Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 08, 2016 | Jun. 30, 2015 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | NUVASIVE INC | ||
Entity Central Index Key | 1,142,596 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | NUVA | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 2.3 | ||
Entity Common Stock, Shares Outstanding | 49,691,101 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 192,339 | $ 142,387 |
Short-term marketable securities | 165,423 | 220,329 |
Accounts receivable, net of allowances of $5,320 and $5,844, respectively | 127,595 | 118,959 |
Inventory, net | 168,140 | 154,638 |
Prepaid income taxes | 40,540 | 11,321 |
Prepaid expenses and other current assets | 8,790 | 10,325 |
Total current assets | 702,827 | 657,959 |
Property and equipment, net | 141,441 | 128,565 |
Long-term marketable securities | 112,332 | 43,042 |
Intangible assets, net | 85,076 | 96,555 |
Goodwill | 154,281 | 154,443 |
Deferred tax assets, non-current | 67,051 | 111,354 |
Restricted cash and investments | 5,615 | 123,233 |
Other assets | 21,026 | 26,420 |
Total assets | 1,289,649 | 1,341,571 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 60,986 | 133,324 |
Accrued payroll and related expenses | 37,641 | 38,032 |
Litigation liabilities | 30,000 | |
Income tax liabilities | 990 | 12,740 |
Total current liabilities | 99,617 | 214,096 |
Senior convertible notes | 376,542 | 360,746 |
Deferred and income tax liabilities, non-current | 8,602 | 11,441 |
Non-current litigation liabilities | 88,261 | 93,700 |
Other long-term liabilities | $ 14,425 | $ 13,230 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized, none outstanding | ||
Common stock, $0.001 par value; 120,000,000 shares authorized at December 31, 2015 and 2014, respectively, 52,616,471 and 47,691,744 issued and outstanding at December 31, 2015 and 2014, respectively | $ 53 | $ 48 |
Additional paid-in capital | 989,387 | 847,145 |
Accumulated other comprehensive loss | (12,112) | (9,670) |
Accumulated deficit | (120,647) | (186,938) |
Treasury stock at cost; 3,316,794 shares and 233,369 shares at December 31, 2015 and December 31, 2014, respectively | (161,788) | (10,537) |
Total NuVasive, Inc. stockholders’ equity | 694,893 | 640,048 |
Non-controlling interests | 7,309 | 8,310 |
Total equity | 702,202 | 648,358 |
Total liabilities and equity | $ 1,289,649 | $ 1,341,571 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 5,320 | $ 5,844 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, shares issued | 52,616,471 | 47,691,744 |
Common stock, shares outstanding | 52,616,471 | 47,691,744 |
Treasury stock at cost, shares | 3,316,794 | 233,369 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | |||
Revenue | $ 811,113 | $ 762,415 | $ 685,173 |
Cost of goods sold (excluding below amortization of intangible assets) | 194,479 | 182,358 | 180,484 |
Gross profit | 616,634 | 580,057 | 504,689 |
Operating expenses: | |||
Sales, marketing and administrative | 464,530 | 468,285 | 420,064 |
Research and development | 35,851 | 37,986 | 32,209 |
Amortization of intangible assets | 12,516 | 13,571 | 19,326 |
Impairment of intangible assets | 10,708 | ||
Litigation liability (gain) loss | (41,826) | 30,000 | |
Business transition costs | 6,480 | 1,363 | |
Total operating expenses | 477,551 | 561,913 | 471,599 |
Interest and other expense, net: | |||
Interest income | 1,589 | 968 | 755 |
Interest expense | (29,078) | (27,911) | (27,178) |
Other income (expense), net | 425 | (2,411) | 3,101 |
Total interest and other expense, net | (27,064) | (29,354) | (23,322) |
Income (loss) before income taxes | 112,019 | (11,210) | 9,768 |
Income tax expense | (46,729) | (6,286) | (2,783) |
Consolidated net income (loss) | 65,290 | (17,496) | 6,985 |
Add back net loss attributable to non-controlling interests | (1,001) | (776) | (917) |
Net income (loss) attributable to NuVasive, Inc. | $ 66,291 | $ (16,720) | $ 7,902 |
Net income (loss) per share attributable to NuVasive, Inc.: | |||
Basic | $ 1.36 | $ (0.36) | $ 0.18 |
Diluted | $ 1.26 | $ (0.36) | $ 0.17 |
Weighted average shares outstanding: | |||
Basic | 48,687 | 46,715 | 44,461 |
Diluted | 52,424 | 46,715 | 46,786 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Consolidated net income (loss) | $ 65,290 | $ (17,496) | $ 6,985 |
Other comprehensive loss: | |||
Unrealized loss on marketable securities, net of tax | (344) | (161) | (27) |
Translation adjustments, net of tax | (2,098) | (6,271) | (3,997) |
Other comprehensive loss: | (2,442) | (6,432) | (4,024) |
Total consolidated comprehensive income (loss) | 62,848 | (23,928) | 2,961 |
Net loss attributable to non-controlling interests | 1,001 | 776 | 917 |
Comprehensive income (loss) attributable to NuVasive, Inc. | $ 63,849 | $ (23,152) | $ 3,878 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] | Nuvasive, Inc. Stockholders’ Equity [Member] | Non-controlling Interest [Member] |
Beginning Balance at Dec. 31, 2012 | $ 537,575 | $ 44 | $ 714,865 | $ 786 | $ (178,120) | $ 537,575 | ||
Beginning Balance, Shares at Dec. 31, 2012 | 43,686 | |||||||
Issuance of common stock under employee and director stock option and purchase plans | 8,422 | $ 1 | 8,421 | 8,422 | ||||
Issuance of common stock under employee and director stock option and purchase plans, Shares | 1,257 | |||||||
Stock-based compensation expense | 33,240 | 33,240 | 33,240 | |||||
Tax benefits related to stock-based compensation awards | 12,677 | 12,677 | 12,677 | |||||
Reclassification of non-controlling interest from mezzanine to equity | 9,489 | $ 9,489 | ||||||
Net income (loss) attributable to NuVasive, Inc. | 7,902 | 7,902 | 7,902 | |||||
Net loss attributable to non-controlling interests | (403) | (403) | ||||||
Other comprehensive loss | (4,024) | (4,024) | (4,024) | |||||
Ending Balance at Dec. 31, 2013 | 604,878 | $ 45 | 769,203 | (3,238) | (170,218) | 595,792 | 9,086 | |
Ending Balance, Shares at Dec. 31, 2013 | 44,943 | |||||||
Issuance of common stock under employee and director stock option and purchase plans | 19,572 | $ 3 | 30,106 | $ (10,537) | 19,572 | |||
Issuance of common stock under employee and director stock option and purchase plans, Shares | 2,660 | (233) | ||||||
Stock-based compensation expense | 33,687 | 33,687 | 33,687 | |||||
Tax benefits related to stock-based compensation awards | 10,988 | 10,988 | 10,988 | |||||
Issuance of common stock in connection with contingent consideration | 3,161 | 3,161 | 3,161 | |||||
Issuance of common stock in connection with contingent consideration shares | 88 | |||||||
Net income (loss) attributable to NuVasive, Inc. | (16,720) | (16,720) | (16,720) | |||||
Net loss attributable to non-controlling interests | (776) | (776) | ||||||
Other comprehensive loss | (6,432) | (6,432) | (6,432) | |||||
Ending Balance at Dec. 31, 2014 | 648,358 | $ 48 | 847,145 | (9,670) | (186,938) | $ (10,537) | 640,048 | 8,310 |
Ending Balance, Shares at Dec. 31, 2014 | 47,691 | (233) | ||||||
Issuance of common stock under employee and director stock option and purchase plans | (44,812) | $ 5 | 106,434 | $ (151,251) | (44,812) | |||
Issuance of common stock under employee and director stock option and purchase plans, Shares | 4,925 | (3,083) | ||||||
Stock-based compensation expense | 25,364 | 25,364 | 25,364 | |||||
Tax benefits related to stock-based compensation awards | 10,444 | 10,444 | 10,444 | |||||
Net income (loss) attributable to NuVasive, Inc. | 66,291 | 66,291 | 66,291 | |||||
Net loss attributable to non-controlling interests | (1,001) | (1,001) | ||||||
Other comprehensive loss | (2,442) | (2,442) | (2,442) | |||||
Ending Balance at Dec. 31, 2015 | $ 702,202 | $ 53 | $ 989,387 | $ (12,112) | $ (120,647) | $ (161,788) | $ 694,893 | $ 7,309 |
Ending Balance, Shares at Dec. 31, 2015 | 52,616 | (3,316) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating activities: | |||
Consolidated net income (loss) | $ 65,290 | $ (17,496) | $ 6,985 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 65,915 | 65,837 | 63,106 |
Deferred income tax expense (benefit) | 34,757 | (23,231) | (11,341) |
Amortization of non-cash interest | 17,851 | 16,490 | 15,336 |
Stock-based compensation | 26,203 | 33,687 | 33,240 |
Impairment of intangible assets | 10,708 | ||
Reserves on current assets | 9,454 | 1,856 | 7,468 |
Other non-cash adjustments | 17,581 | 13,191 | 7,116 |
Changes in operating assets and liabilities, net of effects from acquisitions: | |||
Accounts receivable | (9,463) | (18,465) | (17,384) |
Inventory | (25,984) | (21,343) | (21,002) |
Prepaid expenses and other current assets | 1,239 | (5,183) | (3,608) |
Accounts payable and accrued liabilities | 7,742 | 5,855 | 4,665 |
Accrued payroll and related expenses | (192) | 7,179 | 3,220 |
Accrued royalties | (46,092) | 12,410 | 19,106 |
Litigation liability | (36,270) | 30,000 | (7,500) |
Income taxes | (39,304) | 4,053 | (1,968) |
Net cash provided by operating activities | 88,727 | 115,548 | 97,439 |
Investing activities: | |||
Acquisitions and other investments | (1,357) | (500) | (2,987) |
Purchases of intangible assets | (32,020) | (11,831) | |
Proceeds from sales of property and equipment | 40 | 241 | |
Purchases of property and equipment | (75,772) | (58,424) | (47,597) |
Purchases of marketable securities | (427,945) | (217,158) | (218,454) |
Proceeds from marketable securities | 411,471 | 174,816 | 216,299 |
Purchases of restricted investments | (62,625) | (3,800) | |
Proceeds from restricted investments | 180,694 | ||
Net cash used in investing activities | (7,514) | (104,825) | (64,570) |
Financing activities: | |||
Principal payment of 2013 Senior Convertible Notes | (74,311) | ||
Incremental tax benefits related to stock-based compensation awards | 15,185 | 11,896 | 13,569 |
Proceeds from the issuance of common stock | 12,106 | 23,354 | 8,422 |
Payment of contingent consideration | (514) | (498) | |
Purchase of treasury stock | (56,929) | (3,782) | |
Other financing activities | (192) | (693) | (162) |
Net cash (used in) provided by financing activities | (30,344) | 30,277 | (52,482) |
Effect of exchange rate changes on cash | (917) | (1,438) | (861) |
Increase (decrease) in cash and cash equivalents | 49,952 | 39,562 | (20,474) |
Cash and cash equivalents at beginning of year | 142,387 | 102,825 | 123,299 |
Cash and cash equivalents at end of year | 192,339 | 142,387 | 102,825 |
Supplemental disclosure of non-cash transactions: | |||
Intangible asset purchase | 27,389 | ||
Issuance of common stock for contingent consideration and asset acquisitions | 3,161 | ||
Supplemental cash flow information: | |||
Interest paid | 11,069 | 11,069 | 12,035 |
Income taxes paid | $ 36,303 | $ 13,640 | $ 3,196 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Significant Accounting Policies | 1. Organization and Significant Accounting Policies Description of Business NuVasive, Inc. (the “Company” or “NuVasive”) was incorporated in Delaware on July 21, 1997, and began commercializing its products in 2001. The Company’s principal product offering includes a minimally-disruptive surgical platform called Maximum Access Surgery, or MAS. The MAS platform combines three categories of solutions that collectively minimize soft tissue disruption during spine fusion surgery, provide maximum visualization and are designed to enable safe and reproducible outcomes for the surgeon and the patient. The platform includes our proprietary software-driven nerve detection and avoidance systems, NVM5, and Intraoperative Monitoring (“IOM”), services and support; MaXcess, an integrated split-blade retractor system; and a wide variety of specialized implants and biologics. The Company also recently launched Integrated Global Alignment (“iGA”), in which products and computer assisted technology under the MAS platform help achieve more precise spinal alignment. The individual components of the MAS platform, and many of the Company’s products, can also be used in open or traditional spine surgery. The Company continues to focus research and development efforts to expand its MAS product platform and advance the applications of its unique technology into procedurally-integrated surgical solutions. The Company dedicates significant resources toward training spine surgeons on its unique technology and products. The Company’s primary business model is to loan its MAS systems to surgeons and hospitals that purchase implants, biologics and disposables for use in individual procedures. In addition, for larger customers, the Company’s proprietary nerve monitoring systems, MaXcess and surgical instrument sets are placed with hospitals for an extended period at no up-front cost to them. The Company also offers a range of bone allograft in patented saline packaging, disposables and spine implants, which include its branded CoRoent ® On February 11, 2016, the Company completed the acquisition of Ellipse Technologies, Inc. (“Ellipse Technologies”). Refer to Note 13 to the Consolidated Financial Statements included in this Annual Report for further discussion on the acquisition of Ellipse Technologies. Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its majority-owned or controlled subsidiaries, collectively referred to as either NuVasive or the Company. The Company translates the financial statements of its foreign subsidiaries using end-of-period exchange rates for assets and liabilities and average exchange rates during each reporting period for results of operations. When there is a portion of equity in an acquired subsidiary not attributable, directly or indirectly, to the respective parent entity, the Company records the fair value of the non-controlling interests at the acquisition date and classifies the amounts attributable to non-controlling interests separately in equity in the Company's Consolidated Financial Statements. Any subsequent changes in a parent's ownership interest while the parent retains its controlling financial interest in its subsidiary are accounted for as equity transactions. All significant intercompany balances and transactions have been eliminated in consolidation. Reclassification of prior period amounts to conform to current period presentation does not affect any content or total of prior period financial statements. Use of Estimates To prepare financial statements in conformity with generally accepted accounting principles (“GAAP”) accepted in the United States, management must make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Recent Accounting Pronouncements Not Yet Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update No. 2014-09, , (“ASU 2014-09”) an updated standard on revenue recognition. ASU 2014-09 provides enhancements to the quality and consistency of how revenue is reported by companies while also improving comparability in the financial statements of companies reporting using International Financial Reporting Standards or GAAP. The main purpose of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which a company expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively and improve guidance for multiple-element arrangements. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which deferred the effective date of the new revenue standard for periods beginning after December 15, 2016 to December 15, 2017, with early adoption permitted but not earlier than the original effective date. Accordingly, the updated standard is effective for the Company in the first quarter of fiscal 2018. The Company is evaluating the impact of implementation and transition approach of this standard on its financial statements but does not anticipate a material impact on its financial statements. In April 2014, the FASB issued ASU No. 2015-03 amended requirements that require debt issuance costs, related to a recognized debt liability, to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The Company will apply the amended presentation requirements on January 1, 2016 and does not expect a material impact on its financial statements. Recently Adopted Accounting Standards On November 20, 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, requiring all deferred tax assets and liabilities, and any related valuation allowance, to be classified as non-current on the balance sheet. The Company elected to adopt the accounting standard in the fourth quarter of 2015 with prior periods in the Consolidated Financial Statements retrospectively adjusted. Upon adoption of ASU 2015-17, current deferred tax assets of $22.0 million and current deferred tax liabilities of $0.8 million in the December 31, 2015 consolidated balance sheet were reclassified as non-current. Additionally, current deferred tax assets of $47.9 million and current deferred tax liabilities of $0.8 million in the December 31, 2014 consolidated balance sheet were reclassified as non-current. Revenue Recognition In accordance with the Securities and Exchange Commission’s guidance, the Company recognizes revenue when all four of the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) delivery of the products and/or services has occurred; (iii) the selling price is fixed or determinable; and (iv) collectability is reasonably assured. Specifically, revenue from the sale of implants, biologics and disposables is generally recognized upon acknowledgment of a purchase order from the hospital indicating product use or implantation or upon shipment to third-party customers who immediately accept title. Revenue from the sale of instrument sets is recognized upon receipt of a purchase order and the subsequent shipment to customers who immediately accept title. Accounts Receivable and Related Valuation Accounts Accounts receivable in the accompanying consolidated balance sheets are presented net of allowances for doubtful accounts. In addition, the Company establishes a reserve for estimated sales returns and price adjustments that is recorded as a reduction to revenue. This reserve is maintained to account for the future return and price adjustments of products sold in the current period. Concentration of Credit Risk and Significant Customers Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents, short-term and long-term marketable securities and accounts receivable. The Company limits its exposure to credit loss by placing its cash and investments with high credit quality financial institutions. Additionally, the Company has established guidelines regarding diversification of its investments and their maturities, which are designed to maintain principal and maximize liquidity. Additionally, the Company has a diverse customer base and no single customer represented greater than ten percent of sales or accounts receivable for any of the periods presented. Fair Value of Financial Instruments The Company’s financial instruments consist principally of cash and cash equivalents, marketable securities, restricted investments, derivatives, contingent considerations, accounts receivable, accounts payable, accrued expenses, and Senior Convertible Notes. The Company measures certain assets and liabilities in accordance with authoritative guidance which requires fair value measurements to be classified and disclosed in one of the following three categories: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain assets or liabilities within the fair value hierarchy. The Company did not have any transfers of assets and liabilities between the levels of the fair value measurement hierarchy during the years presented. Cash and Cash Equivalents The Company considers all highly liquid investments that are readily convertible into cash and have an original maturity of three months or less at the time of purchase to be cash equivalents. Marketable Securities The Company defines marketable securities as income yielding securities that can be readily converted into cash. Marketable securities consist of certificates of deposit, corporate notes, commercial paper, U.S. government treasury securities, and securities of government-sponsored entities. The Company classifies all such securities as available-for-sale as the sale of such securities may be required prior to maturity to implement management strategies. These securities are carried at fair value with the unrealized gains and losses reported as a component of other comprehensive income in equity until realized. Realized gains and losses and declines in value judged to be other-than-temporary, if any, on available-for-sale securities are included in other income or expense on the Consolidated Statements of Operations and a new accounting cost basis for the security is established in the period in which it occurs. The Company reviews its investments if there is an indicator of possible other-than-temporary impairment. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the investee, and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the straight-line method and are included in interest income on the Consolidated Statements of Operations. Interest and dividends on securities classified as available-for-sale are also included in interest income on the Consolidated Statements of Operations. Realized gains and losses from the sale of marketable securities, if any, are determined on a specific identification basis. Realized gains and losses and interest income related to marketable securities were immaterial during all periods presented. The Company maintains an investment policy that requires a diversified investment portfolio in terms of types, maturities, and credit exposure, and invests with institutions that have high credit quality. Annually, the Company reassesses the investment policy to ensure it is reflective of current markets and conditions. The Company does not currently hold financial instruments for speculative purposes. Derivatives The Company maintains a foreign currency risk management strategy that uses derivative instruments to protect against fluctuations in earnings and cash flows that may rise from volatility in currency exchange rates. The Company uses foreign currency forward exchange contracts to hedge the currency exchange rate exposure from short-term intercompany receivables and payables denominated in a currency other than the reporting entity’s functional currency. Realized and unrealized gains or losses forward contracts are included in the determination of net income as the forward contracts are not designated for hedge accounting under ASC Topic 815, Derivatives and Hedging. Inventory Inventory consists primarily of purchased finished goods, which includes specialized implants and disposables, and is stated at the lower of cost or market determined by utilizing a standard cost method which approximates the weighted average cost. The Company reviews the components of its inventory on a periodic basis for excess and obsolescence and records a reserve for the identified items. At December 31, 2015 and 2014, the balance of the allowance for excess and obsolete inventory is $32.7 million and $22.6 million, respectively. Goodwill and Intangible Assets The Company’s goodwill represents the excess of the cost over the fair value of net assets acquired from its business combinations. The determination of the value of goodwill and intangible assets arising from business combinations and asset acquisitions requires extensive use of accounting estimates and judgments to allocate the purchase price to the fair value of the net tangible and intangible assets acquired, including capitalized Intangible assets acquired in a business combination that are used for in-process research and development activities are considered indefinite lived until the completion or abandonment of the associated research and development efforts. Upon reaching the end of the relevant research and development project, the Company will amortize the acquired IPR&D over its estimated useful life or expense the acquired in-process research and development should the research and development project be unsuccessful with no future alternative use. Goodwill and IPR&D are not amortized; however, they are assessed for impairment using fair value measurement techniques on an annual basis or more frequently if facts and circumstance warrant such a review. The goodwill or IPR&D are considered to be impaired if we determine that the carrying value of the reporting unit or IPR&D exceeds its respective fair value. The Company performs its goodwill impairment analysis at the reporting unit level, which aligns with the Company’s reporting structure and availability of discrete financial information. If a qualitative assessment is performed the evaluation includes management estimates of cash flow projections based on internal future projections . Key assumptions for these projections include revenue growth, future gross and operating margin growth, and its weighted cost of capital and terminal growth rates. The revenue and margin growth is based on increased sales of new and existing products as we maintain our investment in research and development. Additional assumed value creators may include increased efficiencies from capital spending. The resulting cash flows are discounted using a weighted average cost of capital. Operating mechanisms and requirements to ensure that growth and efficiency assumptions will ultimately be realized are also considered in the evaluation, including timing and probability of regulatory approvals for Company products to be commercialized. The Company’s market capitalization is also considered as a part of its analysis. The Company’s annual evaluation for impairment of goodwill consists of two reporting units; the Progentix reporting unit and the remainder of the Company (the “primary reporting unit”). In accordance with our policy, we completed our most recent annual evaluation for impairment as of October 1, 2015 and determined that no impairment existed, and it was determined that no reporting unit of the Company was at risk of impairment when assessing the unit’s fair value compared to its carrying value. In addition, no indicators of impairments were noted through December 31, 2015 and consequently, no impairment charge has been recorded during the year. Intangible assets with a finite life, such as acquired technology, customer relationships, manufacturing know-how, licensed technology, supply agreements and certain trade names and trademarks, are amortized on a straight-line basis over their estimated useful life, ranging from 1 to 17 years. Intangible assets with a finite life are tested for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. In determining the useful lives of intangible assets, the Company considers the expected use of the assets and the effects of obsolescence, demand, competition, anticipated technological advances, changes in surgical techniques, market influences and other economic factors. For technology based intangible assets, the Company considers the expected life cycles of products which incorporate the