	$ 110,707
Investments	22,500	27,751
Accounts receivable, net of reserves of $220 and $167 at June 30, 2016 and December 31, 2015, respectively	24,597	21,652
Inventories	17,264	14,938
Prepaid expenses and other current assets	1,158	1,385
Total current assets	154,644	176,433
Property and equipment, net	49,198	40,108
Long-term deposits and other	69	69
Intangible assets, net	11,259	11,656
Goodwill	7,568	7,482
Total Assets	222,738	235,748
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	3,294	8,302
Accrued expenses and other current liabilities	6,638	4,778
Income taxes payable	591	4,198
Total current liabilities	10,523	17,278
Other long-term liabilities	1,173	781
Long-term deferred revenue	56	66
Deferred tax liability	6,570	6,775
Commitments and contingencies (Note 12)
Stockholders’ equity:
Preferred stock, $.01 par value; 1,250,000 shares authorized, no shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively
Common stock, $.01 par value; 60,000,000 and 30,000,000 shares authorized, 14,777,663 and 15,036,808 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively	148	150
Additional paid-in-capital	59,506	81,685
Accumulated other comprehensive loss	(6,410)	(6,649)
Retained earnings	151,172	135,662
Total stockholders’ equity	204,416	210,848
Total Liabilities and Stockholders’ Equity	$ 222,738	$ 235,748

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accounts receivable, net of reserves	$ 220	$ 167
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	1,250,000	1,250,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	60,000,000	30,000,000
Common stock, shares issued (in shares)	14,777,663	15,035,808
Common stock, shares outstanding (in shares)	14,777,663	15,035,808

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Product revenue	$ 26,575	$ 22,898	$ 48,853	$ 38,413
Licensing, milestone and contract revenue	6	6	11	11
Total revenue	26,581	22,904	48,864	38,424
Operating expenses:
Cost of product revenue	6,065	5,275	11,490	9,588
Research & development	2,792	1,812	4,951	3,910
Selling, general & administrative	4,255	3,388	8,245	6,993
Total operating expenses	13,112	10,475	24,686	20,491
Income from operations	13,469	12,429	24,178	17,933
Interest income, net	49	24	121	48
Income before income taxes	13,518	12,453	24,299	17,981
Provision for income taxes	4,903	4,634	8,789	6,646
Net income	$ 8,615	$ 7,819	$ 15,510	$ 11,335
Basic net income per share:
Net income (in dollars per share)	$ 0.59	$ 0.52	$ 1.05	$ 0.76
Basic weighted average common shares outstanding (in shares)	14,679	14,961	14,778	14,934
Diluted net income per share:
Net income (in dollars per share)	$ 0.57	$ 0.51	$ 1.02	$ 0.74
Diluted weighted average common shares outstanding (in shares)	15,111	15,336	15,210	15,332
Net income	$ 8,615	$ 7,819	$ 15,510	$ 11,335
Other comprehensive income (loss):
Unrealized gain (loss) on securities, net of tax		(3)		(3)
Foreign currency translation adjustment	(536)	420	238	(1,828)
Total other comprehensive income (loss)	(536)	417	238	(1,831)
Comprehensive income	$ 8,079	$ 8,236	$ 15,748	$ 9,504

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net income	$ 15,510	$ 11,335
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,901	1,827
Stock-based compensation expense	1,478	1,064
Deferred income taxes	(252)	(428)
Provision for doubtful accounts	52
Provision for inventory	181	68
Tax benefit from equity awards	(419)	(934)
Changes in operating assets and liabilities:
Accounts receivable	(2,932)	(2,389)
Inventories	(2,438)	496
Prepaid expenses, other current and long-term assets	186	459
Accounts payable	(4,252)	559
Accrued expenses and other current liabilities	446	(264)
Deferred revenue	(45)	(5)
Income taxes payable	(3,169)	3,194
Other long-term liabilities	396	(98)
Net cash provided by operating activities	6,643	14,884
Cash flows from investing activities:
Proceeds from maturity of investments	27,750	10,250
Purchase of investments	(22,499)	(22,018)
Purchase of property and equipment	(9,869)	(1,134)
Net cash used in investing activities	(4,618)	(12,902)
Cash flows from financing activities:
Repurchases of common stock	(25,000)
Proceeds from exercise of equity awards	922	969
Tax benefit from equity awards	419	934
Net cash (used in) provided by financing activities	(23,659)	1,903
Exchange rate impact on cash	52	(121)
Increase (decrease) in cash and cash equivalents	(21,582)	3,764
Cash and cash equivalents at beginning of period	110,707	100,156
Cash and cash equivalents at end of period	89,125	103,920
Non-cash Investing Activities:
Purchases of property and equipment included in accounts payable and accrued expenses	$ 2,128	$ 116

