Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 20, 2015 | Jun. 30, 2014 |
Document Documentand Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | PODD | ||
Entity Registrant Name | INSULET CORP | ||
Entity Central Index Key | 1145197 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Common Stock, Shares Outstanding | 56,447,961 | ||
Entity Public Float | $2.20 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current Assets | ||
Cash and cash equivalents | $151,193 | $149,727 |
Accounts receivable, net | 39,882 | 33,067 |
Inventories | 13,099 | 9,464 |
Prepaid expenses and other current assets | 4,022 | 5,940 |
Total current assets | 208,196 | 198,198 |
Property and equipment, net | 37,069 | 32,356 |
Intangible assets, net | 14,064 | 18,040 |
Goodwill | 37,536 | 37,536 |
Other assets | 5,291 | 1,825 |
Total assets | 302,156 | 287,955 |
Current Liabilities | ||
Accounts payable | 14,659 | 19,359 |
Accrued expenses and other current liabilities | 24,703 | 19,478 |
Deferred revenue | 1,554 | 900 |
Current portion of capital lease obligations | 3,380 | 2,637 |
Total current liabilities | 44,296 | 42,374 |
Capital lease obligations | 2,263 | 5,390 |
Long-term debt, net of discount | 168,994 | 113,651 |
Other long-term liabilities | 2,774 | 1,943 |
Total liabilities | 218,327 | 163,358 |
Commitments and contingencies (Note 12) | ||
Stockholders’ Equity | ||
Preferred stock, $.001 par value: Authorized: 5,000,000 shares at December 31, 2014 and 2013. Issued and outstanding: zero shares at December 31, 2014 and 2013. | 0 | 0 |
Common stock, $.001 par value: Authorized: 100,000,000 shares at December 31, 2014 and 2013. Issued and outstanding: 56,299,022 and 54,870,424 shares at December 31, 2014 and 2013, respectively. | 56 | 55 |
Additional paid-in capital | 661,798 | 651,067 |
Accumulated deficit | -578,025 | -526,525 |
Total stockholders’ equity | 83,829 | 124,597 |
Total liabilities and stockholders’ equity | $302,156 | $287,955 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, Authorized | 5,000,000 | 5,000,000 |
Preferred stock, Issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, Authorized | 100,000,000 | 100,000,000 |
Common stock, Issued | 56,299,022 | 54,870,424 |
Common stock, outstanding | 56,299,022 | 54,870,424 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||
Revenue | $288,720 | $247,084 | $211,369 |
Cost of revenue | 145,432 | 134,683 | 119,033 |
Gross profit | 143,288 | 112,401 | 92,336 |
Operating expenses: | |||
Research and development | 27,900 | 21,765 | 24,359 |
General and administrative | 66,841 | 64,077 | 51,240 |
Sales and marketing | 60,844 | 55,694 | 52,708 |
Total operating expenses | 155,585 | 141,536 | 128,307 |
Operating loss | -12,297 | -29,135 | -35,971 |
Interest income | 129 | 124 | 110 |
Interest expense | -14,687 | -16,889 | -15,794 |
Other income (expense), net | -1,300 | 1,351 | 0 |
Loss on extinguishment of long-term debt | -23,203 | -325 | 0 |
Interest and other expense, net | -39,061 | -15,739 | -15,684 |
Loss before income taxes | -51,358 | -44,874 | -51,655 |
Income tax expense | -142 | -100 | -212 |
Net loss | ($51,500) | ($44,974) | ($51,867) |
Net loss per share basic and diluted | ($0.93) | ($0.83) | ($1.08) |
Weighted-average number of shares used in calculating net loss per share | 55,628,542 | 54,010,887 | 47,924,324 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholder's Equity (USD $) | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | 3.75% Convertible Notes | 3.75% Convertible Notes | 2% Convertible Senior Notes | 2% Convertible Senior Notes |
In Thousands, except Share data | Additional Paid-in Capital | Additional Paid-in Capital | ||||||
Beginning Balance at Dec. 31, 2011 | $82,735 | $48 | $512,371 | ($429,684) | ||||
Beginning Balance (in shares) at Dec. 31, 2011 | 47,504,131 | |||||||
Exercise of options to purchase common stock (in shares) | 676,819 | |||||||
Exercise of options to purchase common stock | 4,592 | 0 | 4,592 | |||||
Issuance for employee stock purchase plan (in shares) | 18,346 | |||||||
Issuance for employee stock purchase plan | 392 | 392 | ||||||
Stock-based compensation expense | 9,862 | 9,862 | ||||||
Restricted stock units vested, net of shares withheld for taxes (in shares) | 159,767 | |||||||
Restricted stock units vested, net of shares withheld for taxes | -1,538 | -1,538 | ||||||
Allocation to equity for conversion feature for the 2% Notes | 0 | |||||||
Net loss | -51,867 | -51,867 | ||||||
Ending Balance at Dec. 31, 2012 | 44,176 | 48 | 525,679 | -481,551 | ||||
Ending Balance (in shares) at Dec. 31, 2012 | 48,359,063 | |||||||
Issuance of common stock, net of offering costs (in shares) | 4,715,000 | |||||||
Issuance of common stock, net of offering costs | 97,800 | |||||||
Ending Balance at Jan. 31, 2013 | ||||||||
Beginning Balance at Dec. 31, 2012 | 44,176 | 48 | 525,679 | -481,551 | ||||
Beginning Balance (in shares) at Dec. 31, 2012 | 48,359,063 | |||||||
Exercise of options to purchase common stock (in shares) | 872,073 | |||||||
Exercise of options to purchase common stock | 9,461 | 1 | 9,460 | |||||
Issuance for employee stock purchase plan (in shares) | 12,970 | |||||||
Issuance for employee stock purchase plan | 445 | 445 | ||||||
Stock-based compensation expense | 12,616 | 12,616 | ||||||
Restricted stock units vested, net of shares withheld for taxes (in shares) | 217,281 | |||||||
Restricted stock units vested, net of shares withheld for taxes | -3,265 | -3,265 | ||||||
Issuance of common stock, net of offering costs (in shares) | 4,715,000 | |||||||
Issuance of common stock, net of offering costs | 92,812 | 5 | 92,807 | |||||
Exercise of warrants to purchase common stock | 47,392 | |||||||
Issuance of common stock pursuant to conversion of debt (in shares) | 646,645 | |||||||
Issuance of common stock pursuant to conversion of debt | 13,326 | 1 | 13,325 | |||||
Allocation to equity for conversion feature for the 2% Notes | 0 | |||||||
Net loss | -44,974 | -44,974 | ||||||
Ending Balance at Dec. 31, 2013 | 124,597 | 55 | 651,067 | -526,525 | ||||
Ending Balance (in shares) at Dec. 31, 2013 | 54,870,424 | 54,870,424 | ||||||
Exercise of options to purchase common stock (in shares) | 754,522 | 754,522 | ||||||
Exercise of options to purchase common stock | 11,091 | 1 | 11,090 | |||||
Issuance for employee stock purchase plan (in shares) | 13,620 | |||||||
Issuance for employee stock purchase plan | 583 | 583 | ||||||
Stock-based compensation expense | 22,432 | 22,432 | ||||||
Restricted stock units vested, net of shares withheld for taxes (in shares) | 311,921 | |||||||
Restricted stock units vested, net of shares withheld for taxes | -8,665 | -8,665 | ||||||
Issuance of common stock pursuant to conversion of debt (in shares) | 348,535 | |||||||
Issuance of common stock pursuant to conversion of debt | 12,564 | 12,564 | ||||||
Allocation to equity for conversion feature for the 2% Notes | 35,638 | -61,728 | -61,728 | 34,455 | 34,455 | |||
Net loss | -51,500 | -51,500 | ||||||
Ending Balance at Dec. 31, 2014 | $83,829 | $56 | $661,798 | ($578,025) | ||||
Ending Balance (in shares) at Dec. 31, 2014 | 56,299,022 | 56,299,022 |
Consolidated_Statements_of_Sto1
Consolidated Statements of Stockholder's Equity (Parenthetical) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Statement of Stockholders' Equity [Abstract] | |
Issuance of common stock, net of offering costs | $5 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities | |||
Net loss | ($51,500) | ($44,974) | ($51,867) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | |||
Depreciation and amortization | 12,223 | 11,806 | 11,030 |
Non-cash interest and other expense | 10,253 | 9,731 | 10,212 |
Stock-based compensation expense | 22,519 | 12,683 | 9,920 |
Loss on extinguishment of long-term debt | 23,203 | 325 | 0 |
Provision for bad debts | 3,254 | 4,741 | 3,409 |
Impairment and other charges | 0 | 2,511 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable | -10,069 | -4,514 | -13,513 |
Inventories | -3,635 | 5,403 | -3,029 |
Deferred revenue | 654 | -4,545 | 2,863 |
Prepaid expenses and other assets | 662 | -320 | -898 |
Accounts payable, accrued expenses and other current liabilities | 525 | 10,425 | 2,999 |
Other long-term liabilities | 831 | 76 | -185 |
Net cash provided by (used in) operating activities | 8,920 | 3,348 | -29,059 |
Cash flows from investing activities | |||
Purchases of property and equipment | -11,486 | -7,307 | -10,991 |
Net cash used in investing activities | -11,486 | -7,307 | -10,991 |
Cash flows from financing activities | |||
Principal payments of capital lease obligations | -3,858 | -994 | 0 |
Proceeds from issuance of long-term debt, net of issuance costs | 194,490 | 0 | 0 |
Repayment of long-term debt | -189,521 | -2,000 | 0 |
Proceeds from issuance of common stock, net of offering costs | 11,586 | 102,652 | 4,927 |
Payment of withholding taxes in connection with vesting of restricted stock units | -8,665 | -3,265 | -1,539 |
Net cash provided by financing activities | 4,032 | 96,393 | 3,388 |
Net increase (decrease) in cash and cash equivalents | 1,466 | 92,434 | -36,662 |
Cash and cash equivalents, beginning of year | 149,727 | 57,293 | 93,955 |
Cash and cash equivalents, end of year | 151,193 | 149,727 | 57,293 |
Supplemental disclosure of cash flow information | |||
Cash paid for interest | 4,567 | 5,704 | 6,197 |
Cash paid for taxes | 124 | 321 | 11 |
Non-cash financing activities | |||
Allocation to equity for conversion feature for the 2% Notes | 35,638 | 0 | 0 |
Common stock issued in exchange for Senior Convertible Notes | 12,564 | 13,000 | 0 |
Purchases of property and equipment under capital lease | $1,474 | $9,021 | $0 |
Nature_of_the_Business
Nature of the Business | 12 Months Ended |
Dec. 31, 2014 | |
Nature of the Business [Abstract] | |
Nature of the Business | Nature of the Business |
The Company is primarily engaged in the development, manufacturing and sale of its proprietary OmniPod Insulin Management System (the “OmniPod System”), an innovative, discreet and easy-to-use insulin infusion system for people with insulin-dependent diabetes. The OmniPod System features a unique disposable tubeless OmniPod which is worn on the body for approximately three days at a time and the handheld, wireless Personal Diabetes Manager (“PDM”). Conventional insulin pumps require people with insulin-dependent diabetes to learn to use, manage and wear a number of cumbersome components, including up to 42 inches of tubing. In contrast, the OmniPod System features two discreet, easy-to-use devices that eliminate the need for a bulky pump, tubing and separate blood glucose meter, provides for virtually pain-free automated cannula insertion, communicates wirelessly and integrates a blood glucose meter. | |