corresponding technology. Trademarks and trade names that are related to products are assigned lives consistent with the period in which the products bearing each brand are expected to be sold. See Note 2 to the Consolidated Financial Statements included in this Annual Report for further discussion on goodwill and intangible assets. Property and Equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, ranging from 2 to 20 years. The Company depreciates leasehold improvements over their estimated useful lives or the term of the applicable lease, whichever is shorter. Leased property meeting certain capital lease criteria is capitalized, and the net present value of the related lease payments is recorded as a liability. Amortization of assets under capital leases is recorded using the straight-line method over the shorter of the estimated useful lives or the lease terms. The Company reviews property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated future undiscounted cash flows relating to the asset are less than its carrying amount. An impairment loss is measured as the amount by which the carrying amount of an asset exceeds its fair value. Income Taxes The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Tax law and rate changes are reflected in income in the period such changes are enacted. The Company includes interest and penalties related to income taxes, including unrecognized tax benefits, within income tax expense. The Company’s income tax returns are based on calculations and assumptions that are subject to examination by the Internal Revenue Service and other tax authorities. In addition, the calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While the Company believes it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcomes of examinations by tax authorities in determining the adequacy of its provision for income taxes. The Company continually assesses the likelihood and amount of potential adjustments and adjusts the income tax provision, income taxes payable and deferred taxes in the period in which the facts that give rise to a revision become known. The Company recognizes windfall tax benefits associated with share-based awards directly to stockholders’ equity when realized. A windfall tax benefit occurs when the actual tax benefit realized by the Company upon an employee’s disposition of a share-based award exceeds the deferred tax asset, if any, associated with the award that the Company had recorded. When assessing whether excess tax benefits relating to share-based compensation have been realized, the Company follows the with-and-without approach excluding any indirect effects of the excess tax deductions. Under this approach, excess tax benefits related to share-based compensation are not deemed to be realized until after the utilization of all other tax benefits available to the Company. Significant judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and the valuation allowance recorded against our net deferred tax assets. Deferred tax assets and liabilities are determined using the enacted tax rates in effect for the years in which those tax assets are expected to be realized. A valuation allowance is established when it is more likely than not the future realization of all or some of the deferred tax assets will not be achieved. The evaluation of the need for a valuation allowance is performed on a jurisdiction-by-jurisdiction basis, and includes a review of all available positive and negative evidence. Factors reviewed include projections of pre-tax book income for the foreseeable future, determination of cumulative pre-tax book income after permanent differences, earnings history, and reliability of forecasting. See Note 9 to the Consolidated Financial Statements included in this Annual Report for further discussion on income taxes. Loss Contingencies An estimated loss contingency is accrued in the Company’s financial statements if it is probable or reasonably possible that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on the Company’s assessment, it has adequately accrued an amount for contingent liabilities currently in existence. The Company does not accrue amounts for liabilities that it does not believe are probable or that it considers immaterial to its overall financial position. In most cases, significant judgment is required to estimate the amount and timing of a loss to be recorded. The Company is involved in a number of legal actions arising out of the normal course of our business. The outcomes of these legal actions are not within the Company’s complete control and may not be known for prolonged periods of time. In some actions, the claimants seek damages as well as other relief, including injunctions barring the sale of products that are the subject of the lawsuit, that could require significant expenditures or result in lost revenues. Litigation is inherently unpredictable, and unfavorable resolutions could occur. As a result, assessing contingencies is highly subjective and requires judgment about future events. The amount of ultimate loss may exceed the Company’s current accruals, and it is possible that its cash flows or results of operations could be materially affected in any particular period by the unfavorable resolution of one or more of these contingencies. See Note 11 to the Consolidated Financial Statements included in this Annual Report for further discussion on legal proceedings. Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Comprehensive income (loss) includes net of tax, unrealized gains or losses on the Company’s marketable securities and foreign currency translation adjustments. The cumulative translation adjustments included in accumulated other comprehensive loss were $11.6 million, $9.5 million, and $3.3 million at December 31, 2015, 2014, and 2013, respectively. Research and Development Research and development costs are expensed as incurred. To the extent the Company purchases research and development assets with a future alternative use the Company will capitalize and amortize the assets over its useful life. Product Shipment Costs Product shipment costs are included in sales, marketing and administrative expense in the accompanying consolidated statements of operations and were $21.6 million, $23.6 million, and $21.7 million for the years ended December 31, 2015, 2014, and 2013, respectively. The majority of the Company’s shipping costs are related to the loan of instrument sets, which are not sold as part of the Company’s core sales offering. Amounts billed to customers for shipping and handling of products are reflected in revenues and are not significant for any period presented. Restructuring Charges During the year ended December 31, 2014, the Company exited a portion of its New Jersey property and subsequently, in 2015, made the decision to terminate the respective lease entirely to reduce its footprint on the east coast of the United States as part of a company-wide efficiency effort to match its business needs without adversely impacting its ability to deliver surgeon education and local customer fulfillment. As a result, the Company recognized restructuring charges of $2.1 million and $6.4 million during the years ended December 31, 2015 and 2014, respectively. The restructuring charges mainly consist of future rental payments through 2017, and lease termination fee, net of estimated future sublease income and deferred rent write-offs. The Company also recorded impairment charges associated with the exit related to leasehold improvement write-offs of $0.9 million and $2.2 million, in 2015 and 2014, respectively. All of the associated charges are recorded Business Transition Costs The Company incurs various costs related to business combination and integration activities. These activities include restructuring and integrating acquired entities and existing operations through business consolidation activities. Types of costs include severance, relocation, consulting, and other costs directly related to the activity. The Company recorded such expenses of $6.5 million and $1.4 million during the years ended December 31, 2015 and 2014, respectively. The expense related to these activities was minimal during the year ended December 31, 2013. Stock-based Compensation Stock-based compensation expense for equity-classified awards, principally related to restricted stock units (“RSUs”) and performance restricted stock units (“PRSUs”), is measured at the grant date based on the estimated fair value of the award and is recognized over the employee’s requisite service period on an accelerated basis. The fair value of equity instruments that are expected to vest is recognized and amortized over the requisite service period. The Company has granted awards with up to five year graded or cliff vesting terms . The fair value of RSUs including PRSUs with pre-defined performance criteria pre-defined performance criteria is adjusted with the probability of achievement of such performance criteria at each period end Stock-based compensation expense is adjusted from the grant date to exclude expense for awards that are expected to be forfeited. The forfeiture estimate is adjusted as necessary through the vesting date so that full compensation cost is recognized only for awards that vest. The Company assesses the reasonableness of the estimated forfeiture rate at least annually, with any change to be made on a cumulative basis in the period the estimated forfeiture rates change. The Company considered its historical experience of pre-vesting forfeitures on awards by each homogenous group of shareowners as the basis to arrive at its estimated annual pre-vesting forfeiture rates. The Company estimates the fair value of stock options issued under its equity incentive plans and shares issued to shareowners under its employee stock purchase plan using a Black-Scholes option-pricing model on the date of grant. The Black-Scholes option-pricing model incorporates various and highly sensitive assumptions including expected volatility, expected term and risk-free interest rates. The expected volatility is based on the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected term of the Company’s stock options and ESPP which is derived from historical experience. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield in effect at the time of grant. The Company has never declared or paid dividends and has no plans to do so in the foreseeable future . See Note 8 to the Consolidated Financial Statements included in this Annual Report for further discussion on stockholder equity and stock-based compensation. Net Income (Loss) Per Share The Company computes basic net income (loss) per share using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) assumes the conversion, exercise or issuance of all potential common stock equivalents, unless the effect of inclusion would be anti-dilutive. For purposes of this calculation, common stock equivalents include the Company’s stock options, unvested RSUs, including those with performance and market conditions, warrants, and the shares to be issued upon the conversion of the Senior Convertible Notes. For the years 2014 and 2013, no shares related to the assumed conversion of the Senior Convertible Notes were included in the diluted net income (loss) calculation because the inclusion of such shares would have had an anti-dilutive effect. The shares to be issued upon exercise of all outstanding warrants were excluded from the diluted net income (loss) calculation for the years 2014 and 2013 because the inclusion of such shares would have had an anti-dilutive effect. The following table sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except share data) Year Ended December 31, 2015 2014 2013 Numerator: Net income (loss) available to the Company $ 66,291 $ (16,720 ) $ 7,902 Denominator for basic and diluted net income (loss) per share: Weighted average common shares outstanding for basic 48,687 46,715 44,461 Dilutive potential common stock outstanding: Stock options and ESPP 1,089 — 416 RSUs 1,157 — 1,909 Warrants 177 — — Senior Convertible Notes 1,314 — — Weighted average common shares outstanding for diluted 52,424 46,715 46,786 Basic net income (loss) per share attributable to NuVasive, Inc. $ 1.36 $ (0.36 ) $ 0.18 Diluted net income (loss) per share attributable to NuVasive, Inc. $ 1.26 $ (0.36 ) $ 0.17 The following weighted outstanding common stock equivalents were not included in the calculation of net income (loss) per diluted share because their effects were anti-dilutive (in thousands) Year Ended December 31, 2015 2014 2013 Stock Options, ESPP, and RSUs 40 8,902 5,015 Warrants 4,777 9,553 12,709 Senior Convertible Notes — 9,553 9,890 Total 4,817 28,008 27,614 |
Balance Sheet Details
Balance Sheet Details | 12 Months Ended |
Dec. 31, 2015 | |
Balance Sheet Details [Abstract] | |
Balance Sheet Details | 2. Balance Sheet Details Property and Equipment, net Property and equipment, net, consisted of the following ( in thousands, except years : December 31, Useful Life 2015 2014 Instrument sets 4 $ 214,893 $ 189,774 Machinery and equipment 5 to 7 26,871 25,413 Computer equipment and software 3 to 7 55,480 52,269 Leasehold improvements 2 to 15 17,331 20,083 Furniture and fixtures 3 to 7 5,884 7,282 Building and improvements 10 to 20 10,875 7,507 Land — 1,288 541 332,622 302,869 Less: accumulated depreciation and amortization (191,181 ) (174,304 ) $ 141,441 $ 128,565 Our property and equipment mainly consisted of instrument sets, which surgeons and hospitals that purchase implants, biologics and disposables for use in individual procedures, and computer equipment and software. Depreciation expense was $49.8 million, $52.3 million, and $43.8 million for the years ended December 31, 2015, 2014 and 2013, respectively. At December 31, 2015 and 2014, gross assets recorded under capital leases of $1.5 million are included in machinery and equipment. Depreciation of the assets under capital leases is included in depreciation expense. The Company depreciates leasehold improvements over their estimated useful lives or the term of the applicable lease, whichever is shorter. Included in the depreciation expense recognized during the year ended December 31, 2014 was $4.2 million of accelerated depreciation as a result of the Company’s plan to consolidate its offices located in San Diego, California into one corporate headquarters. This project commenced during the year ended December 31, 2014 and completed in 2015. As a result, certain long-lived assets, primarily leasehold improvements, were abandoned and replaced during the respective construction period. In accordance with the authoritative guidance, the Company shortened the depreciable lives of the impacted assets, which resulted in $4.2 million of accelerated depreciation, which was included in sales, marketing and administrative expenses, during the year ended December 31, 2014, that would have otherwise been recorded in future periods. There is no impact to the Company’s Consolidated Statement of Operations over the life of the respective assets . No accelerated depreciation was recorded in 2015. Capitalized internal-use software costs include only those direct costs associated with the actual development or acquisition of computer software for internal use, including costs associated with the design, coding, installation, and testing of the system. At December 31, 2015 and 2014, the Company had $17.6 million and $17.3 million in unamortized capitalized internal-use software costs, respectively. Amortization expense related to capitalized internal-use software costs was $7.3 million, $7.7 million and $5.5 million for the years ended December 31, 2015, 2014 and 2013, respectively. Goodwill and Intangible Assets Goodwill and intangible assets as of December 31, 2015 consisted of the following (in thousands, except years): Weighted- Average Amortization Period Gross Accumulated Intangible (in years) Amount Amortization Assets, net Intangible Assets Subject to Amortization: Developed technology 9 $ 92,648 $ (37,382 ) $ 55,266 Manufacturing know-how and trade secrets 12 21,787 (13,296 ) 8,491 Trade name and trademarks 11 9,500 (5,068 ) 4,432 Customer relationships 8 44,752 (27,865 ) 16,887 Total intangible assets subject to amortization 10 $ 168,687 $ (83,611 ) $ 85,076 Intangible Assets Not Subject to Amortization: Goodwill 154,281 Total goodwill and intangible assets, net $ 239,357 Goodwill and intangible assets as of December 31, 2014 consisted of the following (in thousands, except years): Weighted- Average Amortization Period Gross Accumulated Intangible (in years) Amount Amortization Assets, net Intangible Assets Subject to Amortization: Developed technology 9 $ 79,008 $ (27,760 ) $ 51,248 Manufacturing know-how and trade secrets 12 21,879 (11,640 ) 10,239 Trade name and trademarks 11 9,500 (4,264 ) 5,236 Customer relationships 8 43,153 (23,961 ) 19,192 Total intangible assets subject to amortization 10 $ 153,540 $ (67,625 ) $ 85,915 Intangible Assets Not Subject to Amortization: In-process research and development 10,640 Goodwill 154,443 Total goodwill and intangible assets, net $ 250,998 Total expense related to the amortization of intangible assets was $16.1 million, $13.6 million and $19.3 million for the years ended December 31, 2015, 2014 and 2013, respectively. In October 2015, the Company concluded the relevant research and development project associated with the $10.6 million in-process research and development intangible asset acquired in a previous business combination. At the conclusion of the project, the Company began amortizing the developed technology associated with the project over the estimated useful life of approximately 6 years. During the year ended December 31, 2014, the Company recorded an impairment charge of $10.7 million related to the developed technology acquired from Cervitech in 2009. The primary factors contributing to this impairment charge was the reduction in the Company revenue estimate and related decrease to estimated cash flows for the technology. See Note 1 to the Consolidated Financial Statements included in this Annual Report for further discussion on impairment charges. Total future amortization expense related to intangible assets subject to amortization at December 31, 2015 is set forth in the table below (in thousands): 2016 $ 17,589 2017 14,392 2018 13,882 2019 12,528 2020 12,117 Thereafter through 2026 14,568 Total future amortization expense $ 85,076 The changes to goodwill are comprised of the following ( in thousands December 31, 2015 2014 Balance at January 1 $ 154,443 $ 154,944 Addition recorded in connection with acquisition — — Reduction recorded in connection with disposal of business — (292 ) Other (162 ) (209 ) Balance at December 31 $ 154,281 $ 154,443 Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following ( in thousands : December 31, 2015 2014 Accrued expenses $ 31,187 $ 49,014 Distributor commissions payable 8,502 8,329 Accounts payable 6,792 13,648 Other taxes payable 6,386 6,888 Royalties payable 4,454 51,377 Others 3,665 4,068 Accounts payable and accrued liabilities $ 60,986 $ 133,324 Royalties payable decreased in 2015 as a result of the gain of $56.4 million related to a litigation accrual change resulting from the legal proceedings in Phase 1 of the Medtronic litigation whereby the damages award by the jury was overturned. See Note 11 to the Consolidated Financial Statements included in this Annual Report for further discussion |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 2015 | |
Investments Debt And Equity Securities [Abstract] | |
Marketable Securities | 3. Marketable Securities The Company invests its excess cash in marketable securities and the composition of marketable securities is as follows ( in thousands, except years Contractual Maturity (in Years) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2015: Classified as current assets Certificates of deposit Less than 1 $ 6,615 $ — $ — $ 6,615 Corporate notes Less than 1 108,739 5 (173 ) 108,571 Commercial paper Less than 1 21,991 — — 21,991 Securities of government-sponsored entities Less than 1 28,284 — (38 ) 28,246 Short-term marketable securities 165,629 5 (211 ) 165,423 Classified as non-current assets Certificates of deposit 1 to 2 12,392 — — 12,392 Corporate notes 1 to 2 43,857 — (109 ) 43,748 Securities of government-sponsored entities 1 to 2 56,412 — (220 ) 56,192 Long-term marketable securities 112,661 — (329 ) 112,332 Total marketable securities at December 31, 2015 $ 278,290 $ 5 $ (540 ) $ 277,755 December 31, 2014: Classified as current assets Certificates of deposit Less than 1 $ 282 $ — $ — $ 282 Corporate notes Less than 1 129,037 8 (105 ) 128,940 Commercial paper Less than 1 11,290 — — 11,290 U.S. government treasury securities Less than 1 1,500 1 — 1,501 Securities of government-sponsored entities Less than 1 78,333 12 (29 ) 78,316 Short-term marketable securities 220,442 21 (134 ) 220,329 Classified as non-current assets Corporate notes 1 to 2 14,082 — (13 ) 14,069 Securities of government-sponsored entities 1 to 2 28,996 — (23 ) 28,973 Long-term marketable securities 43,078 - (36 ) 43,042 Classified as restricted investments U.S. government treasury securities Less than 2 51,331 13 (13 ) 51,331 Securities of government-sponsored entities Less than 2 42,862 2 (54 ) 42,810 Restricted investments 94,193 15 (67 ) 94,141 Total marketable securities at December 31, 2014 $ 357,713 $ 36 $ (237 ) $ 357,512 As of December 31, 2015, the Company had no investments that were in a significant unrealized loss position and no impairment charges were recorded during the periods presented. Foreign Currency and Derivative Financial Instruments Some of the Company’s reporting entities conduct a portion of their business in currencies other than the entity’s functional currency. These transactions give rise to receivables and payables that are denominated in currencies other than the entity’s functional currency. The value of these receivables and payables is subject to changes in currency exchange rates from the point at which the transactions are originated until the settlement in cash. Both realized and unrealized gains and losses in the value of these receivables and payables are included in the determination of net income. Net currency exchange gains (losses), which includes gains and losses from derivative instruments, were $0.3 million, $(2.6) million and $0.7 million for the years ended December 31, 2015, 2014 and 2013, respectively, and are included in other income (expense) in the Consolidated Statements of Operations. A s of December 31, 2015 and 2014, a notional principal amount of $8.5 million and $26.0 million, respectively, was outstanding in foreign currency forward contracts to hedge currency risk relative to foreign receivables and payables . In 2013, the Company did not have any gain or loss recognized on derivative instruments. The Company’s currency exposures vary, but are primarily concentrated in the pound sterling the Australian dollar, the Singapore dollar, and the yen The Company does not use derivative financial instruments for speculation or trading purposes or for activities other than risk management. The Company does not require and is not required to pledge collateral for these financial instruments and does not carry any master netting arrangements to mitigate the credit risk. The following table summarizes the fair values of derivative instruments at December 31, 2015 and 2014: Asset Derivatives Liability Derivatives Fair Value Fair Value Balance Sheet December 31, December 31, Balance Sheet December 31, December 31, (in thousands) Location 2015 2014 Location 2015 2014 Derivatives instruments not designated as cash flow hedges Forward exchange contracts Other current assets * $ — Other current liabilities $ — * Total derivatives $ * $ — $ — $ * *De minimus amount recognized in the hedge relationship. The following table summarizes the effect of derivative instruments on the Consolidated Statements of Operations for the years ended December 31, 2015 and 2014: Year ended December 31, 2015 Year ended December 31, 2014 Location of Amount of Location of Amount of (Gain)/Loss (Gain)/Loss (Gain)/Loss (Gain)/Loss Recognized in Recognized in Recognized in Recognized in (in thousands) Income Income Income Income Derivatives instruments not designated as cash flow hedges Forward exchange contracts Other (income) expense $ (1,693 ) Other (income) expense $ (730 ) Total derivatives $ (1,693 ) $ (730 ) |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