Note 1 - Nature of Business

Note 1 - Nature of Business	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Nature of Operations [Text Block]	1. Nature of Business Anika Therapeutics, Inc. is a global, integrated orthopedic medicines company committed to improving the lives of patients with degenerative orthopedic diseases and traumatic conditions by providing innovative and differentiated therapeutic pain management solutions along the continuum of care, from palliative care to regenerative medicine. The Company has over two decades of expertise developing, manufacturing, and commercializing more than 20 products, in markets across the globe, based on the Company’s proprietary hyaluronic acid technology. The Company’s orthopedic medicine portfolio is comprised of marketed (ORTHOVISC and MONOVISC) and pipeline (CINGAL and HYALOFAST in the United States, among others) products to alleviate pain and restore joint function by replenishing depleted HA and aiding cartilage repair and regeneration. The Company is subject to risks common to companies in the biotechnology and medical device industries including, but not limited to, development by the Company or its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, commercialization of existing and new products, and compliance with U.S. Food and Drug Administration (“FDA”) and foreign regulations and approval requirements, as well as the ability to grow the Company’s business through appropriate commercial strategies.

Note 2 - Basis of Presentation

Note 2 - Basis of Presentation	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Business Description and Basis of Presentation [Text Block]	2. Basis of Presentation The accompanying unaudited condensed consolidated financial statements and related notes have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and in accordance with accounting principles generally accepted in the United States (“US GAAP”). The financial statements include the accounts of Anika Therapeutics, Inc. and its subsidiaries. Inter-company transactions and balances have been eliminated. The year-end consolidated balance sheet is derived from the Company’s audited financial statements, but does not include all disclosures required by US GAAP. In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to fairly state the condensed consolidated financial position of the Company as of June 30, 2016, the results of its operations for the three- and six-month periods ended June 30, 2016 and 2015, and cash flows for the six-month periods ended June 30, 2016 and 2015. The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s annual financial statements filed with its Annual Report on Form 10-K for the year ended December 31, 2015. The results of operations for the three- and six-month periods ended June 30, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016. Certain prior period amounts have been reclassified to conform to the current period presentation. There was no impact on operating income.

Note 3 - Recent Accounting Pron

Note 3 - Recent Accounting Pronouncements	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
New Accounting Pronouncements and Changes in Accounting Principles [Text Block]	3. Recent Accounting Pronouncements Recently Issued In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 supersedes the revenue recognition requirements in “Topic 605, Revenue Recognition” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). ASU 2016-02 amends existing leasing accounting requirements. The most significant change will result in the recognition of lease assets and lease liabilities by lessees for virtually all leases. The new guidance will also require significant additional disclosures about the amount, timing and uncertainty of cash flows from leases. ASU 2016-02 is effective for fiscal years and interim periods beginning after December 15, 2018. Upon adoption, entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Early adoption is permitted, and a number of optional practical expedients may be elected to simplify the impact of adoption. The Company is evaluating the impact of adopting this guidance. In March 2016, the FASB issued ASU No. 2016-09, Compensation (Topic 718) Stock Compensation. ASU 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. Early adoption is permitted. The Company is assessing ASU 2016-09 and the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard changes the impairment model for most financial assets and certain other instruments. Under the new standard, entities holding financial assets and net investment in leases that are not accounted for at fair value through net income are to be presented at the net amount expected to be collected. An allowance for credit losses will be a valuation account that will be deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. The new standard will be effective for us on January 1, 2020. The adoption of this standard is not expected to have a material impact on our financial position or results of operations. Recently Adopted In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330) Simplifying the Measurement of Inventory. ASU 2015-11 more closely aligns the measurement of inventory in US GAAP with the measurement of inventory in International Financial Reporting Standards by requiring companies using the first-in, first-out and average costs methods to measure inventory using the lower of cost and net realizable value, where net realizable value is the estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. The provisions of ASU 2015-11 are effective for annual and interim periods beginning after December 15, 2016. ASU 2015-11 should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption of this amendment did not have a material impact on the Company’s financial position or results of operations.

Note 4 - Investments

Note 4 - Investments	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Cash and Cash Equivalents Disclosure [Text Block]	4. Investments All of the Company’s investments are classified as available-for-sale and are carried at fair value with unrealized gains and losses recorded as a component of accumulated other comprehensive income, net of related income taxes. The Company held bank certificates of deposit of $22.5 million and $25.8 million at June 30, 2016 and December 31, 2015, respectively. The Company also held corporate debt securities of $2.0 million at December 31, 2015. There were no unrealized gains or losses on the Company’s available-for-sale securities at June 30, 2016 or December 31, 2015.

