Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 25, 2015 | Jun. 30, 2014 |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | iart | ||
Entity Registrant Name | INTEGRA LIFESCIENCES HOLDINGS CORP | ||
Entity Central Index Key | 917520 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $1,182.30 | ||
Entity Common Stock, Shares Outstanding | 32,778,546 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||
Total revenue, net | $928,305 | $836,214 | $830,871 |
Costs and Expenses: | |||
Cost of goods sold | 352,801 | 327,045 | 314,427 |
Research and development | 51,596 | 52,088 | 51,012 |
Selling, general and administrative | 445,967 | 407,802 | 373,114 |
Intangible asset amortization | 12,400 | 12,697 | 18,536 |
Goodwill impairment charge | 0 | 46,738 | 0 |
Total costs and expenses | 862,764 | 846,370 | 757,089 |
Operating income (loss) | 65,541 | -10,156 | 73,782 |
Interest income | 168 | 443 | 1,205 |
Interest expense | -21,967 | -19,788 | -22,237 |
Other expense, net | -763 | -1,801 | -721 |
Income (loss) before income taxes | 42,979 | -31,302 | 52,029 |
Provision (benefit) for income taxes | 8,975 | -10,235 | 10,825 |
Net income (loss) | $34,004 | ($21,067) | $41,204 |
Basic net income per common share (in dollars per share) | $1.05 | ($0.74) | $1.46 |
Diluted net income per common share (in dollars per share) | $1.03 | ($0.74) | $1.44 |
Weighted average common shares outstanding (See Note 11): | |||
Basic (in shares) | 32,432 | 28,416 | 28,232 |
Diluted (in shares) | 32,960 | 28,416 | 28,516 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $34,004 | ($21,067) | $41,204 |
Other comprehensive income (loss), before tax: | |||
Change in foreign currency translation adjustments | -26,674 | 5,874 | 5,224 |
Unrealized loss on derivatives | |||
Unrealized derivative losses arising during period | -206 | -110 | -2,062 |
Less: Reclassification adjustments for losses included in net income (loss) | -1,747 | -1,830 | -2,210 |
Unrealized gain on derivatives | 1,541 | 1,720 | 148 |
Defined benefit pension plan | |||
Defined benefit pension plan - net gain (loss) arising during period | 1,672 | -1,398 | -1,313 |
Total other comprehensive income (loss), before tax | -23,461 | 6,196 | 4,059 |
Income tax (expense) benefit related to items in other comprehensive income (loss) | -954 | -472 | 237 |
Total other comprehensive income (loss), net of tax | -24,415 | 5,724 | 4,296 |
Comprehensive income (loss), net of tax | $9,589 | ($15,343) | $45,500 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current Assets: | ||
Cash and cash equivalents | $71,994 | $120,614 |
Trade accounts receivable, net of allowances of $6,184 and $6,194 | 131,918 | 118,145 |
Inventories, net | 237,114 | 206,919 |
Deferred tax assets | 58,663 | 48,616 |
Prepaid expenses and other current assets | 29,632 | 26,858 |
Total current assets | 529,321 | 521,152 |
Property, plant and equipment, net | 209,986 | 200,310 |
Intangible assets, net | 459,459 | 197,163 |
Goodwill | 363,888 | 249,764 |
Deferred tax assets | 5,603 | 15,412 |
Other assets | 10,368 | 8,338 |
Total assets | 1,578,625 | 1,192,139 |
Current Liabilities: | ||
Borrowings under senior credit facility | 3,750 | 0 |
Accounts payable, trade | 34,060 | 50,752 |
Deferred revenue | 5,176 | 4,197 |
Accrued compensation | 40,943 | 28,079 |
Accrued expenses and other current liabilities | 42,096 | 36,354 |
Total current liabilities | 126,025 | 119,382 |
Long-term borrowings under senior credit facility | 413,125 | 186,875 |
Long-term convertible securities | 213,121 | 205,182 |
Deferred tax liabilities | 91,623 | 2,083 |
Other liabilities | 30,409 | 12,527 |
Total liabilities | 874,303 | 526,049 |
Commitments and contingencies | ||
Stockholders’ Equity: | ||
Preferred Stock; no par value; 15,000 authorized shares; none outstanding | 0 | 0 |
Common stock; $0.01 par value; 60,000 authorized shares; 41,644 and 41,042 issued at December 31, 2014 and 2013, respectively | 416 | 410 |
Additional paid-in capital | 779,555 | 750,918 |
Treasury stock, at cost; 8,903 shares at December 31, 2014 and 2013, respectively | -367,121 | -367,121 |
Accumulated other comprehensive income (loss) | -23,488 | 927 |
Retained earnings | 314,960 | 280,956 |
Total stockholders’ equity | 704,322 | 666,090 |
Total liabilities and stockholders’ equity | $1,578,625 | $1,192,139 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowances | $6,184 | $6,194 |
Preferred Stock, par value (in dollars per share) | ||
Preferred Stock, authorized shares (in shares) | 15,000,000 | 15,000,000 |
Preferred Stock, outstanding (in shares) | ||
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized (in shares) | 60,000,000 | 60,000,000 |
Common stock, shares issued (in shares) | 41,644,000 | 41,042,000 |
Treasury stock, shares (in shares) | 8,903,000 | 8,903,000 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
OPERATING ACTIVITIES: | |||
Net income (loss) | $34,004 | ($21,067) | $41,204 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 61,128 | 47,010 | 52,611 |
Non-cash impairment charges | 790 | 47,078 | 0 |
Deferred income tax provision (benefit) | -964 | -13,145 | 1,537 |
Share-based compensation | 15,105 | 10,393 | 9,051 |
Amortization of debt issuance costs | 2,571 | 2,298 | 2,725 |
Non-cash interest expense | 7,104 | 6,463 | 8,520 |
Payment of accreted interest | 0 | 0 | -30,617 |
Loss on disposal of property and equipment | 1,201 | 1,965 | 1,312 |
Excess tax benefits from stock-based compensation arrangements | -1,384 | -270 | -3,634 |
Change in fair value of contingent consideration | -764 | 0 | 0 |
Changes in assets and liabilities, net of business acquisitions: | |||
Accounts receivable | -16,145 | -2,892 | 3,783 |
Inventories | -27,006 | -35,505 | -711 |
Prepaid expenses and other current assets | 8,070 | 4,823 | -3,067 |
Other non-current assets | -1,744 | 441 | -553 |
Accounts payable, accrued expenses and other current liabilities | 2,427 | 9,945 | -21,071 |
Deferred revenue | 1,118 | 697 | -1,051 |
Other non-current liabilities | -6,048 | -4,966 | -939 |
Net cash provided by operating activities | 79,463 | 53,268 | 59,100 |
INVESTING ACTIVITIES: | |||
Cash used in business acquisitions, net of cash acquired | -320,921 | -2,980 | -7,278 |
Purchases of property and equipment | -41,921 | -47,851 | -69,031 |
Sales of property and equipment | 0 | 535 | 0 |
Purchases of short-term investments | 0 | 0 | -67,907 |
Maturities of short-term investments | 0 | 0 | 64,940 |
Other changes in intangible assets | -475 | 0 | 0 |
Net cash used in investing activities | -363,317 | -50,296 | -79,276 |
FINANCING ACTIVITIES: | |||
Borrowings under senior credit facility | 425,000 | 30,000 | 155,000 |
Repayments under senior credit facility | -195,000 | -165,000 | -12,812 |
Proceeds from the issuance of common stock, net of issuance costs | 0 | 152,458 | 0 |
Payment of liability component of convertible notes | 0 | 0 | -134,383 |
Payment of capital lease obligation | -605 | 0 | 0 |
Debt issuance costs | -3,210 | -1,053 | -385 |
Proceeds from exercised stock options | 15,215 | 2,344 | 696 |
Excess tax benefits from stock-based compensation arrangements | 1,384 | 270 | 3,634 |
Net cash provided by financing activities | 242,784 | 19,019 | 11,750 |
Effect of exchange rate changes on cash and cash equivalents | -7,550 | 1,685 | 4,556 |
Net increase (decrease) in cash and cash equivalents | -48,620 | 23,676 | -3,870 |
Cash and cash equivalents at beginning of period | 120,614 | 96,938 | 100,808 |
Cash and cash equivalents at end of period | $71,994 | $120,614 | $96,938 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
In Thousands, unless otherwise specified | ||||||
Balance at Dec. 31, 2011 | $492,638 | $357 | ($367,121) | $607,676 | ($9,093) | $260,819 |
Treasury Stock, shares at Dec. 31, 2011 | -8,903 | |||||
Common Stock, shares at Dec. 31, 2011 | 35,734 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 41,204 | 41,204 | ||||
Other comprehensive income (loss), net of tax | 4,296 | 4,296 | ||||
Issuance of common stock through employee benefit plans | 251 | 1 | 250 | |||
Issuance of common stock through employee benefit plans, shares | 9 | |||||
Share-based compensation | -20,614 | 11 | -20,625 | |||
Share-based compensation, shares | 1,109 | |||||
Balance at Dec. 31, 2012 | 517,775 | 369 | -367,121 | 587,301 | -4,797 | 302,023 |
Treasury Stock, shares at Dec. 31, 2012 | -8,903 | |||||
Common Stock, shares at Dec. 31, 2012 | 36,852 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | -21,067 | -21,067 | ||||
Other comprehensive income (loss), net of tax | 5,724 | 5,724 | ||||
Issuance of common stock through employee benefit plans | 234 | 0 | 234 | |||
Issuance of common stock through employee benefit plans, shares | 6 | |||||
Share-based compensation | 10,966 | 1 | 10,965 | |||
Share-based compensation, shares | 159 | |||||
Issuance of common stock | 152,458 | 40 | 152,418 | |||
Issuance of common stock, shares | 4,025 | |||||
Balance at Dec. 31, 2013 | 666,090 | 410 | -367,121 | 750,918 | 927 | 280,956 |
Treasury Stock, shares at Dec. 31, 2013 | -8,903 | -8,903 | ||||
Common Stock, shares at Dec. 31, 2013 | 41,042 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 34,004 | 34,004 | ||||
Other comprehensive income (loss), net of tax | -24,415 | -24,415 | ||||
Issuance of common stock through employee benefit plans | 286 | 0 | 286 | |||
Issuance of common stock through employee benefit plans, shares | 6 | |||||
Share-based compensation | 28,357 | 6 | 28,351 | |||
Share-based compensation, shares | 596 | |||||
Balance at Dec. 31, 2014 | $704,322 | $416 | ($367,121) | $779,555 | ($23,488) | $314,960 |
Treasury Stock, shares at Dec. 31, 2014 | -8,903 | -8,903 | ||||
Common Stock, shares at Dec. 31, 2014 | 41,644 |
BUSINESS
BUSINESS | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS | BUSINESS |
Integra LifeSciences Holdings Corporation (the “Company”) was incorporated in Delaware in 1989. The Company, a world leader in medical devices, is dedicated to limiting uncertainty for surgeons through the development, manufacturing, and marketing of cost-effective surgical implants and medical instruments. Its products are used primarily in neurosurgery, extremity reconstruction, orthopedics and general surgery. | |
The Company sells its products directly through various sales forces and through a variety of other distribution channels. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||||||||||||
BASIS OF PRESENTATION | ||||||||||||||||||||||||||||
These financial statements and the accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America and conform to Regulation S-X under the Securities Exchange Act of 1934, as amended. | ||||||||||||||||||||||||||||
PRINCIPLES OF CONSOLIDATION | ||||||||||||||||||||||||||||
The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly owned. All intercompany accounts and transactions are eliminated in consolidation. See Note 3, “Acquisitions and Pro Forma Results", for details of new subsidiaries included in the consolidation. | ||||||||||||||||||||||||||||
USE OF ESTIMATES | ||||||||||||||||||||||||||||
The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities, and the reported amounts of revenues and expenses. Significant estimates affecting amounts reported or disclosed in the consolidated financial statements include allowances for doubtful accounts receivable and sales returns and allowances, net realizable value of inventories, valuation of intangible assets and in-process research and development ("IPR&D"), amortization periods for acquired intangible assets, discount rates and estimated projected cash flows used to value and test impairments of long-lived assets and goodwill, estimates of projected cash flows, depreciation and amortization periods for long-lived assets, computation of taxes, valuation allowances recorded against deferred tax assets, the valuation of stock-based compensation, valuation of pension assets and liabilities, valuation of derivative instruments, valuation of the equity component of convertible debt instruments, and valuation of debt instruments and loss contingencies. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the current circumstances. Actual results could differ from these estimates. | ||||||||||||||||||||||||||||
OUT OF PERIOD ADJUSTMENTS | ||||||||||||||||||||||||||||
In the fourth quarter of 2013, income tax benefit was increased by $1.0 million for the cumulative effect of immaterial errors related to the Company's reserve for uncertain tax positions that related to prior periods. Of the $1.0 million increase, $0.9 million was to correct an error that was recorded in the deferred tax accounts in 2011, and the remainder of the error had an insignificant impact across 2012 and 2013. Based upon the Company's evaluation of relevant factors related to this matter, it concluded that the uncorrected adjustments in the previously issued consolidated financial statements for any of the periods affected are immaterial and that the impact of recording the cumulative correction in the fourth quarter of 2013 is not material to its earnings for the full year ending December 31, 2013. | ||||||||||||||||||||||||||||
In the fourth quarter of 2012, interest expense was reduced by $3.3 million for the cumulative correction of immaterial errors in capitalized interest on the Company's construction in progress balances related to prior periods. The $3.3 million decrease in interest expense reflects (a) $1.5 million of interest expense that should have been capitalized in previous quarters in 2012, and (b) $1.4 million and $0.4 million of interest expense that should have been capitalized in the years ended December 31, 2011 and 2010, respectively. The 2012 amount above includes $2.1 million, $1.4 million, and $0.4 million related to the first three quarters of 2012 and to the years ended December 31, 2011 and 2010, respectively. Based upon the Company's evaluation of relevant factors related to this matter, it concluded that the uncorrected adjustments in previously issued consolidated financial statements for any of the periods affected are immaterial and that the impact of recording the cumulative correction in the fourth quarter of 2012 is not material to its earnings for the full year ending December 31, 2012. | ||||||||||||||||||||||||||||
RECLASSIFICATIONS | ||||||||||||||||||||||||||||
Certain amounts from the prior years' financial statements have been reclassified in order to conform to the current year's presentation. | ||||||||||||||||||||||||||||
CHANGE IN ACCOUNTING PRINCIPLE AND REALIGNMENT OF SEGMENT REVENUES | ||||||||||||||||||||||||||||
Change in Accounting Principle | ||||||||||||||||||||||||||||
In the first quarter of 2014, the Company changed its method of accounting for the medical device excise tax (“MDET”). Prior to the change the Company recorded the MDET in inventory at the time of the first sale in the United States and then recognized the MDET in cost of goods sold when the medical device was sold to the ultimate customer. Under the new method, the MDET will be recorded in selling, general and administrative expenses in the period the first sale occurs in the United States, which could be an intercompany sale. | ||||||||||||||||||||||||||||
The Company believes that this change in accounting principle is preferable as the new method provides a better comparison with the Company's peers, the majority of which expense the MDET at the time of the first sale in the United States. | ||||||||||||||||||||||||||||
The medical device excise tax applies to sales beginning January 1, 2013; therefore, this change affected only 2013 financial results. The cumulative effect of the change in the prior year is included in retained earnings as of December 31, 2013. The Company has revised the comparative results for the twelve months ended December 31, 2013 to reflect the retrospective application of the change in accounting principle had the new method been in effect for all periods, as follows: | ||||||||||||||||||||||||||||
Condensed Consolidating Statements of Operations and Comprehensive Income: | ||||||||||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||||||
Originally | As | |||||||||||||||||||||||||||
Reported | Adjustments | Adjusted | ||||||||||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||||||||||
Cost of goods sold | $ | 334,085 | $ | (7,040 | ) | $ | 327,045 | |||||||||||||||||||||
Selling, general, and administrative | 394,250 | 13,552 | 407,802 | |||||||||||||||||||||||||
Income tax expense (benefit) | (7,813 | ) | (2,422 | ) | (10,235 | ) | ||||||||||||||||||||||
Net income (loss) | (16,977 | ) | (4,090 | ) | (21,067 | ) | ||||||||||||||||||||||
Basic net income (loss) per common share | $ | (0.60 | ) | $ | (0.14 | ) | $ | (0.74 | ) | |||||||||||||||||||
Diluted net income (loss) per common share | (0.60 | ) | (0.14 | ) | (0.74 | ) | ||||||||||||||||||||||
Comprehensive income (loss) | $ | (11,253 | ) | $ | (4,090 | ) | $ | (15,343 | ) | |||||||||||||||||||
Condensed Consolidated Balance Sheet: | ||||||||||||||||||||||||||||
31-Dec-13 | ||||||||||||||||||||||||||||
Originally | As | |||||||||||||||||||||||||||
Reported | Adjustments | Adjusted | ||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Inventories | $ | 213,431 | $ | (6,512 | ) | $ | 206,919 | |||||||||||||||||||||
Deferred tax assets - current | 46,300 | 2,316 | 48,616 | |||||||||||||||||||||||||
Prepaid expenses and other current assets | 26,752 | 106 | 26,858 | |||||||||||||||||||||||||
Retained earnings | 285,046 | (4,090 | ) | 280,956 | ||||||||||||||||||||||||
Condensed Consolidated Statements of Cash Flows: | ||||||||||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||||||
Originally | As | |||||||||||||||||||||||||||
Reported | Adjustments | Adjusted | ||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Net income (loss) | $ | (16,977 | ) | $ | (4,090 | ) | $ | (21,067 | ) | |||||||||||||||||||
Deferred income tax provision (benefit) | (10,829 | ) | (2,316 | ) | (13,145 | ) | ||||||||||||||||||||||
Inventories | (42,017 | ) | 6,512 | (35,505 | ) | |||||||||||||||||||||||
Prepaid and other current assets | 4,929 | (106 | ) | 4,823 | ||||||||||||||||||||||||
Realignment of Segment Revenues | ||||||||||||||||||||||||||||
In the first quarter of 2014 the Company realigned certain products between operating segments. The Company did not change its management structure and has determined that the Company still has the same five reportable segments. The impact of this immaterial change on all periods presented is that (i) the revenues and segment profit of the U.S. Extremities segment is lower, and U.S. Instruments and U.S. Spine and Other segments are higher, and (ii) the global revenues of the Orthopedics product category is lower and the Instruments product category is higher. These changes have been reflected in all periods presented. There has been no change in the Company's net revenues reported. | ||||||||||||||||||||||||||||
CASH AND CASH EQUIVALENTS | ||||||||||||||||||||||||||||
The Company considers all short-term, highly liquid investments purchased with original maturities of three months or less to be cash equivalents. These investments are carried at cost, which approximates fair value. | ||||||||||||||||||||||||||||
TRADE ACCOUNTS RECEIVABLE AND ALLOWANCES FOR DOUBTFUL ACCOUNTS RECEIVABLE | ||||||||||||||||||||||||||||
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company grants credit to customers in the normal course of business, but generally does not require collateral or any other security to support its receivables. | ||||||||||||||||||||||||||||
The Company evaluates the collectability of accounts receivable based on a combination of factors. In circumstances where a specific customer is unable to meet its financial obligations to the Company, a provision to the allowances for doubtful accounts is recorded against amounts due to reduce the net recognized receivable to the amount that is reasonably expected to be collected. For all other customers, a provision to the allowances for doubtful accounts is recorded based on factors including the length of time the receivables are past due, the current business environment and the Company's historical experience. Provisions to the allowances for doubtful accounts are recorded to selling, general and administrative expenses. Account balances are charged off against the allowance when it is probable that the receivable will not be recovered. | ||||||||||||||||||||||||||||
INVENTORIES | ||||||||||||||||||||||||||||
Inventories, consisting of purchased materials, direct labor and manufacturing overhead, are stated at the lower of cost, the value determined by the first-in, first-out method, or market. Inventories consisted of the following: | ||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||
(As adjusted)* | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Finished goods | $ | 150,483 | $ | 123,786 | ||||||||||||||||||||||||
Work in process | 50,166 | 47,403 | ||||||||||||||||||||||||||
Raw materials | 36,465 | 35,730 | ||||||||||||||||||||||||||
Total inventories, net | $ | 237,114 | $ | 206,919 | ||||||||||||||||||||||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. Impact of adjustment was recorded to finished goods. | ||||||||||||||||||||||||||||
At each balance sheet date, the Company evaluates inventories for excess quantities, obsolescence or shelf life expiration. This evaluation includes analysis of historical sales levels by product, projections of future demand, the risk of technological or competitive obsolescence for products, general market conditions, a review of the shelf life expiration dates for products, as well as the feasibility of reworking or using excess or obsolete products or components in the production or assembly of other products that are not obsolete or for which there are not excess quantities in inventory. To the extent that management determines there are excess or obsolete inventory or quantities with a shelf life that is too near its expiration for the Company to reasonably expect that it can sell those products prior to their expiration, the Company adjusts the carrying value to estimated net realizable value. | ||||||||||||||||||||||||||||
The Company capitalizes inventory costs associated with certain products prior to regulatory approval, based on management's judgment of probable economic benefit. The Company could be required to expense previously capitalized costs related to pre-approval inventory upon a change in such judgment, due to, among other potential factors, a denial or delay of approval by necessary regulatory bodies or a decision by management to discontinue the related development program. No such amounts were capitalized at December 31, 2014 or 2013. | ||||||||||||||||||||||||||||
PROPERTY, PLANT AND EQUIPMENT | ||||||||||||||||||||||||||||
Property, plant and equipment are stated at historical cost less accumulated depreciation and any impairment charges. The Company provides for depreciation using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the lesser of the lease term or the useful life. The cost of major additions and improvements is capitalized, while maintenance and repair costs that do not improve or extend the lives of the respective assets are charged to operations as incurred. The cost of computer software developed or obtained for internal use is accounted for in accordance with the Accounting Standards Codification 350-40, Internal-Use Software. | ||||||||||||||||||||||||||||
Property, plant and equipment balances and corresponding lives were as follows: | ||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | Useful Lives | ||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Land | $ | 3,308 | $ | 3,022 | ||||||||||||||||||||||||
Buildings and building improvements | 16,272 | 15,377 | 5-40 years | |||||||||||||||||||||||||
Leasehold improvements | 45,416 | 42,900 | 1-20 years | |||||||||||||||||||||||||
Machinery and production equipment | 92,149 | 86,192 | 3-20 years | |||||||||||||||||||||||||
Surgical instrument kits | 32,551 | 30,352 | 4-5 years | |||||||||||||||||||||||||
Information systems and hardware | 92,392 | 51,171 | 1-7 years | |||||||||||||||||||||||||
Furniture, fixtures, and office equipment | 15,517 | 16,363 | 1-15 years | |||||||||||||||||||||||||
Construction-in-progress | 86,844 | 112,130 | ||||||||||||||||||||||||||
Total | 384,449 | 357,507 | ||||||||||||||||||||||||||
Less: Accumulated depreciation | (174,463 | ) | (157,197 | ) | ||||||||||||||||||||||||
Property, plant and equipment, net | $ | 209,986 | $ | 200,310 | ||||||||||||||||||||||||
Depreciation expense associated with property, plant and equipment was $30.2 million, $27.6 million, and $27.5 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||||||||||||||||
The Company leases certain computer equipment under capital lease agreements. The gross carrying value of such leases amounted to $2.0 million and $1.6 million at December 31, 2014 and 2013, respectively. The accumulated depreciation of such leases amounted to $0.7 million and $0.1 million at December 31, 2014 and 2013, respectively, and the cost is included as a component of furniture, fixtures, office equipment and information systems and hardware. | ||||||||||||||||||||||||||||
CAPITALIZED INTEREST | ||||||||||||||||||||||||||||
The interest cost on capital projects, including facilities build-out and internal use software, is capitalized and included in the cost of the project. Capitalization commences with the first expenditure for the project and continues until the project is substantially complete and ready for its intended use. When no debt is incurred specifically for a project, interest is capitalized on project expenditures using the weighted average cost of the Company's outstanding borrowings. For the years ended December 31, 2014 and 2013, respectively, the Company capitalized $2.6 million and $3.2 million and of interest expense into property, plant and equipment. | ||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||||||||||||||||||||||||||||
The excess of the cost over the fair value of net assets of acquired businesses is recorded as goodwill. Goodwill is not subject to amortization, but is reviewed for impairment at the reporting unit level annually, or more frequently if impairment indicators arise. The Company's assessment of the recoverability of goodwill is based upon a comparison of the carrying value of goodwill with its estimated fair value. The Company reviews goodwill for impairment annually as of July 31 and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. In reviewing goodwill for impairment, the Company has the option - for any or all of its reporting units that carry goodwill - to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (i.e. greater than 50%) that the estimated fair value of a reporting unit is less than its carrying amount. If the Company elects to perform a qualitative assessment and determines that an impairment is more likely than not, the Company is then required to perform the two-step quantitative impairment test, otherwise no further analysis is required. The Company also may elect not to perform the qualitative assessment and, instead, proceed directly to step one of the two-step quantitative impairment test. The ultimate outcome of the goodwill impairment review for a reporting unit should be the same whether the Company chooses to perform the qualitative assessment or proceeds directly to the two-step quantitative impairment test. The most recent two-step quantitative impairment test completed for each reporting unit was as of July 31, 2013 (the "Base Valuation"), which resulted in the full impairment of goodwill held by the U.S. Spine reporting unit. At July 31, 2014 the following reporting units carried goodwill: U.S. Neurosurgery, U.S. Instruments, U.S. Extremities, Private Label, EMEA and LAPAC. | ||||||||||||||||||||||||||||
At July 31, 2014, management performed a comprehensive analysis of various events and circumstances (i.e. factors) that would likely affect the estimated fair value of all of its reporting units that carried goodwill at that date, and whether those factors would have a positive or negative impact on the fair value of the reporting unit when compared to the Base Valuation. Management considered Company-wide factors such as, but not limited to (i) macroeconomic conditions, (ii) industry conditions, (iii) the Company's overall financial prospects and market capitalization, (iv) the competitive environment, (v) regulatory and political developments, and (vi) any changes in the Company's weighted average cost of capital ("WACC"). Management also considered reporting unit specific factors such as, but not limited to (i) changes in the market for products and services, (ii) strategic business changes, (iii) reporting unit financial performance, (iv) management's most recent prospective revenue estimates, (v) the prospective cost burden of the reporting units, (vi) changes in a reporting unit's management, (vii) how any change in the Company's WACC above might impact the reporting unit specific WACC, and (viii) the suitability of the risk premiums on the reporting unit specific WACC. These factors are then classified by the type of impact they would have on the estimated fair value using positive, neutral, and adverse categories based on current business conditions. The Company then performs an assessment of the level of impact that a particular factor would have on the estimated fair value using high, medium, and low weighting. Finally, management considered all of the factors above in the context of the results of the Base Valuation, and whether it is more likely than not that the carrying value of any of the reporting units that have goodwill exceeds their individual fair value. | ||||||||||||||||||||||||||||
Management concluded that at July 31, 2014, based on the totality of information available for each reporting unit that carried goodwill, it was more likely than not that the estimated fair values of the U.S. Neurosurgery, U.S. Extremities, Private Label, EMEA and LAPAC reporting units were greater than their carrying values, and as such, no further analysis was required for those reporting units. The Company proceeded to step one of the quantitative goodwill impairment test for the U.S. Instruments reporting unit, primarily as a result of recent declines in that reporting unit's revenues. | ||||||||||||||||||||||||||||
To derive the fair value of the U.S. Instruments reporting unit, as required in step one of the impairment test, the Company used the income approach, specifically the discounted cash flow ("DCF") method, which incorporates significant estimates and assumptions made by management which, by their nature, are characterized by uncertainty. Inputs used to fair value the Company's reporting units are considered inputs of the fair value hierarchy. For Level 3 measurements, significant increases or decreases in long-term growth rates or discount rates in isolation or in combination could result in a significantly lower or higher fair value measurement. The key assumptions impacting the valuation included: | ||||||||||||||||||||||||||||
• | The reporting unit's financial projections, which are based on management's assessment of regional and macroeconomic variables, industry trends and market opportunities, and the Company's strategic objectives and future growth plans. | |||||||||||||||||||||||||||
• | The projected terminal value for the reporting unit, which represents the present value of projected cash flows beyond the last period in the discounted cash flow analysis. The terminal value reflects the Company's assumptions related to long-term growth rates and profitability, which are based on several factors, including local and macroeconomic variables, market opportunities, and future growth plans. | |||||||||||||||||||||||||||
• | The discount rate used to measure the present value of the projected future cash flows is set using a weighted-average cost of capital method that considers market and industry data as well as the Company's specific risk factors that are likely to be considered by a market participant. The weighted-average cost of capital is the Company's estimate of the overall after-tax rate of return required by equity and debt holders of a business enterprise. | |||||||||||||||||||||||||||
The Company determined, after performing the Step-1 fair value analysis above, that the U.S. Instruments reporting unit's fair value was in excess of its carrying value; therefore, it was not necessary to proceed to Step-2 of the goodwill impairment test for the U.S. Instruments reporting unit. | ||||||||||||||||||||||||||||
On July 31, 2013, the Company performed the annual goodwill impairment test which resulted in a non-cash goodwill impairment charge of $46.7 million recorded in the third quarter of 2013, representing the remaining goodwill balance in the U.S. Spine reporting unit which is a part of the U.S. Spine and Other reportable segment. During the fourth quarter of 2013, the Company finalized the step two analysis related to its impairment assessment of the goodwill and there were no changes to the impairment initially recorded. Approximately $16.2 million of the goodwill impairment charge was deductible for tax purposes. | ||||||||||||||||||||||||||||
As previously disclosed, the Company was monitoring its U.S. Spine business and disclosed that it was at risk for impairment. During the course of the annual strategic planning process performed during the third quarter of 2013, the Company determined that both the actual and expected income and cash flows for the U.S. Spine reporting unit were projected to be substantially lower than forecasts, and the U.S. spine market recovery may take longer than originally forecasted, including the current expectation of future significant negative pricing pressures. Factors that contributed to the impairment of the U.S. Spine reporting unit included broader market issues as well as company-specific issues. Company-specific issues included turnover of some distributors, significant delays in new product introductions and other operational issues that negatively impacted and decreased projected revenues by a material amount. As a result, the Company lowered its expectations of recovery in the U.S. market and its related impact on the U.S. Spine reporting unit. This revised outlook resulted in a reduction of the U.S. Spine forecasts of the sales, operating income and cash flows expected in 2014 and beyond and consequently, resulted in an impairment charge. | ||||||||||||||||||||||||||||
Changes in the carrying amount of goodwill in 2014 and 2013 were as follows: | ||||||||||||||||||||||||||||
U.S. | U.S. | U.S. | U.S. | International | Total | |||||||||||||||||||||||
Neurosurgery | Instruments | Extremities | Spine | |||||||||||||||||||||||||
and | ||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Goodwill, gross | $ | 95,165 | $ | 58,033 | $ | 61,079 | $ | 56,325 | $ | 25,900 | $ | 296,502 | ||||||||||||||||
Accumulated impairment losses | — | — | — | (46,738 | ) | — | (46,738 | ) | ||||||||||||||||||||
Goodwill at December 31, 2013 | $ | 95,165 | $ | 58,033 | $ | 61,079 | $ | 9,587 | $ | 25,900 | $ | 249,764 | ||||||||||||||||
Confluent Surgical, Inc. acquisition | 95,373 | — | — | — | 9,958 | 105,331 | ||||||||||||||||||||||
MicroFrance acquisition | — | — | — | — | 16,614 | 16,614 | ||||||||||||||||||||||
Metasurg acquisition | — | — | 469 | — | — | 469 | ||||||||||||||||||||||
Foreign currency translation | (4,248 | ) | (1,290 | ) | (1,369 | ) | (213 | ) | (1,170 | ) | (8,290 | ) | ||||||||||||||||
Balance, December 31, 2014 | $ | 186,290 | $ | 56,743 | $ | 60,179 | $ | 9,374 | $ | 51,302 | $ | 363,888 | ||||||||||||||||
Identifiable intangible assets are initially recorded at fair market value at the time of acquisition generally using an income or cost approach. The Company capitalizes costs incurred to renew or extend the term of recognized intangible assets and amortizes those costs over their expected useful lives. | ||||||||||||||||||||||||||||
The components of the Company's identifiable intangible assets were as follows: | ||||||||||||||||||||||||||||
Weighted | December 31, 2014 | Weighted | December 31, 2013 | |||||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||||||
Life | Cost | Accumulated | Net | Life | Cost | Accumulated | Net | |||||||||||||||||||||
Amortization | Amortization | |||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||
Completed technology | 18 years | $ | 345,082 | $ | (62,920 | ) | $ | 282,162 | 12 years | $ | 81,238 | $ | (45,343 | ) | $ | 35,895 | ||||||||||||
Customer relationships | 12 years | 162,031 | (87,653 | ) | 74,378 | 12 years | 146,627 | (79,624 | ) | 67,003 | ||||||||||||||||||
Trademarks/brand names | 34 years | 44,520 | (15,755 | ) | 28,765 | 31 years | 33,703 | (15,648 | ) | 18,055 | ||||||||||||||||||
Trademarks/brand names | Indefinite | 48,484 | — | 48,484 | Indefinite | 48,484 | — | 48,484 | ||||||||||||||||||||
Supplier relationships | 27 years | 34,721 | (10,809 | ) | 23,912 | 27 years | 34,721 | (9,305 | ) | 25,416 | ||||||||||||||||||
All other (1) | 4 years | 4,810 | (3,052 | ) | 1,758 | 4 years | 4,251 | (1,941 | ) | 2,310 | ||||||||||||||||||
$ | 639,648 | $ | (180,189 | ) | $ | 459,459 | $ | 349,024 | $ | (151,861 | ) | $ | 197,163 | |||||||||||||||
-1 | At December 31, 2014 and 2013, all other included IPR&D of $1.4 million which was indefinite-lived. | |||||||||||||||||||||||||||
The Company performs its assessment of the recoverability of indefinite-lived intangible assets annually during the second quarter, or more frequently as impairment indicators arise, and it is based upon a comparison of the carrying value of such assets to their estimated fair values. The Company performed its most recent annual assessment during the second quarter of 2014, which resulted in no impairments. | ||||||||||||||||||||||||||||