Investments Debt And Equity Securities [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements The fair values of the Company’s assets and liabilities, including cash equivalents, marketable securities, restricted investments, derivatives, and contingent considerations are measured at fair value on a recurring basis, and are determined under the fair value categories as follows ( in thousands Quoted Price in Significant Other Significant Active Market Observable Inputs Unobservable Total (Level 1) (Level 2) Inputs (Level 3) December 31, 2015: Cash Equivalents and Marketable Securities: Money market funds $ 68,425 $ 68,425 $ — $ — Certificates of deposit 19,007 19,007 — — Corporate notes 152,319 — 152,319 — Commercial paper 21,991 — 21,991 — Securities of government-sponsored entities 115,929 115,929 — Total cash equivalents and marketable securities $ 377,671 $ 87,432 $ 290,239 $ — December 31, 2014: Cash Equivalents, Marketable Securities and Restricted Investments: Money market funds $ 39,963 $ 39,963 $ — $ — Certificates of deposit 282 282 — — Corporate notes 143,009 — 143,009 — Commercial paper 11,290 — 11,290 — U.S. government treasury securities 52,831 52,831 — — Securities of government-sponsored entities 150,101 — 150,101 — Total cash equivalents, marketable securities and restricted investments $ 397,476 $ 93,076 $ 304,400 $ — Contingent Consideration: Acquisition-related liabilities, current $ (644 ) $ — $ — $ (644 ) Total contingent consideration $ (644 ) $ — $ — $ (644 ) The carrying amounts of certain financial instruments such as cash and cash equivalents, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued expenses, and other current liabilities as of December 31, 2015 and December 31, 2014 approximate their related fair values due to the short-term maturities of these instruments. The fair value of certain financial instruments was measured and classified within Level 1 based on quoted prices. Certain financial instruments classified within Level 2 of the fair value hierarchy include the types of instruments that trade in markets that are not considered to be active, but are valued based on quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. To manage foreign currency exposure risks, the Company uses derivatives for activities in entities that have short-term intercompany receivables and payables denominated in a currency other than the entity’s functional currency. The fair value is based on a quoted market price (Level 1). on the hedge transactions. The fair value, based on a quoted market price (Level 1), of the Company’s outstanding Senior Convertible Notes due 2017 at December 31, 2015 and December 31, 2014 was approximately $551.4 million and $516.1 million, respectively. The carrying value of the Company’s Senior Convertible Notes is discussed in Note 6 to the Consolidated Financial Statements included in this Annual Report Certain contingent consideration liabilities are classified within Level 3 of the fair value hierarchy because they use unobservable inputs. For those liabilities, fair value is determined using a probability-weighted discounted cash flow model, the significant inputs which are not observable in the market. The following table sets forth the changes in the estimated fair value of the Company’s liabilities measured on a recurring basis using significant unobservable inputs (Level 3) ( in thousands 2015 2014 Fair value measurement at January 1 $ 644 $ 1,212 Contingent consideration assumed 431 — Change in fair value measurement included in operating expenses (36 ) 40 Contingent consideration paid or settled (1,039 ) (608 ) Fair value measurement at December 31 $ — $ 644 Non-financial assets and liabilities measured on a nonrecurring basis Certain non-financial assets and liabilities are measured at fair value, usually with Level 3 inputs including discounted cash flow method or cost method, on a nonrecurring basis in accordance with authoritative guidance. These include items such as nonfinancial assets and liabilities initially measured at fair value in a business combination and non-financial long-lived assets measured at fair value for an impairment assessment. In general, non-financial assets, including goodwill, intangible assets and property and equipment, are measured at fair value when there is an indication of impairment and are recorded at fair value only when any impairment is recognized. The carrying values of the Company’s capital lease obligations approximated their estimated fair value as of December 31, 2015 and 2014. The Company has obligations under certain consultancy arrangements based on achievement of specified milestones. There was no accrual as of December 31, 2015 or 2014, related to these payments. In both 2015 and 2014, the Company recognized impairment charges related to leasehold improvement write-offs associated with the lease termination in New Jersey. See Note 1 to the Consolidated Financial Statements included in this Annual Report for further discussion on the New Jersey lease termination and associated charges. During the year ended December 31, 2014, the Company recorded an impairment charge of $10.7 million related to the developed technology acquired from Cervitech in 2009. See Note 1 to the Consolidated Financial Statements included in this Annual Report for further discussion on impairment analysis and leasehold related charges. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2015 | |
Business Combination Description [Abstract] | |
Business Combinations | 5. Business Combinations The Company has completed acquisitions that were not considered individually or collectively material to the overall Consolidated Financial Statements and/or the results of the Company's operations. These acquisitions have been included in the Consolidated Financial Statements from the respective dates of the acquisitions. The Company recognizes the assets acquired, liabilities assumed, and any non-controlling interest at fair value at the date of acquisition. Contingent Consideration Liabilities Contingent consideration arrangements associated with certain asset and/or business acquisitions include future payment obligations based on certain technological or operational milestones. For those contingent arrangements entered in as a result of business combinations, the Company records these obligations at fair value at the time of acquisition with subsequent fair value adjustments to the contingent consideration reflected in the line items of the Consolidated Statement of Operations commensurate with the nature of the contingent consideration. At December 31, 2015, the Company had no contingent consideration liabilities outstanding (see Note 4 to the Consolidated Financial Statements included in this Annual Report for further discussion) Investment in Progentix Orthobiology, B.V. In 2009, the Company completed the purchase of forty percent (40%) of the capital stock of Progentix, a company organized under the laws of the Netherlands, from existing shareholders (the Progentix Shareholders) pursuant to a Preferred Stock Purchase Agreement for $10.0 million in cash (the Initial Investment). As of December 31, 2015, NuVasive loaned Progentix cumulatively $5.3 million at an interest at a rate of 6% per year. NuVasive is not obligated to provide additional funding. In accordance with authoritative guidance, the Company has determined that Progentix is a variable interest entity, (or “VIE”) as it does not have the ability to finance its activities without additional subordinated financial support and its equity investors will not absorb their proportionate share of expected losses and will be limited in the receipt of the potential residual returns of Progentix. Additionally, pursuant to this guidance, NuVasive is considered its primary beneficiary as NuVasive has both the power to direct the economically significant activities of Progentix and the obligation to absorb losses of, or the right to receive benefits from, Progentix. Accordingly, the financial position and results of operations of Progentix have been included in the Company’s consolidated financial statements from the date of the Initial Investment. The liabilities recognized as a result of consolidating Progentix do not represent additional claims on the Company’s general assets. The creditors of Progentix have claims only on the assets of Progentix, which are not material, and the assets of Progentix are not available to NuVasive. The equity interests in Progentix not owned by the Company, which includes shares of both common and preferred stock, are reported as non-controlling interests on the consolidated balance sheet of the Company. The preferred stock represents 18% of the non-controlling equity interests and provides for a cumulative 8% dividend, if and when declared by Progentix’s Board of Directors. As the rights of the preferred stock are substantially the same as those of the common stock, the preferred stock is classified as non-controlling interest and shares in the allocation of the losses incurred by Progentix. Losses incurred by Progentix are charged to the Company and to the non-controlling interest holders based on their ownership percentage. The Option Agreement that was entered into between NuVasive, Progentix and the Progentix Shareholders were not considered to be freestanding financial instruments during the Option Period as defined by authoritative guidance. Therefore, during the Option Period, the Remaining Shares and the Option Agreement were accounted for as a combined unit on the consolidated financial statements as a redeemable non-controlling interest that was initially recorded at fair value and classified as mezzanine equity. Upon the expiration of the Option Agreement on June 13, 2013, the non-controlling interest was no longer redeemable and therefore, pursuant to the authoritative guidance, the non-controlling interest was reclassified out of mezzanine equity to its own component of total equity within the Company’s consolidated balance sheet. Total assets and liabilities of Progentix included in the accompanying consolidated balance sheet are as follows (in thousands): December 31, 2015 2014 Total current assets $ 353 $ 839 Identifiable intangible assets, net 13,048 13,935 Goodwill 12,654 12,654 Other long-term assets — 1 Accounts payable & accrued expenses 574 542 Deferred tax liabilities, net 1,496 2,770 Non-controlling interests 7,309 8,310 The following is a reconciliation of equity attributable to the non-controlling interests ( in thousands Year Ended December 31, 2015 2014 Non-controlling interests at beginning of period $ 8,310 $ 9,086 Less: Net (loss) attributable to the non-controlling interests subsequent to reclassification from mezzanine to equity (1,001 ) (776 ) Non-controlling interests at end of period $ 7,309 $ 8,310 Impulse Monitoring Inc. and Physician Practices The Company maintains contractual relationships with several physician practices ("PCs") which were inherited through the 2011 acquisition of Impulse Monitoring Inc. Under the respective contracts' terms, PCs provide the physician oversight services associated with IOM services. The Company provides management services to the PCs including all non-medical services, management reporting, billing and collections of all charges for medical services provided as well as administrative support. The PCs pay the Company a monthly management fee for these services. In accordance with authoritative guidance, the Company has determined that the PCs are variable interest entities and the Company has controlling financial interests in the PCs as it has both the power to direct the economically significant activities of the PCs, and the obligation to absorb losses of, or the right to receive benefits from, the PCs. Therefore, the accompanying Consolidated Financial Statements include the accounts of the PCs from the date of acquisition. During the periods presented, the result of PCs was immaterial to our financials. The creditors of the PCs have claims only on the assets of the PCs, which are not material, and the assets of the PCs are not available to the Company. |
Senior Convertible Notes
Senior Convertible Notes | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Senior Convertible Notes | 6. Senior Convertible Notes The carrying values of the Company’s Senior Convertible Notes are as follows ( in thousands December 31, 2015 2014 2.75% Senior Convertible Notes due 2017: Principal amount $ 402,500 $ 402,500 Unamortized debt discount (25,958 ) (41,754 ) Total Senior Convertible Notes $ 376,542 $ 360,746 Senior Convertible Notes due 2017 In June 2011, the Company issued $402.5 million 2.75% July 1, 2017 $359.2 million 23.7344 $1,000 $42.13 The cash conversion feature of the 2017 Notes (the “Embedded Conversion Derivative”) required bifurcation from the Notes and was initially accounted for as a derivative liability and debt discount of $88.9 million upon issuance of the Notes without authorization of issuing additional common stocks for the conversion. Upon obtaining stockholder approval for the additional authorized shares of the Company’s common stock, the derivative liability was reclassified to stockholders’ equity, which resulted in recognizing cumulatively $39.5 million in other income for change in fair value measurement and $49.4 million in additional paid-in-capital $11.1 million $15.8 million the year ended December 31, 2014 Prior to January 1, 2017, holders may convert their 2017 Notes only under the following conditions: (a) during any calendar quarter beginning October 1, 2011, if the reported sale price of the Company's common stock for at least 20 30 130% five 98% 2017 Hedge In connection with the offering of the 2017 Notes, the Company entered into the hedge transaction with the initial purchasers and/or their affiliates (the "2017 Counterparties") entitling the Company to purchase up to 9,553,096 $42.13 $80.1 million and accounted for as derivative assets upon issuance of the Notes additional paid-in-capital 2017 Warrants The Company sold warrants to the 2017 Counterparties to acquire up to 477,654 $988.51 20 $47.9 million additional paid-in-capital |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments | 7. Commitments Leases The Company leases office facilities and equipment under various operating and capital lease agreements. The initial terms of these leases range from 1 year to 15 years and generally provide for periodic rent increases and renewal options. Certain leases require the Company to pay taxes, insurance and maintenance. In connection with certain operating leases, the Company has security deposits recorded and maintained as restricted cash totaling $5.6 million as of December 31, 2015. Rent expense is recognized on a straight-line basis over the term of the lease. Accordingly, rent expense recognized in excess of rent paid is reflected as a liability in the accompanying Consolidated Balance Sheets. Rent expense, including costs directly associated with the facility leases, was approximately $9.3 million, $11.5 million, and $12.0 million for the years ended December 31, 2015, 2014, and 2013, respectively. The Company’s future minimum annual lease payments under capital and operating leases, including payments for costs directly associated with the facility leases, for years ending after December 31, 2015 are as follows (in thousands): Capital Operating Leases Leases 2016 $ 554 $ 9,701 2017 162 9,278 2018 20 6,640 2019 — 6,430 2020 — 6,478 Thereafter — 17,111 Total minimum lease payments $ 736 $ 55,638 Less amount representing interest (41 ) Present value of obligations under capital leases 695 Less current portion (521 ) Long-term capital lease obligations $ 174 Licensing and Purchasing Agreements The Company is contingently obligated to make additional payments of up to $18.2 million in cash if specified future events occur or conditions are met specify milestone payment timelines. The Company has also entered into certain consulting arrangements that require payment of up to 264,000 shares (the equivalent value of approximately $14.3 million based on the closing price of our stock as of December 31, 2015) in the Company’s common stock. These agreements expire on various dates through 2024. Executive Employment Agreements The Company has employment contracts with key executives that provide for the continuation of salary if terminated for reasons other than cause, as defined in those agreements. Certain agreements call for payments which are based on historical compensation, accordingly, the amount of the contractual commitment will change over time commensurate with the executive’s applicable earnings. At December 31, 2015, future employment contract commitments for such key executives were approximately $22.1 million. In certain circumstances, the employment agreements call for the acceleration of equity vesting. Those figures are not reflected in the above information. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Stockholders' Equity | 8. Stockholders’ Equity Common Stock There were 120,000,000 shares of common stock authorized at December 31, 2015 and 2014. Preferred Stock There are 5,000,000 shares of preferred stock authorized and none issued or outstanding at December 31, 2015 and 2014. On June 28, 2011, in connection with the issuance of the 2017 Warrants, the Company amended its Restated Certificate of Incorporation to designate 477,654 shares of the Company’s authorized preferred stock, par value $0.001 per share, as Series A Participating Preferred Stock (the “Series A Preferred Stock”). The Series A Preferred Stock will automatically convert into shares of the Company’s common stock. The holders of Series A Preferred Stock (collectively, the Preferred Holders) are entitled to receive dividends when and if declared by the Board of Directors. The preferred dividends are payable in preference and in priority to any dividends on the Company’s common stock. Shares of Series A Preferred Stock are convertible into 20 shares of common stock, subject to certain anti-dilution adjustments. Preferred Holders vote on an equivalent basis with common stockholders on an as-converted basis. The Preferred Holders are entitled to receive liquidation preferences at the rate of $648.20 per share. Liquidation payments to the Preferred Holders have priority and are made in preference to any payments to the holders of common stock. Stock-based Compensation In March 2014, the Compensation Committee (the "Compensation Committee") of the Board of Directors of the Company adopted the 2014 Equity Incentive Plan of NuVasive, Inc. (the "2014 EIP"), replacing the 2004 Amended and Restated Equity Incentive Plan (the “2004 EIP”). No further awards may be granted under the 2004 EIP; however, that plan continues to govern all awards previously issued under it (many of which remain outstanding). The 2014 EIP provides the Company with the ability to grant various types of equity awards to its workforce (including, without limitation, restricted stock units (“RSUs”), restricted stock awards, performance awards, and deferred stock awards). The 2014 EIP also provides for the issuance of performance RSUs (“PRSUs”) to be granted subject to time- and/or performance-based vesting requirements. In addition, the award agreements under the 2014 EIP generally provide for the acceleration of 50% of the unvested equity awards of all shareowners upon a change in control and the vesting of the remaining unvested equity awards for those shareowners that are involuntarily terminated within a year of the change in control. Each of the 2004 EIP and the 2014 EIP allow for “net share settlement” of certain equity awards whereby, in lieu of (i) making cash payments in satisfaction of the exercise price owed respective to non-qualified stock option awards, or (ii) open market selling award shares to generate cash proceeds for use in satisfaction of statutory tax obligations respective to an award’s settlement or exercise, the company offsets the award shares being settled in a respective transaction by the number of shares of company stock with a value equal to the respective obligation, and, in the case of taxes, making a cash payment to the respective taxing authority on behalf of the shareowner using Company cash. The net share settlement is accounted for with the cost of any award shares that are net settled being included in treasury stock and reported as a reduction in total equity at the time of settlement. The compensation cost that has been included in the statement of operations for our stock-based compensation plans was as follows ( in thousands) Year Ended December 31, 2015 2014 2013 Sales, marketing and administrative expense $ 24,817 $ 31,514 $ 31,425 Research and development expense 1,157 1,841 1,649 Cost of goods sold 229 332 166 Stock-based compensation expense before taxes 26,203 33,687 33,240 Related income tax benefits (10,481 ) (13,475 ) (13,296 ) Stock-based compensation expense, net of taxes $ 15,722 $ 20,212 $ 19,944 As of December 31, 2015, there was $13.5 million and $25.1 million of unrecognized compensation expense for RSUs and PRSUs, respectively, which is expected to be recognized over a weighted-average period of approximately 1.8 years and 3.3 years, respectively. In addition, as of December 31, 2015, there was $0.7 million of unrecognized compensation expense for shares expected to be issued under the ESPP which is expected to be recognized through April 2016. There was no unamortized expense for stock options as of December 31, 2015. The benefits of tax deductions in excess of recognized compensation cost is required to be reported as a financing cash flow. Excess tax benefits of $15.2 million, $11.9 million, and $13.6 million were reported as financing cash flows for the years ended December 31, 2015, 2014, and 2013, respectively. Restricted Stock Units The total fair value of RSUs that vested during the year ended December 31, 2015, 2014, and 2013 was $39.0 million, $27.5 million and $10.4 million, respectively. Following is a summary of RSU activity for the year ended December 31, 2015 ( in thousands, except per share amounts Weighted Average Number of Grant Date Shares Fair Value Nonvested at December 31, 2014 2,066 $ 24.99 Granted 361 47.92 Vested (833 ) 23.41 Forfeited (245 ) 28.52 Nonvested at December 31, 2015 1,349 $ 31.82 For the majority of RSUs, shares are issued on the vesting dates net of the amount of shares needed to satisfy statutory tax withholding requirements to be paid by the Company on behalf of the employees. The total shares withheld related to vested RSUs were approximately 330,000 and 29,000 in 2015 and 2014, respectively, and were based on the value of the awards on their vesting dates as determined by the Company’s closing stock price. Total payments for the employees’ tax obligations to the taxing authorities related to vesting RSUs were $15.4 million and $1.1 million in 2015 and 2014, respectively. No shares were withheld from vesting RSUs in 2013. Performance-Based Restricted Stock Units The Company has granted PRSUs since 2012 for which the ultimate issuance amount is determined by the Company’s Compensation Committee upon its certification of Company performance against a pre-determined matrix, including revenue targets, total shareholder return, or earnings per share over pre-determined periods of time. Share payout levels range from 0 to 250% depending on the respective terms of an award. Based upon the company’s actual performance against the performance conditions, approximately 117,000 shares of common stock vested on each of March 1, 2013, March 1, 2014, and March 1, 2015 for PRSUs granted in 2012, and approximately 470,000 shares of common stock vested on each of February 1, 2014 and February 1, 2015 for PRSUs granted in 2013, in each case in the aggregate for all award recipients. On February 1, 2016, based upon the company’s actual performance against the performance conditions, approximately 102,000 shares of common stock vested for PRSUs granted in 2014. In 2015, the Company granted a PRSU award with five year cliff vesting terms to its Chief Executive Officer for which the performance criteria was not based on Company specific performance metrics, and as such, the Company records the award as a long-term liability as expensed over the service period. No amounts have been paid out on this award, or are expected to become due until 2020. The total fair value of performance awards vested during 2015, 2014, and 2013 was $27.1 million, $21.6 million and $2.3 million, respectively. Following is a summary of PRSU activity for the year ended December 31, 2015 ( in thousands, except per share amounts Maximum Number Shares of Shares Eligible to be Issued Average Grant Date Fair Value Outstanding at December 31, 2014 727 936 $ 18.51 Awarded at target 607 1,093 48.34 Achieved in excess of target 95 — 36.39 Vested (588 ) (588 ) 18.52 Forfeited (38 ) (84 ) 37.29 Outstanding at December 31, 2015 803 1,357 $ 46.42 For the majority of PRSUs, shares are issued on the vesting dates net of the amount of shares needed to satisfy statutory tax withholding requirements to be paid by the Company on behalf of the employees. The total shares withheld related to vesting PRSUs were approximately 292,000 in 2015, and were based on the value of the awards on their vesting dates as determined by the Company’s closing stock price. Total payments for the employees’ tax obligations to the taxing authorities related to vesting PRSUs were $13.5 million in 2015. No shares were withheld from vesting PRSUs in each of 2014 and 2013. Stock Options The Company has not granted any stock options since 2011. The stock options previously granted are exercisable for a period of up to ten years after the date of grant. The aggregate intrinsic value of outstanding stock options at December 31, 2015 is based on the Company’s closing stock price on December 31, 2015 of $54.11. The Company received $6.2 million, $17.5 million and $3.4 million in proceeds from the exercise of stock options during the years ended December 31, 2015, 2014 and 2013, respectively. The total intrinsic value of stock options exercised was $63.4 million, $17.6 million, and $2.0 million during the years ended December 31, 2015, 2014 and 2013, respectively. The total fair value of stock options that vested during the year ended December 31, 2015, 2014 and 2013 was $0.3 million, $3.5 million, and $6.8 million, respectively. Following is a summary of stock option activity for the year ended December 31, 2015 under all stock plans ( in thousands, except years and per share amounts Weighted-Average Remaining Weighted Contractual Aggregate Avg. Exercise Term Intrinsic Shares Price (Years) Value Outstanding at December 31, 2014 5,286 $ 32.11 3.88 $ 79,594 Exercised (3,295 ) 30.49 Cancelled (21 ) 23.08 Outstanding at December 31, 2015 1,970 34.91 2.99 $ 37,820 Exercisable at December 31, 2015 1,970 $ 34.91 2.99 $ 37,820 Vested or expected to vest at December 31, 2015 1,970 $ 34.91 2.99 $ 37,820 For the majority of stock options, shares are issued on the exercise dates net of the amount of shares needed to satisfy each of the exercise price (in lieu of cash) and statutory tax withholding requirements, the latter to be paid by the Company on behalf of the employee. The total shares withheld related to exercised stock options were approximately 2,461,000 and 205,000 in 2015 and 2014, respectively, and were based on the value of the stock options on their exercise dates as determined by the Company’s closing stock price. Total cash payments for the employees’ tax obligations to the taxing authorities related to exercised stock options were $28.0 million and $2.7 million, in 2015and 2014, respectively. No shares were withheld from exercised stock options in 2013. Employee Stock Purchase Plan The NuVasive, Inc. 2004 Amended and Restated Employee Stock Purchase Plan (the “ESPP”), provides eligible employees with a means of acquiring equity in the Company at a discounted purchase price using their own accumulated payroll deductions. Under the terms of the ESPP, employees can elect to have up to 15% of their annual compensation, up to a maximum of $21,250 per year, withheld to purchase shares of Company common stock for a purchase price equal to 268,000 The weighted average assumptions used to estimate the fair value of stock options granted and stock purchase rights under the ESPP are as follows: Year Ended December 31, 2015 2014 2013 ESPP Volatility 40 % 46 % 55 % Expected term (years) 1.2 1.3 1.5 Risk free interest rate 0.2 % 0.2 % 0.2 % Expected dividend yield — % — % — % Common Stock Reserved for Future Issuance The following table summarizes common shares reserved for issuance on exercise or conversion at December 31, 2015 (in thousands) Issued and outstanding stock options 1,970 Issued and outstanding RSUs and PRSUs 2,423 Available for issuance under the ESPP 1,549 Available for future grant 1,359 2017 Notes 12,419 2017 Warrants 19,106 Total shares reserved for future issuance 38,826 Pursuant to the terms of the 2014 Equity Incentive Plan, shares subject to awards granted under the 2004 Amended and Restated Equity Incentive Plan may be utilized for future grants of awards under the 2014 Equity Incentive Plan, to the extent such awards are terminated, cancelled or they expire, or shares subject thereto are withheld to cover taxes. As the number of these shares is indeterminate, these shares have not been registered for issuance, nor are they reflected in the number of shares available for future grant. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes Total income (loss) before income taxes summarized by region for the years ended December 31 is as follows ( in thousands Year Ended December 31, 2015 2014 2013 United States $ 128,489 $ 11,462 $ 8,818 Foreign (16,470 ) (22,672 ) 950 Total income (loss) before income taxes $ 112,019 $ (11,210 ) $ 9,768 The income tax provision (benefit) for the years ended December 31 consists of the following ( in thousands Year Ended December 31, 2015 2014 2013 Current: Federal $ 1,480 $ 32,387 $ 10,484 State 178 3,359 2,718 Foreign 2,090 2,259 922 Total current provision 3,748 38,005 14,124 Deferred: Federal 42,719 (28,604 ) (7,042 ) State 4,433 (2,296 ) (2,074 ) Foreign (698 ) (1,528 ) (1,829 ) Total deferred provision 46,454 (32,428 ) (10,945 ) Changes in tax rate 266 (84 ) — Changes in valuation allowance (3,739 ) 793 (396 ) Total provision $ 46,729 $ 6,286 $ 2,783 The differences between the income tax provision at the United States federal statutory tax rate and the Company’s effective tax rate for the years ended December 31 are the following ( in thousands Year Ended December 31, 2015 2014 2013 Tax provision at federal statutory rate $ 39,207 $ (3,923 ) $ 3,419 Globalization initiative 9,039 9,244 — State income tax (benefit) 4,264 827 (222 ) Valuation allowance (3,739 ) 793 (396 ) Income tax reserves 2,301 657 285 Compensation expense (2,115 ) 1,428 1,052 Income tax credits and incentives (1,754 ) (2,198 ) (1,668 ) Non-deductible meals and entertainment 638 521 343 Foreign earnings taxed as non-United States rates (494 ) (199 ) 205 Other (618 ) (864 ) (235 ) Total provision $ 46,729 $ 6,286 $ 2,783 Significant components of the Company’s deferred tax assets and liabilities at December 31 are composed of the following (in thousands): December 31, 2015 2014 Deferred tax assets: Litigation and related accrual $ 34,054 $ 66,307 Share-based compensation 23,641 36,104 Inventory 13,344 9,988 Net operating loss carryforwards 3,484 6,638 General business and other credit carryforwards 5,425 4,336 Deferred rent 5,154 5,354 Other 14,739 12,417 Gross deferred tax assets 99,841 141,144 Less valuation allowance (7,290 ) (11,026 ) Net deferred tax assets 92,551 130,118 Deferred tax liabilities: Depreciation (24,361 ) (19,642 ) Original issue discount (1,090 ) (1,629 ) Acquired intangibles (295 ) (293 ) Other (1,278 ) — Total deferred tax liabilities (27,024 ) (21,564 ) Consolidated net deferred tax assets $ 65,527 $ 108,554 Add deferred tax liability, net, attributable to non-controlling interests 897 1,681 Net deferred tax assets $ 66,424 $ 110,235 The following table summarizes the activity related to our unrecognized tax benefits ( in thousands Year Ended December 31, 2015 2014 2013 Gross unrecognized tax benefits at January 1 $ 12,372 $ 4,504 $ 4,399 Increases in tax positions for prior years 2,614 5,294 92 Decreases in tax positions for prior years (3,156 ) - - Increases in tax positions for current year relating to ongoing operations 618 2,574 13 Gross unrecognized tax benefits at December 31 $ 12,448 $ 12,372 $ 4,504 Included in the gross uncertain tax benefits balance at December 31, 2015 are $0.4 million of tax deductions for which there is uncertainty only regarding the timing of the tax benefit. In the event these deductions are deferred to a later period, it would accelerate the payment of cash to the taxing authority. Other than potential interest and penalties, such deferral would have no impact on tax expense. At December 31, 2015, 2014, and 2013, $7.2 million, $7.2 million, and $3.2 million, respectively, of the Company’s total unrecognized tax benefits, if recognized, would affect the effective income tax rate. In accordance with the disclosure requirements as described in ASC Topic 740, Income Taxes The Company does not anticipate there will be a significant change in unrecognized tax benefits within the next 12 months. The Company is subject to routine compliance reviews on various tax matters around the world in the ordinary course of business. Currently, income tax audits are being conducted in the state of New York and the state of Louisiana. U.S. and most foreign jurisdictions remain subject to examination in all years due to prior year net operating losses and R&D credits. The Company does not record U.S. income taxes on the undistributed earnings of its foreign subsidiaries based upon the Company’s intention to indefinitely reinvest undistributed earnings to ensure sufficient working capital and further expansion of existing operations outside the United States. The undistributed earnings of the foreign subsidiaries as of December 31, 2015 are immaterial. In the event the Company is required to repatriate funds from outside of the United States, such repatriation would be subject to local laws, customs, and tax consequences. Under ASC Topic 718, Compensation—Equity Compensation The Company recognizes excess tax benefits associated with share-based compensation to stockholders’ equity only when realized. When assessing whether excess tax benefits relating to share-based compensation have been realized, the Company follows the with-and-without approach excluding any indirect effects of the excess tax deductions. Under this approach, excess tax benefits related to share-based compensation are not deemed to be realized until after the utilization of all other tax benefits available to the Company. During the year ended December 31, 2015, the Company realized $11.6 million of such excess tax benefits, and accordingly recorded a corresponding credit to additional paid-in capital. As of December 31, 2015, the Company had $18.0 million of unrealized excess tax benefits associated with share-based compensation. These tax benefits will be accounted for as a credit to additional paid-in capital, if and when realized, rather than a reduction of the provision for income taxes. At December 31, 2015, the Company had $38.4 million, $54.2 million and $9.2 million of federal, state and foreign net operating loss carryforwards, respectively, which will begin to expire in 2018, 2016, and 2018, respectively. There were also federal and state research & development income tax credit carryforwards of $5.8 million and $11.3 million, respectively. The federal credits will begin to expire in 2019. The state credits can be carried forward indefinitely. A valuation allowance of $8.3 million was recorded against the state credits due to uncertainty surrounding their realization. Due to the “change of ownership” provision of the Tax Reform Act of 1986, utilization of the Company’s net operating loss and credit carryforwards may be subject to an annual limitation against taxable income in future periods. As a result of any future ownership changes, the annual limitation of loss and credit carryforwards may cause them to expire before ultimately becoming available to reduce future income tax liabilities. |
Business Segment, Product, and
Business Segment, Product, and Geographic Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Business Segment, Product and Geographic Information | 10. Business Segment, Product and Geographic Information The Company operates in one segment based upon the Company’s organizational structure, the way in which the operations and investments are managed and evaluated by the chief operating decision maker (“CODM”) as well as the lack of availability of discrete financial information at a lower level. The Company’s CODM reviews revenue at the product line offering level, and manufacturing, operating income and expenses, and net income at the Company wide level to allocate resources and assess the Company’s overall performance. The Company shares common, centralized support functions, including finance, human resources, legal, information technology, and corporate marketing, all of which report directly to the CODM. Accordingly, decision-making regarding the Company’s overall operating performance and allocation of Company resources is assessed on a consolidated basis. As such, the Company operates as one reporting segment. The Company has disclosed the revenues for each of its product line offerings to provide the reader of the financial statements transparency into the operations of the Company. The Company reports under two distinct product lines for revenue; spine surgery products, and biologics. The Company’s spine surgery products line offerings, which include thoracolumbar product offerings, cervical product offerings, IOM services and disposables are primarily used to enable access to the spine and to perform restorative and fusion procedures in a minimally disruptive fashion. The Company’s biologics product line offerings includes allograft (donated human tissue), FormaGraft (a collagen synthetic product), Osteocel Plus and Osteocel Pro (each an allograft cellular matrix containing viable mesenchymal stem cells, or MSCs), and AttraX (a synthetic bone graft material), all of which are used to aid the spinal fusion or bone healing process. Revenue by product line offerings was as follows: Year Ended December 31, (in thousands) 2015 2014 2013 Spine Surgery Products $ 678,891 $ 632,845 $ 569,540 Biologics 132,222 129,570 115,633 Total Revenue $ 811,113 $ 762,415 $ 685,173 Revenue and property and equipment, net, by geographic area were as follows : Revenue Property Year Ended December 31, December 31, (in thousands) 2015 2014 2013 2015 2014 United States $ 714,768 $ 667,850 $ 620,363 $ 112,581 $ 105,022 International (excludes Puerto Rico) 96,345 94,565 64,810 28,860 23,543 Total $ 811,113 $ 762,415 $ 685,173 $ 141,441 $ 128,565 |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Contingencies [Abstract] | |
Contingencies | 11. Contingencies The Company is subject to potential liabilities under government regulations and various claims and legal actions that are pending or may be asserted from time-to-time. These matters arise in the ordinary course and conduct of the Company’s business and include, for example, commercial, intellectual property, environmental, securities, and matters involving our employees and sales representatives. The Company intends to continue to defend itself vigorously in such matters. Furthermore, the Company regularly assesses contingencies to determine the degree of probability and range of possible loss for potential accrual in its financial statements. In the first quarter of 2015, the Company had a gain of $56.4 million related to a litigation accrual change resulting from the legal proceedings in Phase 1 of the Medtronic litigation whereby the damages award by the jury was overturned, and a gain of $2.8 million in litigation accrual change related to settlement of the NeuroVision trademark litigation. These amounts were offset by a litigation charge of $13.8 million related to the Office of the Inspector General of the U.S. Department of Health and Human Services (“OIG”) investigation and $3.6 million in general litigation matters. Refer to the subsequent section herein titled “Legal Proceedings” for further information. Legal Proceedings Medtronic Sofamor Danek USA, Inc. Litigation In August 2008, Warsaw Orthopedic, Inc., Medtronic Sofamor Danek USA, Inc. and other Medtronic related entities (collectively, “Medtronic”) filed a patent infringement lawsuit against the Company in the United States District Court for the Southern District of California (the “Medtronic Litigation”), alleging that certain of the Company’s products or methods, including the XLIF ® twelve Three nine The case has been administratively broken into several phases. The first phase (“Phase 1”) of the case included three one three one $101.2 million Both parties filed appeals to the U.S. Court of Appeals for the Federal Circuit. On March 2, 2015, the Court of Appeals issued a decision upholding the jury’s findings of liability as to all patents, but overturning the damage award against the Company as improper (“March 2 nd On March 19, 2012, in connection with these proceedings, the Company entered into an escrow arrangement and transferred $113.3 million nd In accordance with the authoritative guidance on the evaluation of loss contingencies, during the year ended December 31, 2011, the Company recorded an accrual of $101.2 million $7.9 million nd nd With respect to the favorable verdict delivered regarding the one Company patent litigated to verdict, the jury awarded the Company monetary damages of approximately $0.7 million $0.7 million The second phase of the case involved one Medtronic cervical plate patent. On April 25, 2013, the Company and Medtronic entered into a settlement agreement fully resolving the second phase of the case. The settlement also removed from the case the cervical plate patent that was part of the first phase. As part of the settlement, the Company received a broad license to practice (i) the Medtronic patent that was the sole subject of the second phase of the litigation, (ii) the Medtronic cervical plate patent that was part of the first phase of the litigation, and (iii) each of the Medtronic patent families that collectively represent the vast majority of Medtronic’s patent rights related to cervical plate technology. In exchange for these license rights, the Company made a one-time payment to Medtronic of $7.5 million ® ® In August 2012, Medtronic filed additional patent claims in the U.S. District Court for the Northern District of Indiana alleging that various Company spinal implants (including its CoRoent ® Trademark Infringement Litigation On September 25, 2009, Neurovision Medical Products, Inc. (NMP) filed suit against the Company in the U.S. District Court for the Central District of California (Case No. 2:09-cv-06988-R-JEM) alleging trademark infringement and unfair competition. NMP sought cancellation of NuVasive’s “NeuroVision” trademark registrations, injunctive relief and damages based on NMP’s common law use of the “NeuroVision” mark. The matter was tried in October 2010 and an unfavorable jury verdict was delivered against the Company. The verdict awarded damages to NMP of $60.0 million. $62.5 million s recorded in short-term liabilities commensurate with the restricted assets. The $2.8 million gain resulting from the litigation accrual adjustment was recorded in the Consolidated Statement of Operations during the second quarter 2015. The Company previously escrowed funds totaling $32.5 million to secure the amount of judgment, and cover potential attorney’s fees and costs. Those funds accrued interest and were included in short-term restricted cash and investments in the Consolidated Balance Sheets until funding of the settlement which occurred during the third quarter 2015. At December 31, 2015, the Company had no remaining liability or restricted cash related to this matter. Securities Litigation On August 28, 2013, a purported securities class action lawsuit was filed in the U.S. District Court for the Southern District of California naming the Company and certain of its current and former executive officers for allegedly making false and materially misleading statements regarding the Company’s business and financial results, specifically relating to the purported improper submission of false claims to Medicare and Medicaid. The complaint asserts a putative class period stemming from October 22, 2008 to July 30, 2013. The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder and seeks unspecified monetary relief, interest, and attorneys’ fees. On February 13, 2014, the lead plaintiff (“Plaintiff”) filed an Amended Class Action Complaint for Violations of the Federal Securities Laws. The District Court granted the Company’s motion to dismiss the Amended Complaint and ordered Plaintiff to amend its complaint. Plaintiff filed a Second Amended Complaint on September 8, 2014, and the District Court once again granted the Company’s motion to dismiss the complaint with leave to amend. On December 23, 2014 Plaintiff filed a Third Amended Complaint. The Company filed a motion to dismiss, and while the Company’s motion was pending, Plaintiff sought leave to file a Fourth Amended Complaint. The Company moved to dismiss the Fourth Amended Complaint. On August 28, 2015, the District Court issued an order granting the Company’s motion to dismiss the Fourth Amended Complaint with leave to amend. On September 11, 2015, Plaintiff filed a Fifth Amended Complaint and the Company subsequently filed a motion to dismiss. The Court has not yet ruled on the Company’s motion. At December 31, 2015, the probable outcome of this litigation cannot be determined, nor can the Company estimate a range of potential loss. In accordance with authoritative guidance on the evaluation of loss contingencies, the Company has not recorded an accrual related to this litigation. |
Regulatory Matters
Regulatory Matters | 12 Months Ended |
Dec. 31, 2015 | |
Regulatory Matter [Abstract] | |
Regulatory Matters | 12. Regulatory Matters In 2013, the Company received a federal administrative subpoena from the Office of the Inspector General of the U.S. Department of Health and Human Services (OIG) in connection with an investigation into possible false or otherwise improper claims submitted to Medicare and Medicaid. In April 2015, the Company announced that it had reached an agreement in principle with the U.S. Department of Justice (“DOJ”) to settle this matter, and in July 2015, the Company entered into a definitive settlement agreement. Under the terms of the agreement, the Company agreed to pay $13.5 million plus fees and accrued interest of approximately $0.3 million to resolve this matter. The settlement was not an admission of liability or wrongdoing by the Company, and the Company was not required to enter into a corporate integrity agreement with the OIG as part of the settlement. In accordance with the authoritative guidance on the evaluation of loss contingencies, the Company recorded a $13.8 million litigation charge related to this matter, which is included in the Consolidated Statements of Operations during the year ended December 31, 2015, and funded the $13.8 million settlement during the year ended December 31, 2015. On August 31, 2015, the Company received a civil investigative demand (“CID”) issued by the DOJ pursuant to the federal False Claims Act. The CID requires the delivery of a wide range of documents and information related to an investigation by the DOJ concerning allegations that the Company assisted a physician group customer in submitting improper claims for reimbursement and made improper payments to the physician group in violation of the Anti-Kickback Statute. The Company is cooperating with the DOJ. No assurance can be given as to the timing or outcome of this investigation. At December 31, 2015, the probable outcome of this matter cannot be determined, nor can the Company estimate a range of potential loss. In accordance with authoritative guidance on the evaluation of loss contingencies, the Company has not recorded an accrual related to this matter. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events Acquisition of Ellipse Technologies, Inc. On January 4, 2016, the Company entered into a definitive agreement to acquire Ellipse Technologies for an upfront payment of $380.0 million at the closing and a potential milestone payment of $30.0 million payable in 2017 related to the achievement of specific revenue targets. The closing of the acquisition occurred on February 11, 2016, and Ellipse Technologies is now a wholly-owned subsidiary of the Company. In connection with the closing, the Company used approximately $380.0 million of its available cash and investments on hand to pay the upfront payment to security holders of Ellipse Technologies, as well as related transaction fees and expenses. Ellipse Technologies offers magnetically adjustable implant systems based on the MAGnetic External Control (“MAGEC”), technology platform. Revolving Senior Credit Facility In February 2016, the Company entered into a Credit Agreement (the “Credit Agreement”) for a revolving senior credit facility (the “Facility”) that provides for secured revolving loans, multicurrency loan options and letters of credit in an aggregate amount of up to $150.0 million. The Credit Agreement also contains an expansion feature, which allows the Company to increase the aggregate principal amount of the Facility provided the Company remains in compliance with the underlying financial covenants. The Facility expires in February 2021. Borrowings under the Facility are used by us to provide financing for working capital and other general corporate purposes, including potential mergers and acquisitions. Loans under the Facility bear interest, at the option of the Company, at either LIBOR (determined in accordance with the Credit Agreement) plus an applicable margin ranging from 1.00 % - 2.00 % per annum subject to Company’s applicable consolidated leverage ratio or the Base Rate (determined in accordance with the Credit Agreement), plus an applicable margin ranging from 0.0% - 1.25% per annum subject to Company’s applicable consolidated leverage ratio. The Facility has a commitment fee, which accrues at a rate of 0.2% - 0.4% per annum (determined in accordance with the Credit Agreement) based on the Company’s current leverage ratio. The Credit Agreement contains affirmative, negative and financial covenants, and events of default customary for financings of this type. The financial covenants require the Company to maintain ratios of consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) to consolidated interest expense, and to consolidated debt, respectively, as defined in the Credit Agreement, at varying scales throughout the life of the Credit Agreement. The Facility grants the lenders preferred first priority liens and security interests in capital stock, intercompany debt and all of the present and future property and assets of the Company and each guarantor. |
Quarterly Data (unaudited)
Quarterly Data (unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Data (unaudited) | 14. Quarterly Data (unaudited) The following quarterly financial data, in the opinion of management, reflects all adjustments, consisting of normal recurring adjustments necessary, for a fair presentation of results for the periods presented (in thousands, except per share amounts): Year Ended December 31, 2015 First Quarter (1) Second Quarter Third Quarter Fourth Quarter Total revenues $ 192,383 $ 202,910 $ 200,538 $ 215,282 Gross profit 146,719 154,495 151,371 164,049 Consolidated net income 31,397 10,040 12,750 11,103 Net income attributable to NuVasive, Inc. 31,560 10,268 12,960 11,503 Basic net income per common share attributable to NuVasive, Inc. 0.66 0.21 0.26 0.23 Diluted net income per common share attributable to NuVasive, Inc. 0.61 0.20 0.24 0.22 Year Ended December 31, 2014 First Quarter (2) Second Quarter (3) Third Quarter Fourth Quarter Total revenues $ 177,496 $ 190,677 $ 189,918 $ 204,324 Gross profit 134,202 145,841 142,199 157,815 Consolidated net income (loss) (18,533 ) (4,270 ) (1,987 ) 7,292 Net income (loss) attributable to NuVasive, Inc. (18,276 ) (4,088 ) (1,830 ) 7,473 Basic net income (loss) per common share attributable to NuVasive, Inc. (0.40 ) (0.09 ) (0.04 ) 0.16 Diluted net income (loss) per common share attributable to NuVasive, Inc. (0.40 ) (0.09 ) (0.04 ) 0.15 (1) Consolidated financial results include a litigation liability gain of $56.4 million stemming from a favorable appeal in Phase 1 of the Medtronic litigation, and a litigation liability loss of $13.8 million in connection with the OIG investigation. (2) Consolidated financial results include a litigation liability charge of $30.0 million representing the reasonably estimated probable loss related to an unfavorable jury verdict. ( 3 ) Consolidated financial results include a intangible assets impairment charge of $10.7 million related to the developed technology acquired from Cervitech in 2009. |
Valuation Accounts
Valuation Accounts | 12 Months Ended |
Dec. 31, 2015 | |
Valuation And Qualifying Accounts [Abstract] | |
Valuation Accounts | Schedule II: Valuation Accounts (In thousands) Balance at Beginning of Period Additions Charged to Expense (1) Deductions or Others (2) Balance at End of Period Inventory Reserve Year ended December 31, 2015 $ 22,578 $ 20,705 $ 14,821 $ 28,462 Year ended December 31, 2014 $ 21,874 $ 11,425 $ 10,721 $ 22,578 Year ended December 31, 2013 $ 16,856 $ 10,003 $ 4,985 $ 21,874 (1) Amount represents excess and obsolete reserve recorded to cost of sales. ( 2 ) Excess and obsolete inventory write-off against reserve or adjustment of reserve formerly established. |
Organization and Significant 23
Organization and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business | Description of Business NuVasive, Inc. (the “Company” or “NuVasive”) was incorporated in Delaware on July 21, 1997, and began commercializing its products in 2001. The Company’s principal product offering includes a minimally-disruptive surgical platform called Maximum Access Surgery, or MAS. The MAS platform combines three categories of solutions that collectively minimize soft tissue disruption during spine fusion surgery, provide maximum visualization and are designed to enable safe and reproducible outcomes for the surgeon and the patient. The platform includes our proprietary software-driven nerve detection and avoidance systems, NVM5, and Intraoperative Monitoring (“IOM”), services and support; MaXcess, an integrated split-blade retractor system; and a wide variety of specialized implants and biologics. The Company also recently launched Integrated Global Alignment (“iGA”), in which products and computer assisted technology under the MAS platform help achieve more precise spinal alignment. The individual components of the MAS platform, and many of the Company’s products, can also be used in open or traditional spine surgery. The Company continues to focus research and development efforts to expand its MAS product platform and advance the applications of its unique technology into procedurally-integrated surgical solutions. The Company dedicates significant resources toward training spine surgeons on its unique technology and products. The Company’s primary business model is to loan its MAS systems to surgeons and hospitals that purchase implants, biologics and disposables for use in individual procedures. In addition, for larger customers, the Company’s proprietary nerve monitoring systems, MaXcess and surgical instrument sets are placed with hospitals for an extended period at no up-front cost to them. The Company also offers a range of bone allograft in patented saline packaging, disposables and spine implants, which include its branded CoRoent ® On February 11, 2016, the Company completed the acquisition of Ellipse Technologies, Inc. (“Ellipse Technologies”). Refer to Note 13 to the Consolidated Financial Statements included in this Annual Report for further discussion on the acquisition of Ellipse Technologies. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its majority-owned or controlled subsidiaries, collectively referred to as either NuVasive or the Company. The Company translates the financial statements of its foreign subsidiaries using end-of-period exchange rates for assets and liabilities and average exchange rates during each reporting period for results of operations. When there is a portion of equity in an acquired subsidiary not attributable, directly or indirectly, to the respective parent entity, the Company records the fair value of the non-controlling interests at the acquisition date and classifies the amounts attributable to non-controlling interests separately in equity in the Company's Consolidated Financial Statements. Any subsequent changes in a parent's ownership interest while the parent retains its controlling financial interest in its subsidiary are accounted for as equity transactions. All significant intercompany balances and transactions have been eliminated in consolidation. Reclassification of prior period amounts to conform to current period presentation does not affect any content or total of prior period financial statements. |