Note 5 - Fair Value Measurement

Note 5 - Fair Value Measurements	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Fair Value Disclosures [Text Block]	5. Fair Value Measurements Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants based on assumptions that market participants would use in pricing an asset or liability. As a basis for classifying the fair value measurements, a three-tier fair value hierarchy, which classifies the fair value measurements based on the inputs used in measuring fair value, was established as follows: (Level 1) observable inputs such as quoted prices in active markets for identical assets or liabilities; (Level 2) significant other observable inputs that are observable either directly or indirectly; and (Level 3) significant unobservable inputs for which there is little or no market data, which requires the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. On a recurring basis, the Company records its investments at fair value. The Company’s investments are all classified within Level 2 of the fair value hierarchy. These investments classified within Level 2 of the fair value hierarchy are valued based on matrix pricing compiled by third party pricing vendors, using observable market inputs such as interest rates, yield curves, and credit risk. The fair value hierarchy of the Company’s cash equivalents and investments at fair value is as follows: Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets Significant Other Significant for Identical Assets Observable Inputs Unobservable Inputs June 30, 2016 (Level 1) (Level 2) (Level 3) Cash equivalents: Money market funds $ 67,001 $ - $ 67,001 $ - Investments: Bank certificates of deposit $ 22,500 $ - $ 22,500 $ - Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets Significant Other Significant for Identical Assets Observable Inputs Unobservable Inputs December 31, 2015 (Level 1) (Level 2) (Level 3) Cash equivalents: Money market funds $ 61,385 $ - $ 61,385 $ - Bank certificates of deposit 250 - 250 - Total cash equivalents $ 61,635 $ - $ 61,635 $ - Investments: Corporate debt securities $ 2,001 $ - $ 2,001 $ - Bank certificates of deposit 25,750 - 25,750 - Total investments $ 27,751 $ - $ 27,751 $ -

Note 6 - Equity Incentive Plan

Note 6 - Equity Incentive Plan	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	6. Equity Incentive Plan The Company estimates the fair value of stock options and stock appreciation rights (“SARs”) using the Black-Scholes valuation model. Fair value of restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) are measured by the grant-date price of the Company’s shares. The fair value of each stock option award during the three- and six-month periods ended June 30, 2016 and 2015, respectively, was estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions: Six Months Ended June 30, 2016 2015 Risk free interest rate 0.94% - 1.40% 1.15% - 1.46% Expected volatility 49.47% - 51.61% 53.15% - 54.65% Expected life (years) 4.5 4.5 Expected dividend yield 0.00% 0.00% The Company recorded $0.7 million and $0.5 million of share-based compensation expense for the three-month periods ended June 30, 2016 and 2015, respectively, for equity compensation awards. The Company recorded $1.5 million and $1.1 million of share-based compensation expense for the six-month periods ended June 30, 2016 and 2015, respectively, for equity compensation awards. The Company presents the expenses related to stock-based compensation awards in the same expense line items as cash compensation paid to the respective recipients. During the three-month period ended June 30, 2016, the Company granted under the Equity Incentive Plan (“Plan”) a total of 43,000 stock options. During the six-month period ended June 30, 2016, the Company granted under the Plan a total of 331,705 stock options including 46,300 RSAs and 11,805 RSUs. All of the RSUs were granted to directors of the Company and vest over a one year period. The stock options and RSAs granted to employees generally become exercisable or vest ratably over four years from the date of grant. A portion of the stock options granted during the six-month period ended June 30, 2016 contained certain performance features, as compared to established targets, in addition to time-based vesting conditions. For performance-based awards with financial achievement targets, the Company recognizes expense using the graded vesting methodology based on the number of shares expected to vest. Compensation cost associated with performance grants is estimated using the Black-Scholes valuation method multiplied by the expected number of shares to be issued, which is adjusted based on the estimated probabilities of achieving the performance goals. Changes to the probability assessment and the estimated shares expected to vest will result in adjustments to the related share-based compensation expense that will be recorded in the period of the change. If the performance targets are not achieved, no compensation cost is recognized and any previously recognized compensation cost is reversed.