In June 2011, the Company acquired Neighborhood Holdings, Inc. and its wholly-owned subsidiaries (collectively, “Neighborhood Diabetes”) in order to expand the Company’s full suite diabetes management product offerings and obtain access to a larger number of insulin dependent patients. Through Neighborhood Diabetes, the Company is able to provide customers with blood glucose testing supplies, traditional insulin pumps, pump supplies and pharmaceuticals and has the ability to process claims as either durable medical equipment or through pharmacy benefits. | |
The Company began commercial sale of the OmniPod System in the United States in 2005. The Company sells the OmniPod System and other diabetes management supplies in the United States through direct sales to customers or through it's distribution partners. The OmniPod System is currently available in multiple countries in Europe through it's exclusive partnerships with Ypsomed Distribution AG (“Ypsomed”) and in Canada. The Company has been selling its new OmniPod System since 2013. The new OmniPod System is approximately one-third smaller and one-quarter lighter than the original model, while maintaining the same features and operating capabilities. By December 31, 2013, all customers have been transitioned to the new OmniPod System. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies | |
Use of Estimates in Preparation of Financial Statements | ||
The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting periods. The most significant estimates used in these financial statements include the valuation of stock-based compensation expense, accounts receivable, inventories, goodwill, deferred revenue, and equity instruments, the lives of property and equipment and intangible assets, as well as warranty and doubtful accounts allowance reserve calculations. Actual results may differ from those estimates. | ||
Principles of Consolidation | ||
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. | ||
Certain Risks and Uncertainties | ||
The Company is subject to risks common to companies in the medical device industry, including, but not limited to, development by the Company or its competitors of new technological innovations, dependence on key personnel, reliance on third party manufacturers, protection of proprietary technology, and compliance with regulatory requirements. | ||
Fair Value Measurements | ||
The Company adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”) related to the fair value measurement of certain of its assets and liabilities. ASC 820 defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. When estimating fair value, depending on the nature and complexity of the asset or liability, the Company may use one or all of the following approaches: | ||
• | Market approach, which is based on market prices and other information from market transactions involving identical or comparable assets or liabilities. | |
• | Cost approach, which is based on the cost to acquire or construct comparable assets less an allowance for functional and/or economic obsolescence. | |
• | Income approach, which is based on the present value of the future stream of net cash flows. | |
FASB ASC 820 also describes three levels of inputs that may be used to measure the fair value: | ||
Level 1 — quoted prices in active markets for identical assets or liabilities | ||
Level 2 — observable inputs other than quoted prices in active markets for identical assets or liabilities | ||
Level 3 — unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions | ||
The assets and liabilities subject to fair value measurement standards at December 31, 2014 and 2013 are cash equivalents, consisting of money market funds, and long-term debt which are both based on Level 1 inputs. In addition, the June 2014 call feature of the modified portion of the 3.75% Notes (as defined below) was subject to fair value measurement standards at December 31, 2013 based on Level 3 inputs. | ||
Certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other liabilities are carried at cost, which approximates their fair value because of the short-term maturity of these financial instruments. | ||
Cash and Cash Equivalents | ||
For the purposes of the financial statement classification, the Company considers all highly liquid investment instruments with original maturities of 90 days or less, when purchased, to be cash equivalents. Cash equivalents consist of money market funds and are carried at cost which approximates their fair value. Outstanding letters of credit, relating to security deposits for lease obligations, totaled $1.2 million and $0.1 million at December 31, 2014 and 2013, respectively. | ||
Accounts Receivable and Allowance for Doubtful Accounts | ||
Accounts receivable consist of amounts due from third-party payors, patients, third-party distributors, and government agencies. The allowance for doubtful accounts is recorded at the time potential collection risk is identified. The Company estimates its allowance based on historical experience, assessment of specific risk, discussions with individual customers and various assumptions and estimates that are believed to be reasonable under the circumstances. | ||
Inventories | ||
Inventories are held at the lower of cost or market, determined under the first-in, first-out method. Inventory has been recorded at cost at December 31, 2014 and 2013. Work in process is calculated based upon a build up in the stage of completion using estimated labor inputs for each stage in production. The Company periodically reviews inventories for net realizable value based on quantities on hand and expectations of future use. | ||
Property and Equipment | ||
Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the respective assets. Leasehold improvements are amortized over their useful life or the life of the lease, whichever is shorter. Assets acquired under capital leases are amortized in accordance with the respective class of owned assets and the amortization is included with depreciation expense. Maintenance and repair costs are expensed as incurred. | ||
Intangibles and Other Long-Lived Assets | ||
The Company’s finite-lived intangible assets are stated at cost less accumulated amortization. The Company assesses its intangible and other long-lived assets for impairment whenever events or changes in circumstances suggest that the carrying value of an asset may not be recoverable. The Company recognizes an impairment loss for intangibles and other finite-lived assets if the carrying amount of a long-lived asset is not recoverable based on its undiscounted future cash flows. Any such impairment loss is measured as the difference between the carrying amount and the fair value of the asset. The estimation of useful lives and expected cash flows requires the Company to make significant judgments regarding future periods that are subject to some factors outside its control. Changes in these estimates can result in significant revisions to the carrying value of these assets and may result in material charges to the results of operations. The estimated life of the acquired tradename asset is 15 years. The estimated useful life of the acquired customer relationship asset is 10 years. Intangible assets with determinable estimated lives are amortized over these lives. | ||
Goodwill | ||
Goodwill represents the excess of the cost of the acquired Neighborhood Diabetes businesses over the fair value of identifiable net assets acquired. The Company follows the provisions of FASB ASC 350-20, Intangibles - Goodwill and Other (“ASC 350-20”). The Company performs an assessment of its goodwill for impairment on at least an annual basis or whenever events or changes in circumstances indicate there might be impairment. | ||
The Company continues to operate in one segment, which is considered to be the sole reporting unit and therefore, goodwill was tested for impairment at the enterprise level. To test for impairment, the Company has elected to first assess the qualitative factors to determine whether it is more likely than not that the fair value of its sole reporting unit is less than its carrying amount. This qualitative analysis is used as a basis for determining whether it is necessary to perform the two-step goodwill impairment analysis. If the Company determines that it is more likely than not that its fair value is less than its carrying amount, then the two-step goodwill impairment test will be performed. The first step compares the carrying value of the reporting unit to its fair value using a discounted cash flow analysis. If the reporting unit’s carrying value exceeds its fair value, the Company would record an impairment loss to the extent that the carrying value of goodwill exceeds its implied fair value. No goodwill impairment was recorded in the year ended December 31, 2014 or 2013. | ||
Warranty | ||
The Company provides a four-year warranty on its PDMs and may replace any OmniPods that do not function in accordance with product specifications. The Company estimates its warranty at the time the product is shipped based on historical experience and the estimated cost to service the claims. Cost to service the claims reflects the current product cost which has been decreasing over time. As these estimates are based on historical experience, and the Company continues to introduce new products and new versions of existing products, the Company also considers the anticipated performance of the product over its warranty period in estimating warranty reserves. | ||
Impairment of Assets | ||
In connection with its efforts to pursue improved gross margins, leverage operational efficiencies and better pursue opportunities for low-cost supplier sourcing, the Company periodically performs an evaluation of its manufacturing processes and reviews the carrying value of its property and equipment to assess the recoverability of these assets whenever events indicate that impairment may have occurred. As part of this assessment, the Company reviews the future undiscounted operating cash flows expected to be generated by those assets. If impairment is indicated through this review, the carrying amount of the asset would be reduced to its estimated fair value. This review of manufacturing processes and equipment can result in an impairment of assets based on current net book value and potential future use of the assets. In the year ended December 31, 2013 in connection with the transition to the new OmniPod System, the Company recorded a $2.5 million charge to expense the value of manufacturing equipment that was no longer expected to be used in its manufacturing process. In the year ended December 31, 2014 the Company recorded no impairment expense as there were no indicators of impairment. | ||
