DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 24, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 0-26224 | |
Entity Registrant Name | INTEGRA LIFESCIENCES HOLDINGS CORP | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 51-0317849 | |
Entity Address | 1100 Campus Road | |
Entity City | Princeton | |
Entity State | NJ | |
Entity Postal Zip Code | 08540 | |
City Area Code | 609 | |
Local Phone Number | 275-0500 | |
Title of 12(b) Security | Common Stock, Par Value $.01 Per Share | |
Trading Symbol | IART | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Smaller Reporting Company | false | |
Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 83,518,163 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000917520 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Total revenue, net | $ 385,191 | $ 386,861 | $ 1,159,644 | $ 1,136,924 |
Costs and expenses: | ||||
Cost of goods sold | 148,445 | 144,468 | 439,418 | 441,558 |
Research and development | 24,736 | 25,831 | 74,410 | 68,326 |
Selling, general and administrative | 143,820 | 156,010 | 464,397 | 475,195 |
Intangible asset amortization | 3,141 | 4,113 | 10,339 | 12,838 |
Total costs and expenses | 320,142 | 330,422 | 988,564 | 997,917 |
Operating income | 65,049 | 56,439 | 171,080 | 139,007 |
Interest income | 3,264 | 1,786 | 6,606 | 5,298 |
Interest expense | (12,809) | (12,192) | (36,700) | (38,270) |
Gain (loss) from the sale of businesses | 644 | (230) | 644 | 41,967 |
Other income, net | 2,648 | 4,985 | 8,056 | 14,888 |
Income before income taxes | 58,796 | 50,788 | 149,686 | 162,890 |
Provision for income taxes | 8,881 | 7,559 | 22,082 | 39,199 |
Net income | $ 49,915 | $ 43,229 | $ 127,604 | $ 123,691 |
Net income per share | ||||
Basic (in dollars per share) | $ 0.60 | $ 0.51 | $ 1.54 | $ 1.46 |
Diluted (in dollars per share) | $ 0.60 | $ 0.51 | $ 1.53 | $ 1.45 |
Weighted average common shares outstanding (See Note 13): | ||||
Basic (in shares) | 83,042 | 84,754 | 82,955 | 84,647 |
Diluted (in shares) | 83,399 | 85,447 | 83,476 | 85,391 |
Comprehensive income (See Note 14) | $ 55,691 | $ 46,417 | $ 165,320 | $ 150,975 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 511,937 | $ 513,448 |
Trade accounts receivable, net of allowances of $3,958 and $4,735 | 248,268 | 231,831 |
Inventories, net | 311,060 | 317,386 |
Prepaid expenses and other current assets | 123,357 | 91,051 |
Assets held for sale | 1,831 | 0 |
Total current assets | 1,196,453 | 1,153,716 |
Property, plant and equipment, net | 300,729 | 311,703 |
Right of use asset - operating leases | 148,270 | 84,543 |
Intangible assets, net | 1,054,035 | 1,145,573 |
Goodwill | 977,860 | 1,013,458 |
Deferred tax assets, net | 51,768 | 56,950 |
Other assets | 77,898 | 16,440 |
Total assets | 3,807,013 | 3,782,383 |
Current liabilities: | ||
Current portion of borrowings under senior credit facility | 56,250 | 45,000 |
Current portion of lease liability - operating leases | 13,488 | 14,775 |
Accounts payable, trade | 80,732 | 61,837 |
Contract liabilities | 6,364 | 5,295 |
Accrued compensation | 68,626 | 92,656 |
Accrued expenses and other current liabilities | 78,992 | 120,458 |
Total current liabilities | 304,452 | 340,021 |
Long-term borrowings under senior credit facility | 814,530 | 824,257 |
Long-term borrowings under securitization facility | 106,000 | 112,500 |
Long-term convertible securities | 566,612 | 564,426 |
Lease liability - operating leases | 157,533 | 90,329 |
Deferred tax liabilities | 69,743 | 45,788 |
Other liabilities | 63,729 | 120,258 |
Total liabilities | 2,082,599 | 2,097,579 |
Stockholders’ equity: | ||
Preferred stock; no par value; 15,000 authorized shares; none outstanding | 0 | 0 |
Common stock; $0.01 par value; 240,000 authorized shares; 90,341 and 89,600 issued at September 30, 2022 and December 31, 2021, respectively | 903 | 896 |
Additional paid-in capital | 1,267,641 | 1,264,943 |
Treasury stock, at cost; 6,823 shares and 4,899 shares at September 30, 2022 and December 31, 2021, respectively | (362,863) | (234,448) |
Accumulated other comprehensive loss | (7,439) | (45,155) |
Retained earnings | 826,172 | 698,568 |
Total stockholders’ equity | 1,724,414 | 1,684,804 |
Total liabilities and stockholders’ equity | $ 3,807,013 | $ 3,782,383 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowance | $ 3,958 | $ 4,735 |
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, authorized shares (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, outstanding shares (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares (in shares) | 240,000,000 | 240,000,000 |
Common stock, issued shares (in shares) | 90,341,000 | 89,600,000 |
Treasury stock (in shares) | 6,823,000 | 4,899,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
OPERATING ACTIVITIES: | |||||||
Net income | $ 49,915 | $ 32,901 | $ 43,229 | $ 45,394 | $ 127,604 | $ 123,691 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 88,803 | 89,090 | |||||
Non-cash impairment charges | 0 | 2,754 | |||||
Deferred income tax provision (benefit) | 1,439 | (13,498) | |||||
Share-based compensation | 21,994 | 29,778 | |||||
Amortization of debt issuance costs and expenses associated with debt refinancing | 5,142 | 5,308 | |||||
Non-cash lease expense | 3,040 | 3,099 | |||||
Loss on disposal of property and equipment | 914 | 2,029 | |||||
Gain from the sale of businesses | (644) | 230 | (644) | (41,967) | |||
Change in fair value of contingent consideration and others | (19,481) | (544) | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (23,870) | 17,437 | |||||
Inventories | (24,443) | (3,598) | |||||
Prepaid expenses and other current assets | 1,629 | (11,696) | |||||
Other non-current assets | 9,575 | 5,900 | |||||
Accounts payable, accrued expenses and other current liabilities | (803) | 33,858 | |||||
Contract liabilities | 2,524 | 0 | |||||
Other non-current liabilities | (14,288) | 1,509 | |||||
Net cash provided by operating activities | 179,135 | 243,150 | |||||
INVESTING ACTIVITIES: | |||||||
Purchases of property and equipment | (27,887) | (20,595) | |||||
Proceeds from sale of property and equipment | 0 | 3 | |||||
Proceeds from sale of businesses | 23,960 | 190,468 | |||||
Acquired in-process research and development milestone | (4,742) | 0 | |||||
Net proceeds from swaps designated as net investment hedges | 4,909 | 76 | |||||
Cash paid for business acquisitions, net of cash acquired | 0 | (303,910) | |||||
Net cash used in investing activities | (3,760) | (133,958) | |||||
FINANCING ACTIVITIES: | |||||||
Proceeds from borrowings of long-term indebtedness | 34,250 | 13,450 | |||||
Payments on debt | (40,750) | (114,250) | |||||
Payment of debt issuance costs | 0 | (249) | |||||
Purchases of treasury stock | (125,000) | 0 | |||||
Proceeds from exercised stock options | 1,592 | 6,588 | |||||
Cash taxes paid in net equity settlement | (24,346) | (4,286) | |||||
Net cash used in financing activities | (154,254) | (98,747) | |||||
Effect of exchange rate changes on cash and cash equivalents | (22,632) | (10,380) | |||||
Net decrease in cash and cash equivalents | (1,511) | 65 | |||||
Cash and cash equivalents at beginning of period | $ 513,448 | $ 470,166 | 513,448 | 470,166 | $ 470,166 | ||
Cash and cash equivalents at end of period | $ 511,937 | $ 470,231 | $ 511,937 | $ 470,231 | $ 513,448 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Treasury Stock | Additional Paid-In Capital | Additional Paid-In Capital Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Loss | Retained Earnings | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment |
Balance Beginning of Period, Shares (in shares) at Dec. 31, 2020 | 89,251,000 | ||||||||
Balance, Beginning of Period at Dec. 31, 2020 | $ 1,514,867 | $ (66,046) | $ 893 | $ (235,141) | $ 1,290,909 | $ (63,274) | $ (74,059) | $ 532,265 | $ (2,772) |
Balance, Beginning of Period, Treasury Stock, Shares (in shares) at Dec. 31, 2020 | (4,914,000) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 45,394 | 45,394 | |||||||
Other comprehensive income (loss), net of tax | 30,432 | 30,432 | |||||||
Issuance of common stock through employee stock purchase plan (in shares) | 18,000 | ||||||||
Issuance of common stock through employee stock purchase plan | 1,127 | 1,127 | |||||||
Issuance of common stock for vesting of share based awards, net of shares withheld for taxes (in shares) | 137,000 | 15,000 | |||||||
Issuance of common stock for vesting of share based awards, net of shares withheld for taxes | (2,541) | $ 1 | $ 680 | (3,222) | |||||
Share-based compensation | 6,098 | 6,098 | |||||||
Balance End of Period, Shares (in shares) at Mar. 31, 2021 | 89,406,000 | ||||||||
Balance, End of Period at Mar. 31, 2021 | 1,529,331 | $ 894 | $ (234,461) | 1,231,638 | (43,627) | 574,887 | |||
Balance, End of Period, Treasury Stock, Shares (in shares) at Mar. 31, 2021 | (4,899,000) | ||||||||
Balance Beginning of Period, Shares (in shares) at Dec. 31, 2020 | 89,251,000 | ||||||||
Balance, Beginning of Period at Dec. 31, 2020 | 1,514,867 | $ (66,046) | $ 893 | $ (235,141) | 1,290,909 | $ (63,274) | (74,059) | 532,265 | $ (2,772) |
Balance, Beginning of Period, Treasury Stock, Shares (in shares) at Dec. 31, 2020 | (4,914,000) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 123,691 | ||||||||
Balance End of Period, Shares (in shares) at Sep. 30, 2021 | 89,597,000 | ||||||||
Balance, End of Period at Sep. 30, 2021 | 1,631,687 | $ 896 | $ (234,449) | 1,258,830 | (46,774) | 653,184 | |||
Balance, End of Period, Treasury Stock, Shares (in shares) at Sep. 30, 2021 | (4,899,000) | ||||||||
Balance Beginning of Period, Shares (in shares) at Mar. 31, 2021 | 89,406,000 | ||||||||
Balance, Beginning of Period at Mar. 31, 2021 | 1,529,331 | $ 894 | $ (234,461) | 1,231,638 | (43,627) | 574,887 | |||
Balance, Beginning of Period, Treasury Stock, Shares (in shares) at Mar. 31, 2021 | (4,899,000) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 35,068 | 35,068 | |||||||
Other comprehensive income (loss), net of tax | (6,336) | (6,336) | |||||||
Issuance of common stock for vesting of share based awards, net of shares withheld for taxes (in shares) | 68,000 | ||||||||
Issuance of common stock for vesting of share based awards, net of shares withheld for taxes | 1,176 | $ 1 | 1,175 | ||||||
Share-based compensation | 15,742 | 15,742 | |||||||
Balance End of Period, Shares (in shares) at Jun. 30, 2021 | 89,474,000 | ||||||||
Balance, End of Period at Jun. 30, 2021 | 1,574,981 | $ 895 | $ (234,461) | 1,248,555 | (49,963) | 609,955 | |||
Balance, End of Period, Treasury Stock, Shares (in shares) at Jun. 30, 2021 | (4,899,000) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 43,229 | 43,229 | |||||||
Other comprehensive income (loss), net of tax | 3,189 | 3,189 | |||||||
Issuance of common stock for vesting of share based awards, net of shares withheld for taxes (in shares) | 123,000 | ||||||||
Issuance of common stock for vesting of share based awards, net of shares withheld for taxes | 2,542 | $ 1 | $ 12 | 2,529 | |||||
Share-based compensation | 7,746 | 7,746 | |||||||
Balance End of Period, Shares (in shares) at Sep. 30, 2021 | 89,597,000 | ||||||||
Balance, End of Period at Sep. 30, 2021 | 1,631,687 | $ 896 | $ (234,449) | 1,258,830 | (46,774) | 653,184 | |||
Balance, End of Period, Treasury Stock, Shares (in shares) at Sep. 30, 2021 | (4,899,000) | ||||||||
Balance Beginning of Period, Shares (in shares) at Dec. 31, 2021 | 89,600,000 | ||||||||
Balance, Beginning of Period at Dec. 31, 2021 | $ 1,684,804 | $ 896 | $ (234,448) | 1,264,943 | (45,155) | 698,568 | |||
Balance, Beginning of Period, Treasury Stock, Shares (in shares) at Dec. 31, 2021 | (4,899,000) | (4,899,000) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | $ 32,901 | 32,901 | |||||||
Other comprehensive income (loss), net of tax | 24,130 | 24,130 | |||||||
Issuance of common stock through employee stock purchase plan (in shares) | 17,000 | ||||||||
Issuance of common stock through employee stock purchase plan | 1,078 | 1,078 | |||||||
Issuance of common stock for vesting of share based awards, net of shares withheld for taxes (in shares) | 339,000 | 14,000 | |||||||
Issuance of common stock for vesting of share based awards, net of shares withheld for taxes | (9,040) | $ 4 | $ 714 | (9,758) | |||||
Share-based compensation | 6,324 | 6,324 | |||||||
Accelerated shares repurchased (shares) | (1,938,000) | ||||||||
Accelerated shares repurchased | (125,000) | $ (129,152) | 4,152 | ||||||
Balance End of Period, Shares (in shares) at Mar. 31, 2022 | 89,956,000 | ||||||||
Balance, End of Period at Mar. 31, 2022 | 1,615,197 | $ 900 | $ (362,886) | 1,266,739 | (21,025) | 731,469 | |||
Balance, End of Period, Treasury Stock, Shares (in shares) at Mar. 31, 2022 | (6,823,000) | ||||||||
Balance Beginning of Period, Shares (in shares) at Dec. 31, 2021 | 89,600,000 | ||||||||
Balance, Beginning of Period at Dec. 31, 2021 | $ 1,684,804 | $ 896 | $ (234,448) | 1,264,943 | (45,155) | 698,568 | |||
Balance, Beginning of Period, Treasury Stock, Shares (in shares) at Dec. 31, 2021 | (4,899,000) | (4,899,000) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | $ 127,604 | ||||||||
Other comprehensive income (loss), net of tax | 37,716 | ||||||||
Balance End of Period, Shares (in shares) at Sep. 30, 2022 | 90,341,000 | ||||||||
Balance, End of Period at Sep. 30, 2022 | $ 1,724,414 | $ 903 | $ (362,863) | 1,267,641 | (7,439) | 826,172 | |||
Balance, End of Period, Treasury Stock, Shares (in shares) at Sep. 30, 2022 | (6,823,000) | (6,823,000) | |||||||
Balance Beginning of Period, Shares (in shares) at Mar. 31, 2022 | 89,956,000 | ||||||||
Balance, Beginning of Period at Mar. 31, 2022 | $ 1,615,197 | $ 900 | $ (362,886) | 1,266,739 | (21,025) | 731,469 | |||
Balance, Beginning of Period, Treasury Stock, Shares (in shares) at Mar. 31, 2022 | (6,823,000) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 44,788 | 44,788 | |||||||
Other comprehensive income (loss), net of tax | 7,810 | 7,810 | |||||||
Issuance of common stock for vesting of share based awards, net of shares withheld for taxes (in shares) | 378,000 | ||||||||
Issuance of common stock for vesting of share based awards, net of shares withheld for taxes | (13,646) | $ 3 | $ 6 | (13,655) | |||||
Share-based compensation | 6,768 | 6,768 | |||||||
Balance End of Period, Shares (in shares) at Jun. 30, 2022 | 90,334,000 | ||||||||
Balance, End of Period at Jun. 30, 2022 | 1,660,917 | $ 903 | $ (362,880) | 1,259,852 | (13,215) | 776,257 | |||
Balance, End of Period, Treasury Stock, Shares (in shares) at Jun. 30, 2022 | (6,823,000) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 49,915 | 49,915 | |||||||
Other comprehensive income (loss), net of tax | 5,776 | 5,776 | |||||||
Issuance of common stock for vesting of share based awards, net of shares withheld for taxes (in shares) | 7,000 | ||||||||
Issuance of common stock for vesting of share based awards, net of shares withheld for taxes | (1,143) | $ 17 | (1,160) | ||||||
Share-based compensation | 8,949 | 8,949 | |||||||
Balance End of Period, Shares (in shares) at Sep. 30, 2022 | 90,341,000 | ||||||||
Balance, End of Period at Sep. 30, 2022 | $ 1,724,414 | $ 903 | $ (362,863) | $ 1,267,641 | $ (7,439) | $ 826,172 | |||
Balance, End of Period, Treasury Stock, Shares (in shares) at Sep. 30, 2022 | (6,823,000) | (6,823,000) |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION General The terms “we,” “our,” “us,” “Company” and “Integra” refer to Integra LifeSciences Holdings Corporation, a Delaware corporation, and its subsidiaries unless the context suggests otherwise. In the opinion of management, the September 30, 2022 unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the financial position, statement of changes in shareholders' equity, results of operations and cash flows of the Company. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K. The December 31, 2021 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States. Operating results for the three and nine-month period ended September 30, 2022 are not necessarily indicative of the results to be expected for the entire year. The preparation of consolidated financial statements is in conformity with generally accepted accounting principles in the United States ("GAAP") which requires management to make estimates and assumptions that affect the reported amount 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 including 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 and 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 derivative instruments, valuation of contingent liabilities, the fair value 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. Risks and Uncertainties The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic, including reductions in capital and overall spending by our customers, increased freight costs, decreased availability of certain raw materials used in certain of our products and labor constraints. The COVID-19 pandemic has had, and may continue to have, an adverse effect on the Company’s business, results of operations, financial condition, and cash flows, and its future impacts remain highly uncertain and unpredictable. Although there was not a material impact to the Company’s consolidated financial statements as of and for the nine months ended September 30, 2022, changes in the Company’s assessment about the length and severity of the pandemic, as well as other factors, could result in actual results differing from estimates. The severity of the impact of the COVID-19 pandemic on the Company's business will depend on a number of factors, including, but not limited to, duration of the pandemic, including resurgences, new variants or strains, impact of government regulations, the speed and effectiveness of vaccine distribution, vaccine adoption rates and the duration of direct and indirect economic effects of the pandemic, containment measures and other macroeconomic factors which could cause a local/or global economic recession. Even after the COVID-19 pandemic and government responses thereto have subsided, residual economic and other effects may have an impact on the demand for post-pandemic surgery levels that are difficult to predict. Employee Termination Benefits The Company incurred employee termination costs on restructuring activities associated with a closure of a manufacturing facility in France, outsourcing plans for select transactional back office activities, and executive reorganization in the consolidated statement of operations for the nine months ended September 30, 2022. The following table summarizes our restructuring related accrual balances included within accrued expenses and other current liabilities in the consolidated balance sheet for the nine months ended September 30, 2022. (Dollars in thousands) Amount Balance at December 31,2021 $ 10,226 Charges: Cost of Goods Sold $ 1,379 Research and development 130 Selling, general and administrative 3,494 Payments and other adjustments $ (10,569) Balance at September 30,2022 $ 4,660 Included in the accrual balance at September 30, 2022 above is $1.8 million related to the closure o f a manufacturing facility located in France, $1.7 million related to executive reorganization and $1.2 million related to the outsourcing plans for select transactional back office activities. Assets Held for Sale On July 18 2022, the Company entered into a preliminary agreement to sell a manufacturing facility located in France which is expected to close during the fourth quarter of 2022, subject to satisfaction of customary conditions. The Company considered the building to be accounted as held-for-sale as the six criteria under ASC 260 were met during the third quarter of 2022. Assets held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell and are not depreciated while they are held for sale. The fair value of the business less costs to sell exceeded the related carrying value. Recent Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes : Simplifying the Accounting for Income Taxes, intended to simplify the accounting for income taxes by eliminating certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for annual periods beginning after December 15, 2020 and interim periods within, with early adoption permitted. The Company adopted ASU 2019-12 as of January 1, 2021. Adoption of the standard requires certain changes to be made prospectively, with some changes to be made retrospectively. The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), and subsequent amendment to the initial guidance: ASU 2021-01, Reference Rate Reform (Topic 848): Scope (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference London Inter-Bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. The guidance generally can be applied from March 12, 2020 through December 31, 2022. On October 5, 2022, the FASB approved an extension of the sunset date of the reference rate reform from December 31, 2022 to December 31, 2024, past LIBOR’s end date. The Company currently has contracts that are indexed to LIBOR and are continuing to evaluate the scope of impacted contracts and potential risk. The Company is also monitoring the developments regarding alternative rates and may amend certain contracts to accommodate those rates if the contract does not already specify a replacement rate. While the notional value of agreements potentially indexed to LIBOR is material, the Company does not expect a material impact to the consolidated financial statements and related disclosures associated with this transition. In August 2020, the FASB issued ASU 2020-06, Debt- Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40):Accounting for Convertible Instruments and Contracts in an Entity's Own Equity . The guidance simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify. The guidance also simplifies the diluted net income per share calculation in certain areas. The ASU was effective for annual and interim periods beginning after December 15, 2021, and early adoption was permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years using either the modified retrospective or full retrospective method. As detailed in Note 6, Debt , on February 4, 2020, the Company issued $575.0 million aggregate principal amount of its 0.5% Convertible Senior Notes due 2025 (the "2025 Notes"). The 2025 Notes are subject to the guidance included in ASU 2020-06. The Company adopted this guidance on January 1, 2021 using the modified retrospective approach which resulted in a cumulative-effect adjustment that increased (decreased) the following consolidated balance sheet accounts: Adjustment Consolidated Balance Sheet Classification Amount Deferred tax impact of cumulative-effect adjustment Deferred tax liabilities $ (20.6) Debt discount reclassification Long-term convertible securities 89.1 Equity issuance costs reclassification Long-term convertible securities (2.5) Debt discount amortization and equity costs reclassification, net of tax Retained Earnings (2.8) Net impact of cumulative-effect adjustment Additional paid-in capital (63.3) On December 9, 2020, the Company made an irrevocable election under the indenture to require the principal portion of its 2025 Notes to be settled in cash and any excess in shares. Following the irrevocable notice, only the amounts settled in excess of the principal will be considered in diluted earnings per share under the “if-converted” method. Upon adoption of ASU 2020-06, the Company’s 2025 Notes were reflected entirely as a liability since the embedded conversion feature will no longer be separately presented within stockholders’ equity. Additionally, from January 1, 2021, the Company is no longer incurring non-cash interest expense for the amortization of debt discount. In October 2020, the FASB issued ASU 2020-10, Codification Improvements , which updates various codification topics by clarifying or improving disclosure requirements to align with the regulations of the U.S. Securities and Exchange Commission (the "SEC"). The ASU has been effective for the Company for annual and interim periods beginning after January 1, 2021. The Company adopted this standard on the January 1, 2021. The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements and related disclosures. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options which provides guidance to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments in this ASU No. 2021-04 are effective for all entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, including interim periods within those fiscal years. The amendment had no impact to the Company as the effect will largely depend on the terms of written call options or financings issued or modified in the future. There are no other recently issued accounting pronouncements that are expected to have any significant effect on the Company's financial position, results of operations or cash flows. |
ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES | 9 Months Ended |
Sep. 30, 2022 | |
Mergers, Acquisitions and Dispositions [Abstract] | |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES Sale of non-core traditional wound care business On August 31, 2022, the Company completed its previously announced sale of its non-core traditional wound care ("TWC") business to Gentell, LLC ("Gentell") for $28.8 million, which consists of $27.8 million in cash plus $1.0 million in contingent consideration which may be received upon achieving certain revenue-based performance milestones two years after the closing date. The proceeds from the sale of the TWC business of $27.8 million is presented in the consolidated statement of cash flows net of cash transferred of $3.5 million and other transaction fees . The transaction included the sale of the Company's TWC products, such as sponges, gauze and conforming bandages, and certain advanced wound care dressings, such as supportive, calcium alginate, hydrogel, and foam dressings. The divestiture did not represent a strategic shift that had a major effect on the Company's operations and financial statements . Goodwill was allocated to the assets and liabilities divested using the relative fair value method of the TWC business to the Company's Tissue Technologies reportable business segment. In connection with the sale, the Company recognized $0.6 million as a gain from the sale of the business in the consolidated statement of operations for the nine months ended September 30, 2022. The transaction is subject to final working capital adjustments. In addition to the purchase and sale agreement, the Company also entered into a contract manufacturing agreement with Gentell. Under the terms of the agreement, Gentell received inventory, equipment, and tooling to manufacture certain MediHoney ® and TCC-EZ ® products on behalf of the Company. On the close date of this transa ction, the Company transferred all inventory associated with these products to Gentell and subsequently recognized a prepaid asset of $11.1 million, as a form of a deposit for the inventory transferred. Based on the expected timing of inventory purchases, $8.3 million was included within prepaid expenses and other current assets and $2.8 million within other assets in the consolidated balance sheet. This deposit will be utilized by the Company on future orders placed to G entell for such products. Sale of Extremity Orthopedics Business On January 4, 2021, the Company completed the sale of its Extremity Orthopedics business to Smith & Nephew USD Limited ("Smith & Nephew"). The transaction included the sale of the Company's upper and lower Extremity Orthopedics product portfolio, including ankle and shoulder arthroplasty and hand and wrist product lines. The Company received an aggregate purchase price of $240.0 million from Smith & Nephew and concurrently paid $41.5 million to the Consortium of Focused Orthopedists, LLC ("CFO") effectively terminating the licensing agreement between Integra and the CFO relating to the development of shoulder arthroplasty products. The divestiture did not represent a strategic shift that had a major effect on the Company's operations and financial statements. Goodwill was allocated to the assets and liabilities divested using the relative fair value method of the Extremity Orthopedics business to the Company's Tissue Technologies reportable business segment. In connection with the sale, the Company recognized a $41.8 million as a gain from the sale of the business in the consolidated statement of operations for the year ended December 31, 202 1. The Company finalized the net working capital with Smith & Nephew as of December 31, 2021. The Company also entered into a transition services agreement ("TSA") with Smit h & Nephew which requires the Company to provide certain services on behalf of Smith & Nephew for the duration of the period subsequent to the sale of the business as defined in the TSA. The Company recognized a payable due to Smith & Nephew of $3.0 million as of September 30, 2022, which is included in the consolidated balance sheets within accrued expenses and other current liabilities. The TSA includes services such as invoicing and cash collections from customers on behalf of Smith & Nephew. As of September 30, 2022, the Company has concluded the majority of the transition services agreement, pending final payment. ACell, Inc. Acquisition On January 20, 2021, the Company acquired ACell, Inc. (the "ACell Acquisition") for a total purchase price of $306.9 million plus contingent consideration of up to $100 million, which may be payable upon the Company achieving certain revenue-based performance milestones in 2022, 2023 and 2025. The final working capital adjustments of $1.3 million was finalized and paid as of June 30, 2021. Prior to the acquisition, ACell was a privately-held company that offered a portfolio of regenerative products for complex wound management, including developing and commercializing products based on MatriStem Urinary Bladder Matrix, a technology platform derived from porcine urinary bladder extracellular matrix. Assets Acquired and Liabilities Assumed at Fair Value The ACell Acquisition has been accounted for using the acquisition method of accounting. This method requires that assets acquired and liabilities assumed in a business combination are recognized at their fair values as of the acquisition date. The following table summarizes the final fair values of the assets acquired and liabilities assumed at the acquisition date: Dollars in thousands Final Valuation Weighted Average Life Current assets: Cash $ 2,726 Trade accounts receivable, net 16,469 Inventories, net 18,299 Prepaid expenses and other current assets 1,498 Total current assets $ 38,992 Property, plant and equipment, net 13,769 Intangible assets 245,000 13-14 years Goodwill 94,147 Right of use asset - operating leases 9,259 Deferred tax assets 7,465 Other assets 148 Total assets acquired $ 408,780 Current liabilities: Accounts payable $ 718 Accrued expenses 5,966 Current portion of lease liability - operating leases 1,673 Total current liabilities $ 8,357 Other long-term liability 276 Lease liability - operating leases 7,585 Deferred tax liability 61,724 Contingent consideration 23,900 Total liabilities assumed $ 101,842 Net assets acquired $ 306,938 Intangible Assets The estimated fair value of the developed technology acquired was determined using the multi-period excess earnings method of the income approach, which estimates value based on the present value of future economic benefits. Some of the more significant assumptions inherent in the development of those asset valuations include the estimated net cash flows for each year for each product including net revenues, cost of sales, R&D costs, selling and marketing costs, the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, and competitive trends impacting the asset and each cash flow stream. The Company used a discount rate of 8.5% to arrive at the present value for the acquired intangible assets to reflect the rate of return a market participant would expect to earn and incremental commercial uncertainty in the cash flow projections. No assurances can be given that the underlying assumptions used to prepare the discounted cash flow analysis will not change. For these and other reasons, actual results may vary significantly from estimated results. Goodwill The Company allocated goodwill related to the ACell acquisition to the Tissue Technologies reportable business segment. Goodwill is the excess of the consideration transferred over the net assets recognized and represents the expected synergies of the combined company and assembled workforce. Goodwill recognized as a result of this acquisition is non-deductible for income tax purposes. Contingent Consideration As part of the ACell Acquisition, the Company is required to make payments to the former shareholders of ACell up to $100 million based on the achievement by the Company of certain revenue-based performance milestones in 2022, 2023, and 2025. The Company used iterations of the Monte Carlo simulation to calculate the fair value of the contingent consideration that considered the possible outcomes of scenarios related to each specific milestone. The Company estimated the fair value of the contingent consideration to be $23.9 million at the acquisition date. The estimated fair value as of September 30, 2022 was $5.0 million. The Company recorded $5.0 million and $23.0 million in other liabilities at September 30, 2022 and September 30, 2021, respectively, in the consolidated balance sheets of the Company. The change in the fair value of the contingent obligation was primarily as a result of changes in the timing and amount of revenue estimates. The Company determined the acquisition date fair value of contingent consideration obligations using a Monte Carlo simulation, as well as significant unobservable inputs, reflecting the Company’s assessment of the assumptions market participants would use to value these liabilities. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined using the fair value concepts in ASC 820. The resultant most likely payouts are discounted using an appropriate effective annual interest rate. At each reporting date, the contingent consideration obligations are revalued to estimated fair value and changes in fair value will be reflected as income or expense in our consolidated statement of operations. Changes in the fair value of the contingent considerations may result from changes in discount periods and rates and changes in the timing and amount of revenue estimates. Deferred Tax Liabilities Deferred tax liabilities result from identifiable intangible assets’ fair value adjustments. These adjustments create excess book basis over tax basis which is tax-effected by the statutory tax rates of applicable jurisdictions. |
REVENUES FROM CONTRACTS WITH CU
REVENUES FROM CONTRACTS WITH CUSTOMERS | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES FROM CONTRACTS WITH CUSTOMERS | REVENUES FROM CONTRACTS WITH CUSTOMERS Summary of Accounting Policies on Revenue Recognition Revenue is recognized upon the transfer of control of promised products or services to the customers in an amount that reflects the consideration the Company expects to receive in exchange for those products and services. Performance Obligations The Company's performance obligations consist mainly of transferring control of goods and services identified in the contracts, purchase orders, or invoices. The Company has no significant multi-element contracts with customers. Significant Judgments Usage-based royalties and licenses are estimated based on the provisions of contracts with customers 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 reported licensee sales and those that were estimated are adjusted in the period in which they become known, which is typically the following quarter. Historically, such adjustments have not been significant. The Company estimates returns, price concessions, and discount allowances using the expected value method based on historical trends and other known factors. Rebate allowances are estimated using the most likely method based on each customer contract. The Company's return policy, as set forth in its product catalogs and sales invoices, requires review and authorization in advance prior to the return of product. Upon the authorization, a credit will be issued for the goods returned within a set amount of days from the shipment, which is generally ninety days. In the third quarter of 2022, due to the voluntary recall of the CereLink ® intracranial pressure monitors, the Company recorded a $1.5 million provision for product returns, as a reduction of net revenue, and a $0.8 million rework accrual in cost of goods sold. The Company disregards the effects of a financing component if the Company expects, at contract inception, that the period between the transfer and customer payment for the goods or services will be one year or less. The Company has no significant revenues recognized on payments expected to be received more than one year after the transfer of control of products or services to customers. Contract Asset and Liability Revenues recognized from the Company's private label business that are not invoiced to the customers as a result of recognizing revenue over time are recorded as a contract asset included in the prepaid expenses and other current assets account in the consolidated balance sheet. Upon invoicing to the customer, the balance is recorded in trade receivable, net in the consolidated balance sheet. Other operating revenues may include fees received under service agreements. Non-refundable fees received under multiple-period service agreements are recognized as revenue as the Company satisfies the performance obligations to the other party. A portion of the transaction price allocated to the performance obligations to be satisfied in the future periods is recognized as contract liability. The following table summarized the changes in the contract asset and liability balances for the nine months ended September 30, 2022: Dollars in thousands Total Contract Asset Contract asset, January 1, 2022 $ 11,412 Transferred to trade receivable of contract asset included in beginning of the year contract asset (11,412) Contract asset, net of transferred to trade receivables on contracts during the period 6,281 Contract asset, September 30, 2022 $ 6,281 Contract Liability Contract liability, January 1, 2022 $ 11,946 Recognition of revenue included in beginning of year contract liability $ (6,054) Contract liability, net of revenue recognized on contracts during the period 8,534 Foreign currency translation (120) Contract liability, September 30, 2022 $ 14,306 At September 30, 2022, the short-term portion of the contract liability of $6.4 million and the long-term portion of $7.9 million is included in current liabilities and other liabilities, respectively, in the consolidated balance sheets. As of September 30, 2022, the Company is expected to recognize revenue of approximately 44% of unsatisfied (or partially unsatisfied) performance obligations as revenue within twelve months, with the remaining balance to be recognized thereafter. Shipping and Handling Fees The Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation. Amounts billed to customers for shipping and handling are included as part of the transaction price and recognized as revenue when control of underlying products is transferred to the customer. The related shipping and freight charges incurred by the Company are included in the cost of goods sold. Product Warranties Certain of the Company's medical devices, including monitoring systems and neurosurgical systems, are designed to operate over long periods of time. These products are sold with warranties which may extend for up to two years from the date of purchase. The warranties are not considered a separate performance obligation. The Company estimates its product warranties using the expected value method based on historical trends and other known factors. The Company includes them in accrued expenses and other current liabilities in the consolidated balance sheet. Taxes Collected from Customers The Company elected to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer. Disaggregated Revenue The following table presents revenues disaggregated by the major sources of revenues for the three and nine months ended September 30, 2022 and 2021 (dollar amounts in thousands): Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 Neurosurgery $ 193,848 $ 199,210 $ 588,818 $ 591,064 Instruments 55,948 57,287 166,149 163,511 Total Codman Specialty Surgical 249,796 256,497 754,967 754,575 Wound Reconstruction and Care 104,625 99,744 304,149 291,058 Private Label 30,770 30,620 100,528 91,291 Total Tissue Technologies (1) 135,395 130,364 404,677 382,349 Total revenue $ 385,191 $ 386,861 $ 1,159,644 $ 1,136,924 (1) On August 31, 2022, the Company completed the sale of its non-core traditional wound care ("TWC") business. See Note 2, Acquisitions and Divestitures. See Note 15, Segment and Geographical Information , for details of revenues based on the location of the customer. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories, net consisted of the following: Dollars in thousands September 30, 2022 December 31, 2021 Finished goods $ 163,160 $ 162,528 Work in process 73,326 65,323 Raw materials 74,574 89,535 Total inventories, net $ 311,060 $ 317,386 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Changes in the carrying amount of goodwill for the nine-month period ended September 30, 2022 were as follows: Dollars in thousands Codman Specialty Tissue Technologies Total Goodwill at December 31, 2021 $ 663,428 $ 350,030 $ 1,013,458 Divestitures (1) — (5,019) (5,019) Foreign currency translation (20,117) (10,462) (30,579) Goodwill at September 30, 2022 $ 643,311 $ 334,549 $ 977,860 (1) On August 31, 2022, the Company completed the sale of the TWC business. See Note 2, Acquisitions and Divestitures. Other Intangible Assets The components of the Company’s identifiable intangible assets were as follows: September 30, 2022 Dollars in thousands Weighted Cost Accumulated Net Completed technology 18 years $ 1,114,779 $ (350,055) $ 764,724 Customer relationships 12 years $ 190,848 $ (140,433) $ 50,415 Trademarks/brand names 28 years $ 95,406 $ (33,261) $ 62,145 Codman tradename Indefinite $ 161,663 $ — $ 161,663 Supplier relationships 30 years $ 30,211 $ (16,926) $ 13,285 All other 11 years $ 5,547 $ (3,744) $ 1,803 $ 1,598,454 $ (544,419) $ 1,054,035 December 31, 2021 Dollars in thousands Weighted Cost Accumulated Net Completed technology 18 years $ 1,132,954 $ (307,013) $ 825,941 Customer relationships 12 years 211,344 (142,755) 68,589 Trademarks/brand names 28 years 98,367 (31,468) 66,899 Codman tradename Indefinite 167,758 — 167,758 Supplier relationships 30 years 30,211 (16,192) 14,019 All other 11 years 6,258 (3,891) 2,367 $ 1,646,892 $ (501,319) $ 1,145,573 On August 31, 2022, $10.5 million of customer relationship assets, net were divested in conjunction with the sale of the TWC business. See Note 2 , Acquisitions and Divestitures . Goodwill and Intangible Assets with Indefinite Lives The Company tests goodwill and intangible assets with indefinite lives for impairment annually in the third quarter in accordance with ASC Topic 350. Additionally, the Company may perform interim tests if an event occurs or circumstances change that could potentially reduce the fair value of a reporting unit or indefinite lived intangible asset below its carrying amount. The carrying value of each reporting unit is determined by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units. The Company tests for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors, including reporting unit specific operating results as well as industry, market and general economic conditions, to determine whether it is more likely than not that the fair values of a reporting unit is less than its carrying amount, including goodwill. The Company may elect to bypass this qualitative evaluation for some or all of its reporting units and perform a quantitative test. During the third quarter of 2022, the Company elected to perform a qualitative analysis for its three reporting units and intangible asset with indefinite lives. The Company determined, after performing the qualitative analysis, that there was no evidence that it is more likely than not that the fair value was less that the carrying amounts, therefore, it was not necessary to perform a quantitative impairment test. Based on quarter-end exchange rates, amortization expense (including amounts reported in cost of goods sold) is expected to be approximately $19.1 million for the remainder of 2022, $76.3 million in 2023, $75.7 million in 2024, $75.7 million in 2025, $75.5 million in 2026, $73.6 million in 2027 and $499.0 million thereafter. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Amendment to the Sixth Amended and Restated Senior Credit Agreement On February 3, 2020, the Company entered into the sixth amendment and restatement (the "February 2020 Amendment") of its Senior Credit Facility (the "Senior Credit Facility") with a syndicate of lending banks with Bank of America, N.A., as Administrative Agent. The February 2020 Amendment extended the maturity date to February 3, 2025. The Company continues to have the aggregate principal amount of up to approximately $2.2 billion available to it through the following facilities: (i) a $877.5 million Term Loan facility, and (ii) a $1.3 billion revolving credit facility, which includes a $60 million sublimit for the issuance of standby letters of credit and a $60 million sublimit for swingline loans. The Company’s maximum consolidated total leverage ratio in the financial covenants (as defined in the Senior Credit Facility) is the following: Fiscal Quarter Maximum Consolidated Total Leverage Ratio September 30, 2022 through June 30, 2023 4.50 to 1.00 September 30, 2023 and the last day of each fiscal quarter thereafter 4.00 to 1.00 Borrowings under the Senior Credit Facility bear interest, at the Company’s option, at a rate equal to the following: 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 2.25%), 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% 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 as of such date less cash that is not subject to any restriction on the use or investment thereof to (b) consolidated EBITDA, for the period of four consecutive fiscal quarters ending on such date). The Company will pay an annual commitment fee (ranging from 0.15% to 0.30%), based on the Company's consolidated total leverage ratio, on the amount available for borrowing under the revolving 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 September 30, 2022, the Company was in compliance with all such covenants. At September 30, 2022 and December 31, 2021, there wa s $65.0 million an d $31.3 million, respectively, ou tstanding under the revolving portion of the Senior Credit Facility at weighted average interest rates of 4.5% and 1.4%, respectively. At September 30, 2022 and December 31, 2021, there was $810.0 million and $843.8 million, respectively, outstanding under the Term Loan component of the Senior Credit Facility at a weighted average interest rate of 4.5% and 1.4%, respectively. At September 30, 2022 and December 31, 2021, there was $56.3 million and $45.0 million, respectively of the Term Loan component of the Senior Credit Facility classified as current on the consolidated balance sheets. The fair value of outstanding borrowings of the Senior Credit Facility's revolving credit and Term Loan components at September 30, 2022 wer e $64.1 million and $799.7 million, re sp ectively. 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 i nputs that reflect unadjusted quoted prices for identical assets or liabilities. Letters of credit outstanding as of September 30, 2022 and December 31, 2021 to taled $1.6 million. There were no amounts drawn as of September 30, 2022. Contractual repayments of the Term Loan component of the Senior Credit Facility are due as follows: Quarter Ended September 30, 2022 Principal Repayment Dollars in thousands Remainder of 2022 $ 11,250 2023 $ 61,875 2024 $ 67,500 2025 $ 669,375 $ 810,000 Future interest payments on the term loan component of the Senior Credit Facility based on current interest rates are expected to approximate $9.0 million for remainder of 2022, $34.2 million in 2023, $31.2 million in 2024, and $2.8 million in 2025. Interest is calculated on the term loan portion of the Senior Credit Facility based on LIBOR plus the certain amounts set forth in the Sixth Amended and Restated Credit Agreement. As the revolving credit facility and Securitization Facility can be repaid at any time, no interest has been included in the calculation. The outstanding balance of the revolving credit component of the Senior Credit Facility is due on February 3, 2025. Convertible Senior Notes On February 4, 2020, the Company issued $575.0 million aggregate principal amount of its 0.5% Convertible Senior Notes due 2025 (the "2025 Notes"). The 2025 Notes will mature on August 15, 2025 and bear interest at a rate of 0.5% per annum payable semi-annually in arrears, unless earlier converted, repurchased or redeemed in accordance with the terms of the 2025 Notes. The portion of debt proceeds that was classified as equity at the time of the offering was $104.5 million. The effective interest rate implicit in the liability component was 4.2%. In connection with this offering, the Company capitalized $13.2 million of financing fees. The 2025 Notes are senior, unsecured obligations of the Company, and are convertible into cash and shares of its common stock based on initial conversion rate, subject to adjustment of 13.5739 shares per $1,000 principal amounts of the 2025 Notes (which represents an initial conversion price of $73.67 per share). The 2025 Notes convert only in the following circumstances: (1) if the closing price of the Company's common stock has been at least 130% of the conversion price during the period; (2) if the average trading price per $1,000 principal amount of the 2025 Notes is less than or equal to 98% of the average conversion value of the 2025 Notes during a period as defined in the indenture; (3) at any time on or after February 20, 2023; or (4) if specified corporate transactions occur. As of September 30, 2022, none of these conditions existed with respect to the 2025 Notes and as a result the 2025 Notes are classified as long term. On December 9, 2020, the Company entered into the First Supplemental Indenture to the original agreement dated as of February 4, 2020 between the Company and Citibank, N.A., as trustee, governing the Company’s outstanding 2025 Notes. The Company irrevocably elected (1) to eliminate the Company’s option to choose physical settlement on any conversion of the 2025 Notes that occurs on or after the date of the First Supplemental Indenture and (2) with respect to any Combination Settlement for a conversion of the 2025 Notes, the Specified Dollar Amount that will be settled in cash per $1,000 principal amount of the 2025 Notes shall be no lower than $1,000. Holders of the Notes will have the right to require the Company to repurchase for cash all or a portion of their Notes at 100% of their principal amount, plus any accrued and unpaid interest, upon the occurrence of a fundamental change (as defined in the indenture relating to the Notes). The Company will also be required to increase the conversion rate for holders who convert their Notes in connection with certain fundamental changes occurring prior to the maturity date or following delivery by the Company of a notice of redemption. In connection with the issuance of the 2025 Notes, the Company entered into call transactions and warrant transactions, primarily with affiliates of the initial purchasers of the 2025 Notes (the “hedge participants”). The cost of the call transactions was $104.2 million for the 2025 Notes. The Company received $44.5 million of proceeds from the warrant transactions for the 2025 Notes. The call transactions involved purchasing call options from the hedge participants, and the warrant transactions involved selling call options to the hedge participants with a higher strike price than the purchased call options. The initial strike price of the call transactions was $73.67, subject to anti-dilution adjustments substantially similar to those in the 2025 Notes. The initial strike price of the warrant transactions was $113.34 for the 2025 Notes, subject to customary anti-dilution adjustments. At December 31, 2020, the carrying amount of the liability component was $485.9 million , the remaining unamortized discount wa s $89.1 million , and the principal amount outstanding was $575.0 million . On January 1, 2021, the Company adopted ASU 2020-06 using the modified retrospective method. See Note 1, Basis of Presentation, for further details. At September 30, 2022 , the carrying amount of the liability w as $575.0 million. The fair value of the 2025 Notes at September 30, 2022 was $505.2 million. Factors that the Company considered when estimating the fair value of the 2025 Notes included recent quoted market prices or dealer quote. The level of the 2025 Notes is considered as Level 1. As a result of the adoption of ASU 2020-06, for the nine months ended September 30, 2022 and September 30, 2021, the Company recognized only cash interest related to the contractual interest coupon on the 2025 Notes of $2.2 million and $2.1 million, respectively. Securitization Facility During the fourth quarter of 2018, the Company entered into an accounts receivable securitization facility (the "Securitization Facility") under which accounts receivable of certain domestic subsidiaries are sold on a non-recourse basis to a special purpose entity (“SPE”), which is a bankruptcy-remote, consolidated subsidiary of the Company. Accordingly, the assets of the SPE are not available to satisfy the obligations of the Company or any of its subsidiaries. From time to time, the SPE may finance such accounts receivable with a revolving loan facility secured by a pledge of such accounts receivable. The amount of outstanding borrowings on the Securitization Facility at any one time is limited to $150.0 million. The Securitization Facility Agreement ("Securitization Agreement") governing the Securitization Facility contains certain covenants and termination events. An occurrence of an event of default or a termination event under this Securitization Agreement may give rise to the right of its counterparty to terminate this facility. As of September 30, 2022, the Company was in compliance with the covenants and none of the termination events had occurred. On May 28, 2021, the Company entered into an amendment (the "May 2021 Amendment") of the Securitization Facility which extended the maturity date from December 21, 2021 to May 28, 2024. The May 2021 Amendment does not increase the Company’s total indebtedness. At September 30, 2022 and December 31, 2021, the Company had $106.0 million and $112.5 million, respectively, of outstanding borrowings under its Securitization Facility at a weighted average interest rate of 3.5% and 1.1%, respectively. The fair value of the outstanding borrowing of the Securitization Facility at September 30, 2022 was $104.5 million. 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 i nputs that reflect unadjusted quoted prices for identical assets or liabilities. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 9 Months Ended |
Sep. 30, 2022 | |
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 interest rate borrowings. The Company uses interest rate swap derivative instruments to manage earnings and cash flow exposure resulting from changes in interest rates. These interest rate swaps apply a fixed interest rate on a portion of the Company's expected LIBOR-indexed floating-rate borrowings. The Company held the following interest rate swaps as of September 30, 2022 and December 31, 2021 (dollar amounts in thousands): September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Hedged Item Notional Amount Designation Date Effective Date Termination Date Fixed Interest Rate Estimated Fair Value Asset (Liability) 1-month USD LIBOR Loan 300,000 300,000 December 13, 2017 January 1, 2018 December 31, 2022 2.201 % 1,078 (5,268) 1-month USD LIBOR Loan 150,000 150,000 December 13, 2017 July 1, 2019 June 30, 2024 2.423 % 4,671 (5,520) 1-month USD LIBOR Loan 200,000 200,000 December 13, 2017 January 1, 2018 December 31, 2024 2.313 % 8,212 (7,421) 1-month USD LIBOR Loan 75,000 75,000 October 10, 2018 July 1, 2020 June 30, 2025 3.220 % 1,719 (5,512) 1-month USD LIBOR Loan 75,000 75,000 October 10, 2018 July 1, 2020 June 30, 2025 3.199 % 1,828 (5,464) 1-month USD LIBOR Loan 75,000 75,000 October 10, 2018 July 1, 2020 June 30, 2025 3.209 % 1,673 (5,494) 1-month USD LIBOR Loan 100,000 100,000 December 18, 2018 December 30, 2022 December 31, 2027 2.885 % 4,578 (6,886) 1-month USD LIBOR Loan 100,000 100,000 December 18, 2018 December 30, 2022 December 31, 2027 2.867 % 4,545 (6,764) 1-month USD LIBOR Loan 575,000 575,000 December 15, 2020 July 31, 2025 December 31, 2027 1.415 % 26,261 3,552 1-month USD LIBOR Loan 125,000 125,000 December 15, 2020 July 1, 2025 December 31, 2027 1.404 % 6,039 821 $ 1,775,000 $ 1,775,000 $ 60,604 $ (43,957) The Company has designated these derivative instruments as cash flow hedges. The Company assesses the effectiveness of these derivative instruments and has recorded the changes in the fair value of the derivative instrument designated as a cash flow hedge as unrealized gains or losses in accumulated other comprehensive loss (“AOCL”), net of tax, until the hedged item has affected earnings, at which point any gain or loss was 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 remaining amount of any gain or loss on the related cash flow hedge recorded in AOCL to interest expense at that time. 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 assesses the effectiveness of the contracts that are designated as hedging instruments. The changes in fair value of foreign currency cash flow hedges are recorded in AOCL, net of tax. Those amounts are subsequently reclassified to earnings from AOCL as impacted by the hedged item when the hedged item affects 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. For contracts not designated as hedging instruments, the changes in fair value of the contracts are recognized in other income, net in the consolidated statements of operation, along with the offsetting foreign currency gain or loss on the underlying assets or liabilities. The success of the Company’s hedging program depends, in part, on forecasts of certain activity denominated in foreign currency. The Company may experience unanticipated currency exchange gains or losses to the extent that there are differences between forecasted and actual activities during periods of currency volatility. In addition, changes in currency exchange rates related to any unhedged transactions may affect earnings and cash flows. Cross-Currency Rate Swaps On October 2, 2017, the Company entered into cross-currency swap agreements to convert a notional amount of $300.0 million equivalent to 291.2 million of Swiss Franc ("CHF") denominated intercompany loans into U.S. dollars. The CHF-denominated intercompany loans were the result of the purchase of intellectual property by a subsidiary in Switzerland as part of an acquisition. As of December 31, 2021, $150.0 million of the $300.0 million notional amount remained outstanding. On September 26, 2022, the Company amended the CHF-denominated intercompany loan to extend the termination date to September 2023 and as a result, the Company early terminated the cross-currency swap designated as cash flow hedge of an intercompany loan with aggregate notional amount of $50.0 million. Simultaneously, the Company entered into a cross-currency swap agreement to convert a notional amount of CHF 48.5 million equivalent to $49.1 million of this amended intercompany loan into U.S. dollars. The loss recorded by the Company upon the settlement of the swap was not material for the period. On December 21, 2020, the Company entered into cross-currency swap agreements to convert a notional amount of $471.6 million equivalent to 420.1 million of a CHF-denominated intercompany loan into U.S. dollars. The CHF-denominated intercompany loan was the result of an intra-entity transfer of certain intellectual property rights to a subsidiary in Switzerland completed during the fourth quarter of 2020. The intercompany loan requires quarterly payments of CHF 5.8 million plus accrued interest. As a result, the aggregate notional amount of the related cross-currency swaps will decrease by a corresponding amount. The objective of these cross-currency swaps is to reduce volatility of earnings and cash flows associated with changes in the foreign currency exchange rate. Under the terms of these contracts, which have been designated as cash flow hedges, the Company will make interest payments in Swiss Francs and receive interest in U.S. dollars. Upon the maturity of these contracts, the Company will pay the principal amount of the loans in Swiss Francs and receive U.S. dollars from the counterparties. The Company held the following cross-currency rate swaps as of September 30, 2022 and December 31, 2021 (dollar amounts in thousands): September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Effective Date Termination Date Fixed Rate Aggregate Notional Amount Fair Value Pay CHF September 28, 2022 September 29, 2023 1.95% CHF 48,532 — (106) — Receive U.S.$ 5.32% $ 49,142 — Pay CHF October 2, 2017 October 3, 2022 1.95% CHF 97,065 145,598 2,281 (8,283) Receive U.S.$ 4.52% $ 100,000 150,000 Pay CHF December 21, 2020 December 22, 2025 3.00% CHF 379,887 397,137 18,394 41 Receive U.S.$ 3.98% $ 426,456 445,821 Total $ 20,569 $ (8,242) On October 3 rd , 2022, in accordance with the termination date, the Company settled cross-currency swaps designated as cash flow hedges of an intercompany loan with aggregate notional amounts of $100 million. Based on the closing exchange rates, the gain upon settlement of these swaps was approximately $1.6 million which was offset by the loss on the settlement of the intercompany loan. The cross-currency swaps are carried on the consolidated balance sheet at fair value, and changes in the fair values are recorded as unrealized gains or losses in AOCL Net Investment Hedges The Company manages certain foreign exchange risks through a variety of strategies, including hedging. The Company is exposed to foreign exchange risk from its international operations through foreign currency purchases, net investments in foreign subsidiaries, and foreign currency assets and liabilities created in the normal course of business. On October 1, 2018, December 16, 2020 and May 26, 2022, the Company entered into cross-currency swap agreements designated as net investment hedges to partially offset the effects of foreign currency on foreign subsidiaries. The Company held the following cross-currency rate swaps designated as net investment hedges as of September 30, 2022 and December 31, 2021, respectively (dollar amounts in thousands): September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Effective Date Termination Date Fixed Rate Aggregate Notional Amount Fair Value Pay EUR October 3, 2018 September 30, 2023 —% EUR 51,760 51,760 9,198 2,503 Receive U.S.$ 2.57% $ 60,000 60,000 Pay EUR October 3, 2018 September 30, 2025 —% EUR 38,820 38,820 7,049 2,147 Receive U.S.$ 2.19% $ 45,000 45,000 Pay CHF December 16, 2020 December 16, 2027 —% CHF — 222,300 — (792) Receive U.S.$ 1.10% $ — 250,000 Pay CHF May 26, 2022 December 16, 2028 —% CHF 288,210 — (522) — Receive U.S.$ 1.94% $ 300,000 — Total $ 15,725 $ 3,858 On May 26, 2022, the Company early settled cross-currency swaps designated as net investment hedge with an aggregate notional amount of $250 million equivalent to 222.3 million CHF. The original settlement date was December 16, 2027. As a result of the settlement, the Company recorded a gain of $4.9 million in AOCL. On May 26, 2022, the Company entered into cross-currency swap agreements designated as net investment hedge to replace these swaps with a notional amount of $300 million equivalent to 288 million CHF. On September 30, 2021, in accordance with the termination date, the Company settled cross-currency swaps designated as net investment hedge with an aggregate notional amount of $52 million equivalent to 44.9 million Euros based on the termination date. As a result of the settlement, the Company recorded a gain of $0.1 million in AOCL. The cross-currency swaps are carried on the consolidated balance sheet at fair value, and changes in the fair values are recorded as unrealized gains or losses in AOCL 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 values of the interest rate swaps and cross-currency swaps were 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. Effects of Derivative Instruments on Financial Position and Results of Operations The following table summarizes the fair value for derivatives designated as hedging instruments in the condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021: Fair Value as of Location on Balance Sheet (1) : September 30, 2022 December 31, 2021 Dollars in thousands Derivatives designated as hedges — Assets: Prepaid expenses and other current assets Cash Flow Hedges Interest rate swap (2) 13,111 $ — Cross-currency swap $ 9,287 $ 4,900 Net Investment Hedges Cross-currency swap 16,138 5,120 Other assets Cash Flow Hedges Interest rate swap (2) 47,493 4,373 Cross-currency swap 11,387 — Net Investment Hedges Cross-currency swap 6,054 2,104 Total derivatives designated as hedges — Assets $ 103,470 $ 16,497 Derivatives designated as hedges — Liabilities: Accrued expenses and other current liabilities Cash Flow Hedges Interest rate swap (2) $ — $ 18,187 Cross-currency swap $ 105 8,283 Cash Flow Hedges Interest rate swap (2) $ — 30,143 Cross-currency swap $ — 4,859 Net Investment Hedges Cross-currency swap $ 6,467 3,366 Total derivatives designated as hedges — Liabilities $ 6,572 $ 64,838 (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 September 30, 2022 and December 31, 2021, the total notional amounts related to the Company’s interest rate swaps were both $1.8 billion, respectively. The following table presents the effect of derivative instruments designated as cash flow hedges and net investment hedges on the AOCL and earnings, both net of tax, during the three and nine months ended September 30, 2022 and 2021: Dollars in thousands Balance in AOCL Amount of Amount of Gain (Loss) Balance in AOCL Location in Three Months Ended September 30, 2022 Cash Flow Hedges Interest rate swap $ 26,939 $ 32,939 $ (726) $ 60,604 Interest expense Cross-currency swap (17,835) 12,332 17,627 (23,130) Other income, net Net Investment Hedges Cross-currency swap 7,506 9,403 2,378 14,531 Interest income $ 16,610 $ 54,674 $ 19,279 $ 52,005 Three Months Ended September 30, 2021 Cash Flow Hedges Interest rate swap $ (62,736) $ 2,488 $ (5,434) $ (54,814) Interest expense Cross-currency swap (4,363) 7,045 5,874 (3,192) Other income, net Net Investment Hedges Cross-currency swap (2,078) 6,882 1,749 3,055 Interest income $ (69,177) $ 16,415 $ 2,189 $ (54,951) Dollars in thousands Balance in AOCL Amount of Amount of Gain (Loss) Balance in AOCL Location in Nine Months Ended September 30, 2022 Cash Flow Hedges Interest rate swap $ (43,956) $ 94,729 $ (9,831) $ 60,604 Interest expense Cross-currency swap (9,688) 33,784 47,226 (23,130) Other income, net Net Investment Hedges Cross-currency swap (2,321) 21,528 4,676 14,531 Interest income $ (55,965) $ 150,041 $ 42,071 $ 52,005 Nine Months Ended September 30, 2021 Cash Flow Hedges Interest rate swap $ (93,769) $ 21,993 $ (16,962) $ (54,814) Interest expense Cross-currency swap (1,073) 36,270 38,389 (3,192) Other income, net Net Investment Hedges Cross-currency swap (12,291) 20,543 5,197 3,055 Interest income $ (107,133) $ 78,806 $ 26,624 $ (54,951) For the three and nine months ended September 30, 2022, the Company recorded gains of $16.5 million and $42.2 million, respectively, in other income, net related to change in fair value related to the foreign currency rate translation of the cross-currency swaps, designated as cash flow hedges, to offset the losses recognized on the intercompany loans. For the three and nine months ended September 30, 2021, the Company recorded a gains of $4.3 million and $34.3 million, respectively, in other income, net related to change in fair value related to the foreign currency rate translation of the cross-currency swaps, designated as cash flow hedges, to offset the losses recognized on the intercompany loans. For the three and nine months ended September 30, 2022, the Company recorded gains of $1.1 million and $5.0 million, respectively, in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps designated as cash flow hedges. For the three and nine months ended September 30, 2021, the Company recorded gains of $1.5 million and $4.1 