Note 7 - Earnings Per Share ("E

Note 7 - Earnings Per Share ("EPS")	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Earnings Per Share [Text Block]	7. Earnings Per Share (“EPS”) Basic EPS is calculated by dividing net income by the weighted average number of shares outstanding during the period. Unvested restricted shares, although legally issued and outstanding, are not considered outstanding for purposes of calculating basic earnings per share. Diluted EPS is calculated by dividing net income by the weighted average number of shares outstanding plus the dilutive effect, if any, of outstanding stock options, SARs, RSAs, and RSUs using the treasury stock method. The following table provides share information used in the calculation of the Company's basic and diluted earnings per share: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Shares used in the calculation of basic earnings per share 14,679 14,961 14,778 14,934 Effect of dilutive securities: Stock options, SARs, and RSAs 432 375 432 398 Diluted shares used in the calculation of earnings per share 15,111 15,336 15,210 15,332 Equity awards of 0.3 million shares were outstanding for the three- and six-month periods ended June 30, 2016 and were not included in the computation of diluted earnings per share because the awards’ impact on earnings per share was anti-dilutive. Equity awards of 0.2 million shares were outstanding for the three- and six-month periods ended June 30, 2015, respectively, and were not included in the computation of diluted earnings per share because the awards’ impact on earnings per share was anti-dilutive. On February 26, 2016, the Company entered into an accelerated stock repurchase agreement with Morgan Stanley & Co. LLC (“Morgan Stanley”) pursuant to a Fixed Dollar Accelerated Share Repurchase Transaction (“ASR Agreement") to purchase $25.0 million of shares of its common stock. Pursuant to the terms of the ASR Agreement, the Company paid Morgan Stanley $25.0 million in cash and received an initial delivery of 377,155 shares of the Company’s common stock on February 29, 2016 based on a closing market price of $46.40 and the applicable contractual discount. This is approximately 70% of the total number of shares of expected to be repurchased under the ASR Agreement. These shares are held by the Company as authorized but unissued shares pursuant to Massachusetts law. The initial delivery of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net income per share. As of June 30, 2016, the Company has approximately $7.5 million remaining under the ASR Agreement which was recorded as an equity forward sale contract and was included in additional paid-in capital in stockholders' equity in the condensed consolidated balance sheet as it met the criteria for equity accounting. Pursuant to the terms of the ASR Agreement, the final number of shares and the average purchase price will be determined at the end of the applicable purchase period, which is expected to occur in the third quarter of 2016. Upon settlement of the ASR Agreement, the Company may receive additional shares or be required to either pay additional cash or deliver shares of our common stock (at its option) to Morgan Stanley, based on the forward price. If the ASR Agreement had been settled as of June 30, 2016, based on the volume-weighted average price since the effective date of the ASR Agreement, Morgan Stanley would have been required to deliver approximately 0.2 million additional shares to the Company. However, the Company cannot predict the final number of shares to be received, or delivered, by it under the ASR Agreement, and, as such, these shares are not included in the calculation of diluted weighted-average common shares outstanding during the period because the effect is anti-dilutive.

Note 8 - Inventories

Note 8 - Inventories	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Inventory Disclosure [Text Block]	8. Inventories Inventories consist of the following: June 30, December 31, 2016 2015 Raw materials $ 6,812 $ 5,780 Work-in-process 6,140 5,656 Finished goods 4,312 3,502 Total $ 17,264 $ 14,938 Inventories are stated at the lower of cost or market, with cost being determined using the first-in, first-out method. Work-in-process and finished goods inventories include materials, labor, and manufacturing overhead. Inventory costs associated with product candidates that have not yet received regulatory approval are capitalized if the Company believes there is probable future commercial use and future economic benefit.

Note 9 - Intangible Assets

Note 9 - Intangible Assets	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Goodwill and Intangible Assets Disclosure [Text Block]	9. Intangible Assets In connection with the 2009 acquisition of Anika Therapeutics S.r.l. (“Anika S.r.l.”), the Company acquired various intangible assets and goodwill. The Company evaluated the various intangible assets and related cash flows from these intangible assets, as well as the useful lives and amortization methods related to these intangible assets. The in-process research and development (“IPR&D”) intangible assets initially have indefinite lives and are reviewed periodically to assess the project status, valuation, and disposition, including write-off(s) for abandoned projects. Until such determination is made, they are not amortized. Intangible assets as of June 30, 2016 and December 31, 2015 consist of the following: June 30, 2016 December 31, 2015 Gross Value Accumulated Currency Translation Adjustment Accumulated Amortization Net Book Value Net Book Value Useful Life Developed technology $ 17,100 $ (3,108 ) $ (6,373 ) $ 7,619 $ 7,959 15 In-process research & development 4,406 (1,286 ) - 3,120 3,099 Indefinite Distributor relationships 4,700 (415 ) (4,285 ) - - 5 Patents 1,000 (186 ) (357 ) 457 473 16 Elevess trade name 1,000 - (937 ) 63 125 9 Total $ 28,206 $ (4,995 ) $ (11,952 ) $ 11,259 $ 11,656 The aggregate amortization expense related to intangible assets was $0.3 million for the three-month periods ended June 30, 2016 and 2015, respectively. The aggregate amortization expense related to intangible assets was $0.6 million and $0.5 million for the six-month periods ended June 30, 2016 and 2015, respectively.

Note 10 - Goodwill

Note 10 - Goodwill	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Goodwill Disclosure [Text Block]	10. Goodwill Through June 30, 2016, there have not been any events or changes in circumstances that indicate that the carrying value of goodwill may not be recoverable. Changes in the carrying value of goodwill were as follows: Six Months Ended Twelve Months 2016 2015 Balance, beginning $ 7,482 $ 8,339 Effect of foreign currency adjustments 86 (857 ) Balance, ending $ 7,568 $ 7,482

Note 11 - Accrued Expenses

Note 11 - Accrued Expenses	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Accounts Payable and Accrued Liabilities Disclosure [Text Block]	11. Accrued Expenses Accrued expenses consist of the following: June 30, December 31, 2016 2015 Compensation and related expenses $ 2,416 $ 3,082 Facility construction costs 1,769 415 Research grants 481 381 Professional fees 889 210 Clinical trial costs 339 252 Other 744 438 Total $ 6,638 $ 4,778