Revenue Recognition | ||
The Company generates nearly all of its revenue from sales of its OmniPod System and other diabetes related products including blood glucose testing supplies, traditional insulin pumps, pump supplies and pharmaceuticals to customers and third-party distributors who resell the products to patients with diabetes. | ||
Revenue recognition requires that persuasive evidence of a sales arrangement exists, delivery of goods occurs through transfer of title and risk and rewards of ownership, the selling price is fixed or determinable and collectibility is reasonably assured. With respect to these criteria: | ||
• | The evidence of an arrangement generally consists of a physician order form, a patient information form and, if applicable, third-party insurance approval for sales directly to patients or a purchase order for sales to a third-party distributor. | |
• | Transfer of title and risk and rewards of ownership are passed to the patient or third-party distributor upon shipment of the products. | |
• | The selling prices for all sales are fixed and agreed with the patient or third-party distributor and, if applicable, the patient’s third-party insurance provider(s) prior to shipment and are based on established list prices or, in the case of certain third-party insurers, contractually agreed upon prices. Provisions for discounts and rebates to customers are established as a reduction to revenue in the same period the related sales are recorded. | |
The Company offers a 45-day right of return for its OmniPod System sales to new patients and defers revenue to reflect estimated sales returns in the same period that the related product sales are recorded. Returns are estimated through a comparison of the Company’s historical return data to its related sales. Historical rates of return are adjusted for known or expected changes in the marketplace when appropriate. When doubt exists about reasonable assuredness of collectibility from specific customers, the Company defers revenue from sales of products to those customers until payment is received. | ||
In June 2011, the Company entered into a development agreement with a U.S. based pharmaceutical company (the "Development Agreement”). Under the Development Agreement, the Company was required to perform design, development, regulatory, and other services to support the pharmaceutical company as it works to obtain regulatory approval to use the Company’s drug delivery technology as a delivery method for its pharmaceutical. Over the term of the Development Agreement, the Company has invoiced amounts based upon meeting certain deliverable milestones. Revenue on the Development Agreement was recognized using a proportional performance methodology based on efforts incurred and total payments under the agreement. The impact of changes in the expected total effort or contract payments were recognized as a change in estimate using the cumulative catch-up method. | ||
The Company deferred revenue of $1.6 million and $0.9 million as of December 31, 2014 and 2013, respectively. The deferred revenue recorded was primarily comprised of product-related revenue. | ||
International sales accounted for 18%, 10%, and 8% of total revenue during the years ended December 31, 2014 and 2013, and 2012, respectively. | ||
Shipping and Handling Costs | ||
The Company does not typically charge its customers for shipping and handling costs associated with shipping its product to its customers. These shipping and handling costs are included in general and administrative expenses. | ||
Concentration of Credit Risk | ||
Financial instruments that subject the Company to credit risk primarily consist of cash and cash equivalents. The Company maintains the majority of its cash with two accredited financial institutions. | ||
The Company purchases complete OmniPods from Flextronics International Ltd., its single source supplier. As of December 31, 2014 and 2013, liabilities from this vendor represented approximately 24% and 36% of the combined balance of accounts payable, accrued expenses and other current liabilities, respectively. | ||
In the year ended December 31, 2014 revenue from two customers represented 15% and 11% of total revenue, respectively. In the years ended December 31, 2013 and 2012, revenue from one customer represented 13% and 11% of total revenue, respectively. | ||
Research and Development Expenses | ||
The Company’s research and development expenses consist of engineering, product development, quality assurance, clinical and regulatory expenses. These expenses are primarily related to employee compensation, including salary, benefits and stock-based compensation. The Company also incurs expenses related to consulting fees, materials and supplies, and clinical studies, including data management and associated travel expenses. Research and development costs are expensed as incurred. | ||
General and Administrative Expenses | ||
General and administrative expenses are primarily comprised of salaries and benefits associated with finance, legal and other administrative personnel, overhead and occupancy costs, outside legal costs, and other general and administrative costs. | ||
Sales and Marketing Expenses | ||
Sales and marketing expenses are primarily comprised of salaries and benefits associated with sales and marketing personnel, outside marketing expenses including commercial product samples, tradeshows and advertising expenses. | ||
Segment Reporting | ||
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision-maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance of the segment. The Company’s current product offering primarily consists of diabetes supplies, including the OmniPod System as well as other diabetes related products and supplies such as blood glucose testing supplies, traditional insulin pumps, pump supplies, and pharmaceuticals. The Company’s current product offering is marketed to a single customer type. As the Company sells a single product type, management operates the business as a single entity. | ||
Income Taxes | ||
The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates that will be in effect in the years in which the differences are expected to reverse. A valuation allowance is required to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company reviews its deferred tax assets for recoverability considering historical profitability, projected future taxable income, and the expected timing of the reversals of existing temporary differences and tax planning strategies. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. | ||
The Company follows the provisions of FASB ASC 740-10, Income Taxes (“ASC 740-10”) on accounting for uncertainty in income taxes recognized in its financial statements. ASC 740-10 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In addition, ASC 740-10 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company had no unrecognized tax benefits as of December 31, 2014 and 2013, respectively. The Company recognizes estimated interest and penalties for uncertain tax positions in income tax expense. | ||
The Company files federal, state and foreign tax returns. These returns are generally open to examination by the relevant tax authorities from three to four years from the date they are filed. The tax filings relating to the Company’s federal and state tax returns are currently open to examination for tax years 2011 through 2013 and 2010 through 2013, respectively. In addition, the Company has generated tax losses since its inception in 2000. These years may be subject to examination if the losses are carried forward and utilized in future years. | ||
Stock-Based Compensation | ||
The Company accounts for stock-based compensation under the provisions of FASB ASC 718-10, Compensation — Stock Compensation (“ASC 718-10”), which requires all share-based payments to employees, including grants of employee stock options and restricted stock units, to be recognized in the income statement based on their fair values. Share-based payments that contain performance conditions are recognized when such conditions are probable of being achieved. | ||
The Company uses the Black-Scholes option pricing model to determine the weighted-average fair value of options granted. The Company determines the intrinsic value of restricted stock and restricted stock units based on the closing price of its common stock on the date of grant. The Company recognizes the compensation expense of share-based awards on a straight-line basis for awards with only service conditions and on an accelerated method for awards with performance conditions. Compensation expense is recognized over the vesting period of the awards. | ||
The determination of the fair value of share-based payment awards utilizing the Black-Scholes model is affected by the stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. The expected life of the awards is estimated based on the midpoint scenario, which combines historical exercise data with hypothetical exercise data for outstanding options. The risk-free interest rate assumption is based on observed interest rates appropriate for the terms of the awards. The dividend yield assumption is based on Company history and the expectation of paying no dividends. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Stock-based compensation expense recognized in the financial statements is based on awards that are ultimately expected to vest. The Company evaluates the assumptions used to value the awards on a quarterly basis and if factors change and different assumptions are utilized, stock-based compensation expense may differ significantly from what has been recorded in the past. If there are any modifications or cancellations of the underlying unvested securities, the Company may be required to accelerate, increase or cancel any remaining unearned stock-based compensation expense. | ||
In the years ended December 31, 2014, 2013, and 2012, the Company recorded $22.5 million, $12.7 million, and $9.9 million of stock-based compensation expense, respectively. | ||
See Footnote 13 for a summary of the stock option activity under the Company’s stock-based employee compensation plan. | ||