million, respectively, in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps designated as cash flow hedges. The estimated gain that is expected to be reclassified to other income, net from AOCL as of September 30, 2022, for the cross-currency swaps designated as cash flow hedges, within the next twelve months is $9.2 million. As of September 30, 2022, the Company does not expect any gains or losses will be reclassified into earnings as a result of the discontinuance of these cash flow hedges because the original forecasted transaction will not occur. The estimated gain that is expected to be reclassified to interest income from AOCL as of September 30, 2022, for the c ross-currency swaps designated as net investment hedges, within the next twelve months is $16.1 million. Derivative Instruments not designated hedges: During the fourth quarter of 2020, the Company entered into foreign currency forward contracts, with a notional amount of $4.2 million, to mitigate the foreign exchange risk related to certain intercompany loans denominated in Canadian Dollar ("CAD"). During the second quarter of 2022, the Company entered into foreign currency forward contract, with a notional amount of $4.2 million, to mitigate the foreign exchange risk related to certain intercompany receivables denominated in Japanese Yen ("JPY"). These contracts were settled in third quarter of 2022, in accordance with their termination date with a gain of $0.2 million. During the third quarter of 2022, the Company also entered into foreign currency forward contracts, with a notional amount of $2.0 million, which was also settled in the third quarter of 2022 in accordance with its term, resulting in a gain of $0.1 million. During the third quarter of 2022, the Company entered into foreign currency forward contracts, with a notional amount of $16.4 million, to mitigate the foreign exchange risk related to certain intercompany receivables denominated in JPY, CHF and the Chinese Renminbi traded in Hong Kong. The contracts are not designated as hedging instruments. The fair value of the foreign currency forward contracts was $1.2 million and $0.2 million as of September 30, 2022 and December 31, 2021, respectively. During the third quarter of 2022, the Company entered into a foreign currency swap, with a notional amount of $12.2 million to mitigate the risk from fluctuations in foreign currency exchange rates associated with an intercompany loan denominated in CHF. During the second quarter of 2021, the Company entered into a foreign currency swap, with a notional amount of $7.3 million to mitigate the risk from fluctuations in foreign currency exchange rates associated with an intercompany loan denominated in JPY. In a foreign currency swap transaction, the Company agrees with another party to exchange, at specified intervals, the difference between one currency and another currency at a fixed exchange rate, generally set at inception, calculated by reference to an agreed upon notional amount. The notional amount of each currency is exchanged at the inception and termination of the currency swap by each party. The Company subsequently paid down a portion of this swap, bringing the notional amount down to $6.4 million. The following table summarizes the gains (losses) of derivative instruments not designated as hedges on the condensed consolidated statements of income, which was included in other income: Dollars in thousands Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Foreign currency forward contracts $ 1,162 $ 117 $ 1,154 $ (186) Foreign currency swaps 184 (7) 1,777 404 Total $ 1,346 $ 110 $ 2,931 $ 218 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION As of September 30, 2022, the Company had stock options, restricted stock awards, performance stock awards, contract stock awards and restricted stock unit awards outstanding under the Integra LifeSciences Holdings Corporation Fifth Amended and Restated 2003 Equity Incentive Plan (the “2003 Plan”). Stock options issued under the 2003 Plan become exercisable over specified periods, generally within four years from the date of grant for officers and employees, within one year from date of grant for directors which generally expire eight years from the grant date for employees, and from six Stock Options As of September 30, 2022, there were approx imately $3.9 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 three years. There were 145,565 stock options granted during the nine months ended September 30, 2022. For the nine months ended September 30, 2022, the weighted average grant date fair value for stock options was $23.15 per option. Awards of Restricted Stock and Performance Stock Performance stock and restricted stock awards generally have requisite service periods of three years, except in certain instances that result in accelerated vesting due to death, disability, retirement age provision or change in-control provisions in their grant agreements. Performance stock units are subject to graded vesting conditions based on revenue goals of the Company. The Company expenses the fair value of restricted stock awards on a straight-line basis over the requisite service period. A s of September 30, 2022, there was approximately $33.6 million of total unrecognized compensation costs related to these unvested awards. The Company expects to recognize these costs over a weighted-average period of approximately two years. The Company granted 397,333 restricted stock awards and 130,753 performance stock awards during the nine months ended September 30, 2022. For the nine months ended September 30, 2022, the weighted average grant date fair value for restricted stock awards and performance stock units was $63.62 and $65.11 per award, respectively. The Company also maintains an Employee Stock Purchase Plan (the “ESPP”), which provides eligible employees with the opportunity to acquire shares of common stock at periodic intervals by means of accumulated payroll deductions. The ESPP is a non-compensatory plan based on its terms. |
RETIREMENT PLANS
RETIREMENT PLANS | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
RETIREMENT PLANS | RETIREMENT PLANS The Company maintains defined benefit pension plans that cover certain employees in France, Japan, Germany and Switzerland. Net periodic benefit cost for the Company’s defined benefit pension plans for the three and nine months ended September 30, 2022 were $0.3 million and $0.8 million. The components of the net periodic benefit costs other than the service cost component of $0.6 million and $1.9 million for the three and nine months ended September 30, 2022 are included in other income, net in the consolidated statements of operations. Net periodic benefit costs for the Company’s defined benefit pension plans for the three and nine months ended September 30, 2021 were $0.5 million and $1.8 million. The components of the net periodic benefit costs other than the service cost component of $0.8 million and $2.4 million for the three and nine months ended September 30, 2021 are included in other income, net in the consolidated statements of operations. The estimated fair values of plan assets were $34.0 million and $39.9 million as of September 30, 2022 and December 31, 2021, respectively. The net plan assets of the pension plans are invested in common trusts as of September 30, 2022 and December 31, 2021. Common trusts are classified as Level 2 in the fair value hierarchy. The fair value of common trusts is valued at the net asset value based on the fair values of the underlying investments of the trusts as determined by the sponsor of the trusts. The investment strategy of 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 an appropriate risk profile. Deferred Compensation Plan The Company maintains a Deferred Compensation Plan in which certain employees of the Company may defer the payment and taxation of up to 75% of their base salary and up to 100% of bonus amounts and other eligible cash compensation. This deferred compensation is invested in funds offered under this plan and is valued based on Level 1 measurements in the fair value hierarchy. Assets of the Company's deferred compensation plan are included in other current assets and recorded at fair value based on their quoted market prices. The fair value of these assets were $4.3 million and $3.8 million as of September 30, 2022 and December 31, 2021. Offsetting liabilities relating to the deferred compensation plan are included in Other liabilities. |
LEASES AND RELATED PARTY LEASES
LEASES AND RELATED PARTY LEASES | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
LEASES AND RELATED PARTY LEASES | LEASES AND RELATED PARTY LEASESThe Company leases administrative, manufacturing, research and distribution facilities and vehicles through operating lease agreements. The Company has no finance leases as of September 30, 2022. Many of the Company's leases include both lease (e.g., fixed payments including rent) and non-lease components (e.g., common-area or other maintenance costs). For vehicles, the Company has elected the practical expedient to group lease and non-lease components. Most facility leases include one or more options to renew. The exercise of lease renewal options is typically at the Company's sole discretion, therefore, the majority of renewals to extend the lease terms are not included in the Right of Use ("ROU") assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates renewal options and when they are reasonably certain of exercise, the renewal period is included in the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses a collateralized incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. Total operating lease expense for the nine months ended September 30, 2022 and September 30, 2021 was $16.6 million and $15.7 million respectively, which includes $0.2 million, in related party operating lease expense. Supplemental balance sheet information related to operating leases were as follows: Dollars in thousands, except lease term and discount rate September 30, 2022 December 31, 2021 ROU assets $ 148,270 $ 84,543 Current lease liabilities 13,488 14,775 Non-current lease liabilities 157,533 90,329 Total lease liabilities $ 171,021 $ 105,104 Weighted average remaining lease term (in years): Leased facilities 17.3 years 10.4 years Leased vehicles 2.0 years 2.1 years Weighted average discount rate: Leased facilities 5.3 % 5.1 % Leased vehicles 2.7 % 2.6 % Supplemental cash flow information related to leases for the nine months ended September 30, 2022 and 2021 were as follows: Dollars in thousands September 30, 2022 September 30, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 12,804 $ 10,942 ROU assets obtained in exchange for lease liabilities: Operating leases $ 75,588 $ 10,725 Future minimum lease payments under operating leases at September 30, 2022 were as follows: Dollars in thousands Related Parties Third Parties Total Remainder of 2022 $ 74 $ 4,112 $ 4,186 2023 296 18,902 19,198 2024 296 19,435 19,731 2025 296 18,014 18,310 2026 296 16,624 16,920 2027 296 15,773 16,069 Thereafter 246 164,838 165,084 Total minimum lease payments $ 1,800 $ 257,698 $ 259,498 Less: Imputed interest 88,477 Total lease liabilities 171,021 Less: Current lease liabilities 13,488 Long-term lease liabilities 157,533 Related Party Leases The Company leases its manufacturing facility in Plainsboro, New Jersey, from a general partnership that is 50% owned by a corporation whose stockholders are trusts, whose beneficiaries include family members of the Company’s former director. The term of the current lease agreement is through October 31, 2029 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, 2029 through October 31, 2034 at the fair market rental rate of the premises, and (ii) another 5-year renewal option to extend the lease from November 1, 2034 through October 31, 2039 at the fair market rental rate of the premises. |
TREASURY STOCK
TREASURY STOCK | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
TREASURY STOCK | TREASURY STOCK On April 26 2022, the Board of Directors authorized the Company to repurchase up to $225.0 million of the Company’s common stock. The program allows the Company to repurchase its shares opportunistically from time to time. The repurchase authorization expires in December 2024. This stock repurchase authorization replaces the previous $225 million stock repurchase authorization, of which $100 million remained authorized at the time of its replacement, and which was otherwise set to expire on December 31, 2022. Purchases may be affected through one or more open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, or a combination of the foregoing. As of September 30, 2022 and December 31, 2021, there were 6.8 million and 4.9 million shares of treasury stock outstanding with a cost of $362.9 million and $234.4 million, at a weighted average cost per share of $53.18 and $47.86, respectively. On January 12, 2022, the Company entered into a $125.0 million accelerated share repurchase ("2022 ASR") and received 1.48 million shares of Company common stock at inception, which represented approximately 80% of the expected total shares. On March 24, 2022, the early exercise provision was exercised by the 2022 ASR counterparty. Upon settlement on March 24, 2022, the Company received an additional 0.46 million shares determined using the volume-weighted average price of the Company's common stock during the term of the 2022 ASR. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The following table provides a summary of the Company's effective tax rate: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Reported tax rate 15.1 % 14.9 % 14.8 % 24.1 % The Company’s effective income tax rates for the three months ended September 30, 2022 and 2021 were 15.1% and 14.9%, respectively. For the three months ended September 30, 2022, the primary driver of the higher tax rate is a decrease of income in lower-taxed jurisdictions, offset by a $1.2 million benefit related to prior year amended tax returns. The Company’s effective income tax rates for the nine months ended September 30, 2022 and 2021 were 14.8% and 24.1%, respectively. For the nine months ended September 30, 2022, the primary driver of the lower tax rate is a $5.5 million benefit related to excess tax benefits from stock compensation, offset by the prior year tax impact of the gain on the sale of the Extremity Orthopedics business, which was completed during the first quarter of 2021. Changes to income tax laws and regulations, in any of the tax jurisdictions in which the Company operates, could impact the effective tax rate. Various governments, both U.S. and non-U.S., are increasingly focused on tax reform and revenue-raising legislation. Further, legislation in foreign jurisdictions may be enacted, in response to the base erosion and profit-sharing project begun by the Organization for Economic Cooperation and Development ("OECD"). The OECD recently finalized major reform of the international tax system with respect to a global minimum tax rate. Such changes in U.S. and non-U.S. jurisdictions could have an adverse effect on the Company’s effective tax rate. On August 16, President Biden signed into law the Inflation Reduction Act of 2022. The Act imposes a Corporate Minimum Tax of 15% on book income profits greater than $1 billion. The company is not expected to be subject to the Corporate Minimum Tax. The act provides for credits for investments in clean energy production, and the Company is exploring whether those credits align with any plans it may develop for clean energy production. The Act imposes an excise tax of 1% on share repurchases. Beginning in 2023, all share repurchases shall be subject to the excise tax, but the Company does not expect the excise tax to impact the company’s capital deployment plans. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE Basic and diluted net income per share was as follows: Three Months Ended September 30, Nine Months Ended September 30, Dollars in thousands, except per share amounts 2022 2021 2022 2021 Basic net income per share: Net income $ 49,915 $ 43,229 $ 127,604 $ 123,691 Weighted average common shares outstanding 83,042 84,754 82,955 84,647 Basic net income per common share $ 0.60 $ 0.51 $ 1.54 $ 1.46 Diluted net income per share: Net income $ 49,915 $ 43,229 $ 127,604 $ 123,691 Weighted average common shares outstanding — Basic 83,042 84,754 82,955 84,647 Effect of dilutive securities: Stock options and restricted stock 357 693 521 744 Weighted average common shares for diluted earnings per share 83,399 85,447 83,476 85,391 Diluted net income per common share $ 0.60 $ 0.51 $ 1.53 $ 1.45 Common stock of approximately 0.3 million an d 0.1 million shares at September 30, 2022, and 2021, res pectively that are issuable through exercise of dilutive securities were not included in the computation of diluted net income per share because their effect would have been anti-dilutive. Based on the adoption of ASU 2020-06, as the principal amount of the 2025 Notes will be paid in cash and only the conversion spread is settled in shares, the Company will be utilizing the if-converted method and only includes the net number of incremental shares that would be issued upon conversion. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS Comprehensive income for the nine months ended September 30, 2022 and 2021 was as follows: Three Months Ended September 30, Nine Months Ended September 30, Dollars in thousands 2022 2021 2022 2021 Net income $ 49,915 $ 43,229 $ 127,604 $ 123,691 Foreign currency translation adjustment (21,392) (7,815) (45,142) (13,058) Change in unrealized gain (loss) on derivatives, net of tax 27,213 10,964 82,957 40,075 Pension liability adjustment, net of tax (45) 39 (99) 267 Comprehensive income, net $ 55,691 $ 46,417 $ 165,320 $ 150,975 Changes in accumulated other comprehensive loss by component between December 31, 2021 and September 30, 2022 are presented in the table below, net of tax: Dollars in thousands Gains and Losses on Derivatives Defined Benefit Pension Items Foreign Currency Items Total Balance at January 1, 2022 $ (42,981) $ 1,893 $ (4,067) $ (45,155) Other comprehensive gain (loss) 115,298 (99) (45,142) 70,057 Less: Amounts reclassified from accumulated other comprehensive income, net 32,341 — — 32,341 Net current-period other comprehensive gain (loss) 82,957 (99) (45,142) 37,716 Balance at September 30, 2022 $ 39,976 $ 1,794 $ (49,209) $ (7,439) For the nine months ended September 30, 2022, the Company reclassified a gain of $36.3 million and a loss of $4.0 million from accumulated other comprehensive loss to other income, net and interest income, respectively. |
SEGMENT AND GEOGRAPHIC INFORMAT
SEGMENT AND GEOGRAPHIC INFORMATION | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT AND GEOGRAPHIC INFORMATION The Company internally manages two global reportable segments and reports the results of its businesses to its chief operating decision maker. The two reportable segments and their activities are described below. • The Codman Specialty Surgical segment includes (i) the Neurosurgery business, which sells a full line of products for neurosurgery and neuro critical care such as tissue ablation equipment, dural repair products, cerebral spinal fluid management devices, intracranial monitoring equipment, cranial stabilization equipment, and solutions for use in minimally invasive neurosurgery and in the management of intracerebral hemorrhages, and (ii) the Instruments business, which sells more than 40,000 instrument patterns and surgical and lighting products to hospitals, surgery centers, dental, podiatry, and veterinary offices. • The Tissue Technologies segment includes a large, complementary portfolio of products to address plastic and surgical reconstructive procedures such as complex and traumatic wounds, hernia and abdominal wall repair, breast reconstruction, and peripheral nerve repair. The Tissue Technologies segment has four unique technology platforms, including bovine engineered collagen matrix, bovine dermal matrix, amniotic technology and porcine bladder matrix technology, to address regenerative soft tissue reconstruction procedures. The Corporate and other category includes (i) various executive, finance, human resource, information systems and legal functions, (ii) brand management, and (iii) share-based compensation costs. 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 each reportable segment for the three and nine months ended September 30, 2022 and 2021 are as follows: Three Months Ended September 30, Nine Months Ended September 30, Dollars in thousands 2022 2021 2022 2021 Segment Net Sales Codman Specialty Surgical $ 249,796 $ 256,497 $ 754,967 $ 754,575 Tissue Technologies 135,395 130,364 404,677 382,349 Total revenues $ 385,191 $ 386,861 $ 1,159,644 $ 1,136,924 Segment Profit Codman Specialty Surgical $ 105,717 $ 110,686 $ 308,073 $ 331,460 Tissue Technologies 59,754 57,730 175,273 172,154 Segment profit 165,471 168,416 483,346 503,614 Amortization (3,141) (4,113) (10,339) (12,838) Corporate and other (97,281) (107,864) (301,927) (351,769) Operating income $ 65,049 $ 56,439 $ 171,080 $ 139,007 The Company does not allocate any assets to the reportable segments. No asset information is reported to the chief operating decision maker and disclosed in the financial information for each segment. The Company attributes revenues to geographic areas based on the location of the customer. Total revenue by major geographic area consisted of the following: Three Months Ended September 30, Nine Months Ended September 30, Dollars in thousands 2022 2021 2022 2021 United States $ 282,016 $ 275,775 $ 832,714 $ 801,754 Europe 38,301 46,458 128,907 140,714 Asia Pacific 42,774 45,015 133,856 136,616 Rest of World 22,100 19,613 64,167 57,840 Total Revenues $ 385,191 $ 386,861 $ 1,159,644 $ 1,136,924 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