Use of Estimates | Use of Estimates To prepare financial statements in conformity with generally accepted accounting principles (“GAAP”) accepted in the United States, management must make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Recently Adopted Accounting Standards | Recent Accounting Pronouncements Not Yet Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update No. 2014-09, , (“ASU 2014-09”) an updated standard on revenue recognition. ASU 2014-09 provides enhancements to the quality and consistency of how revenue is reported by companies while also improving comparability in the financial statements of companies reporting using International Financial Reporting Standards or GAAP. The main purpose of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which a company expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively and improve guidance for multiple-element arrangements. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which deferred the effective date of the new revenue standard for periods beginning after December 15, 2016 to December 15, 2017, with early adoption permitted but not earlier than the original effective date. Accordingly, the updated standard is effective for the Company in the first quarter of fiscal 2018. The Company is evaluating the impact of implementation and transition approach of this standard on its financial statements but does not anticipate a material impact on its financial statements. In April 2014, the FASB issued ASU No. 2015-03 amended requirements that require debt issuance costs, related to a recognized debt liability, to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The Company will apply the amended presentation requirements on January 1, 2016 and does not expect a material impact on its financial statements. Recently Adopted Accounting Standards On November 20, 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, requiring all deferred tax assets and liabilities, and any related valuation allowance, to be classified as non-current on the balance sheet. The Company elected to adopt the accounting standard in the fourth quarter of 2015 with prior periods in the Consolidated Financial Statements retrospectively adjusted. Upon adoption of ASU 2015-17, current deferred tax assets of $22.0 million and current deferred tax liabilities of $0.8 million in the December 31, 2015 consolidated balance sheet were reclassified as non-current. Additionally, current deferred tax assets of $47.9 million and current deferred tax liabilities of $0.8 million in the December 31, 2014 consolidated balance sheet were reclassified as non-current. |
Revenue Recognition | Revenue Recognition In accordance with the Securities and Exchange Commission’s guidance, the Company recognizes revenue when all four of the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) delivery of the products and/or services has occurred; (iii) the selling price is fixed or determinable; and (iv) collectability is reasonably assured. Specifically, revenue from the sale of implants, biologics and disposables is generally recognized upon acknowledgment of a purchase order from the hospital indicating product use or implantation or upon shipment to third-party customers who immediately accept title. Revenue from the sale of instrument sets is recognized upon receipt of a purchase order and the subsequent shipment to customers who immediately accept title. |
Accounts Receivable and Related Valuation Accounts | Accounts Receivable and Related Valuation Accounts Accounts receivable in the accompanying consolidated balance sheets are presented net of allowances for doubtful accounts. In addition, the Company establishes a reserve for estimated sales returns and price adjustments that is recorded as a reduction to revenue. This reserve is maintained to account for the future return and price adjustments of products sold in the current period. |
Concentration of Credit Risk and Significant Customers | Concentration of Credit Risk and Significant Customers Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents, short-term and long-term marketable securities and accounts receivable. The Company limits its exposure to credit loss by placing its cash and investments with high credit quality financial institutions. Additionally, the Company has established guidelines regarding diversification of its investments and their maturities, which are designed to maintain principal and maximize liquidity. Additionally, the Company has a diverse customer base and no single customer represented greater than ten percent of sales or accounts receivable for any of the periods presented. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist principally of cash and cash equivalents, marketable securities, restricted investments, derivatives, contingent considerations, accounts receivable, accounts payable, accrued expenses, and Senior Convertible Notes. The Company measures certain assets and liabilities in accordance with authoritative guidance which requires fair value measurements to be classified and disclosed in one of the following three categories: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain assets or liabilities within the fair value hierarchy. The Company did not have any transfers of assets and liabilities between the levels of the fair value measurement hierarchy during the years presented. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments that are readily convertible into cash and have an original maturity of three months or less at the time of purchase to be cash equivalents. |
Marketable Securities | Marketable Securities We define marketable securities as income yielding securities that can be readily converted into cash. Marketable securities consist of certificates of deposit, corporate notes, commercial paper, U.S. government treasury securities, and securities of government-sponsored entities. We classify all such securities as available-for-sale as the sale of such securities may be required prior to maturity to implement management strategies. These securities are carried at fair value with the unrealized gains and losses reported as a component of other comprehensive income in equity until realized. Realized gains and losses and declines in value judged to be other-than-temporary, if any, on available-for-sale securities are included in other income or expense on the Consolidated Statements of Operations and a new accounting cost basis for the security is established in the period in which it occurs. We review our investments if there is an indicator of possible other-than-temporary impairment. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the investee, and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the straight-line method and are included in interest income on the Consolidated Statements of Operations. Interest and dividends on securities classified as available-for-sale are also included in interest income on the Consolidated Statements of Operations. Realized gains and losses from the sale of marketable securities, if any, are determined on a specific identification basis. Realized gains and losses and interest income related to marketable securities were immaterial during all periods presented. We maintain an investment policy that requires a diversified investment portfolio in terms of types, maturities, and credit exposure, and invests with institutions that have high credit quality. Annually, we reassess the investment policy to ensure it is reflective of current markets and conditions. We do not currently hold financial instruments for speculative purposes. |
Derivatives | Derivatives The Company maintains a foreign currency risk management strategy that uses derivative instruments to protect against fluctuations in earnings and cash flows that may rise from volatility in currency exchange rates. The Company uses foreign currency forward exchange contracts to hedge the currency exchange rate exposure from short-term intercompany receivables and payables denominated in a currency other than the reporting entity’s functional currency. Realized and unrealized gains or losses forward contracts are included in the determination of net income as the forward contracts are not designated for hedge accounting under ASC Topic 815, Derivatives and Hedging. |
Inventory | Inventory Inventory consists primarily of purchased finished goods, which includes specialized implants and disposables, and is stated at the lower of cost or market determined by utilizing a standard cost method which approximates the weighted average cost. The Company reviews the components of its inventory on a periodic basis for excess and obsolescence and records a reserve for the identified items. At December 31, 2015 and 2014, the balance of the allowance for excess and obsolete inventory is $32.7 million and $22.6 million, respectively. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company’s goodwill represents the excess of the cost over the fair value of net assets acquired from its business combinations. The determination of the value of goodwill and intangible assets arising from business combinations and asset acquisitions requires extensive use of accounting estimates and judgments to allocate the purchase price to the fair value of the net tangible and intangible assets acquired, including capitalized Intangible assets acquired in a business combination that are used for in-process research and development activities are considered indefinite lived until the completion or abandonment of the associated research and development efforts. Upon reaching the end of the relevant research and development project, the Company will amortize the acquired IPR&D over its estimated useful life or expense the acquired in-process research and development should the research and development project be unsuccessful with no future alternative use. Goodwill and IPR&D are not amortized; however, they are assessed for impairment using fair value measurement techniques on an annual basis or more frequently if facts and circumstance warrant such a review. The goodwill or IPR&D are considered to be impaired if we determine that the carrying value of the reporting unit or IPR&D exceeds its respective fair value. The Company performs its goodwill impairment analysis at the reporting unit level, which aligns with the Company’s reporting structure and availability of discrete financial information. If a qualitative assessment is performed the evaluation includes management estimates of cash flow projections based on internal future projections . Key assumptions for these projections include revenue growth, future gross and operating margin growth, and its weighted cost of capital and terminal growth rates. The revenue and margin growth is based on increased sales of new and existing products as we maintain our investment in research and development. Additional assumed value creators may include increased efficiencies from capital spending. The resulting cash flows are discounted using a weighted average cost of capital. Operating mechanisms and requirements to ensure that growth and efficiency assumptions will ultimately be realized are also considered in the evaluation, including timing and probability of regulatory approvals for Company products to be commercialized. The Company’s market capitalization is also considered as a part of its analysis. The Company’s annual evaluation for impairment of goodwill consists of two reporting units; the Progentix reporting unit and the remainder of the Company (the “primary reporting unit”). In accordance with our policy, we completed our most recent annual evaluation for impairment as of October 1, 2015 and determined that no impairment existed, and it was determined that no reporting unit of the Company was at risk of impairment when assessing the unit’s fair value compared to its carrying value. In addition, no indicators of impairments were noted through December 31, 2015 and consequently, no impairment charge has been recorded during the year. Intangible assets with a finite life, such as acquired technology, customer relationships, manufacturing know-how, licensed technology, supply agreements and certain trade names and trademarks, are amortized on a straight-line basis over their estimated useful life, ranging from 1 to 17 years. Intangible assets with a finite life are tested for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. In determining the useful lives of intangible assets, the Company considers the expected use of the assets and the effects of obsolescence, demand, competition, anticipated technological advances, changes in surgical techniques, market influences and other economic factors. For technology based intangible assets, the Company considers the expected life cycles of products which incorporate the corresponding technology. Trademarks and trade names that are related to products are assigned lives consistent with the period in which the products bearing each brand are expected to be sold. See Note 2 to the Consolidated Financial Statements included in this Annual Report for further discussion on goodwill and intangible assets. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, ranging from 2 to 20 years. The Company depreciates leasehold improvements over their estimated useful lives or the term of the applicable lease, whichever is shorter. Leased property meeting certain capital lease criteria is capitalized, and the net present value of the related lease payments is recorded as a liability. Amortization of assets under capital leases is recorded using the straight-line method over the shorter of the estimated useful lives or the lease terms. The Company reviews property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated future undiscounted cash flows relating to the asset are less than its carrying amount. An impairment loss is measured as the amount by which the carrying amount of an asset exceeds its fair value. |
Income Taxes | Income Taxes The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Tax law and rate changes are reflected in income in the period such changes are enacted. The Company includes interest and penalties related to income taxes, including unrecognized tax benefits, within income tax expense. The Company’s income tax returns are based on calculations and assumptions that are subject to examination by the Internal Revenue Service and other tax authorities. In addition, the calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While the Company believes it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcomes of examinations by tax authorities in determining the adequacy of its provision for income taxes. The Company continually assesses the likelihood and amount of potential adjustments and adjusts the income tax provision, income taxes payable and deferred taxes in the period in which the facts that give rise to a revision become known. The Company recognizes windfall tax benefits associated with share-based awards directly to stockholders’ equity when realized. A windfall tax benefit occurs when the actual tax benefit realized by the Company upon an employee’s disposition of a share-based award exceeds the deferred tax asset, if any, associated with the award that the Company had recorded. When assessing whether excess tax benefits relating to share-based compensation have been realized, the Company follows the with-and-without approach excluding any indirect effects of the excess tax deductions. Under this approach, excess tax benefits related to share-based compensation are not deemed to be realized until after the utilization of all other tax benefits available to the Company. Significant judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and the valuation allowance recorded against our net deferred tax assets. Deferred tax assets and liabilities are determined using the enacted tax rates in effect for the years in which those tax assets are expected to be realized. A valuation allowance is established when it is more likely than not the future realization of all or some of the deferred tax assets will not be achieved. The evaluation of the need for a valuation allowance is performed on a jurisdiction-by-jurisdiction basis, and includes a review of all available positive and negative evidence. Factors reviewed include projections of pre-tax book income for the foreseeable future, determination of cumulative pre-tax book income after permanent differences, earnings history, and reliability of forecasting. See Note 9 to the Consolidated Financial Statements included in this Annual Report for further discussion on income taxes. |
Loss Contingencies | Loss Contingencies An estimated loss contingency is accrued in the Company’s financial statements if it is probable or reasonably possible that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on the Company’s assessment, it has adequately accrued an amount for contingent liabilities currently in existence. The Company does not accrue amounts for liabilities that it does not believe are probable or that it considers immaterial to its overall financial position. In most cases, significant judgment is required to estimate the amount and timing of a loss to be recorded. The Company is involved in a number of legal actions arising out of the normal course of our business. The outcomes of these legal actions are not within the Company’s complete control and may not be known for prolonged periods of time. In some actions, the claimants seek damages as well as other relief, including injunctions barring the sale of products that are the subject of the lawsuit, that could require significant expenditures or result in lost revenues. Litigation is inherently unpredictable, and unfavorable resolutions could occur. As a result, assessing contingencies is highly subjective and requires judgment about future events. The amount of ultimate loss may exceed the Company’s current accruals, and it is possible that its cash flows or results of operations could be materially affected in any particular period by the unfavorable resolution of one or more of these contingencies. See Note 11 to the Consolidated Financial Statements included in this Annual Report for further discussion on legal proceedings. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Comprehensive income (loss) includes net of tax, unrealized gains or losses on the Company’s marketable securities and foreign currency translation adjustments. The cumulative translation adjustments included in accumulated other comprehensive loss were $11.6 million, $9.5 million, and $3.3 million at December 31, 2015, 2014, and 2013, respectively. |
Research and Development | Research and Development Research and development costs are expensed as incurred. To the extent the Company purchases research and development assets with a future alternative use the Company will capitalize and amortize the assets over its useful life. |
Product Shipment Costs | Product Shipment Costs Product shipment costs are included in sales, marketing and administrative expense in the accompanying consolidated statements of operations and were $21.6 million, $23.6 million, and $21.7 million for the years ended December 31, 2015, 2014, and 2013, respectively. The majority of the Company’s shipping costs are related to the loan of instrument sets, which are not sold as part of the Company’s core sales offering. Amounts billed to customers for shipping and handling of products are reflected in revenues and are not significant for any period presented. |
Restructuring Charges | Restructuring Charges During the year ended December 31, 2014, the Company exited a portion of its New Jersey property and subsequently, in 2015, made the decision to terminate the respective lease entirely to reduce its footprint on the east coast of the United States as part of a company-wide efficiency effort to match its business needs without adversely impacting its ability to deliver surgeon education and local customer fulfillment. As a result, the Company recognized restructuring charges of $2.1 million and $6.4 million during the years ended December 31, 2015 and 2014, respectively. The restructuring charges mainly consist of future rental payments through 2017, and lease termination fee, net of estimated future sublease income and deferred rent write-offs. The Company also recorded impairment charges associated with the exit related to leasehold improvement write-offs of $0.9 million and $2.2 million, in 2015 and 2014, respectively. All of the associated charges are recorded |
Business Transition Costs | Business Transition Costs The Company incurs various costs related to business combination and integration activities. These activities include restructuring and integrating acquired entities and existing operations through business consolidation activities. Types of costs include severance, relocation, consulting, and other costs directly related to the activity. The Company recorded such expenses of $6.5 million and $1.4 million during the years ended December 31, 2015 and 2014, respectively. The expense related to these activities was minimal during the year ended December 31, 2013. |
Stock-based Compensation | Stock-based Compensation Stock-based compensation expense for equity-classified awards, principally related to restricted stock units (“RSUs”) and performance restricted stock units (“PRSUs”), is measured at the grant date based on the estimated fair value of the award and is recognized over the employee’s requisite service period on an accelerated basis. The fair value of equity instruments that are expected to vest is recognized and amortized over the requisite service period. The Company has granted awards with up to five year graded or cliff vesting terms . The fair value of RSUs including PRSUs with pre-defined performance criteria pre-defined performance criteria is adjusted with the probability of achievement of such performance criteria at each period end Stock-based compensation expense is adjusted from the grant date to exclude expense for awards that are expected to be forfeited. The forfeiture estimate is adjusted as necessary through the vesting date so that full compensation cost is recognized only for awards that vest. The Company assesses the reasonableness of the estimated forfeiture rate at least annually, with any change to be made on a cumulative basis in the period the estimated forfeiture rates change. The Company considered its historical experience of pre-vesting forfeitures on awards by each homogenous group of shareowners as the basis to arrive at its estimated annual pre-vesting forfeiture rates. The Company estimates the fair value of stock options issued under its equity incentive plans and shares issued to shareowners under its employee stock purchase plan using a Black-Scholes option-pricing model on the date of grant. The Black-Scholes option-pricing model incorporates various and highly sensitive assumptions including expected volatility, expected term and risk-free interest rates. The expected volatility is based on the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected term of the Company’s stock options and ESPP which is derived from historical experience. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield in effect at the time of grant. The Company has never declared or paid dividends and has no plans to do so in the foreseeable future . See Note 8 to the Consolidated Financial Statements included in this Annual Report for further discussion on stockholder equity and stock-based compensation. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share The Company computes basic net income (loss) per share using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) assumes the conversion, exercise or issuance of all potential common stock equivalents, unless the effect of inclusion would be anti-dilutive. For purposes of this calculation, common stock equivalents include the Company’s stock options, unvested RSUs, including those with performance and market conditions, warrants, and the shares to be issued upon the conversion of the Senior Convertible Notes. For the years 2014 and 2013, no shares related to the assumed conversion of the Senior Convertible Notes were included in the diluted net income (loss) calculation because the inclusion of such shares would have had an anti-dilutive effect. The shares to be issued upon exercise of all outstanding warrants were excluded from the diluted net income (loss) calculation for the years 2014 and 2013 because the inclusion of such shares would have had an anti-dilutive effect. The following table sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except share data) Year Ended December 31, 2015 2014 2013 Numerator: Net income (loss) available to the Company $ 66,291 $ (16,720 ) $ 7,902 Denominator for basic and diluted net income (loss) per share: Weighted average common shares outstanding for basic 48,687 46,715 44,461 Dilutive potential common stock outstanding: Stock options and ESPP 1,089 — 416 RSUs 1,157 — 1,909 Warrants 177 — — Senior Convertible Notes 1,314 — — Weighted average common shares outstanding for diluted 52,424 46,715 46,786 Basic net income (loss) per share attributable to NuVasive, Inc. $ 1.36 $ (0.36 ) $ 0.18 Diluted net income (loss) per share attributable to NuVasive, Inc. $ 1.26 $ (0.36 ) $ 0.17 The following weighted outstanding common stock equivalents were not included in the calculation of net income (loss) per diluted share because their effects were anti-dilutive (in thousands) Year Ended December 31, 2015 2014 2013 Stock Options, ESPP, and RSUs 40 8,902 5,015 Warrants 4,777 9,553 12,709 Senior Convertible Notes — 9,553 9,890 Total 4,817 28,008 27,614 |