Recent Accounting Pronouncements Not Yet Adopted | ||
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 requires that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Under this guidance, a company may make additional estimates regarding performance conditions and the allocation of variable consideration. The guidance is effective in fiscal years beginning after January 1, 2017, with early adoption permitted. The Company is currently evaluating the impact of ASU 2014-09. | ||
In June 2014, the FASB issued ASU No. 2014-12, Compensation - Stock Compensation (Topic 718), Accounting for Share-Based Payments when the terms of an award provide that a performance target could be achieve after the requisite service period ("ASU 2014-12"). ASU 2014-12 clarifies the period over which compensation cost would be recognized in awards with a performance target that affects vesting and that could be achieved after the requisite service period. Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective in fiscal years beginning after January 1, 2016, with early adoption permitted. The Company is currently evaluating the impact of ASU 2014-12. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair Value Measurements | Fair Value Measurements | |||||||||||||||
ASC 820, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 defines fair value as the exit price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. Valuation techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. To measure fair value, the Company uses the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable: | ||||||||||||||||
Level 1 — quoted prices in active markets for identical assets or liabilities | ||||||||||||||||
Level 2 — observable inputs other than quoted prices in active markets for identical assets or liabilities | ||||||||||||||||
Level 3 — unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions | ||||||||||||||||
Fair value under ASC 820 is principally applied to financial assets which consist of investments in money market funds. The following table provides a summary of financial assets that are measured at fair value on a recurring basis as of December 31, 2014, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands): | ||||||||||||||||
Fair Value Measurements | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets | ||||||||||||||||
Cash Equivalents - Money Market Funds | $ | 123,141 | $ | 123,141 | $ | — | $ | — | ||||||||
The following table provides a summary of financial assets that are measured at fair value on a recurring basis as of December 31, 2013, aggregated by the level in the fair value hierarchy within those those measurements fall (in thousands): | ||||||||||||||||
Fair Value Measurements | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets | ||||||||||||||||
Cash Equivalents - Money Market Funds | $ | 128,308 | $ | 128,308 | $ | — | $ | — | ||||||||
Other Asset - Call feature on 3.75% Notes | $ | 1,351 | $ | — | $ | — | $ | 1,351 | ||||||||
Cash and Cash Equivalents | ||||||||||||||||
The fair value of cash and cash equivalents is estimated based on the quoted market price of the investments. The carrying amount of the Company's cash equivalents approximate their fair value due to the short-term maturity of these instruments. | ||||||||||||||||
Other Asset | ||||||||||||||||
At December 31, 2013, the Company's financial assets included a call feature on the outstanding principal amount of the modified portion of the 3.75% Notes which was valued using Level 3 inputs. The call feature was valued at $1.4 million at December 31, 2013 and included in other assets. The valuation of this feature was measured at fair value using a trinomial lattice model which incorporates the terms and conditions of the 3.75% Notes and estimates the fair value based on changes in the price of the underlying equity over successive periods of time. This lattice model is considered to be a single-factor model, in that it solely incorporates uncertainty related to the Company’s stock price and values the option to convert the note into common stock using a trinomial structure. The $1.4 million decrease in the valuation of this feature in the year ended December 31, 2014, was a result of the extinguishment of the outstanding principal amount of the 3.75% Notes and recorded as other expense. The call feature had no value at December 31, 2014 as there was no principal amount of the 3.75% Notes outstanding. The key assumptions used in the lattice model valuation for the call feature at December 31, 2013 were as follows: | ||||||||||||||||
Term to Maturity (years) | 2.46 | |||||||||||||||
Bond Inputs: | ||||||||||||||||
Bond Yield | 8.61% | |||||||||||||||
Coupon Rate | 3.75% | |||||||||||||||
Conversion Price | $26.20 | |||||||||||||||
Bond Call Strike Price | $100.00 | |||||||||||||||
Stock Inputs: | ||||||||||||||||
Stock Price | $37.10 | |||||||||||||||
Risk Free Rate | 0.56% | |||||||||||||||
Volatility | 38.00% | |||||||||||||||
Dividend Yield | —% | |||||||||||||||
The estimated yield is based on a trinomial single-factor convertible bond model which takes into account the conversion option and the call option. The risk free interest rate is based on United States Treasury rates with maturity dates approximating the expected term to maturity of the 3.75% Notes. The expected volatility considers the Company’s historical volatility with a lookback period commensurate with years to maturity of the notes and the implied volatility using call option contracts on the Company’s stock. | ||||||||||||||||
Debt | ||||||||||||||||
The estimated fair value of debt is based on the Level 1 quoted market prices for the same or similar issues and includes the impact of the conversion features. | ||||||||||||||||
The carrying amounts and the estimated fair values of financial instruments as of December 31, 2014 and 2013, are as follows (in thousands): | ||||||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||||
Carrying | Estimated Fair | Carrying | Estimated Fair | |||||||||||||
Value | Value | Value | Value | |||||||||||||
2% Convertible Senior Notes | $ | 168,994 | $ | 237,475 | $ | — | $ | — | ||||||||
3.75% Convertible Senior Notes | $ | — | $ | — | $ | 113,651 | $ | 211,370 | ||||||||
The carrying value of the 3.75% Notes at December 31, 2013 included a debt discount of $30.1 million which was being amortized as non-cash interest expense over the term of the 3.75% Notes. The Company extinguished the principal amount of the 3.75% Notes and issued $201.3 million in principal amount of 2% Notes (as defined below) in the year ended December 31, 2014. The carrying value of the 2% Notes at December 31, 2014 includes a debt discount of $32.3 million which is being amortized as non-cash interest expense over the term of the 2% Notes. The increase in the estimated fair values of these liabilities from December 31, 2013 to December 31, 2014 represents the extinguishment of the 3.75% Notes and issuance of the 2% Notes as well as the impact of the quoted bond prices at those dates. |
Debt
Debt | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Debt Disclosure [Abstract] | ||||||||||||
Debt | Debt | |||||||||||
At December 31, 2014 and 2013, the Company had outstanding convertible debt and related deferred financing costs on its balance sheet as follows (in thousands): | ||||||||||||
As of December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Principal amount of the 3.75% Convertible Senior Notes | $ | — | $ | 143,750 | ||||||||
Principal amount of the 2% Convertible Senior Notes | 201,250 | — | ||||||||||
Unamortized discount | (32,256 | ) | (30,099 | ) | ||||||||
Long-term debt, net of discount | $ | 168,994 | $ | 113,651 | ||||||||
Deferred financing costs, net | $ | 4,974 | $ | 1,414 | ||||||||
Interest expense related to the 5.375% Senior Notes (as defined below), the 3.75% Senior Notes, and the 2% Notes was included in interest and other expense on the consolidated statements of operations as follows (in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Contractual coupon interest | $ | 4,657 | $ | 5,704 | $ | 6,197 | ||||||
Accretion of debt discount | 8,007 | 10,492 | 9,619 | |||||||||
Loss on debt extinguishment | 23,203 | 325 | — | |||||||||
Amortization of deferred financing costs | 895 | 590 | 593 | |||||||||
Total interest and other expense | $ | 36,762 | $ | 17,111 | $ | 16,409 | ||||||
The Company expects to pay cash interest of $4.0 million in each year through 2018 and $1.8 million in 2019. Additionally, $201.3 million related to the 2.00% Notes is due to the holders in 2019. | ||||||||||||
5.375% Convertible Senior Notes | ||||||||||||
In June 2008, the Company sold $85.0 million principal amount of 5.375% Convertible Senior Notes due June 15, 2013 (the “5.375% Notes”). The interest rate on the notes was 5.375% per annum on the principal amount from June 16, 2008, payable semi-annually in arrears in cash on December 15 and June 15 of each year. The 5.375% Notes were convertible into the Company’s common stock at an initial conversion rate of 46.8467 shares of common stock per $1,000 principal amount of the 5.375% Notes. The 5.375% Notes were convertible for cash up to their principal amount and shares of the Company’s common stock for the remainder of the conversion value in excess of the principal amount. | ||||||||||||
In June 2011, in connection with the issuance of $143.8 million in principal amount of 3.75% Convertible Notes due June 15, 2016 (the “3.75% Notes”), the Company repurchased $70 million in principal amount of the 5.375% Notes for $85.1 million, a 21.5% premium on the principal amount. The investors that held the $70 million in principal amount of repurchased 5.375% Notes purchased $59.5 million in principal amount of the 3.75% Notes and retained approximately $13.5 million in principal amount of the remaining 5.375% Notes. The investors’ combined $73.0 million in principal amount of convertible debt ($13.5 million of 5.375% Notes and $59.5 million of 3.75% Notes) was considered to be a modification of a portion of the 5.375% Notes. See the section entitled “3.75% Convertible Senior Notes” below for additional detail on the modification accounting. | ||||||||||||
In May 2013, the Company entered into an Exchange Agreement with a holder of its 5.375% Notes. Under the Exchange Agreement, the Company purchased $13 million in principal amount of the 5.375% Notes in exchange for 620,122 shares of the Company's common stock and a cash payment of $0.3 million, representing the accrued and unpaid interest. Furthermore, the Company recorded a loss on extinguishment of debt of $0.3 million for the impact of the inducement which was included in interest and other expense in the year ended December 31, 2013. | ||||||||||||