During 2014, the Company recorded impairment charges of $0.2 million in research and development expense related to IPR&D projects primarily acquired in connection with the Metasurg acquisition. In connection with this acquisition, we acquired IPR&D related to a product that will be discontinued. Therefore, a full-impairment of acquired IPR&D was recorded in the Company's selling, general, and administrative expenses. We also recorded an impairment charge of $0.6 million in cost of sales related to acquired technology product rights in conjunction with the Covidien acquisition. Subsequent to the acquisition date, a regulatory event occurred that was not known, or knowable, at the time of acquisition which resulted in the impairment. | ||||||||||||||||||||||||||||
During 2013, the Company recorded impairment charges of $0.4 million in research and development expense related to IPR&D projects that have been discontinued in its U.S Extremities segment. | ||||||||||||||||||||||||||||
During 2012, the Company recorded impairment charges of $0.1 million in cost of goods sold of its U.S. Neurosurgery segment related to technology assets whose related products were being discontinued. | ||||||||||||||||||||||||||||
Amortization expense for the years ended December 31, 2014, 2013 and 2012 was $31.8 million, $19.4 million and $25.1 million, respectively. Annual amortization expense (including amounts reported in cost of product revenues, but excluding any possible future amortization associated with acquired IPR&D) is expected to approximate $32.1 million in 2015, $29.9 million in 2016, $27.8 million in 2017, $27.5 million in 2018 and $26.7 million in 2019. Amortization of product technology based intangible assets totaled $19.3 million, $6.7 million and $6.6 million for the years ended December 31, 2014, 2013 and 2012, respectively, and is presented by the Company within cost of goods sold. | ||||||||||||||||||||||||||||
LONG-LIVED ASSETS | ||||||||||||||||||||||||||||
Long-lived assets held and used by the Company, including property, plant and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets to be held and used, a recoverability test is performed using projected undiscounted net cash flows applicable to the long-lived assets. If an impairment exists, the amount of such impairment is calculated based on the estimated fair value of the asset. Impairments to long-lived assets to be disposed of are recorded based upon the difference between the carrying value and the fair value of the applicable assets. | ||||||||||||||||||||||||||||
INTEGRA FOUNDATION | ||||||||||||||||||||||||||||
The Company may periodically make contributions to the Integra Foundation, Inc. The Integra Foundation was incorporated in 2002 exclusively for charitable, educational, and scientific purposes and qualifies under IRC 501(c)(3) as an exempt private foundation. Under its charter, the Integra Foundation engages in activities that promote health, the diagnosis and treatment of disease, and the development of medical science through grants, contributions and other appropriate means. The Integra Foundation is a separate legal entity and is not a subsidiary of the Company; therefore, its results are not included in these consolidated financial statements. The Company contributed $0.6 million, $0.6 million and $1.0 million to the Integra Foundation during the years ended December 31, 2014, 2013 and 2012, respectively. These contributions were recorded in selling, general, and administrative expense. | ||||||||||||||||||||||||||||
DERIVATIVES | ||||||||||||||||||||||||||||
The Company develops, manufactures, and sells medical devices globally, and its earnings and cash flows are exposed to market risk from changes in interest rates and currency exchange rates. The Company addresses these risks through a risk management program that includes the use of derivative financial instruments, and operates the program pursuant to documented corporate risk management policies. All derivative financial instruments are recognized in the financial statements at fair value in accordance with the authoritative guidance. Under the guidance, for those instruments that are designated and qualify as hedging instruments, the hedging instrument must be designated as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation, based on the exposure being hedged. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. The Company's derivative instruments do not subject its earnings or cash flows to material risk, and gains and losses on these derivatives generally offset losses and gains on the item being hedged. The Company has not entered into derivative transactions for speculative purposes and from time to time, the Company may enter into derivatives that are not designated as hedging instruments in order to protect itself from currency volatility due to intercompany balances. | ||||||||||||||||||||||||||||
All derivative instruments are recognized at their fair values as either assets or liabilities on the balance sheet. The Company determines the fair value of its derivative instruments, using the framework prescribed by the authoritative guidance, by considering the estimated amount the Company would receive to sell or transfer these instruments at the reporting date and by taking into account: expected forward interest rates, currency exchange rates, the creditworthiness of the counterparty for assets, and its creditworthiness for liabilities. In certain instances, the Company utilizes a discounted cash flow model to measure fair value. Generally, the Company uses inputs that include quoted prices for similar assets or liabilities in active markets, other observable inputs for the asset or liability and inputs derived principally from, or corroborated by, observable market data by correlation or other means. The Company has classified all of its derivative assets and liabilities within Level 2 of the fair value hierarchy because observable inputs are available for substantially the full term of its derivative instruments. The Company classifies derivatives that meet the definition of hedges in the same category as the item being hedged for cash flow presentation purposes. | ||||||||||||||||||||||||||||
FOREIGN CURRENCY | ||||||||||||||||||||||||||||
All assets and liabilities of foreign subsidiaries which have a functional currency other than the U.S. dollar are translated at the rate of exchange at year-end, while elements of the income statement are translated at the average exchange rates in effect during the year. The net effect of these translation adjustments is shown as a component of accumulated other comprehensive income (loss). These currency translation adjustments are not currently adjusted for income taxes as they relate to permanent investments in non-U.S. subsidiaries. Foreign currency transaction gains and losses are reported in other income (expense), net. | ||||||||||||||||||||||||||||
INCOME TAXES | ||||||||||||||||||||||||||||
Income taxes are accounted for by using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. | ||||||||||||||||||||||||||||
The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. Reserves are established for positions that don't meet this recognition threshold. The reserve is measured as the largest amount of benefit determined on a cumulative probability basis that the Company believes is more likely than not to be realized upon ultimate settlement of the position. These reserves are classified as long-term liabilities in the consolidated balance sheets of the Company. The Company also records interest and penalties accrued in relation to uncertain tax benefits as a component of income tax expense. | ||||||||||||||||||||||||||||
While the Company believes it has identified all reasonably identifiable exposures and the reserve it has established for identifiable exposures is appropriate under the circumstances, it is possible that additional exposures exist and that exposures may be settled at amounts different than the amounts reserved. It is also possible that changes in facts and circumstances could cause the Company to either materially increase or reduce the carrying amount of its tax reserve. | ||||||||||||||||||||||||||||
The Company continues to indefinitely reinvest substantially all of its foreign earnings. Our current analysis indicates that we have sufficient U.S. liquidity, including borrowing capacity, to fund foreseeable U.S. cash needs without requiring the repatriation of foreign cash. As of December 31, 2014, taxes have not been provided on approximately $223.5 million of accumulated foreign unremitted earnings on certain non-US subsidiaries that are expected to remain invested indefinitely. The unrecognized deferred tax liability associated with these temporary differences was estimated to be $36.4 million. One time or unusual items that may impact our ability or intent to keep our foreign earnings and cash indefinitely reinvested include significant U.S. acquisitions, loans from a foreign subsidiary, changes in tax laws. | ||||||||||||||||||||||||||||
REVENUE RECOGNITION | ||||||||||||||||||||||||||||
Total revenues, net, include product sales, product royalties and other revenues, such as fees received under research, licensing, distribution arrangements, research grants, and technology-related royalties. | ||||||||||||||||||||||||||||
Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred; title and risk of loss have passed to the customer, there is a fixed or determinable sales price, and collectability of that sales price is reasonably assured. For product sales, the Company's stated terms are primarily FOB shipping point and with most customers, title and risk of loss pass to the customer at that time. With certain United States customers, the Company retains risk of loss until the customers receive the product, and in those situations, the Company recognizes revenue upon receipt by the customer. A portion of the Company's product revenue is generated from consigned inventory maintained at hospitals and distributors, and also from inventory physically held by field sales representatives. For these types of products sales, the Company retains title until receiving appropriate notification that the product has been used or implanted, at which time revenue is recognized. | ||||||||||||||||||||||||||||
Each revenue transaction is evidenced by either a contract with the customer or a valid purchase order and an invoice which includes all relevant terms of sale. There are generally no significant customer acceptance or other conditions that prevent the Company from recognizing revenue in accordance with its delivery terms. In certain cases, where the Company has performance obligations that are significant to the functionality of the product, the Company recognizes revenue upon fulfillment of its obligation. | ||||||||||||||||||||||||||||
Sales invoices issued to customers contain the Company's price for each product or service. The Company performs a review of each specific customer's credit worthiness and ability to pay prior to accepting them as a customer. Further, the Company performs periodic reviews of its customers' status prospectively. | ||||||||||||||||||||||||||||
The Company records a provision for estimated returns and allowances on revenues in the same period as the related revenues are recorded. These estimates are based on historical sales returns and discounts and other known factors. The provisions are recorded as a reduction to revenues. | ||||||||||||||||||||||||||||
The Company's return policy, as set forth in its product catalogs and sales invoices, requires the Company to review and authorize the return of product in advance. Upon authorization, a credit will be issued for goods returned within a set amount of days from shipment, which is generally ninety days. | ||||||||||||||||||||||||||||
Product royalties are estimated and recognized in the same period that the royalty-based products are sold by the Company's strategic partners. The Company estimates and recognizes royalty revenue based upon communication with licensees, historical information and expected sales trends. Differences between actual revenues and estimated royalty revenues are adjusted in the period in which they become known, which is typically the following quarter. Historically, such adjustments have not been significant. | ||||||||||||||||||||||||||||
Other operating revenues may include fees received under research, licensing, and distribution arrangements, technology-related royalties and research grants. Non-refundable fees received under research, licensing and distribution arrangements or for the licensing of technology are recognized as revenue when received if the Company has no continuing obligations to the other party. For those arrangements where the Company has continuing performance obligations, revenue is recognized using the lesser of the amount of non-refundable cash received or the result achieved using the proportional performance method of accounting based upon the estimated cost to complete these obligations. Research grant revenue is recognized when the related expenses are incurred. | ||||||||||||||||||||||||||||
SHIPPING AND HANDLING FEES AND COSTS | ||||||||||||||||||||||||||||
Amounts billed to customers for shipping and handling are included in revenues. The related shipping and freight charges incurred by the Company are included in cost of goods sold. Distribution and handling costs of $14.3 million, $14.1 million and $13.6 million were recorded in selling, general and administrative expense during the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||||||||||||||||
PRODUCT WARRANTIES | ||||||||||||||||||||||||||||
Certain of the Company's medical devices, including monitoring systems and neurosurgical systems, are reusable and are designed to operate over long periods of time. These products are sold with warranties which may extend for up to two years from date of purchase. The Company accrues estimated product warranty costs at the time of sale based on historical experience. Any additional amounts are recorded when such costs are probable and can be reasonably estimated. Accrued warranty expense of $0.3 million is recorded in the consolidated balance sheet at December 31, 2014 and 2013. | ||||||||||||||||||||||||||||
RESEARCH AND DEVELOPMENT | ||||||||||||||||||||||||||||
Research and development costs, including salaries, depreciation, consultant and other external fees, and facility costs directly attributable to research and development activities, are expensed in the period in which they are incurred. | ||||||||||||||||||||||||||||
IPR&D recorded in connection with acquisitions represent the value assigned to acquired assets to be used in research and development activities and for which there is no alternative use. Value is generally assigned to these assets based on the net present value of the projected cash flows expected to be generated by those assets. | ||||||||||||||||||||||||||||
During 2014 the Company capitalized $0.2 million of IPR&D as a result of current-year acquisitions, and there was $0.3 million capitalized in 2013. However, the full amount of the 2014 capitalized IPR&D was impaired due to regulatory events occurring subsequent to the acquisition date and the Company's decision not to pursue acquired projects. | ||||||||||||||||||||||||||||
EMPLOYEE TERMINATION BENEFITS AND OTHER EXIT-RELATED COSTS | ||||||||||||||||||||||||||||
The Company does not have a written severance plan, and it does not offer similar termination benefits to affected employees in all restructuring initiatives. Accordingly, in situations where minimum statutory termination benefits must be paid to the affected employees, the Company records employee severance costs associated with these restructuring activities in accordance with the authoritative guidance for non-retirement post-employment benefits. Charges associated with these activities are recorded when the payment of benefits is probable and can be reasonably estimated. In all other situations where the Company pays out termination benefits, including supplemental benefits paid in excess of statutory minimum amounts and benefits offered to affected employees based on management's discretion, the Company records these termination costs in accordance with the authoritative guidance for ASC Topic 712 Compensation-Nonretirement Benefits and ASC Topic 420 One-time Employee Termination Benefits. | ||||||||||||||||||||||||||||
The timing of the recognition of charges for employee severance costs other than minimum statutory benefits depends on whether the affected employees are required to render service beyond their legal notification period in order to receive the benefits. If affected employees are required to render service beyond their legal notification period, charges are recognized ratably over the future service period. Otherwise, charges are recognized when management has approved a specific plan and employee communication requirements have been met. | ||||||||||||||||||||||||||||
For leased facilities and equipment that have been abandoned, the Company records estimated lease losses based on the fair value of the lease liability, as measured by the present value of future lease payments subsequent to abandonment, less the present value of any estimated sublease income on the cease-use date. For owned facilities and equipment that will be disposed of, the Company records impairment losses based on fair value less costs to sell. The Company also reviews the remaining useful life of long-lived assets following a decision to exit a facility and may accelerate depreciation or amortization of these assets, as appropriate. | ||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | ||||||||||||||||||||||||||||
The Company applies the authoritative guidance for stock-based compensation. This guidance requires companies to recognize the expense related to the fair value of their stock-based compensation awards. Stock-based compensation expense for stock option awards granted after January 1, 2006 was based on the fair value on the grant date using the binomial distribution model. The Company recognized compensation expense for stock option awards, restricted stock awards, performance stock awards and contract stock awards on a ratable basis over the requisite service period of the award. The long form method was used in the determination of the windfall tax benefit in accordance with the guidance. | ||||||||||||||||||||||||||||
PENSION BENEFITS | ||||||||||||||||||||||||||||
Defined benefit pension plans cover certain employees and retirees in the U.K. and former employees in Germany. Various factors are considered in determining the pension liability, including the number of employees expected to be paid their salary levels and years of service, the expected return on plan assets, the discount rate used to determine the benefit obligations, the timing of benefit payments and other actuarial assumptions. If the actual results and events for the pension plans differ from current assumptions, the benefit obligation may be over or under valued. | ||||||||||||||||||||||||||||
Retirement benefit plan assumptions are reassessed on an annual basis or more frequently if changes in circumstances indicate a re-evaluation of assumptions are required. The key benefit plan assumptions are the discount rate and expected rate of return on plan assets. The discount rate is based on average rates on bonds that matched the expected cash outflows of the benefit plans. The expected rate of return is based on historical and expected returns on the various categories of plan assets. | ||||||||||||||||||||||||||||
Pension contributions are expected to be consistent over the next few years since the Germany and U.K. plans are frozen. Contributions to the plans during the years ended December 31, 2014, 2013 and 2012 were $0.9 million, $0.8 million and $0.8 million, respectively. | ||||||||||||||||||||||||||||
CONCENTRATION OF CREDIT RISK | ||||||||||||||||||||||||||||
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents, which are held at major financial institutions, investment-grade marketable debt securities and trade receivables. | ||||||||||||||||||||||||||||
The Company's products are sold on an uncollateralized basis and on credit terms based upon a credit risk assessment of each customer. A portion of the Company's trade receivables to customers outside the United States includes sales to foreign distributors, who then sell to government owned or supported healthcare systems. The ongoing economic conditions in certain European countries, especially Greece, Ireland, Italy, Portugal and Spain remain uncertain. Accounts receivable from customers in these countries was approximately $6.2 million at December 31, 2014, of which $0.3 million was reserved. At December 31, 2013, the accounts receivable from customers in these countries was $6.1 million, of which $0.7 million was reserved. | ||||||||||||||||||||||||||||
None of the Company's customers accounted for 10% or more of the consolidated net sales during the years ended December 31, 2014, 2013 and 2012. | ||||||||||||||||||||||||||||
RECENTLY ISSUED AND ADOPTED ACCOUNTING STANDARDS | ||||||||||||||||||||||||||||
In July 2013, the FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This updated guidance requires an unrecognized tax benefit to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, similar tax loss, or a tax credit carryforward. To the extent the tax benefit is not available at the reporting date under the governing tax law or if the entity does not intend to use the deferred tax asset for such purpose, the unrecognized tax benefit should be presented as a liability and not combined with deferred tax assets. This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2013 for public entities and early adoption is permitted. The amendments are to be applied to all unrecognized tax benefits that exist as of the effective date and may be applied retrospectively to each prior reporting period presented. The standard adoption did not have a material impact on the Company's financial statements. | ||||||||||||||||||||||||||||
In April 2014, the FASB issued amendments to guidance for reporting discontinued operations and disposals of components of an entity. The amended guidance requires that a disposal representing a strategic shift that has (or will have) a major effect on an entity’s financial results or a business activity classified as held for sale should be reported as discontinued operations. The amendments also expand the disclosure requirements for discontinued operations and add new disclosures for individually significant dispositions that do not qualify as discontinued operations. The amendments are effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2014 (early adoption is permitted only for disposals that have not been previously reported). The implementation of the amended guidance is not expected to have a material impact on the Company's consolidated financial position or results of operations, however, it will likely increase required footnote disclosures. | ||||||||||||||||||||||||||||
In May 2014, the FASB issued Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of the guidance is that an entity should recognize revenue to depict 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. To achieve that core principle, an entity should: 1) identify the contract(s) with a customer, 2) identify the performance obligations in the contract, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract, and 5) recognize revenue when (or as) the entity satisfies a performance obligation. This update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and early adoption is not permitted. The Company is in the process of evaluating the impact of this standard on its financial statements. | ||||||||||||||||||||||||||||
In June 2014, the FASB issued Update No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (Topic 718). The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This update is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period, and early adoption is permitted. The implementation of the amended guidance is not expected to have a material impact on the Company's consolidated financial position or results of operations. | ||||||||||||||||||||||||||||
There are no other recently issued accounting pronouncements that are expected to have a material effect on the Company's financial position, results of operations or cash flows. | ||||||||||||||||||||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||||||||||||||||||||||
In addition to the payment of accreted interest associated with the settlement of the 2012 Convertible Notes, cash paid for interest during the years ended December 31, 2014, 2013 and 2012 was $10.9 million (net of $2.6 million that was capitalized into construction in progress), $9.5 million (net of $3.2 million that was capitalized into construction in progress) and $12.0 million (net of $2.1 million that was capitalized into construction in progress), respectively. | ||||||||||||||||||||||||||||
Cash paid for income taxes for the years ended December 31, 2014, 2013 and 2012 was $10.9 million, $7.6 million and $12.7 million, respectively. | ||||||||||||||||||||||||||||
Property and equipment purchases included in liabilities at December 31, 2014, 2013 and 2012 were $3.6 million, $8.6 million and $9.5 million, respectively. |
ACQUISITIONS_AND_PRO_FORMA_RES
ACQUISITIONS AND PRO FORMA RESULTS | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Business Combinations [Abstract] | |||||||
ACQUISITIONS AND PRO FORMA RESULTS | ACQUISITIONS AND PRO FORMA RESULTS | ||||||
Metasurg | |||||||
On December 5, 2014, the Company acquired certain assets of Koby Ventures II, L.P. dba Metasurg ("Metasurg") for an aggregate purchase price of $27.2 million. The purchase price consists of an initial cash payment to Metasurg of $26.5 million and contingent consideration with an acquisition date fair value of $0.7 million. The potential maximum undiscounted contingent consideration of $38.5 million is based on reaching certain sales of acquired products. The fair value of this liability is based on future sales projections of the Metasurg product under various potential scenarios and weighting the probability of these outcomes for the period ended December 31, 2015. At the date of the acquisition, the cash flow projection was discounted using an internal rate of return of 19.9%. These fair value measurements were based on significant inputs not observed in the market and thus represented a Level 3 measurement. | |||||||
Metasurg develops intuitive implant systems for the foot and ankle market and sells almost entirely in the U.S. market. The acquired foot and ankle products will enhance the Company's lower extremities market position. | |||||||
The following summarizes the preliminary allocation of the purchase price as of December 31, 2014 based on the fair value of the assets acquired and liabilities assumed: | |||||||
Preliminary Purchase Price | |||||||
Allocation | |||||||
(Dollars in thousands) | |||||||
Inventory | $ | 4,730 | |||||
Property, plant, and equipment | 1,171 | ||||||
Intangible assets: | Wtd. Avg. Life: | ||||||
Technology product rights | 20,590 | 8 - 14 Years | |||||
In-process research and development | 190 | Indefinite | |||||
Goodwill | 469 | ||||||
Net assets acquired | $ | 27,150 | |||||
MicroFrance | |||||||
On October 27, 2014, the Company acquired all outstanding shares of Medtronic Xomed Instrumentation, SAS ("MicroFrance") from Medtronic, Inc. ("Medtronic") as well as certain assets of Medtronic for $61.6 million in cash. MicroFrance specializes in manual ear, nose, and throat ("ENT") instruments and designs, manufactures, and sells reusable handheld instruments to ENT and laparoscopy surgical specialists around the world. The acquired ENT instruments fill a portfolio gap for the Company with clear growth opportunities through market adjacencies and provides for increased scale and reach in the international market. | |||||||
The following summarizes the preliminary allocation of the purchase price as of December 31, 2014 based on the fair value of the assets acquired and liabilities assumed: | |||||||
Preliminary Purchase Price | |||||||
Allocation | |||||||
(Dollars in thousands) | |||||||
Cash | $ | 2,195 | |||||
Inventory | 3,765 | ||||||
Prepaid expenses | 620 | ||||||
Property, plant, and equipment | 3,675 | ||||||
Other current assets | 5,025 | ||||||
Intangible assets: | Wtd. Avg. Life: | ||||||
Trade name | 11,990 | 20 Years | |||||
Technology | 4,580 | 15 - 16 Years | |||||
Customer relationships | 18,130 | 12 - 16 Years | |||||
Goodwill | 17,435 | ||||||
Total assets acquired | 67,415 | ||||||
Accounts payable and other liabilities | 5,800 | ||||||
Net assets acquired | $ | 61,615 | |||||
Confluent Surgical, Inc. | |||||||
On January 15, 2014, the Company acquired all outstanding shares of Confluent Surgical, Inc., ("Confluent Surgical") - including its surgical sealant and adhesion barrier product lines - from Covidien Group S.a.r.l, ("Covidien") for an aggregate purchase price of $255.9 million. The purchase price consists of an initial cash payment to Covidien of $231.0 million upon the closing of the transaction, a separate prepayment of $4.0 million made under a transitional supply agreement with an affiliate of Covidien, and contingent consideration with an acquisition date fair value of $20.9 million. The potential maximum undiscounted contingent consideration of $30.0 million consists of $25.0 million upon obtaining certain U.S. governmental approvals and $5.0 million upon obtaining certain European governmental approvals, both related to the completion of the transition of the Confluent Surgical business. | |||||||
The transitional supply agreement secures the supply of the acquired products from an affiliate of Covidien until the earlier of (i) the time that the transition of the Confluent Surgical business as discussed above is complete, or (ii) the fifth anniversary of the effective date of the agreement (the agreement also contains an option to extend for another two years by providing written notice at least 180 days prior to the end of the initial five-year period). This agreement contains financial incentives to the affiliate of Covidien for the timely supply of products each fiscal quarter through the third anniversary of the agreement. The prices paid under the supply agreement are essentially flat through the third anniversary of the agreement, and then increase significantly each of the following three years. The Company also entered into a transition services agreement with an affiliate of Covidien at the closing for services such as customer service, accounting and information technology management, clinical and regulatory affairs, manufacturing transition services, and other functions. | |||||||
This acquisition complements the Company's global neurosurgery growth strategy aimed at providing a broader set of solutions for surgical procedures in the head. | |||||||
The Company recorded revenue for Confluent Surgical of approximately $69.0 million in the consolidated statements of operations from the acquisition date through December 31, 2014. The net income or loss attributable to this acquisition cannot be identified on a stand-alone basis because it has been fully integrated into the Company's operations. | |||||||
The Company adjusted the preliminary purchase price allocation during the quarter ended June 30, 2014 to reduce deferred tax liabilities by $12.4 million. This adjustment offset goodwill and was the result of the Company analyzing and revising its tax positions in certain jurisdictions. The following summarizes the final allocation of the purchase price as of December 31, 2014 based on the fair value of the assets acquired and liabilities assumed: | |||||||
Final Purchase Price | |||||||
Allocation | |||||||
(Dollars in thousands) | |||||||
Inventory deposit | $ | 4,000 | |||||
Property, plant, and equipment | 438 | ||||||
Intangible assets: | Wtd. Avg. Life: | ||||||
Technology product rights | 239,800 | 3 - 20 Years | |||||
Other | 400 | ||||||
Deferred tax assets - long term | 12 | ||||||
Goodwill | 105,331 | ||||||
Total assets acquired | 349,981 | ||||||
Contingent supply liability | 5,891 | ||||||
Other | 731 | ||||||
Deferred tax liabilities - long term | 87,464 | ||||||
Net assets acquired | $ | 255,895 | |||||
Subsequent to the acquisition date, a regulatory event occurred that resulted in the full-impairment of one of the acquired technology product rights of $0.6 million. This event was not known, or knowable, at the time of the acquisition and therefore the impairment has been included in the Company's cost of sales. | |||||||
The Company accounted for the contingent supply liability by recording its fair value as a liability on the date of the acquisition based on a discounted cash-flow model. This contingent supply liability relates to contractual quarterly incentive payments that will be made to an affiliate of Covidien if certain supply minimums under the transitional supply agreement are met. | |||||||
The Company accounted for the contingent consideration by recording its fair value as a liability on the date of the acquisition. The contingent consideration relates to the Company's obtaining certain U.S. and European regulatory approvals. At the date of the acquisition, both of these milestones were valued using a discount rate of 2.2%, which is equivalent to the cost of debt for the estimated time horizon, and an overall probability of occurring of 95%. Accordingly, on January 15, 2014 the Company recorded a $20.9 million liability representing the initial fair value estimate of the probability weighted contingent consideration that management believes will be paid between early 2017 and late 2018. Depending on the expected timing of the estimated payments, the acquisition date fair value of the probability adjusted payments could have been $0.3 million higher or $0.4 million lower. These fair value measurements were based on significant inputs not observed in the market and thus represented a Level 3 measurement. The contingent consideration is re-measured to fair value at each reporting date until the contingency is resolved, and those changes in fair value are recognized in earnings. | |||||||
Tarsus Medical Inc. | |||||||
On January 24, 2013, the Company acquired all outstanding preferred and common stock of Tarsus Medical, Inc. ("Tarsus") for a total of $4.7 million consisting of $3.1 million in cash (including working capital adjustments of $0.2 million) and contingent consideration with an estimated acquisition date fair value of approximately $1.6 million. The potential maximum undiscounted contingent consideration consists of a first milestone payment of up to $1.5 million and a second payment of up to $11.5 million. These payments are based on reaching certain sales thresholds of acquired products. During the second quarter of 2014, the Company adjusted the fair value of the contingent consideration to zero as it no longer believes the achievement of the sales targets is probable. Tarsus is a podiatry device company addressing clinical needs associated with diseases and injuries of the foot and ankle. | |||||||
The following summarizes the final allocation of the purchase price based on fair value of the assets acquired and liabilities assumed: | |||||||
Final Purchase Price | |||||||
Allocation | |||||||
(Dollars in thousands) | |||||||
Cash | $ | 85 | |||||
Prepaid expenses | 13 | ||||||
Intangible assets: | Wtd. Avg. Life: | ||||||
Technology | 5,040 | 10 - 14 years | |||||
In-process research and development | 340 | Indefinite | |||||
Deferred tax asset - long term | 1,334 | ||||||
Goodwill | 116 | ||||||
Total assets acquired | 6,928 | ||||||
Accounts payable and other liabilities | 111 | ||||||
Deferred tax liability | 2,152 | ||||||
Net assets acquired | $ | 4,665 | |||||
Management determined the preliminary fair value of net assets acquired during the first quarter of 2013 and finalized the working capital adjustment in the second quarter of 2013. The Company accounts for the contingent consideration by recording its fair value as a liability on the date of the acquisition and re-measuring the fair value at each reporting date until the contingency is resolved. Changes in fair value of the contingent consideration are recognized in earnings. Accordingly, on January 24, 2013 the Company recorded $1.6 million representing the initial fair value estimate of the contingent consideration that will be earned through December 31, 2015. The fair value of this liability is based on future sales projections of the Tarsus Medical product under various potential scenarios and weighting the probability of these outcomes for the period ended December 31, 2015. At the date of the acquisition, the first milestone cash flow projection was discounted using a rate of 4.3% based on an estimated after tax cost of debt; the second milestone cash flow projection was discounted using a weighted average cost of capital of 16.5%. These fair value measurements were based on significant inputs not observed in the market and thus represented a Level 3 measurement. | |||||||
The goodwill recorded in connection with these acquisitions is based on (i) expected cost savings, operating synergies and other benefits expected to result from the combined operations, (ii) the value of the going-concern element of the existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately), and (iii) intangible assets that do not qualify for separate recognition such as an assembled workforce. The acquisitions generated a combination of deductible and non-deductible goodwill. | |||||||
Contingent Consideration | |||||||