Note 12 - Commitments and Conti

Note 12 - Commitments and Contingencies	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Commitments and Contingencies Disclosure [Text Block]	12. Commitments and Contingencies In certain of its contracts, the Company warrants to its customers that the products it manufactures conform to the product specifications as in effect at the time of delivery of the specific product. The Company may also warrant that the products it manufactures do not infringe, violate, or breach any U.S. patent or intellectual property right, trade secret, or other proprietary information of any third party. On occasion, the Company contractually indemnifies its customers against any and all losses arising out of, or in any way connected with, any claim or claims of breach of its warranties or any actual or alleged defect in any product caused by the negligent acts or omissions of the Company. The Company maintains a products liability insurance policy that limits its exposure to these risks. Based on the Company’s historical activity, in combination with its liability insurance coverage, the Company believes the estimated fair value of these indemnification agreements is immaterial. The Company had no accrued warranties at June 30, 2016 or December 31, 2015, respectively, and has no history of claims paid. The Company is also involved in various legal proceedings arising in the normal course of business. Although the outcomes of these legal proceedings are inherently difficult to predict, the Company does not expect the resolution of these legal proceedings to have a material adverse effect on its financial position, results of operations, or cash flow.

Note 13 - Leases

Note 13 - Leases	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Leases of Lessee Disclosure [Text Block]	13. Leases On October 9, 2015, Anika S.r.l. entered into a build-to-suit lease agreement with Consorzio Zona Industriale E Porto Fluviale di Padova (“ZIP”), as landlord, pursuant to which Anika S.r.l. will lease a new European headquarters facility, consisting of approximately 33,000 square feet of general office, research and development, training, and warehousing space located in Padova, Italy. The lease has an initial term of fifteen years, which is expected to commence during the fourth quarter of 2016 once construction of the facility is completed. The lease will automatically renew for up to three additional six-year terms, subject to certain terms and conditions. The Company has the ability to withdraw from this lease subject to certain financial penalties after six years and with no penalties after the ninth year. Beginning on the commencement date, the lease provides for an initial yearly rent of approximately $0.4 million. Construction of the new facility began in the first quarter of 2016 and is expected to be completed in late 2016. During the period of construction the Company is considered the deemed owner of the facility. Accordingly, the landlord's costs of constructing the facility are required to be capitalized, as a non-cash transaction, offset by a corresponding facility lease obligation in the Company’s consolidated balance sheet. As of June 30, 2016, the Company has recorded a construction-in-process asset of approximately $0.9 million. This includes $0.5 million incurred by ZIP for the construction of the new facility, which was recorded as a facility lease obligation within other long-term liabilities on the balance sheet.

Note 14 - Income Taxes

Note 14 - Income Taxes	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Income Tax Disclosure [Text Block]	14. Income Taxes Provisions for income taxes were $4.9 million and $8.8 million for the three- and six-month periods ended June 30, 2016, based on effective tax rates of 36.3% and 36.2%, respectively. Provisions for income taxes were $4.6 million and $6.6 million for the three- and six-month periods ended June 30, 2015, based on effective tax rates of 37% for both periods. The increase in income taxes for the three- and six-month period ended June 30, 2016 resulted from higher net income as compared to the same periods in the prior year. The net decrease in the effective tax rate for the three- and six-month period ended June 30, 2016, as compared to the same period in 2015, The Company files income tax returns in the United States on a federal basis, in certain U.S. states, and in Italy. The associated tax filings remain subject to examination by applicable tax authorities for a certain length of time following the tax year to which those filings relate. The Company’s filings from 2012 through the present tax year remain subject to examination by the IRS and other taxing authorities for U.S. federal and state tax purposes. The Company currently has a tax audit in progress in the United States and does not anticipate that the audit will have a material impact on its financial statements. The Company’s filings from 2010 through the present tax year remain subject to examination by the appropriate governmental authorities in Italy. In connection with the preparation of the financial statements, the Company performed an analysis to ascertain if it was more likely than not that it would be able to utilize, in future periods, the net deferred tax assets associated with its net operating loss carryforward. The Company concluded that the positive evidence outweighs the negative evidence and, thus, those deferred tax assets are realizable on a “more likely than not” basis. As such, the Company did not record a valuation allowance at June 30, 2016 or December 31, 2015.