Organization and Significant 24
Organization and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except share data) Year Ended December 31, 2015 2014 2013 Numerator: Net income (loss) available to the Company $ 66,291 $ (16,720 ) $ 7,902 Denominator for basic and diluted net income (loss) per share: Weighted average common shares outstanding for basic 48,687 46,715 44,461 Dilutive potential common stock outstanding: Stock options and ESPP 1,089 — 416 RSUs 1,157 — 1,909 Warrants 177 — — Senior Convertible Notes 1,314 — — Weighted average common shares outstanding for diluted 52,424 46,715 46,786 Basic net income (loss) per share attributable to NuVasive, Inc. $ 1.36 $ (0.36 ) $ 0.18 Diluted net income (loss) per share attributable to NuVasive, Inc. $ 1.26 $ (0.36 ) $ 0.17 |
Anti-dilutive common stock equivalents not included in calculation of net income per diluted share | The following weighted outstanding common stock equivalents were not included in the calculation of net income (loss) per diluted share because their effects were anti-dilutive (in thousands) Year Ended December 31, 2015 2014 2013 Stock Options, ESPP, and RSUs 40 8,902 5,015 Warrants 4,777 9,553 12,709 Senior Convertible Notes — 9,553 9,890 Total 4,817 28,008 27,614 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Balance Sheet Details [Abstract] | |
Property and equipment net | Property and Equipment, net Property and equipment, net, consisted of the following ( in thousands, except years : December 31, Useful Life 2015 2014 Instrument sets 4 $ 214,893 $ 189,774 Machinery and equipment 5 to 7 26,871 25,413 Computer equipment and software 3 to 7 55,480 52,269 Leasehold improvements 2 to 15 17,331 20,083 Furniture and fixtures 3 to 7 5,884 7,282 Building and improvements 10 to 20 10,875 7,507 Land — 1,288 541 332,622 302,869 Less: accumulated depreciation and amortization (191,181 ) (174,304 ) $ 141,441 $ 128,565 |
Goodwill and intangible assets | Goodwill and Intangible Assets Goodwill and intangible assets as of December 31, 2015 consisted of the following (in thousands, except years): Weighted- Average Amortization Period Gross Accumulated Intangible (in years) Amount Amortization Assets, net Intangible Assets Subject to Amortization: Developed technology 9 $ 92,648 $ (37,382 ) $ 55,266 Manufacturing know-how and trade secrets 12 21,787 (13,296 ) 8,491 Trade name and trademarks 11 9,500 (5,068 ) 4,432 Customer relationships 8 44,752 (27,865 ) 16,887 Total intangible assets subject to amortization 10 $ 168,687 $ (83,611 ) $ 85,076 Intangible Assets Not Subject to Amortization: Goodwill 154,281 Total goodwill and intangible assets, net $ 239,357 Goodwill and intangible assets as of December 31, 2014 consisted of the following (in thousands, except years): Weighted- Average Amortization Period Gross Accumulated Intangible (in years) Amount Amortization Assets, net Intangible Assets Subject to Amortization: Developed technology 9 $ 79,008 $ (27,760 ) $ 51,248 Manufacturing know-how and trade secrets 12 21,879 (11,640 ) 10,239 Trade name and trademarks 11 9,500 (4,264 ) 5,236 Customer relationships 8 43,153 (23,961 ) 19,192 Total intangible assets subject to amortization 10 $ 153,540 $ (67,625 ) $ 85,915 Intangible Assets Not Subject to Amortization: In-process research and development 10,640 Goodwill 154,443 Total goodwill and intangible assets, net $ 250,998 |
Future amortization expense related to intangible assets | Total future amortization expense related to intangible assets subject to amortization at December 31, 2015 is set forth in the table below (in thousands): 2016 $ 17,589 2017 14,392 2018 13,882 2019 12,528 2020 12,117 Thereafter through 2026 14,568 Total future amortization expense $ 85,076 |
Change to goodwill | The changes to goodwill are comprised of the following ( in thousands December 31, 2015 2014 Balance at January 1 $ 154,443 $ 154,944 Addition recorded in connection with acquisition — — Reduction recorded in connection with disposal of business — (292 ) Other (162 ) (209 ) Balance at December 31 $ 154,281 $ 154,443 |
Accounts payable and accrued liabilities | Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following ( in thousands : December 31, 2015 2014 Accrued expenses $ 31,187 $ 49,014 Distributor commissions payable 8,502 8,329 Accounts payable 6,792 13,648 Other taxes payable 6,386 6,888 Royalties payable 4,454 51,377 Others 3,665 4,068 Accounts payable and accrued liabilities $ 60,986 $ 133,324 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments Debt And Equity Securities [Abstract] | |
Composition of Marketable Securities | Contractual Maturity (in Years) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2015: Classified as current assets Certificates of deposit Less than 1 $ 6,615 $ — $ — $ 6,615 Corporate notes Less than 1 108,739 5 (173 ) 108,571 Commercial paper Less than 1 21,991 — — 21,991 Securities of government-sponsored entities Less than 1 28,284 — (38 ) 28,246 Short-term marketable securities 165,629 5 (211 ) 165,423 Classified as non-current assets Certificates of deposit 1 to 2 12,392 — — 12,392 Corporate notes 1 to 2 43,857 — (109 ) 43,748 Securities of government-sponsored entities 1 to 2 56,412 — (220 ) 56,192 Long-term marketable securities 112,661 — (329 ) 112,332 Total marketable securities at December 31, 2015 $ 278,290 $ 5 $ (540 ) $ 277,755 December 31, 2014: Classified as current assets Certificates of deposit Less than 1 $ 282 $ — $ — $ 282 Corporate notes Less than 1 129,037 8 (105 ) 128,940 Commercial paper Less than 1 11,290 — — 11,290 U.S. government treasury securities Less than 1 1,500 1 — 1,501 Securities of government-sponsored entities Less than 1 78,333 12 (29 ) 78,316 Short-term marketable securities 220,442 21 (134 ) 220,329 Classified as non-current assets Corporate notes 1 to 2 14,082 — (13 ) 14,069 Securities of government-sponsored entities 1 to 2 28,996 — (23 ) 28,973 Long-term marketable securities 43,078 - (36 ) 43,042 Classified as restricted investments U.S. government treasury securities Less than 2 51,331 13 (13 ) 51,331 Securities of government-sponsored entities Less than 2 42,862 2 (54 ) 42,810 Restricted investments 94,193 15 (67 ) 94,141 Total marketable securities at December 31, 2014 $ 357,713 $ 36 $ (237 ) $ 357,512 |
Schedule of Derivatives Not Designated as Cash Flow Hedges | The following table summarizes the fair values of derivative instruments at December 31, 2015 and 2014: Asset Derivatives Liability Derivatives Fair Value Fair Value Balance Sheet December 31, December 31, Balance Sheet December 31, December 31, (in thousands) Location 2015 2014 Location 2015 2014 Derivatives instruments not designated as cash flow hedges Forward exchange contracts Other current assets * $ — Other current liabilities $ — * Total derivatives $ * $ — $ — $ * *De minimus amount recognized in the hedge relationship. |
Schedule of Derivative Instruments Effect on Statements of Operations | The following table summarizes the effect of derivative instruments on the Consolidated Statements of Operations for the years ended December 31, 2015 and 2014: Year ended December 31, 2015 Year ended December 31, 2014 Location of Amount of Location of Amount of (Gain)/Loss (Gain)/Loss (Gain)/Loss (Gain)/Loss Recognized in Recognized in Recognized in Recognized in (in thousands) Income Income Income Income Derivatives instruments not designated as cash flow hedges Forward exchange contracts Other (income) expense $ (1,693 ) Other (income) expense $ (730 ) Total derivatives $ (1,693 ) $ (730 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Table [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The fair values of the Company’s assets and liabilities, including cash equivalents, marketable securities, restricted investments, derivatives, and contingent considerations are measured at fair value on a recurring basis, and are determined under the fair value categories as follows ( in thousands Quoted Price in Significant Other Significant Active Market Observable Inputs Unobservable Total (Level 1) (Level 2) Inputs (Level 3) December 31, 2015: Cash Equivalents and Marketable Securities: Money market funds $ 68,425 $ 68,425 $ — $ — Certificates of deposit 19,007 19,007 — — Corporate notes 152,319 — 152,319 — Commercial paper 21,991 — 21,991 — Securities of government-sponsored entities 115,929 115,929 — Total cash equivalents and marketable securities $ 377,671 $ 87,432 $ 290,239 $ — December 31, 2014: Cash Equivalents, Marketable Securities and Restricted Investments: Money market funds $ 39,963 $ 39,963 $ — $ — Certificates of deposit 282 282 — — Corporate notes 143,009 — 143,009 — Commercial paper 11,290 — 11,290 — U.S. government treasury securities 52,831 52,831 — — Securities of government-sponsored entities 150,101 — 150,101 — Total cash equivalents, marketable securities and restricted investments $ 397,476 $ 93,076 $ 304,400 $ — Contingent Consideration: Acquisition-related liabilities, current $ (644 ) $ — $ — $ (644 ) Total contingent consideration $ (644 ) $ — $ — $ (644 ) |
Fair Value Liabilities Measured on Recurring Basis Unobservable Input Reconciliation | The following table sets forth the changes in the estimated fair value of the Company’s liabilities measured on a recurring basis using significant unobservable inputs (Level 3) ( in thousands 2015 2014 Fair value measurement at January 1 $ 644 $ 1,212 Contingent consideration assumed 431 — Change in fair value measurement included in operating expenses (36 ) 40 Contingent consideration paid or settled (1,039 ) (608 ) Fair value measurement at December 31 $ — $ 644 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Combination Description [Abstract] | |
Summary of assets and liabilities included in the accompanying consolidated balance sheet | Total assets and liabilities of Progentix included in the accompanying consolidated balance sheet are as follows (in thousands): December 31, 2015 2014 Total current assets $ 353 $ 839 Identifiable intangible assets, net 13,048 13,935 Goodwill 12,654 12,654 Other long-term assets — 1 Accounts payable & accrued expenses 574 542 Deferred tax liabilities, net 1,496 2,770 Non-controlling interests 7,309 8,310 |
Reconciliation of equity attributable to the non-controlling interests | The following is a reconciliation of equity attributable to the non-controlling interests ( in thousands Year Ended December 31, 2015 2014 Non-controlling interests at beginning of period $ 8,310 $ 9,086 Less: Net (loss) attributable to the non-controlling interests subsequent to reclassification from mezzanine to equity (1,001 ) (776 ) Non-controlling interests at end of period $ 7,309 $ 8,310 |
Senior Convertible Notes (Table
Senior Convertible Notes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Net carrying amount of the debt component | The carrying values of the Company’s Senior Convertible Notes are as follows ( in thousands December 31, 2015 2014 2.75% Senior Convertible Notes due 2017: Principal amount $ 402,500 $ 402,500 Unamortized debt discount (25,958 ) (41,754 ) Total Senior Convertible Notes $ 376,542 $ 360,746 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Future minimum annual lease payments under capital and operating leases | The Company’s future minimum annual lease payments under capital and operating leases, including payments for costs directly associated with the facility leases, for years ending after December 31, 2015 are as follows (in thousands): Capital Operating Leases Leases 2016 $ 554 $ 9,701 2017 162 9,278 2018 20 6,640 2019 — 6,430 2020 — 6,478 Thereafter — 17,111 Total minimum lease payments $ 736 $ 55,638 Less amount representing interest (41 ) Present value of obligations under capital leases 695 Less current portion (521 ) Long-term capital lease obligations $ 174 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Compensation costs included in statement of income for all stock-based compensation arrangements | The compensation cost that has been included in the statement of operations for our stock-based compensation plans was as follows ( in thousands) Year Ended December 31, 2015 2014 2013 Sales, marketing and administrative expense $ 24,817 $ 31,514 $ 31,425 Research and development expense 1,157 1,841 1,649 Cost of goods sold 229 332 166 Stock-based compensation expense before taxes 26,203 33,687 33,240 Related income tax benefits (10,481 ) (13,475 ) (13,296 ) Stock-based compensation expense, net of taxes $ 15,722 $ 20,212 $ 19,944 |
Summary of restricted stock units | The total fair value of RSUs that vested during the year ended December 31, 2015, 2014, and 2013 was $39.0 million, $27.5 million and $10.4 million, respectively. Following is a summary of RSU activity for the year ended December 31, 2015 ( in thousands, except per share amounts Weighted Average Number of Grant Date Shares Fair Value Nonvested at December 31, 2014 2,066 $ 24.99 Granted 361 47.92 Vested (833 ) 23.41 Forfeited (245 ) 28.52 Nonvested at December 31, 2015 1,349 $ 31.82 For the majority of RSUs, shares are issued on the vesting dates net of the amount of shares needed to satisfy statutory tax withholding requirements to be paid by the Company on behalf of the employees. The total shares withheld related to vested RSUs were approximately 330,000 and 29,000 in 2015 and 2014, respectively, and were based on the value of the awards on their vesting dates as determined by the Company’s closing stock price. Total payments for the employees’ tax obligations to the taxing authorities related to vesting RSUs were $15.4 million and $1.1 million in 2015 and 2014, respectively. No shares were withheld from vesting RSUs in 2013. |
Schedule of performance-based restricted stock units | Following is a summary of PRSU activity for the year ended December 31, 2015 ( in thousands, except per share amounts Maximum Number Shares of Shares Eligible to be Issued Average Grant Date Fair Value Outstanding at December 31, 2014 727 936 $ 18.51 Awarded at target 607 1,093 48.34 Achieved in excess of target 95 — 36.39 Vested (588 ) (588 ) 18.52 Forfeited (38 ) (84 ) 37.29 Outstanding at December 31, 2015 803 1,357 $ 46.42 |
Summary of stock option activity under all stock plans | Weighted-Average Remaining Weighted Contractual Aggregate Avg. Exercise Term Intrinsic Shares Price (Years) Value Outstanding at December 31, 2014 5,286 $ 32.11 3.88 $ 79,594 Exercised (3,295 ) 30.49 Cancelled (21 ) 23.08 Outstanding at December 31, 2015 1,970 34.91 2.99 $ 37,820 Exercisable at December 31, 2015 1,970 $ 34.91 2.99 $ 37,820 Vested or expected to vest at December 31, 2015 1,970 $ 34.91 2.99 $ 37,820 |
Weighted average assumptions used to estimate fair value of stock options granted and stock purchase rights under ESPP | The weighted average assumptions used to estimate the fair value of stock options granted and stock purchase rights under the ESPP are as follows: Year Ended December 31, 2015 2014 2013 ESPP Volatility 40 % 46 % 55 % Expected term (years) 1.2 1.3 1.5 Risk free interest rate 0.2 % 0.2 % 0.2 % Expected dividend yield — % — % — % |
Common stock reserved for future issuance | The following table summarizes common shares reserved for issuance on exercise or conversion at December 31, 2015 (in thousands) Issued and outstanding stock options 1,970 Issued and outstanding RSUs and PRSUs 2,423 Available for issuance under the ESPP 1,549 Available for future grant 1,359 2017 Notes 12,419 2017 Warrants 19,106 Total shares reserved for future issuance 38,826 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Summarized details of income (loss) before income taxes by region | Total income (loss) before income taxes summarized by region for the years ended December 31 is as follows ( in thousands Year Ended December 31, 2015 2014 2013 United States $ 128,489 $ 11,462 $ 8,818 Foreign (16,470 ) (22,672 ) 950 Total income (loss) before income taxes $ 112,019 $ (11,210 ) $ 9,768 |
Components of income tax expense (benefit) | The income tax provision (benefit) for the years ended December 31 consists of the following ( in thousands Year Ended December 31, 2015 2014 2013 Current: Federal $ 1,480 $ 32,387 $ 10,484 State 178 3,359 2,718 Foreign 2,090 2,259 922 Total current provision 3,748 38,005 14,124 Deferred: Federal 42,719 (28,604 ) (7,042 ) State 4,433 (2,296 ) (2,074 ) Foreign (698 ) (1,528 ) (1,829 ) Total deferred provision 46,454 (32,428 ) (10,945 ) Changes in tax rate 266 (84 ) — Changes in valuation allowance (3,739 ) 793 (396 ) Total provision $ 46,729 $ 6,286 $ 2,783 |
Effective income tax rate continuing operations tax rate reconciliation | The differences between the income tax provision at the United States federal statutory tax rate and the Company’s effective tax rate for the years ended December 31 are the following ( in thousands Year Ended December 31, 2015 2014 2013 Tax provision at federal statutory rate $ 39,207 $ (3,923 ) $ 3,419 Globalization initiative 9,039 9,244 — State income tax (benefit) 4,264 827 (222 ) Valuation allowance (3,739 ) 793 (396 ) Income tax reserves 2,301 657 285 Compensation expense (2,115 ) 1,428 1,052 Income tax credits and incentives (1,754 ) (2,198 ) (1,668 ) Non-deductible meals and entertainment 638 521 343 Foreign earnings taxed as non-United States rates (494 ) (199 ) 205 Other (618 ) (864 ) (235 ) Total provision $ 46,729 $ 6,286 $ 2,783 |
Significant components of Company's deferred tax assets and liabilities | Significant components of the Company’s deferred tax assets and liabilities at December 31 are composed of the following (in thousands): December 31, 2015 2014 Deferred tax assets: Litigation and related accrual $ 34,054 $ 66,307 Share-based compensation 23,641 36,104 Inventory 13,344 9,988 Net operating loss carryforwards 3,484 6,638 General business and other credit carryforwards 5,425 4,336 Deferred rent 5,154 5,354 Other 14,739 12,417 Gross deferred tax assets 99,841 141,144 Less valuation allowance (7,290 ) (11,026 ) Net deferred tax assets 92,551 130,118 Deferred tax liabilities: Depreciation (24,361 ) (19,642 ) Original issue discount (1,090 ) (1,629 ) Acquired intangibles (295 ) (293 ) Other (1,278 ) — Total deferred tax liabilities (27,024 ) (21,564 ) Consolidated net deferred tax assets $ 65,527 $ 108,554 Add deferred tax liability, net, attributable to non-controlling interests 897 1,681 Net deferred tax assets $ 66,424 $ 110,235 |
Schedule of Gross Unrecognized Tax Benefits Roll Forward | The following table summarizes the activity related to our unrecognized tax benefits ( in thousands Year Ended December 31, 2015 2014 2013 Gross unrecognized tax benefits at January 1 $ 12,372 $ 4,504 $ 4,399 Increases in tax positions for prior years 2,614 5,294 92 Decreases in tax positions for prior years (3,156 ) - - Increases in tax positions for current year relating to ongoing operations 618 2,574 13 Gross unrecognized tax benefits at December 31 $ 12,448 $ 12,372 $ 4,504 |
Business Segment, Product and G
Business Segment, Product and Geographical Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Revenue from External Customers by Products and Services | Revenue by product line offerings was as follows: Year Ended December 31, (in thousands) 2015 2014 2013 Spine Surgery Products $ 678,891 $ 632,845 $ 569,540 Biologics 132,222 129,570 115,633 Total Revenue $ 811,113 $ 762,415 $ 685,173 |
Schedule of Revenue from Net Property and Equipment by Geographical Areas | Revenue and property and equipment, net, by geographic area were as follows : Revenue Property Year Ended December 31, December 31, (in thousands) 2015 2014 2013 2015 2014 United States $ 714,768 $ 667,850 $ 620,363 $ 112,581 $ 105,022 International (excludes Puerto Rico) 96,345 94,565 64,810 28,860 23,543 Total $ 811,113 $ 762,415 $ 685,173 $ 141,441 $ 128,565 |
Quarterly Data (unaudited) (Tab
Quarterly Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of unaudited quarterly financial data | The following quarterly financial data, in the opinion of management, reflects all adjustments, consisting of normal recurring adjustments necessary, for a fair presentation of results for the periods presented (in thousands, except per share amounts): Year Ended December 31, 2015 First Quarter (1) Second Quarter Third Quarter Fourth Quarter Total revenues $ 192,383 $ 202,910 $ 200,538 $ 215,282 Gross profit 146,719 154,495 151,371 164,049 Consolidated net income 31,397 10,040 12,750 11,103 Net income attributable to NuVasive, Inc. 31,560 10,268 12,960 11,503 Basic net income per common share attributable to NuVasive, Inc. 0.66 0.21 0.26 0.23 Diluted net income per common share attributable to NuVasive, Inc. 0.61 0.20 0.24 0.22 Year Ended December 31, 2014 First Quarter (2) Second Quarter (3) Third Quarter Fourth Quarter Total revenues $ 177,496 $ 190,677 $ 189,918 $ 204,324 Gross profit 134,202 145,841 142,199 157,815 Consolidated net income (loss) (18,533 ) (4,270 ) (1,987 ) 7,292 Net income (loss) attributable to NuVasive, Inc. (18,276 ) (4,088 ) (1,830 ) 7,473 Basic net income (loss) per common share attributable to NuVasive, Inc. (0.40 ) (0.09 ) (0.04 ) 0.16 Diluted net income (loss) per common share attributable to NuVasive, Inc. (0.40 ) (0.09 ) (0.04 ) 0.15 (1) Consolidated financial results include a litigation liability gain of $56.4 million stemming from a favorable appeal in Phase 1 of the Medtronic litigation, and a litigation liability loss of $13.8 million in connection with the OIG investigation. (2) Consolidated financial results include a litigation liability charge of $30.0 million representing the reasonably estimated probable loss related to an unfavorable jury verdict. ( 3 ) Consolidated financial results include a intangible assets impairment charge of $10.7 million related to the developed technology acquired from Cervitech in 2009. |
Organization and Significant 35
Organization and Significant Accounting Policies (Details Textual) | Oct. 01, 2015USD ($) | Dec. 31, 2015USD ($)Customersegment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Schedule Of Organization And Significant Accounting Policies [Line Items] | ||||
Deferred tax assets, non-current | $ 67,051,000 | $ 111,354,000 | ||
Deferred tax liabilities, non-current | $ 8,602,000 | 11,441,000 | ||
Customer represented greater than 10 percent | Customer | 0 | |||
Inventory Valuation Reserves | $ 32,700,000 | 22,600,000 | ||
Number of Reportable Units | segment | 2 | |||
Impairment of goodwill and intangible assets | $ 0 | |||
Impairment charges related to goodwill | $ 0 | |||
Translation Adjustment Functional to Reporting Currency, Net of Tax | (11,600,000) | (9,500,000) | $ (3,300,000) | |
Product shipment costs | 21,600,000 | 23,600,000 | $ 21,700,000 | |
Restructuring and associated impairment charges | 2,100,000 | 6,400,000 | ||
Gain from writing-off deferred rent liabilities and leasehold improvements | 900,000 | 2,200,000 | ||
Relocation, consulting, and other costs | $ 6,500,000 | $ 1,400,000 | ||
Performance Based Restricted Stock Units (PRSUs) [Member] | ||||
Schedule Of Organization And Significant Accounting Policies [Line Items] | ||||
Vesting period for the award | 5 years | 5 years | ||
Minimum [Member] | ||||
Schedule Of Organization And Significant Accounting Policies [Line Items] | ||||
Finite-Lived intangible assets, useful life | 1 year | |||
Property and equipment, useful life | 2 years | |||
Maximum [Member] | ||||
Schedule Of Organization And Significant Accounting Policies [Line Items] | ||||
Finite-Lived intangible assets, useful life | 17 years | |||
Property and equipment, useful life | 20 years | |||
Reclassification [Member] | ||||
Schedule Of Organization And Significant Accounting Policies [Line Items] | ||||
Deferred tax assets, non-current | $ 22,000,000 | $ 47,900,000 | ||
Deferred tax liabilities, non-current | $ 800,000 | $ 800,000 |
Organization and Significant 36
Organization and Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | [1] | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | [2] | Mar. 31, 2014 | [3] | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Numerator: | ||||||||||||||
Net income (loss) available to the Company | $ 66,291 | $ (16,720) | $ 7,902 | |||||||||||
Denominator for basic and diluted net income (loss) per share: | ||||||||||||||
Weighted average common shares outstanding for basic | 48,687,000 | 46,715,000 | 44,461,000 | |||||||||||
Dilutive potential common stock outstanding: | ||||||||||||||
Weighted average common shares outstanding for diluted | 52,424,000 | 46,715,000 | 46,786,000 | |||||||||||
Basic net income (loss) per share attributable to NuVasive, Inc. | $ 0.23 | $ 0.26 | $ 0.21 | $ 0.66 | $ 0.16 | $ (0.04) | $ (0.09) | $ (0.40) | $ 1.36 | $ (0.36) | $ 0.18 | |||
Diluted net income (loss) per share attributable to NuVasive, Inc. | $ 0.22 | $ 0.24 | $ 0.20 | $ 0.61 | $ 0.15 | $ (0.04) | $ (0.09) | $ (0.40) | $ 1.26 | $ (0.36) | $ 0.17 | |||
Stock options and ESPP [Member] | ||||||||||||||
Dilutive potential common stock outstanding: | ||||||||||||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 1,089,000 | 416,000 | ||||||||||||
RSUs [Member] | ||||||||||||||
Dilutive potential common stock outstanding: | ||||||||||||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 1,157,000 | 1,909,000 | ||||||||||||
Warrants [Member] | ||||||||||||||
Dilutive potential common stock outstanding: | ||||||||||||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 177,000 | |||||||||||||
Senior Convertible Notes [Member] | ||||||||||||||
Dilutive potential common stock outstanding: | ||||||||||||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 1,314,000 | |||||||||||||
[1] | Consolidated financial results include a litigation liability gain of $56.4 million stemming from a favorable appeal in Phase 1 of the Medtronic litigation, and a litigation liability loss of $13.8 million in connection with the OIG investigation. | |||||||||||||
[2] | Consolidated financial results include a intangible assets impairment charge of $10.7 million related to the developed technology acquired from Cervitech in 2009. | |||||||||||||
[3] | Consolidated financial results include a litigation liability charge of $30.0 million representing the reasonably estimated probable loss related to an unfavorable jury verdict. |
Organization and Significant 37
Organization and Significant Accounting Policies (Details 1) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earnings per share | 4,817 | 28,008 | 27,614 |