The fair value of contingent consideration during the year-ended December 31, 2014 was (i) increased to reflect current period acquisitions, and the change in the time value of money during the period, and (ii) decreased because the Company believes that it is no longer probable that it will reach certain sales-based milestone targets. A reconciliation of the opening balances to the closing balances of these Level 3 measurements is as follows (in thousands): | |||||||
Location in Statement of Operations | |||||||
Balance as of January 1, 2014 | $ | 1,227 | |||||
Contingent consideration from Confluent Surgical Acquisition | 20,895 | ||||||
Contingent consideration from Metasurg Acquisition | 650 | ||||||
(Gain)/Loss from decrease in fair value of contingent consideration liability | (764 | ) | Selling, general and administrative | ||||
Fair value at December 31, 2014 | $ | 22,008 | |||||
Pro Forma Results (unaudited) | |||||||
The following unaudited pro forma financial information summarizes the results of operations for the year ended December 31, 2014 as if the acquisitions completed by the Company during 2014 had been completed as of January 1, 2013. The pro forma results are based upon certain assumptions and estimates, and they give effect to actual operating results prior to the acquisitions and adjustments to reflect (i) increased interest expense, depreciation expense, intangible asset amortization and fair value inventory step-up, (ii) timing of recognition for certain expenses that will not be recurring in the post-acquisition entity, and (iii) income taxes at a rate consistent with the Company’s statutory rate. No effect has been given to other cost reductions or operating synergies. As a result, these pro forma results do not necessarily represent results that would have occurred if the acquisitions had taken place on the basis assumed above, nor are they indicative of the results of future combined operations. | |||||||
The impact of the Tarsus acquisition is not material to the consolidated operating results of the Company; therefore, the pro-forma impact of the acquisition has not been presented. | |||||||
Year Ended December 31, | |||||||
2014 | 2013 | ||||||
(In thousands except per share amounts) | |||||||
Total revenue | $ | 964,738 | $ | 942,455 | |||
Net income | $ | 43,814 | $ | (7,298 | ) | ||
Net income per share: | |||||||
Basic | $ | 1.35 | $ | (0.22 | ) | ||
DEBT
DEBT | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Debt Disclosure [Abstract] | ||||||||||||
DEBT | DEBT | |||||||||||
Amended and Restated Senior Credit Agreement | ||||||||||||
On August 10, 2010, the Company entered into an amended and restated credit agreement with a syndicate of lending banks (the “Senior Credit Facility”), and subsequently amended the Senior Credit Facility on June 8, 2011, May 11, 2012, June 21, 2013, July 2, 2014, and December 19, 2014. | ||||||||||||
The June 8, 2011 amendment: | ||||||||||||
i. | increased the revolving credit component from $450 million to $600 million and eliminated the $150 million term loan component that existed under the original amended and restated credit agreement; | |||||||||||
ii. | allows the Company to further increase the size of the revolving credit component by an aggregate of $200 million with additional commitments; | |||||||||||
iii. | provides the Company with decreased borrowing rates and annual commitment fees, and provides more favorable financial covenants; and | |||||||||||
iv. | extended the maturity date from August 10, 2015 to June 8, 2016. | |||||||||||
On May 11, 2012, the Company entered into another amendment to the Senior Credit Facility (the “2012 Amendment”). The 2012 Amendment modified certain financial and negative covenants. The 2012 Amendment provides that the Company’s Maximum Consolidated Total Leverage Ratio (a measure of net debt to consolidated EBITDA, in each case as defined in the Senior Credit Facility, as amended) during any consecutive four quarter period should not be greater than 3.75 to 1.00 during any such period ending on December 31, 2013 (instead of March 31, 2012). In addition, when calculating consolidated EBITDA for any period, the 2012 Amendment permits the addition of certain costs and expenses in the calculation of consolidated net income for such period, to the extent deducted in the calculation of consolidated net income. The Company capitalized $0.4 million of incremental financing costs in connection with the 2012 Amendment. | ||||||||||||
On June 21, 2013, the Company entered into another amendment to the Senior Credit Facility (the “2013 Amendment”). The 2013 Amendment modified certain financial and negative covenants and increased the Company’s Maximum Consolidated Total Leverage Ratio (a measure of net debt to consolidated EBITDA, in each case as defined in the Senior Credit Facility, as amended) to 4.25 through June 30, 2014, with a step-down to 4.00 through March 31, 2015, and then with another step-down to 3.75 thereafter. In addition, when calculating consolidated EBITDA for any period, the 2013 Amendment permits the addition of certain costs and expenses in the calculation of consolidated net income for such period, to the extent deducted in the calculation of consolidated net income. The effect of the 2013 Amendment is to increase the ability of the Company to borrow under the Senior Credit Facility during the affected periods. The Company capitalized $1.1 million of incremental financing costs in connection with the 2013 Amendment, which will be amortized through the maturity date of the Senior Credit Facility. | ||||||||||||
On July 2, 2014, the Company entered into an amended and restated credit agreement with a syndicate of lending banks, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, Wells Fargo Bank, National Association, as Syndication Agent and HSBC Bank USA, National Association, Royal Bank of Canada, Citizens Bank, National Association, DNB Capital LLC, Credit Agricole-Corporate and Investment Bank and TD Bank, N.A., as Co-Documentation Agents. | ||||||||||||
The 2014 amended and restated Senior Credit Facility created an aggregate principal amount of up to $900.0 million available to the Company through the following facilities: | ||||||||||||
i. | a $750.0 million revolving credit facility (increased from $600.0 million), which includes a $60.0 million sublimit for the issuance of standby letters of credit and a $60.0 million sublimit for swingline loans, and | |||||||||||
ii. | a $150.0 million term loan facility. | |||||||||||
The Senior Credit Facility allows the Company to further increase the size of either the revolving credit facility or the term loan facility, or a combination thereof, by an aggregate of $200.0 million with additional commitments. The July 2014 amended and restated Senior Credit Facility extended the maturity date of the prior facility from June 8, 2016 to July 2, 2019. | ||||||||||||
On December 19, 2014, the Company entered into an amendment to the Senior Credit Facility which modified covenants to permit the distribution and/or dividend by the Company of its spine business to the Company's public stockholders. The intent of the amendment is to permit the Company to consummate the spine business spin-off transactions. | ||||||||||||
Borrowings under the Senior Credit Facility bear interest, at the Company's option, at a rate equal to: | ||||||||||||
i. | the Eurodollar Rate (as defined in the amendment and restatement) in effect from time to time plus the applicable rate (ranging from 1.00% to 1.75%), or | |||||||||||
ii. | the highest of: | |||||||||||
1 | the weighted average overnight Federal funds rate, as published by the Federal Reserve Bank of New York, plus 0.50%, or | |||||||||||
2 | the prime lending rate of Bank of America, N.A., or | |||||||||||
3 | the one-month Eurodollar Rate plus 1.00%. | |||||||||||
The applicable rates are based on the Company’s consolidated total leverage ratio (defined as the ratio of (a) consolidated funded indebtedness less cash in excess of $40.0 million that is not subject to any restriction of the use or investment thereof to (b) consolidated EBITDA) at the time of the applicable borrowing. | ||||||||||||
The Company will also pay an annual commitment fee (ranging from 0.15% to 0.30%), based on the Company’s consolidated total leverage ratio, on the daily amount by which the revolving credit facility exceeds the outstanding loans and letters of credit under the credit facility. | ||||||||||||
The Senior Credit Facility is collateralized by substantially all of the assets of the Company’s U.S. subsidiaries, excluding intangible assets. The Senior Credit Facility is subject to various financial and negative covenants and at December 31, 2014 the Company was in compliance with all such covenants. In connection with the modification of the 2014 amendment and restatement of the Senior Credit Facility the Company capitalized $3.2 million of incremental financing costs, and expensed $0.3 million of previously capitalized financing costs. | ||||||||||||
On July 2, 2014, the Company borrowed $422.0 million under the Senior Credit Facility consisting of a $150.0 million term loan and $272.0 million under its revolving credit facility. The Company used the funds to repay the balance of its previous Senior Credit Facility. The outstanding borrowings have one, two, three, six months, or, if available, twelve months interest periods. | ||||||||||||
At December 31, 2014 and 2013, there was $266.9 million and $186.9 million outstanding, respectively, under the revolving portion of the Senior Credit Facility at a weighted average interest rate of 1.7% and 2.0%, respectively. At December 31, 2014 there was $150.0 million outstanding under the term loan component of the Senior Credit Facility at a weighted average interest rate of 1.7%. At December 31, 2014, there was approximately $483.1 million available for borrowing under the Senior Credit Facility. The fair value of outstanding borrowings of the Senior Credit Facility's revolving credit facility and term loan components at December 31, 2014 was approximately $248.2 million and $140.3 million, respectively. These fair values were determined by using a discounted cash flow model based on current market interest rates available to the Company. These inputs are corroborated by observable market data for similar liabilities and therefore classified within Level 2 of the fair value hierarchy. Level 2 inputs represent inputs that are observable for the asset or liability, either directly or indirectly and are other than active market observable inputs that reflect unadjusted quoted prices for identical assets or liabilities. The Company considers the balance to be long term in nature based on its current intent and ability to repay the borrowing outside of the next twelve-month period. | ||||||||||||
Contractual repayments of the term loan do not begin until September 30, 2015 and are due as follows: | ||||||||||||
Year Ended December 31, | Principal Repayment | |||||||||||
(In thousands) | ||||||||||||
2015 | $3,750 | |||||||||||
2016 | 9,735 | |||||||||||
2017 | 13,125 | |||||||||||
2018 | 15,000 | |||||||||||
2019 | 108,750 | |||||||||||
2016 Convertible Senior Notes | ||||||||||||
On June 15, 2011, the Company issued $230.0 million aggregate principal amount of its 1.625% Convertible Senior Notes due 2016 (the “2016 Notes”). The 2016 Notes mature on December 15, 2016, and bear interest at a rate of 1.625% per annum payable semi-annually in arrears on December 15 and June 15 of each year. The portion of the debt proceeds that was classified as equity at the time of the offering was $43.2 million, an equivalent of that amount is being amortized to interest expense using the effective interest method through December 2016. The effective interest rate implicit in the liability component is 5.6%. | ||||||||||||
At December 31, 2014, the carrying amount of the liability component was $213.1 million, the remaining unamortized discount was $16.9 million, and the principal amount outstanding was $230.0 million. At December 31, 2013, the carrying amount of the liability component was $205.2 million, the remaining unamortized discount was $24.8 million and the principal amount outstanding was $230.0 million. | ||||||||||||
The fair value of the 2016 Notes at December 31, 2014 was approximately $254.0 million. The fair value of the liability of the 2016 Notes was determined using a discounted cash flow model based on current market interest rates available to the Company. These inputs are corroborated by observable market data for similar liabilities and therefore classified within Level 2 of the fair-value hierarchy. | ||||||||||||
The 2016 Notes are senior, unsecured obligations of the Company, and are convertible into cash and, if applicable, shares of its common stock based on an initial conversion rate, subject to adjustment of 17.4092 shares per $1,000 principal amount of 2016 Notes (which represents an initial conversion price of approximately $57.44 per share). The Company will satisfy any conversion of the 2016 Notes with cash up to the principal amount of the 2016 Notes pursuant to the net share settlement mechanism set forth in the indenture and, with respect to any excess conversion value, with shares of the Company’s common stock. The 2016 Notes are convertible only in the following circumstances: (1) if the closing sale price of the Company’s common stock exceeds 150% of the conversion price during a period as defined in the indenture; (2) if the average trading price per $1,000 principal amount of the 2016 Notes is less than or equal to 98% of the average conversion value of the 2016 Notes during a period as defined in the indenture; (3) at any time on or after June 15, 2016; or (4) if specified corporate transactions occur, which includes the planned spin-off of the spine business. The issue price of the 2016 Notes was equal to their face amount, which is also the amount holders are entitled to receive at maturity if the 2016 Notes are not converted. As of December 31, 2014, none of these conditions existed as of December 31, 2014 with respect to the 2016 Notes and as a result, the 2016 Notes are classified as long term. | ||||||||||||
In connection with the issuance of the 2016 Notes, the Company entered into call transactions and warrant transactions, primarily with affiliates of the initial purchasers of such notes (the “hedge participants”). The initial strike price of the call transaction is approximately $57.44 per share, subject to customary anti-dilution adjustments. The initial strike price of the warrant transaction is approximately $70.05 per share, subject to customary anti-dilution adjustments. | ||||||||||||
2012 Senior Convertible Notes | ||||||||||||
On June 11, 2007, the Company issued $165.0 million aggregate principal amount of its 2012 Notes (the “2012 Notes”). The 2012 Notes bear interest at a rate of 2.375% per annum payable semi-annually in arrears on December 1 and June 1 of each year. In accordance with the accounting guidance for debt with conversion and other options, the Company accounted for the liability and equity components of the 2012 Notes separately. The portion of the debt proceeds that the Company had classified as equity at the time of the offering, and recognized as a debt discount, was determined based on the fair value of similar debt instruments that did not include a conversion feature and amounted to $30.6 million. The Company amortized the debt discount to interest expense using the effective interest method through June 2012. The effective interest rate implicit in the liability component was based on the Company’s estimated non-convertible borrowing rate at the date the 2012 Notes were issued and was 6.8%. | ||||||||||||
In connection with the issuance of the 2012 Notes, the Company entered into call transactions and warrant transactions, primarily with affiliates of the initial purchasers of such notes (the “hedge participants”). The total cost of the call transactions to the Company was approximately $30.4 million and the Company received approximately $12.2 million of proceeds from the warrant transactions. The call transactions involve the Company’s purchasing call options from the hedge participants, and the warrant transactions involve the Company’s selling call options to the hedge participants with a higher strike price than the purchased call options. | ||||||||||||
In June 2012, the Company repaid the 2012 Notes at maturity with long-term borrowings from its Senior Credit Facility and cash on hand. The related bond hedge contracts terminated in components over the 100 trading day period commencing 90 days after the maturity of the 2012 Notes. | ||||||||||||
Convertible Note Interest | ||||||||||||
The interest expense components of the Company’s convertible notes are as follows: | ||||||||||||
Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(In thousands) | ||||||||||||
2016 Notes: | ||||||||||||
Amortization of the discount on the liability component (1) | $ | 7,104 | $ | 6,463 | $ | 5,993 | ||||||
Cash interest related to the contractual interest coupon (2) | 3,342 | 3,218 | 3,154 | |||||||||
Total | $ | 10,446 | $ | 9,681 | $ | 9,147 | ||||||
2012 Notes: | ||||||||||||
Amortization of the discount on the liability component (1) | $ | — | $ | — | $ | 2,527 | ||||||
Cash interest related to the contractual interest coupon (2) | — | — | 1,378 | |||||||||
Total | $ | — | $ | — | $ | 3,905 | ||||||
-1 | In 2014 and 2013, the amortization of the discount on the liability component of the 2016 Note is presented net of capitalized interest of $0.9 million and $1.0 million, respectively. In 2012, the amortization of the discount on the liability component of the 2016 and 2012 Notes are presented net of capitalized interest of $1.1 million and $0.5 million, respectively. | |||||||||||
-2 | In 2014 and 2013, the cash interest related to the contractual interest coupon on the 2016 Note is presented net of capitalized interest of $0.4 million and $0.5 million, respectively. In 2012, the cash interest related to the contractual interest coupon on the 2016 and 2012 Notes are presented net of capitalized interest of $0.6 million and $0.3 million, respectively. |
DERIVATIVE_INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS | |||||||||||||||||
Interest Rate Hedging | ||||||||||||||||||
The Company’s interest rate risk relates to U.S. dollar denominated variable LIBOR interest rate borrowings. The Company uses an interest rate swap derivative instrument entered into on August 10, 2010 with an effective date of December 31, 2010 to manage its earnings and cash flow exposure to changes in interest rates by converting a portion of its floating-rate debt into fixed-rate debt beginning on December 31, 2010. This interest rate swap expires on August 10, 2015. | ||||||||||||||||||
The Company designates this derivative instrument as a cash flow hedge. The Company records the effective portion of any change in the fair value of a derivative instrument designated as a cash flow hedge as unrealized gains or losses in accumulated other comprehensive income (“AOCI”), net of tax, until the hedged item affects earnings, at which point 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, the Company will reclassify the amount of any gain or loss on the related cash flow hedge to interest expense at that time. | ||||||||||||||||||
The Company expects that approximately $0.9 million of pre-tax losses recorded as net in AOCI related to the interest rate hedge could be reclassified to earnings within the next twelve months. | ||||||||||||||||||
Foreign Currency Hedging | ||||||||||||||||||
From time to time the Company enters into foreign currency hedge contracts intended to protect the U.S. dollar value of certain forecasted foreign currency denominated transactions. The Company records the effective portion of any change in the fair value of foreign currency cash flow hedges in AOCI, net of tax, until the hedged item affects earnings. Once the related hedged item affects earnings, the Company reclassifies the effective portion of any related unrealized gain or loss on the foreign currency cash flow hedge to earnings. If the hedged forecasted transaction does not occur, or if it becomes probable that it will not occur, the Company will reclassify the amount of any gain or loss on the related cash flow hedge to earnings at that time. | ||||||||||||||||||
The success of the Company’s hedging program depends, in part, on forecasts of certain activity denominated in euros. The Company may experience unanticipated currency exchange gains or losses to the extent that there are differences between forecasted and actual activity during periods of currency volatility. In addition, changes in currency exchange rates related to any unhedged transactions may affect its earnings and cash flows. | ||||||||||||||||||
Counterparty Credit Risk | ||||||||||||||||||
The Company manages its concentration of counterparty credit risk on its derivative instruments by limiting acceptable counterparties to a group of major financial institutions with investment grade credit ratings, and by actively monitoring their credit ratings and outstanding positions on an ongoing basis. Therefore, the Company considers the credit risk of the counterparties to be low. Furthermore, none of the Company’s derivative transactions are subject to collateral or other security arrangements, and none contain provisions that depend upon the Company’s credit ratings from any credit rating agency. | ||||||||||||||||||
Fair Value of Derivative Instruments | ||||||||||||||||||
The Company has classified all of its derivative instruments within Level 2 of the fair value hierarchy because observable inputs are available for substantially the full term of the derivative instruments. The fair value of the foreign currency forward exchange contracts related to inventory purchases is determined by comparing the forward rate as of the period end and the settlement rate specified in each contract. The fair value of the interest rate swap was developed using a market approach based on publicly available market yield curves and the terms of the swap. The Company performs ongoing assessments of counterparty credit risk. | ||||||||||||||||||
The following table summarizes the fair value, notional amounts presented in U.S. dollars, and presentation in the consolidated balance sheet for derivatives designated as hedging instruments as of December 31, 2014 and December 31, 2013: | ||||||||||||||||||
Fair Value as of | ||||||||||||||||||
December 31, | December 31, | |||||||||||||||||
2014 | 2013 | |||||||||||||||||
Location on Balance Sheet (1): | (In thousands) | |||||||||||||||||
Derivatives designated as hedges — Liabilities: | ||||||||||||||||||
Interest rate swap — Accrued expenses and other current liabilities (2) | $ | 898 | $ | 1,676 | ||||||||||||||
Interest rate swap — Other liabilities (2) | — | 763 | ||||||||||||||||
Total Derivatives designated as hedges — Liabilities | $ | 898 | $ | 2,439 | ||||||||||||||
(1) | The Company classifies derivative assets and liabilities as current based on the cash flows expected to be incurred within the following 12 months. | |||||||||||||||||
(2) | At December 31, 2014 and December 31, 2013, the notional amount related to the Company’s sole interest rate swap was $97.5 million and $112.5 million, respectively. In the next 12 months, the Company expects to reduce the notional amount by $11.3 million. | |||||||||||||||||
The following presents the effect of derivative instruments designated as cash flow hedges on the accompanying consolidated statements of operations during the years ended December 31, 2014 and 2013: | ||||||||||||||||||
Balance in AOCI | Amount of | Amount of Gain (Loss) | Balance in AOCI | Location in | ||||||||||||||
Beginning of | Gain (Loss) | Reclassified from | End of Year | Statements of | ||||||||||||||
Year | Recognized in | AOCI into | Operations | |||||||||||||||
AOCI- | Earnings-(Effective | |||||||||||||||||
(Effective Portion) | Portion) | |||||||||||||||||
(In thousands) | ||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||
Interest rate swap | $ | (2,439 | ) | $ | (206 | ) | $ | (1,747 | ) | $ | (898 | ) | Interest (expense) | |||||
$ | (2,439 | ) | $ | (206 | ) | $ | (1,747 | ) | $ | (898 | ) | |||||||
Year Ended December 31, 2013 | ||||||||||||||||||
Foreign currency forward contracts | $ | (34 | ) | $ | 142 | $ | 108 | $ | — | Costs of goods sold | ||||||||
Interest rate swap | (4,125 | ) | (252 | ) | (1,938 | ) | (2,439 | ) | Interest (expense) | |||||||||
$ | (4,159 | ) | $ | (110 | ) | $ | (1,830 | ) | $ | (2,439 | ) | |||||||
The Company recognized no gains or losses resulting from ineffectiveness of cash flow hedges during the years ended December 31, 2014 and 2013. |
TREASURY_STOCK
TREASURY STOCK | 12 Months Ended |
Dec. 31, 2014 | |
Treasury Stock Transactions, Excluding Value of Shares Reissued [Abstract] | |
TREASURY STOCK | TREASURY STOCK |
On October 28, 2014, the Board of Directors terminated the October 2012 authorization and authorized up to $75.0 million of its outstanding common stock through December 2016. As of December 31, 2014 there remained $75.0 million available for repurchases under this authorization. | |
There were no treasury stock repurchases during the years ended December 31, 2014 or December 31, 2013. |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION | |||||||||||||
Stock-based compensation expense - all related to employees - recognized under the authoritative guidance was as follows: | ||||||||||||||
Years Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
(In thousands) | ||||||||||||||
Selling, general and administrative | $ | 14,459 | $ | 9,948 | $ | 8,646 | ||||||||
Research and development | 481 | 355 | 335 | |||||||||||
Cost of goods sold | 165 | 90 | 70 | |||||||||||
Total stock-based compensation expense | 15,105 | 10,393 | 9,051 | |||||||||||
Total estimated tax benefit related to stock-based compensation expense | 5,578 | 4,018 | 3,532 | |||||||||||
Net effect on net income | $ | 9,527 | $ | 6,375 | $ | 5,519 | ||||||||
EMPLOYEE STOCK PURCHASE PLAN | ||||||||||||||
The purpose of the Employee Stock Purchase Plan (the “ESPP”) is to provide eligible employees of the Company with the opportunity to acquire shares of common stock at periodic intervals by means of accumulated payroll deductions. Under the ESPP, a total of 1.5 million shares of common stock are reserved for issuance. These shares will be made available either from the Company’s authorized but unissued shares of common stock or from shares of common stock reacquired by the Company as treasury shares. At December 31, 2014, 1.0 million shares remain available for purchase under the ESPP. During the years ended December 31, 2014, 2013 and 2012, the Company issued 4,475 shares, 6,309 shares and 6,315 shares under the ESPP for $0.2 million, $0.3 million and $0.2 million, respectively. | ||||||||||||||
The ESPP was amended in 2005 to reduce the discount available to participants to five percent and to fix the price against which such discount would be applied. Accordingly, the ESPP is a non-compensatory plan. | ||||||||||||||
EQUITY AWARD PLANS | ||||||||||||||
As of December 31, 2014, the Company had stock options, restricted stock awards, performance stock awards, contract stock awards and restricted stock unit awards outstanding under three plans, the 2000 Equity Incentive Plan (the “2000 Plan”), the 2001 Equity Incentive Plan (the “2001 Plan”), and the 2003 Equity Incentive Plan (the “2003 Plan,” and collectively, (the “Plans”). | ||||||||||||||
In July 2008 and May 2010, the stockholders of the Company approved amendments to the 2003 Plan to increase by 750,000 and 1,750,000, respectively, the number of shares of common stock that may be issued under the 2003 Plan. The Company has reserved 2,000,000 shares under each of the 2000 Plan and the 2001 Plan, and 6,500,000 shares under the 2003 Plan. The Plans permit the Company to grant incentive and non-qualified stock options, stock appreciation rights, restricted stock, contract stock, performance stock, or dividend equivalent rights to designated directors, officers, employees and associates of the Company. | ||||||||||||||
Stock options issued under the Plans become exercisable over specified periods, generally within four years from the date of grant for officers, directors and employees, and generally expire six years from the grant date for employees and from six to ten years for directors and certain executive officers. Restricted stock issued under the Plans vests ratably over specified periods, generally three years after the date of grant. | ||||||||||||||
Stock Options | ||||||||||||||
The Company values stock option grants using the binomial distribution model. Management believes that the binomial distribution model is preferable to the Black-Scholes model because the binomial distribution model is a more flexible model that considers the impact of non-transferability, and vesting provisions in the valuation of employee stock options. | ||||||||||||||
In determining the value of stock options granted, the Company considered that it has never paid cash dividends and does not currently intend to pay cash dividends, and thus has assumed a 0% dividend yield. Expected volatilities are based on the historical volatility of the Company’s stock price with forward-looking assumptions. The expected life of stock options is estimated based on historical data on exercise of stock options, post-vesting forfeitures and other factors to estimate the expected term of the stock options granted. The risk-free interest rates are derived from the U.S. Treasury yield curve in effect on the date of grant for instruments with a remaining term similar to the expected life of the options. In addition, the Company applies an expected forfeiture rate when amortizing stock-based compensation expenses. The estimate of the forfeiture rates is based primarily upon historical experience of employee turnover. As individual grant awards become fully vested, stock-based compensation expense is adjusted to recognize actual forfeitures. | ||||||||||||||
The following weighted-average assumptions were used in the calculation of fair value: | ||||||||||||||
Years Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Dividend yield | 0% | 0% | 0% | |||||||||||
Expected volatility | 29% | 31% | 30% | |||||||||||
Risk free interest rate | 2.41% | 1.52% | 1.33% | |||||||||||
Expected life of option from grant date | 8 years | 8 years | 8 years | |||||||||||
The following table summarizes the Company’s stock option activity: | ||||||||||||||
Weighted Average Exercise Price | Weighted Average Contractual Term in Years | Aggregate Intrinsic Value | ||||||||||||
Shares | ||||||||||||||
Stock Options | (In thousands) | (In thousands) | ||||||||||||
Outstanding at December 31, 2013 | 1,639 | $ | 37.64 | |||||||||||
Granted | 81 | 47.25 | ||||||||||||
Exercised | (458 | ) | 32.63 | |||||||||||
Forfeited or Expired | (24 | ) | 49.17 | |||||||||||
Outstanding at December 31, 2014 | 1,238 | $ | 39.89 | 3.4 years | $ | 17,759 | ||||||||
Vested or expected to vest at December 31, 2014 | 1,238 | $ | 39.89 | 3.4 years | $ | 17,759 | ||||||||
Exercisable at December 31, 2014 | 1,136 | $ | 39.45 | 3.1 years | $ | 16,779 | ||||||||
The intrinsic value of options exercised for the years ended December 31, 2014, 2013 and 2012 were negligible. The weighted average grant date fair value of options granted during the years ended December 31, 2014, 2013 and 2012 was $18.15, $13.86 and $12.18, respectively. Cash received from option exercises was $15.2 million, $2.3 million and $0.7 million, for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||
As of December 31, 2014, there was approximately $1.3 million of total unrecognized compensation costs related to unvested stock options. These costs are expected to be recognized over a weighted-average period of approximately two years. | ||||||||||||||
Awards of Restricted Stock, Performance Stock and Contract Stock | ||||||||||||||
The following table summarizes the Company’s awards of restricted stock, performance stock and contract stock for the year ended December 31, 2014: | ||||||||||||||
Performance Stock and Contract Stock Awards | ||||||||||||||
Restricted Stock Awards | ||||||||||||||
Shares | Weighted Average Grant Date Fair Value Per Share | Shares | Weighted Average Grant Date Fair Value Per Share | |||||||||||
(In thousands) | (In thousands) | |||||||||||||
Unvested, December 31, 2013 | 321 | $ | 37.29 | 264 | $ | 32.74 | ||||||||
Granted | 239 | 46.16 | 26 | 46.41 | ||||||||||
Cancellations | (48 | ) | 42.2 | (4 | ) | 43.07 | ||||||||
Released | (204 | ) | 39.8 | (3 | ) | 35.48 | ||||||||
Unvested, December 31, 2014 | 308 | $ | 43.29 | 283 | $ | 34.43 | ||||||||
The Company recognized $13.7 million, $9.2 million and $7.7 million in expense related to such awards during the years ended December 31, 2014, 2013 and 2012, respectively. The total fair market value of shares vested in 2014, 2013 and 2012 was $9.4 million, $6.5 million and $6.7 million, respectively. | ||||||||||||||
Performance stock awards have performance features associated with them. Performance stock, restricted stock and contract stock awards generally have requisite service periods of three years. The fair value of these awards is being expensed on a straight-line basis over the vesting period. As of December 31, 2014, there was approximately $11.6 million of total unrecognized compensation costs related to unvested awards. These costs are expected to be recognized over a weighted-average period of approximately two years. | ||||||||||||||
On June 7, 2012, the Company's former CEO terminated his employment with the Company and ceased to serve as Executive Chairman of the Board of Directors and as an officer or employee of the Company and its subsidiaries and affiliates. The Company's former CEO continues to serve as Chairman of the Board of Directors and as a non-employee member of the Board. In the fourth quarter of 2012, the Company distributed to him in the form of shares of its common stock 1.67 million deferred stock units, less shares withheld for taxes, as a result of the termination of his employment. | ||||||||||||||
At December 31, 2014, there are approximately 0.2 million additional vested Restricted Units held by various employees for which the related shares have not yet been issued. | ||||||||||||||
At December 31, 2014, there were approximately 1.7 million shares available for grant under the Plans. |
RETIREMENT_BENEFIT_PLANS
RETIREMENT BENEFIT PLANS | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||
RETIREMENT BENEFIT PLANS | RETIREMENT BENEFIT PLANS | ||||||||||||||||
DEFINED BENEFIT PLANS | |||||||||||||||||
The Company maintains defined benefit pension plans that cover employees in its manufacturing plants located in Andover, United Kingdom (the “UK Plan”) and Tuttlingen, Germany (the “Germany Plan”). The Company closed the Tuttlingen, Germany plant in December 2005. The Company did not terminate the Germany Plan, and the Company remains obligated for the accrued pension benefits related to this plan. The plans cover certain current and former employees. | |||||||||||||||||
Effective March 31, 2011, the Company froze the benefits due to the participants of the UK Plan in their entirety; this curtailment resulted in a $0.3 million reduction in the projected benefit obligations which the Company recorded on that date. The Company recorded the entire curtailment gain as an offset to the unrecognized net actuarial loss in accumulated other comprehensive income; therefore, this gain had no impact on the consolidated statements of operations. | |||||||||||||||||
Net periodic benefit costs for the Company’s defined benefit pension plans included the following amounts: | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
(In thousands) | |||||||||||||||||
Service cost | $ | — | $ | — | $ | — | |||||||||||
Interest cost | 619 | 556 | 582 | ||||||||||||||
Expected return on plan assets | (511 | ) | (407 | ) | (392 | ) | |||||||||||
Recognized net actuarial loss | 53 | 2 | — | ||||||||||||||
Net period benefit cost | $ | 161 | $ | 151 | $ | 190 | |||||||||||
The following weighted average assumptions were used to develop net periodic pension benefit cost and the actuarial present value of projected pension benefit obligations: | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Discount rate | 3.5 | % | 4.4 | % | 4.2 | % | |||||||||||
Expected return on plan assets | 2.4 | % | 3.6 | % | 3 | % | |||||||||||
Rate of compensation increase | 0 | % | 0 | % | 0 | % | |||||||||||
The discount rate is set using the Bank of America Merrill Lynch AA Corporate Bond yield curve weighted by the UK benefit plan cash flows for the year ending December 31, 2014. The expected return on plan assets represents the average rate of return expected to be earned on plan assets over the period the benefits included in the benefit obligation are to be paid. In developing the expected rate of return, the Company considers long-term compound annualized returns of historical market data as well as actual returns on the plan assets and applies adjustments that reflect more recent capital market experience. Using this reference information, the long-term return expectations for each asset category are developed according to the allocation among those investment categories. In 2014, 2013 and 2012, the discount rate was prescribed as the current yield on corporate bonds with an average rating of AA of equivalent currency and term to the liabilities. | |||||||||||||||||
The following sets forth the change in projected benefit obligations and the change in plan assets for the years ended December 31, 2014 and 2013 and a reconciliation of the funded status at December 31, 2014 and 2013: | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