Note 15 - Segment and Geographi

Note 15 - Segment and Geographic Information	6 Months Ended
	Jun. 30, 2016
Notes to Financial Statements
Segment Reporting Disclosure [Text Block]	15. Segment and Geographic Information The Company has one reportable operating segment, for the purposes of assessing performance and deciding how to allocate resources. Product revenue by product group is as follows: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Orthobiologics $ 23,304 $ 19,283 $ 42,891 $ 31,255 Surgical 1,433 1,647 2,751 3,037 Dermal 582 303 963 719 Other 1,256 1,665 2,248 3,402 Product Revenue $ 26,575 $ 22,898 $ 48,853 $ 38,413 Total revenue by geographic location and as a percentage of overall total revenue for the three-month periods ended June 30, 2016 and 2015 are as follows: Three Months Ended June 30, 2016 2015 Total Percentage of Total Percentage of Revenue Revenue Revenue Revenue Geographic Location: United States $ 21,895 82 % $ 19,218 84 % Europe 2,977 11 % 2,331 10 % Other 1,709 7 % 1,355 6 % Total Revenue $ 26,581 100 % $ 22,904 100 % Six Months Ended June 30, 2016 2015 Total Percentage of Total Percentage of Revenue Revenue Revenue Revenue Geographic Location: United States $ 39,906 82 % $ 31,809 83 % Europe 5,542 11 % 4,317 11 % Other 3,416 7 % 2,298 6 % Total $ 48,864 100 % $ 38,424 100 %

Note 5 - Fair Value Measureme21

Note 5 - Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Fair Value, Assets Measured on Recurring Basis [Table Text Block]	Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets Significant Other Significant for Identical Assets Observable Inputs Unobservable Inputs June 30, 2016 (Level 1) (Level 2) (Level 3) Cash equivalents: Money market funds $ 67,001 $ - $ 67,001 $ - Investments: Bank certificates of deposit $ 22,500 $ - $ 22,500 $ - Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets Significant Other Significant for Identical Assets Observable Inputs Unobservable Inputs December 31, 2015 (Level 1) (Level 2) (Level 3) Cash equivalents: Money market funds $ 61,385 $ - $ 61,385 $ - Bank certificates of deposit 250 - 250 - Total cash equivalents $ 61,635 $ - $ 61,635 $ - Investments: Corporate debt securities $ 2,001 $ - $ 2,001 $ - Bank certificates of deposit 25,750 - 25,750 - Total investments $ 27,751 $ - $ 27,751 $ -

Note 6 - Equity Incentive Plan

Note 6 - Equity Incentive Plan (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]	Six Months Ended June 30, 2016 2015 Risk free interest rate 0.94% - 1.40% 1.15% - 1.46% Expected volatility 49.47% - 51.61% 53.15% - 54.65% Expected life (years) 4.5 4.5 Expected dividend yield 0.00% 0.00%

Note 7 - Earnings Per Share (23

Note 7 - Earnings Per Share ("EPS") (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Shares used in the calculation of basic earnings per share 14,679 14,961 14,778 14,934 Effect of dilutive securities: Stock options, SARs, and RSAs 432 375 432 398 Diluted shares used in the calculation of earnings per share 15,111 15,336 15,210 15,332

Note 8 - Inventories (Tables)

Note 8 - Inventories (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Schedule of Inventory, Current [Table Text Block]	June 30, December 31, 2016 2015 Raw materials $ 6,812 $ 5,780 Work-in-process 6,140 5,656 Finished goods 4,312 3,502 Total $ 17,264 $ 14,938

Note 9 - Intangible Assets (Tab

Note 9 - Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets by Major Class [Table Text Block]	June 30, 2016 December 31, 2015 Gross Value Accumulated Currency Translation Adjustment Accumulated Amortization Net Book Value Net Book Value Useful Life Developed technology $ 17,100 $ (3,108 ) $ (6,373 ) $ 7,619 $ 7,959 15 In-process research & development 4,406 (1,286 ) - 3,120 3,099 Indefinite Distributor relationships 4,700 (415 ) (4,285 ) - - 5 Patents 1,000 (186 ) (357 ) 457 473 16 Elevess trade name 1,000 - (937 ) 63 125 9 Total $ 28,206 $ (4,995 ) $ (11,952 ) $ 11,259 $ 11,656

Note 10 - Goodwill (Tables)

Note 10 - Goodwill (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Schedule of Goodwill [Table Text Block]	Six Months Ended Twelve Months 2016 2015 Balance, beginning $ 7,482 $ 8,339 Effect of foreign currency adjustments 86 (857 ) Balance, ending $ 7,568 $ 7,482

Note 11 - Accrued Expenses (Tab

Note 11 - Accrued Expenses (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Schedule of Accrued Liabilities [Table Text Block]	June 30, December 31, 2016 2015 Compensation and related expenses $ 2,416 $ 3,082 Facility construction costs 1,769 415 Research grants 481 381 Professional fees 889 210 Clinical trial costs 339 252 Other 744 438 Total $ 6,638 $ 4,778