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. 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. Contingent Consideration The Company determined the fair value of contingent consideration during the nine month period ended September 30, 2022 and September 30, 2021 to reflect the change in estimate, additions, payments, transfers and the time value of money during the period. A reconciliation of the opening balances to the closing balances of these Level 3 measurements for the nine months ended September 30, 2022 and September 30, 2021 is as follows (in thousands): Nine Months Ended September 30, 2022 Contingent Consideration Liability Related to Acquisition of: Arkis Location in Financial Statements Derma Sciences ACell Inc. Location in Financial Statements Short-term Long-term Long-term Short-term Long-term Balance as of January 1, 2022 $ 3,691 $ 11,408 $ 230 $ — $ 21,800 Transfers — — — 4,885 (4,885) Change in fair value of contingent consideration liabilities (862) $ (1,819) Research and development — (4,885) (11,915) Selling, general and administrative Balance as of September 30, 2022 $ 2,829 $ 9,589 $ 230 $ — $ 5,000 Nine Months Ended September 30, 2021 Contingent Consideration Liability Related to Acquisition of: Arkis Location in Financial Statements Derma Sciences ACell Inc. Location in Financial Statements Short-term Long-term Long-term Long-term Balance as of January 1, 2021 $ 3,415 $ 11,746 $ 230 $ — Additions from acquisition of ACell — — — 23,900 Transfers (3,415) 3,415 — — Change in fair value of contingent consideration liabilities — (544) Research and development — (900) Selling, general and administrative Balance as of September 30, 2021 $ — $ 14,617 $ 230 $ 23,000 Arkis BioSciences Inc. On July 29, 2019, the Company acquired Arkis BioSciences Inc. ("Arkis") for an acquisition purchase price of $30.6 million (the "Arkis Acquisition") plus contingent consideration of up to $25.5 million, that may be payable based on the successful completion of certain development and commercial milestones. Arkis was a privately-held company that marketed the CerebroFlo ® external ventricular drainage catheter with Endexo ® technology, a permanent additive designed to reduce the potential for catheter obstruction due to thrombus formation. As part of the acquisition, the Company is required to pay the former shareholders of Arkis up to $25.5 million based on the timing of certain development milestones of $10.0 million and commercial sales milestones of $15.5 million, respectively. The Company used a probability weighted income approach to calculate the fair value of the contingent consideration that considered the possible outcomes of scenarios related to each specified milestone. The Company estimated the fair value of the contingent consideration to be $13.1 million at the acquisition date. The estimated fair value as of September 30, 2022 and September 30, 2021 was $12.4 million and $14.6 million, respectively. The Company recorded $9.6 million and $14.6 million in other liabilities at September 30, 2022 and September 30, 2021, respectively, and $2.8 million in accrued expenses and other current liabilities at September 30, 2022, in the consolidated balance sheet of the Company. Derma Sciences |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis Of Presentation | BASIS OF PRESENTATION General The terms “we,” “our,” “us,” “Company” and “Integra” refer to Integra LifeSciences Holdings Corporation, a Delaware corporation, and its subsidiaries unless the context suggests otherwise. In the opinion of management, the September 30, 2022 unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the financial position, statement of changes in shareholders' equity, results of operations and cash flows of the Company. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K. The December 31, 2021 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States. Operating results for the three and nine-month period ended September 30, 2022 are not necessarily indicative of the results to be expected for the entire year. |
Risks and Uncertainties | Risks and Uncertainties The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic, including reductions in capital and overall spending by our customers, increased freight costs, decreased availability of certain raw materials used in certain of our products and labor constraints. The COVID-19 pandemic has had, and may continue to have, an adverse effect on the Company’s business, results of operations, financial condition, and cash flows, and its future impacts remain highly uncertain and unpredictable. Although there was not a material impact to the Company’s consolidated financial statements as of and for the nine months ended September 30, 2022, changes in the Company’s assessment about the length and severity of the pandemic, as well as other factors, could result in actual results differing from estimates. The severity of the impact of the COVID-19 pandemic on the Company's business will depend on a number of factors, including, but not limited to, duration of the pandemic, including resurgences, new variants or strains, impact of government regulations, the speed and effectiveness of vaccine distribution, vaccine adoption rates and the duration of direct and indirect economic effects of the pandemic, containment measures and other macroeconomic factors which could cause a local/or global economic recession. Even after the COVID-19 pandemic and government responses thereto have subsided, residual economic and other effects may have an impact on the demand for post-pandemic surgery levels that are difficult to predict. |
Assets Held for Sale | Assets Held for Sale On July 18 2022, the Company entered into a preliminary agreement to sell a manufacturing facility located in France which is expected to close during the fourth quarter of 2022, subject to satisfaction of customary conditions. The Company considered the building to be accounted as held-for-sale as the six criteria under ASC 260 were met during the third quarter of 2022. Assets held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell and are not depreciated while they are held for sale. The fair value of the business less costs to sell exceeded the related carrying value. |
Employee Termination Benefits | Employee Termination Benefits The Company incurred employee termination costs on restructuring activities associated with a closure of a manufacturing facility in France, outsourcing plans for select transactional back office activities, and executive reorganization in the consolidated statement of operations for the nine months ended September 30, 2022. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes : Simplifying the Accounting for Income Taxes, intended to simplify the accounting for income taxes by eliminating certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for annual periods beginning after December 15, 2020 and interim periods within, with early adoption permitted. The Company adopted ASU 2019-12 as of January 1, 2021. Adoption of the standard requires certain changes to be made prospectively, with some changes to be made retrospectively. The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), and subsequent amendment to the initial guidance: ASU 2021-01, Reference Rate Reform (Topic 848): Scope (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference London Inter-Bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. The guidance generally can be applied from March 12, 2020 through December 31, 2022. On October 5, 2022, the FASB approved an extension of the sunset date of the reference rate reform from December 31, 2022 to December 31, 2024, past LIBOR’s end date. The Company currently has contracts that are indexed to LIBOR and are continuing to evaluate the scope of impacted contracts and potential risk. The Company is also monitoring the developments regarding alternative rates and may amend certain contracts to accommodate those rates if the contract does not already specify a replacement rate. While the notional value of agreements potentially indexed to LIBOR is material, the Company does not expect a material impact to the consolidated financial statements and related disclosures associated with this transition. In August 2020, the FASB issued ASU 2020-06, Debt- Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40):Accounting for Convertible Instruments and Contracts in an Entity's Own Equity . The guidance simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify. The guidance also simplifies the diluted net income per share calculation in certain areas. The ASU was effective for annual and interim periods beginning after December 15, 2021, and early adoption was permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years using either the modified retrospective or full retrospective method. As detailed in Note 6, Debt , on February 4, 2020, the Company issued $575.0 million aggregate principal amount of its 0.5% Convertible Senior Notes due 2025 (the "2025 Notes"). The 2025 Notes are subject to the guidance included in ASU 2020-06. The Company adopted this guidance on January 1, 2021 using the modified retrospective approach which resulted in a cumulative-effect adjustment that increased (decreased) the following consolidated balance sheet accounts: Adjustment Consolidated Balance Sheet Classification Amount Deferred tax impact of cumulative-effect adjustment Deferred tax liabilities $ (20.6) Debt discount reclassification Long-term convertible securities 89.1 Equity issuance costs reclassification Long-term convertible securities (2.5) Debt discount amortization and equity costs reclassification, net of tax Retained Earnings (2.8) Net impact of cumulative-effect adjustment Additional paid-in capital (63.3) On December 9, 2020, the Company made an irrevocable election under the indenture to require the principal portion of its 2025 Notes to be settled in cash and any excess in shares. Following the irrevocable notice, only the amounts settled in excess of the principal will be considered in diluted earnings per share under the “if-converted” method. Upon adoption of ASU 2020-06, the Company’s 2025 Notes were reflected entirely as a liability since the embedded conversion feature will no longer be separately presented within stockholders’ equity. Additionally, from January 1, 2021, the Company is no longer incurring non-cash interest expense for the amortization of debt discount. In October 2020, the FASB issued ASU 2020-10, Codification Improvements , which updates various codification topics by clarifying or improving disclosure requirements to align with the regulations of the U.S. Securities and Exchange Commission (the "SEC"). The ASU has been effective for the Company for annual and interim periods beginning after January 1, 2021. The Company adopted this standard on the January 1, 2021. The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements and related disclosures. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options which provides guidance to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments in this ASU No. 2021-04 are effective for all entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, including interim periods within those fiscal years. The amendment had no impact to the Company as the effect will largely depend on the terms of written call options or financings issued or modified in the future. There are no other recently issued accounting pronouncements that are expected to have any significant effect on the Company's financial position, results of operations or cash flows. |
Summary of Accounting Policies on Revenue Recognition and Shipping and Handling Fees | Summary of Accounting Policies on Revenue Recognition Revenue is recognized upon the transfer of control of promised products or services to the customers in an amount that reflects the consideration the Company expects to receive in exchange for those products and services. Performance Obligations The Company's performance obligations consist mainly of transferring control of goods and services identified in the contracts, purchase orders, or invoices. The Company has no significant multi-element contracts with customers. Significant Judgments Usage-based royalties and licenses are estimated based on the provisions of contracts with customers 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 reported licensee sales and those that were estimated are adjusted in the period in which they become known, which is typically the following quarter. Historically, such adjustments have not been significant. The Company estimates returns, price concessions, and discount allowances using the expected value method based on historical trends and other known factors. Rebate allowances are estimated using the most likely method based on each customer contract. The Company's return policy, as set forth in its product catalogs and sales invoices, requires review and authorization in advance prior to the return of product. Upon the authorization, a credit will be issued for the goods returned within a set amount of days from the shipment, which is generally ninety days. In the third quarter of 2022, due to the voluntary recall of the CereLink ® intracranial pressure monitors, the Company recorded a $1.5 million provision for product returns, as a reduction of net revenue, and a $0.8 million rework accrual in cost of goods sold. The Company disregards the effects of a financing component if the Company expects, at contract inception, that the period between the transfer and customer payment for the goods or services will be one year or less. The Company has no significant revenues recognized on payments expected to be received more than one year after the transfer of control of products or services to customers. Contract Asset and Liability Revenues recognized from the Company's private label business that are not invoiced to the customers as a result of recognizing revenue over time are recorded as a contract asset included in the prepaid expenses and other current assets account in the consolidated balance sheet. Upon invoicing to the customer, the balance is recorded in trade receivable, net in the consolidated balance sheet. Other operating revenues may include fees received under service agreements. Non-refundable fees received under multiple-period service agreements are recognized as revenue as the Company satisfies the performance obligations to the other party. A portion of the transaction price allocated to the performance obligations to be satisfied in the future periods is recognized as contract liability. Shipping and Handling Fees The Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation. Amounts billed to customers for shipping and handling are included as part of the transaction price and recognized as revenue when control of underlying products is transferred to the customer. The related shipping and freight charges incurred by the Company are included in the cost of goods sold. |
Product Warranties | Product Warranties Certain of the Company's medical devices, including monitoring systems and neurosurgical systems, are designed to operate over long periods of time. These products are sold with warranties which may extend for up to two years from the date of purchase. The warranties are not considered a separate performance obligation. The Company estimates its product warranties using the expected value method based on historical trends and other known factors. The Company includes them in accrued expenses and other current liabilities in the consolidated balance sheet. |
Taxes Collected from Customers | Taxes Collected from Customers The Company elected to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Restructuring and Related Costs | The following table summarizes our restructuring related accrual balances included within accrued expenses and other current liabilities in the consolidated balance sheet for the nine months ended September 30, 2022. (Dollars in thousands) Amount Balance at December 31,2021 $ 10,226 Charges: Cost of Goods Sold $ 1,379 Research and development 130 Selling, general and administrative 3,494 Payments and other adjustments $ (10,569) Balance at September 30,2022 $ 4,660 |
Accounting Standards Update | The Company adopted this guidance on January 1, 2021 using the modified retrospective approach which resulted in a cumulative-effect adjustment that increased (decreased) the following consolidated balance sheet accounts: Adjustment Consolidated Balance Sheet Classification Amount Deferred tax impact of cumulative-effect adjustment Deferred tax liabilities $ (20.6) Debt discount reclassification Long-term convertible securities 89.1 Equity issuance costs reclassification Long-term convertible securities (2.5) Debt discount amortization and equity costs reclassification, net of tax Retained Earnings (2.8) Net impact of cumulative-effect adjustment Additional paid-in capital (63.3) |
ACQUISITIONS AND DIVESTITURES (
ACQUISITIONS AND DIVESTITURES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Mergers, Acquisitions and Dispositions [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | The following table summarizes the final fair values of the assets acquired and liabilities assumed at the acquisition date: Dollars in thousands Final Valuation Weighted Average Life Current assets: Cash $ 2,726 Trade accounts receivable, net 16,469 Inventories, net 18,299 Prepaid expenses and other current assets 1,498 Total current assets $ 38,992 Property, plant and equipment, net 13,769 Intangible assets 245,000 13-14 years Goodwill 94,147 Right of use asset - operating leases 9,259 Deferred tax assets 7,465 Other assets 148 Total assets acquired $ 408,780 Current liabilities: Accounts payable $ 718 Accrued expenses 5,966 Current portion of lease liability - operating leases 1,673 Total current liabilities $ 8,357 Other long-term liability 276 Lease liability - operating leases 7,585 Deferred tax liability 61,724 Contingent consideration 23,900 Total liabilities assumed $ 101,842 Net assets acquired $ 306,938 |
REVENUES FROM CONTRACTS WITH _2
REVENUES FROM CONTRACTS WITH CUSTOMERS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Changes in Contract Assets and Contract Liabilities | The following table summarized the changes in the contract asset and liability balances for the nine months ended September 30, 2022: Dollars in thousands Total Contract Asset Contract asset, January 1, 2022 $ 11,412 Transferred to trade receivable of contract asset included in beginning of the year contract asset (11,412) Contract asset, net of transferred to trade receivables on contracts during the period 6,281 Contract asset, September 30, 2022 $ 6,281 Contract Liability Contract liability, January 1, 2022 $ 11,946 Recognition of revenue included in beginning of year contract liability $ (6,054) Contract liability, net of revenue recognized on contracts during the period 8,534 Foreign currency translation (120) Contract liability, September 30, 2022 $ 14,306 |
Schedule of Disaggregation of Revenue | The following table presents revenues disaggregated by the major sources of revenues for the three and nine months ended September 30, 2022 and 2021 (dollar amounts in thousands): Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 Neurosurgery $ 193,848 $ 199,210 $ 588,818 $ 591,064 Instruments 55,948 57,287 166,149 163,511 Total Codman Specialty Surgical 249,796 256,497 754,967 754,575 Wound Reconstruction and Care 104,625 99,744 304,149 291,058 Private Label 30,770 30,620 100,528 91,291 Total Tissue Technologies (1) 135,395 130,364 404,677 382,349 Total revenue $ 385,191 $ 386,861 $ 1,159,644 $ 1,136,924 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net | Inventories, net consisted of the following: Dollars in thousands September 30, 2022 December 31, 2021 Finished goods $ 163,160 $ 162,528 Work in process 73,326 65,323 Raw materials 74,574 89,535 Total inventories, net $ 311,060 $ 317,386 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | Changes in the carrying amount of goodwill for the nine-month period ended September 30, 2022 were as follows: Dollars in thousands Codman Specialty Tissue Technologies Total Goodwill at December 31, 2021 $ 663,428 $ 350,030 $ 1,013,458 Divestitures (1) — (5,019) (5,019) Foreign currency translation (20,117) (10,462) (30,579) Goodwill at September 30, 2022 $ 643,311 $ 334,549 $ 977,860 (1) On August 31, 2022, the Company completed the sale of the TWC business. See Note 2, Acquisitions and Divestitures. |
Schedule of Finite-Lived Intangible Assets | The components of the Company’s identifiable intangible assets were as follows: September 30, 2022 Dollars in thousands Weighted Cost Accumulated Net Completed technology 18 years $ 1,114,779 $ (350,055) $ 764,724 Customer relationships 12 years $ 190,848 $ (140,433) $ 50,415 Trademarks/brand names 28 years $ 95,406 $ (33,261) $ 62,145 Codman tradename Indefinite $ 161,663 $ — $ 161,663 Supplier relationships 30 years $ 30,211 $ (16,926) $ 13,285 All other 11 years $ 5,547 $ (3,744) $ 1,803 $ 1,598,454 $ (544,419) $ 1,054,035 December 31, 2021 Dollars in thousands Weighted Cost Accumulated Net Completed technology 18 years $ 1,132,954 $ (307,013) $ 825,941 Customer relationships 12 years 211,344 (142,755) 68,589 Trademarks/brand names 28 years 98,367 (31,468) 66,899 Codman tradename Indefinite 167,758 — 167,758 Supplier relationships 30 years 30,211 (16,192) 14,019 All other 11 years 6,258 (3,891) 2,367 $ 1,646,892 $ (501,319) $ 1,145,573 |
Schedule of Indefinite-Lived Intangible Assets | The components of the Company’s identifiable intangible assets were as follows: September 30, 2022 Dollars in thousands Weighted Cost Accumulated Net Completed technology 18 years $ 1,114,779 $ (350,055) $ 764,724 Customer relationships 12 years $ 190,848 $ (140,433) $ 50,415 Trademarks/brand names 28 years $ 95,406 $ (33,261) $ 62,145 Codman tradename Indefinite $ 161,663 $ — $ 161,663 Supplier relationships 30 years $ 30,211 $ (16,926) $ 13,285 All other 11 years $ 5,547 $ (3,744) $ 1,803 $ 1,598,454 $ (544,419) $ 1,054,035 December 31, 2021 Dollars in thousands Weighted Cost Accumulated Net Completed technology 18 years $ 1,132,954 $ (307,013) $ 825,941 Customer relationships 12 years 211,344 (142,755) 68,589 Trademarks/brand names 28 years 98,367 (31,468) 66,899 Codman tradename Indefinite 167,758 — 167,758 Supplier relationships 30 years 30,211 (16,192) 14,019 All other 11 years 6,258 (3,891) 2,367 $ 1,646,892 $ (501,319) $ 1,145,573 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Maximum Leverage Ratios | The Company’s maximum consolidated total leverage ratio in the financial covenants (as defined in the Senior Credit Facility) is the following: Fiscal Quarter Maximum Consolidated Total Leverage Ratio September 30, 2022 through June 30, 2023 4.50 to 1.00 September 30, 2023 and the last day of each fiscal quarter thereafter 4.00 to 1.00 |