Stock Options, ESPP, and RSUs [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earnings per share | 40 | 8,902 | 5,015 |
Warrants [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earnings per share | 4,777 | 9,553 | 12,709 |
Senior Convertible Notes [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earnings per share | 9,553 | 9,890 |
Balance Sheet Details (Details)
Balance Sheet Details (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property and equipment net | ||
Property and equipment, gross | $ 332,622 | $ 302,869 |
Less: accumulated depreciation and amortization | (191,181) | (174,304) |
Property and equipment, net | $ 141,441 | 128,565 |
Minimum [Member] | ||
Property and equipment net | ||
Property and equipment, useful life | 2 years | |
Maximum [Member] | ||
Property and equipment net | ||
Property and equipment, useful life | 20 years | |
Instrument sets [Member] | ||
Property and equipment net | ||
Property and equipment, useful life | 4 years | |
Property and equipment, gross | $ 214,893 | 189,774 |
Machinery and equipment [Member] | ||
Property and equipment net | ||
Property and equipment, gross | $ 26,871 | 25,413 |
Machinery and equipment [Member] | Minimum [Member] | ||
Property and equipment net | ||
Property and equipment, useful life | 5 years | |
Machinery and equipment [Member] | Maximum [Member] | ||
Property and equipment net | ||
Property and equipment, useful life | 7 years | |
Computer equipment and software [Member] | ||
Property and equipment net | ||
Property and equipment, gross | $ 55,480 | 52,269 |
Computer equipment and software [Member] | Minimum [Member] | ||
Property and equipment net | ||
Property and equipment, useful life | 3 years | |
Computer equipment and software [Member] | Maximum [Member] | ||
Property and equipment net | ||
Property and equipment, useful life | 7 years | |
Leasehold improvements [Member] | ||
Property and equipment net | ||
Property and equipment, gross | $ 17,331 | 20,083 |
Leasehold improvements [Member] | Minimum [Member] | ||
Property and equipment net | ||
Property and equipment, useful life | 2 years | |
Leasehold improvements [Member] | Maximum [Member] | ||
Property and equipment net | ||
Property and equipment, useful life | 15 years | |
Furniture and fixtures [Member] | ||
Property and equipment net | ||
Property and equipment, gross | $ 5,884 | 7,282 |
Furniture and fixtures [Member] | Minimum [Member] | ||
Property and equipment net | ||
Property and equipment, useful life | 3 years | |
Furniture and fixtures [Member] | Maximum [Member] | ||
Property and equipment net | ||
Property and equipment, useful life | 7 years | |
Building and improvements [Member] | ||
Property and equipment net | ||
Property and equipment, gross | $ 10,875 | 7,507 |
Building and improvements [Member] | Minimum [Member] | ||
Property and equipment net | ||
Property and equipment, useful life | 10 years | |
Building and improvements [Member] | Maximum [Member] | ||
Property and equipment net | ||
Property and equipment, useful life | 20 years | |
Land [Member] | ||
Property and equipment net | ||
Property and equipment, gross | $ 1,288 | $ 541 |
Balance Sheet Details (Details
Balance Sheet Details (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Oct. 31, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property Plant And Equipment [Line Items] | ||||||
Depreciation expense | $ 49,800,000 | $ 52,300,000 | $ 43,800,000 | |||
Assets recorded under capital leases | 1,500,000 | 1,500,000 | ||||
Accelerated depreciation | 0 | 4,200,000 | ||||
Capitalized internal use software development costs | 17,600,000 | 17,300,000 | ||||
Capitalized internal use software amortization | 7,300,000 | 7,700,000 | 5,500,000 | |||
Amortization expense related to intangible assets | 16,100,000 | 13,571,000 | $ 19,326,000 | |||
In-process research and development | $ 10,600,000 | 10,640,000 | ||||
Impairment charge, intangible assets | $ 10,700,000 | 10,700,000 | ||||
Accrued expenses related to intangible asset | 27,400,000 | |||||
Litigation accrual adjustment | $ 41,826,000 | (30,000,000) | ||||
Medtronic Litigation [Member] | ||||||
Property Plant And Equipment [Line Items] | ||||||
Litigation accrual adjustment | $ 56,400,000 | |||||
Developed technology [Member] | ||||||
Property Plant And Equipment [Line Items] | ||||||
Finite-Lived intangible assets, useful life | 6 years | |||||
Impairment charge, intangible assets | 10,700,000 | |||||
Service Life [Member] | ||||||
Property Plant And Equipment [Line Items] | ||||||
Change in accounting estimate, effect on net income | $ 1,800,000 | |||||
Change in accounting estimate on earning per share | $ 0.04 |
Balance Sheet Details (Detail40
Balance Sheet Details (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Oct. 31, 2015 | Dec. 31, 2013 | |
Intangible Assets Not Subject to Amortization: | ||||
In-process research and development | $ 10,640 | $ 10,600 | ||
Goodwill | $ 154,281 | 154,443 | $ 154,944 | |
Total goodwill and intangible assets, net | $ 239,357 | $ 250,998 | ||
Intangible Assets Subject to Amortization: | ||||
Weighted Average Amortization Period | 10 years | 10 years | ||
Gross Amount | $ 168,687 | $ 153,540 | ||
Accumulated Amortization | (83,611) | (67,625) | ||
Intangible Assets, net | $ 85,076 | $ 85,915 | ||
Developed technology [Member] | ||||
Intangible Assets Subject to Amortization: | ||||
Weighted Average Amortization Period | 9 years | 9 years | ||
Gross Amount | $ 92,648 | $ 79,008 | ||
Accumulated Amortization | (37,382) | (27,760) | ||
Intangible Assets, net | $ 55,266 | $ 51,248 | ||
Manufacturing know-how and trade secrets [Member] | ||||
Intangible Assets Subject to Amortization: | ||||
Weighted Average Amortization Period | 12 years | 12 years | ||
Gross Amount | $ 21,787 | $ 21,879 | ||
Accumulated Amortization | (13,296) | (11,640) | ||
Intangible Assets, net | $ 8,491 | $ 10,239 | ||
Trade name and trademarks [Member] | ||||
Intangible Assets Subject to Amortization: | ||||
Weighted Average Amortization Period | 11 years | 11 years | ||
Gross Amount | $ 9,500 | $ 9,500 | ||
Accumulated Amortization | (5,068) | (4,264) | ||
Intangible Assets, net | $ 4,432 | $ 5,236 | ||
Customer relationships [Member] | ||||
Intangible Assets Subject to Amortization: | ||||
Weighted Average Amortization Period | 8 years | 8 years | ||
Gross Amount | $ 44,752 | $ 43,153 | ||
Accumulated Amortization | (27,865) | (23,961) | ||
Intangible Assets, net | $ 16,887 | $ 19,192 |
Balance Sheet Details (Detail41
Balance Sheet Details (Details 2) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Future amortization expense related to intangible assets | ||
2,016 | $ 17,589 | |
2,017 | 14,392 | |
2,018 | 13,882 | |
2,019 | 12,528 | |
2,020 | 12,117 | |
Thereafter through 2026 | 14,568 | |
Intangible Assets, net | $ 85,076 | $ 85,915 |
Balance Sheet Details (Detail42
Balance Sheet Details (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Change to goodwill | ||
Balance at January 1 | $ 154,443 | $ 154,944 |
Reduction recorded in connection with disposal of business | (292) | |
Other | (162) | (209) |
Balance at December 31 | $ 154,281 | $ 154,443 |
Balance Sheet Details (Detail43
Balance Sheet Details (Details 4) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts payable and accrued liabilities | ||
Accrued expenses | $ 31,187 | $ 49,014 |
Distributor commissions payable | 8,502 | 8,329 |
Accounts payable | 6,792 | 13,648 |
Other taxes payable | 6,386 | 6,888 |
Royalties payable | 4,454 | 51,377 |
Others | 3,665 | 4,068 |
Accounts payable and accrued liabilities | $ 60,986 | $ 133,324 |
Marketable Securities - Composi
Marketable Securities - Composition of Marketable Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | $ 278,290 | $ 357,713 |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 5 | 36 |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (540) | (237) |
Available-for-sale Securities, Fair Value | 277,755 | 357,512 |
Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | 165,629 | 220,442 |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 5 | 21 |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (211) | (134) |
Available-for-sale Securities, Fair Value | 165,423 | 220,329 |
Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | 112,661 | 43,078 |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (329) | (36) |
Available-for-sale Securities, Fair Value | 112,332 | 43,042 |
Certificates of deposit [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | 6,615 | 282 |
Available-for-sale Securities, Fair Value | 6,615 | $ 282 |
Certificates of deposit [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | 12,392 | |
Available-for-sale Securities, Fair Value | $ 12,392 | |
Certificates of deposit [Member] | Maximum [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 1 year | 1 year |
Certificates of deposit [Member] | Maximum [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 2 years | |
Certificates of deposit [Member] | Minimum [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 1 year | |
Commercial paper [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | $ 21,991 | $ 11,290 |
Available-for-sale Securities, Fair Value | $ 21,991 | $ 11,290 |
Commercial paper [Member] | Maximum [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 1 year | 1 year |
Restricted Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | $ 94,193 | |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 15 | |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (67) | |
Available-for-sale Securities, Fair Value | 94,141 | |
Corporate notes [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | $ 108,739 | 129,037 |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 5 | 8 |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (173) | (105) |
Available-for-sale Securities, Fair Value | 108,571 | 128,940 |
Corporate notes [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | 43,857 | 14,082 |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (109) | (13) |
Available-for-sale Securities, Fair Value | $ 43,748 | $ 14,069 |
Corporate notes [Member] | Maximum [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 1 year | 1 year |
Corporate notes [Member] | Maximum [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 2 years | 2 years |
Corporate notes [Member] | Minimum [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 1 year | 1 year |
Securities of government-sponsored entities [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | $ 28,284 | $ 78,333 |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 12 | |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (38) | (29) |
Available-for-sale Securities, Fair Value | 28,246 | 78,316 |
Securities of government-sponsored entities [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | 56,412 | 28,996 |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (220) | (23) |
Available-for-sale Securities, Fair Value | $ 56,192 | $ 28,973 |
Securities of government-sponsored entities [Member] | Maximum [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 1 year | 1 year |
Securities of government-sponsored entities [Member] | Maximum [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 2 years | 2 years |
Securities of government-sponsored entities [Member] | Minimum [Member] | Long-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 1 year | 1 year |
Securities of government-sponsored entities [Member] | Restricted Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | $ 42,862 | |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 2 | |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (54) | |
Available-for-sale Securities, Fair Value | $ 42,810 | |
Securities of government-sponsored entities [Member] | Restricted Investments [Member] | Maximum [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 2 years | |
U.S. government treasury securities [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | $ 1,500 | |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 1 | |
Available-for-sale Securities, Fair Value | $ 1,501 | |
U.S. government treasury securities [Member] | Maximum [Member] | Short-term Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 1 year | |
U.S. government treasury securities [Member] | Restricted Investments [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities, Cost | $ 51,331 | |
Available-for-sale Securities, Gross Unrealized Gains, Before Tax | 13 | |
Available-for-sale Securities, Gross Unrealized Losses, Before Tax | (13) | |
Available-for-sale Securities, Fair Value | $ 51,331 | |
U.S. government treasury securities [Member] | Restricted Investments [Member] | Maximum [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale Securities Contractual Maturity | 2 years |
Marketable Securities (Details
Marketable Securities (Details Textual) | 12 Months Ended | ||
Dec. 31, 2015USD ($)investment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Schedule Of Trading Securities And Other Trading Assets [Line Items] | |||
Unrealized loss position investment | investment | 0 | ||
Impairment charges recorded for earnings | $ 0 | ||
Net currency exchange gains (losses), includes gains and losses from derivatives instruments | 300,000 | $ (2,600,000) | $ 700,000 |
Gain or loss recognized on derivative instruments | $ 0 | ||
Foreign Exchange Forward [Member] | |||
Schedule Of Trading Securities And Other Trading Assets [Line Items] | |||
Notional principal amount | $ 8,500,000 | $ 26,000,000 |
Marketable Securities - Schedul
Marketable Securities - Schedule of Derivative Instruments Effect on Statements of Operations (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Derivative Instruments Gain Loss [Line Items] | |||
Amount of (Gain)/Loss Recognized in Income | $ 0 | ||
Cash Flow Hedges [Member] | Not Designated As Hedging Instrument [Member] | |||
Derivative Instruments Gain Loss [Line Items] | |||
Amount of (Gain)/Loss Recognized in Income | $ (1,693,000) | $ (730,000) | |
Cash Flow Hedges [Member] | Not Designated As Hedging Instrument [Member] | Foreign Exchange Forward [Member] | Other (Income) Expense [Member] | |||
Derivative Instruments Gain Loss [Line Items] | |||
Amount of (Gain)/Loss Recognized in Income | $ (1,693,000) | $ (730,000) |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Assets and Liabilities (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Contingent Consideration: | ||
Acquisition-related liabilities | $ 0 | |
Fair value measurements on recurring basis [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 377,671,000 | $ 397,476,000 |
Contingent Consideration: | ||
Acquisition-related liabilities, current | (644,000) | |
Acquisition-related liabilities | (644,000) | |
Fair value measurements on recurring basis [Member] | Money Market Funds [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 68,425,000 | 39,963,000 |
Fair value measurements on recurring basis [Member] | Certificates of deposit [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 19,007,000 | 282,000 |
Fair value measurements on recurring basis [Member] | Corporate notes [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 152,319,000 | 143,009,000 |
Fair value measurements on recurring basis [Member] | Commercial paper [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 21,991,000 | 11,290,000 |
Fair value measurements on recurring basis [Member] | Securities of government-sponsored entities [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 115,929,000 | 150,101,000 |
Fair value measurements on recurring basis [Member] | U.S. government treasury securities [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 52,831,000 | |
Fair value measurements on recurring basis [Member] | Quoted price in active market (Level 1) [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 87,432,000 | 93,076,000 |
Fair value measurements on recurring basis [Member] | Quoted price in active market (Level 1) [Member] | Money Market Funds [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 68,425,000 | 39,963,000 |
Fair value measurements on recurring basis [Member] | Quoted price in active market (Level 1) [Member] | Certificates of deposit [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 19,007,000 | 282,000 |
Fair value measurements on recurring basis [Member] | Quoted price in active market (Level 1) [Member] | U.S. government treasury securities [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 52,831,000 | |
Fair value measurements on recurring basis [Member] | Significant other observable inputs (Level 2) [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 290,239,000 | 304,400,000 |
Fair value measurements on recurring basis [Member] | Significant other observable inputs (Level 2) [Member] | Corporate notes [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 152,319,000 | 143,009,000 |
Fair value measurements on recurring basis [Member] | Significant other observable inputs (Level 2) [Member] | Commercial paper [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | 21,991,000 | 11,290,000 |
Fair value measurements on recurring basis [Member] | Significant other observable inputs (Level 2) [Member] | Securities of government-sponsored entities [Member] | ||
Marketable Securities and Restricted Investments | ||
Total marketable securities and restricted investments | $ 115,929,000 | 150,101,000 |
Fair value measurements on recurring basis [Member] | Significant unobservable inputs (Level 3) [Member] | ||
Contingent Consideration: | ||
Acquisition-related liabilities, current | (644,000) | |
Acquisition-related liabilities | $ (644,000) |
Fair Value Measurements (Detail
Fair Value Measurements (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | |||
Impairment charge, intangible assets | $ 10.7 | $ 10.7 | |
Quoted price in active market (Level 1) [Member] | |||
Business Acquisition [Line Items] | |||
Debt instrument, fair value disclosure | $ 516.1 | $ 551.4 |
Fair Value Measurements - Estim
Fair Value Measurements - Estimated Fair Value of Liabilities Measured on a Recurring Basis Using Significant Unobservable Inputs (Level 3) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value Disclosures [Abstract] | ||
Fair value measurement at beginning of period | $ 644 | $ 1,212 |
Contingent consideration assumed | 431 | |
Change in fair value measurement included in operating expenses | (36) | 40 |
Contingent consideration paid or settled | $ (1,039) | (608) |
Fair value measurement at end of period | $ 644 |
Business Combinations (Details
Business Combinations (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2009 | |
Business Acquisition [Line Items] | ||
Contingent consideration assumed | $ 0 | |
Progentix Orthobiology [Member] | ||
Business Acquisition [Line Items] | ||
Advanced loan accordance to loan agreement | $ 5,300,000 | |
Accrued interest rate of loan | 6.00% | |
Progentix Orthobiology [Member] | Preferred Stock Purchase Agreement [Member] | ||
Business Acquisition [Line Items] | ||
Percentage of ownership Interests acquired | 40.00% | |
Cash payment on purchase of outstanding shares | $ 10,000,000 | |
Percentage of cumulative dividend, description | cumulative 8% dividend | |
Progentix Orthobiology [Member] | Preferred Stock Purchase Agreement [Member] | Cumulative Preferred Stock [Member] | ||
Business Acquisition [Line Items] | ||
Percentage of minority interest represented by preferred stock | 18.00% | |
Percentage of cumulative dividend | 8.00% |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | |||
Total current assets | $ 702,827 | $ 657,959 | |
Identifiable intangible assets, net | 85,076 | 96,555 | |
Goodwill | 154,281 | 154,443 | $ 154,944 |
Other long-term assets | 21,026 | 26,420 | |
Deferred tax liabilities, net | 27,024 | 21,564 | |
Non-controlling interests | 7,309 | 8,310 | |
Variable Interest Entity [Member] | |||
Business Acquisition [Line Items] | |||
Non-controlling interests | 7,309 | 8,310 | $ 9,086 |
Variable Interest Entity [Member] | Progentix Orthobiology [Member] | |||
Business Acquisition [Line Items] | |||
Total current assets | 353 | 839 | |
Identifiable intangible assets, net | 13,048 | 13,935 | |
Goodwill | 12,654 | 12,654 | |
Other long-term assets | 1 | ||
Accounts payable & accrued expenses | 574 | 542 | |
Deferred tax liabilities, net | 1,496 | 2,770 | |
Non-controlling interests | $ 7,309 | $ 8,310 |
Reconciliation of Equity Attrib
Reconciliation of Equity Attributable to the Non-controlling Interests (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of equity attributable to the non-controlling interests | |||
Non-controlling interests at beginning of period | $ 8,310 | ||
Less: Net (loss) attributable to the non-controlling interests subsequent to reclassification from mezzanine to equity | (1,001) | $ (776) | $ (403) |
Non-controlling interests at end of period | 7,309 | 8,310 | |
Variable Interest Entity [Member] | |||
Reconciliation of equity attributable to the non-controlling interests | |||
Non-controlling interests at beginning of period | 8,310 | 9,086 | |
Less: Net (loss) attributable to the non-controlling interests subsequent to reclassification from mezzanine to equity | (1,001) | (776) | |
Non-controlling interests at end of period | $ 7,309 | $ 8,310 | $ 9,086 |
Senior Convertible Notes (Detai
Senior Convertible Notes (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2011 | Jun. 30, 2011 |
Debt Instrument [Line Items] | ||||
Total Senior Convertible Notes | $ 376,542 | $ 360,746 | ||
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 402,500 | 402,500 | $ 402,500 | |
Unamortized debt discount | (25,958) | (41,754) | $ (88,900) | |
Total Senior Convertible Notes | $ 376,542 | $ 360,746 |
Senior Convertible Notes (Paren
Senior Convertible Notes (Parenthetical) (Details) | Dec. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2011 |
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate on convertible notes | 2.75% | 2.75% | 2.75% |
Senior Convertible Notes (Det55
Senior Convertible Notes (Details Textual) | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2011USD ($)$ / shares | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2011USD ($)$ / sharesshares | |
Debt Instrument [Line Items] | ||||
Contractual coupon interest expense | $ 11,100,000 | $ 11,100,000 | ||
Amortization of debt discount (premium) | 15,800,000 | 14,700,000 | ||
Derivative, maturity date | Jul. 1, 2017 | |||
Initial strike price at which warrants to be acquired | $ / shares | $ 988.51 | |||
Number of common stock shares preferred stock convertible into | shares | 20 | |||
Cash proceeds from the sale of warrants | $ 47,900,000 | |||
2017 Hedge [Member] | ||||
Debt Instrument [Line Items] | ||||
Number of common stock to be purchased | shares | 9,553,096 | |||
Cost of hedge transaction | $ 80,100,000 | |||
Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Class of warrant or rights expiry month and year | 2017-09 | |||
Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Class of warrant or rights expiry month and year | 2018-01 | |||
Maximum [Member] | Series A Convertible Participating Preferred Stock [Member] | ||||
Debt Instrument [Line Items] | ||||
Number of preferred or common stock into which the warrants is converted | shares | 477,654 | |||
Other Expense [Member] | 2017 Hedge [Member] | ||||
Debt Instrument [Line Items] | ||||
Embedded derivative, gain (loss) reclassified to earnings | $ 37,100,000 | |||
Additional Paid-in Capital [Member] | 2017 Hedge [Member] | ||||
Debt Instrument [Line Items] | ||||
Embedded derivative, amount reclassified to stockholders' equity | $ 43,000,000 | |||
Common Shares [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Number of preferred or common stock into which the warrants is converted | shares | 9,553,080 | |||
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 402,500,000 | $ 402,500,000 | $ 402,500,000 | |
Net proceeds of unsecured senior convertible notes | $ 359,200,000 | |||
Interest rate on convertible notes | 2.75% | 2.75% | 2.75% | |
Debt instrument, maturity date | Jul. 1, 2017 | |||
Initial conversion rate adjustment, shares | 23.7344 | |||
Principal amount of debt considered for conversion rate | $ 1,000 | |||
Initial conversion price of convertible notes | $ / shares | $ 42.13 | |||
Fair value of debt conversion cost | $ 25,958,000 | $ 41,754,000 | $ 88,900,000 | |
Effective interest rate | 8.00% | |||
Principal payments due | $ 0 | |||
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | Scenario Two [Member] | ||||
Debt Instrument [Line Items] | ||||
Consecutive trading days considered for debt conversion | 5 days | |||
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Percentage of conversion price | 130.00% | |||
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | Minimum [Member] | Scenario One [Member] | ||||
Debt Instrument [Line Items] | ||||
Consecutive trading days considered for debt conversion | 20 days | |||
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Percentage of conversion price | 98.00% | |||
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | Maximum [Member] | Scenario One [Member] | ||||
Debt Instrument [Line Items] | ||||
Consecutive trading days considered for debt conversion | 30 days | |||
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | Other Income [Member] | ||||
Debt Instrument [Line Items] | ||||
Embedded derivative, gain (loss) reclassified to earnings | $ 39,500,000 | |||
2.75% Senior Convertible Notes [Member] | Convertible Notes due 2017 [Member] | Additional Paid-in Capital [Member] | ||||
Debt Instrument [Line Items] | ||||
Embedded derivative, amount reclassified to stockholders' equity | $ 49,400,000 |
Commitments (Details Textual)
Commitments (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Commitments (Textual) [Abstract] | |||
Restricted cash for security deposit | $ 5.6 | ||
Rent expense | 9.3 | $ 11.5 | $ 12 |
Licensing and Purchasing Agreements [Member] | |||
Commitments (Textual) [Abstract] | |||
Maximum additional payment the company is contingently obligated to make due to several purchase agreements | $ 18.2 | ||
Maximum number of common stock issued for consulting arrangement require payment | 264,000 | ||
Value of common stock issued for consulting arrangement require payment | $ 14.3 | ||
Executive Employment Agreements [Member] | |||
Commitments (Textual) [Abstract] | |||
Other commitments, future minimum payments, remainder of fiscal year | $ 22.1 | ||
Minimum [Member] | |||
Commitments (Textual) [Abstract] | |||
Initial terms of lease | 1 year | ||
Maximum [Member] | |||
Commitments (Textual) [Abstract] | |||
Initial terms of lease | 15 years |
Commitments - Future Minimum Le
Commitments - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Capital Leases | |
2,016 | $ 554 |
2,017 | 162 |
2,018 | 20 |
Total minimum lease payments | 736 |
Less amount representing interest | (41) |