(In thousands) | |||||||||||||||||
CHANGE IN PROJECTED BENEFIT OBLIGATION | |||||||||||||||||
Projected benefit obligation, beginning of year | $ | 15,182 | $ | 13,918 | |||||||||||||
Interest cost | 619 | 556 | |||||||||||||||
Benefits paid | (563 | ) | (506 | ) | |||||||||||||
Actuarial loss | 1,361 | 881 | |||||||||||||||
Effect of foreign currency exchange rates | (960 | ) | 333 | ||||||||||||||
Projected benefit obligation, end of year | $ | 15,639 | $ | 15,182 | |||||||||||||
CHANGE IN PLAN ASSETS | |||||||||||||||||
Plan assets at fair value, beginning of year | $ | 14,694 | $ | 14,080 | |||||||||||||
Actual return on plan assets | 3,410 | (6 | ) | ||||||||||||||
Employer contributions | 875 | 826 | |||||||||||||||
Benefits paid | (549 | ) | (493 | ) | |||||||||||||
Effect of foreign currency exchange rates | (929 | ) | 287 | ||||||||||||||
Plan assets at fair value, end of year | $ | 17,501 | $ | 14,694 | |||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
(In thousands) | |||||||||||||||||
RECONCILIATION OF FUNDED STATUS | |||||||||||||||||
Funded status - over (under) funded | $ | 1,862 | $ | (488 | ) | ||||||||||||
Unrecognized net actuarial loss | 1,165 | 2,911 | |||||||||||||||
Accumulated other comprehensive loss | (1,165 | ) | (2,911 | ) | |||||||||||||
Amounts recognized | $ | 1,862 | $ | (488 | ) | ||||||||||||
The funded status is included in other liabilities at December 31, 2014 and 2013. | |||||||||||||||||
The combined accumulated benefit obligation for the defined benefit plans was $15.6 million and $15.2 million as of December 31, 2014 and 2013, respectively. | |||||||||||||||||
The investment strategy for the Company’s defined benefit plans is both to meet the liabilities of the plans as they fall due and to maximize the return on invested assets within appropriate risk tolerances. The UK Plan invests in pooled funds which provide a diversification that supports the overall investment objectives. The Germany Plan had no assets at December 31, 2014 or 2013. | |||||||||||||||||
Based on the assets which comprise each of the funds, the weighted-average allocation of plan assets by asset category is as follows: | |||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Government bonds | 98.9 | % | 100 | % | |||||||||||||
Cash | 1.1 | % | 0 | % | |||||||||||||
100 | % | 100 | % | ||||||||||||||
The fair value of the Company’s pension plan assets at December 31, 2014 and 2013 is as follows: | |||||||||||||||||
Fair Value Measurements at December 31, 2014: | |||||||||||||||||
Manager/Fund | Asset Category | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
(In thousands) | |||||||||||||||||
Bank account | Cash | $ | 184 | $ | 184 | $ | — | $ | — | ||||||||
Legal & General Index-Linked Gilts Index (various tenors) (a) | Index-linked government bonds | 14,857 | — | 14,857 | — | ||||||||||||
Legal & General Over 15 Years Gilts Index (b) | Government bonds | 2,460 | — | 2,460 | — | ||||||||||||
Total | $ | 17,501 | $ | 184 | $ | 17,317 | $ | — | |||||||||
Fair Value Measurements at December 31, 2013: | |||||||||||||||||
Manager/Fund | Asset Category | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
(In thousands) | |||||||||||||||||
Bank account | Cash | $ | 8 | $ | 8 | $ | — | $ | — | ||||||||
Legal & General Index-Linked Gilts Index (various tenors) (a) | Index-linked government bonds | 12,630 | — | 12,630 | — | ||||||||||||
Legal & General Over 15 Years Gilts Index (b) | Government bonds | 2,056 | — | 2,056 | — | ||||||||||||
Total | $ | 14,694 | $ | 8 | $ | 14,686 | $ | — | |||||||||
_______________________________ | |||||||||||||||||
(a) | This category represents funds consisting of index-linked gilts and is designated to follow a benchmark index. | ||||||||||||||||
(b) | This category represents funds consisting of gilts and is designated to follow a benchmark index. | ||||||||||||||||
The Level 2 investments are single priced. The fund prices are calculated by the trustee by taking the closing market price of each underlying investment using a variety of independent pricing sources (i.e., quoted market prices). The prices also include income receivable and expenses payable, where applicable. | |||||||||||||||||
Based on year-end exchange rates, the Company anticipates contributing approximately $0.9 million to its defined benefit plans in 2014. | |||||||||||||||||
Also based on year-end exchange rates, the Company expects to pay the following estimated future benefit payments in the years indicated: | |||||||||||||||||
Expected Future Benefit Payments | |||||||||||||||||
(In thousands) | |||||||||||||||||
2015 | $ | 567 | |||||||||||||||
2016 | 586 | ||||||||||||||||
2017 | 599 | ||||||||||||||||
2018 | 631 | ||||||||||||||||
2019 | 652 | ||||||||||||||||
2020-2023 | 3,608 | ||||||||||||||||
Included in accumulated other comprehensive income is $1.2 million of unrecognized net actuarial loss, a portion of which is expected to be recognized as a component of net periodic benefit cost in 2014. | |||||||||||||||||
DEFINED CONTRIBUTION PLANS | |||||||||||||||||
The Company also has various defined contribution savings plans that cover substantially all employees in the United States, the United Kingdom and Puerto Rico. The Company matches a certain percentage of each employee’s contributions as per the provisions of the plans. Total contributions by the Company to the plans were $3.0 million, $2.9 million and $2.7 million for the years ended December 31, 2014, 2013 and 2012, respectively. |
LEASES_AND_RELATED_PARTY_LEASE
LEASES AND RELATED PARTY LEASES | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Leases [Abstract] | ||||||||||||
LEASES AND RELATED PARTY LEASES | LEASES AND RELATED PARTY LEASES | |||||||||||
The Company leases administrative, manufacturing, research and distribution facilities and various manufacturing, office and transportation equipment through operating lease agreements. Future minimum lease payments under operating leases at December 31, 2014 were as follows: | ||||||||||||
Related Parties | Third Parties | Total | ||||||||||
(In thousands) | ||||||||||||
2015 | $ | 272 | $ | 11,234 | $ | 11,506 | ||||||
2016 | 272 | 9,522 | 9,794 | |||||||||
2017 | 272 | 6,757 | 7,029 | |||||||||
2018 | 296 | 5,025 | 5,321 | |||||||||
2019 | 296 | 3,084 | 3,380 | |||||||||
Thereafter | 4,014 | 24,917 | 28,931 | |||||||||
Total minimum lease payments | $ | 5,422 | $ | 60,539 | $ | 65,961 | ||||||
Total rental expense for the years ended December 31, 2014, 2013 and 2012 and was $10.2 million, $10.4 million and $10.9 million, respectively, and included $0.3 million, in related party rental expense in each of the three years. | ||||||||||||
Future minimum lease payments under capital leases at December 31, 2014 were as follows: | ||||||||||||
Payments under capital leases | ||||||||||||
(In thousands) | ||||||||||||
2015 | $ | 826 | ||||||||||
2016 | 672 | |||||||||||
Total minimum lease payments | 1,498 | |||||||||||
Amount representing interest | 70 | |||||||||||
Present value of minimum lease payments | $ | 1,428 | ||||||||||
Related Party Leases | ||||||||||||
The Company leases certain production equipment from a corporation whose sole stockholder is a general partnership, of which the Company’s former Chairman (and current director) is a partner and the President. The term of the lease is through March 31, 2022, and the Company has an option to renew through March 31, 2032. Under the terms of the lease agreement, the Company pays $0.1 million per year to the related party lessor. The Company also leases its manufacturing facility in Plainsboro, New Jersey, from a general partnership that is 50% owned by a corporation whose shareholders are trusts, whose beneficiaries include family members of the Company’s former Chairman (and current director). The term of the current lease agreement is through October 31, 2032 at an annual rate of approximately $0.3 million per year. The current lease agreement also provides (i) a 5-year renewal option for the Company to extend the lease from November 1, 2032 through October 31, 2037 at the fair market rental rate of the premises, and (ii) another 5-year renewal option to extend the lease from November 1, 2037 through October 31, 2042 at the fair market rental rate of the premises. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
INCOME TAXES | INCOME TAXES | |||||||||||
Income (loss) before income taxes consisted of the following: | ||||||||||||
Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(As adjusted)* | ||||||||||||
(In thousands) | ||||||||||||
United States operations | $ | 16,766 | $ | (33,162 | ) | $ | 25,293 | |||||
Foreign operations | 26,213 | 1,860 | 26,736 | |||||||||
Total | $ | 42,979 | $ | (31,302 | ) | $ | 52,029 | |||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. | ||||||||||||
A reconciliation of the U.S. Federal statutory rate to the Company’s effective tax rate is as follows: | ||||||||||||
Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(As adjusted)* | ||||||||||||
Federal statutory rate | 35 | % | 35 | % | 35 | % | ||||||
Increase (decrease) in income taxes resulting from: | ||||||||||||
State income taxes, net of federal tax benefit | 5.6 | % | 0.3 | % | 2.6 | % | ||||||
Foreign operations | (16.0 | )% | (17.2 | )% | (14.7 | )% | ||||||
Goodwill impairment | — | % | 34.1 | % | — | % | ||||||
Changes in valuation allowances | 3 | % | (1.1 | )% | (0.4 | )% | ||||||
Uncertain tax positions | (3.8 | )% | (8.5 | )% | (2.5 | )% | ||||||
Research and development credit | (2.2 | )% | (1.8 | )% | — | % | ||||||
Return to provision | 1.5 | % | (6.6 | )% | (0.5 | )% | ||||||
Other | (2.2 | )% | (1.5 | )% | 1.3 | % | ||||||
Effective tax rate | 20.9 | % | 32.7 | % | 20.8 | % | ||||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. | ||||||||||||
The effective tax rate decreased by 11.8% in 2014 compared with 2013 primarily due to the impairment of goodwill in 2013 as well as a change in the mix of earnings between the U.S. and overseas. The goodwill impairment primarily created a non-deductible tax event in the prior year. The Company recorded an income tax benefit of $2.2 million in the current year for the release of tax contingency reserves as compared to $2.7 million in the prior year. This current year benefit was offset by the establishment of $0.5 million of new tax contingency positions during the year. The Company also recorded a $1.1 million tax expense for the settlement of various state tax audits that were not previously reserved. | ||||||||||||
During 2014, the Company's foreign operations generated a $0.25 million decrease in income tax expense as a result of, among other factors, the geographic and business mix of taxable earnings and losses and the re-establishment of an income tax benefit in France for half of the year related to intercompany interest. The 2014 foreign effective tax rate is 6.9%, an increase of approximately 66% over the rate in 2013. The Company's foreign tax rate is primarily based upon statutory tax rates and is not related to a tax holiday or negotiated tax rate. | ||||||||||||
During 2013, the Company's foreign operations generated a $2.7 million increase in income tax expense as a result of, among other factors, the geographic and business mix of taxable earnings and losses and the change of an income tax benefit in France as a result of a French tax law change that occurred on December 30, 2013. The 2013 foreign effective tax rate is (60.6)%, a decrease of approximately 83% over the rate in 2012. The Company's foreign tax rate is primarily based upon statutory tax rates and is not related to a tax holiday or negotiated tax rate. | ||||||||||||
During 2012, the Company's foreign operations generated a $1.3 million income tax expense as a result of, among other factors, the geographic and business mix of taxable earnings and losses. The Company's operations in Ireland contributed to the majority of this income tax benefit, as income earned in Ireland is taxed at a corporate income tax rate that is significantly lower than the U.S. corporate rate. The 2012 foreign effective tax rate is 7.8% and the Company's foreign tax rate is primarily based upon statutory tax rates and is not related to a tax holiday or negotiated tax rate. | ||||||||||||
As of December 31, 2014, the Company has not provided deferred U.S. income taxes or foreign withholding taxes on temporary differences of approximately $223.5 million resulting from earnings for certain non-U.S. subsidiaries which are permanently reinvested outside the U.S. The unrecognized deferred tax liability associated with these temporary differences was estimated to be $36.4 million at December 31, 2014. Events that could trigger a need to repatriate foreign cash to the U.S. and generate a tax might include U.S. acquisitions, loans from a foreign subsidiary, or anticipated tax law changes that are considered unfavorable and would result in higher taxes on repatriations that occur after the change in tax law goes into effect. | ||||||||||||
The provision for income taxes consisted of the following: | ||||||||||||
Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(As adjusted)* | ||||||||||||
(In thousands) | ||||||||||||
Current: | ||||||||||||
Federal | $ | 4,224 | $ | 3,160 | $ | 3,614 | ||||||
State | 1,683 | (1,374 | ) | 1,373 | ||||||||
Foreign | 4,032 | 1,124 | 4,301 | |||||||||
Total current | $ | 9,939 | $ | 2,910 | $ | 9,288 | ||||||
Deferred: | ||||||||||||
Federal | (200 | ) | (13,817 | ) | 4,053 | |||||||
State | 953 | (757 | ) | 497 | ||||||||
Foreign | (1,717 | ) | 1,429 | (3,013 | ) | |||||||
Total deferred | $ | (964 | ) | $ | (13,145 | ) | $ | 1,537 | ||||
Provision (benefit) for income taxes | $ | 8,975 | $ | (10,235 | ) | $ | 10,825 | |||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. | ||||||||||||
The income tax effects of significant temporary differences that give rise to deferred tax assets and liabilities, shown before jurisdictional netting, are presented below: | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
(As adjusted)* | ||||||||||||
(In thousands) | ||||||||||||
Current assets: | ||||||||||||
Doubtful accounts | $ | 1,632 | $ | 1,791 | ||||||||
Inventory related items | 35,660 | 34,968 | ||||||||||
Tax credits | 3,052 | 3,883 | ||||||||||
Accrued vacation | 2,667 | 2,492 | ||||||||||
Accrued bonus | 5,085 | 1,266 | ||||||||||
Net operating loss carryforwards | 2,454 | 4,550 | ||||||||||
Other | 1,302 | 1,960 | ||||||||||
Total current deferred tax assets | 51,852 | 50,910 | ||||||||||
Less valuation allowance | (681 | ) | (2,232 | ) | ||||||||
Current deferred tax assets after valuation allowance | $ | 51,171 | $ | 48,678 | ||||||||
Current liabilities: | ||||||||||||
Other | (597 | ) | (646 | ) | ||||||||
Total current deferred tax liabilities | $ | (597 | ) | $ | (646 | ) | ||||||
Net current deferred tax assets | $ | 50,574 | $ | 48,032 | ||||||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
(As adjusted)* | ||||||||||||
(In thousands) | ||||||||||||
Non-current assets: | ||||||||||||
Stock compensation | 15,349 | 14,879 | ||||||||||
Deferred revenue | 3 | 186 | ||||||||||
Net operating loss carryforwards | 21,368 | 26,613 | ||||||||||
Federal & state tax credits | 14,531 | 19,045 | ||||||||||
Other | 581 | 897 | ||||||||||
Total non-current deferred tax assets | 51,832 | 61,620 | ||||||||||
Less valuation allowance | (6,579 | ) | (6,828 | ) | ||||||||
Non-current deferred tax assets after valuation allowance | $ | 45,253 | $ | 54,792 | ||||||||
Non-current liabilities: | ||||||||||||
Intangible & fixed assets | (123,257 | ) | (41,563 | ) | ||||||||
Other | (52 | ) | 105 | |||||||||
Total non-current deferred tax liabilities | $ | (123,309 | ) | $ | (41,458 | ) | ||||||
Net non-current deferred tax assets (liabilities) | $ | (78,056 | ) | $ | 13,334 | |||||||
Total net deferred tax assets (liabilities) | $ | (27,482 | ) | $ | 61,366 | |||||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. | ||||||||||||
At December 31, 2014, the Company had net operating loss carryforwards of $42.3 million for federal income tax purposes, $33.2 million for foreign income tax purposes and $23.2 million for state income tax purposes to offset future taxable income. The federal net operating loss carryforwards expire through 2032, $10.0 million of the foreign net operating loss carryforwards expire through 2021 with the remaining $23.2 million having an indefinite carry forward period. The state net operating loss carryforwards expire through 2032. | ||||||||||||
Deferred tax assets relating to tax benefits of employee stock option grants have been reduced to reflect exercises in 2012. Some exercises have resulted in tax deductions in excess of previously recorded benefits based on the option value at the time of grant (“windfalls”). Although these additional tax benefits are reflected in net operating tax loss carryforwards the additional tax benefit associated with the windfall is not recognized until the deduction reduces taxes payable. Accordingly, since the tax benefit does not reduce our current taxes payable in 2012 due to net operating loss carryforwards, these “windfall” tax benefits are not reflected in our net operating losses in deferred tax assets for 2012. Windfalls included in net operating loss carryforwards but not reflected in deferred tax assets for 2012 are $0.1 million. | ||||||||||||
A valuation allowance of $7.3 million, $9.0 million and $14.2 million is recorded against the Company’s gross deferred tax assets of $103.7 million, $110.2 million, and $110.5 million recorded at December 31, 2014, 2013 and 2012, respectively. | ||||||||||||
The valuation allowance relates to deferred tax assets for certain items that will be deductible for income tax purposes under very limited circumstances and for which the Company believes it is not more likely than not that it will realize the associated tax benefit. The Company does not anticipate additional income tax benefits through future reductions in the valuation allowance. However, in the event that the Company determines that it would be able to realize more or less than the recorded amount of net deferred tax assets, an adjustment to the deferred tax asset valuation allowance would be recorded in the period such a determination is made. | ||||||||||||
The Company’s valuation allowance decreased by $1.8 million, and $5.2 million in 2014 and 2013, respectively. The 2014 overall decrease in the valuation allowance was primarily due to expiring net operating losses in the Netherlands which is offset by a reduction in the related deferred tax asset. | ||||||||||||
A reconciliation of the beginning and ending amount of uncertain tax benefits is as follows: | ||||||||||||
Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(As adjusted)* | ||||||||||||
(In thousands) | ||||||||||||
Balance, beginning of year | $ | 3,396 | $ | 6,136 | $ | 3,927 | ||||||
Gross increases: | ||||||||||||
Current year tax positions | — | 346 | — | |||||||||
Prior years' tax positions | 543 | 729 | 7,796 | |||||||||
Gross decreases: | ||||||||||||
Prior years' tax positions | (286 | ) | (477 | ) | — | |||||||
Settlements | (828 | ) | — | (3,523 | ) | |||||||
Statute of limitations lapses | (1,580 | ) | (3,338 | ) | (2,064 | ) | ||||||
Balance, end of year | $ | 1,245 | $ | 3,396 | $ | 6,136 | ||||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. | ||||||||||||
Approximately $1.2 million of the balance at December 31, 2014 relates to uncertain tax positions that, if recognized, would affect the annual effective tax rate. Included in the balance of uncertain tax positions at December 31, 2014 is $0.5 million related to tax positions for which it is reasonably possible that the total amounts could be reduced during the twelve months following December 31, 2014, as a result of expiring statutes of limitations. | ||||||||||||
The Company recognizes interest and penalties relating to uncertain tax positions in income tax expense. The Company recognized a $0.2 million benefit, a $0.8 million benefit, and a $0.1 million expense for interest and penalties in the income statement during the years ended December 31, 2014, 2013 and 2012, respectively. The Company had approximately $0.1 million, $0.4 million, and $1.4 million of interest and penalties accrued at December 31, 2014, 2013 and 2012, respectively. | ||||||||||||
At December 31, 2012 the Company had a deferred tax asset and reserve for uncertain tax positions for $0.5 million related to research and development credit from a prior business acquisition. It was determined in 2013 that this credit would not be realizable; therefore, the deferred tax asset was removed and the corresponding reserve for uncertain tax positions was released thus impairing this acquired benefit. | ||||||||||||
During 2012, the Company settled the review of years 2008 through 2010 with the IRS, which resulted in $2.1 million being recorded in the consolidated statement of operations as an income tax benefit, partially offset by an additional Federal income tax expense of $0.2 million in 2012, as a result of receiving the agreed upon settlement. In addition, the Company reclassified $4.2 million from deferred taxes to long-term liabilities, which had no effect on the current year tax provision. These amounts include interest and penalties related to the settlement. | ||||||||||||
The Company files Federal income tax returns, as well as multiple state, local and foreign jurisdiction tax returns. The Company is no longer subject to examinations of its Federal income tax returns by the IRS through fiscal year 2010. All significant state and local matters have been concluded through fiscal 2005. All significant foreign matters have been settled through fiscal 2007. |
NET_INCOME_LOSS_PER_SHARE
NET INCOME (LOSS) PER SHARE | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
NET INCOME (LOSS) PER SHARE | NET INCOME (LOSS) PER SHARE | |||||||||||
Basic and diluted net income (loss) per share was as follows: | ||||||||||||
Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(As adjusted)* | ||||||||||||
(In thousands, except per share amounts) | ||||||||||||
Basic net income (loss) per share: | ||||||||||||
Net income (loss) | $ | 34,004 | $ | (21,067 | ) | $ | 41,204 | |||||
Weighted average common shares outstanding | 32,432 | 28,416 | 28,232 | |||||||||
Basic net income (loss) per common share | $ | 1.05 | $ | (0.74 | ) | $ | 1.46 | |||||
Diluted net income (loss) per share: | ||||||||||||
Net income (loss) | $ | 34,004 | $ | (21,067 | ) | $ | 41,204 | |||||
Weighted average common shares outstanding — Basic | 32,432 | 28,416 | 28,232 | |||||||||
Effect of dilutive securities: | ||||||||||||
Stock options and restricted stock | 528 | — | 284 | |||||||||
Weighted average common shares for diluted earnings per share | 32,960 | 28,416 | 28,516 | |||||||||
Diluted net income (loss) per common share | $ | 1.03 | $ | (0.74 | ) | $ | 1.44 | |||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. | ||||||||||||
Common stock of approximately 0.2 million, 0.7 million and 1.0 million shares at December 31, 2014, 2013 and 2012, respectively, that are issuable through exercise or conversion of dilutive securities were not included in the computation of diluted net income per share because their effect would have been antidilutive.The Company also has warrants outstanding related to its 2016 Notes at December 31, 2014, 2013, and 2012 and the Company's 2016 Notes are convertible to common shares in certain circumstances (see Note 4). These warrants and the excess conversion value of the 2016 Notes are included in the diluted earnings per share calculation using the treasury stock method, unless the effect of including such items would be anti-dilutive. | ||||||||||||
Performance Shares and Restricted Units that entitle the holders to approximately 0.2 million shares of common stock are included in the basic and diluted weighted average shares outstanding calculation from their date of issuance because no further consideration is due related to the issuance of the underlying common shares. |
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Comprehensive Income (Loss) [Abstract] | |||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||
Changes in accumulated other comprehensive income (loss) by component between December 31, 2014 and 2013 are presented in the table below, net of tax: | |||||||||||||||||
Gains and Losses on Cash Flow Hedges | Defined Benefit Pension Items | Foreign Currency Items | Total | ||||||||||||||
(In thousands) | |||||||||||||||||
Balance at December 31, 2013 | $ | (1,390 | ) | $ | (2,287 | ) | $ | 4,604 | $ | 927 | |||||||
Other comprehensive income before reclassifications | (118 | ) | 1,381 | (26,674 | ) | (25,411 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income | 996 | — | — | 996 | |||||||||||||
Current period other comprehensive income (loss) | 878 | 1,381 | (26,674 | ) | (24,415 | ) | |||||||||||
Balance at December 31, 2014 | $ | (512 | ) | $ | (906 | ) | $ | (22,070 | ) | $ | (23,488 | ) | |||||
The reclassification adjustments out of accumulated other comprehensive (loss) income during the years ended December 31, 2014 and 2013 were as follows: | |||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
Details about Accumulated Other Comprehensive Income Components | Amount Reclassified from Accumulated Other Comprehensive Income | Affected Line Item in the Statement where Net Income (Loss) is Presented | |||||||||||||||
(In thousands) | |||||||||||||||||
Gains and losses on cash flow hedges | |||||||||||||||||
Interest rate swap | $ | (1,747 | ) | Interest expense | |||||||||||||
751 | Tax benefit | ||||||||||||||||
$ | (996 | ) | Net of tax | ||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Details about Accumulated Other Comprehensive Income Components | Amount Reclassified from Accumulated Other Comprehensive Income | Affected Line Item in the Statement where Net Income (Loss) is Presented | |||||||||||||||
(In thousands) | |||||||||||||||||
Gains and losses on cash flow hedges | |||||||||||||||||
Interest rate swap | $ | (1,938 | ) | Interest expense | |||||||||||||
Foreign currency forwards | 108 | Cost of goods sold | |||||||||||||||
(1,830 | ) | Total before tax | |||||||||||||||
793 | Tax benefit | ||||||||||||||||
$ | (1,037 | ) | Net of tax |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES |
In consideration for certain technology, manufacturing, distribution, and selling rights and licenses granted to the Company, the Company has agreed to pay royalties on sales of certain products that it sells. The royalty payments that the Company made under these agreements were not significant for any of the periods presented. | |
The Company is subject to various claims, lawsuits and proceedings in the ordinary course of the Company's business, including claims by current or former employees, distributors and competitors and with respect to its products and product liability claims, lawsuits and proceedings, some of which have been settled by the Company. In the opinion of management, such claims are either adequately covered by insurance or otherwise indemnified, or are not expected, individually or in the aggregate, to result in a material adverse effect on the Company's financial condition. However, it is possible that the Company's results of operations, financial position and cash flows in a particular period could be materially affected by these contingencies. | |
On June 6, 2012, the Company was contacted by the United States Attorney's Office for the District of New Jersey regarding the activities of sales representatives in a single region within the Extremities Reconstruction division. The U.S. Attorney's Office was investigating the activities of three sales representatives, one of whom was a supervisor until terminated by the Company for failure to cooperate with this investigation. The activities at issue pertained to alleged improper billing of products for extremities indications. On August 12, 2014, the United States Attorney for the District of New Jersey announced that two former Integra sales representatives, one of whom was a supervisor, entered guilty pleas as a result of the investigation; those individuals were sentenced in January 2015. According to the United States Attorney for the District of New Jersey, these individuals acted without the awareness of the Company. The Company cooperated with the U.S. Attorney’s Office on a voluntary basis throughout the investigation and has reimbursed affected customers. The reimbursements were made in historical periods and were not material. The Company was not a subject or target of the investigation, and believes the investigation to now be concluded. | |
The Company manufactures and sells certain extremities products internationally pursuant to a license agreement that the licensor had indicated it would terminate effective October 20, 2014 after the parties were unable to resolve disagreements under the license agreement. On October 17, 2014, the parties resolved their disagreements and extended the Company’s right to manufacture and sell these products through December 31, 2015. | |
The Company accrues for loss contingencies when it is deemed probable that a loss has been incurred and that loss is estimable. The amounts accrued are based on the full amount of the estimated loss before considering insurance proceeds, and do not include an estimate for legal fees expected to be incurred in connection with the loss contingency. The Company consistently accrues legal fees expected to be incurred in connection with loss contingencies as those fees are incurred by outside counsel as a period cost. |
SEGMENT_AND_GEOGRAPHIC_INFORMA
SEGMENT AND GEOGRAPHIC INFORMATION | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||
SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT AND GEOGRAPHIC INFORMATION | |||||||||||||||
Starting in the first quarter of 2012, because of changes in how the Company internally manages and reports the results of its businesses to its chief operating decision maker, the Company began reporting five reportable segments. The five reportable segments and a description of their activities are described below: | ||||||||||||||||
• | The U.S. Neurosurgery segment sells a full line of products specifically for neurosurgery and critical care such as tissue ablation equipment, dural repair products, cerebral spinal fluid management devices, intracranial monitoring equipment, and cranial stabilization equipment. | |||||||||||||||
• | The U.S. Instruments business sells more than 60,000 instrument patterns and surgical products and lighting to hospitals, surgery centers, and dental, podiatry, and veterinary offices. | |||||||||||||||
• | The U.S. Extremities segment includes the U.S. extremity reconstruction business, which includes such offerings as skin and wound repair, bone and joint fixation, implants in the upper and lower extremities, bone grafts and nerve and tendon repair. | |||||||||||||||
• | The U.S. Spine and Other segment includes (i) the U.S. Spine business, which focuses on spinal fusion, spinal implants, and deformity correction, together with bone graft substitutes and other related medical devices that are used to enhance the repair and regeneration of bone in various types of orthopedic surgical procedures, and (ii) the Private Label business, which sells the Company’s regenerative technology and other products to strategic partners. | |||||||||||||||
• | The International segment sells similar products to those discussed above, but are managed through the following geographies: (i) Europe, Middle East and Africa, and (ii) Latin/South America, Asia-Pacific, Australia, New Zealand and Canada. | |||||||||||||||
The Corporate and other category includes (i) various legal, finance, executive, and human resource functions, (ii) brand management, (iii) share-based compensation costs, and (iv) costs related to procurement, manufacturing operations and logistics for the Company’s entire organization. | ||||||||||||||||
The operating results of the various reportable segments as presented are not comparable to one another because (i) certain operating segments are more dependent than others on corporate functions for unallocated general and administrative and/or operational manufacturing functions, and (ii) the Company does not allocate certain manufacturing costs and general and administrative costs to the operating segment results. | ||||||||||||||||
Net sales and profit by reportable segment for the years ended December 31, 2014, 2013 and 2012 are as follows: | ||||||||||||||||
Years Ended December 31, | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
(In thousands) | ||||||||||||||||
Segment Net Sales | ||||||||||||||||
U.S. Neurosurgery | $ | 244,603 | $ | 172,250 | $ | 171,278 | ||||||||||
U.S. Instruments * | 157,816 | 163,908 | 166,921 | |||||||||||||
U.S. Extremities * | 143,384 | 128,336 | 116,279 | |||||||||||||
U.S. Spine and Other * | 171,363 | 182,007 | 192,516 | |||||||||||||
International | 211,139 | 189,713 | 183,877 | |||||||||||||
Total revenues | $ | 928,305 | $ | 836,214 | $ | 830,871 | ||||||||||
Segment Profit | ||||||||||||||||
U.S. Neurosurgery | $ | 133,165 | $ | 83,211 | $ | 91,070 | ||||||||||
U.S. Instruments * | 48,036 | 49,348 | 50,277 | |||||||||||||
U.S. Extremities * | 61,343 | 47,880 | 43,952 | |||||||||||||
U.S. Spine and Other * | 53,318 | 10,136 | 57,388 | |||||||||||||
International | 69,663 | 56,869 | 61,336 | |||||||||||||
Segment profit | 365,525 | 247,444 | 304,023 | |||||||||||||
Amortization | -12,400 | -12,697 | -18,536 | |||||||||||||
Corporate and other | (287,584 | ) | (244,903 | ) | (211,705 | ) | ||||||||||
Operating income (loss) | $ | 65,541 | $ | (10,156 | ) | $ | 73,782 | |||||||||
* Certain revenues and profits have been reclassified from the U.S. Extremities segment to the U.S. Instruments segment and the U.S. Spine and Other segment for the years ended December 31, 2013 and 2012. | ||||||||||||||||
The Company does not allocate any assets to the reportable segments, and, therefore, no asset information is reported to the chief operating decision maker and disclosed in the financial information for each segment. | ||||||||||||||||
Revenue by major product category consisted of the following: | ||||||||||||||||
Years Ended December 31, | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
(In thousands) | ||||||||||||||||
Orthopedics ** | $ | 370,082 | $ | 370,359 | $ | 364,714 | ||||||||||
Neurosurgery | 371,676 | 278,672 | 277,527 | |||||||||||||
Instruments ** | 186,547 | 187,183 | 188,630 | |||||||||||||
Total revenues | $ | 928,305 | $ | 836,214 | $ | 830,871 | ||||||||||
** Certain revenues have been reclassified from the Orthopedics category to the Instruments category for the years ended December 31, 2013 and 2012. | ||||||||||||||||
The Company attributes revenue to geographic areas based on the location of the customer. There are certain revenues managed by the various U.S. segments above that are generated from non-U.S. customers and therefore included in Europe and the Rest of World revenues below. | ||||||||||||||||
Total revenue, net and long-lived assets (tangible) by major geographic area are summarized below: | ||||||||||||||||
United States* | Europe | Rest of the World | Consolidated | |||||||||||||
(In thousands) | ||||||||||||||||
Total revenue, net: | ||||||||||||||||
2014 | $ | 714,040 | $ | 105,697 | $ | 108,568 | $ | 928,305 | ||||||||
2013 | 642,694 | 93,977 | 99,543 | 836,214 | ||||||||||||
2012 | 642,830 | 90,920 | 97,121 | 830,871 | ||||||||||||
Total long-lived assets: | ||||||||||||||||
2014 | $ | 197,897 | $ | 21,218 | $ | 1,239 | $ | 220,354 | ||||||||
2013 | 187,608 | 20,010 | 1,030 | 208,648 | ||||||||||||
* Includes long-lived assets in Puerto Rico. |
SELECTED_QUARTERLY_INFORMATION
SELECTED QUARTERLY INFORMATION - UNAUDITED | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Selected Quarterly Financial Information [Abstract] | ||||||||||||||||
SELECTED QUARTERLY INFORMATION - UNAUDITED | SELECTED QUARTERLY INFORMATION - UNAUDITED | |||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Total revenue, net: | ||||||||||||||||
2014 | $ | 215,059 | $ | 231,351 | $ | 229,719 | $ | 252,176 | ||||||||
2013 (As adjusted)* | 196,652 | 205,547 | 213,246 | 220,769 | ||||||||||||
Gross margin: | ||||||||||||||||
2014 | $ | 132,676 | $ | 144,375 | $ | 143,745 | $ | 154,708 | ||||||||
2013 (As adjusted)* | 117,040 | 123,718 | 131,479 | 136,932 | ||||||||||||
Net income (loss): | ||||||||||||||||
2014 | $ | 2,206 | $ | 4,825 | $ | 9,807 | $ | 17,166 | ||||||||
2013 (As adjusted)* (1) | (6,028 | ) | 1,520 | (30,330 | ) | 13,771 | ||||||||||
Basic net income (loss) per common share (2): | ||||||||||||||||
2014 | $ | 0.07 | $ | 0.15 | $ | 0.3 | $ | 0.53 | ||||||||
2013 (As adjusted)* | (0.22 | ) | 0.05 | (1.09 | ) | 0.46 | ||||||||||
Diluted net income (loss) per common share (2): | ||||||||||||||||
2014 | $ | 0.07 | $ | 0.15 | $ | 0.3 | $ | 0.52 | ||||||||
2013 (As adjusted)* | (0.22 | ) | 0.05 | (1.09 | ) | 0.45 | ||||||||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. | ||||||||||||||||
(1) The first quarter of 2013 was negatively impacted by a voluntary recall of certain products manufactured in the Company's Añasco, Puerto Rico facility. | ||||||||||||||||
On July 31, 2013, the Company performed the annual goodwill impairment test which resulted in a non-cash goodwill impairment charge of $46.7 million for its U.S. Spine reporting unit, which is a part of the U.S. Spine and Other reportable segment. | ||||||||||||||||
The Company incurred incremental costs related to the implementation of its global enterprise resource planning system in the first, second, third, and fourth quarters of 2013 of $6.1 million, $7.6 million, $5.0 million and $5.6 million, respectively. | ||||||||||||||||