In June 2013, the Company repaid the remaining outstanding principal and accrued interest on the 5.375% Notes in accordance with the terms. In addition to a cash payment of $2.1 million, representing principal and accrued and unpaid interest, the Company issued 26,523 shares of its common stock to the holders, representing the conversion value in excess of the principal amount in accordance with the terms of the 5.375% Notes. | ||||||||||||
There was no cash interest expense related to the 5.375 % Notes in the year ended December 31, 2014. Cash interest expense related to the 5.375% Notes was $0.3 million and $0.8 million for the years ended December 31, 2013 and 2012, respectively. No non-cash interest expense related to the 5.375% Notes was recorded in the year ended December 31, 2014. Non-cash interest expense related to the 5.375% Notes was $0.3 million and $0.6 million for the years ended December 31, 2013 and 2012, respectively. | ||||||||||||
As of December 31, 2013, the 5.375% Notes were repaid in full and no amounts remained on the Company's balance sheet related to these notes. | ||||||||||||
3.75% Convertible Senior Notes | ||||||||||||
In June 2011, the Company sold $143.8 million in principal amount of 3.75% Notes. The interest rate on the notes was 3.75% per annum, payable semi-annually in arrears in cash on December 15 and June 15 of each year. The 3.75% Notes were convertible into the Company’s common stock at an initial conversion rate of 38.1749 shares of common stock per $1,000 principal amount of the 3.75% Notes, which is equivalent to a conversion price of approximately $26.20 per share. | ||||||||||||
The Company identified certain features related to a portion of the 3.75% Notes, including the holders’ ability to require the Company to repurchase their notes and the higher interest payments required in an event of default, which are considered embedded derivatives and should be bifurcated and accounted for at fair value. The Company assessed the value of each of these embedded derivatives at each balance sheet date. At December 31, 2013, the Company separately accounted for the call feature related to the possibility that the Company could redeem the 3.75% Notes, at its option, beginning June 20, 2014, for the modified portion of the 3.75% Notes. The Company determined that the fair value of this feature was approximately $1.4 million and included this amount in other assets and as other income at December 31, 2013. The call feature had no value at December 31, 2014 as there was no principal amount of the 3.75% Notes outstanding. | ||||||||||||
In connection with the issuance of the 3.75% Notes, the Company repurchased $70 million in principal amount of the 5.375% Notes for $85.1 million, a 21.5% premium on the principal amount. The investors that held the $70 million in principal amount of repurchased 5.375% Notes purchased $59.5 million in principal amount of the 3.75% Notes and retained approximately $13.5 million in principal amount of the remaining 5.375% Notes. This transaction was treated as a modification of a portion of the 5.375% Notes. The Company accounted for this modification of existing debt separately from the issuance of the remainder of the 3.75% Notes. | ||||||||||||
Prior to the transaction, the $70 million in principal amount of repurchased 5.375% Notes had a debt discount of $10.5 million. This amount remained in debt discount related to the $73 million in principal amount of modified debt. The Company recorded additional debt discount of $15.1 million related to the premium payment in connection with the repurchase and $0.2 million related to the increase in the value of the conversion feature. The total debt discount of $25.8 million related to the modified debt was being amortized as non-cash interest expense at the effective rate of 16.5% over the five year term of the modified debt. The Company paid transaction fees of approximately $2.0 million related to the modification, which were recorded as interest and other expense at the time of the modification. | ||||||||||||
Of the $143.8 million in principal amount of 3.75% Notes issued in June 2011, $84.3 million in principal amount was considered to be an issuance of new debt. The Company recorded a debt discount of $26.6 million related to the $84.3 million in principal amount of 3.75% Notes. The debt discount was recorded as additional paid-in capital to reflect the value of its nonconvertible debt borrowing rate of 12.4% per annum. This debt discount was being amortized as non-cash interest expense over the five year term of the 3.75% Notes. The Company incurred deferred financing costs related to this offering of approximately $2.8 million, of which $0.9 million has been reclassified as an offset to the value of the amount allocated to equity. The remainder was recorded as other assets in the consolidated balance sheet and was being amortized as non-cash interest expense over the five year term of the 3.75% Notes. | ||||||||||||
In June 2014, in connection with the issuance of $201.3 million in principal amount of 2% Convertible Senior Notes due June 15, 2019 (the “2% Notes”), the Company repurchased approximately $114.9 million in principal amount of the 3.75% Notes for $160.7 million, a premium of $45.8 million over the principal amount. Investors that held approximately $80.0 million of 3.75% Notes purchased approximately $98.2 million in principal amount of the 2% Notes. The repurchase of the 3.75% Notes was treated as an extinguishment of debt since the fair value of the conversion feature changed by more than 10%. The extinguishment of the 3.75% Notes was accounted for separately from the issuance of the 2% Notes. The $160.7 million paid to extinguish the debt was allocated to debt and equity based on their respective fair values immediately prior to the transaction. The Company allocated $112.4 million of the payment to the debt and $48.3 million to equity. | ||||||||||||
The 3.75% Notes were convertible at the option of the holder during the quarter ended June 30, 2014 since the last reported sales price per share of the Company's common stock was equal to or greater than 130% of the conversion price for at least 20 of the 30 trading days ended on March 31, 2014. The 3.75% Notes and any unpaid interest were convertible at the Company’s option for cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock. | ||||||||||||
Beginning on June 20, 2014, the Company had the right to redeem the 3.75% Notes, at its option, in whole or in part, if the last reported sale price per share of the Company’s common stock was at least 130% of the conversion price then in effect for at least 20 trading days during a period of 30 consecutive trading days. In June 2014, the Company met the redemption requirements and notified holders of its intent to redeem the outstanding $28.8 million in principal amount of 3.75% Notes in July 2014. Prior to the redemption date, holders of $28.5 million in principal amount of 3.75% Notes notified the Company that they exercised their right to convert their outstanding 3.75% Notes. The Company settled this conversion of the 3.75% Notes in July 2014 by providing cash of $28.5 million for the principal amount of the outstanding 3.75% Notes converted and issuing 348,535 shares of common stock for the conversion premium totaling $12.6 million, for a total consideration paid of $41.1 million. The Company settled the redemption of the remaining $0.3 million in principal amount in exchange for a cash payment of $0.3 million representing principal and accrued and unpaid interest. The Company allocated $27.9 million of the total consideration paid to the debt and $13.5 million to equity. | ||||||||||||
The Company recorded a loss on extinguishment of debt of $23.2 million in connection with the repurchase and redemption of the 3.75% Notes during the year ended December 31, 2014, representing the excess of the $140.3 million allocated to the debt over its carrying value, net of deferred financing costs. | ||||||||||||
Cash interest expense related to the $143.8 million in principal amount of 3.75% Notes was $2.4 million in the year ended December 31, 2014 and $5.4 million in each of the years ended December 31, 2013 and 2012. Non-cash interest expense related to the 3.75% Notes was $4.9 million, $10.8 million and $9.6 million in the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||
As of December 31, 2014, no amounts remain outstanding related to the 3.75% Notes. | ||||||||||||
2% Convertible Senior Notes | ||||||||||||
In June 2014, the Company sold $201.3 million in principal amount of the 2% Notes. The interest rate on the notes is 2% per annum, payable semi-annually in arrears in cash on December 15 and June 15 of each year. The 2% Notes are convertible into the Company’s common stock at an initial conversion rate of 21.5019 shares of common stock per $1,000 principal amount of the 2% Notes, which is equivalent to a conversion price of approximately $46.51 per share, subject to adjustment under certain circumstances. | ||||||||||||
In June 2014, in connection with the issuance of the 2% Notes, the Company repurchased approximately $114.9 million in principal amount of the 3.75% Notes for $160.7 million, a premium of $45.8 million over the principal amount. Investors that held approximately $80.0 million in repurchased 3.75% Notes purchased approximately $98.2 million in principal amount of the 2% Notes. The repurchase of the 3.75% Notes was treated as an extinguishment of debt since the fair value of the conversion feature changed by more than 10%. The extinguishment of the 3.75% Notes was accounted for separately from the issuance of the 2% Notes. See 3.75% Convertible Senior Notes above for additional detail on the extinguishment accounting. | ||||||||||||
The Company recorded a debt discount of $35.6 million related to the 2% Notes. The debt discount was recorded as additional paid-in capital to reflect the value of the Company’s nonconvertible debt borrowing rate of 6.2% per annum. This debt discount is being amortized as non-cash interest expense over the five year term of the 2% Notes. The Company incurred deferred financing costs related to this offering of approximately $6.7 million, of which $1.2 million has been reclassified as an offset to the value of the amount allocated to equity. The remainder is recorded as other assets in the consolidated balance sheet and is being amortized as non-cash interest expense over the five year term of the 2% Notes. | ||||||||||||