Note 15 - Segment and Geograp28

Note 15 - Segment and Geographic Information (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Tables
Schedule of Segment Reporting Information, by Segment [Table Text Block]	Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Orthobiologics $ 23,304 $ 19,283 $ 42,891 $ 31,255 Surgical 1,433 1,647 2,751 3,037 Dermal 582 303 963 719 Other 1,256 1,665 2,248 3,402 Product Revenue $ 26,575 $ 22,898 $ 48,853 $ 38,413
Schedule of Revenue and Operating Income by Geographical Areas [Table Text Block]	Three Months Ended June 30, 2016 2015 Total Percentage of Total Percentage of Revenue Revenue Revenue Revenue Geographic Location: United States $ 21,895 82 % $ 19,218 84 % Europe 2,977 11 % 2,331 10 % Other 1,709 7 % 1,355 6 % Total Revenue $ 26,581 100 % $ 22,904 100 % Six Months Ended June 30, 2016 2015 Total Percentage of Total Percentage of Revenue Revenue Revenue Revenue Geographic Location: United States $ 39,906 82 % $ 31,809 83 % Europe 5,542 11 % 4,317 11 % Other 3,416 7 % 2,298 6 % Total $ 48,864 100 % $ 38,424 100 %

Note 1 - Nature of Business (De

Note 1 - Nature of Business (Details Textual)	Jun. 30, 2016
Number of Products Developed, Manufactured, and Commercialized	20

Note 4 - Investments (Details T

Note 4 - Investments (Details Textual) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Certificates of Deposit [Member]
Available-for-sale Securities	$ 22,500,000	$ 25,800,000
Corporate Debt Securities [Member]
Available-for-sale Securities		2,000,000
Available-for-sale Securities, Accumulated Gross Unrealized Gain (Loss), before Tax	$ 0	$ 0

Note 5 - Fair Value of Financia

Note 5 - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Cash equivalents	$ 67,001	$ 61,385
Money Market Funds [Member]
Cash equivalents	67,001	61,385
Certificates of Deposit [Member] | Fair Value, Inputs, Level 2 [Member]
Cash equivalents		250
Investments	22,500	25,750
Certificates of Deposit [Member]
Cash equivalents		250
Investments	22,500	25,750
Corporate Debt Securities [Member]
Investments		2,001
Fair Value, Inputs, Level 2 [Member]
Cash equivalents		61,635
Cash equivalents		61,635
Investments	$ 22,500	$ 27,751

Note 6 - Equity Incentive Pla32

Note 6 - Equity Incentive Plan (Details Textual) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Restricted Stock and Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value	$ 0.7	$ 0.5	$ 1.5	$ 1.1
Restricted Stock [Member] | Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			4 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period			46,300
Employee Stock Option [Member] | Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			4 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	43,000		331,705
Restricted Stock Units (RSUs) [Member] | Plan [Member] | Board of Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period			11,805
Restricted Stock Units (RSUs) [Member] | Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			1 year

Note 6 - Assumptions Used to Es

Note 6 - Assumptions Used to Estimate Fair Value of Stock Options and Stock Appreciation Rights Awards (Details)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Minimum [Member]
Risk free interest rate	0.94%	1.15%
Expected volatility	49.47%	53.15%
Maximum [Member]
Risk free interest rate	1.40%	1.46%
Expected volatility	51.61%	54.65%
Expected life (years)	4 years 182 days	4 years 182 days
Expected dividend yield	0.00%	0.00%

Note 7 - Earnings Per Share (34

Note 7 - Earnings Per Share ("EPS") (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	Jun. 30, 2016	Feb. 29, 2016	Feb. 26, 2016	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Accelerated Stock Repurchase [Member] | Morgan Stanley & Co., LLC [Member] | Common Stock [Member]
Stock Repurchase Program, Authorized Amount			$ 25,000
Accelerated Share Repurchases, Initial Price Paid Per Share		$ 46.40
Stock Repurchase Program, Percentage Repurchased		70.00%
Accelerated Stock Repurchase [Member] | Morgan Stanley & Co., LLC [Member] | Additional Paid-in Capital [Member]
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 7,500			$ 7,500		$ 7,500
Accelerated Stock Repurchase [Member] | Morgan Stanley & Co., LLC [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	200,000
Payments for Repurchase of Common Stock			$ 25,000
Stock Repurchased and Retired During Period, Shares		377,155
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount				300,000	200,000	300,000	200,000
Payments for Repurchase of Common Stock						$ 25,000

Note 7 - Basic and Diluted Earn

Note 7 - Basic and Diluted Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Shares used in the calculation of basic earnings per share (in shares)	14,679	14,961	14,778	14,934
Effect of dilutive securities:
Stock options, SARs, and RSAs (in shares)	432	375	432	398
Diluted shares used in the calculation of earnings per share (in shares)	15,111	15,336	15,210	15,332

Note 8 - Inventories (Details)

Note 8 - Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Raw materials	$ 6,812	$ 5,780
Work-in-process	6,140	5,656
Finished goods	4,312	3,502
Total	$ 17,264	$ 14,938

Note 9 - Intangible Assets (Det

Note 9 - Intangible Assets (Details Textual) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Amortization of Intangible Assets	$ 0.3	$ 0.3	$ 0.6	$ 0.5