The Company incurred costs related to the remediation of the FDA warning letters at its manufacturing facilities of $2.1 million, $3.0 million, $2.8 million and $0.4 million in the first, second, third and fourth quarters of 2013, respectively. | ||||||||||||||||
(2) Per common share amounts for the quarters and full years have been calculated separately. Accordingly, quarterly amounts do not necessarily add to the annual amount because of differences in the weighted average common shares outstanding during each period principally due to the effect of the Company’s issuing shares of its common stock during the year. |
SCHEDULE_II_VALUATION_AND_QUAL
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||||||
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS | |||||||||||||||||||
Balance at Beginning of Period | Charged to Costs and Expenses | Charged to Other Accounts (1) | Deductions | Balance at End of Period | ||||||||||||||||
Description | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Year ended December 31, 2014: | ||||||||||||||||||||
Allowance for doubtful accounts and sales returns and allowances | $ | 6,194 | 1,944 | — | (1,954 | ) | $ | 6,184 | ||||||||||||
Deferred tax asset valuation allowance (As adjusted)* | 9,060 | (1,102 | ) | — | (698 | ) | 7,260 | |||||||||||||
Year ended December 31, 2013: | ||||||||||||||||||||
Allowance for doubtful accounts and sales returns and allowances | $ | 7,221 | $ | 601 | $ | — | $ | (1,628 | ) | $ | 6,194 | |||||||||
Deferred tax asset valuation allowance (As adjusted)* | 14,243 | (4,469 | ) | — | (714 | ) | 9,060 | |||||||||||||
Year ended December 31, 2012: | ||||||||||||||||||||
Allowance for doubtful accounts and sales returns and allowances | $ | 6,978 | $ | 1,315 | $ | — | $ | (1,072 | ) | $ | 7,221 | |||||||||
Deferred tax asset valuation allowance | 32,304 | (16,979 | ) | 477 | (1,559 | ) | 14,243 | |||||||||||||
(1) In 2012, $0.5 million of deferred tax liability was reclassified to the valuation allowance with no impact to the consolidated statement of operations. There were no such reclassification adjustments made during 2014 or 2013. | ||||||||||||||||||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES (Policies) | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||
Basis Of Presentation | BASIS OF PRESENTATION | |||||||||||||||||||||||||||
These financial statements and the accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America and conform to Regulation S-X under the Securities Exchange Act of 1934, as amended. | ||||||||||||||||||||||||||||
Principles Of Consolidation | PRINCIPLES OF CONSOLIDATION | |||||||||||||||||||||||||||
The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly owned. All intercompany accounts and transactions are eliminated in consolidation. See Note 3, “Acquisitions and Pro Forma Results", for details of new subsidiaries included in the consolidation. | ||||||||||||||||||||||||||||
Use Of Estimates | USE OF ESTIMATES | |||||||||||||||||||||||||||
The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities, and the reported amounts of revenues and expenses. Significant estimates affecting amounts reported or disclosed in the consolidated financial statements include allowances for doubtful accounts receivable and sales returns and allowances, net realizable value of inventories, valuation of intangible assets and in-process research and development ("IPR&D"), amortization periods for acquired intangible assets, discount rates and estimated projected cash flows used to value and test impairments of long-lived assets and goodwill, estimates of projected cash flows, depreciation and amortization periods for long-lived assets, computation of taxes, valuation allowances recorded against deferred tax assets, the valuation of stock-based compensation, valuation of pension assets and liabilities, valuation of derivative instruments, valuation of the equity component of convertible debt instruments, and valuation of debt instruments and loss contingencies. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the current circumstances. Actual results could differ from these estimates. | ||||||||||||||||||||||||||||
Reclassifications | RECLASSIFICATIONS | |||||||||||||||||||||||||||
Certain amounts from the prior years' financial statements have been reclassified in order to conform to the current year's presentation. | ||||||||||||||||||||||||||||
Cash And Cash Equivalents | CASH AND CASH EQUIVALENTS | |||||||||||||||||||||||||||
The Company considers all short-term, highly liquid investments purchased with original maturities of three months or less to be cash equivalents. These investments are carried at cost, which approximates fair value. | ||||||||||||||||||||||||||||
Trade Accounts Receivable And Allowances For Doubtful Accounts Receivable | TRADE ACCOUNTS RECEIVABLE AND ALLOWANCES FOR DOUBTFUL ACCOUNTS RECEIVABLE | |||||||||||||||||||||||||||
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company grants credit to customers in the normal course of business, but generally does not require collateral or any other security to support its receivables. | ||||||||||||||||||||||||||||
The Company evaluates the collectability of accounts receivable based on a combination of factors. In circumstances where a specific customer is unable to meet its financial obligations to the Company, a provision to the allowances for doubtful accounts is recorded against amounts due to reduce the net recognized receivable to the amount that is reasonably expected to be collected. For all other customers, a provision to the allowances for doubtful accounts is recorded based on factors including the length of time the receivables are past due, the current business environment and the Company's historical experience. Provisions to the allowances for doubtful accounts are recorded to selling, general and administrative expenses. Account balances are charged off against the allowance when it is probable that the receivable will not be recovered. | ||||||||||||||||||||||||||||
Inventories | INVENTORIES | |||||||||||||||||||||||||||
Inventories, consisting of purchased materials, direct labor and manufacturing overhead, are stated at the lower of cost, the value determined by the first-in, first-out method, or market. Inventories consisted of the following: | ||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||
(As adjusted)* | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Finished goods | $ | 150,483 | $ | 123,786 | ||||||||||||||||||||||||
Work in process | 50,166 | 47,403 | ||||||||||||||||||||||||||
Raw materials | 36,465 | 35,730 | ||||||||||||||||||||||||||
Total inventories, net | $ | 237,114 | $ | 206,919 | ||||||||||||||||||||||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. Impact of adjustment was recorded to finished goods. | ||||||||||||||||||||||||||||
At each balance sheet date, the Company evaluates inventories for excess quantities, obsolescence or shelf life expiration. This evaluation includes analysis of historical sales levels by product, projections of future demand, the risk of technological or competitive obsolescence for products, general market conditions, a review of the shelf life expiration dates for products, as well as the feasibility of reworking or using excess or obsolete products or components in the production or assembly of other products that are not obsolete or for which there are not excess quantities in inventory. To the extent that management determines there are excess or obsolete inventory or quantities with a shelf life that is too near its expiration for the Company to reasonably expect that it can sell those products prior to their expiration, the Company adjusts the carrying value to estimated net realizable value. | ||||||||||||||||||||||||||||
The Company capitalizes inventory costs associated with certain products prior to regulatory approval, based on management's judgment of probable economic benefit. The Company could be required to expense previously capitalized costs related to pre-approval inventory upon a change in such judgment, due to, among other potential factors, a denial or delay of approval by necessary regulatory bodies or a decision by management to discontinue the related development program. | ||||||||||||||||||||||||||||
Property, Plant And Equipment | PROPERTY, PLANT AND EQUIPMENT | |||||||||||||||||||||||||||
Property, plant and equipment are stated at historical cost less accumulated depreciation and any impairment charges. The Company provides for depreciation using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the lesser of the lease term or the useful life. The cost of major additions and improvements is capitalized, while maintenance and repair costs that do not improve or extend the lives of the respective assets are charged to operations as incurred. The cost of computer software developed or obtained for internal use is accounted for in accordance with the Accounting Standards Codification 350-40, Internal-Use Software. | ||||||||||||||||||||||||||||
Property, plant and equipment balances and corresponding lives were as follows: | ||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | Useful Lives | ||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Land | $ | 3,308 | $ | 3,022 | ||||||||||||||||||||||||
Buildings and building improvements | 16,272 | 15,377 | 5-40 years | |||||||||||||||||||||||||
Leasehold improvements | 45,416 | 42,900 | 1-20 years | |||||||||||||||||||||||||
Machinery and production equipment | 92,149 | 86,192 | 3-20 years | |||||||||||||||||||||||||
Surgical instrument kits | 32,551 | 30,352 | 4-5 years | |||||||||||||||||||||||||
Information systems and hardware | 92,392 | 51,171 | 1-7 years | |||||||||||||||||||||||||
Furniture, fixtures, and office equipment | 15,517 | 16,363 | 1-15 years | |||||||||||||||||||||||||
Construction-in-progress | 86,844 | 112,130 | ||||||||||||||||||||||||||
Total | 384,449 | 357,507 | ||||||||||||||||||||||||||
Less: Accumulated depreciation | (174,463 | ) | (157,197 | ) | ||||||||||||||||||||||||
Property, plant and equipment, net | $ | 209,986 | $ | 200,310 | ||||||||||||||||||||||||
Depreciation expense associated with property, plant and equipment was $30.2 million, $27.6 million, and $27.5 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||||||||||||||||
The Company leases certain computer equipment under capital lease agreements. The gross carrying value of such leases amounted to $2.0 million and $1.6 million at December 31, 2014 and 2013, respectively. The accumulated depreciation of such leases amounted to $0.7 million and $0.1 million at December 31, 2014 and 2013, respectively, and the cost is included as a component of furniture, fixtures, office equipment and information systems and hardware. | ||||||||||||||||||||||||||||
CAPITALIZED INTEREST | ||||||||||||||||||||||||||||
The interest cost on capital projects, including facilities build-out and internal use software, is capitalized and included in the cost of the project. Capitalization commences with the first expenditure for the project and continues until the project is substantially complete and ready for its intended use. When no debt is incurred specifically for a project, interest is capitalized on project expenditures using the weighted average cost of the Company's outstanding borrowings. For the years ended December 31, 2014 and 2013, respectively, the Company capitalized $2.6 million and $3.2 million and of interest expense into property, plant and equipment. | ||||||||||||||||||||||||||||
Goodwill And Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS | |||||||||||||||||||||||||||
The excess of the cost over the fair value of net assets of acquired businesses is recorded as goodwill. Goodwill is not subject to amortization, but is reviewed for impairment at the reporting unit level annually, or more frequently if impairment indicators arise. The Company's assessment of the recoverability of goodwill is based upon a comparison of the carrying value of goodwill with its estimated fair value. The Company reviews goodwill for impairment annually as of July 31 and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. In reviewing goodwill for impairment, the Company has the option - for any or all of its reporting units that carry goodwill - to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (i.e. greater than 50%) that the estimated fair value of a reporting unit is less than its carrying amount. If the Company elects to perform a qualitative assessment and determines that an impairment is more likely than not, the Company is then required to perform the two-step quantitative impairment test, otherwise no further analysis is required. The Company also may elect not to perform the qualitative assessment and, instead, proceed directly to step one of the two-step quantitative impairment test. The ultimate outcome of the goodwill impairment review for a reporting unit should be the same whether the Company chooses to perform the qualitative assessment or proceeds directly to the two-step quantitative impairment test. The most recent two-step quantitative impairment test completed for each reporting unit was as of July 31, 2013 (the "Base Valuation"), which resulted in the full impairment of goodwill held by the U.S. Spine reporting unit. At July 31, 2014 the following reporting units carried goodwill: U.S. Neurosurgery, U.S. Instruments, U.S. Extremities, Private Label, EMEA and LAPAC. | ||||||||||||||||||||||||||||
At July 31, 2014, management performed a comprehensive analysis of various events and circumstances (i.e. factors) that would likely affect the estimated fair value of all of its reporting units that carried goodwill at that date, and whether those factors would have a positive or negative impact on the fair value of the reporting unit when compared to the Base Valuation. Management considered Company-wide factors such as, but not limited to (i) macroeconomic conditions, (ii) industry conditions, (iii) the Company's overall financial prospects and market capitalization, (iv) the competitive environment, (v) regulatory and political developments, and (vi) any changes in the Company's weighted average cost of capital ("WACC"). Management also considered reporting unit specific factors such as, but not limited to (i) changes in the market for products and services, (ii) strategic business changes, (iii) reporting unit financial performance, (iv) management's most recent prospective revenue estimates, (v) the prospective cost burden of the reporting units, (vi) changes in a reporting unit's management, (vii) how any change in the Company's WACC above might impact the reporting unit specific WACC, and (viii) the suitability of the risk premiums on the reporting unit specific WACC. These factors are then classified by the type of impact they would have on the estimated fair value using positive, neutral, and adverse categories based on current business conditions. The Company then performs an assessment of the level of impact that a particular factor would have on the estimated fair value using high, medium, and low weighting. Finally, management considered all of the factors above in the context of the results of the Base Valuation, and whether it is more likely than not that the carrying value of any of the reporting units that have goodwill exceeds their individual fair value. | ||||||||||||||||||||||||||||
Management concluded that at July 31, 2014, based on the totality of information available for each reporting unit that carried goodwill, it was more likely than not that the estimated fair values of the U.S. Neurosurgery, U.S. Extremities, Private Label, EMEA and LAPAC reporting units were greater than their carrying values, and as such, no further analysis was required for those reporting units. The Company proceeded to step one of the quantitative goodwill impairment test for the U.S. Instruments reporting unit, primarily as a result of recent declines in that reporting unit's revenues. | ||||||||||||||||||||||||||||
To derive the fair value of the U.S. Instruments reporting unit, as required in step one of the impairment test, the Company used the income approach, specifically the discounted cash flow ("DCF") method, which incorporates significant estimates and assumptions made by management which, by their nature, are characterized by uncertainty. Inputs used to fair value the Company's reporting units are considered inputs of the fair value hierarchy. For Level 3 measurements, significant increases or decreases in long-term growth rates or discount rates in isolation or in combination could result in a significantly lower or higher fair value measurement. The key assumptions impacting the valuation included: | ||||||||||||||||||||||||||||
• | The reporting unit's financial projections, which are based on management's assessment of regional and macroeconomic variables, industry trends and market opportunities, and the Company's strategic objectives and future growth plans. | |||||||||||||||||||||||||||
• | The projected terminal value for the reporting unit, which represents the present value of projected cash flows beyond the last period in the discounted cash flow analysis. The terminal value reflects the Company's assumptions related to long-term growth rates and profitability, which are based on several factors, including local and macroeconomic variables, market opportunities, and future growth plans. | |||||||||||||||||||||||||||
• | The discount rate used to measure the present value of the projected future cash flows is set using a weighted-average cost of capital method that considers market and industry data as well as the Company's specific risk factors that are likely to be considered by a market participant. The weighted-average cost of capital is the Company's estimate of the overall after-tax rate of return required by equity and debt holders of a business enterprise. | |||||||||||||||||||||||||||
The Company determined, after performing the Step-1 fair value analysis above, that the U.S. Instruments reporting unit's fair value was in excess of its carrying value; therefore, it was not necessary to proceed to Step-2 of the goodwill impairment test for the U.S. Instruments reporting unit. | ||||||||||||||||||||||||||||
On July 31, 2013, the Company performed the annual goodwill impairment test which resulted in a non-cash goodwill impairment charge of $46.7 million recorded in the third quarter of 2013, representing the remaining goodwill balance in the U.S. Spine reporting unit which is a part of the U.S. Spine and Other reportable segment. During the fourth quarter of 2013, the Company finalized the step two analysis related to its impairment assessment of the goodwill and there were no changes to the impairment initially recorded. Approximately $16.2 million of the goodwill impairment charge was deductible for tax purposes. | ||||||||||||||||||||||||||||
As previously disclosed, the Company was monitoring its U.S. Spine business and disclosed that it was at risk for impairment. During the course of the annual strategic planning process performed during the third quarter of 2013, the Company determined that both the actual and expected income and cash flows for the U.S. Spine reporting unit were projected to be substantially lower than forecasts, and the U.S. spine market recovery may take longer than originally forecasted, including the current expectation of future significant negative pricing pressures. Factors that contributed to the impairment of the U.S. Spine reporting unit included broader market issues as well as company-specific issues. Company-specific issues included turnover of some distributors, significant delays in new product introductions and other operational issues that negatively impacted and decreased projected revenues by a material amount. As a result, the Company lowered its expectations of recovery in the U.S. market and its related impact on the U.S. Spine reporting unit. This revised outlook resulted in a reduction of the U.S. Spine forecasts of the sales, operating income and cash flows expected in 2014 and beyond and consequently, resulted in an impairment charge. | ||||||||||||||||||||||||||||
Changes in the carrying amount of goodwill in 2014 and 2013 were as follows: | ||||||||||||||||||||||||||||
U.S. | U.S. | U.S. | U.S. | International | Total | |||||||||||||||||||||||
Neurosurgery | Instruments | Extremities | Spine | |||||||||||||||||||||||||
and | ||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Goodwill, gross | $ | 95,165 | $ | 58,033 | $ | 61,079 | $ | 56,325 | $ | 25,900 | $ | 296,502 | ||||||||||||||||
Accumulated impairment losses | — | — | — | (46,738 | ) | — | (46,738 | ) | ||||||||||||||||||||
Goodwill at December 31, 2013 | $ | 95,165 | $ | 58,033 | $ | 61,079 | $ | 9,587 | $ | 25,900 | $ | 249,764 | ||||||||||||||||
Confluent Surgical, Inc. acquisition | 95,373 | — | — | — | 9,958 | 105,331 | ||||||||||||||||||||||
MicroFrance acquisition | — | — | — | — | 16,614 | 16,614 | ||||||||||||||||||||||
Metasurg acquisition | — | — | 469 | — | — | 469 | ||||||||||||||||||||||
Foreign currency translation | (4,248 | ) | (1,290 | ) | (1,369 | ) | (213 | ) | (1,170 | ) | (8,290 | ) | ||||||||||||||||
Balance, December 31, 2014 | $ | 186,290 | $ | 56,743 | $ | 60,179 | $ | 9,374 | $ | 51,302 | $ | 363,888 | ||||||||||||||||
Identifiable intangible assets are initially recorded at fair market value at the time of acquisition generally using an income or cost approach. The Company capitalizes costs incurred to renew or extend the term of recognized intangible assets and amortizes those costs over their expected useful lives. | ||||||||||||||||||||||||||||
The components of the Company's identifiable intangible assets were as follows: | ||||||||||||||||||||||||||||
Weighted | December 31, 2014 | Weighted | December 31, 2013 | |||||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||||||
Life | Cost | Accumulated | Net | Life | Cost | Accumulated | Net | |||||||||||||||||||||
Amortization | Amortization | |||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||
Completed technology | 18 years | $ | 345,082 | $ | (62,920 | ) | $ | 282,162 | 12 years | $ | 81,238 | $ | (45,343 | ) | $ | 35,895 | ||||||||||||
Customer relationships | 12 years | 162,031 | (87,653 | ) | 74,378 | 12 years | 146,627 | (79,624 | ) | 67,003 | ||||||||||||||||||
Trademarks/brand names | 34 years | 44,520 | (15,755 | ) | 28,765 | 31 years | 33,703 | (15,648 | ) | 18,055 | ||||||||||||||||||
Trademarks/brand names | Indefinite | 48,484 | — | 48,484 | Indefinite | 48,484 | — | 48,484 | ||||||||||||||||||||
Supplier relationships | 27 years | 34,721 | (10,809 | ) | 23,912 | 27 years | 34,721 | (9,305 | ) | 25,416 | ||||||||||||||||||
All other (1) | 4 years | 4,810 | (3,052 | ) | 1,758 | 4 years | 4,251 | (1,941 | ) | 2,310 | ||||||||||||||||||
$ | 639,648 | $ | (180,189 | ) | $ | 459,459 | $ | 349,024 | $ | (151,861 | ) | $ | 197,163 | |||||||||||||||
-1 | At December 31, 2014 and 2013, all other included IPR&D of $1.4 million which was indefinite-lived. | |||||||||||||||||||||||||||
The Company performs its assessment of the recoverability of indefinite-lived intangible assets annually during the second quarter, or more frequently as impairment indicators arise, and it is based upon a comparison of the carrying value of such assets to their estimated fair values. The Company performed its most recent annual assessment during the second quarter of 2014, which resulted in no impairments. | ||||||||||||||||||||||||||||
During 2014, the Company recorded impairment charges of $0.2 million in research and development expense related to IPR&D projects primarily acquired in connection with the Metasurg acquisition. In connection with this acquisition, we acquired IPR&D related to a product that will be discontinued. Therefore, a full-impairment of acquired IPR&D was recorded in the Company's selling, general, and administrative expenses. We also recorded an impairment charge of $0.6 million in cost of sales related to acquired technology product rights in conjunction with the Covidien acquisition. Subsequent to the acquisition date, a regulatory event occurred that was not known, or knowable, at the time of acquisition which resulted in the impairment. | ||||||||||||||||||||||||||||
During 2013, the Company recorded impairment charges of $0.4 million in research and development expense related to IPR&D projects that have been discontinued in its U.S Extremities segment. | ||||||||||||||||||||||||||||
During 2012, the Company recorded impairment charges of $0.1 million in cost of goods sold of its U.S. Neurosurgery segment related to technology assets whose related products were being discontinued. | ||||||||||||||||||||||||||||
Amortization expense for the years ended December 31, 2014, 2013 and 2012 was $31.8 million, $19.4 million and $25.1 million, respectively. Annual amortization expense (including amounts reported in cost of product revenues, but excluding any possible future amortization associated with acquired IPR&D) is expected to approximate $32.1 million in 2015, $29.9 million in 2016, $27.8 million in 2017, $27.5 million in 2018 and $26.7 million in 2019. Amortization of product technology based intangible assets totaled $19.3 million, $6.7 million and $6.6 million for the years ended December 31, 2014, 2013 and 2012, respectively, and is presented by the Company within cost of goods sold. | ||||||||||||||||||||||||||||
Long-Lived Assets | LONG-LIVED ASSETS | |||||||||||||||||||||||||||
Long-lived assets held and used by the Company, including property, plant and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets to be held and used, a recoverability test is performed using projected undiscounted net cash flows applicable to the long-lived assets. If an impairment exists, the amount of such impairment is calculated based on the estimated fair value of the asset. Impairments to long-lived assets to be disposed of are recorded based upon the difference between the carrying value and the fair value of the applicable assets. | ||||||||||||||||||||||||||||
Integra Foundation | INTEGRA FOUNDATION | |||||||||||||||||||||||||||
The Company may periodically make contributions to the Integra Foundation, Inc. The Integra Foundation was incorporated in 2002 exclusively for charitable, educational, and scientific purposes and qualifies under IRC 501(c)(3) as an exempt private foundation. Under its charter, the Integra Foundation engages in activities that promote health, the diagnosis and treatment of disease, and the development of medical science through grants, contributions and other appropriate means. The Integra Foundation is a separate legal entity and is not a subsidiary of the Company; therefore, its results are not included in these consolidated financial statements. The Company contributed $0.6 million, $0.6 million and $1.0 million to the Integra Foundation during the years ended December 31, 2014, 2013 and 2012, respectively. These contributions were recorded in selling, general, and administrative expense. | ||||||||||||||||||||||||||||
Derivatives | DERIVATIVES | |||||||||||||||||||||||||||
The Company develops, manufactures, and sells medical devices globally, and its earnings and cash flows are exposed to market risk from changes in interest rates and currency exchange rates. The Company addresses these risks through a risk management program that includes the use of derivative financial instruments, and operates the program pursuant to documented corporate risk management policies. All derivative financial instruments are recognized in the financial statements at fair value in accordance with the authoritative guidance. Under the guidance, for those instruments that are designated and qualify as hedging instruments, the hedging instrument must be designated as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation, based on the exposure being hedged. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. The Company's derivative instruments do not subject its earnings or cash flows to material risk, and gains and losses on these derivatives generally offset losses and gains on the item being hedged. The Company has not entered into derivative transactions for speculative purposes and from time to time, the Company may enter into derivatives that are not designated as hedging instruments in order to protect itself from currency volatility due to intercompany balances. | ||||||||||||||||||||||||||||
All derivative instruments are recognized at their fair values as either assets or liabilities on the balance sheet. The Company determines the fair value of its derivative instruments, using the framework prescribed by the authoritative guidance, by considering the estimated amount the Company would receive to sell or transfer these instruments at the reporting date and by taking into account: expected forward interest rates, currency exchange rates, the creditworthiness of the counterparty for assets, and its creditworthiness for liabilities. In certain instances, the Company utilizes a discounted cash flow model to measure fair value. Generally, the Company uses inputs that include quoted prices for similar assets or liabilities in active markets, other observable inputs for the asset or liability and inputs derived principally from, or corroborated by, observable market data by correlation or other means. The Company has classified all of its derivative assets and liabilities within Level 2 of the fair value hierarchy because observable inputs are available for substantially the full term of its derivative instruments. The Company classifies derivatives that meet the definition of hedges in the same category as the item being hedged for cash flow presentation purposes. | ||||||||||||||||||||||||||||
Foreign Currency | FOREIGN CURRENCY | |||||||||||||||||||||||||||
All assets and liabilities of foreign subsidiaries which have a functional currency other than the U.S. dollar are translated at the rate of exchange at year-end, while elements of the income statement are translated at the average exchange rates in effect during the year. The net effect of these translation adjustments is shown as a component of accumulated other comprehensive income (loss). These currency translation adjustments are not currently adjusted for income taxes as they relate to permanent investments in non-U.S. subsidiaries. Foreign currency transaction gains and losses are reported in other income (expense), net. | ||||||||||||||||||||||||||||
Income Taxes | INCOME TAXES | |||||||||||||||||||||||||||
Income taxes are accounted for by using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. | ||||||||||||||||||||||||||||
The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. Reserves are established for positions that don't meet this recognition threshold. The reserve is measured as the largest amount of benefit determined on a cumulative probability basis that the Company believes is more likely than not to be realized upon ultimate settlement of the position. These reserves are classified as long-term liabilities in the consolidated balance sheets of the Company. The Company also records interest and penalties accrued in relation to uncertain tax benefits as a component of income tax expense. | ||||||||||||||||||||||||||||
While the Company believes it has identified all reasonably identifiable exposures and the reserve it has established for identifiable exposures is appropriate under the circumstances, it is possible that additional exposures exist and that exposures may be settled at amounts different than the amounts reserved. It is also possible that changes in facts and circumstances could cause the Company to either materially increase or reduce the carrying amount of its tax reserve. | ||||||||||||||||||||||||||||
The Company continues to indefinitely reinvest substantially all of its foreign earnings. Our current analysis indicates that we have sufficient U.S. liquidity, including borrowing capacity, to fund foreseeable U.S. cash needs without requiring the repatriation of foreign cash. As of December 31, 2014, taxes have not been provided on approximately $223.5 million of accumulated foreign unremitted earnings on certain non-US subsidiaries that are expected to remain invested indefinitely. The unrecognized deferred tax liability associated with these temporary differences was estimated to be $36.4 million. One time or unusual items that may impact our ability or intent to keep our foreign earnings and cash indefinitely reinvested include significant U.S. acquisitions, loans from a foreign subsidiary, changes in tax laws. | ||||||||||||||||||||||||||||
Revenue Recognition | REVENUE RECOGNITION | |||||||||||||||||||||||||||
Total revenues, net, include product sales, product royalties and other revenues, such as fees received under research, licensing, distribution arrangements, research grants, and technology-related royalties. | ||||||||||||||||||||||||||||
Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred; title and risk of loss have passed to the customer, there is a fixed or determinable sales price, and collectability of that sales price is reasonably assured. For product sales, the Company's stated terms are primarily FOB shipping point and with most customers, title and risk of loss pass to the customer at that time. With certain United States customers, the Company retains risk of loss until the customers receive the product, and in those situations, the Company recognizes revenue upon receipt by the customer. A portion of the Company's product revenue is generated from consigned inventory maintained at hospitals and distributors, and also from inventory physically held by field sales representatives. For these types of products sales, the Company retains title until receiving appropriate notification that the product has been used or implanted, at which time revenue is recognized. | ||||||||||||||||||||||||||||
Each revenue transaction is evidenced by either a contract with the customer or a valid purchase order and an invoice which includes all relevant terms of sale. There are generally no significant customer acceptance or other conditions that prevent the Company from recognizing revenue in accordance with its delivery terms. In certain cases, where the Company has performance obligations that are significant to the functionality of the product, the Company recognizes revenue upon fulfillment of its obligation. | ||||||||||||||||||||||||||||
Sales invoices issued to customers contain the Company's price for each product or service. The Company performs a review of each specific customer's credit worthiness and ability to pay prior to accepting them as a customer. Further, the Company performs periodic reviews of its customers' status prospectively. | ||||||||||||||||||||||||||||
The Company records a provision for estimated returns and allowances on revenues in the same period as the related revenues are recorded. These estimates are based on historical sales returns and discounts and other known factors. The provisions are recorded as a reduction to revenues. | ||||||||||||||||||||||||||||
The Company's return policy, as set forth in its product catalogs and sales invoices, requires the Company to review and authorize the return of product in advance. Upon authorization, a credit will be issued for goods returned within a set amount of days from shipment, which is generally ninety days. | ||||||||||||||||||||||||||||
Product royalties are estimated and recognized in the same period that the royalty-based products are sold by the Company's strategic partners. The Company estimates and recognizes royalty revenue based upon communication with licensees, historical information and expected sales trends. Differences between actual revenues and estimated royalty revenues are adjusted in the period in which they become known, which is typically the following quarter. Historically, such adjustments have not been significant. | ||||||||||||||||||||||||||||
Other operating revenues may include fees received under research, licensing, and distribution arrangements, technology-related royalties and research grants. Non-refundable fees received under research, licensing and distribution arrangements or for the licensing of technology are recognized as revenue when received if the Company has no continuing obligations to the other party. For those arrangements where the Company has continuing performance obligations, revenue is recognized using the lesser of the amount of non-refundable cash received or the result achieved using the proportional performance method of accounting based upon the estimated cost to complete these obligations. Research grant revenue is recognized when the related expenses are incurred. | ||||||||||||||||||||||||||||
Shipping And Handling Fees And Costs | SHIPPING AND HANDLING FEES AND COSTS | |||||||||||||||||||||||||||
Amounts billed to customers for shipping and handling are included in revenues. The related shipping and freight charges incurred by the Company are included in cost of goods sold. Distribution and handling costs of $14.3 million, $14.1 million and $13.6 million were recorded in selling, general and administrative expense during the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||||||||||||||||
Product Warranties | PRODUCT WARRANTIES | |||||||||||||||||||||||||||
Certain of the Company's medical devices, including monitoring systems and neurosurgical systems, are reusable and are designed to operate over long periods of time. These products are sold with warranties which may extend for up to two years from date of purchase. The Company accrues estimated product warranty costs at the time of sale based on historical experience. Any additional amounts are recorded when such costs are probable and can be reasonably estimated. Accrued warranty expense of $0.3 million is recorded in the consolidated balance sheet at December 31, 2014 and 2013. | ||||||||||||||||||||||||||||