Present value of obligations under capital leases | 695 |
Less current portion | (521) |
Long-term capital lease obligations | 174 |
Operating Leases | |
2,016 | 9,701 |
2,017 | 9,278 |
2,018 | 6,640 |
2,019 | 6,430 |
2,020 | 6,478 |
Thereafter | 17,111 |
Total minimum lease payments | $ 55,638 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) | Feb. 01, 2016 | Mar. 01, 2015 | Feb. 01, 2015 | Mar. 01, 2014 | Feb. 01, 2014 | Mar. 01, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2011 | Jun. 28, 2011 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Common stock, shares authorized | 120,000,000 | 120,000,000 | |||||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |||||||||
Preferred stock, shares issued | 0 | 0 | |||||||||
Preferred stock, shares outstanding | 0 | 0 | |||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||||||
Shares issued on conversion | 20 | ||||||||||
Incremental tax benefits related to stock-based compensation awards | $ 15,185,000 | $ 11,896,000 | $ 13,569,000 | ||||||||
Closing price of stock | $ 54.11 | ||||||||||
Proceeds from exercise of stock options | $ 6,200,000 | 17,500,000 | 3,400,000 | ||||||||
Total intrinsic value | 63,400,000 | 17,600,000 | 2,000,000 | ||||||||
Total fair value of options vested | $ 300,000 | $ 3,500,000 | $ 6,800,000 | ||||||||
Employee Stock Purchase Plan [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
ESPP offering period | 2 years | ||||||||||
Number of share purchased under ESPP | 209,000 | 268,000 | 417,000 | ||||||||
ESPP [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Unrecognized cost related to share-based compensation | $ 700,000 | ||||||||||
Maximum percentage of annual compensation | 15.00% | ||||||||||
Maximum amount withheld to purchase shares of the company | $ 21,250 | ||||||||||
Percentage of issuance price of stock under the stock issuance program | 85.00% | ||||||||||
2014 Equity Incentive Plan [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Percentage of acceleration of stock options in case of change in control | 50.00% | ||||||||||
RSUs [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Unrecognized cost related to share-based compensation | $ 13,500,000 | ||||||||||
Weighted average contractual term | 1 year 9 months 18 days | ||||||||||
Fair value of restricted stock units vested | $ 39,000,000 | $ 27,500,000 | $ 10,400,000 | ||||||||
Total shares withheld related to statutory tax | 330,000 | 29,000 | 0 | ||||||||
Payments of employees tax obligations | $ 15,400,000 | $ 1,100,000 | |||||||||
Vested during the period | 833,000 | ||||||||||
Performance Based Restricted Stock Units (PRSUs) [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Unrecognized cost related to share-based compensation | $ 25,100,000 | ||||||||||
Weighted average contractual term | 3 years 3 months 18 days | ||||||||||
Total shares withheld related to statutory tax | 292,000 | 0 | 0 | ||||||||
Payments of employees tax obligations | $ 13,500,000 | ||||||||||
Vesting period for the award | 5 years | 5 years | |||||||||
Performance Based Restricted Stock Units (PRSUs) [Member] | Granted in 2012 [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Vested during the period | 117,000 | 117,000 | 117,000 | ||||||||
Performance Based Restricted Stock Units (PRSUs) [Member] | Granted in 2013 [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Vested during the period | 470,000 | 470,000 | |||||||||
Performance Based Restricted Stock Units (PRSUs) [Member] | Granted in 2014 [Member] | Subsequent Event [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Vested during the period | 102,000 | ||||||||||
Performance Based Restricted Stock Units (PRSUs) [Member] | Minimum [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Share payout levels | 0.00% | ||||||||||
Performance Based Restricted Stock Units (PRSUs) [Member] | Maximum [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Share payout levels | 250.00% | ||||||||||
Stock Options [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Unrecognized cost related to share-based compensation | $ 0 | ||||||||||
Total shares withheld related to statutory tax | 2,461,000 | 205,000 | 0 | ||||||||
Payments of employees tax obligations | $ 28,000,000 | $ 2,700,000 | |||||||||
Performance Shares [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Fair value of restricted stock units vested | $ 27,100,000 | $ 21,600,000 | $ 2,300,000 | ||||||||
Vested during the period | 588,000 | ||||||||||
Series A Preferred Stock [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Preferred stock, shares authorized | 477,654 | ||||||||||
Preferred stock, par value | $ 0.001 | ||||||||||
Shares issued on conversion | 20 | ||||||||||
Preferred stock, liquidation preference per share | $ 648.20 |
Stockholders' Equity, Stock Com
Stockholders' Equity, Stock Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense before taxes | $ 26,203 | $ 33,687 | $ 33,240 |
Related income tax benefits | (10,481) | (13,475) | (13,296) |
Stock-based compensation expense, net of taxes | 15,722 | 20,212 | 19,944 |
Sales, Marketing and Administrative Expense [Member] | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense before taxes | 24,817 | 31,514 | 31,425 |
Research and development expense [Member] | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense before taxes | 1,157 | 1,841 | 1,649 |
Cost of goods sold [Member] | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense before taxes | $ 229 | $ 332 | $ 166 |
Stockholders' Equity, Restricte
Stockholders' Equity, Restricted Award Activity (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Restricted Stock Units | |
Number of shares nonvested, Ending balance | 2,423 |
RSUs [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Weighted average grant date fair value nonvested, Beginning balance | $ / shares | $ 24.99 |
Weighted average grant date fair value, Granted | $ / shares | 47.92 |
Weighted average grant date fair value, Vested | $ / shares | 23.41 |
Weighted average grant date fair value, Forfeited | $ / shares | 28.52 |
Weighted average grant date fair value nonvested, Ending balance | $ / shares | $ 31.82 |
Restricted Stock Units | |
Number of shares nonvested, Beginning balance | 2,066 |
Number of shares, Granted | 361 |
Number of shares, Vested | (833) |
Number of shares, Forfeited | (245) |
Number of shares nonvested, Ending balance | 1,349 |
Stockholders' Equity Stockholde
Stockholders' Equity Stockholders' Equity, Performance Based Restricted Stock Award Activity (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of shares nonvested, Ending balance | 2,423 |
Maximum Number of Shares Eligible to be Issued, Outstanding, Ending balance | 1,359 |
Performance Shares [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of shares nonvested, Beginning balance | 727 |
Shares, Awarded at target | 607 |
Shares, Achieved in excess of target | 95 |
Number of shares, Vested | (588) |
Number of shares, Forfeited | (38) |
Number of shares nonvested, Ending balance | 803 |
Maximum Number of Shares Eligible to be Issued, Outstanding, Beginning balance | 936 |
Maximum Number of Shares Eligible to be Issued, Awarded at target | 1,093 |
Maximum Number of Shares Eligible to be Issued, Vested | (588) |
Maximum Number of Shares Eligible to be Issued, Forfeited | (84) |
Maximum Number of Shares Eligible to be Issued, Outstanding, Ending balance | 1,357 |
Performance Based Restricted Stock Units (PRSUs) [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Weighted average grant date fair value nonvested, Beginning balance | $ / shares | $ 18.51 |
Average Grant Date Fair Value, Awarded at target | $ / shares | 48.34 |
Average Grant Date Fair Value, Achieved in excess of target | $ / shares | 36.39 |
Average Grant Date Fair Value, Vested | $ / shares | 18.52 |
Average Grant Date Fair Value, Forfeited | $ / shares | 37.29 |
Weighted average grant date fair value nonvested, Ending balance | $ / shares | $ 46.42 |
Stockholders' Equity, Stock Opt
Stockholders' Equity, Stock Options Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of stock option activity under all stock plans | ||
Underlying shares outstanding, Beginning balance | 5,286 | |
Underlying shares, exercised | (3,295) | |
Underlying shares, cancelled | (21) | |
Underlying shares outstanding, Ending balance | 1,970 | 5,286 |
Underlying shares exercisable, Ending balance | 1,970 | |
Underlying shares vested or expected to vest, Ending balance | 1,970 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Weighted average exercise price outstanding, Beginning balance | $ 32.11 | |
Weighted Average Exercise Price, exercised | 30.49 | |
Weighted Average Exercise Price, cancelled | 23.08 | |
Weighted Average Exercise Price outstanding, Ending balance | 34.91 | $ 32.11 |
Weighted Average Exercise Price option exercisable, Ending balance | 34.91 | |
Weighted Average Exercise price vested or expected to vest, Ending balance | $ 34.91 | |
Weighted Average Remaining Contractual Term outstanding, Beginning balance | 2 years 11 months 27 days | 3 years 10 months 17 days |
Weighted Average Remaining Contractual Term exercisable, Ending balance | 2 years 11 months 27 days | |
Weighted Average Remaining Contractual Term vested or expected to vest, Ending balance | 2 years 11 months 27 days | |
Aggregate Intrinsic Value outstanding, Beginning balance | $ 79,594 | |
Aggregate Intrinsic Value outstanding, Ending balance | 37,820 | $ 79,594 |
Aggregate intrinsic value exercisable, Ending balance | 37,820 | |
Aggregate intrinsic value vested or expected to vest, Ending balance | $ 37,820 |
Stockholders' Equity, Assumptio
Stockholders' Equity, Assumptions Table (Details) - ESPP [Member] | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Weighted average assumptions used to estimate fair value of stock options granted and stock purchase rights under ESPP | |||
Volatility | 40.00% | 46.00% | 55.00% |
Expected term (years) | 1 year 2 months 12 days | 1 year 3 months 18 days | 1 year 6 months |
Risk free interest rate | 0.20% | 0.20% | 0.20% |
Stockholders' Equity, Stock Res
Stockholders' Equity, Stock Reserved for Future Issuance (Details) - shares shares in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Common stock options: | ||
Issued and outstanding stock options | 1,970 | 5,286 |
Issued and outstanding RSUs and PRSUs | 2,423 | |
Available for issuance under the ESPP | 1,549 | |
Available for future grant | 1,359 | |
Total shares reserved for future issuance | 38,826 | |
2.75% Senior Convertible Notes due 2017 [Member] | ||
Common stock options: | ||
2017 Notes | 12,419 | |
Senior Convertible Warrants Due 2017 [Member] | ||
Common stock options: | ||
2017 Warrants | 19,106 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Summarized details of income (loss) before income taxes by region | |||
United States | $ 128,489 | $ 11,462 | $ 8,818 |
Foreign | (16,470) | (22,672) | 950 |
(Loss) income before income taxes | $ 112,019 | $ (11,210) | $ 9,768 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||
Federal | $ 1,480 | $ 32,387 | $ 10,484 |
State | 178 | 3,359 | 2,718 |
Foreign | 2,090 | 2,259 | 922 |
Total current provision | 3,748 | 38,005 | 14,124 |
Deferred: | |||
Federal | 42,719 | (28,604) | (7,042) |
State | 4,433 | (2,296) | (2,074) |
Foreign | (698) | (1,528) | (1,829) |
Total deferred provision | 46,454 | (32,428) | (10,945) |
Changes in tax rate | 266 | (84) | |
Changes in valuation allowance | (3,739) | 793 | (396) |
Total income tax (benefit) expense | $ 46,729 | $ 6,286 | $ 2,783 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Tax provision at federal statutory rate | $ 39,207 | $ (3,923) | $ 3,419 |
Globalization initiative | 9,039 | 9,244 | |
State income tax (benefit) | 4,264 | 827 | (222) |
Valuation allowance | (3,739) | 793 | (396) |
Income tax reserves | 2,301 | 657 | 285 |
Compensation expense | (2,115) | 1,428 | 1,052 |
Income tax credits and incentives | (1,754) | (2,198) | (1,668) |
Non-deductible meals and entertainment | 638 | 521 | 343 |
Foreign earnings taxed as non-United States rates | (494) | (199) | 205 |
Other | (618) | (864) | (235) |
Total income tax (benefit) expense | $ 46,729 | $ 6,286 | $ 2,783 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Litigation and related accrual | $ 34,054 | $ 66,307 |
Share-based compensation | 23,641 | 36,104 |
Inventory | 13,344 | 9,988 |
Net operating loss carryforwards | 3,484 | 6,638 |
General business and other credit carryforwards | 5,425 | 4,336 |
Deferred rent | 5,154 | 5,354 |
Other | 14,739 | 12,417 |
Gross deferred tax assets | 99,841 | 141,144 |
Less valuation allowance | (7,290) | (11,026) |
Net deferred tax assets | 92,551 | 130,118 |
Deferred tax liabilities: | ||
Depreciation | (24,361) | (19,642) |
Original issue discount | (1,090) | (1,629) |
Acquired intangibles | (295) | (293) |
Other | (1,278) | |
Total deferred tax liabilities | (27,024) | (21,564) |
Deferred tax assets (liabilities), net | 65,527 | 108,554 |
Non-controlling Interest [Member] | ||
Deferred tax liabilities: | ||
Deferred tax assets (liabilities), net | (897) | (1,681) |
Nuvasive, Inc. Stockholders’ Equity [Member] | ||
Deferred tax liabilities: | ||
Deferred tax assets (liabilities), net | $ 66,424 | $ 110,235 |
Income Taxes - Schedule of Gros
Income Taxes - Schedule of Gross Unrecognized Tax Benefits Roll Forward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Gross unrecognized tax benefits at beginning of period | $ 12,372 | $ 4,504 | $ 4,399 |
Increases in tax positions for prior years | 2,614 | 5,294 | 92 |
Decreases in tax positions for prior years | (3,156) | ||
Increases in tax positions for current year relating to ongoing operations | 618 | 2,574 | 13 |
Gross unrecognized tax benefits period end | $ 12,448 | $ 12,372 | $ 4,504 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes [Line Items] | |||
Gross uncertain tax benefit | $ 400,000 | ||
Unrecognized tax benefits that would impact effective tax | 7,200,000 | $ 7,200,000 | $ 3,200,000 |
Income tax, penalties and interest expense | 100,000 | 0 | 0 |
Income tax penalties and interest accrued | 100,000 | 0 | |
Incremental tax benefits related to stock-based compensation awards | 11,600,000 | 11,900,000 | $ 13,600,000 |
Adjustments to additional paid in capital, income tax benefit from share-based compensation | 11,600,000 | ||
Unrealized excess tax benefits associated with share-based compensation | 18,000,000 | ||
Deferred tax assets valuation allowance | 7,290,000 | $ 11,026,000 | |
Federal Tax Authority [Member] | |||
Income Taxes [Line Items] | |||
Net operating loss carry forwards | $ 38,400,000 | ||
Operating loss carry forwards expiration year | 2,018 | ||
Net research and development carry forwards | $ 5,800,000 | ||
Federal tax credit carryforwards, expiration year | 2,019 | ||
State and Local Jurisdiction [Member] | |||
Income Taxes [Line Items] | |||
Net operating loss carry forwards | $ 54,200,000 | ||
Operating loss carry forwards expiration year | 2,016 | ||
Net research and development carry forwards | $ 11,300,000 | ||
Deferred tax assets valuation allowance | 8,300,000 | ||
Foreign Tax Authority [Member] | |||
Income Taxes [Line Items] | |||
Net operating loss carry forwards | $ 9,200,000 | ||
Operating loss carry forwards expiration year | 2,018 |
Business Segment, Product and71
Business Segment, Product and Geographic Information (Details Textual) | 12 Months Ended |
Dec. 31, 2015segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Business Segment, Product and72
Business Segment, Product and Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | [1] | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | [2] | Mar. 31, 2014 | [3] | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Entity Wide Information Revenue From External Customer [Line Items] | ||||||||||||||
Total Revenue | $ 215,282 | $ 200,538 | $ 202,910 | $ 192,383 | $ 204,324 | $ 189,918 | $ 190,677 | $ 177,496 | $ 811,113 | $ 762,415 | $ 685,173 | |||
Spine surgery products [Member] | ||||||||||||||
Entity Wide Information Revenue From External Customer [Line Items] | ||||||||||||||
Total Revenue | 678,891 | 632,845 | 569,540 | |||||||||||
Biologics [Member] | ||||||||||||||
Entity Wide Information Revenue From External Customer [Line Items] | ||||||||||||||
Total Revenue | $ 132,222 | $ 129,570 | $ 115,633 | |||||||||||
[1] | Consolidated financial results include a litigation liability gain of $56.4 million stemming from a favorable appeal in Phase 1 of the Medtronic litigation, and a litigation liability loss of $13.8 million in connection with the OIG investigation. | |||||||||||||
[2] | Consolidated financial results include a intangible assets impairment charge of $10.7 million related to the developed technology acquired from Cervitech in 2009. | |||||||||||||
[3] | Consolidated financial results include a litigation liability charge of $30.0 million representing the reasonably estimated probable loss related to an unfavorable jury verdict. |
Business Segment, Product and73
Business Segment, Product and Geographic Information (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | [1] | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | [2] | Mar. 31, 2014 | [3] | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues and Net Property and Equipment by Geographical Areas [Line Items] | ||||||||||||||
Revenue | $ 215,282 | $ 200,538 | $ 202,910 | $ 192,383 | $ 204,324 | $ 189,918 | $ 190,677 | $ 177,496 | $ 811,113 | $ 762,415 | $ 685,173 | |||
Property and Equipment, Net | 141,441 | 128,565 | 141,441 | 128,565 | ||||||||||
UNITED STATES | ||||||||||||||
Revenues and Net Property and Equipment by Geographical Areas [Line Items] | ||||||||||||||
Revenue | 714,768 | 667,850 | 620,363 | |||||||||||
Property and Equipment, Net | 112,581 | 105,022 | 112,581 | 105,022 | ||||||||||
International [Member] | ||||||||||||||
Revenues and Net Property and Equipment by Geographical Areas [Line Items] | ||||||||||||||
Revenue | 96,345 | 94,565 | $ 64,810 | |||||||||||
Property and Equipment, Net | $ 28,860 | $ 23,543 | $ 28,860 | $ 23,543 | ||||||||||
[1] | Consolidated financial results include a litigation liability gain of $56.4 million stemming from a favorable appeal in Phase 1 of the Medtronic litigation, and a litigation liability loss of $13.8 million in connection with the OIG investigation. | |||||||||||||
[2] | Consolidated financial results include a intangible assets impairment charge of $10.7 million related to the developed technology acquired from Cervitech in 2009. | |||||||||||||
[3] | Consolidated financial results include a litigation liability charge of $30.0 million representing the reasonably estimated probable loss related to an unfavorable jury verdict. |
Contingencies (Details)
Contingencies (Details) | Jul. 20, 2015USD ($) | Dec. 02, 2014USD ($) | Apr. 25, 2013USD ($) | Sep. 20, 2011USD ($)patent | Oct. 31, 2010USD ($) | Aug. 31, 2008patent | Mar. 31, 2015USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)patent | Dec. 31, 2014USD ($) | Mar. 02, 2015USD ($) | Sep. 30, 2012USD ($) | Dec. 31, 2011USD ($) |
Loss Contingencies [Line Items] | |||||||||||||
Litigation accrual adjustment | $ 41,826,000 | $ (30,000,000) | |||||||||||
Litigation charge | $ 3,600,000 | $ 30,000,000 | |||||||||||
Loss contingency, estimate of possible loss | $ 87,600,000 | ||||||||||||
Legal Proceedings (Textual) [Abstract] | |||||||||||||
Unrecorded royalty damages | 0 | ||||||||||||
Remaining litigation liability | 30,000,000 | ||||||||||||
OIG [Member] | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Litigation accrual adjustment | (13,800,000) | 13,800,000 | |||||||||||
Litigation loss offset | 13,800,000 | ||||||||||||
Legal Proceedings (Textual) [Abstract] | |||||||||||||
Loss contingency, settlement agreement, consideration | $ 13,800,000 | ||||||||||||
Medtronic Litigation [Member] | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Litigation accrual adjustment | 56,400,000 | ||||||||||||
Number of patents assigned or licensed | patent | 12 | 9 | |||||||||||
Number of patents withdrawn | patent | 3 | ||||||||||||
Number of patents selected for litigation | patent | 3 | ||||||||||||
Company's patents in initial phase of litigation | patent | 1 | ||||||||||||
Litigation, damages awarded | $ 101,200,000 | ||||||||||||
Loss contingency, settlement agreement, court | On May 15, 2013, the District Court granted the parties’ joint motion to dismiss claims relating to one of the three Medtronic patents pursuant to a settlement agreement, leaving two Medtronic patents remaining in the litigation. On June 11, 2013, the District Court granted the parties ongoing royalties with respect to the two Medtronic patents and the one Company patent remaining in the first phase of the case (the “June 2013 ruling”). | ||||||||||||
Company's cash and investment in escrow | $ 113,300,000 | ||||||||||||
Release of funds from escrow | 114,100,000 | ||||||||||||
Litigation liability | $ 101,200,000 | ||||||||||||
Royalty accrual charge | 7,900,000 | ||||||||||||
Legal Proceedings (Textual) [Abstract] | |||||||||||||
Unrecorded royalty damages | 700,000 | ||||||||||||
Loss contingency, settlement agreement, consideration | $ 7,500,000 | ||||||||||||
Trademark Infringement [Member] | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Litigation accrual adjustment | $ 2,800,000 | ||||||||||||
Company's cash and investment in escrow | $ 32,500,000 | $ 62,500,000 | |||||||||||
Release of funds from escrow | $ 62,500,000 | ||||||||||||
Litigation liability | 30,000,000 | ||||||||||||
Legal Proceedings (Textual) [Abstract] | |||||||||||||
Loss contingency, settlement agreement, consideration | $ 27,200,000 | ||||||||||||
Jury award | $ 60,000,000 | ||||||||||||
Remaining litigation liability | 0 | ||||||||||||
Restricted cash | $ 0 |
Regulatory Matters (Details Tex
Regulatory Matters (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Jul. 31, 2015 | |
Regulatory Asset [Line Items] | ||||
Liability related to settlement with OIG | $ 41,826 | $ (30,000) | ||
OIG [Member] | ||||
Regulatory Asset [Line Items] | ||||
Definitive settlement agreement payable | $ 13,500 | |||
Fees and accrued interest | $ 300 | |||
Liability related to settlement with OIG | $ (13,800) | 13,800 | ||
Litigation settlement amount | $ 13,800 |
Subsequent Events (Details Text
Subsequent Events (Details Textual) - Subsequent Event [Member] - USD ($) | Feb. 11, 2016 | Jan. 04, 2016 |
Revolving Senior Credit Facility [Member] | ||
Subsequent Event [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 150,000,000 | |
Credit facility, expiration date | 2021-02 | |
Revolving Senior Credit Facility [Member] | Minimum [Member] | ||
Subsequent Event [Line Items] | ||
Line of credit facility, commitment fee percentage | 0.20% | |
Revolving Senior Credit Facility [Member] | Minimum [Member] | LIBOR [Member] | ||
Subsequent Event [Line Items] | ||
Debt instrument, interest rate | 1.00% | |
Revolving Senior Credit Facility [Member] | Minimum [Member] | Base Rate [Member] | ||
Subsequent Event [Line Items] | ||
Debt instrument, interest rate | 0.00% | |
Revolving Senior Credit Facility [Member] | Maximum [Member] | ||
Subsequent Event [Line Items] | ||
Line of credit facility, commitment fee percentage | 0.40% | |
Revolving Senior Credit Facility [Member] | Maximum [Member] | LIBOR [Member] | ||
Subsequent Event [Line Items] | ||
Debt instrument, interest rate | 2.00% | |
Revolving Senior Credit Facility [Member] | Maximum [Member] | Base Rate [Member] | ||
Subsequent Event [Line Items] | ||
Debt instrument, interest rate | 1.25% | |
Ellipse Technologies Inc [Member] | ||
Subsequent Event [Line Items] | ||
Business acquisition, date of agreement | Jan. 4, 2016 | |
Cash payment on purchase of outstanding shares | $ 380,000,000 | |
Business acquisition, potential future milestone payment | $ 30,000,000 |
Quarterly Data (unaudited) (Det
Quarterly Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | [1] | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | [2] | Mar. 31, 2014 | [3] | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||
Total Revenue | $ 215,282 | $ 200,538 | $ 202,910 | $ 192,383 | $ 204,324 | $ 189,918 | $ 190,677 | $ 177,496 | $ 811,113 | $ 762,415 | $ 685,173 | |||
Gross profit | 164,049 | 151,371 | 154,495 | 146,719 | 157,815 | 142,199 | 145,841 | 134,202 | 616,634 | 580,057 | 504,689 | |||
Consolidated net income (loss) | 11,103 | 12,750 | 10,040 | 31,397 | 7,292 | (1,987) | (4,270) | (18,533) | 65,290 | (17,496) | 6,985 | |||
Net income (loss) attributable to NuVasive, Inc. | $ 11,503 | $ 12,960 | $ 10,268 | $ 31,560 | $ 7,473 | $ (1,830) | $ (4,088) | $ (18,276) | $ 66,291 | $ (16,720) | $ 7,902 | |||
Basic net income per common share attributable to NuVasive, Inc. | $ 0.23 | $ 0.26 | $ 0.21 | $ 0.66 | $ 0.16 | $ (0.04) | $ (0.09) | $ (0.40) | $ 1.36 | $ (0.36) | $ 0.18 | |||
Diluted net income per common share attributable to NuVasive, Inc. | $ 0.22 | $ 0.24 | $ 0.20 | $ 0.61 | $ 0.15 | $ (0.04) | $ (0.09) | $ (0.40) | $ 1.26 | $ (0.36) | $ 0.17 | |||
[1] | Consolidated financial results include a litigation liability gain of $56.4 million stemming from a favorable appeal in Phase 1 of the Medtronic litigation, and a litigation liability loss of $13.8 million in connection with the OIG investigation. | |||||||||||||
[2] | Consolidated financial results include a intangible assets impairment charge of $10.7 million related to the developed technology acquired from Cervitech in 2009. | |||||||||||||
[3] | Consolidated financial results include a litigation liability charge of $30.0 million representing the reasonably estimated probable loss related to an unfavorable jury verdict. |
Quarterly Data (unaudited) (Par
Quarterly Data (unaudited) (Parenthetical) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information [Line Items] | |||||
Litigation accrual adjustment | $ 41,826 | $ (30,000) | |||
Litigation charge | $ 3,600 | $ 30,000 | |||
Impairment charge, intangible assets | $ 10,700 | $ 10,700 | |||
OIG [Member] | |||||
Quarterly Financial Information [Line Items] | |||||
Litigation accrual adjustment | (13,800) | $ 13,800 | |||
Medtronic Litigation [Member] | |||||
Quarterly Financial Information [Line Items] | |||||
Litigation accrual adjustment | $ 56,400 |
Valuation Accounts (Details)
Valuation Accounts (Details) - Inventory Reserve [Member] - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Valuation And Qualifying Accounts Disclosure [Line Items] | ||||
Balance at Beginning of Period | $ 22,578 | $ 21,874 | $ 16,856 | |
Additions Charged to Expense | [1] | 20,705 | 11,425 | 10,003 |
Deductions or Others | [2] | 14,821 | 10,721 | 4,985 |
Balance at End of Period | $ 28,462 | $ 22,578 | $ 21,874 | |
[1] | Amount represents excess and obsolete reserve recorded to cost of sales. | |||
[2] | Excess and obsolete inventory write-off against reserve or adjustment of reserve formerly established. |