The Company determined that the higher interest and tax payments required in certain circumstances are considered embedded derivatives and should be bifurcated and accounted for at fair value. The Company assesses the value of the embedded derivatives at each balance sheet date. The derivatives had de minimis value at December 31, 2014. | ||||||||||||
Cash interest expense related to the 2% Notes was $2.3 million in the year ended December 31, 2014. Non-cash interest expense related to the 2% Notes was $4.0 million in the year ended December 31, 2014. | ||||||||||||
As of December 31, 2014, the Company included $169.0 million on its balance sheet in long-term debt related to the 2% Notes. |
Capital_Lease_Obligations
Capital Lease Obligations | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Leases [Abstract] | |||||||
Capital Lease Obligations | Capital Lease Obligations | ||||||
The Company acquired $9.0 million of manufacturing equipment under capital leases in the year ended December 31, 2013 and an additional $1.5 million in the year ended December 31, 2014. The $9.0 million obligation under the capital leases is being repaid in equal monthly installments over the 36 month terms of the leases and includes principal and interest payments with an effective interest rate of approximately 17%. In the year ended December 31, 2013, the Company recorded a $2.5 million charge to expense the value of certain equipment as it was no longer expected to be used in its manufacturing process. The remaining underlying assets have been recorded at their fair value of $8.0 million and are included in property and equipment on the Company's balance sheet as of December 31, 2014. The assets acquired under capital leases are being amortized on a straight-line basis over 5 years in accordance with the Company's policy for depreciation of manufacturing equipment. Amortization expense on assets acquired under capital leases is included with depreciation expense. Amortization expense related to these capital leased assets was $1.3 million and $0.6 million in the years ended December 31, 2014 and 2013, respectively. No amortization expense was recorded on the leased assets in the year ended December 31, 2012. | |||||||
Assets held under capital leases consist of the following (in thousands): | |||||||
As of December 31, | |||||||
2014 | 2013 | ||||||
Manufacturing equipment | $ | 7,984 | $ | 6,510 | |||
Less: Accumulated amortization | (1,885 | ) | (582 | ) | |||
Total | $ | 6,099 | $ | 5,928 | |||
The aggregate future minimum lease payments related to these capital leases as of December 31, 2014, are as follows (in thousands): | |||||||
Year Ending | Minimum Lease Payments | ||||||
December 31, | |||||||
2015 | $ | 4,068 | |||||
2016 | 2,408 | ||||||
Total future minimum lease payments | 6,476 | ||||||
Interest expense | (833 | ) | |||||
Total capital lease obligations | $ | 5,643 | |||||
The Company recorded $1.2 million and $0.4 million of interest expense on capital leases in the years ended December 31, 2014 and 2013, respectively. No interest expense was recorded on capital leases in the year ended December 31, 2012. |
Net_Loss_Per_Share
Net Loss Per Share | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Disclosure Potential Common Shares Excluded From Computation Of Diluted Net Loss Per Share [Abstract] | |||||||||
Net Loss Per Share | Net Loss Per Share | ||||||||
Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period, excluding unvested restricted stock units. Diluted net loss per share is computed using the weighted average number of common shares outstanding and, when dilutive, potential common share equivalents from options, restricted stock units, and warrants (using the treasury-stock method), and potential common shares from convertible securities (using the if-converted method). Because the Company reported a net loss for the years ended December 31, 2014, 2013 and 2012, all potential common shares have been excluded from the computation of the diluted net loss per share for all periods presented because the effect would have been anti-dilutive. | |||||||||
Potential dilutive common share equivalents consist of the following: | |||||||||
Year Ended December 31, | |||||||||
2014 | 2013 | 2012 | |||||||
5.375% Convertible Senior Notes | — | — | 702,701 | ||||||
3.75% Convertible Senior Notes | — | 5,487,642 | 5,487,642 | ||||||
2% Convertible Senior Notes | 4,327,257 | — | — | ||||||
Unvested restricted stock units | 746,612 | 1,011,893 | 825,068 | ||||||
Outstanding options | 1,847,669 | 1,828,613 | 2,502,190 | ||||||
Outstanding warrants | — | — | 62,752 | ||||||
Total dilutive common shares | 6,921,538 | 8,328,148 | 9,580,353 | ||||||
Accounts_Receivable
Accounts Receivable | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Receivables [Abstract] | ||||||||
Accounts Receivable | Accounts Receivable | |||||||
Accounts receivable consist of amounts due from third-party payors, patients, third-party distributors and government agencies. The Company records an allowance for doubtful accounts at the time potential collection risk is identified. The Company estimates its allowance based on historical experience, assessment of specific risk, discussions with individual customers or various assumptions and estimates that are believed to be reasonable under the circumstances. The Company believes the reserve is adequate to mitigate current collection risk. | ||||||||
As of December 31, 2014, accounts receivable from two customers represented approximately 19% and 10% of gross accounts receivable, respectively. As of December 31, 2013, accounts receivable from two customers represented approximately 12% and 10% of gross accounts receivable, respectively. | ||||||||
The components of accounts receivable are as follows (in thousands): | ||||||||
As of December 31, | ||||||||
2014 | 2013 | |||||||
Trade receivables | $ | 45,719 | $ | 40,200 | ||||
Allowance for doubtful accounts | (5,837 | ) | (7,133 | ) | ||||
Total accounts receivable | $ | 39,882 | $ | 33,067 | ||||
Bad debt expense for the years ended December 31, 2014, 2013 and 2012 amounted to $3.3 million, $4.7 million, and $3.4 million, respectively. |
Inventories
Inventories | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Disclosure Components Of Inventories [Abstract] | ||||||||
Inventories | Inventories | |||||||
Inventories consist of the following (in thousands): | ||||||||
As of December 31, | ||||||||
2014 | 2013 | |||||||
Raw materials | $ | 853 | $ | 399 | ||||
Work-in-process | 254 | 1,671 | ||||||
Finished goods | 11,992 | 7,394 | ||||||
Total inventories | $ | 13,099 | $ | 9,464 | ||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||
Property and Equipment | Property and Equipment | |||||||||
Property and equipment consist of the following (in thousands): | ||||||||||
Estimated | As of | |||||||||
Useful Life | December 31, | |||||||||
(Years) | 2014 | 2013 | ||||||||
Machinery and equipment | 5-Feb | $ | 35,690 | $ | 48,814 | |||||
Lab equipment | 3-Feb | 1,585 | 1,481 | |||||||
Computers | 3 | 4,511 | 3,796 | |||||||
Software | 3 | 5,618 | 4,813 | |||||||
Office furniture and fixtures | 5-Mar | 1,253 | 2,048 | |||||||
Leasehold improvement | * | 826 | 2,971 | |||||||
Construction in process | — | 10,502 | 2,895 | |||||||
Total property and equipment | $ | 59,985 | $ | 66,818 | ||||||
Less: accumulated depreciation | (22,916 | ) | (34,462 | ) | ||||||
Total property and equipment | $ | 37,069 | $ | 32,356 | ||||||
_________________________ | ||||||||||
* Lesser of lease term or useful life of asset | ||||||||||
Depreciation expense related to property and equipment was $8.2 million, $6.9 million, and $5.0 million for the years ended December 31, 2014, 2013 and 2012, respectively. The Company recorded $0.2 million, $0.3 million, and $0.6 million of capitalized interest for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||
Construction in process mainly consists of infrastructure improvements and internal use software. Depreciation on the computer equipment and software does not begin until the assets are integrated into the current systems. | ||||||||||
During the year ended December 31, 2014, the Company wrote-off $19.8 million of fully depreciated assets, as the assets were no longer in use. No gain or loss was recognized in the year ended December 31, 2014 related to the write-off of these assets. | ||||||||||
Property and equipment included $8.0 million and $6.5 million of capital leases assets at December 31, 2014 and December 31, 2013, respectively. |
Other_Intangible_Assets
Other Intangible Assets | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||
Other Intangible Assets | Other Intangible Assets | |||||||||||||||||||||||
Other intangible assets consist of the following (in thousands): | ||||||||||||||||||||||||
As of December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Cost | Accumulated | NBV | Cost | Accumulated | NBV | |||||||||||||||||||
Amortization | Amortization | |||||||||||||||||||||||
Customer relationships | $ | 30,100 | $ | (18,167 | ) | $ | 11,933 | $ | 30,100 | $ | (14,378 | ) | $ | 15,722 | ||||||||||
Tradename | 2,800 | (669 | ) | 2,131 | 2,800 | (482 | ) | 2,318 | ||||||||||||||||
Total intangible assets | $ | 32,900 | $ | (18,836 | ) | $ | 14,064 | $ | 32,900 | $ | (14,860 | ) | $ | 18,040 | ||||||||||
The Company recorded $32.9 million of other intangible assets as a result of the acquisition of Neighborhood Diabetes. The Company determined that the estimated useful life of the customer relationships asset is ten years and is amortizing the asset over the period using an estimated cash flow pattern. The Company determined that the estimated useful life of the tradename is 15 years and is amortizing the asset over that period on a straight-line basis. The amortization expense related to other intangible assets was approximately $4.0 million, $4.9 million, and $6.0 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||||||||||||
Amortization expense expected for the next five years is as follows (in thousands): | ||||||||||||||||||||||||
Amortization Expense | ||||||||||||||||||||||||
Year Ending December 31, | Customer | Tradename | Total | |||||||||||||||||||||
Relationships | ||||||||||||||||||||||||
2015 | $ | 3,064 | $ | 187 | $ | 3,251 | ||||||||||||||||||
2016 | 2,478 | 187 | 2,665 | |||||||||||||||||||||
2017 | 2,003 | 187 | 2,190 | |||||||||||||||||||||
2018 | 1,619 | 187 | 1,806 | |||||||||||||||||||||