Note 9 - Intangible Assets (D38

Note 9 - Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Jun. 30, 2016
Developed Technology Rights [Member]
Gross Value		$ 17,100
Accumulated Currency Translation Adjustment		(3,108)
Accumulated Amortization		(6,373)
Net Book Value	$ (7,959)	7,619
Net Book Value	$ 7,959	(7,619)
Useful Life	15 years
In Process Research and Development [Member]
Gross Value		4,406
Accumulated Currency Translation Adjustment		(1,286)
Net Book Value	$ (3,099)	3,120
Net Book Value	$ 3,099	(3,120)
Distribution Rights [Member]
Gross Value		4,700
Accumulated Currency Translation Adjustment		(415)
Accumulated Amortization		(4,285)
Useful Life	5 years
Patents [Member]
Gross Value		1,000
Accumulated Currency Translation Adjustment		(186)
Accumulated Amortization		(357)
Net Book Value	$ (473)	457
Net Book Value	$ 473	(457)
Useful Life	16 years
Elevess Trade Name [Member]
Gross Value		1,000
Accumulated Amortization		(937)
Net Book Value	$ (125)	63
Net Book Value	$ 125	(63)
Useful Life	9 years
Gross Value		28,206
Accumulated Currency Translation Adjustment		(4,995)
Accumulated Amortization		(11,952)
Net Book Value	$ 11,656	11,259
Net Book Value	$ (11,656)	$ (11,259)

Note 10 - Changes in the Carryi

Note 10 - Changes in the Carrying Value of Goodwill (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Balance	$ 7,482	$ 8,339
Effect of foreign currency adjustments	86	(857)
Balance	$ 7,568	$ 7,482

Note 11 - Accrued Expenses (Det

Note 11 - Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Compensation and related expenses	$ 2,416	$ 3,082
Facility construction costs	1,769	415
Research grants	481	381
Professional fees	889	210
Clinical trial costs	339	252
Other	744	438
Total	$ 6,638	$ 4,778

Note 12 - Commitments and Con41

Note 12 - Commitments and Contingencies (Details Textual) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Standard and Extended Product Warranty Accrual	$ 0	$ 0

Note 13 - Leases (Details Textu

Note 13 - Leases (Details Textual) - European Headquarters Facility [Member] $ in Millions	Oct. 09, 2015ft²	Mar. 31, 2016USD ($)	Jun. 30, 2016USD ($)
Area of Real Estate Property | ft²	33,000
Lessee Leasing Arrangements, Term of Contract	15 years
Lessee Leasing Arrangements, Number of Renewal Terms	3
Lessee Leasing Arrangements, Renewal Term	6 years
Lessee Leasing Arrangements Ability to Withdraw With Penalty	6 years
Lessee Leasing Arrangements Ability to Withdrawn Without Penalty	9 years
Lessee Leasing Arrangements Initial Yearly Rent		$ 0.4
Construction in Progress, Gross			$ 0.9
Build-to-suit Lease Agreement, Offsetting Facility Lease Obligation			$ 0.5

Note 14 - Income Taxes (Details

Note 14 - Income Taxes (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member] | Earliest Tax Year [Member]
Open Tax Year			2,012
Foreign Tax Authority [Member] | Ministry of Economic Affairs and Finance, Italy [Member] | Earliest Tax Year [Member]
Open Tax Year			2,010
Income Tax Expense (Benefit)	$ 4,903,000	$ 4,634,000	$ 8,789,000	$ 6,646,000
Effective Income Tax Rate Reconciliation, Percent	36.30%	37.00%	36.20%	37.00%
Deferred Tax Assets, Valuation Allowance	$ 0		$ 0		$ 0

Note 15 - Segment and Geograp44

Note 15 - Segment and Geographic Information (Details Textual)	6 Months Ended
	Jun. 30, 2016
Number of Reportable Segments	1

Note 15 - Product Revenue by Pr

Note 15 - Product Revenue by Product Group (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Orthobiologics [Member]
Product revenue	$ 23,304	$ 19,283	$ 42,891	$ 31,255
Surgical [Member]
Product revenue	1,433	1,647	2,751	3,037
Dermal [Member]
Product revenue	582	303	963	719
Other [Member]
Product revenue	1,256	1,665	2,248	3,402
Product revenue	$ 26,575	$ 22,898	$ 48,853	$ 38,413

Note 15 - Product Revenue by Ge

Note 15 - Product Revenue by Geographic Location (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
UNITED STATES
Total Revenue	$ 21,895	$ 19,218	$ 39,906	$ 31,809
Percentage of Revenue	82.00%	84.00%	82.00%	83.00%
Europe [Member]
Total Revenue	$ 2,977	$ 2,331	$ 5,542	$ 4,317
Percentage of Revenue	11.00%	10.00%	11.00%	11.00%
Other Location [Member]
Total Revenue	$ 1,709	$ 1,355	$ 3,416	$ 2,298
Percentage of Revenue	7.00%	6.00%	7.00%	6.00%
Total Revenue	$ 26,581	$ 22,904	$ 48,864	$ 38,424
Percentage of Revenue	100.00%	100.00%	100.00%	100.00%