Schedule of Contractual Repayments of Long-Term Debt | Contractual repayments of the Term Loan component of the Senior Credit Facility are due as follows: Quarter Ended September 30, 2022 Principal Repayment Dollars in thousands Remainder of 2022 $ 11,250 2023 $ 61,875 2024 $ 67,500 2025 $ 669,375 $ 810,000 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The Company held the following interest rate swaps as of September 30, 2022 and December 31, 2021 (dollar amounts in thousands): September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Hedged Item Notional Amount Designation Date Effective Date Termination Date Fixed Interest Rate Estimated Fair Value Asset (Liability) 1-month USD LIBOR Loan 300,000 300,000 December 13, 2017 January 1, 2018 December 31, 2022 2.201 % 1,078 (5,268) 1-month USD LIBOR Loan 150,000 150,000 December 13, 2017 July 1, 2019 June 30, 2024 2.423 % 4,671 (5,520) 1-month USD LIBOR Loan 200,000 200,000 December 13, 2017 January 1, 2018 December 31, 2024 2.313 % 8,212 (7,421) 1-month USD LIBOR Loan 75,000 75,000 October 10, 2018 July 1, 2020 June 30, 2025 3.220 % 1,719 (5,512) 1-month USD LIBOR Loan 75,000 75,000 October 10, 2018 July 1, 2020 June 30, 2025 3.199 % 1,828 (5,464) 1-month USD LIBOR Loan 75,000 75,000 October 10, 2018 July 1, 2020 June 30, 2025 3.209 % 1,673 (5,494) 1-month USD LIBOR Loan 100,000 100,000 December 18, 2018 December 30, 2022 December 31, 2027 2.885 % 4,578 (6,886) 1-month USD LIBOR Loan 100,000 100,000 December 18, 2018 December 30, 2022 December 31, 2027 2.867 % 4,545 (6,764) 1-month USD LIBOR Loan 575,000 575,000 December 15, 2020 July 31, 2025 December 31, 2027 1.415 % 26,261 3,552 1-month USD LIBOR Loan 125,000 125,000 December 15, 2020 July 1, 2025 December 31, 2027 1.404 % 6,039 821 $ 1,775,000 $ 1,775,000 $ 60,604 $ (43,957) The Company held the following cross-currency rate swaps as of September 30, 2022 and December 31, 2021 (dollar amounts in thousands): September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Effective Date Termination Date Fixed Rate Aggregate Notional Amount Fair Value Pay CHF September 28, 2022 September 29, 2023 1.95% CHF 48,532 — (106) — Receive U.S.$ 5.32% $ 49,142 — Pay CHF October 2, 2017 October 3, 2022 1.95% CHF 97,065 145,598 2,281 (8,283) Receive U.S.$ 4.52% $ 100,000 150,000 Pay CHF December 21, 2020 December 22, 2025 3.00% CHF 379,887 397,137 18,394 41 Receive U.S.$ 3.98% $ 426,456 445,821 Total $ 20,569 $ (8,242) The Company held the following cross-currency rate swaps designated as net investment hedges as of September 30, 2022 and December 31, 2021, respectively (dollar amounts in thousands): September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Effective Date Termination Date Fixed Rate Aggregate Notional Amount Fair Value Pay EUR October 3, 2018 September 30, 2023 —% EUR 51,760 51,760 9,198 2,503 Receive U.S.$ 2.57% $ 60,000 60,000 Pay EUR October 3, 2018 September 30, 2025 —% EUR 38,820 38,820 7,049 2,147 Receive U.S.$ 2.19% $ 45,000 45,000 Pay CHF December 16, 2020 December 16, 2027 —% CHF — 222,300 — (792) Receive U.S.$ 1.10% $ — 250,000 Pay CHF May 26, 2022 December 16, 2028 —% CHF 288,210 — (522) — Receive U.S.$ 1.94% $ 300,000 — Total $ 15,725 $ 3,858 |
Schedule of Fair Value and Presentation of Derivatives | The following table summarizes the fair value for derivatives designated as hedging instruments in the condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021: Fair Value as of Location on Balance Sheet (1) : September 30, 2022 December 31, 2021 Dollars in thousands Derivatives designated as hedges — Assets: Prepaid expenses and other current assets Cash Flow Hedges Interest rate swap (2) 13,111 $ — Cross-currency swap $ 9,287 $ 4,900 Net Investment Hedges Cross-currency swap 16,138 5,120 Other assets Cash Flow Hedges Interest rate swap (2) 47,493 4,373 Cross-currency swap 11,387 — Net Investment Hedges Cross-currency swap 6,054 2,104 Total derivatives designated as hedges — Assets $ 103,470 $ 16,497 Derivatives designated as hedges — Liabilities: Accrued expenses and other current liabilities Cash Flow Hedges Interest rate swap (2) $ — $ 18,187 Cross-currency swap $ 105 8,283 Cash Flow Hedges Interest rate swap (2) $ — 30,143 Cross-currency swap $ — 4,859 Net Investment Hedges Cross-currency swap $ 6,467 3,366 Total derivatives designated as hedges — Liabilities $ 6,572 $ 64,838 (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 September 30, 2022 and December 31, 2021, the total notional amounts related to the Company’s interest rate swaps were both $1.8 billion, respectively. |
Effect of Derivative Instruments Designated as Cash Flow Hedges on Statements of Operations | The following table presents the effect of derivative instruments designated as cash flow hedges and net investment hedges on the AOCL and earnings, both net of tax, during the three and nine months ended September 30, 2022 and 2021: Dollars in thousands Balance in AOCL Amount of Amount of Gain (Loss) Balance in AOCL Location in Three Months Ended September 30, 2022 Cash Flow Hedges Interest rate swap $ 26,939 $ 32,939 $ (726) $ 60,604 Interest expense Cross-currency swap (17,835) 12,332 17,627 (23,130) Other income, net Net Investment Hedges Cross-currency swap 7,506 9,403 2,378 14,531 Interest income $ 16,610 $ 54,674 $ 19,279 $ 52,005 Three Months Ended September 30, 2021 Cash Flow Hedges Interest rate swap $ (62,736) $ 2,488 $ (5,434) $ (54,814) Interest expense Cross-currency swap (4,363) 7,045 5,874 (3,192) Other income, net Net Investment Hedges Cross-currency swap (2,078) 6,882 1,749 3,055 Interest income $ (69,177) $ 16,415 $ 2,189 $ (54,951) Dollars in thousands Balance in AOCL Amount of Amount of Gain (Loss) Balance in AOCL Location in Nine Months Ended September 30, 2022 Cash Flow Hedges Interest rate swap $ (43,956) $ 94,729 $ (9,831) $ 60,604 Interest expense Cross-currency swap (9,688) 33,784 47,226 (23,130) Other income, net Net Investment Hedges Cross-currency swap (2,321) 21,528 4,676 14,531 Interest income $ (55,965) $ 150,041 $ 42,071 $ 52,005 Nine Months Ended September 30, 2021 Cash Flow Hedges Interest rate swap $ (93,769) $ 21,993 $ (16,962) $ (54,814) Interest expense Cross-currency swap (1,073) 36,270 38,389 (3,192) Other income, net Net Investment Hedges Cross-currency swap (12,291) 20,543 5,197 3,055 Interest income $ (107,133) $ 78,806 $ 26,624 $ (54,951) |
Derivatives Not Designated as Hedging Instruments | The following table summarizes the gains (losses) of derivative instruments not designated as hedges on the condensed consolidated statements of income, which was included in other income: Dollars in thousands Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Foreign currency forward contracts $ 1,162 $ 117 $ 1,154 $ (186) Foreign currency swaps 184 (7) 1,777 404 Total $ 1,346 $ 110 $ 2,931 $ 218 |
LEASES AND RELATED PARTY LEAS_2
LEASES AND RELATED PARTY LEASES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Supplemental Balance Sheet Information | Supplemental balance sheet information related to operating leases were as follows: Dollars in thousands, except lease term and discount rate September 30, 2022 December 31, 2021 ROU assets $ 148,270 $ 84,543 Current lease liabilities 13,488 14,775 Non-current lease liabilities 157,533 90,329 Total lease liabilities $ 171,021 $ 105,104 Weighted average remaining lease term (in years): Leased facilities 17.3 years 10.4 years Leased vehicles 2.0 years 2.1 years Weighted average discount rate: Leased facilities 5.3 % 5.1 % Leased vehicles 2.7 % 2.6 % |
Supplemental Cash Flow Information | Supplemental cash flow information related to leases for the nine months ended September 30, 2022 and 2021 were as follows: Dollars in thousands September 30, 2022 September 30, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 12,804 $ 10,942 ROU assets obtained in exchange for lease liabilities: Operating leases $ 75,588 $ 10,725 |
Schedule of Operating Lease Maturities | Future minimum lease payments under operating leases at September 30, 2022 were as follows: Dollars in thousands Related Parties Third Parties Total Remainder of 2022 $ 74 $ 4,112 $ 4,186 2023 296 18,902 19,198 2024 296 19,435 19,731 2025 296 18,014 18,310 2026 296 16,624 16,920 2027 296 15,773 16,069 Thereafter 246 164,838 165,084 Total minimum lease payments $ 1,800 $ 257,698 $ 259,498 Less: Imputed interest 88,477 Total lease liabilities 171,021 Less: Current lease liabilities 13,488 Long-term lease liabilities 157,533 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate | The following table provides a summary of the Company's effective tax rate: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Reported tax rate 15.1 % 14.9 % 14.8 % 24.1 % |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Income (Loss) Per Share | Basic and diluted net income per share was as follows: Three Months Ended September 30, Nine Months Ended September 30, Dollars in thousands, except per share amounts 2022 2021 2022 2021 Basic net income per share: Net income $ 49,915 $ 43,229 $ 127,604 $ 123,691 Weighted average common shares outstanding 83,042 84,754 82,955 84,647 Basic net income per common share $ 0.60 $ 0.51 $ 1.54 $ 1.46 Diluted net income per share: Net income $ 49,915 $ 43,229 $ 127,604 $ 123,691 Weighted average common shares outstanding — Basic 83,042 84,754 82,955 84,647 Effect of dilutive securities: Stock options and restricted stock 357 693 521 744 Weighted average common shares for diluted earnings per share 83,399 85,447 83,476 85,391 Diluted net income per common share $ 0.60 $ 0.51 $ 1.53 $ 1.45 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of Comprehensive Income (Loss) | Comprehensive income for the nine months ended September 30, 2022 and 2021 was as follows: Three Months Ended September 30, Nine Months Ended September 30, Dollars in thousands 2022 2021 2022 2021 Net income $ 49,915 $ 43,229 $ 127,604 $ 123,691 Foreign currency translation adjustment (21,392) (7,815) (45,142) (13,058) Change in unrealized gain (loss) on derivatives, net of tax 27,213 10,964 82,957 40,075 Pension liability adjustment, net of tax (45) 39 (99) 267 Comprehensive income, net $ 55,691 $ 46,417 $ 165,320 $ 150,975 |
Schedule of Changes in Accumulated Other Comprehensive Loss by Component | Changes in accumulated other comprehensive loss by component between December 31, 2021 and September 30, 2022 are presented in the table below, net of tax: Dollars in thousands Gains and Losses on Derivatives Defined Benefit Pension Items Foreign Currency Items Total Balance at January 1, 2022 $ (42,981) $ 1,893 $ (4,067) $ (45,155) Other comprehensive gain (loss) 115,298 (99) (45,142) 70,057 Less: Amounts reclassified from accumulated other comprehensive income, net 32,341 — — 32,341 Net current-period other comprehensive gain (loss) 82,957 (99) (45,142) 37,716 Balance at September 30, 2022 $ 39,976 $ 1,794 $ (49,209) $ (7,439) |
SEGMENT AND GEOGRAPHIC INFORM_2
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Net Sales and Profit by Segments | Net sales and profit by each reportable segment for the three and nine months ended September 30, 2022 and 2021 are as follows: Three Months Ended September 30, Nine Months Ended September 30, Dollars in thousands 2022 2021 2022 2021 Segment Net Sales Codman Specialty Surgical $ 249,796 $ 256,497 $ 754,967 $ 754,575 Tissue Technologies 135,395 130,364 404,677 382,349 Total revenues $ 385,191 $ 386,861 $ 1,159,644 $ 1,136,924 Segment Profit Codman Specialty Surgical $ 105,717 $ 110,686 $ 308,073 $ 331,460 Tissue Technologies 59,754 57,730 175,273 172,154 Segment profit 165,471 168,416 483,346 503,614 Amortization (3,141) (4,113) (10,339) (12,838) Corporate and other (97,281) (107,864) (301,927) (351,769) Operating income $ 65,049 $ 56,439 $ 171,080 $ 139,007 Three Months Ended September 30, Nine Months Ended September 30, Dollars in thousands 2022 2021 2022 2021 United States $ 282,016 $ 275,775 $ 832,714 $ 801,754 Europe 38,301 46,458 128,907 140,714 Asia Pacific 42,774 45,015 133,856 136,616 Rest of World 22,100 19,613 64,167 57,840 Total Revenues $ 385,191 $ 386,861 $ 1,159,644 $ 1,136,924 |
Schedule of Geographic Revenue by Area | Net sales and profit by each reportable segment for the three and nine months ended September 30, 2022 and 2021 are as follows: Three Months Ended September 30, Nine Months Ended September 30, Dollars in thousands 2022 2021 2022 2021 Segment Net Sales Codman Specialty Surgical $ 249,796 $ 256,497 $ 754,967 $ 754,575 Tissue Technologies 135,395 130,364 404,677 382,349 Total revenues $ 385,191 $ 386,861 $ 1,159,644 $ 1,136,924 Segment Profit Codman Specialty Surgical $ 105,717 $ 110,686 $ 308,073 $ 331,460 Tissue Technologies 59,754 57,730 175,273 172,154 Segment profit 165,471 168,416 483,346 503,614 Amortization (3,141) (4,113) (10,339) (12,838) Corporate and other (97,281) (107,864) (301,927) (351,769) Operating income $ 65,049 $ 56,439 $ 171,080 $ 139,007 Three Months Ended September 30, Nine Months Ended September 30, Dollars in thousands 2022 2021 2022 2021 United States $ 282,016 $ 275,775 $ 832,714 $ 801,754 Europe 38,301 46,458 128,907 140,714 Asia Pacific 42,774 45,015 133,856 136,616 Rest of World 22,100 19,613 64,167 57,840 Total Revenues $ 385,191 $ 386,861 $ 1,159,644 $ 1,136,924 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Contingent Consideration | A reconciliation of the opening balances to the closing balances of these Level 3 measurements for the nine months ended September 30, 2022 and September 30, 2021 is as follows (in thousands): Nine Months Ended September 30, 2022 Contingent Consideration Liability Related to Acquisition of: Arkis Location in Financial Statements Derma Sciences ACell Inc. Location in Financial Statements Short-term Long-term Long-term Short-term Long-term Balance as of January 1, 2022 $ 3,691 $ 11,408 $ 230 $ — $ 21,800 Transfers — — — 4,885 (4,885) Change in fair value of contingent consideration liabilities (862) $ (1,819) Research and development — (4,885) (11,915) Selling, general and administrative Balance as of September 30, 2022 $ 2,829 $ 9,589 $ 230 $ — $ 5,000 Nine Months Ended September 30, 2021 Contingent Consideration Liability Related to Acquisition of: Arkis Location in Financial Statements Derma Sciences ACell Inc. Location in Financial Statements Short-term Long-term Long-term Long-term Balance as of January 1, 2021 $ 3,415 $ 11,746 $ 230 $ — Additions from acquisition of ACell — — — 23,900 Transfers (3,415) 3,415 — — Change in fair value of contingent consideration liabilities — (544) Research and development — (900) Selling, general and administrative Balance as of September 30, 2021 $ — $ 14,617 $ 230 $ 23,000 |
BASIS OF PRESENTATION - Schedul
BASIS OF PRESENTATION - Schedule of Restructuring Charges (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31,2021 | $ 10,226 |
Payments and other adjustments | (10,569) |
Balance at September 30,2022 | 4,660 |
Cost of Goods Sold | |
Restructuring Reserve [Roll Forward] | |
Charges: | 1,379 |
Research and development | |
Restructuring Reserve [Roll Forward] | |
Charges: | 130 |
Selling, general and administrative | |
Restructuring Reserve [Roll Forward] | |
Charges: | $ 3,494 |
BASIS OF PRESENTATION - Narrati
BASIS OF PRESENTATION - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Feb. 04, 2020 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Restructuring Reserve | $ 4,660 | $ 10,226 | |
Closure of Facility | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Restructuring Reserve | 1,800 | ||
Executive Reorganization | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Restructuring Reserve | 1,700 | ||
Outsourcing Plans | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Restructuring Reserve | $ 1,200 | ||
2025 Notes | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Convertible debt | $ 575,000 | ||
2025 Notes | Convertible Debt | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Convertible notes, interest rate | 0.50% |
BASIS OF PRESENTATION - Adoptio
BASIS OF PRESENTATION - Adoption of 2020-06 (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred tax liabilities | $ 69,743 | $ 45,788 | |
Long-term convertible securities | 566,612 | 564,426 | |
Retained earnings | $ 826,172 | $ 698,568 | |
Cumulative Effect, Period of Adoption, Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred tax liabilities | $ (20,600) | ||
Retained earnings | (2,800) | ||
Additional paid-in capital | (63,300) | ||
Cumulative Effect, Period of Adoption, Adjustment, Debt Discount Reclassification | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Long-term convertible securities | 89,100 | ||
Cumulative Effect, Period of Adoption, Adjustment, Debt Discount Amortization and Equity Costs Reclassification | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Long-term convertible securities | $ (2,500) |
ACQUISITIONS AND DIVESTITURES -
ACQUISITIONS AND DIVESTITURES - Divestitures, Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Aug. 31, 2022 | Jan. 20, 2021 | Jan. 04, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Jun. 30, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Gain (loss) from the sale of businesses | $ 644,000 | $ (230,000) | $ 644,000 | $ 41,967,000 | |||||
ACell, Inc. | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Payments to acquire businesses, gross | $ 306,900,000 | ||||||||
Contingent consideration, maximum undiscounted payment amount | $ 100,000,000 | 100,000,000 | 100,000,000 | ||||||
Business combination, working capital adjustment | $ 1,300,000 | ||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Traditional Wound Care | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Sale of business, disposition price | $ 28,800,000 | ||||||||
Proceeds from sale of businesses | 27,800,000 | ||||||||
Sale of business, contingent consideration | $ 1,000,000 | ||||||||
Period for revenue based performance milestone | 2 years | ||||||||
Cash divested from deconsolidation | $ 3,500,000 | ||||||||
Gain (loss) from the sale of businesses | 600,000 | ||||||||
Discontinued operation, continuing involvement, prepaid asset | 11,100,000 | 11,100,000 | |||||||
Inventory purchase, prepaid expenses and other current assets | 8,300,000 | 8,300,000 | |||||||
Inventory purchases, other assets | 2,800,000 | 2,800,000 | |||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Extremity Orthopedics | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Sale of business, disposition price | $ 240,000,000 | ||||||||
Gain (loss) from the sale of businesses | $ 41,800,000 | ||||||||
Transitional supply agreement, payable | $ 3,000,000 | $ 3,000,000 | |||||||
Consortium of Focused Orthopedists, LLC | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Extremity Orthopedics | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Payment related to contract termination | $ 41,500,000 |
ACQUISITIONS AND DIVESTITURES-
ACQUISITIONS AND DIVESTITURES- Business Combination, Narrative (Details) - ACell, Inc. - USD ($) | Jan. 20, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 |
Business Acquisition [Line Items] | ||||
Payments to acquire businesses, gross | $ 306,900,000 | |||
Contingent consideration, maximum undiscounted payment amount | $ 100,000,000 | $ 100,000,000 | ||
Business combination, working capital adjustment | $ 1,300,000 | |||
Intangible asset acquired, discount rate (percent) | 8.50% | |||
Contingent consideration, estimated fair value | $ 23,900,000 | 5,000,000 | ||
Contingent consideration, noncurrent | $ 5,000,000 | $ 23,000,000 |
ACQUISITIONS AND DIVESTITURES_2
ACQUISITIONS AND DIVESTITURES - Business Combination, Schedule of Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | |||
Goodwill | $ 977,860 | $ 1,013,458 | |
ACell, Inc. | |||
Current assets: | |||
Cash | $ 2,726 | ||
Trade accounts receivable, net | 16,469 | ||
Inventories, net | 18,299 | ||
Prepaid expenses and other current assets | 1,498 | ||
Total current assets | 38,992 | ||
Property, plant and equipment, net | 13,769 | ||
Intangible assets | 245,000 | ||
Goodwill | 94,147 | ||
Right of use asset - operating leases | 9,259 | ||
Deferred tax assets | 7,465 | ||
Other assets | 148 | ||
Total assets acquired | 408,780 | ||
Current liabilities: | |||
Accounts payable | 718 | ||
Accrued expenses | 5,966 | ||
Current portion of lease liability - operating leases | 1,673 | ||
Total current liabilities | 8,357 | ||
Other long-term liability | 276 | ||
Lease liability - operating leases | 7,585 | ||
Deferred tax liability | 61,724 | ||
Contingent consideration | 23,900 | ||
Total liabilities assumed | 101,842 | ||
Net assets acquired | $ 306,938 | ||
ACell, Inc. | Minimum | |||
Current liabilities: | |||
Weighted Average Life | 13 years | ||
ACell, Inc. | Maximum | |||
Current liabilities: | |||
Weighted Average Life | 14 years |
REVENUES FROM CONTRACTS WITH _3
REVENUES FROM CONTRACTS WITH CUSTOMERS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||||
Number of days from shipment to issue a credit | 90 days | ||||
Revenue from contract with customer, excluding assessed tax | $ 385,191 | $ 386,861 | $ 1,159,644 | $ 1,136,924 | |
Cost of goods sold, rework accrual | 800 | ||||
Short-term portion of contract liability | 6,364 | 6,364 | $ 5,295 | ||
Long-term portion of contract liability | 7,900 | $ 7,900 | |||
Product warranty period (up to) | 2 years | ||||
Product Return | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customer, excluding assessed tax | $ (1,500) |
REVENUES FROM CONTRACTS WITH _4
REVENUES FROM CONTRACTS WITH CUSTOMERS - Narrative, Revenue Remaining Performance Obligation (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | Sep. 30, 2022 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected performance obligation through 2022, percentage | 44% |
Performance obligations expected to be satisfied, expected timing | 12 months |
REVENUES FROM CONTRACTS WITH _5
REVENUES FROM CONTRACTS WITH CUSTOMERS - Schedule of Changes in Contract Assets and Liabilities (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Contract Asset | |
Contract asset, Beginning of period | $ 11,412 |
Transferred to trade receivable of contract asset included in beginning of the year contract asset | (11,412) |
Contract asset, net of transferred to trade receivables on contracts during the period | 6,281 |
Contract asset, End of Period | 6,281 |
Contract Liability | |
Contract liability, Beginning of Period | 11,946 |
Recognition of revenue included in beginning of year contract liability | (6,054) |
Contract liability, net of revenue recognized on contracts during the period | 8,534 |
Foreign currency translation | (120) |
Contract liability, End of Period | $ 14,306 |
REVENUES FROM CONTRACTS WITH _6
REVENUES FROM CONTRACTS WITH CUSTOMERS - Schedule of Revenues Disaggregated by Major Source (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | $ 385,191 | $ 386,861 | $ 1,159,644 | $ 1,136,924 |
Codman Specialty Surgical | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | 249,796 | 256,497 | 754,967 | 754,575 |
Codman Specialty Surgical | Neurosurgery | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | 193,848 | 199,210 | 588,818 | 591,064 |
Codman Specialty Surgical | Instruments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | 55,948 | 57,287 | 166,149 | 163,511 |
Tissue Technologies | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | 135,395 | 130,364 | 404,677 | 382,349 |
Tissue Technologies | Wound Reconstruction and Care | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | 104,625 | 99,744 | 304,149 | 291,058 |
Tissue Technologies | Private Label | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | $ 30,770 | $ 30,620 | $ 100,528 | $ 91,291 |
INVENTORIES - Schedule of Net I
INVENTORIES - Schedule of Net Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 163,160 | $ 162,528 |
Work in process | 73,326 | 65,323 |
Raw materials | 74,574 | 89,535 |
Total inventories, net | $ 311,060 | $ 317,386 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Beginning of Period | $ 1,013,458 |
Divestitures | (5,019) |
Foreign currency translation | (30,579) |
End of Period | 977,860 |
Codman Specialty Surgical | |
Goodwill [Roll Forward] | |
Beginning of Period | 663,428 |
Divestitures | 0 |
Foreign currency translation | (20,117) |
End of Period | 643,311 |
Tissue Technologies | |
Goodwill [Roll Forward] | |
Beginning of Period | 350,030 |