2019 | 1,309 | 187 | 1,496 | |||||||||||||||||||||
Thereafter | 1,460 | 1,196 | 2,656 | |||||||||||||||||||||
Total | $ | 11,933 | $ | 2,131 | $ | 14,064 | ||||||||||||||||||
As of December 31, 2014, the weighted average amortization period of the Company’s intangible assets is approximately seven years. |
Accrued_Expenses_and_Other_Cur
Accrued Expenses and Other Current Liabilities | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accrued Liabilities and Other Liabilities [Abstract] | ||||||||
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities | |||||||
Accrued expenses and other current liabilities consist of the following (in thousands): | ||||||||
As of | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Employee compensation and related items | $ | 10,243 | $ | 6,887 | ||||
Professional and consulting services | 4,373 | 2,437 | ||||||
Sales and use tax | 3,843 | 3,928 | ||||||
Supplier charges | 1,852 | 1,850 | ||||||
Interest | 168 | 225 | ||||||
Warranty | 981 | 1,173 | ||||||
Training | 770 | 717 | ||||||
Other | 2,473 | 2,261 | ||||||
Total accrued expenses and other current liabilities | $ | 24,703 | $ | 19,478 | ||||
During the year ended December 31, 2014 the Company recorded expense of $10.4 million related to management transition costs. | ||||||||
Product Warranty Costs | ||||||||
The Company provides a four-year warranty on its PDMs and may replace any OmniPods that do not function in accordance with product specifications. Warranty expense is recorded in the period that shipment occurs. The expense, or any required adjustment to expense is based on historical experience and the estimated cost to service the claims. | ||||||||
A reconciliation of the changes in the Company’s product warranty liability is as follows (in thousands): | ||||||||
Year Ended | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Balance at the beginning of year | $ | 3,090 | $ | 1,992 | ||||
Warranty expense | 1,665 | 4,065 | ||||||
Warranty claims settled | (2,141 | ) | (2,967 | ) | ||||
Balance at the end of the year | $ | 2,614 | $ | 3,090 | ||||
As of | ||||||||
31-Dec-14 | 31-Dec-13 | |||||||
Composition of balance: | ||||||||
Short-term | $ | 981 | $ | 1,173 | ||||
Long-term | 1,633 | 1,917 | ||||||
Total warranty balance | $ | 2,614 | $ | 3,090 | ||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Commitments and Contingencies | Commitments and Contingencies | |||
Operating Leases | ||||
The Company leases its facilities in Massachusetts, New York, Florida, and Singapore. The Company’s leases are accounted for as operating leases. The leases generally provide for a base rent plus real estate taxes and certain operating expenses related to the leases. During the year ended December 31, 2013, the Company entered into a new lease agreement for approximately 90,000 square feet of laboratory and office space for its corporate headquarters in Billerica, Massachusetts. The lease term began in August 2014 and expires in October 2022 and contains escalating payments over the life of the lease. Also during the year ended December 31, 2013, the Company extended its Singapore lease which now expires in July 2015. During the year ended December 31, 2014, the Company amended its existing lease for warehouse space in Billerica, Massachusetts. In addition to extending the term, the Company increased the approximate square footage under the lease. The lease now expires in September 2019. Additionally, in the year ended December 31, 2014 the Company amended its existing lease for office space in New York which now expires in January 2019. The Company's Florida lease expires December 2015. | ||||
Certain of the Company’s operating lease agreements contain scheduled rent increases. Rent expense is recorded using the straight-line method and deferred rent is included in other liabilities in the accompanying balance sheets. The Company has considered FASB ASC 840-20, Leases in accounting for these lease provisions. | ||||
The aggregate future minimum lease payments of these leases as of December 31, 2014, are as follows (in thousands): | ||||
Year Ending December 31, | Minimum | |||
Lease Payments | ||||
2015 | $ | 2,226 | ||
2016 | 2,196 | |||
2017 | 2,284 | |||
2018 | 2,290 | |||
2019 | 2,181 | |||
Thereafter | 6,080 | |||
Total | $ | 17,257 | ||
Rent expense of approximately $1.5 million, $1.6 million, and $1.7 million was charged to operations in the years ended December 31, 2014, 2013 and 2012, respectively. | ||||
Legal Proceedings | ||||
In June 2014, the Company entered into a Settlement and License Agreement (the "Settlement Agreement") with Becton, Dickinson and Company (“BD”) resolving the lawsuit filed by BD against the Company in the United States District Court for the District of New Jersey alleging that the OmniPod System infringes two of its patents. The Settlement Agreement provides for a one-time cash payment by the Company to BD and a cross-license of certain patent claims. The Company has recorded approximately $7.0 million of expense related to the one-time cash payment and associated legal fees in connection with the lawsuit. The lawsuit was dismissed with prejudice on July 15, 2014. | ||||
In October 2013, the Company received a letter from the Office of the Massachusetts Attorney General contending that prior to September 2012 Neighborhood Diabetes engaged in improper sales practices by automatically refilling certain prescriptions for MassHealth patients. The Company responded to this letter, stating that Neighborhood Diabetes’ refill practices during the period in question were appropriate and consistent with applicable laws. In January 2015, the Company entered into Settlement and Release Agreement and at December 31, 2014 the Company has recorded a liability of $1.5 million in connection with the settlement of this matter. | ||||
In September 2013, the Company entered into a Settlement and Cross-License Agreement (the “Settlement Agreement”) with Medtronic MiniMed Inc., Medtronic Puerto Rico Operations Co. and MiniMed Distribution Corp. (collectively, “Medtronic”) of the lawsuit brought by Medtronic in United States District Court for the Central District of California alleging that the Company infringes certain Medtronic patents. The Settlement Agreement was entered into in full settlement of the patent infringement suit brought by Medtronic against the Company, which lawsuit was dismissed with prejudice on October 2, 2013. The Settlement Agreement provides for a one-time cash payment by the Company to Medtronic and a cross-license of certain patent claims. These licenses may generally not be assigned or sublicensed, but include “have made” licenses solely for each party's own sale of its products. Each license will terminate if the licensee is acquired by an entity in the business of manufacturing, marketing or distributing ambulatory external insulin pumps. In addition, each party agrees not to sue the other for patent infringement based on any existing product, or any feature, element or component, or any existing combination thereof, as exist in any currently existing commercially available products. The Company has recorded approximately $10 million of expense related to the one-time cash payment and associated legal fees in connection with the lawsuit. | ||||
The Company is, from time to time, involved in the normal course of business in various legal proceedings, including intellectual property, contract employment and product liability suits. Although the Company is unable to quantify the exact financial impact of any of these matters, the Company believes that none of these currently pending matters will have an outcome material to its financial condition or business. | ||||
Indemnifications | ||||
In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations. | ||||
In accordance with its bylaws, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving at the Company’s request in such capacity. There have been no claims to date under such indemnification obligations and the Company has a director and officer insurance policy that enables it to recover a portion of any amounts paid for future claims. | ||||
The Company is subject to an on-going sales and use tax audit by the Massachusetts Department of Revenue related to Neighborhood Diabetes for a period prior to the acquisition. At December 31, 2014, the Company has recorded a liability related to the assessment by the Massachusetts Department of Revenue. The Company continues to appeal the assessment. Under the Merger Agreement, the Company has been indemnified by the former stockholders of Neighborhood Diabetes for any liability resulting from or related to any tax attributable to pre-acquisition periods. In August 2014, the Company entered into a Settlement Agreement with the former stockholders of Neighborhood Diabetes related to certain indemnified items. Amounts received by the Company under the Settlement Agreement were recorded as an offset to expenses in the year ended December 31, 2014. |
Equity
Equity | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Equity [Abstract] | ||||||||||||||
Equity | Equity | |||||||||||||
In January 2013, in a public offering, the Company issued and sold 4,715,000 shares of its common stock at a price of $20.75 per share. In connection with the offering, the Company received total gross proceeds of $97.8 million, or approximately $92.8 million in net proceeds after deducting underwriting discounts and offering expenses. | ||||||||||||||
In May 2013, the Company entered into an Exchange Agreement with a holder of its 5.375% Notes. Under the Exchange Agreement, the Company issued 620,122 shares of its common stock to the holder in exchange for the extinguishment of $13 million in principal amount of the 5.375% Notes. In June 2013, in connection with the repayment of the remaining $2 million in principal amount of the 5.375% Notes the Company issued 26,523 shares of its common stock to the holders, representing the conversion value in excess of the principal amount in accordance with the terms of the 5.375% Notes. | ||||||||||||||
In November 2013, the Company issued 47,392 shares of its common stock as a result of the exercise of warrants. | ||||||||||||||
In July 2014, in connection with the extinguishment of $28.5 million in principal amount of 3.75% Notes, the Company issued 348,535 shares of its common stock to the holders representing the conversion premium. | ||||||||||||||