Research And Development | RESEARCH AND DEVELOPMENT | |||||||||||||||||||||||||||
Research and development costs, including salaries, depreciation, consultant and other external fees, and facility costs directly attributable to research and development activities, are expensed in the period in which they are incurred. | ||||||||||||||||||||||||||||
IPR&D recorded in connection with acquisitions represent the value assigned to acquired assets to be used in research and development activities and for which there is no alternative use. Value is generally assigned to these assets based on the net present value of the projected cash flows expected to be generated by those assets. | ||||||||||||||||||||||||||||
During 2014 the Company capitalized $0.2 million of IPR&D as a result of current-year acquisitions, and there was $0.3 million capitalized in 2013. However, the full amount of the 2014 capitalized IPR&D was impaired due to regulatory events occurring subsequent to the acquisition date and the Company's decision not to pursue acquired projects. | ||||||||||||||||||||||||||||
Employee Termination Benefits And Other Exit-Related Costs | EMPLOYEE TERMINATION BENEFITS AND OTHER EXIT-RELATED COSTS | |||||||||||||||||||||||||||
The Company does not have a written severance plan, and it does not offer similar termination benefits to affected employees in all restructuring initiatives. Accordingly, in situations where minimum statutory termination benefits must be paid to the affected employees, the Company records employee severance costs associated with these restructuring activities in accordance with the authoritative guidance for non-retirement post-employment benefits. Charges associated with these activities are recorded when the payment of benefits is probable and can be reasonably estimated. In all other situations where the Company pays out termination benefits, including supplemental benefits paid in excess of statutory minimum amounts and benefits offered to affected employees based on management's discretion, the Company records these termination costs in accordance with the authoritative guidance for ASC Topic 712 Compensation-Nonretirement Benefits and ASC Topic 420 One-time Employee Termination Benefits. | ||||||||||||||||||||||||||||
The timing of the recognition of charges for employee severance costs other than minimum statutory benefits depends on whether the affected employees are required to render service beyond their legal notification period in order to receive the benefits. If affected employees are required to render service beyond their legal notification period, charges are recognized ratably over the future service period. Otherwise, charges are recognized when management has approved a specific plan and employee communication requirements have been met. | ||||||||||||||||||||||||||||
For leased facilities and equipment that have been abandoned, the Company records estimated lease losses based on the fair value of the lease liability, as measured by the present value of future lease payments subsequent to abandonment, less the present value of any estimated sublease income on the cease-use date. For owned facilities and equipment that will be disposed of, the Company records impairment losses based on fair value less costs to sell. The Company also reviews the remaining useful life of long-lived assets following a decision to exit a facility and may accelerate depreciation or amortization of these assets, as appropriate. | ||||||||||||||||||||||||||||
Stock-Based Compensation | STOCK-BASED COMPENSATION | |||||||||||||||||||||||||||
The Company applies the authoritative guidance for stock-based compensation. This guidance requires companies to recognize the expense related to the fair value of their stock-based compensation awards. Stock-based compensation expense for stock option awards granted after January 1, 2006 was based on the fair value on the grant date using the binomial distribution model. The Company recognized compensation expense for stock option awards, restricted stock awards, performance stock awards and contract stock awards on a ratable basis over the requisite service period of the award. The long form method was used in the determination of the windfall tax benefit in accordance with the guidance. | ||||||||||||||||||||||||||||
Pension Benefits | PENSION BENEFITS | |||||||||||||||||||||||||||
Defined benefit pension plans cover certain employees and retirees in the U.K. and former employees in Germany. Various factors are considered in determining the pension liability, including the number of employees expected to be paid their salary levels and years of service, the expected return on plan assets, the discount rate used to determine the benefit obligations, the timing of benefit payments and other actuarial assumptions. If the actual results and events for the pension plans differ from current assumptions, the benefit obligation may be over or under valued. | ||||||||||||||||||||||||||||
Retirement benefit plan assumptions are reassessed on an annual basis or more frequently if changes in circumstances indicate a re-evaluation of assumptions are required. The key benefit plan assumptions are the discount rate and expected rate of return on plan assets. The discount rate is based on average rates on bonds that matched the expected cash outflows of the benefit plans. The expected rate of return is based on historical and expected returns on the various categories of plan assets. | ||||||||||||||||||||||||||||
Pension contributions are expected to be consistent over the next few years since the Germany and U.K. plans are frozen. Contributions to the plans during the years ended December 31, 2014, 2013 and 2012 were $0.9 million, $0.8 million and $0.8 million, respectively. | ||||||||||||||||||||||||||||
Concentration Of Credit Risk | CONCENTRATION OF CREDIT RISK | |||||||||||||||||||||||||||
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents, which are held at major financial institutions, investment-grade marketable debt securities and trade receivables. | ||||||||||||||||||||||||||||
The Company's products are sold on an uncollateralized basis and on credit terms based upon a credit risk assessment of each customer. A portion of the Company's trade receivables to customers outside the United States includes sales to foreign distributors, who then sell to government owned or supported healthcare systems. The ongoing economic conditions in certain European countries, especially Greece, Ireland, Italy, Portugal and Spain remain uncertain. Accounts receivable from customers in these countries was approximately $6.2 million at December 31, 2014, of which $0.3 million was reserved. At December 31, 2013, the accounts receivable from customers in these countries was $6.1 million, of which $0.7 million was reserved. | ||||||||||||||||||||||||||||
None of the Company's customers accounted for 10% or more of the consolidated net sales during the years ended December 31, 2014, 2013 and 2012. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES (Tables) | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||
Schedule Of Change in Accounting Estimate | Company has revised the comparative results for the twelve months ended December 31, 2013 to reflect the retrospective application of the change in accounting principle had the new method been in effect for all periods, as follows: | |||||||||||||||||||||||||||
Condensed Consolidating Statements of Operations and Comprehensive Income: | ||||||||||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||||||
Originally | As | |||||||||||||||||||||||||||
Reported | Adjustments | Adjusted | ||||||||||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||||||||||
Cost of goods sold | $ | 334,085 | $ | (7,040 | ) | $ | 327,045 | |||||||||||||||||||||
Selling, general, and administrative | 394,250 | 13,552 | 407,802 | |||||||||||||||||||||||||
Income tax expense (benefit) | (7,813 | ) | (2,422 | ) | (10,235 | ) | ||||||||||||||||||||||
Net income (loss) | (16,977 | ) | (4,090 | ) | (21,067 | ) | ||||||||||||||||||||||
Basic net income (loss) per common share | $ | (0.60 | ) | $ | (0.14 | ) | $ | (0.74 | ) | |||||||||||||||||||
Diluted net income (loss) per common share | (0.60 | ) | (0.14 | ) | (0.74 | ) | ||||||||||||||||||||||
Comprehensive income (loss) | $ | (11,253 | ) | $ | (4,090 | ) | $ | (15,343 | ) | |||||||||||||||||||
Condensed Consolidated Balance Sheet: | ||||||||||||||||||||||||||||
31-Dec-13 | ||||||||||||||||||||||||||||
Originally | As | |||||||||||||||||||||||||||
Reported | Adjustments | Adjusted | ||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Inventories | $ | 213,431 | $ | (6,512 | ) | $ | 206,919 | |||||||||||||||||||||
Deferred tax assets - current | 46,300 | 2,316 | 48,616 | |||||||||||||||||||||||||
Prepaid expenses and other current assets | 26,752 | 106 | 26,858 | |||||||||||||||||||||||||
Retained earnings | 285,046 | (4,090 | ) | 280,956 | ||||||||||||||||||||||||
Condensed Consolidated Statements of Cash Flows: | ||||||||||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||||||
Originally | As | |||||||||||||||||||||||||||
Reported | Adjustments | Adjusted | ||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Net income (loss) | $ | (16,977 | ) | $ | (4,090 | ) | $ | (21,067 | ) | |||||||||||||||||||
Deferred income tax provision (benefit) | (10,829 | ) | (2,316 | ) | (13,145 | ) | ||||||||||||||||||||||
Inventories | (42,017 | ) | 6,512 | (35,505 | ) | |||||||||||||||||||||||
Prepaid and other current assets | 4,929 | (106 | ) | 4,823 | ||||||||||||||||||||||||
Schedule Of Inventories, Net | Inventories, consisting of purchased materials, direct labor and manufacturing overhead, are stated at the lower of cost, the value determined by the first-in, first-out method, or market. Inventories consisted of the following: | |||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||
(As adjusted)* | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Finished goods | $ | 150,483 | $ | 123,786 | ||||||||||||||||||||||||
Work in process | 50,166 | 47,403 | ||||||||||||||||||||||||||
Raw materials | 36,465 | 35,730 | ||||||||||||||||||||||||||
Total inventories, net | $ | 237,114 | $ | 206,919 | ||||||||||||||||||||||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. Impact of adjustment was recorded to finished goods. | ||||||||||||||||||||||||||||
Schedule Of Property, Plant And Equipment Balances And Corresponding Lives | Property, plant and equipment balances and corresponding lives were as follows: | |||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||
2014 | 2013 | Useful Lives | ||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Land | $ | 3,308 | $ | 3,022 | ||||||||||||||||||||||||
Buildings and building improvements | 16,272 | 15,377 | 5-40 years | |||||||||||||||||||||||||
Leasehold improvements | 45,416 | 42,900 | 1-20 years | |||||||||||||||||||||||||
Machinery and production equipment | 92,149 | 86,192 | 3-20 years | |||||||||||||||||||||||||
Surgical instrument kits | 32,551 | 30,352 | 4-5 years | |||||||||||||||||||||||||
Information systems and hardware | 92,392 | 51,171 | 1-7 years | |||||||||||||||||||||||||
Furniture, fixtures, and office equipment | 15,517 | 16,363 | 1-15 years | |||||||||||||||||||||||||
Construction-in-progress | 86,844 | 112,130 | ||||||||||||||||||||||||||
Total | 384,449 | 357,507 | ||||||||||||||||||||||||||
Less: Accumulated depreciation | (174,463 | ) | (157,197 | ) | ||||||||||||||||||||||||
Property, plant and equipment, net | $ | 209,986 | $ | 200,310 | ||||||||||||||||||||||||
Schedule Of Changes In Carrying Amount Of Goodwill | Changes in the carrying amount of goodwill in 2014 and 2013 were as follows: | |||||||||||||||||||||||||||
U.S. | U.S. | U.S. | U.S. | International | Total | |||||||||||||||||||||||
Neurosurgery | Instruments | Extremities | Spine | |||||||||||||||||||||||||
and | ||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Goodwill, gross | $ | 95,165 | $ | 58,033 | $ | 61,079 | $ | 56,325 | $ | 25,900 | $ | 296,502 | ||||||||||||||||
Accumulated impairment losses | — | — | — | (46,738 | ) | — | (46,738 | ) | ||||||||||||||||||||
Goodwill at December 31, 2013 | $ | 95,165 | $ | 58,033 | $ | 61,079 | $ | 9,587 | $ | 25,900 | $ | 249,764 | ||||||||||||||||
Confluent Surgical, Inc. acquisition | 95,373 | — | — | — | 9,958 | 105,331 | ||||||||||||||||||||||
MicroFrance acquisition | — | — | — | — | 16,614 | 16,614 | ||||||||||||||||||||||
Metasurg acquisition | — | — | 469 | — | — | 469 | ||||||||||||||||||||||
Foreign currency translation | (4,248 | ) | (1,290 | ) | (1,369 | ) | (213 | ) | (1,170 | ) | (8,290 | ) | ||||||||||||||||
Balance, December 31, 2014 | $ | 186,290 | $ | 56,743 | $ | 60,179 | $ | 9,374 | $ | 51,302 | $ | 363,888 | ||||||||||||||||
Components Of Company's Identifiable Intangible Assets | The components of the Company's identifiable intangible assets were as follows: | |||||||||||||||||||||||||||
Weighted | December 31, 2014 | Weighted | December 31, 2013 | |||||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||||||
Life | Cost | Accumulated | Net | Life | Cost | Accumulated | Net | |||||||||||||||||||||
Amortization | Amortization | |||||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||
Completed technology | 18 years | $ | 345,082 | $ | (62,920 | ) | $ | 282,162 | 12 years | $ | 81,238 | $ | (45,343 | ) | $ | 35,895 | ||||||||||||
Customer relationships | 12 years | 162,031 | (87,653 | ) | 74,378 | 12 years | 146,627 | (79,624 | ) | 67,003 | ||||||||||||||||||
Trademarks/brand names | 34 years | 44,520 | (15,755 | ) | 28,765 | 31 years | 33,703 | (15,648 | ) | 18,055 | ||||||||||||||||||
Trademarks/brand names | Indefinite | 48,484 | — | 48,484 | Indefinite | 48,484 | — | 48,484 | ||||||||||||||||||||
Supplier relationships | 27 years | 34,721 | (10,809 | ) | 23,912 | 27 years | 34,721 | (9,305 | ) | 25,416 | ||||||||||||||||||
All other (1) | 4 years | 4,810 | (3,052 | ) | 1,758 | 4 years | 4,251 | (1,941 | ) | 2,310 | ||||||||||||||||||
$ | 639,648 | $ | (180,189 | ) | $ | 459,459 | $ | 349,024 | $ | (151,861 | ) | $ | 197,163 | |||||||||||||||
-1 | At December 31, 2014 and 2013, all other included IPR&D of $1.4 million which was indefinite-lived. |
ACQUISITIONS_AND_PRO_FORMA_RES1
ACQUISITIONS AND PRO FORMA RESULTS (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Business Combinations [Abstract] | |||||||
Schedule of Assets Acquired and Liabilities Assumed | The following summarizes the preliminary allocation of the purchase price as of December 31, 2014 based on the fair value of the assets acquired and liabilities assumed: | ||||||
Preliminary Purchase Price | |||||||
Allocation | |||||||
(Dollars in thousands) | |||||||
Inventory | $ | 4,730 | |||||
Property, plant, and equipment | 1,171 | ||||||
Intangible assets: | Wtd. Avg. Life: | ||||||
Technology product rights | 20,590 | 8 - 14 Years | |||||
In-process research and development | 190 | Indefinite | |||||
Goodwill | 469 | ||||||
Net assets acquired | $ | 27,150 | |||||
The following summarizes the final allocation of the purchase price based on fair value of the assets acquired and liabilities assumed: | |||||||
Final Purchase Price | |||||||
Allocation | |||||||
(Dollars in thousands) | |||||||
Cash | $ | 85 | |||||
Prepaid expenses | 13 | ||||||
Intangible assets: | Wtd. Avg. Life: | ||||||
Technology | 5,040 | 10 - 14 years | |||||
In-process research and development | 340 | Indefinite | |||||
Deferred tax asset - long term | 1,334 | ||||||
Goodwill | 116 | ||||||
Total assets acquired | 6,928 | ||||||
Accounts payable and other liabilities | 111 | ||||||
Deferred tax liability | 2,152 | ||||||
Net assets acquired | $ | 4,665 | |||||
Final Purchase Price | |||||||
Allocation | |||||||
(Dollars in thousands) | |||||||
Inventory deposit | $ | 4,000 | |||||
Property, plant, and equipment | 438 | ||||||
Intangible assets: | Wtd. Avg. Life: | ||||||
Technology product rights | 239,800 | 3 - 20 Years | |||||
Other | 400 | ||||||
Deferred tax assets - long term | 12 | ||||||
Goodwill | 105,331 | ||||||
Total assets acquired | 349,981 | ||||||
Contingent supply liability | 5,891 | ||||||
Other | 731 | ||||||
Deferred tax liabilities - long term | 87,464 | ||||||
Net assets acquired | $ | 255,895 | |||||
Preliminary Purchase Price | |||||||
Allocation | |||||||
(Dollars in thousands) | |||||||
Cash | $ | 2,195 | |||||
Inventory | 3,765 | ||||||
Prepaid expenses | 620 | ||||||
Property, plant, and equipment | 3,675 | ||||||
Other current assets | 5,025 | ||||||
Intangible assets: | Wtd. Avg. Life: | ||||||
Trade name | 11,990 | 20 Years | |||||
Technology | 4,580 | 15 - 16 Years | |||||
Customer relationships | 18,130 | 12 - 16 Years | |||||
Goodwill | 17,435 | ||||||
Total assets acquired | 67,415 | ||||||
Accounts payable and other liabilities | 5,800 | ||||||
Net assets acquired | $ | 61,615 | |||||
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | A reconciliation of the opening balances to the closing balances of these Level 3 measurements is as follows (in thousands): | ||||||
Location in Statement of Operations | |||||||
Balance as of January 1, 2014 | $ | 1,227 | |||||
Contingent consideration from Confluent Surgical Acquisition | 20,895 | ||||||
Contingent consideration from Metasurg Acquisition | 650 | ||||||
(Gain)/Loss from decrease in fair value of contingent consideration liability | (764 | ) | Selling, general and administrative | ||||
Fair value at December 31, 2014 | $ | 22,008 | |||||
Pro Forma Financial Information, Summary Of Results Of Operations | The impact of the Tarsus acquisition is not material to the consolidated operating results of the Company; therefore, the pro-forma impact of the acquisition has not been presented. | ||||||
Year Ended December 31, | |||||||
2014 | 2013 | ||||||
(In thousands except per share amounts) | |||||||
Total revenue | $ | 964,738 | $ | 942,455 | |||
Net income | $ | 43,814 | $ | (7,298 | ) | ||
Net income per share: | |||||||
Basic | $ | 1.35 | $ | (0.22 | ) | ||
DEBT_Tables
DEBT (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Debt Disclosure [Abstract] | ||||||||||||
Schedule of Maturities of Long-term Debt | Contractual repayments of the term loan do not begin until September 30, 2015 and are due as follows: | |||||||||||
Year Ended December 31, | Principal Repayment | |||||||||||
(In thousands) | ||||||||||||
2015 | $3,750 | |||||||||||
2016 | 9,735 | |||||||||||
2017 | 13,125 | |||||||||||
2018 | 15,000 | |||||||||||
2019 | 108,750 | |||||||||||
Components of Interest Expense | The interest expense components of the Company’s convertible notes are as follows: | |||||||||||
Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(In thousands) | ||||||||||||
2016 Notes: | ||||||||||||
Amortization of the discount on the liability component (1) | $ | 7,104 | $ | 6,463 | $ | 5,993 | ||||||
Cash interest related to the contractual interest coupon (2) | 3,342 | 3,218 | 3,154 | |||||||||
Total | $ | 10,446 | $ | 9,681 | $ | 9,147 | ||||||
2012 Notes: | ||||||||||||
Amortization of the discount on the liability component (1) | $ | — | $ | — | $ | 2,527 | ||||||
Cash interest related to the contractual interest coupon (2) | — | — | 1,378 | |||||||||
Total | $ | — | $ | — | $ | 3,905 | ||||||
-1 | In 2014 and 2013, the amortization of the discount on the liability component of the 2016 Note is presented net of capitalized interest of $0.9 million and $1.0 million, respectively. In 2012, the amortization of the discount on the liability component of the 2016 and 2012 Notes are presented net of capitalized interest of $1.1 million and $0.5 million, respectively. | |||||||||||
-2 | In 2014 and 2013, the cash interest related to the contractual interest coupon on the 2016 Note is presented net of capitalized interest of $0.4 million and $0.5 million, respectively. In 2012, the cash interest related to the contractual interest coupon on the 2016 and 2012 Notes are presented net of capitalized interest of $0.6 million and $0.3 million, respectively. |
DERIVATIVE_INSTRUMENTS_Tables
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||
Summary Of Fair Value In Balance Sheet For Derivatives Designated As Hedging Instruments | The following table summarizes the fair value, notional amounts presented in U.S. dollars, and presentation in the consolidated balance sheet for derivatives designated as hedging instruments as of December 31, 2014 and December 31, 2013: | |||||||||||||||||
Fair Value as of | ||||||||||||||||||
December 31, | December 31, | |||||||||||||||||
2014 | 2013 | |||||||||||||||||
Location on Balance Sheet (1): | (In thousands) | |||||||||||||||||
Derivatives designated as hedges — Liabilities: | ||||||||||||||||||
Interest rate swap — Accrued expenses and other current liabilities (2) | $ | 898 | $ | 1,676 | ||||||||||||||
Interest rate swap — Other liabilities (2) | — | 763 | ||||||||||||||||
Total Derivatives designated as hedges — Liabilities | $ | 898 | $ | 2,439 | ||||||||||||||
(1) | The Company classifies derivative assets and liabilities as current based on the cash flows expected to be incurred within the following 12 months. | |||||||||||||||||
(2) | At December 31, 2014 and December 31, 2013, the notional amount related to the Company’s sole interest rate swap was $97.5 million and $112.5 million, respectively. In the next 12 months, the Company expects to reduce the notional amount by $11.3 million. | |||||||||||||||||
Effect Of Derivative Instruments Designated As Cash Flow Hedges On Statements Of Operations | The following presents the effect of derivative instruments designated as cash flow hedges on the accompanying consolidated statements of operations during the years ended December 31, 2014 and 2013: | |||||||||||||||||
Balance in AOCI | Amount of | Amount of Gain (Loss) | Balance in AOCI | Location in | ||||||||||||||
Beginning of | Gain (Loss) | Reclassified from | End of Year | Statements of | ||||||||||||||
Year | Recognized in | AOCI into | Operations | |||||||||||||||
AOCI- | Earnings-(Effective | |||||||||||||||||
(Effective Portion) | Portion) | |||||||||||||||||
(In thousands) | ||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||
Interest rate swap | $ | (2,439 | ) | $ | (206 | ) | $ | (1,747 | ) | $ | (898 | ) | Interest (expense) | |||||
$ | (2,439 | ) | $ | (206 | ) | $ | (1,747 | ) | $ | (898 | ) | |||||||
Year Ended December 31, 2013 | ||||||||||||||||||
Foreign currency forward contracts | $ | (34 | ) | $ | 142 | $ | 108 | $ | — | Costs of goods sold | ||||||||
Interest rate swap | (4,125 | ) | (252 | ) | (1,938 | ) | (2,439 | ) | Interest (expense) | |||||||||
$ | (4,159 | ) | $ | (110 | ) | $ | (1,830 | ) | $ | (2,439 | ) |
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||
Summary Of Employee Stock-Based Compensation Expense | Stock-based compensation expense - all related to employees - recognized under the authoritative guidance was as follows: | |||||||||||||
Years Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
(In thousands) | ||||||||||||||
Selling, general and administrative | $ | 14,459 | $ | 9,948 | $ | 8,646 | ||||||||
Research and development | 481 | 355 | 335 | |||||||||||
Cost of goods sold | 165 | 90 | 70 | |||||||||||
Total stock-based compensation expense | 15,105 | 10,393 | 9,051 | |||||||||||
Total estimated tax benefit related to stock-based compensation expense | 5,578 | 4,018 | 3,532 | |||||||||||
Net effect on net income | $ | 9,527 | $ | 6,375 | $ | 5,519 | ||||||||
Summary Of Weighted-Average Assumptions | The following weighted-average assumptions were used in the calculation of fair value: | |||||||||||||
Years Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Dividend yield | 0% | 0% | 0% | |||||||||||
Expected volatility | 29% | 31% | 30% | |||||||||||
Risk free interest rate | 2.41% | 1.52% | 1.33% | |||||||||||
Expected life of option from grant date | 8 years | 8 years | 8 years | |||||||||||
Summary Of Stock Option Activity | The following table summarizes the Company’s stock option activity: | |||||||||||||
Weighted Average Exercise Price | Weighted Average Contractual Term in Years | Aggregate Intrinsic Value | ||||||||||||
Shares | ||||||||||||||
Stock Options | (In thousands) | (In thousands) | ||||||||||||
Outstanding at December 31, 2013 | 1,639 | $ | 37.64 | |||||||||||
Granted | 81 | 47.25 | ||||||||||||
Exercised | (458 | ) | 32.63 | |||||||||||
Forfeited or Expired | (24 | ) | 49.17 | |||||||||||
Outstanding at December 31, 2014 | 1,238 | $ | 39.89 | 3.4 years | $ | 17,759 | ||||||||
Vested or expected to vest at December 31, 2014 | 1,238 | $ | 39.89 | 3.4 years | $ | 17,759 | ||||||||
Exercisable at December 31, 2014 | 1,136 | $ | 39.45 | 3.1 years | $ | 16,779 | ||||||||
Summary Of Vested And Unvested RSU | The following table summarizes the Company’s awards of restricted stock, performance stock and contract stock for the year ended December 31, 2014: | |||||||||||||
Performance Stock and Contract Stock Awards | ||||||||||||||
Restricted Stock Awards | ||||||||||||||
Shares | Weighted Average Grant Date Fair Value Per Share | Shares | Weighted Average Grant Date Fair Value Per Share | |||||||||||
(In thousands) | (In thousands) | |||||||||||||
Unvested, December 31, 2013 | 321 | $ | 37.29 | 264 | $ | 32.74 | ||||||||
Granted | 239 | 46.16 | 26 | 46.41 | ||||||||||
Cancellations | (48 | ) | 42.2 | (4 | ) | 43.07 | ||||||||
Released | (204 | ) | 39.8 | (3 | ) | 35.48 | ||||||||
Unvested, December 31, 2014 | 308 | $ | 43.29 | 283 | $ | 34.43 | ||||||||
RETIREMENT_BENEFIT_PLANS_Table
RETIREMENT BENEFIT PLANS (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||
Net Periodic Benefit Costs For Defined Benefit Pension Plans | Net periodic benefit costs for the Company’s defined benefit pension plans included the following amounts: | ||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
(In thousands) | |||||||||||||||||
Service cost | $ | — | $ | — | $ | — | |||||||||||
Interest cost | 619 | 556 | 582 | ||||||||||||||
Expected return on plan assets | (511 | ) | (407 | ) | (392 | ) | |||||||||||
Recognized net actuarial loss | 53 | 2 | — | ||||||||||||||
Net period benefit cost | $ | 161 | $ | 151 | $ | 190 | |||||||||||
Weighted Average Assumptions | The following weighted average assumptions were used to develop net periodic pension benefit cost and the actuarial present value of projected pension benefit obligations: | ||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Discount rate | 3.5 | % | 4.4 | % | 4.2 | % | |||||||||||
Expected return on plan assets | 2.4 | % | 3.6 | % | 3 | % | |||||||||||
Rate of compensation increase | 0 | % | 0 | % | 0 | % | |||||||||||
Changes In Projected Benefit Obligation And Fair Value Of Plan Assets | The following sets forth the change in projected benefit obligations and the change in plan assets for the years ended December 31, 2014 and 2013 and a reconciliation of the funded status at December 31, 2014 and 2013: | ||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
(In thousands) | |||||||||||||||||
CHANGE IN PROJECTED BENEFIT OBLIGATION | |||||||||||||||||
Projected benefit obligation, beginning of year | $ | 15,182 | $ | 13,918 | |||||||||||||
Interest cost | 619 | 556 | |||||||||||||||
Benefits paid | (563 | ) | (506 | ) | |||||||||||||
Actuarial loss | 1,361 | 881 | |||||||||||||||
Effect of foreign currency exchange rates | (960 | ) | 333 | ||||||||||||||
Projected benefit obligation, end of year | $ | 15,639 | $ | 15,182 | |||||||||||||
CHANGE IN PLAN ASSETS | |||||||||||||||||
Plan assets at fair value, beginning of year | $ | 14,694 | $ | 14,080 | |||||||||||||
Actual return on plan assets | 3,410 | (6 | ) | ||||||||||||||
Employer contributions | 875 | 826 | |||||||||||||||
Benefits paid | (549 | ) | (493 | ) | |||||||||||||
Effect of foreign currency exchange rates | (929 | ) | 287 | ||||||||||||||
Plan assets at fair value, end of year | $ | 17,501 | $ | 14,694 | |||||||||||||
Schedule Of Reconciliation Of Funded Status | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
(In thousands) | |||||||||||||||||
RECONCILIATION OF FUNDED STATUS | |||||||||||||||||
Funded status - over (under) funded | $ | 1,862 | $ | (488 | ) | ||||||||||||
Unrecognized net actuarial loss | 1,165 | 2,911 | |||||||||||||||
Accumulated other comprehensive loss | (1,165 | ) | (2,911 | ) | |||||||||||||
Amounts recognized | $ | 1,862 | $ | (488 | ) | ||||||||||||
Schedule Of Weighted Average Allocation Of Plan Assets | Based on the assets which comprise each of the funds, the weighted-average allocation of plan assets by asset category is as follows: | ||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Government bonds | 98.9 | % | 100 | % | |||||||||||||
Cash | 1.1 | % | 0 | % | |||||||||||||
100 | % | 100 | % | ||||||||||||||
Schedule Of Pension Plan Assets At Fair Value | The fair value of the Company’s pension plan assets at December 31, 2014 and 2013 is as follows: | ||||||||||||||||
Fair Value Measurements at December 31, 2014: | |||||||||||||||||
Manager/Fund | Asset Category | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
(In thousands) | |||||||||||||||||
Bank account | Cash | $ | 184 | $ | 184 | $ | — | $ | — | ||||||||
Legal & General Index-Linked Gilts Index (various tenors) (a) | Index-linked government bonds | 14,857 | — | 14,857 | — | ||||||||||||
Legal & General Over 15 Years Gilts Index (b) | Government bonds | 2,460 | — | 2,460 | — | ||||||||||||
Total | $ | 17,501 | $ | 184 | $ | 17,317 | $ | — | |||||||||
Fair Value Measurements at December 31, 2013: | |||||||||||||||||
Manager/Fund | Asset Category | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
(In thousands) | |||||||||||||||||
Bank account | Cash | $ | 8 | $ | 8 | $ | — | $ | — | ||||||||
Legal & General Index-Linked Gilts Index (various tenors) (a) | Index-linked government bonds | 12,630 | — | 12,630 | — | ||||||||||||
Legal & General Over 15 Years Gilts Index (b) | Government bonds | 2,056 | — | 2,056 | — | ||||||||||||
Total | $ | 14,694 | $ | 8 | $ | 14,686 | $ | — | |||||||||
_______________________________ | |||||||||||||||||
(a) | This category represents funds consisting of index-linked gilts and is designated to follow a benchmark index. | ||||||||||||||||
(b) | This category represents funds consisting of gilts and is designated to follow a benchmark index. | ||||||||||||||||
Schedule Of Expected Benefit Payments | Also based on year-end exchange rates, the Company expects to pay the following estimated future benefit payments in the years indicated: | ||||||||||||||||
Expected Future Benefit Payments | |||||||||||||||||
(In thousands) | |||||||||||||||||
2015 | $ | 567 | |||||||||||||||
2016 | 586 | ||||||||||||||||
2017 | 599 | ||||||||||||||||
2018 | 631 | ||||||||||||||||
2019 | 652 | ||||||||||||||||
2020-2023 | 3,608 | ||||||||||||||||
LEASES_AND_RELATED_PARTY_LEASE1
LEASES AND RELATED PARTY LEASES (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Leases [Abstract] | ||||||||||||
Schedule Of Minimum Lease Payments for Operating Leases | Future minimum lease payments under operating leases at December 31, 2014 were as follows: | |||||||||||
Related Parties | Third Parties | Total | ||||||||||
(In thousands) | ||||||||||||
2015 | $ | 272 | $ | 11,234 | $ | 11,506 | ||||||
2016 | 272 | 9,522 | 9,794 | |||||||||
2017 | 272 | 6,757 | 7,029 | |||||||||
2018 | 296 | 5,025 | 5,321 | |||||||||
2019 | 296 | 3,084 | 3,380 | |||||||||
Thereafter | 4,014 | 24,917 | 28,931 | |||||||||
Total minimum lease payments | $ | 5,422 | $ | 60,539 | $ | 65,961 | ||||||
Schedule Of Future Minimum Lease Payments for Capital Leases | Future minimum lease payments under capital leases at December 31, 2014 were as follows: | |||||||||||
Payments under capital leases | ||||||||||||
(In thousands) | ||||||||||||
2015 | $ | 826 | ||||||||||
2016 | 672 | |||||||||||
Total minimum lease payments | 1,498 | |||||||||||
Amount representing interest | 70 | |||||||||||
Present value of minimum lease payments | $ | 1,428 | ||||||||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Schedule Of Income Before Income Taxes | Income (loss) before income taxes consisted of the following: | |||||||||||
Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(As adjusted)* | ||||||||||||
(In thousands) | ||||||||||||
United States operations | $ | 16,766 | $ | (33,162 | ) | $ | 25,293 | |||||
Foreign operations | 26,213 | 1,860 | 26,736 | |||||||||
Total | $ | 42,979 | $ | (31,302 | ) | $ | 52,029 | |||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. | ||||||||||||
Schedule Of Effective Income Tax Rate Reconciliation | A reconciliation of the U.S. Federal statutory rate to the Company’s effective tax rate is as follows: | |||||||||||
Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(As adjusted)* | ||||||||||||
Federal statutory rate | 35 | % | 35 | % | 35 | % | ||||||
Increase (decrease) in income taxes resulting from: | ||||||||||||
State income taxes, net of federal tax benefit | 5.6 | % | 0.3 | % | 2.6 | % | ||||||
Foreign operations | (16.0 | )% | (17.2 | )% | (14.7 | )% | ||||||
Goodwill impairment | — | % | 34.1 | % | — | % | ||||||
Changes in valuation allowances | 3 | % | (1.1 | )% | (0.4 | )% | ||||||
Uncertain tax positions | (3.8 | )% | (8.5 | )% | (2.5 | )% | ||||||
Research and development credit | (2.2 | )% | (1.8 | )% | — | % | ||||||
Return to provision | 1.5 | % | (6.6 | )% | (0.5 | )% | ||||||
Other | (2.2 | )% | (1.5 | )% | 1.3 | % | ||||||
Effective tax rate | 20.9 | % | 32.7 | % | 20.8 | % | ||||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. | ||||||||||||
Schedule Of Provision For Income Taxes | The provision for income taxes consisted of the following: | |||||||||||
Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(As adjusted)* | ||||||||||||
(In thousands) | ||||||||||||
Current: | ||||||||||||
Federal | $ | 4,224 | $ | 3,160 | $ | 3,614 | ||||||
State | 1,683 | (1,374 | ) | 1,373 | ||||||||
Foreign | 4,032 | 1,124 | 4,301 | |||||||||
Total current | $ | 9,939 | $ | 2,910 | $ | 9,288 | ||||||
Deferred: | ||||||||||||
Federal | (200 | ) | (13,817 | ) | 4,053 | |||||||
State | 953 | (757 | ) | 497 | ||||||||
Foreign | (1,717 | ) | 1,429 | (3,013 | ) | |||||||
Total deferred | $ | (964 | ) | $ | (13,145 | ) | $ | 1,537 | ||||
Provision (benefit) for income taxes | $ | 8,975 | $ | (10,235 | ) | $ | 10,825 | |||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. | ||||||||||||
Schedule Of Deferred Tax Assets And Liabilities | The income tax effects of significant temporary differences that give rise to deferred tax assets and liabilities, shown before jurisdictional netting, are presented below: | |||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
(As adjusted)* | ||||||||||||
(In thousands) | ||||||||||||
Current assets: | ||||||||||||
Doubtful accounts | $ | 1,632 | $ | 1,791 | ||||||||
Inventory related items | 35,660 | 34,968 | ||||||||||
Tax credits | 3,052 | 3,883 | ||||||||||
Accrued vacation | 2,667 | 2,492 | ||||||||||
Accrued bonus | 5,085 | 1,266 | ||||||||||
Net operating loss carryforwards | 2,454 | 4,550 | ||||||||||
Other | 1,302 | 1,960 | ||||||||||
Total current deferred tax assets | 51,852 | 50,910 | ||||||||||
Less valuation allowance | (681 | ) | (2,232 | ) | ||||||||
Current deferred tax assets after valuation allowance | $ | 51,171 | $ | 48,678 | ||||||||
Current liabilities: | ||||||||||||
Other | (597 | ) | (646 | ) | ||||||||
Total current deferred tax liabilities | $ | (597 | ) | $ | (646 | ) | ||||||
Net current deferred tax assets | $ | 50,574 | $ | 48,032 | ||||||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
(As adjusted)* | ||||||||||||
(In thousands) | ||||||||||||
Non-current assets: | ||||||||||||
Stock compensation | 15,349 | 14,879 | ||||||||||
Deferred revenue | 3 | 186 | ||||||||||
Net operating loss carryforwards | 21,368 | 26,613 | ||||||||||
Federal & state tax credits | 14,531 | 19,045 | ||||||||||
Other | 581 | 897 | ||||||||||
Total non-current deferred tax assets | 51,832 | 61,620 | ||||||||||
Less valuation allowance | (6,579 | ) | (6,828 | ) | ||||||||
Non-current deferred tax assets after valuation allowance | $ | 45,253 | $ | 54,792 | ||||||||
Non-current liabilities: | ||||||||||||
Intangible & fixed assets | (123,257 | ) | (41,563 | ) | ||||||||
Other | (52 | ) | 105 | |||||||||
Total non-current deferred tax liabilities | $ | (123,309 | ) | $ | (41,458 | ) | ||||||
Net non-current deferred tax assets (liabilities) | $ | (78,056 | ) | $ | 13,334 | |||||||
Total net deferred tax assets (liabilities) | $ | (27,482 | ) | $ | 61,366 | |||||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. | ||||||||||||
Schedule Of Uncertain Tax Benefits Reconciliation | A reconciliation of the beginning and ending amount of uncertain tax benefits is as follows: | |||||||||||
Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(As adjusted)* | ||||||||||||
(In thousands) | ||||||||||||
Balance, beginning of year | $ | 3,396 | $ | 6,136 | $ | 3,927 | ||||||
Gross increases: | ||||||||||||
Current year tax positions | — | 346 | — | |||||||||
Prior years' tax positions | 543 | 729 | 7,796 | |||||||||
Gross decreases: | ||||||||||||
Prior years' tax positions | (286 | ) | (477 | ) | — | |||||||
Settlements | (828 | ) | — | (3,523 | ) | |||||||
Statute of limitations lapses | (1,580 | ) | (3,338 | ) | (2,064 | ) | ||||||
Balance, end of year | $ | 1,245 | $ | 3,396 | $ | 6,136 | ||||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. |
NET_INCOME_LOSS_PER_SHARE_Tabl
NET INCOME (LOSS) PER SHARE (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Basic And Diluted Net Income Per Share | Basic and diluted net income (loss) per share was as follows: | |||||||||||
Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(As adjusted)* | ||||||||||||
(In thousands, except per share amounts) | ||||||||||||
Basic net income (loss) per share: | ||||||||||||
Net income (loss) | $ | 34,004 | $ | (21,067 | ) | $ | 41,204 | |||||
Weighted average common shares outstanding | 32,432 | 28,416 | 28,232 | |||||||||