Divestitures | (5,019) |
Foreign currency translation | (10,462) |
End of Period | $ 334,549 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Components of Company's Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 1,598,454 | $ 1,646,892 |
Accumulated Amortization | (544,419) | (501,319) |
Net | 1,054,035 | 1,145,573 |
Codman tradename | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Cost | 161,663 | 167,758 |
Net | $ 161,663 | $ 167,758 |
Completed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 18 years | 18 years |
Cost | $ 1,114,779 | $ 1,132,954 |
Accumulated Amortization | (350,055) | (307,013) |
Net | $ 764,724 | $ 825,941 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 12 years | 12 years |
Cost | $ 190,848 | $ 211,344 |
Accumulated Amortization | (140,433) | (142,755) |
Net | $ 50,415 | $ 68,589 |
Trademarks/brand names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 28 years | 28 years |
Cost | $ 95,406 | $ 98,367 |
Accumulated Amortization | (33,261) | (31,468) |
Net | $ 62,145 | $ 66,899 |
Supplier relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 30 years | 30 years |
Cost | $ 30,211 | $ 30,211 |
Accumulated Amortization | (16,926) | (16,192) |
Net | $ 13,285 | $ 14,019 |
All other | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 11 years | 11 years |
Cost | $ 5,547 | $ 6,258 |
Accumulated Amortization | (3,744) | (3,891) |
Net | $ 1,803 | $ 2,367 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Aug. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Expected annual amortization expense, remainder of 2022 | $ 19.1 | |
Expected annual amortization expense, in 2023 | 76.3 | |
Expected annual amortization expense, in 2024 | 75.7 | |
Expected annual amortization expense, in 2025 | 75.7 | |
Expected annual amortization expense, in 2026 | 75.5 | |
Expected annual amortization expense, in 2027 | 73.6 | |
Expected annual amortization expense, thereafter | $ 499 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Traditional Wound Care | Customer relationships | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Intangible assets | $ 10.5 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) | 9 Months Ended | |||||
Feb. 04, 2020 USD ($) $ / shares | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Feb. 03, 2020 USD ($) | |
Debt Instrument [Line Items] | ||||||
Term loan component of senior credit facility | $ 56,250,000 | $ 45,000,000 | ||||
Interest payments, year one | 9,000,000 | |||||
Interest payments, year two | 34,200,000 | |||||
Interest payments, year three | 31,200,000 | |||||
Interest payments, year four | 2,800,000 | |||||
Carrying amount, liability component | 566,612,000 | 564,426,000 | ||||
Securitization program outstanding borrowings, maximum limit | 150,000,000 | |||||
Secured long-term debt, securitization program | $ 106,000,000 | $ 112,500,000 | ||||
Weighted average interest rate, accounts receivable securitization revolving loan facility | 3.50% | 1.10% | ||||
Fair Value, Inputs, Level 2 | ||||||
Debt Instrument [Line Items] | ||||||
Securitization facility, outstanding borrowings, fair value | $ 104,500,000 | |||||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 1,300,000,000 | |||||
Line of credit facility outstanding | $ 65,000,000 | $ 31,300,000 | ||||
Weighted average interest rate on debt | 4.50% | 1.40% | ||||
Revolving Credit Facility | Fair Value, Inputs, Level 2 | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, fair value of amount outstanding | $ 64,100,000 | |||||
Standby Letters of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 60,000,000 | |||||
Swingline Loans | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 60,000,000 | |||||
Senior Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 2,200,000,000 | |||||
Senior Credit Facility | Overnight Federal Funds | ||||||
Debt Instrument [Line Items] | ||||||
Interest rates available | 0.50% | |||||
Senior Credit Facility | One Month Eurodollar Rate | ||||||
Debt Instrument [Line Items] | ||||||
Interest rates available | 1% | |||||
Senior Credit Facility | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit, commitment fee percentage | 0.15% | |||||
Senior Credit Facility | Minimum | Eurodollar | ||||||
Debt Instrument [Line Items] | ||||||
Interest rates available | 1% | |||||
Senior Credit Facility | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit, commitment fee percentage | 0.30% | |||||
Senior Credit Facility | Maximum | Eurodollar | ||||||
Debt Instrument [Line Items] | ||||||
Interest rates available | 2.25% | |||||
Senior Credit Facility | Standby Letters of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility outstanding | $ 0 | |||||
Letters of credit outstanding | 1,600,000 | $ 1,600,000 | ||||
Term Loan Facility | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 877,500,000 | |||||
Line of credit facility outstanding | $ 810,000,000 | $ 843,800,000 | ||||
Weighted average interest rate on debt | 4.50% | 1.40% | ||||
Term loan component of senior credit facility | $ 56,300,000 | $ 45,000,000 | ||||
Term Loan Facility | Secured Debt | Fair Value, Inputs, Level 2 | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, fair value of amount outstanding | 799,700,000 | |||||
2025 Notes | Convertible Debt | ||||||
Debt Instrument [Line Items] | ||||||
Convertible notes, maximum borrowing capacity | $ 575,000,000 | 575,000,000 | $ 575,000,000 | |||
Convertible notes, interest rate | 0.50% | |||||
Debt proceeds, classified as equity at time of offering | $ 104,500,000 | |||||
Effective interest rate | 4.20% | |||||
Incremental financing costs capitalized | $ 13,200,000 | |||||
Initial conversion rate | 0.0135739 | |||||
Initial conversion price (in dollars per share) | $ / shares | $ 73.67 | |||||
Maximum selling price of the company's common stock of the conversion price | 130% | |||||
Maximum average conversion value of notes | 98% | |||||
Redemption price, percentage | 100% | |||||
Warrant strike price (in dollars per share) | $ / shares | $ 113.34 | |||||
Carrying amount, liability component | 485,900,000 | |||||
Unamortized discount | $ 89,100,000 | |||||
Fair value | 505,200,000 | |||||
Cash interest | $ 2,200,000 | $ 2,100,000 | ||||
2025 Notes | Convertible Debt | Call Option | ||||||
Debt Instrument [Line Items] | ||||||
Cost of call transactions | $ 104,200,000 | |||||
Proceeds from warrant transactions | $ 44,500,000 | |||||
Initial strike price (in dollars per share) | $ / shares | $ 73.67 |
DEBT - Maximum Total Leverage R
DEBT - Maximum Total Leverage Ratio Table (Details) - Senior Credit Facility | Jul. 14, 2020 |
September 30, 2022 through June 30, 2023 | |
Debt Instrument [Line Items] | |
Maximum Consolidated Total Leverage Ratio | 4.50 |
September 30, 2023 and the last day of each fiscal quarter thereafter | |
Debt Instrument [Line Items] | |
Maximum Consolidated Total Leverage Ratio | 4 |
DEBT - Contractual Maturity Tab
DEBT - Contractual Maturity Table (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Debt Disclosure [Abstract] | |
Remainder of 2022 | $ 11,250 |
2023 | 61,875 |
2024 | 67,500 |
2025 | 669,375 |
Principal Repayment | $ 810,000 |
DERIVATIVE INSTRUMENTS - Schedu
DERIVATIVE INSTRUMENTS - Schedule of Derivatives (Details) - Cash Flow Hedges - Designated as Hedging Instrument - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Derivative [Line Items] | ||
Estimated Fair Value, Asset (Liability) | $ 60,604,000 | $ (43,957,000) |
1-Month USD LIBOR | ||
Derivative [Line Items] | ||
Notional amount | 1,775,000,000 | 1,775,000,000 |
1-Month USD LIBOR | Interest Rate Swap Designated December 13, 2017 Tranche 1 | ||
Derivative [Line Items] | ||
Notional amount | $ 300,000,000 | 300,000,000 |
Fixed Interest Rate | 2.201% | |
Estimated Fair Value, Asset (Liability) | $ 1,078,000 | (5,268,000) |
1-Month USD LIBOR | Interest Rate Swap Designated December 13, 2017 Tranche 2 | ||
Derivative [Line Items] | ||
Notional amount | $ 150,000,000 | 150,000,000 |
Fixed Interest Rate | 2.423% | |
Estimated Fair Value, Asset (Liability) | $ 4,671,000 | (5,520,000) |
1-Month USD LIBOR | Interest Rate Swap Designated December 13, 2017 Tranche 3 | ||
Derivative [Line Items] | ||
Notional amount | $ 200,000,000 | 200,000,000 |
Fixed Interest Rate | 2.313% | |
Estimated Fair Value, Asset (Liability) | $ 8,212,000 | (7,421,000) |
1-Month USD LIBOR | Interest Rate Swap Designated October 10, 2018 Tranche 1 | ||
Derivative [Line Items] | ||
Notional amount | $ 75,000,000 | 75,000,000 |
Fixed Interest Rate | 3.22% | |
Estimated Fair Value, Asset (Liability) | $ 1,719,000 | (5,512,000) |
1-Month USD LIBOR | Interest Rate Swap Designated October 10, 2018 Tranche 2 | ||
Derivative [Line Items] | ||
Notional amount | $ 75,000,000 | 75,000,000 |
Fixed Interest Rate | 3.199% | |
Estimated Fair Value, Asset (Liability) | $ 1,828,000 | (5,464,000) |
1-Month USD LIBOR | Interest Rate Swap Designated October 10, 2018 Tranche 3 | ||
Derivative [Line Items] | ||
Notional amount | $ 75,000,000 | 75,000,000 |
Fixed Interest Rate | 3.209% | |
Estimated Fair Value, Asset (Liability) | $ 1,673,000 | (5,494,000) |
1-Month USD LIBOR | Interest Rate Swap Designated December 18, 2018 Tranche 1 | ||
Derivative [Line Items] | ||
Notional amount | $ 100,000,000 | 100,000,000 |
Fixed Interest Rate | 2.885% | |
Estimated Fair Value, Asset (Liability) | $ 4,578,000 | (6,886,000) |
1-Month USD LIBOR | Interest Rate Swap Designated December 18, 2018 Tranche 2 | ||
Derivative [Line Items] | ||
Notional amount | $ 100,000,000 | 100,000,000 |
Fixed Interest Rate | 2.867% | |
Estimated Fair Value, Asset (Liability) | $ 4,545,000 | (6,764,000) |
1-Month USD LIBOR | Interest Rate Swap Designated December 15, 2020 Tranche 1 | ||
Derivative [Line Items] | ||
Notional amount | $ 575,000,000 | 575,000,000 |
Fixed Interest Rate | 1.415% | |
Estimated Fair Value, Asset (Liability) | $ 26,261,000 | 3,552,000 |
1-Month USD LIBOR | Interest Rate Swap Designated December 15, 2020 Tranche 2 | ||
Derivative [Line Items] | ||
Notional amount | $ 125,000,000 | 125,000,000 |
Fixed Interest Rate | 1.404% | |
Estimated Fair Value, Asset (Liability) | $ 6,039,000 | $ 821,000 |
DERIVATIVE INSTRUMENTS - Narrat
DERIVATIVE INSTRUMENTS - Narrative (Details) € in Thousands, SFr in Thousands | 3 Months Ended | 9 Months Ended | ||||||||||||||||||
Oct. 03, 2022 USD ($) | May 26, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2022 CHF (SFr) | Sep. 30, 2021 USD ($) | Sep. 26, 2022 USD ($) | Sep. 26, 2022 CHF (SFr) | Jun. 30, 2022 USD ($) | May 26, 2022 CHF (SFr) | Dec. 31, 2021 USD ($) | Sep. 30, 2021 EUR (€) | Jun. 30, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 21, 2020 USD ($) | Dec. 21, 2020 CHF (SFr) | Oct. 02, 2017 USD ($) | Oct. 02, 2017 CHF (SFr) | |
Designated as Hedging Instrument | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Total derivatives designated as hedges — Assets | $ 103,470,000 | $ 103,470,000 | $ 16,497,000 | |||||||||||||||||
Gain (loss) recorded in AOCL, change in fair value | 54,674,000 | $ 16,415,000 | 150,041,000 | $ 78,806,000 | ||||||||||||||||
Foreign currency forward contracts | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative instruments not designated as hedging instruments, gain | 200,000 | |||||||||||||||||||
Foreign currency forward contracts | Not Designated as Hedging Instrument | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Current notional amount | 16,400,000 | 16,400,000 | $ 4,200,000 | $ 4,200,000 | ||||||||||||||||
Total derivatives designated as hedges — Assets | (1,200,000) | (1,200,000) | 200,000 | |||||||||||||||||
Foreign currency swaps | Not Designated as Hedging Instrument | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Current notional amount | $ 6,400,000 | 12,200,000 | 6,400,000 | 12,200,000 | 6,400,000 | $ 7,300,000 | ||||||||||||||
Cross-currency swap | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Current notional amount | $ 471,600,000 | SFr 420,100 | ||||||||||||||||||
Gain (loss) reclassified into other income | (1,100,000) | (1,500,000) | (5,000,000) | (4,100,000) | ||||||||||||||||
Intercompany loan quarterly payments | SFr | SFr 5,800 | |||||||||||||||||||
Gain expected to be reclassified to earnings in the next twelve months | 9,200,000 | 9,200,000 | ||||||||||||||||||
Loss on settlement of net investment hedge | $ 4,900,000 | 100,000 | ||||||||||||||||||
Cross-currency swap | Subsequent Event | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Loss on settlement of net investment hedge | $ 1,600,000 | |||||||||||||||||||
Cross-currency swap | Designated as Hedging Instrument | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Current notional amount | 300,000,000 | SFr 288,000 | ||||||||||||||||||
Cross-currency swap | Cash Flow Hedges | Designated as Hedging Instrument | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Gain (loss) reclassified into other income | (16,500,000) | (4,300,000) | (42,200,000) | (34,300,000) | ||||||||||||||||
Cross-currency swap | Net Investment Hedges | Designated as Hedging Instrument | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative, notional amount, terminated | $ 250,000,000 | $ 52,000,000 | $ 52,000,000 | $ 52,000,000 | SFr 222,300 | € 44,900 | ||||||||||||||
Gain expected to be reclassified to earnings in the next twelve months | 16,100,000 | 16,100,000 | ||||||||||||||||||
Cross-currency swap | Long | Codman | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Current notional amount | SFr | SFr 291,200 | |||||||||||||||||||
Cross-currency swap | Short | Codman | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Current notional amount | $ 49,100,000 | SFr 48,500 | $ 150,000,000 | $ 300,000,000 | ||||||||||||||||
Derivative, notional amount, terminated | $ 50,000,000 | |||||||||||||||||||
Cross-currency swap | Short | Codman | Subsequent Event | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative, notional amount, terminated | $ 100,000,000 | |||||||||||||||||||
Foreign Exchange Forward Entered and Settled in the Same Period | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Derivative instruments not designated as hedging instruments, gain | 100,000 | |||||||||||||||||||
Foreign Exchange Forward Entered and Settled in the Same Period | Not Designated as Hedging Instrument | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Current notional amount | $ 2,000,000 | $ 2,000,000 |
DERIVATIVE INSTRUMENTS - Sche_2
DERIVATIVE INSTRUMENTS - Schedule of Cross Currency Swap Derivatives (Details) | Sep. 30, 2022 USD ($) | Sep. 30, 2022 CHF (SFr) | Sep. 26, 2022 USD ($) | Sep. 26, 2022 CHF (SFr) | May 26, 2022 USD ($) | May 26, 2022 CHF (SFr) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 CHF (SFr) | Dec. 21, 2020 USD ($) | Dec. 21, 2020 CHF (SFr) | Oct. 02, 2017 USD ($) | Oct. 02, 2017 CHF (SFr) |
Cross-currency swap | ||||||||||||
Derivative [Line Items] | ||||||||||||
Aggregate Notional Amount | $ 471,600,000 | SFr 420,100,000 | ||||||||||
Codman | Cross-currency swap | Long | ||||||||||||
Derivative [Line Items] | ||||||||||||
Aggregate Notional Amount | SFr | SFr 291,200,000 | |||||||||||
Codman | Cross-currency swap | Short | ||||||||||||
Derivative [Line Items] | ||||||||||||
Aggregate Notional Amount | $ 49,100,000 | SFr 48,500,000 | $ 150,000,000 | $ 300,000,000 | ||||||||
Designated as Hedging Instrument | Cross-currency swap | ||||||||||||
Derivative [Line Items] | ||||||||||||
Aggregate Notional Amount | $ 300,000,000 | SFr 288,000,000 | ||||||||||
Cash Flow Hedges | Designated as Hedging Instrument | ||||||||||||
Derivative [Line Items] | ||||||||||||
Fair Value Asset (Liability) | $ 60,604,000 | (43,957,000) | ||||||||||
Cash Flow Hedges | Designated as Hedging Instrument | Codman | Cross-currency swap | ||||||||||||
Derivative [Line Items] | ||||||||||||
Fair Value Asset (Liability) | 20,569,000 | (8,242,000) | ||||||||||
Cash Flow Hedges | Designated as Hedging Instrument | Codman | Cross Currency Interest Rate Swap One | ||||||||||||
Derivative [Line Items] | ||||||||||||
Fair Value Asset (Liability) | $ (106,000) | 0 | ||||||||||
Cash Flow Hedges | Designated as Hedging Instrument | Codman | Cross Currency Interest Rate Swap One | Long | ||||||||||||
Derivative [Line Items] | ||||||||||||
Fixed Rate | 1.95% | 1.95% | ||||||||||
Aggregate Notional Amount | SFr | SFr 48,532,000 | SFr 0 | ||||||||||
Cash Flow Hedges | Designated as Hedging Instrument | Codman | Cross Currency Interest Rate Swap One | Short | ||||||||||||
Derivative [Line Items] | ||||||||||||
Fixed Rate | 5.32% | 5.32% | ||||||||||
Aggregate Notional Amount | $ 49,142,000 | 0 | ||||||||||
Cash Flow Hedges | Designated as Hedging Instrument | Codman | Cross Currency Interest Rate Swap Two | ||||||||||||
Derivative [Line Items] | ||||||||||||
Fair Value Asset (Liability) | $ 2,281,000 | (8,283,000) | ||||||||||
Cash Flow Hedges | Designated as Hedging Instrument | Codman | Cross Currency Interest Rate Swap Two | Long | ||||||||||||
Derivative [Line Items] | ||||||||||||
Fixed Rate | 1.95% | 1.95% | ||||||||||
Aggregate Notional Amount | SFr | SFr 97,065,000 | 145,598,000 | ||||||||||
Cash Flow Hedges | Designated as Hedging Instrument | Codman | Cross Currency Interest Rate Swap Two | Short | ||||||||||||
Derivative [Line Items] | ||||||||||||
Fixed Rate | 4.52% | 4.52% | ||||||||||
Aggregate Notional Amount | $ 100,000,000 | 150,000,000 | ||||||||||
Cash Flow Hedges | Designated as Hedging Instrument | Codman | Cross Currency Interest Rate Swap Three | ||||||||||||
Derivative [Line Items] | ||||||||||||
Fair Value Asset (Liability) | $ 18,394,000 | 41,000 | ||||||||||
Cash Flow Hedges | Designated as Hedging Instrument | Codman | Cross Currency Interest Rate Swap Three | Long | ||||||||||||
Derivative [Line Items] | ||||||||||||
Fixed Rate | 3% | 3% | ||||||||||
Aggregate Notional Amount | SFr | SFr 379,887,000 | SFr 397,137,000 | ||||||||||
Cash Flow Hedges | Designated as Hedging Instrument | Codman | Cross Currency Interest Rate Swap Three | Short | ||||||||||||
Derivative [Line Items] | ||||||||||||
Fixed Rate | 3.98% | 3.98% | ||||||||||
Aggregate Notional Amount | $ 426,456,000 | $ 445,821,000 |
DERIVATIVE INSTRUMENTS - Sche_3
DERIVATIVE INSTRUMENTS - Schedule of Net Investment Hedges Derivatives (Details) € in Thousands, SFr in Thousands | Sep. 30, 2022 USD ($) | Sep. 30, 2022 CHF (SFr) | Sep. 30, 2022 EUR (€) | May 26, 2022 USD ($) | May 26, 2022 CHF (SFr) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 CHF (SFr) | Dec. 31, 2021 EUR (€) | Dec. 21, 2020 USD ($) | Dec. 21, 2020 CHF (SFr) |
Cross-currency swap | ||||||||||
Derivative [Line Items] | ||||||||||
Aggregate Notional Amount | $ 471,600,000 | SFr 420,100 | ||||||||
Designated as Hedging Instrument | Cross-currency swap | ||||||||||
Derivative [Line Items] | ||||||||||
Aggregate Notional Amount | $ 300,000,000 | SFr 288,000 | ||||||||
Designated as Hedging Instrument | Net Investment Hedges | Cross-currency swap | ||||||||||
Derivative [Line Items] | ||||||||||
Fair Value Asset (Liability) | $ 15,725,000 | $ 3,858,000 | ||||||||
Designated as Hedging Instrument | Net Investment Hedges | Cross Currency Interest Rate Swap One | ||||||||||
Derivative [Line Items] | ||||||||||
Fair Value Asset (Liability) | $ 9,198,000 | 2,503,000 | ||||||||
Designated as Hedging Instrument | Net Investment Hedges | Cross Currency Interest Rate Swap One | Long | ||||||||||
Derivative [Line Items] | ||||||||||
Fixed Rate | 0% | 0% | 0% | |||||||
Aggregate Notional Amount | € | € 51,760 | € 51,760 | ||||||||
Designated as Hedging Instrument | Net Investment Hedges | Cross Currency Interest Rate Swap One | Short | ||||||||||
Derivative [Line Items] | ||||||||||
Fixed Rate | 2.57% | 2.57% | 2.57% | |||||||
Aggregate Notional Amount | $ 60,000,000 | 60,000,000 | ||||||||
Designated as Hedging Instrument | Net Investment Hedges | Cross Currency Interest Rate Swap Two | ||||||||||
Derivative [Line Items] | ||||||||||
Fair Value Asset (Liability) | $ 7,049,000 | 2,147,000 | ||||||||
Designated as Hedging Instrument | Net Investment Hedges | Cross Currency Interest Rate Swap Two | Long | ||||||||||
Derivative [Line Items] | ||||||||||
Fixed Rate | 0% | 0% | 0% | |||||||
Aggregate Notional Amount | € | € 38,820 | € 38,820 | ||||||||
Designated as Hedging Instrument | Net Investment Hedges | Cross Currency Interest Rate Swap Two | Short | ||||||||||
Derivative [Line Items] | ||||||||||
Fixed Rate | 2.19% | 2.19% | 2.19% | |||||||
Aggregate Notional Amount | $ 45,000,000 | 45,000,000 | ||||||||
Designated as Hedging Instrument | Net Investment Hedges | Cross Currency Interest Rate Swap Three | ||||||||||
Derivative [Line Items] | ||||||||||
Fair Value Asset (Liability) | $ 0 | (792,000) | ||||||||
Designated as Hedging Instrument | Net Investment Hedges | Cross Currency Interest Rate Swap Three | Long | ||||||||||
Derivative [Line Items] | ||||||||||
Fixed Rate | 0% | 0% | 0% | |||||||
Aggregate Notional Amount | SFr | SFr 0 | SFr 222,300 | ||||||||
Designated as Hedging Instrument | Net Investment Hedges | Cross Currency Interest Rate Swap Three | Short | ||||||||||
Derivative [Line Items] | ||||||||||
Fixed Rate | 1.10% | 1.10% | 1.10% | |||||||
Aggregate Notional Amount | $ 0 | 250,000,000 | ||||||||
Designated as Hedging Instrument | Net Investment Hedges | Cross Currency Interest Rate Contract Four | ||||||||||
Derivative [Line Items] | ||||||||||
Fair Value Asset (Liability) | $ (522,000) | 0 | ||||||||
Designated as Hedging Instrument | Net Investment Hedges | Cross Currency Interest Rate Contract Four | Long | ||||||||||
Derivative [Line Items] | ||||||||||
Fixed Rate | 0% | 0% | 0% | |||||||
Aggregate Notional Amount | SFr | SFr 288,210 | SFr 0 | ||||||||
Designated as Hedging Instrument | Net Investment Hedges | Cross Currency Interest Rate Contract Four | Short | ||||||||||
Derivative [Line Items] | ||||||||||
Fixed Rate | 1.94% | 1.94% | 1.94% | |||||||
Aggregate Notional Amount | $ 300,000,000 | $ 0 |
DERIVATIVE INSTRUMENTS - Fair V
DERIVATIVE INSTRUMENTS - Fair Value of Derivative Instruments By Balance Sheet Location (Details) SFr in Thousands | Sep. 30, 2022 USD ($) | May 26, 2022 USD ($) | May 26, 2022 CHF (SFr) | Dec. 31, 2021 USD ($) | Dec. 21, 2020 USD ($) | Dec. 21, 2020 CHF (SFr) |
Designated as Hedging Instrument | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Total derivatives designated as hedges — Assets | $ 103,470,000 | $ 16,497,000 | ||||
Total derivatives designated as hedges — Liabilities | 6,572,000 | 64,838,000 | ||||
Interest rate swap | Cash Flow Hedges | Designated as Hedging Instrument | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Current notional amount | 1,800,000,000 | 1,800,000,000 | ||||
Interest rate swap | Cash Flow Hedges | Designated as Hedging Instrument | Prepaid expenses and other current assets | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Total derivatives designated as hedges — Assets | 13,111,000 | 0 | ||||
Interest rate swap | Cash Flow Hedges | Designated as Hedging Instrument | Other assets | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Total derivatives designated as hedges — Assets | 47,493,000 | 4,373,000 | ||||
Interest rate swap | Cash Flow Hedges | Designated as Hedging Instrument | Accrued expenses and other current liabilities | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Total derivatives designated as hedges — Liabilities | 0 | 18,187,000 | ||||
Interest rate swap | Cash Flow Hedges | Designated as Hedging Instrument | Other Liabilities [Member] | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Total derivatives designated as hedges — Liabilities | 0 | 30,143,000 | ||||
Cross-currency swap | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Current notional amount | $ 471,600,000 | SFr 420,100 | ||||
Cross-currency swap | Designated as Hedging Instrument | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Current notional amount | $ 300,000,000 | SFr 288,000 | ||||
Cross-currency swap | Cash Flow Hedges | Designated as Hedging Instrument | Prepaid expenses and other current assets | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Total derivatives designated as hedges — Assets | 9,287,000 | 4,900,000 | ||||
Cross-currency swap | Cash Flow Hedges | Designated as Hedging Instrument | Other assets | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Total derivatives designated as hedges — Assets | 11,387,000 | 0 | ||||
Cross-currency swap | Cash Flow Hedges | Designated as Hedging Instrument | Accrued expenses and other current liabilities | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Total derivatives designated as hedges — Liabilities | 105,000 | 8,283,000 | ||||
Cross-currency swap | Cash Flow Hedges | Designated as Hedging Instrument | Other Liabilities [Member] | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Total derivatives designated as hedges — Liabilities | 0 | 4,859,000 | ||||
Cross-currency swap | Net Investment Hedges | Designated as Hedging Instrument | Prepaid expenses and other current assets | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Total derivatives designated as hedges — Assets | 16,138,000 | 5,120,000 | ||||
Cross-currency swap | Net Investment Hedges | Designated as Hedging Instrument | Other assets | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Total derivatives designated as hedges — Assets | 6,054,000 | 2,104,000 | ||||
Cross-currency swap | Net Investment Hedges | Designated as Hedging Instrument | Other Liabilities [Member] | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Total derivatives designated as hedges — Liabilities | $ 6,467,000 | $ 3,366,000 |
DERIVATIVE INSTRUMENTS - Effect
DERIVATIVE INSTRUMENTS - Effect of Derivative Instruments Designated Cash Flow Hedges on Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Roll Forward] | ||||
Balance, Beginning of Period | $ 1,660,917 | $ 1,574,981 | $ 1,684,804 | $ 1,514,867 |
Balance, End of Period | 1,724,414 | 1,631,687 | 1,724,414 | 1,631,687 |
Accumulated Other Comprehensive Loss | ||||
Derivative Instruments, Gain (Loss) [Roll Forward] | ||||
Balance, Beginning of Period | (13,215) | (49,963) | (45,155) | (74,059) |
Balance, End of Period | (7,439) | (46,774) | (7,439) | (46,774) |
Designated as Hedging Instrument | ||||
Derivative Instruments, Gain (Loss) [Roll Forward] | ||||
Amount of Gain (Loss) Recognized in AOCL | 54,674 | 16,415 | 150,041 | 78,806 |
Amount of Gain (Loss) Reclassified from AOCL into Earnings | 19,279 | 2,189 | 42,071 | 26,624 |
Designated as Hedging Instrument | Accumulated Other Comprehensive Loss | ||||
Derivative Instruments, Gain (Loss) [Roll Forward] | ||||
Balance, Beginning of Period | 16,610 | (69,177) | (55,965) | (107,133) |
Balance, End of Period | 52,005 | (54,951) | 52,005 | (54,951) |
Designated as Hedging Instrument | Interest rate swap | Cash Flow Hedges | Interest expense | ||||
Derivative Instruments, Gain (Loss) [Roll Forward] | ||||
Balance, Beginning of Period | 26,939 | (62,736) | (43,956) | (93,769) |
Amount of Gain (Loss) Recognized in AOCL | 32,939 | 2,488 | 94,729 | 21,993 |
Amount of Gain (Loss) Reclassified from AOCL into Earnings | (726) | (5,434) | (9,831) | (16,962) |
Balance, End of Period | 60,604 | (54,814) | 60,604 | (54,814) |
Designated as Hedging Instrument | Cross-currency swap | Cash Flow Hedges | Other income, net | ||||
Derivative Instruments, Gain (Loss) [Roll Forward] | ||||
Balance, Beginning of Period | (17,835) | (4,363) | (9,688) | (1,073) |
Amount of Gain (Loss) Recognized in AOCL | 12,332 | 7,045 | 33,784 | 36,270 |
Amount of Gain (Loss) Reclassified from AOCL into Earnings | 17,627 | 5,874 | 47,226 | 38,389 |
Balance, End of Period | (23,130) | (3,192) | (23,130) | (3,192) |
Designated as Hedging Instrument | Cross-currency swap | Net Investment Hedges | Interest income | ||||
Derivative Instruments, Gain (Loss) [Roll Forward] | ||||
Balance, Beginning of Period | 7,506 | (2,078) | (2,321) | (12,291) |
Amount of Gain (Loss) Recognized in AOCL | 9,403 | 6,882 | 21,528 | 20,543 |
Amount of Gain (Loss) Reclassified from AOCL into Earnings | 2,378 | 1,749 | 4,676 | 5,197 |
Balance, End of Period | $ 14,531 | $ 3,055 | $ 14,531 | $ 3,055 |
DERIVATIVE INSTRUMENTS- Schedul
DERIVATIVE INSTRUMENTS- Schedule of gain and loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative instruments not designated as hedging instruments, gain (loss), net | $ 1,346 | $ 110 | $ 2,931 | $ 218 |
Foreign currency forward contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative instruments not designated as hedging instruments, gain (loss), net | 1,162 | 117 | 1,154 | (186) |
Foreign currency swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative instruments not designated as hedging instruments, gain (loss), net | $ 184 | $ (7) | $ 1,777 | $ 404 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grants in period, net of forfeitures (in shares) | shares | 145,565 |
Options, weighted average grant date fair value (in dollars per share) | $ / shares | $ 23.15 |
Document Period End Date | Sep. 30, 2022 |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized compensation costs | $ | $ 3.9 |
Weighted-average period for cost recognition | 3 years |
Stock Options | Directors | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options exercisable, vesting period | 1 year |
Stock Options | Employees | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expiration period | 8 years |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options exercisable, vesting period | 3 years |
Total unrecognized compensation costs | $ | $ 33.6 |
Weighted-average period for cost recognition | 2 years |
Awards granted during the period (in shares) | shares | 397,333 |
Other than options, weighted average grant date fair value (in dollars per share) | $ / shares | $ 63.62 |
Performance Stock and Restricted Stock Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Requisite service periods of awards | 3 years |
Performance Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards granted during the period (in shares) | shares | 130,753 |
Other than options, weighted average grant date fair value (in dollars per share) | $ / shares | $ 65.11 |
Minimum | Stock Options | Directors and Certain Executive Officers | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expiration period | 6 years |
Maximum | Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options exercisable, vesting period | 4 years |
Maximum | Stock Options | Directors and Certain Executive Officers | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expiration period | 10 years |
RETIREMENT PLANS - Narrative (D
RETIREMENT PLANS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |||||
Net periodic benefit costs | $ 0.3 | $ 0.5 | $ 0.8 | $ 1.8 | |
Service cost component | 0.6 | $ 0.8 | 1.9 | $ 2.4 | |
Estimated fair value of plan assets | 34 | $ 34 | $ 39.9 | ||
Defer payment and taxation, base salary, percentage (up to) | 75% | ||||
Defer payment and taxation, bonus and other eligible cash compensation, percentage (up to) | 100% | ||||
Deferred compensation plan, fair value of assets | $ 4.3 | $ 4.3 | $ 3.8 |
LEASES AND RELATED PARTY LEAS_3
LEASES AND RELATED PARTY LEASES - Narrative (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 USD ($) renewal_option | Sep. 30, 2021 USD ($) | |
Operating Leased Assets [Line Items] | ||
Number of renewal options (or more) | renewal_option | 1 | |
Operating lease expense | $ 16.6 | $ 15.7 |
Affiliated Entity | ||
Operating Leased Assets [Line Items] | ||
Operating lease expense | $ 0.2 | $ 0.2 |
Percent of manufacturing facility owned by corporation whose shareholders are trusts whose beneficiaries include family members of company's former director | 50% | |
Annual rate of lease agreement | $ 0.3 | |
Affiliated Entity | Five Year Option Lease From November 1, 2029 Through October 31, 2034 | ||
Operating Leased Assets [Line Items] | ||
Option to extend lease, years | 5 years | |
Period for extended lease | November 1, 2029 through October 31, 2034 | |
Affiliated Entity | Five Year Option Lease From November 1, 2034 Through October 31, 2039 | ||
Operating Leased Assets [Line Items] | ||
Option to extend lease, years | 5 years | |
Period for extended lease | November 1, 2034 through October 31, 2039 |
LEASES AND RELATED PARTY LEAS_4
LEASES AND RELATED PARTY LEASES - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Lessee, Lease, Description [Line Items] | ||
ROU assets | $ 148,270 | $ 84,543 |
Current lease liabilities | 13,488 | 14,775 |
Non-current lease liabilities | 157,533 | 90,329 |
Total lease liabilities | $ 171,021 | $ 105,104 |
Leased facilities | ||
Lessee, Lease, Description [Line Items] | ||
Weighted average remaining lease term (in years) | 17 years 3 months 18 days | 10 years 4 months 24 days |
Weighted average discount rate | 5.30% | 5.10% |
Leased vehicles | ||
Lessee, Lease, Description [Line Items] | ||
Weighted average remaining lease term (in years) | 2 years | 2 years 1 month 6 days |
Weighted average discount rate | 2.70% | 2.60% |
LEASES AND RELATED PARTY LEAS_5
LEASES AND RELATED PARTY LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 12,804 | $ 10,942 |
ROU assets obtained in exchange for lease liabilities: | ||
Operating leases | $ 75,588 | $ 10,725 |
LEASES AND RELATED PARTY LEAS_6
LEASES AND RELATED PARTY LEASES - Future Minimum Lease Payment Under Operating Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Operating Leased Assets [Line Items] | ||
Remainder of 2022 | $ 4,186 | |
2023 | 19,198 | |
2024 | 19,731 | |
2025 | 18,310 | |
2026 | 16,920 | |
2027 | 16,069 | |
Thereafter | 165,084 | |
Total minimum lease payments | 259,498 | |
Less: Imputed interest | 88,477 | |
Total lease liabilities | 171,021 | $ 105,104 |
Less: Current lease liabilities | 13,488 | 14,775 |
Long-term lease liabilities | 157,533 | $ 90,329 |
Related Parties | ||
Operating Leased Assets [Line Items] | ||
Remainder of 2022 | 74 | |
2023 | 296 | |
2024 | 296 | |
2025 | 296 | |
2026 | 296 | |
2027 | 296 | |
Thereafter | 246 | |
Total minimum lease payments | 1,800 | |
Third Parties | ||
Operating Leased Assets [Line Items] | ||
Remainder of 2022 | 4,112 | |
2023 | 18,902 | |
2024 | 19,435 | |
2025 | 18,014 | |
2026 | 16,624 | |
2027 | 15,773 | |
Thereafter | 164,838 | |
Total minimum lease payments | $ 257,698 |
TREASURY STOCK - Narrative (Det
TREASURY STOCK - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 30, 2022 | Jan. 12, 2022 | Dec. 31, 2021 | Apr. 26, 2022 | Mar. 24, 2022 |
Equity [Abstract] | |||||
Stock repurchase program, authorized amount (up to) | $ 225 | ||||
Remaining amount under share repurchase | $ 100 | ||||
Treasury stock (in shares) | 6,823,000 | 4,899,000 | |||
Treasury stock | $ 362.9 | $ 234.4 | |||
Treasury stock, average cost per share (in dollars per share) | $ 53.18 | $ 47.86 | |||
Accelerated share repurchase program, receipt (payment) | $ 125 | ||||
Accelerated share repurchases, shares received at inception | 1,480,000 | ||||
Accelerated share repurchases, percentage of expected total repurchased | 80% | ||||
Accelerated share repurchases, additional shares received | 460,000 |
INCOME TAXES - Summary of Effec
INCOME TAXES - Summary of Effective Tax Rate (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Reported tax rate | 15.10% | 14.90% | 14.80% | 24.10% |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 15.10% | 14.90% | 14.80% | 24.10% |
Effective income tax rate reconciliation, prior year income taxes, amount | $ (1,200) | |||
Benefit related to excess tax benefits from stock compensation | $ 5,500 |
NET INCOME PER SHARE - Basic an
NET INCOME PER SHARE - Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Basic net income per share: | ||||||||
Net income | $ 49,915 | $ 44,788 | $ 32,901 | $ 43,229 | $ 35,068 | $ 45,394 | $ 127,604 | $ 123,691 |
Weighted average common shares outstanding - Basic (in shares) | 83,042 | 84,754 | 82,955 | 84,647 | ||||
Basic net income per common share (in dollars per share) | $ 0.60 | $ 0.51 | $ 1.54 | $ 1.46 | ||||
Diluted net income per share: | ||||||||
Net income | $ 49,915 | $ 44,788 | $ 32,901 | $ 43,229 | $ 35,068 | $ 45,394 | $ 127,604 | $ 123,691 |
Weighted average common shares outstanding - Basic (in shares) | 83,042 | 84,754 | 82,955 | 84,647 | ||||
Effect of dilutive securities: | ||||||||
Stock options and restricted stock (in shares) | 357 | 693 | 521 | 744 | ||||
Weighted average common shares for diluted earnings per share (in shares) | 83,399 | 85,447 | 83,476 | 85,391 | ||||
Diluted net income per common share (in dollars per share) | $ 0.60 | $ 0.51 | $ 1.53 | $ 1.45 |
NET INCOME PER SHARE - Narrativ
NET INCOME PER SHARE - Narrative (Details) - shares shares in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||
Shares excluded from computation as their effect would be antidilutive (in shares) | 0.3 | 0.1 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS - Schedule of Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Equity [Abstract] | ||||||||
Net income | $ 49,915 | $ 44,788 | $ 32,901 | $ 43,229 | $ 35,068 | $ 45,394 | $ 127,604 | $ 123,691 |
Foreign currency translation adjustment | (21,392) | (7,815) | (45,142) | (13,058) | ||||
Change in unrealized gain (loss) on derivatives, net of tax | 27,213 | 10,964 | 82,957 | 40,075 | ||||
Pension liability adjustment, net of tax | (45) | 39 | (99) | 267 | ||||
Comprehensive income, net | $ 55,691 | $ 46,417 | $ 165,320 | $ 150,975 |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE LOSS - Schedule of Changes in Accumulated Other Comprehensive Income by Component (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance, Beginning of Period | $ 1,660,917 | $ 1,615,197 | $ 1,684,804 | $ 1,574,981 | $ 1,529,331 | $ 1,514,867 | $ 1,684,804 |
Other comprehensive gain (loss) | 70,057 | ||||||
Less: Amounts reclassified from accumulated other comprehensive income, net | 32,341 | ||||||
Net current-period other comprehensive gain (loss) | 5,776 | 7,810 | 24,130 | 3,189 | (6,336) | 30,432 | 37,716 |
Balance, End of Period | 1,724,414 | 1,660,917 | 1,615,197 | 1,631,687 | 1,574,981 | 1,529,331 | 1,724,414 |
Total | |||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance, Beginning of Period | (13,215) | (21,025) | (45,155) | (49,963) | (43,627) | (74,059) | (45,155) |
Net current-period other comprehensive gain (loss) | 5,776 | 7,810 | 24,130 | 3,189 | (6,336) | 30,432 | |
Balance, End of Period | (7,439) | $ (13,215) | (21,025) | $ (46,774) | $ (49,963) | $ (43,627) | (7,439) |
Gains and Losses on Derivatives | |||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance, Beginning of Period | (42,981) | (42,981) | |||||
Other comprehensive gain (loss) | 115,298 | ||||||
Less: Amounts reclassified from accumulated other comprehensive income, net | 32,341 | ||||||
Net current-period other comprehensive gain (loss) | 82,957 | ||||||
Balance, End of Period | 39,976 | 39,976 | |||||
Defined Benefit Pension Items | |||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance, Beginning of Period | 1,893 | 1,893 | |||||
Other comprehensive gain (loss) | (99) | ||||||
Less: Amounts reclassified from accumulated other comprehensive income, net | 0 | ||||||
Net current-period other comprehensive gain (loss) | (99) | ||||||
Balance, End of Period | 1,794 | 1,794 | |||||
Foreign Currency Items | |||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||||
Balance, Beginning of Period | $ (4,067) | (4,067) | |||||
Other comprehensive gain (loss) | (45,142) | ||||||
Less: Amounts reclassified from accumulated other comprehensive income, net | 0 | ||||||
Net current-period other comprehensive gain (loss) | (45,142) | ||||||
Balance, End of Period | $ (49,209) | $ (49,209) |
ACCUMULATED OTHER COMPREHENSI_5
ACCUMULATED OTHER COMPREHENSIVE LOSS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Other income, net | $ 2,648 | $ 4,985 | $ 8,056 | $ 14,888 |
Investment Income, Interest | $ (3,264) | $ (1,786) | (6,606) | $ (5,298) |
Gains and Losses on Derivatives | Reclassification out of Accumulated Other Comprehensive Income | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Other income, net | 36,300 | |||
Investment Income, Interest | $ 4,000 |
SEGMENT AND GEOGRAPHIC INFORM_3
SEGMENT AND GEOGRAPHIC INFORMATION - Narrative (Details) product in Thousands | 9 Months Ended |
Sep. 30, 2022 Segment product | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | Segment | 2 |
Codman Specialty Surgical | |
Segment Reporting Information [Line Items] | |
Number of products offered (more than) | product | 40 |
SEGMENT AND GEOGRAPHIC INFORM_4
SEGMENT AND GEOGRAPHIC INFORMATION - Net Sales and Profit by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Net Sales | ||||
Revenue from contract with customer, excluding assessed tax | $ 385,191 | $ 386,861 | $ 1,159,644 | $ 1,136,924 |
Segment Profit | ||||
Amortization | (3,141) | (4,113) | (10,339) | (12,838) |
Operating income | 65,049 | 56,439 | 171,080 | 139,007 |
Operating Segments | ||||
Segment Profit | ||||
Operating income | 165,471 | 168,416 | 483,346 | 503,614 |
Corporate and other | ||||
Segment Profit | ||||
Operating income | (97,281) | (107,864) | (301,927) | (351,769) |
Codman Specialty Surgical | ||||
Segment Net Sales | ||||
Revenue from contract with customer, excluding assessed tax | 249,796 | 256,497 | 754,967 | 754,575 |
Codman Specialty Surgical | Operating Segments | ||||
Segment Profit | ||||
Operating income | 105,717 | 110,686 | 308,073 | 331,460 |
Tissue Technologies | ||||
Segment Net Sales | ||||
Revenue from contract with customer, excluding assessed tax | 135,395 | 130,364 | 404,677 | 382,349 |
Tissue Technologies | Operating Segments | ||||
Segment Profit | ||||
Operating income | $ 59,754 | $ 57,730 | $ 175,273 | $ 172,154 |
SEGMENT AND GEOGRAPHIC INFORM_5
SEGMENT AND GEOGRAPHIC INFORMATION - Total Revenue by Major Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | $ 385,191 | $ 386,861 | $ 1,159,644 | $ 1,136,924 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | 282,016 | 275,775 | 832,714 | 801,754 |
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | 38,301 | 46,458 | 128,907 | 140,714 |
Asia Pacific | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | 42,774 | 45,015 | 133,856 | 136,616 |
Rest of World | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | $ 22,100 | $ 19,613 | $ 64,167 | $ 57,840 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Fair Value Contingent Consideration, Balance Information (Details) - Contingent Consideration Liability - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Arkis | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance, End of Period | $ 12,400 | $ 14,600 |
Arkis | Short-term | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance, Beginning of Period | 3,691 | 3,415 |
Additions from acquisition of ACell | 0 | |
Transfers | 0 | (3,415) |
Change in fair value of contingent consideration liabilities | (862) | 0 |
Balance, End of Period | 2,829 | 0 |
Arkis | Long-term | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance, Beginning of Period | 11,408 | 11,746 |
Additions from acquisition of ACell | 0 | |
Transfers | 0 | 3,415 |
Change in fair value of contingent consideration liabilities | (1,819) | (544) |
Balance, End of Period | 9,589 | 14,617 |
Derma Sciences | Long-term | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance, Beginning of Period | 230 | 230 |
Additions from acquisition of ACell | 0 | |
Transfers | 0 | 0 |
Change in fair value of contingent consideration liabilities | 0 | 0 |
Balance, End of Period | 230 | 230 |
ACell | Short-term | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance, Beginning of Period | 0 | |
Transfers | 4,885 | |
Change in fair value of contingent consideration liabilities | (4,885) | |
Balance, End of Period | 0 | |
ACell | Long-term | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance, Beginning of Period | 21,800 | 0 |
Additions from acquisition of ACell | 23,900 | |
Transfers | (4,885) | 0 |
Change in fair value of contingent consideration liabilities | (11,915) | (900) |
Balance, End of Period | $ 5,000 | $ 23,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Narrative (Details) | 9 Months Ended | ||||
Jul. 29, 2019 USD ($) | Sep. 30, 2022 USD ($) liability | Dec. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Arkis | |||||
Loss Contingencies [Line Items] | |||||
Purchase price of business combination | $ 30,600,000 | ||||
Contingent consideration, estimated fair value | 25,500,000 | ||||
Contingent consideration | 13,100,000 | ||||
Arkis | Fair Value, Inputs, Level 3 | Contingent Consideration Liability | |||||
Loss Contingencies [Line Items] | |||||
Fair value | $ 12,400,000 | $ 14,600,000 | |||
Arkis | Long-term | Fair Value, Inputs, Level 3 | Contingent Consideration Liability | |||||
Loss Contingencies [Line Items] | |||||
Fair value | 9,589,000 | $ 11,408,000 | 14,617,000 | $ 11,746,000 | |
Arkis | Accrued expenses and other current liabilities | Fair Value, Inputs, Level 3 | Contingent Consideration Liability | |||||
Loss Contingencies [Line Items] | |||||
Fair value | $ 2,800,000 | ||||
Arkis | Development Milestones | |||||
Loss Contingencies [Line Items] | |||||
Contingent consideration, estimated fair value | 10,000,000 | ||||
Arkis | Commercial Sales Milestones | |||||
Loss Contingencies [Line Items] | |||||
Contingent consideration, estimated fair value | $ 15,500,000 | ||||
Derma Sciences | |||||
Loss Contingencies [Line Items] | |||||
Number of contingent liabilities remaining | liability | 1 | ||||
Contingent consideration, maximum undiscounted payment amount | $ 3,000,000 | ||||
Derma Sciences | Fair Value, Inputs, Level 3 | |||||
Loss Contingencies [Line Items] | |||||
Contingent consideration, estimated fair value | 200,000 | 200,000 | |||
Derma Sciences | Long-term | Fair Value, Inputs, Level 3 | Contingent Consideration Liability | |||||
Loss Contingencies [Line Items] | |||||
Fair value | 230,000 | $ 230,000 | $ 230,000 | $ 230,000 | |
Derma Sciences | BioD Earnout Payments and Medihoney Earnout Payments | |||||
Loss Contingencies [Line Items] | |||||
Payment for contingent consideration | $ 33,300,000 |
Uncategorized Items - iart-2022
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2020-06 [Member] |