Basic net income (loss) per common share | $ | 1.05 | $ | (0.74 | ) | $ | 1.46 | |||||
Diluted net income (loss) per share: | ||||||||||||
Net income (loss) | $ | 34,004 | $ | (21,067 | ) | $ | 41,204 | |||||
Weighted average common shares outstanding — Basic | 32,432 | 28,416 | 28,232 | |||||||||
Effect of dilutive securities: | ||||||||||||
Stock options and restricted stock | 528 | — | 284 | |||||||||
Weighted average common shares for diluted earnings per share | 32,960 | 28,416 | 28,516 | |||||||||
Diluted net income (loss) per common share | $ | 1.03 | $ | (0.74 | ) | $ | 1.44 | |||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. |
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Comprehensive Income (Loss) [Abstract] | |||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive income (loss) by component between December 31, 2014 and 2013 are presented in the table below, net of tax: | ||||||||||||||||
Gains and Losses on Cash Flow Hedges | Defined Benefit Pension Items | Foreign Currency Items | Total | ||||||||||||||
(In thousands) | |||||||||||||||||
Balance at December 31, 2013 | $ | (1,390 | ) | $ | (2,287 | ) | $ | 4,604 | $ | 927 | |||||||
Other comprehensive income before reclassifications | (118 | ) | 1,381 | (26,674 | ) | (25,411 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income | 996 | — | — | 996 | |||||||||||||
Current period other comprehensive income (loss) | 878 | 1,381 | (26,674 | ) | (24,415 | ) | |||||||||||
Balance at December 31, 2014 | $ | (512 | ) | $ | (906 | ) | $ | (22,070 | ) | $ | (23,488 | ) | |||||
Reclassification out of Accumulated Other Comprehensive Income | The reclassification adjustments out of accumulated other comprehensive (loss) income during the years ended December 31, 2014 and 2013 were as follows: | ||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
Details about Accumulated Other Comprehensive Income Components | Amount Reclassified from Accumulated Other Comprehensive Income | Affected Line Item in the Statement where Net Income (Loss) is Presented | |||||||||||||||
(In thousands) | |||||||||||||||||
Gains and losses on cash flow hedges | |||||||||||||||||
Interest rate swap | $ | (1,747 | ) | Interest expense | |||||||||||||
751 | Tax benefit | ||||||||||||||||
$ | (996 | ) | Net of tax | ||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Details about Accumulated Other Comprehensive Income Components | Amount Reclassified from Accumulated Other Comprehensive Income | Affected Line Item in the Statement where Net Income (Loss) is Presented | |||||||||||||||
(In thousands) | |||||||||||||||||
Gains and losses on cash flow hedges | |||||||||||||||||
Interest rate swap | $ | (1,938 | ) | Interest expense | |||||||||||||
Foreign currency forwards | 108 | Cost of goods sold | |||||||||||||||
(1,830 | ) | Total before tax | |||||||||||||||
793 | Tax benefit | ||||||||||||||||
$ | (1,037 | ) | Net of tax |
SEGMENT_AND_GEOGRAPHIC_INFORMA1
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||
Schedule Of Net Sales And Operating Income By Reportable Segment | Net sales and profit by reportable segment for the years ended December 31, 2014, 2013 and 2012 are as follows: | |||||||||||||||
Years Ended December 31, | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
(In thousands) | ||||||||||||||||
Segment Net Sales | ||||||||||||||||
U.S. Neurosurgery | $ | 244,603 | $ | 172,250 | $ | 171,278 | ||||||||||
U.S. Instruments * | 157,816 | 163,908 | 166,921 | |||||||||||||
U.S. Extremities * | 143,384 | 128,336 | 116,279 | |||||||||||||
U.S. Spine and Other * | 171,363 | 182,007 | 192,516 | |||||||||||||
International | 211,139 | 189,713 | 183,877 | |||||||||||||
Total revenues | $ | 928,305 | $ | 836,214 | $ | 830,871 | ||||||||||
Segment Profit | ||||||||||||||||
U.S. Neurosurgery | $ | 133,165 | $ | 83,211 | $ | 91,070 | ||||||||||
U.S. Instruments * | 48,036 | 49,348 | 50,277 | |||||||||||||
U.S. Extremities * | 61,343 | 47,880 | 43,952 | |||||||||||||
U.S. Spine and Other * | 53,318 | 10,136 | 57,388 | |||||||||||||
International | 69,663 | 56,869 | 61,336 | |||||||||||||
Segment profit | 365,525 | 247,444 | 304,023 | |||||||||||||
Amortization | -12,400 | -12,697 | -18,536 | |||||||||||||
Corporate and other | (287,584 | ) | (244,903 | ) | (211,705 | ) | ||||||||||
Operating income (loss) | $ | 65,541 | $ | (10,156 | ) | $ | 73,782 | |||||||||
* Certain revenues and profits have been reclassified from the U.S. Extremities segment to the U.S. Instruments segment and the U.S. Spine and Other segment for the years ended December 31, 2013 and 2012. | ||||||||||||||||
Revenues By Market Category | Revenue by major product category consisted of the following: | |||||||||||||||
Years Ended December 31, | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
(In thousands) | ||||||||||||||||
Orthopedics ** | $ | 370,082 | $ | 370,359 | $ | 364,714 | ||||||||||
Neurosurgery | 371,676 | 278,672 | 277,527 | |||||||||||||
Instruments ** | 186,547 | 187,183 | 188,630 | |||||||||||||
Total revenues | $ | 928,305 | $ | 836,214 | $ | 830,871 | ||||||||||
** Certain revenues have been reclassified from the Orthopedics category to the Instruments category for the years ended December 31, 2013 and 2012. | ||||||||||||||||
Total Revenue By Major Geographic Area | Total revenue, net and long-lived assets (tangible) by major geographic area are summarized below: | |||||||||||||||
United States* | Europe | Rest of the World | Consolidated | |||||||||||||
(In thousands) | ||||||||||||||||
Total revenue, net: | ||||||||||||||||
2014 | $ | 714,040 | $ | 105,697 | $ | 108,568 | $ | 928,305 | ||||||||
2013 | 642,694 | 93,977 | 99,543 | 836,214 | ||||||||||||
2012 | 642,830 | 90,920 | 97,121 | 830,871 | ||||||||||||
Total long-lived assets: | ||||||||||||||||
2014 | $ | 197,897 | $ | 21,218 | $ | 1,239 | $ | 220,354 | ||||||||
2013 | 187,608 | 20,010 | 1,030 | 208,648 | ||||||||||||
* Includes long-lived assets in Puerto Rico. |
SELECTED_QUARTERLY_INFORMATION1
SELECTED QUARTERLY INFORMATION - UNAUDITED (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Selected Quarterly Financial Information [Abstract] | ||||||||||||||||
Selected Quarterly Information | ||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Total revenue, net: | ||||||||||||||||
2014 | $ | 215,059 | $ | 231,351 | $ | 229,719 | $ | 252,176 | ||||||||
2013 (As adjusted)* | 196,652 | 205,547 | 213,246 | 220,769 | ||||||||||||
Gross margin: | ||||||||||||||||
2014 | $ | 132,676 | $ | 144,375 | $ | 143,745 | $ | 154,708 | ||||||||
2013 (As adjusted)* | 117,040 | 123,718 | 131,479 | 136,932 | ||||||||||||
Net income (loss): | ||||||||||||||||
2014 | $ | 2,206 | $ | 4,825 | $ | 9,807 | $ | 17,166 | ||||||||
2013 (As adjusted)* (1) | (6,028 | ) | 1,520 | (30,330 | ) | 13,771 | ||||||||||
Basic net income (loss) per common share (2): | ||||||||||||||||
2014 | $ | 0.07 | $ | 0.15 | $ | 0.3 | $ | 0.53 | ||||||||
2013 (As adjusted)* | (0.22 | ) | 0.05 | (1.09 | ) | 0.46 | ||||||||||
Diluted net income (loss) per common share (2): | ||||||||||||||||
2014 | $ | 0.07 | $ | 0.15 | $ | 0.3 | $ | 0.52 | ||||||||
2013 (As adjusted)* | (0.22 | ) | 0.05 | (1.09 | ) | 0.45 | ||||||||||
*See Note 2 of these consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax. | ||||||||||||||||
(1) The first quarter of 2013 was negatively impacted by a voluntary recall of certain products manufactured in the Company's Añasco, Puerto Rico facility. | ||||||||||||||||
On July 31, 2013, the Company performed the annual goodwill impairment test which resulted in a non-cash goodwill impairment charge of $46.7 million for its U.S. Spine reporting unit, which is a part of the U.S. Spine and Other reportable segment. | ||||||||||||||||
The Company incurred incremental costs related to the implementation of its global enterprise resource planning system in the first, second, third, and fourth quarters of 2013 of $6.1 million, $7.6 million, $5.0 million and $5.6 million, respectively. | ||||||||||||||||
The Company incurred costs related to the remediation of the FDA warning letters at its manufacturing facilities of $2.1 million, $3.0 million, $2.8 million and $0.4 million in the first, second, third and fourth quarters of 2013, respectively. | ||||||||||||||||
(2) Per common share amounts for the quarters and full years have been calculated separately. Accordingly, quarterly amounts do not necessarily add to the annual amount because of differences in the weighted average common shares outstanding during each period principally due to the effect of the Company’s issuing shares of its common stock during the year. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES (Narrative) (Details) (USD $) | 12 Months Ended | 1 Months Ended | 3 Months Ended | ||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Jul. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | |
Segment | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Provision (benefit) for income taxes | $8,975,000 | ($10,235,000) | $10,825,000 | ||||||
Capitalized interest | 2,100,000 | 1,400,000 | 400,000 | ||||||
Number of reportable segments | 5 | ||||||||
Inventory, Capitalized Expenses | 0 | 0 | |||||||
Depreciation expense | 30,200,000 | 27,600,000 | 27,500,000 | ||||||
Interest expense capitalized to property, plant, and equipment | 2,600,000 | 3,200,000 | |||||||
Goodwill impairment charge | 0 | 46,738,000 | 0 | ||||||
Impairment of Indefinite-lived Assets | 0 | ||||||||
Amortization expense | 31,800,000 | 19,400,000 | 25,100,000 | ||||||
Annual amortization expense expected to approximate in 2015 | 32,100,000 | ||||||||
Annual amortization expense expected to approximate in 2016 | 29,900,000 | ||||||||
Annual amortization expense expected to approximate in 2017 | 27,800,000 | ||||||||
Annual amortization expense expected to approximate in 2018 | 27,500,000 | ||||||||
Annual amortization expense expected to approximate in 2019 | 26,700,000 | ||||||||
Charitable contributions | 600,000 | 600,000 | 1,000,000 | ||||||
Undistributed Earnings of Foreign Subsidiaries | 223,500,000 | ||||||||
Amount of Unrecognized Deferred Tax Liability | 36,400,000 | ||||||||
Distribution and handling costs | 14,300,000 | 14,100,000 | 13,600,000 | ||||||
Extended warranties, in years | 2 years | ||||||||
Accrued warranty expense | 300,000 | 300,000 | 300,000 | ||||||
Capitalized research and development costs | 200,000 | 300,000 | |||||||
Pension contributions | 900,000 | 800,000 | 800,000 | ||||||
Interest paid | 10,900,000 | 9,500,000 | 12,000,000 | ||||||
Interest paid, capitalized | 2,600,000 | 3,200,000 | 2,100,000 | ||||||
Income taxes paid | 10,900,000 | 7,600,000 | 12,700,000 | ||||||
Capital expenditures incurred but not yet paid | 3,600,000 | 8,600,000 | 9,500,000 | ||||||
Europe | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Accounts receivables from certain European countries customers | 6,200,000 | 6,100,000 | 6,100,000 | ||||||
Accounts receivable reserved from certain European countries | 300,000 | 700,000 | 700,000 | ||||||
In-Process Research And Development | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Impairment charges | 200,000 | 400,000 | 100,000 | ||||||
Technology | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Amortization expense, included in cost of product revenues | 19,300,000 | 6,700,000 | 6,600,000 | ||||||
U.S. Spine | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Goodwill impairment charge | 46,700,000 | ||||||||
Goodwill Tax Deductible Amount | 16,200,000 | ||||||||
Computer Equipment | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Capital Leased Assets, Gross | 2,000,000 | 1,600,000 | 1,600,000 | ||||||
Capital Leases, Lessee Balance Sheet, Assets by Major Class, Accumulated Depreciation | 700,000 | 100,000 | 100,000 | ||||||
Out-of-period Adjustment | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Provision (benefit) for income taxes | -2,422,000 | 1,000,000 | |||||||
Capitalized interest | 3,300,000 | ||||||||
First Three Quarters of 2012 | Out-of-period Adjustment | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Capitalized interest | 1,500,000 | ||||||||
Full Year 2011 | Out-of-period Adjustment | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Capitalized interest | 1,400,000 | ||||||||
Last Quarter of 2010 | Out-of-period Adjustment | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Capitalized interest | 400,000 | ||||||||
Sales Revenue, Net | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Concentration risk, percentage | 10.00% | 10.00% | 10.00% | ||||||
Concentration Risk, Number of Customers Over Benchmark | 0 | 0 | 0 | ||||||
Deferred tax accounts in 2011 error | Out-of-period Adjustment | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Provision (benefit) for income taxes | 900,000 | ||||||||
Confluent Surgical, Inc. | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Impairment of Finite-lived Assets | $600,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES (Schedule of Changes in Accounting Estimate) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||||||||||
Cost of goods sold | $352,801 | $327,045 | $314,427 | ||||||||
Selling, general and administrative | 445,967 | 407,802 | 373,114 | ||||||||
Provision (benefit) for income taxes | 8,975 | -10,235 | 10,825 | ||||||||
Net income (loss) | 17,166 | 9,807 | 4,825 | 2,206 | 13,771 | -30,330 | 1,520 | -6,028 | 34,004 | -21,067 | 41,204 |
Deferred Income Tax Expense (Benefit) | -964 | -13,145 | 1,537 | ||||||||
Basic net income per common share (in dollars per share) | $1.05 | ($0.74) | $1.46 | ||||||||
Diluted net income per common share (in dollars per share) | $1.03 | ($0.74) | $1.44 | ||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | 9,589 | -15,343 | 45,500 | ||||||||
Statement of Financial Position [Abstract] | |||||||||||
Inventories, net | 237,114 | 206,919 | 237,114 | 206,919 | |||||||
Deferred tax assets | 58,663 | 48,616 | 58,663 | 48,616 | |||||||
Prepaid expenses and other current assets | 29,632 | 26,858 | 29,632 | 26,858 | |||||||
Retained earnings | 314,960 | 280,956 | 314,960 | 280,956 | |||||||
Statement of Cash Flows [Abstract] | |||||||||||
Net income (loss) | 17,166 | 9,807 | 4,825 | 2,206 | 13,771 | -30,330 | 1,520 | -6,028 | 34,004 | -21,067 | 41,204 |
Deferred Income Tax Expense (Benefit) | -964 | -13,145 | 1,537 | ||||||||
Increase (Decrease) in Inventories | -27,006 | -35,505 | -711 | ||||||||
Increase (Decrease) in Prepaid Expense and Other Assets | 8,070 | 4,823 | -3,067 | ||||||||
Scenario, Previously Reported [Member] | |||||||||||
Income Statement [Abstract] | |||||||||||
Cost of goods sold | 334,085 | ||||||||||
Selling, general and administrative | 394,250 | ||||||||||
Provision (benefit) for income taxes | -7,813 | ||||||||||
Net income (loss) | -16,977 | ||||||||||
Deferred Income Tax Expense (Benefit) | -10,829 | ||||||||||
Basic net income per common share (in dollars per share) | ($0.60) | ||||||||||
Diluted net income per common share (in dollars per share) | ($0.60) | ||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | -11,253 | ||||||||||
Statement of Financial Position [Abstract] | |||||||||||
Inventories, net | 213,431 | 213,431 | |||||||||
Deferred tax assets | 46,300 | 46,300 | |||||||||
Prepaid expenses and other current assets | 26,752 | 26,752 | |||||||||
Retained earnings | 285,046 | 285,046 | |||||||||
Statement of Cash Flows [Abstract] | |||||||||||
Net income (loss) | -16,977 | ||||||||||
Deferred Income Tax Expense (Benefit) | -10,829 | ||||||||||
Increase (Decrease) in Inventories | -42,017 | ||||||||||
Increase (Decrease) in Prepaid Expense and Other Assets | 4,929 | ||||||||||
Out-of-period Adjustment | |||||||||||
Income Statement [Abstract] | |||||||||||
Cost of goods sold | -7,040 | ||||||||||
Selling, general and administrative | 13,552 | ||||||||||
Provision (benefit) for income taxes | 1,000 | -2,422 | |||||||||
Net income (loss) | -4,090 | ||||||||||
Deferred Income Tax Expense (Benefit) | -2,316 | ||||||||||
Basic net income per common share (in dollars per share) | ($0.14) | ||||||||||
Diluted net income per common share (in dollars per share) | ($0.14) | ||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | -4,090 | ||||||||||
Statement of Financial Position [Abstract] | |||||||||||
Inventories, net | -6,512 | -6,512 | |||||||||
Deferred tax assets | 2,316 | 2,316 | |||||||||
Prepaid expenses and other current assets | 106 | 106 | |||||||||
Retained earnings | -4,090 | -4,090 | |||||||||
Statement of Cash Flows [Abstract] | |||||||||||
Net income (loss) | -4,090 | ||||||||||
Deferred Income Tax Expense (Benefit) | -2,316 | ||||||||||
Increase (Decrease) in Inventories | 6,512 | ||||||||||
Increase (Decrease) in Prepaid Expense and Other Assets | ($106) |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES (Schedule Of Inventories, Net) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounting Policies [Abstract] | ||
Finished goods | $150,483 | $123,786 |
Work-in process | 50,166 | 47,403 |
Raw materials | 36,465 | 35,730 |
Inventories, net | $237,114 | $206,919 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES (Schedule Of Property, Plant And Equipment Balances And Corresponding Lives) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | 384,449 | $357,507 |
Less: Accumulated depreciation | -174,463 | -157,197 |
Property, plant and equipment, net | 209,986 | 200,310 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | 3,308 | 3,022 |
Buildings and building improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | 16,272 | 15,377 |
Buildings and building improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 5 years | |
Buildings and building improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 40 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | 45,416 | 42,900 |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 1 year | |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 20 years | |
Machinery and production equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | 92,149 | 86,192 |
Machinery and production equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 3 years | |
Machinery and production equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 20 years | |
Surgical instrument kits | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | 32,551 | 30,352 |
Surgical instrument kits | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 4 years | |
Surgical instrument kits | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 5 years | |
Information systems and hardware | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | 92,392 | 51,171 |
Information systems and hardware | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 1 year | |
Information systems and hardware | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 7 years | |
Furniture, fixtures, and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | 15,517 | 16,363 |
Furniture, fixtures, and office equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 1 year | |
Furniture, fixtures, and office equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 15 years | |
Construction-in-progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | 86,844 | $112,130 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT7
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES (Schedule Of Changes In Carrying Amount Of Goodwill) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 15, 2014 |
Goodwill [Roll Forward] | |||
Goodwill, gross | $296,502 | ||
Accumulated impairment losses | -46,738 | ||
Goodwill at December 31, 2013 | 249,764 | ||
Foreign currency translation | -8,290 | ||
Balance, December 31, 2014 | 363,888 | ||
Confluent Surgical, Inc. | |||
Goodwill [Roll Forward] | |||
Goodwill at December 31, 2013 | 105,331 | ||
Goodwill acquired during the period | 105,331 | ||
Balance, December 31, 2014 | 105,331 | ||
Medtronic MicroFrance | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during the period | 16,614 | ||
Balance, December 31, 2014 | 17,435 | ||
Metasurg | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during the period | 469 | ||
Balance, December 31, 2014 | 469 | ||
U.S. Neurosurgery | |||
Goodwill [Roll Forward] | |||
Goodwill, gross | 95,165 | ||
Accumulated impairment losses | 0 | ||
Goodwill at December 31, 2013 | 95,165 | ||
Foreign currency translation | -4,248 | ||
Balance, December 31, 2014 | 186,290 | ||
U.S. Neurosurgery | Confluent Surgical, Inc. | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during the period | 95,373 | ||
U.S. Neurosurgery | Medtronic MicroFrance | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during the period | 0 | ||
U.S. Neurosurgery | Metasurg | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during the period | 0 | ||
U.S. Instruments | |||
Goodwill [Roll Forward] | |||
Goodwill, gross | 58,033 | ||
Accumulated impairment losses | 0 | ||
Goodwill at December 31, 2013 | 58,033 | ||
Foreign currency translation | -1,290 | ||
Balance, December 31, 2014 | 56,743 | ||
U.S. Instruments | Confluent Surgical, Inc. | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during the period | 0 | ||
U.S. Instruments | Medtronic MicroFrance | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during the period | 0 | ||
U.S. Instruments | Metasurg | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during the period | 0 | ||
U.S. Extremities | |||
Goodwill [Roll Forward] | |||
Goodwill, gross | 61,079 | ||
Accumulated impairment losses | 0 | ||
Goodwill at December 31, 2013 | 61,079 | ||
Foreign currency translation | -1,369 | ||
Balance, December 31, 2014 | 60,179 | ||
U.S. Extremities | Confluent Surgical, Inc. | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during the period | 0 | ||
U.S. Extremities | Medtronic MicroFrance | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during the period | 0 | ||
U.S. Extremities | Metasurg | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during the period | 469 | ||
U.S. Spine and Other | |||
Goodwill [Roll Forward] | |||
Goodwill, gross | 56,325 | ||
Accumulated impairment losses | -46,738 | ||
Goodwill at December 31, 2013 | 9,587 | ||
Foreign currency translation | -213 | ||
Balance, December 31, 2014 | 9,374 | ||
U.S. Spine and Other | Confluent Surgical, Inc. | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during the period | 0 | ||
U.S. Spine and Other | Medtronic MicroFrance | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during the period | 0 | ||
U.S. Spine and Other | Metasurg | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during the period | 0 | ||
International | |||
Goodwill [Roll Forward] | |||
Goodwill, gross | 25,900 | ||
Accumulated impairment losses | 0 | ||
Goodwill at December 31, 2013 | 25,900 | ||
Foreign currency translation | -1,170 | ||
Balance, December 31, 2014 | 51,302 | ||
International | Confluent Surgical, Inc. | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during the period | 9,958 | ||
International | Medtronic MicroFrance | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during the period | 16,614 | ||
International | Metasurg | |||
Goodwill [Roll Forward] | |||
Goodwill acquired during the period | $0 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT8
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES (Components Of Company's Identifiable Intangible Assets) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill And Other Intangible Assets [Line Items] | ||
Accumulated Amortization | ($180,189,000) | ($151,861,000) |
Finite and indefinite-lived intangible asests, Cost | 639,648,000 | 349,024,000 |
Finite and indefinite-lived assets, Net | 459,459,000 | 197,163,000 |
Trademarks/Brand Names Indefinite | ||
Goodwill And Other Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 48,484,000 | 48,484,000 |
Completed Technology | ||
Goodwill And Other Intangible Assets [Line Items] | ||
Weighted Average Life, Years | 18 years | 12 years |
Finite-lived intangible assets, Cost | 345,082,000 | 81,238,000 |
Accumulated Amortization | -62,920,000 | -45,343,000 |
Finite-lived intangible assets, Net | 282,162,000 | 35,895,000 |
Customer Relationship | ||
Goodwill And Other Intangible Assets [Line Items] | ||
Weighted Average Life, Years | 12 years | 12 years |
Finite-lived intangible assets, Cost | 162,031,000 | 146,627,000 |
Accumulated Amortization | -87,653,000 | -79,624,000 |
Finite-lived intangible assets, Net | 74,378,000 | 67,003,000 |
Trademarks Brand Names | ||
Goodwill And Other Intangible Assets [Line Items] | ||
Weighted Average Life, Years | 34 years | 31 years |
Finite-lived intangible assets, Cost | 44,520,000 | 33,703,000 |
Accumulated Amortization | -15,755,000 | -15,648,000 |
Finite-lived intangible assets, Net | 28,765,000 | 18,055,000 |
Supplier Relationships | ||
Goodwill And Other Intangible Assets [Line Items] | ||
Weighted Average Life, Years | 27 years | 27 years |
Finite-lived intangible assets, Cost | 34,721,000 | 34,721,000 |
Accumulated Amortization | -10,809,000 | -9,305,000 |
Finite-lived intangible assets, Net | 23,912,000 | 25,416,000 |
All Other | ||
Goodwill And Other Intangible Assets [Line Items] | ||
Weighted Average Life, Years | 4 years | 4 years |
Finite-lived intangible assets, Cost | 4,810,000 | 4,251,000 |
Accumulated Amortization | -3,052,000 | -1,941,000 |
Finite-lived intangible assets, Net | 1,758,000 | 2,310,000 |
In-Process Research And Development | ||
Goodwill And Other Intangible Assets [Line Items] | ||
Other Indefinite-lived Intangible Assets | $1,400,000 | $1,400,000 |
ACQUISITIONS_AND_PRO_FORMA_RES2
ACQUISITIONS AND PRO FORMA RESULTS (Narrative) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 05, 2014 | Oct. 27, 2014 | Jan. 15, 2014 | Sep. 30, 2014 | Jan. 24, 2013 | Jun. 30, 2014 | |
intangible_asset | |||||||||
Business Acquisition [Line Items] | |||||||||
Additions during period | $22,008,000 | $1,227,000 | |||||||
Payments to Acquire Businesses, Net of Cash Acquired | 320,921,000 | 2,980,000 | 7,278,000 | ||||||
Metasurg | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration Transferred | 27,200,000 | ||||||||
Payments to Acquire Business | 26,500,000 | ||||||||
Additions during period | 650,000 | ||||||||
Contingent Consideration Arrangements, Maximum Payout | 38,500,000 | ||||||||
Discount Rate | 19.90% | ||||||||
Net assets acquired | 27,150,000 | ||||||||
Medtronic MicroFrance | |||||||||
Business Acquisition [Line Items] | |||||||||
Payments to Acquire Business | 61,600,000 | ||||||||
Net assets acquired | 61,615,000 | ||||||||
Confluent Surgical, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Additions during period | 20,895,000 | ||||||||
Contingent Consideration Arrangements, Maximum Payout | 30,000,000 | ||||||||
Discount Rate | 2.20% | ||||||||
Net assets acquired | 255,895,000 | ||||||||
Payment for Business Interest | 231,000,000 | ||||||||
Payments for Transitional Supply Agreement | 4,000,000 | ||||||||
Arrangement Extension Period | 2 years | ||||||||
Required Number of Days for Extension | 180 days | ||||||||
Period of Contingent Consideration Arrangement | 5 years | ||||||||
Period of Transitional Supply Price Increases | 3 years | ||||||||
Revenue Since Acquisition Date | 69,000,000 | ||||||||
Number of Assets Impaired | 1 | ||||||||
Impairment of Finite-lived Assets | 600,000 | ||||||||
Probability of Event | 95.00% | ||||||||
Incremental Increase in Liability | 300,000 | ||||||||
Incremental Decrease in Liability | 400,000 | ||||||||
Tarsus Medical, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Payments to Acquire Business | 4,700,000 | ||||||||
Additions during period | 1,600,000 | ||||||||
Contingent Consideration Arrangements, Maximum Payout | 11,500,000 | ||||||||
Net assets acquired | 4,665,000 | ||||||||
Payments to Acquire Businesses, Net of Cash Acquired | 3,100,000 | ||||||||
Adjustment on Consideration Transferred | 200,000 | ||||||||
Contingent Consideration, Low Estimate | 1,500,000 | ||||||||
Cash Consideration One | Confluent Surgical, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Contingent Consideration Arrangements, Maximum Payout | 25,000,000 | ||||||||
Cash Consideration One | Tarsus Medical, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Discount Rate | 4.30% | ||||||||
Cash Consideration Two | Confluent Surgical, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Contingent Consideration Arrangements, Maximum Payout | 5,000,000 | ||||||||
Cash Consideration Two | Tarsus Medical, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Discount Rate | 16.50% | ||||||||
Deferred Tax Liability | Confluent Surgical, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Goodwill Adjustments | $12,400,000 |
ACQUISITIONS_AND_PRO_FORMA_RES3
ACQUISITIONS AND PRO FORMA RESULTS (Schedule of Assets Acquired and Liabilities Assumed) (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Jan. 24, 2013 | Dec. 31, 2013 | Jan. 15, 2014 |
Business Acquisition [Line Items] | ||||
Goodwill | 363,888 | $249,764 | ||
Metasurg | ||||
Business Acquisition [Line Items] | ||||
Inventory | 4,730 | |||
Property, plant, and equipment | 1,171 | |||
Goodwill | 469 | |||
Net assets acquired | 27,150 | |||
Metasurg | Technology-Based Intangible Assets | ||||
Business Acquisition [Line Items] | ||||
Technology | 20,590 | |||
Medtronic MicroFrance | ||||
Business Acquisition [Line Items] | ||||
Inventory | 3,765 | |||
Property, plant, and equipment | 3,675 | |||
Goodwill | 17,435 | |||
Cash | 2,195 | |||
Prepaid expenses | 620 | |||
Other current assets | 5,025 | |||
Total assets acquired | 67,415 | |||
Accounts payable and other liabilities | 5,800 | |||
Net assets acquired | 61,615 | |||
Medtronic MicroFrance | Technology-Based Intangible Assets | ||||
Business Acquisition [Line Items] | ||||
Technology | 4,580 | |||
Medtronic MicroFrance | Trade Name | ||||
Business Acquisition [Line Items] | ||||
Technology | 11,990 | |||
Medtronic MicroFrance | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Technology | 18,130 | |||
Confluent Surgical, Inc. | ||||
Business Acquisition [Line Items] | ||||
Property, plant, and equipment | 438 | |||
Goodwill | 105,331 | |||
Prepaid expenses | 4,000 | |||
Deferred tax asset - long term | 12 | |||
Total assets acquired | 349,981 | |||
Contingent supply liability | 5,891 | |||
Accounts payable and other liabilities | 731 | |||
Deferred tax liability | 87,464 | |||
Net assets acquired | 255,895 | |||
Confluent Surgical, Inc. | Developed Technology Rights | ||||
Business Acquisition [Line Items] | ||||
Technology | 239,800 | |||
Confluent Surgical, Inc. | Other Intangible Assets | ||||
Business Acquisition [Line Items] | ||||
Technology | 400 | |||
Tarsus Medical, Inc. | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 116 | |||
Cash | 85 | |||
Prepaid expenses | 13 | |||
Deferred tax asset - long term | 1,334 | |||
Total assets acquired | 6,928 | |||
Accounts payable and other liabilities | 111 | |||
Deferred tax liability | 2,152 | |||
Net assets acquired | 4,665 | |||
Tarsus Medical, Inc. | Technology-Based Intangible Assets | ||||
Business Acquisition [Line Items] | ||||
Technology | 5,040 | |||
In-Process Research And Development | Metasurg | ||||
Business Acquisition [Line Items] | ||||
In-process research and development | 190 | |||
In-Process Research And Development | Tarsus Medical, Inc. | ||||
Business Acquisition [Line Items] | ||||
In-process research and development | 340 | |||
Maximum | Metasurg | Technology-Based Intangible Assets | ||||
Business Acquisition [Line Items] | ||||
Wtd. Avg. Life: | 14 years | |||
Maximum | Medtronic MicroFrance | Technology-Based Intangible Assets | ||||
Business Acquisition [Line Items] | ||||
Wtd. Avg. Life: | 16 years | |||
Maximum | Medtronic MicroFrance | Trade Name | ||||
Business Acquisition [Line Items] | ||||
Wtd. Avg. Life: | 20 years | |||
Maximum | Medtronic MicroFrance | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Wtd. Avg. Life: | 16 years | |||
Maximum | Confluent Surgical, Inc. | Technology-Based Intangible Assets | ||||
Business Acquisition [Line Items] | ||||
Wtd. Avg. Life: | 20 years | |||
Maximum | Tarsus Medical, Inc. | Technology-Based Intangible Assets | ||||
Business Acquisition [Line Items] | ||||
Wtd. Avg. Life: | 14 years | |||
Minimum | Metasurg | Technology-Based Intangible Assets | ||||
Business Acquisition [Line Items] | ||||
Wtd. Avg. Life: | 8 years | |||
Minimum | Medtronic MicroFrance | Technology-Based Intangible Assets | ||||
Business Acquisition [Line Items] | ||||
Wtd. Avg. Life: | 15 years | |||
Minimum | Medtronic MicroFrance | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Wtd. Avg. Life: | 12 years | |||
Minimum | Confluent Surgical, Inc. | Technology-Based Intangible Assets | ||||
Business Acquisition [Line Items] | ||||
Wtd. Avg. Life: | 3 years | |||
Minimum | Tarsus Medical, Inc. | Technology-Based Intangible Assets | ||||
Business Acquisition [Line Items] | ||||
Wtd. Avg. Life: | 10 years |
ACQUISITIONS_AND_PRO_FORMA_RES4
ACQUISITIONS AND PRO FORMA RESULTS (Roll Forward of Contingent Consideration Liability for Purchase of Tarsus Medical) (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 15, 2014 | Dec. 05, 2014 |
Business Acquisition, Contingent Consideration [Roll Forward] | ||||
Beginning of Period | $1,227 | |||
Additions during period | 22,008 | 1,227 | ||
Ending of Period | 22,008 | 1,227 | ||
Confluent Surgical, Inc. | ||||
Business Acquisition, Contingent Consideration [Roll Forward] | ||||
Beginning of Period | 20,895 | |||
Additions during period | 20,895 | |||
Ending of Period | 20,895 | |||
Metasurg | ||||
Business Acquisition, Contingent Consideration [Roll Forward] | ||||
Beginning of Period | 650 | |||
Additions during period | 650 | |||
Ending of Period | 650 | |||
Selling, General and Administrative Expenses | ||||
Business Acquisition, Contingent Consideration [Roll Forward] | ||||
(Gain)/Loss from decrease in fair value of contingent consideration liability | ($764) |
ACQUISITIONS_AND_PRO_FORMA_RES5
ACQUISITIONS AND PRO FORMA RESULTS (Pro Forma Financial Information Summarization Results of Operations) (Details) (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Business Combinations [Abstract] | ||
Total revenue | $964,738 | $942,455 |
Net income | $43,814 | ($7,298) |
Net income per share | ||
Basic (in dollars per share) | $1.35 | ($0.22) |
DEBT_Narrative_Details
DEBT (Narrative) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | |||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 08, 2011 | Jul. 02, 2014 | Jun. 30, 2012 | 11-May-12 | Jun. 21, 2013 | Jun. 15, 2011 | Jun. 11, 2007 | |
Debt Instrument [Line Items] | ||||||||||
Amortization of debt issuance costs | $2,571,000 | $2,298,000 | $2,725,000 | |||||||
Carrying amount of liability | 213,121,000 | 205,182,000 | ||||||||
Senior Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility outstanding | 266,900,000 | 186,900,000 | ||||||||
Weighted average interest rate on debt | 1.70% | 2.00% | ||||||||
Available borrowings under senior secured revolving credit facility | 483,100,000 | |||||||||
Fair value of outstanding borrowings | 248,200,000 | |||||||||
Senior Credit Facility | August 2010 Amendment | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior credit facility, maximum borrowing capacity | 450,000,000 | |||||||||
Line of credit facility, expiration date | 10-Aug-15 | |||||||||
Senior Credit Facility | June 2011 Amendment | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior credit facility, maximum borrowing capacity | 600,000,000 | |||||||||
Reallocated term loan | 150,000,000 | |||||||||
Senior credit facility, additional commitments | 200,000,000 | |||||||||
Line of credit facility, expiration date | 8-Jun-16 | |||||||||
Senior Credit Facility | May 2012 Amendment | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Capitalized incremental financing costs | 400,000 | |||||||||
Senior Credit Facility | May 2012 Amendment | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum consolidated total leverage ratio (net debt to consolidated EBITDA) | 1 | |||||||||
Senior Credit Facility | May 2012 Amendment | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum consolidated total leverage ratio (net debt to consolidated EBITDA) | 3.75 | |||||||||
Senior Credit Facility | June 2013 Amendment | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Capitalized incremental financing costs | 1,100,000 | |||||||||
Senior Credit Facility | June 2013 Amendment | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum consolidated total leverage ratio (net debt to consolidated EBITDA) | 3.75 | |||||||||
July 2014 Amendment | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior credit facility, maximum borrowing capacity | 900,000,000 | |||||||||
Capitalized incremental financing costs | 3,200,000 | |||||||||
Cash balance threshold above which excess amount is not subject to any restriction of use or investment | 40,000,000 | |||||||||
Amortization of debt issuance costs | 300,000 | |||||||||
July 2014 Amendment | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit, commitment fee percentage | 0.15% | |||||||||
July 2014 Amendment | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit, commitment fee percentage | 0.30% | |||||||||
Proceeds from Lines of Credit | 422,000,000 | |||||||||
2016 Convertible Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Fair value of outstanding borrowings | 254,000,000 | |||||||||
Principal amount outstanding | 230,000,000 | 230,000,000 | 230,000,000 | |||||||
Interest rate on debt | 1.63% | |||||||||
Portion of the debt proceeds that was classified as equity at the time of the offering | 43,200,000 | |||||||||
Debt Instrument, Interest Rate, Effective Percentage | 5.60% | |||||||||
Carrying amount of liability | 213,100,000 | 205,200,000 | ||||||||
Unamortized discount | 16,900,000 | 24,800,000 | ||||||||
Common stock based on initial conversion rate ratio (in shares) | 17.4092 | |||||||||
Principal amount to be considered for conversion purpose | 1,000 | |||||||||
Initial conversion price, per share | $57.44 | |||||||||
Maximum selling price of company's common stock | 150.00% | |||||||||
Principal amount of notes per average trading price | 1,000 | |||||||||
Maximum average conversion value of the Notes | 98.00% | |||||||||
Earliest conversion date | June 15, 2016 | |||||||||
Strike price of the call transaction (in dollars per share) | $57.44 | |||||||||
Strike price of warrant transactions (in dollars per share) | $70.05 | |||||||||
2012 Senior Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount outstanding | 165,000,000 | |||||||||
Interest rate on debt | 2.38% | |||||||||
Portion of the debt proceeds that was classified as equity at the time of the offering | 30,600,000 | |||||||||
Debt Instrument, Interest Rate, Effective Percentage | 6.80% | |||||||||
Cost of call transactions | 30,400,000 | |||||||||
Proceeds from warrant transactions | 12,200,000 | |||||||||
Bond hedge contract termination, trading day period (in days) | 100 days | |||||||||
Bond hedge contract termination, commencement period (in days) | 90 days | |||||||||
Leverage Ratio June 21, 2013 through June 30, 2014 | Senior Credit Facility | June 2013 Amendment | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum consolidated total leverage ratio (net debt to consolidated EBITDA) | 4.25 | |||||||||
Leverage Ratio July 01, 2014 through March 31, 2015 | Senior Credit Facility | June 2013 Amendment | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum consolidated total leverage ratio (net debt to consolidated EBITDA) | 4 | |||||||||
Revolving Credit Facility | July 2014 Amendment | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior credit facility, maximum borrowing capacity | 750,000,000 | |||||||||
Proceeds from Lines of Credit | 272,000,000 | |||||||||
Standby Letters of Credit | July 2014 Amendment | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior credit facility, maximum borrowing capacity | 60,000,000 | |||||||||
Swingline Loan | July 2014 Amendment | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior credit facility, maximum borrowing capacity | 60,000,000 | |||||||||
Term Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Weighted average interest rate on debt | 1.70% | |||||||||
Term loan, amount outstanding | 150,000,000 | |||||||||
Fair value of outstanding borrowings | 140,300,000 | |||||||||
Term Loan | July 2014 Amendment | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior credit facility, maximum borrowing capacity | $150,000,000 | |||||||||
Eurodollar | July 2014 Amendment | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rates available to the Company at its option | 1.00% | |||||||||
Eurodollar | July 2014 Amendment | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rates available to the Company at its option | 1.75% | |||||||||
Federal Funds | July 2014 Amendment | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rates available to the Company at its option | 0.50% | |||||||||
(LIBOR) | July 2014 Amendment | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rates available to the Company at its option | 1.00% |
DEBT_Schedule_of_Debt_Maturity
DEBT (Schedule of Debt Maturity) (Details) (Term Loan, USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Term Loan | |
Debt Instrument [Line Items] | |
2015 | $3,750 |
2016 | 9,735 |
2017 | 13,125 |
2018 | 15,000 |
2019 | $108,750 |
DEBT_Components_of_Interest_Ex
DEBT (Components of Interest Expense) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
2016 Convertible Senior Notes | |||
Debt Instrument [Line Items] | |||
Amortization of the discount on the liability component | $7,104,000 | $6,463,000 | $5,993,000 |
Cash interest related to the contractual interest coupon | 3,342,000 | 3,218,000 | 3,154,000 |
Total | 10,446,000 | 9,681,000 | 9,147,000 |
Amortization of debt discount, capitalized interest | 900,000 | 1,000,000 | 1,100,000 |
Cash interest related to contractual interest coupon, capitalized interest | 400,000 | 500,000 | 600,000 |
2012 Senior Convertible Notes | |||
Debt Instrument [Line Items] | |||
Amortization of the discount on the liability component | 0 | 0 | 2,527,000 |
Cash interest related to the contractual interest coupon | 0 | 0 | 1,378,000 |
Total | 0 | 0 | 3,905,000 |
Amortization of debt discount, capitalized interest | 500,000 | ||
Cash interest related to contractual interest coupon, capitalized interest | $300,000 |
DERIVATIVE_INSTRUMENTS_Narrati
DERIVATIVE INSTRUMENTS (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Derivative [Line Items] | ||
Interest rate swap expiration date | August 10, 2015 | |
Gain (Loss) on ineffectiveness | $0 | $0 |
Interest rate swap | ||
Derivative [Line Items] | ||
Pretax losses expected to be reclassified from AOCI in next 12 months | $900,000 |
DERIVATIVE_INSTRUMENTS_Summary
DERIVATIVE INSTRUMENTS (Summary of Fair Value in Balance Sheet for Derivatives Designated Hedging Instruments) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||
Derivative fair value of derivative liability | $898,000 | $2,439,000 |
Interest rate swap | ||
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||
Derivative, Notional Amount | 97,500,000 | 112,500,000 |
Reduction In Notional Amount Of Interest Rate Derivatives In Next Twelve Months | 11,300,000 | |
Interest rate swap | Accrued expenses and other current liabilities | ||
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||
Derivative fair value of derivative liability | 898,000 | 1,676,000 |
Interest rate swap | Other liabilities | ||
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||
Derivative fair value of derivative liability | $0 | $763,000 |
DERIVATIVE_INSTRUMENTS_Effect_
DERIVATIVE INSTRUMENTS (Effect of Derivative Instruments Designated Cash Flow Hedges on Statements of Operations) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance in AOCI Beginning of Year | ($2,439) | ($4,159) |
Amount of Gain (Loss) Recognized in AOCI- (Effective Portion) | -206 | -110 |
Amount of Gain (Loss) Reclassified from AOCI into Earnings-(Effective Portion) | -1,747 | -1,830 |
Balance in AOCI End of Year | -898 | -2,439 |
Interest (expense) | Interest rate swap | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance in AOCI Beginning of Year | -2,439 | -4,125 |
Amount of Gain (Loss) Recognized in AOCI- (Effective Portion) | -206 | -252 |
Amount of Gain (Loss) Reclassified from AOCI into Earnings-(Effective Portion) | -1,747 | -1,938 |
Balance in AOCI End of Year | -898 | -2,439 |
Cost of Goods Sold | Foreign Currency Forward Contracts | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance in AOCI Beginning of Year | -34 | |
Amount of Gain (Loss) Recognized in AOCI- (Effective Portion) | 142 | |
Amount of Gain (Loss) Reclassified from AOCI into Earnings-(Effective Portion) | 108 | |
Balance in AOCI End of Year | $0 |
TREASURY_STOCK_Narrative_Detai
TREASURY STOCK (Narrative) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Oct. 28, 2014 | |
Accelerated Share Repurchases [Line Items] | |||
Repurchase of common stock, shares | 0 | 0 | |
2014 Share Repurchase Program | |||
Accelerated Share Repurchases [Line Items] | |||
Stock repurchase authorized amount | $75,000,000 | ||
Amount available for share repurchase under this latest authorization | 75,000,000 |
STOCKBASED_COMPENSATION_Narrat
STOCK-BASED COMPENSATION (Narrative) (Details) (USD $) | 12 Months Ended | 3 Months Ended | 1 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | 31-May-10 | Jul. 31, 2008 | |
stock_based_compensation_plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares available for purchase (in shares) | 1,700,000 | |||||
Number of stock-based compensation plans | 3 | |||||
Dividend yield | 0.00% | 0.00% | 0.00% | |||
Weighted average grant date fair value of options granted (in dollars per share) | $18.15 | $13.86 | $12.18 | |||
Cash received from option exercises | $15,200,000 | $2,300,000 | $700,000 | |||
Share-based compensation expense recognized | 15,105,000 | 10,393,000 | 9,051,000 | |||
Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options exercisable for officers, directors and employees, vesting period, in years | 4 years | |||||
Stock options exercisable for directors, expiration period, in years | 6 years | |||||
Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options exercisable for employees, expiration period, in years | 6 years | |||||
Stock options exercisable for directors, expiration period, in years | 10 years | |||||
Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total unrecognized compensation costs related to unvested awards | 1,300,000 | |||||
Weighted-average period for cost recognition, in years | 2 years | |||||
Restricted Stock, Performance Stock and Contract Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total unrecognized compensation costs related to unvested awards | 11,600,000 | |||||
Weighted-average period for cost recognition, in years | 2 years | |||||
Share-based compensation expense recognized | 13,700,000 | 9,200,000 | 7,700,000 | |||
Fair value of shares vested | 9,400,000 | 6,500,000 | 6,700,000 | |||
Requisite service periods of performance stock, restricted stock and contract stock awards, in years | 3 years | |||||
Deferred Stock Units (SUs) | Executive Chairman | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Distribution of common stock to individual (in shares) | 1,670,000 | |||||
Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period | 3 years | |||||
Restricted Stock Units (RSUs) | Non Former Chief Executive Officer | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Non issued vested restricted stock units (in shares) | 200,000 | |||||
2000 and 2001 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock reserved for issuance (in shares) | 2,000,000 | |||||
2003 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock reserved for issuance (in shares) | 6,500,000 | |||||
Increase in authorized shares (in shares) | 1,750,000 | 750,000 | ||||
Employee Stock Purchase Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock reserved for issuance (in shares) | 1,500,000 | |||||
Shares available for purchase (in shares) | 1,000,000 | |||||
Shares issued (in shares) | 4,475 | 6,309 | 6,315 | |||
ESPP proceeds received | $200,000 | $300,000 | $200,000 | |||
Discount percentage available to participants | 5.00% |
STOCKBASED_COMPENSATION_Summar
STOCK-BASED COMPENSATION (Summary Of Employee Stock-Based Compensation Expense) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $15,105 | $10,393 | $9,051 |
Total estimated tax benefit related to stock-based compensation expense | 5,578 | 4,018 | 3,532 |
Net effect on net income | 9,527 | 6,375 | 5,519 |
Selling, general and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 14,459 | 9,948 | 8,646 |
Research and development | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 481 | 355 | 335 |
Cost of goods sold | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $165 | $90 | $70 |
STOCKBASED_COMPENSATION_Summar1
STOCK-BASED COMPENSATION (Summary Of Weighted-Average Assumptions) (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 29.00% | 31.00% | 30.00% |
Risk free interest rate | 2.41% | 1.52% | 1.33% |
Expected life of option from grant date | 8 years | 8 years | 8 years |
STOCKBASED_COMPENSATION_Summar2
STOCK-BASED COMPENSATION (Summary Of Stock Option Activity) (Details) (USD $) | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Share, Outstanding at beginning of year | 1,639 |
Shares, Granted | 81 |
Shares, Exercised | -458 |
Shares, Forfeited or Expired | -24 |
Shares, Outstanding at end of year | 1,238 |
Shares, Vested or expected to vest at end of year | 1,238 |
Shares, Exercisable at end of year | 1,136 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Weighted Average Exercise Price, Outstanding at beginning of year | $37.64 |
Weighted Average Exercise Price, Granted | $47.25 |
Weighted Average Exercise Price, Exercised | $32.63 |
Weighted Average Exercise Price, Forfeited or Expired | $49.17 |
Weighted Average Exercise Price, Outstanding at end of year | $39.89 |
Weighted Average Exercise Price, Vested or expected to vest at end of year | $39.89 |
Weighted Average Exercise Price, Exercisable at end of year | $39.45 |
Weighted Average Contractual Term in Years, Outstanding at end of year | 3 years 4 months 8 days |
Weighted Average Contractual Term in Years, Vested or expected to vest at end of year | 3 years 4 months 8 days |
Weighted Average Contractual Term in Years, Exercisable at end of year | 3 years 1 month 2 days |
Aggregate Intrinsic Value, Outstanding at end of year | $17,759 |
Aggregate Intrinsic Value, Vested or expected to vest at end of year | 17,759 |
Aggregate Intrinsic Value, Exercisable at end of year | $16,779 |
STOCKBASED_COMPENSATION_Summar3
STOCK-BASED COMPENSATION (Summary Of Vested And Unvested RSU) (Details) (USD $) | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Shares, Unvested beginning balance | 321 |
Shares, Granted | 239 |
Shares, Cancellations | -48 |
Shares, Unvested ending balance, shares | 308 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Weighted Average Grant Date Fair Value Per Share, Unvested beginning balance | $37.29 |
Weighted Average Grant Date Fair Value Per Share, Granted | $46.16 |
Weighted Average Grant Date Fair Value Per Share, Cancellations | $42.20 |
Weighted Average Grant Date Fair Value Per Share, Unvested ending balance | $43.29 |
Performance Stock and Contract Stock Awards | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Shares, Unvested beginning balance | 264 |
Shares, Granted | 26 |
Shares, Cancellations | -4 |
Shares, Unvested ending balance, shares | 283 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Weighted Average Grant Date Fair Value Per Share, Unvested beginning balance | $32.74 |
Weighted Average Grant Date Fair Value Per Share, Granted | $46.41 |
Weighted Average Grant Date Fair Value Per Share, Cancellations | $43.07 |
Weighted Average Grant Date Fair Value Per Share, Unvested ending balance | $34.43 |
Released | Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Shares, Released | -204 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Weighted Average Grant Date Fair Value Per Share, Released | $39.80 |
Released | Performance Stock and Contract Stock Awards | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Shares, Released | -3 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Weighted Average Grant Date Fair Value Per Share, Released | $35.48 |
RETIREMENT_BENEFIT_PLANS_Narra
RETIREMENT BENEFIT PLANS (Narrative) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined benefit plan, fair value of plan assets | $17,501,000 | $14,694,000 | ||
Reduction in projected benefit obligations | 300,000 | |||
Accumulated benefit obligation for the defined benefit plans | 15,600,000 | 15,200,000 | ||
Anticipated company contributions to defined benefit plans | 900,000 | |||
Unrecognized accumulated other comprehensive loss | 1,200,000 | |||
Total contributions made by the Company | 3,000,000 | 2,900,000 | 2,700,000 | |
Foreign Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined benefit plan, fair value of plan assets | 17,501,000 | 14,694,000 | 14,080,000 | |
GERMANY | Foreign Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined benefit plan, fair value of plan assets | $0 | $0 |
RETIREMENT_BENEFIT_PLANS_Net_P
RETIREMENT BENEFIT PLANS (Net Periodic Benefit Costs for Defined Benefit Pension Plans) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Compensation and Retirement Disclosure [Abstract] | |||
Service cost | $0 | $0 | $0 |
Interest cost | 619 | 556 | 582 |
Expected return on plan assets | -511 | -407 | -392 |
Recognized net actuarial loss | 53 | 2 | 0 |
Net period benefit cost | $161 | $151 | $190 |
RETIREMENT_BENEFIT_PLANS_Weigh
RETIREMENT BENEFIT PLANS (Weighted Average Assumptions) (Details) (Foreign Pension Plan) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Foreign Pension Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Discount rate | 3.50% | 4.40% | 4.20% |
Expected return on plan assets | 2.40% | 3.60% | 3.00% |
Rate of compensation increase | 0.00% | 0.00% | 0.00% |
RETIREMENT_BENEFIT_PLANS_Chang
RETIREMENT BENEFIT PLANS (Changes In Projected Benefit Obligation And Fair Value Of Plan Assets) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
CHANGE IN PROJECTED BENEFIT OBLIGATION | |||
Interest cost | $619,000 | $556,000 | $582,000 |
CHANGE IN PLAN ASSETS | |||
Plan assets at fair value, beginning of year | 14,694,000 | ||
Plan assets at fair value, end of year | 17,501,000 | 14,694,000 | |
Foreign Pension Plan | |||
CHANGE IN PROJECTED BENEFIT OBLIGATION | |||
Projected benefit obligation, beginning of year | 15,182,000 | 13,918,000 | |
Interest cost | 619,000 | 556,000 | |
Actuarial loss | 1,361,000 | 881,000 | |
Effect of foreign currency exchange rates | -960,000 | 333,000 | |
Projected benefit obligation, end of year | 15,639,000 | 15,182,000 | |
CHANGE IN PLAN ASSETS | |||
Plan assets at fair value, beginning of year | 14,694,000 | 14,080,000 | |
Actual return on plan assets | 3,410,000 | -6,000 | |
Employer contributions | 875,000 | 826,000 | |
Effect of foreign currency exchange rates | -929,000 | 287,000 | |
Plan assets at fair value, end of year | 17,501,000 | 14,694,000 | |
Foreign Pension Plan | Change In Projected Benefit Obligation | |||
CHANGE IN PROJECTED BENEFIT OBLIGATION | |||
Benefits paid | -563,000 | -506,000 | |
CHANGE IN PLAN ASSETS | |||
Benefits paid | -563,000 | -506,000 | |
Foreign Pension Plan | Change In Plan Assets | |||
CHANGE IN PROJECTED BENEFIT OBLIGATION | |||
Benefits paid | -549,000 | -493,000 | |
CHANGE IN PLAN ASSETS | |||
Benefits paid | ($549,000) | ($493,000) |
RETIREMENT_BENEFIT_PLANS_Sched
RETIREMENT BENEFIT PLANS (Schedule Of Reconciliation Of Funded Status) (Details) (Foreign Pension Plan, USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Foreign Pension Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Funded status - over (under) funded | $1,862 | ($488) |
Unrecognized net actuarial loss | 1,165 | 2,911 |
Accumulated other comprehensive loss | -1,165 | -2,911 |
Amounts recognized | $1,862 | ($488) |
RETIREMENT_BENEFIT_PLANS_Sched1
RETIREMENT BENEFIT PLANS (Schedule Of Weighted Average Allocation Of Plan Assets) (Details) (Foreign Pension Plan) | Dec. 31, 2014 | Dec. 31, 2013 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Weighted average allocation of plan assets | 100.00% | 100.00% |
Government bonds | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Weighted average allocation of plan assets | 98.90% | 100.00% |
Cash | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Weighted average allocation of plan assets | 1.10% | 0.00% |
RETIREMENT_BENEFIT_PLANS_Sched2
RETIREMENT BENEFIT PLANS (Schedule Of Pension Plan Assets At Fair Value) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, fair value of plan assets | $17,501,000 | $14,694,000 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, fair value of plan assets | 184,000 | 8,000 |
Significant Observable Inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, fair value of plan assets | 17,317,000 | 14,686,000 |
Significant Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, fair value of plan assets | 0 | 0 |
Cash | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, fair value of plan assets | 184,000 | 8,000 |
Cash | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, fair value of plan assets | 184,000 | 8,000 |
Cash | Significant Observable Inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, fair value of plan assets | 0 | 0 |
Cash | Significant Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, fair value of plan assets | 0 | 0 |
Index-linked government bonds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, fair value of plan assets | 14,857,000 | 12,630,000 |
Index-linked government bonds | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, fair value of plan assets | 0 | 0 |
Index-linked government bonds | Significant Observable Inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, fair value of plan assets | 14,857,000 | 12,630,000 |
Index-linked government bonds | Significant Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, fair value of plan assets | 0 | 0 |
Government bonds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, fair value of plan assets | 2,460,000 | 2,056,000 |
Government bonds | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, fair value of plan assets | 0 | 0 |
Government bonds | Significant Observable Inputs (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, fair value of plan assets | 2,460,000 | 2,056,000 |
Government bonds | Significant Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, fair value of plan assets | $0 | $0 |
RETIREMENT_BENEFIT_PLANS_Sched3
RETIREMENT BENEFIT PLANS (Schedule of Expected Benefit Payments) (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Compensation and Retirement Disclosure [Abstract] | |
2015 | $567 |
2016 | 586 |
2017 | 599 |
2018 | 631 |
2019 | 652 |
2020-2023 | $3,608 |
LEASES_AND_RELATED_PARTY_LEASE2
LEASES AND RELATED PARTY LEASES (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating Leased Assets [Line Items] | |||
Total rental expense | $10.20 | $10.40 | $10.90 |
Related Party | |||
Operating Leased Assets [Line Items] | |||
Total rental expense | 0.3 | 0.3 | 0.3 |
Term of lease | 31-Mar-22 | ||
Option to renew lease | 31-Mar-32 | ||
Payment per year to related party lessor | 0.1 | ||
Percent of manufacturing facility owned by corporation whose shareholders are trusts whose beneficiaries include family members of company's former chairman | 50.00% | ||
Annual rate of lease agreement | $0.30 | ||
Five-Year Option Lease From November 1, 2032 Through October 31, 2037 | Related Party | |||
Operating Leased Assets [Line Items] | |||
Option to extend lease, years | 5 years | ||
Period for extended lease | November 1, 2032 through October 31, 2037 | ||
Five-Year Option Lease From November 1, 2037 Through October 31, 2042 | Related Party | |||
Operating Leased Assets [Line Items] | |||
Option to extend lease, years | 5 years | ||
Period for extended lease | November 1, 2037 through October 31, 2042 |
LEASES_AND_RELATED_PARTY_LEASE3
LEASES AND RELATED PARTY LEASES (Schedule Of Minimum Lease Payments) (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Operating Leased Assets [Line Items] | |
2015 | $11,506 |
2016 | 9,794 |
2017 | 7,029 |
2018 | 5,321 |
2019 | 3,380 |
Thereafter | 28,931 |
Total minimum lease payments | 65,961 |
Related Parties | |
Operating Leased Assets [Line Items] | |
2015 | 272 |
2016 | 272 |
2017 | 272 |
2018 | 296 |
2019 | 296 |
Thereafter | 4,014 |
Total minimum lease payments | 5,422 |
Third Parties | |
Operating Leased Assets [Line Items] | |
2015 | 11,234 |
2016 | 9,522 |
2017 | 6,757 |
2018 | 5,025 |
2019 | 3,084 |
Thereafter | 24,917 |
Total minimum lease payments | $60,539 |
LEASES_AND_RELATED_PARTY_LEASE4
LEASES AND RELATED PARTY LEASES (Schedule of Future Minimum Lease Payments for Capital Leases) (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Leases [Abstract] | |
2015 | $826 |
2016 | 672 |
Total minimum lease payments | 1,498 |
Amount representing interest | 70 |
Present value of minimum lease payments | $1,428 |
INCOME_TAXES_Narrative_Details
INCOME TAXES (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax [Line Items] | |||
Change in effective income tax rate during the period | 11.80% | ||
Income tax benefit for release of tax contingency reserve | $2.20 | $2.70 | |
Tax Settlements | 1.1 | ||
Income tax expense for repatriation of foreign earnings | 0.25 | -2.7 | -1.3 |
Effective foreign income tax rate | 6.90% | -60.60% | 7.80% |
Change in effective foreign income tax rate during period | -66.00% | 83.00% | |
Undistributed Earnings of Foreign Subsidiaries | 223.5 | ||
Estimated Tax Liability on Undistributed Earnings of Foreign Subsidiaries | 36.4 | ||
Operating Loss Carryforwards, Not Subject to Expiration | 23.2 | ||
Tax Deductions in Excess of Previously Recorded Benefits Based on Option Value at the Time of Grant | 0.1 | ||
Deferred Tax Assets, Valuation Allowance | 7.3 | 9 | 14.2 |
Deferred Tax Assets, Gross | 103.7 | 110.2 | 110.5 |
Valuation Allowances and Reserves, Period Increase (Decrease) | -1.8 | -5.2 | |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 1.2 | ||
Amount of Unrecorded Benefit Expected to be Recognized | 0.5 | ||
Income Tax Penalties and Interest Expense | 0.2 | 0.8 | -0.1 |
Penalties and Interest Accrued | 0.1 | 0.4 | 1.4 |
Valuation Allowance, Change in Amount | 0.5 | ||
Audits Settled During Year | 2008 through 2010 | ||
Liability (Refund) Adjustment from Settlement with Taxing Authority | 2.1 | ||
Tax Settlement Amount | 0.2 | ||
Uncertain Taxes Reclassified | 4.2 | ||
Internal Revenue Service (IRS) | |||
Income Tax [Line Items] | |||
Operating Loss Carryforwards | 42.3 | ||
Foreign Tax Authority | |||
Income Tax [Line Items] | |||
Operating Loss Carryforwards | 33.2 | ||
Operating Loss Carryforwards, Subject to Expiration | 10 | ||
State and Local Jurisdiction | |||
Income Tax [Line Items] | |||
Operating Loss Carryforwards | $23.20 |
INCOME_TAXES_Schedule_Of_Incom
INCOME TAXES (Schedule Of Income Before Income Taxes) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
United States operations | $16,766 | ($33,162) | $25,293 |
Foreign operations | 26,213 | 1,860 | 26,736 |
Income (loss) before income taxes | $42,979 | ($31,302) | $52,029 |
INCOME_TAXES_Schedule_of_Effec
INCOME TAXES (Schedule of Effective Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 35.00% | 35.00% | 35.00% |
Increase (decrease) in income taxes resulting from: | |||
State income taxes, net of federal tax benefit | 5.60% | 0.30% | 2.60% |
Foreign operations | -16.00% | -17.20% | -14.70% |
Goodwill impairment | 0.00% | 34.10% | 0.00% |
Changes in valuation allowances | 3.00% | -1.10% | -0.40% |
Uncertain tax positions | -3.80% | -8.50% | -2.50% |
Research and development credit | -2.20% | -1.80% | 0.00% |
Return to provision | 1.50% | -6.60% | -0.50% |
Other | -2.20% | -1.50% | 1.30% |
Effective tax rate | 20.90% | 32.70% | 20.80% |
INCOME_TAXES_Schedule_Of_Provi
INCOME TAXES (Schedule Of Provision For Income Taxes) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current: | |||
Federal | $4,224 | $3,160 | $3,614 |
State | 1,683 | -1,374 | 1,373 |
Foreign | 4,032 | 1,124 | 4,301 |
Total current | 9,939 | 2,910 | 9,288 |
Deferred: | |||
Federal | -200 | -13,817 | 4,053 |
State | 953 | -757 | 497 |
Foreign | -1,717 | 1,429 | -3,013 |
Total deferred | -964 | -13,145 | 1,537 |
Provision (benefit) for income taxes | $8,975 | ($10,235) | $10,825 |
INCOME_TAXES_Schedule_Of_Defer
INCOME TAXES (Schedule Of Deferred Tax Assets And Liabilities) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Doubtful accounts | $1,632 | $1,791 |
Inventory related items | 35,660 | 34,968 |
Tax credits | 3,052 | 3,883 |
Accrued vacation | 2,667 | 2,492 |
Accrued bonus | 5,085 | 1,266 |
Net operating loss carryforwards | 2,454 | 4,550 |
Other | 1,302 | 1,960 |
Total current deferred tax assets | 51,852 | 50,910 |
Less valuation allowance | -681 | -2,232 |
Current deferred tax assets after valuation allowance | 51,171 | 48,678 |
Current liabilities: | ||
Other | -597 | -646 |
Total current deferred tax liabilities | -597 | -646 |
Net current deferred tax assets | 50,574 | 48,032 |
Non-current assets: | ||
Stock compensation | 15,349 | 14,879 |
Deferred revenue | 3 | 186 |
Net operating loss carryforwards | 21,368 | 26,613 |
Federal & state tax credits | 14,531 | 19,045 |
Other | 581 | 897 |
Total non-current deferred tax assets | 51,832 | 61,620 |
Less valuation allowance | -6,579 | -6,828 |
Non-current deferred tax assets after valuation allowance | 45,253 | 54,792 |
Non-current liabilities: | ||
Intangible & fixed assets | -123,257 | -41,563 |
Other | -52 | 105 |
Total non-current deferred tax liabilities | -123,309 | -41,458 |
Net non-current deferred tax assets (liabilities) | -78,056 | 13,334 |
Total net deferred tax assets (liabilities) | ($27,482) | $61,366 |
INCOME_TAXES_Schedule_of_Uncer
INCOME TAXES (Schedule of Uncertain Tax Benefits Reconciliation) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation of Uncertain Tax Benefits [Roll Forward] | |||
Balance, beginning of year | $3,396 | $6,136 | $3,927 |
Current year tax positions | 0 | 346 | 0 |
Prior years' tax positions | 543 | 729 | 7,796 |
Prior years' tax positions | -286 | -477 | 0 |
Settlements | -828 | 0 | -3,523 |
Statute of limitations lapses | -1,580 | -3,338 | -2,064 |
Balance, end of year | $1,245 | $3,396 | $6,136 |
NET_INCOME_LOSS_PER_SHARE_Narr
NET INCOME (LOSS) PER SHARE (Narrative) (Details) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Earnings Per Share [Abstract] | |||
Shares excluded from computation as their effect would be antidilutive | 0.2 | 0.7 | 1 |
Additional EPS Shares | 0.2 |
NET_INCOME_LOSS_PER_SHARE_Basi
NET INCOME (LOSS) PER SHARE (Basic and Diluted Net Income Per Share) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Basic net income per share: | |||||||||||
Net income (loss) | $17,166 | $9,807 | $4,825 | $2,206 | $13,771 | ($30,330) | $1,520 | ($6,028) | $34,004 | ($21,067) | $41,204 |
Weighted average common shares outstanding (in shares) | 32,432 | 28,416 | 28,232 | ||||||||
Basic net income per common share (in dollars per share) | $1.05 | ($0.74) | $1.46 | ||||||||
Diluted net income per share: | |||||||||||
Net income (loss) | $17,166 | $9,807 | $4,825 | $2,206 | $13,771 | ($30,330) | $1,520 | ($6,028) | $34,004 | ($21,067) | $41,204 |
Weighted average common shares outstanding (in shares) | 32,432 | 28,416 | 28,232 | ||||||||
Effect of dilutive securities: | |||||||||||
Stock options and restricted stock (in shares) | 528 | 0 | 284 | ||||||||
Weighted average common shares for diluted earnings per share (in shares) | 32,960 | 28,416 | 28,516 | ||||||||
Diluted net income per common share (in dollars per share) | $1.03 | ($0.74) | $1.44 |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Schedule of Accumulated Other Comprehensive Income (Loss)) (Details) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance at December 31, 2013 | $927 |
Other comprehensive income before reclassifications | -25,411 |
Amounts reclassified from accumulated other comprehensive income | 996 |
Current period other comprehensive income (loss) | -24,415 |
Balance at December 31, 2014 | -23,488 |
Gains and Losses on Cash Flow Hedges | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance at December 31, 2013 | -1,390 |
Other comprehensive income before reclassifications | -118 |
Amounts reclassified from accumulated other comprehensive income | 996 |
Current period other comprehensive income (loss) | 878 |
Balance at December 31, 2014 | -512 |
Defined Benefit Pension Items | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance at December 31, 2013 | -2,287 |
Other comprehensive income before reclassifications | 1,381 |
Amounts reclassified from accumulated other comprehensive income | 0 |
Current period other comprehensive income (loss) | 1,381 |
Balance at December 31, 2014 | -906 |
Foreign Currency Items | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance at December 31, 2013 | 4,604 |
Other comprehensive income before reclassifications | -26,674 |
Amounts reclassified from accumulated other comprehensive income | 0 |
Current period other comprehensive income (loss) | -26,674 |
Balance at December 31, 2014 | ($22,070) |
ACCUMULATED_OTHER_COMPREHENSIV3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Reclassification out of Accumulated Other Comprehensive Income) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Interest expense | ($21,967) | ($19,788) | ($22,237) |
Cost of goods sold | 352,801 | 327,045 | 314,427 |
Tax benefit | -8,975 | 10,235 | -10,825 |
Gains and Losses on Cash Flow Hedges | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | -1,830 | ||
Tax benefit | 751 | 793 | |
Net of tax | -996 | -1,037 | |
Interest rate swap | Gains and Losses on Cash Flow Hedges | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Interest expense | -1,747 | -1,938 | |
Foreign currency forwards | Gains and Losses on Cash Flow Hedges | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Cost of goods sold | $108 |
SEGMENT_AND_GEOGRAPHIC_INFORMA2
SEGMENT AND GEOGRAPHIC INFORMATION (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 5 |
U.S. Instruments | |
Segment Reporting Information [Line Items] | |
Number of instrument patterns, surgical products, and lighting sold (more than 60,000) | 60,000 |
SEGMENT_AND_GEOGRAPHIC_INFORMA3
SEGMENT AND GEOGRAPHIC INFORMATION (Net Sales and Profit by Reportable Segment) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenue from External Customer [Line Items] | |||||||||||
Segment Net Sales | $252,176 | $229,719 | $231,351 | $215,059 | $220,769 | $213,246 | $205,547 | $196,652 | $928,305 | $836,214 | $830,871 |
Segment Profit | 365,525 | 247,444 | 304,023 | ||||||||
Amortization | -12,400 | -12,697 | -18,536 | ||||||||
Corporate and other | -287,584 | -244,903 | -211,705 | ||||||||
Operating income (loss) | 65,541 | -10,156 | 73,782 | ||||||||
U.S. Neurosurgery | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Segment Net Sales | 244,603 | 172,250 | 171,278 | ||||||||
Segment Profit | 133,165 | 83,211 | 91,070 | ||||||||
U.S. Instruments | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Segment Net Sales | 157,816 | 163,908 | 166,921 | ||||||||
Segment Profit | 48,036 | 49,348 | 50,277 | ||||||||
U.S. Extremities | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Segment Net Sales | 143,384 | 128,336 | 116,279 | ||||||||
Segment Profit | 61,343 | 47,880 | 43,952 | ||||||||
U.S. Spine and Other | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Segment Net Sales | 171,363 | 182,007 | 192,516 | ||||||||
Segment Profit | 53,318 | 10,136 | 57,388 | ||||||||
International | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Segment Net Sales | 211,139 | 189,713 | 183,877 | ||||||||
Segment Profit | $69,663 | $56,869 | $61,336 |
SEGMENT_AND_GEOGRAPHIC_INFORMA4
SEGMENT AND GEOGRAPHIC INFORMATION (Revenue by Major Product Category) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenue from External Customer [Line Items] | |||||||||||
Total revenues | $252,176 | $229,719 | $231,351 | $215,059 | $220,769 | $213,246 | $205,547 | $196,652 | $928,305 | $836,214 | $830,871 |
Orthopedics | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Total revenues | 370,082 | 370,359 | 364,714 | ||||||||
Neurosurgery | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Total revenues | 371,676 | 278,672 | 277,527 | ||||||||
Instruments | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Total revenues | $186,547 | $187,183 | $188,630 |
SEGMENT_AND_GEOGRAPHIC_INFORMA5
SEGMENT AND GEOGRAPHIC INFORMATION (Total Revenue by Major Geographic Area) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | |||||||||||
Total revenue, net | $252,176 | $229,719 | $231,351 | $215,059 | $220,769 | $213,246 | $205,547 | $196,652 | $928,305 | $836,214 | $830,871 |
Total long-lived assets | 220,354 | 208,648 | 220,354 | 208,648 | |||||||
United States | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue, net | 714,040 | 642,694 | 642,830 | ||||||||
Total long-lived assets | 197,897 | 187,608 | 197,897 | 187,608 | |||||||
Europe | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue, net | 105,697 | 93,977 | 90,920 | ||||||||
Total long-lived assets | 21,218 | 20,010 | 21,218 | 20,010 | |||||||
Rest of the World | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue, net | 108,568 | 99,543 | 97,121 | ||||||||
Total long-lived assets | $1,239 | $1,030 | $1,239 | $1,030 |
SELECTED_QUARTERLY_INFORMATION2
SELECTED QUARTERLY INFORMATION - UNAUDITED (Narrative) (Details) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | |||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 31, 2013 | |
Segment Reporting Information [Line Items] | ||||||||
Goodwill impairment charge | $0 | $46,738,000 | $0 | |||||
Global ERP implementation costs | 5,600,000 | 5,000,000 | 7,600,000 | 6,100,000 | ||||
FDA remediation costs | 400,000 | 2,800,000 | 3,000,000 | 2,100,000 | ||||
U.S. Spine | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Goodwill impairment charge | $46,700,000 |
SELECTED_QUARTERLY_INFORMATION3
SELECTED QUARTERLY INFORMATION - UNAUDITED (Selected Quarterly Information) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Selected Quarterly Financial Information [Abstract] | |||||||||||
Total revenue, net | $252,176 | $229,719 | $231,351 | $215,059 | $220,769 | $213,246 | $205,547 | $196,652 | $928,305 | $836,214 | $830,871 |
Gross margin | 154,708 | 143,745 | 144,375 | 132,676 | 136,932 | 131,479 | 123,718 | 117,040 | |||
Net income (loss) | $17,166 | $9,807 | $4,825 | $2,206 | $13,771 | ($30,330) | $1,520 | ($6,028) | $34,004 | ($21,067) | $41,204 |
Basic net income (loss) (USD per share) | $0.53 | $0.30 | $0.15 | $0.07 | $0.46 | ($1.09) | $0.05 | ($0.22) | |||
Diluted net income (loss) (USD per share) | $0.52 | $0.30 | $0.15 | $0.07 | $0.45 | ($1.09) | $0.05 | ($0.22) |
SCHEDULE_II_VALUATION_AND_QUAL1
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation allowance adjustment | $0 | $0 | $500,000 |
Allowance for doubtful accounts and sales returns and allowances | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 6,194,000 | 7,221,000 | 6,978,000 |
Charged to Costs and Expenses | 1,944,000 | 601,000 | 1,315,000 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | -1,954,000 | -1,628,000 | -1,072,000 |
Balance at End of Period | 6,184,000 | 6,194,000 | 7,221,000 |
Deferred tax asset valuation allowance (As adjusted) | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 9,060,000 | 14,243,000 | 32,304,000 |
Charged to Costs and Expenses | -1,102,000 | -4,469,000 | -16,979,000 |
Charged to Other Accounts | 0 | 0 | 477,000 |
Deductions | -698,000 | -714,000 | -1,559,000 |
Balance at End of Period | $7,260,000 | $9,060,000 | $14,243,000 |