The Company grants share-based awards to employees in the form of options to purchase the Company’s common stock, the ability to purchase stock at a discounted price under the employee stock purchase plan and restricted stock units. Stock-based compensation expense related to share-based awards recognized in the years ended December 31, 2014, 2013, and 2012 was $22.5 million, $12.7 million, and $9.9 million, respectively, and was calculated based on awards ultimately expected to vest. In connection with the retirement of one of the Company's executives, the Company accelerated the vesting of options to purchase 83,875 shares of common stock and 164,000 restricted stock units previously granted to the executive. The accelerated vesting resulted in a modification of the original awards and resulted in $5.2 million of stock compensation expense in the year ended December 31, 2014. | ||||||||||||||
At December 31, 2014, the Company had $29.9 million of total unrecognized compensation expense related to unvested stock options and restricted stock units. | ||||||||||||||
Stock Options | ||||||||||||||
In May 2007, upon the closing of the Company’s initial public offering, the Company’s 2007 Stock Option and Incentive Plan (the “2007 Plan”) became effective and the Company’s Board of Directors determined not to make any further grants under the Company’s 2000 Stock Option and Incentive Plan. Under the 2007 Plan, awards may be granted to persons who are, at the time of grant, employees, officers, non-employee directors or key persons (including consultants and prospective employees) of the Company. The 2007 Plan provides for the granting of stock options, restricted stock units, stock appreciation rights, deferred stock awards, restricted stock, unrestricted stock, cash-based awards, performance share awards or dividend equivalent rights. Options granted under the 2007 Plan generally vest over a period of four years and expire ten years from the date of grant. At December 31, 2014, 2,596,092 shares remain available for future issuance under the 2007 Plan. | ||||||||||||||
Under the Company’s 2000 Stock Option and Incentive Plan (the “2000 Plan”), options could be granted to persons who were, at the time of grant, employees, officers, or directors of, or consultants or advisors to, the Company. The 2000 Plan provided for the granting of non-statutory stock options, incentive stock options, stock bonuses, and rights to acquire restricted stock. The option price at the date of grant was determined by the Board of Directors and, in the case of incentive stock options, could not be less than the fair market value of the common stock at the date of grant, as determined by the Board of Directors. Options granted under the 2000 Plan generally vest over a period of four years and expire ten years from the date of grant. The provisions of the 2000 Plan limit the exercise of incentive stock options. At the time of grant, options are typically immediately exercisable, but subject to restrictions. The restrictions generally lapse over a period of four years. | ||||||||||||||
The following summarizes the activity under the Company’s stock option plans: | ||||||||||||||
Number of | Weighted | Aggregate | ||||||||||||
Options(#) | Average | Intrinsic | ||||||||||||
Exercise | Value($) | |||||||||||||
Price($) | ||||||||||||||
(In thousands) | ||||||||||||||
Balance, December 31, 2013 | 1,828,613 | $ | 16.46 | |||||||||||
Granted | 838,846 | 38.97 | ||||||||||||
Exercised | (754,522 | ) | 14.69 | $ | 20,418 | (1 | ) | |||||||
Canceled | (65,268 | ) | 28.22 | |||||||||||
Balance, December 31, 2014 | 1,847,669 | $ | 26.99 | $ | 35,361 | |||||||||
Vested, December 31, 2014 | 927,900 | $ | 19.59 | $ | 24,597 | (2 | ) | |||||||
Vested and expected to vest, December 31, 2014 (3) | 1,754,359 | $ | 34,437 | (2 | ) | |||||||||
_________________________ | ||||||||||||||
-1 | The aggregate intrinsic value was calculated based on the positive difference between the estimated fair value of the Company’s common stock as of the date of exercise and the exercise price of the underlying options. The aggregate intrinsic value of options exercised in the years ended December 31, 2014, 2013 and 2012, was $20.4 million, $17.8 million and $9.0 million, respectively. | |||||||||||||
-2 | The aggregate intrinsic value was calculated based on the positive difference between the estimated fair value of the Company’s common stock as of December 31, 2014, and the exercise price of the underlying options. | |||||||||||||
-3 | Represents the number of vested options as of December 31, 2014, plus the number of unvested options expected to vest as of December 31, 2014, based on the unvested options outstanding at December 31, 2014, adjusted for the estimated forfeitures. | |||||||||||||
At December 31, 2014, there were 1,847,669 options outstanding with a weighted average exercise price of $26.99 and a weighted average remaining contractual life of 7.4 years. At December 31, 2014, there were 927,900 options exercisable with a weighted average exercise price of $19.59 and a weighted average remaining contractual life of 5.8 years. | ||||||||||||||
The Company recognizes compensation expense for all share-based payment awards made to its employees, directors and consultants. Stock-based compensation expense recognized is based on the value of the portion of stock-based awards that is ultimately expected to vest. The Company recognizes the value of stock-based compensation in operating expense using the straight-line method. | ||||||||||||||
The Company uses the Black-Scholes option pricing model to determine the fair value of stock options. The determination of the fair value of stock-based payment awards on the date of grant using a pricing model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. The estimated grant date fair values of the employee stock options were calculated using the Black-Scholes option pricing model, based on the following assumptions: | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Risk-free interest rate | 0.12% - 1.98% | 0.93% - 1.91% | 0.80% - 1.16% | |||||||||||
Expected term (in years) | 1.0 - 6.25 | 6.25 | 6.25 | |||||||||||
Dividend yield | — | — | — | |||||||||||
Expected volatility | 37% - 63% | 63% - 66% | 67% - 71% | |||||||||||
Risk-free interest rate. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options. | ||||||||||||||
Expected volatility. Expected volatility measures the amount that a stock price has fluctuated or is expected to fluctuate during a period. | ||||||||||||||
Expected life. The Company analyzes historical employee stock option exercise and termination data to estimate the expected life assumption. The Company calculates the expected life assumption using the midpoint scenario, which combines historical exercise data with hypothetical exercise data for outstanding options, as the Company believes this data currently represents the best estimate of the expected life of a new employee option. During the year ended December 31, 2014, the Company began stratifying its employee population into two groups based upon organizational hierarchy. | ||||||||||||||
Dividend yield. The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future, and, therefore, used an expected dividend yield of zero in the valuation model. | ||||||||||||||
Forfeitures. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that are expected to vest. If the Company’s actual forfeiture rate is materially different from its estimate, the stock-based compensation expense could be significantly different from what the Company has recorded in the current period. During the year ended December 31, 2014, the Company began stratifying its employee population into two groups based upon organizational hierarchy and recognized additional expense of $0.9 million as a change in estimate using the cumulative catch-up method. | ||||||||||||||
The weighted average grant date fair value of options granted for the years ended December 31, 2014, 2013 and 2012 was $15.88, $15.42, and $12.04, respectively. Stock-based compensation expense, related to stock options, recognized in the years ended December 31, 2014, 2013 and 2012 was $7.7 million, $4.6 million, and $4.8 million, respectively, and was calculated based on awards ultimately expected to vest. | ||||||||||||||
At December 31, 2014, the Company had $12.6 million of total unrecognized compensation expense related to stock options that will be recognized over a weighted-average period of 1.4 years. | ||||||||||||||
2007 Employee Stock Purchase Plan | ||||||||||||||
The 2007 Employee Stock Purchase Plan (“2007 ESPP”) was adopted by the Board of Directors and approved by stockholders in April 2007 and became effective upon the closing of the initial public offering in May 2007. The 2007 ESPP authorizes the issuance of up to a total of 380,000 shares of common stock to participating employees. | ||||||||||||||
All employees who are employed by the Company 20 days prior to the first day of the offering period and whose customary employment is for more than 20 hours a week are eligible to participate in the 2007 ESPP. Any employee who owns 5% or more of the voting power or value of shares of the Company’s common stock is not eligible to purchase shares under the 2007 ESPP. | ||||||||||||||
The Company will make one or more offerings each year to employees to purchase stock under the 2007 ESPP. Offerings usually begin on each January 1 and July 1 and continue for six-month periods, referred to as offering periods. | ||||||||||||||
Each employee who is a participant in the Company’s 2007 ESPP may purchase shares by authorizing payroll deductions of up to 10% of his or her cash compensation during an offering period. Unless the participating employee has previously withdrawn from the offering, his or her accumulated payroll deductions will be used to purchase common stock on the last business day of the offering period at a price equal to 85% of the fair market value of the common stock on the last day of the offering period. Under applicable tax rules, an employee may purchase no more than $25,000 worth of common stock, valued at the start of the purchase period, under the 2007 ESPP in any calendar year. | ||||||||||||||
The accumulated payroll deductions of any employee who is not a participant on the last day of an offering period will be refunded. An employee’s rights under the 2007 ESPP terminate upon voluntary withdrawal from the plan or when the employee ceases employment with the Company for any reason. | ||||||||||||||
The 2007 ESPP may be terminated or amended by the Board of Directors at any time. An amendment to increase the number of shares of common stock that is authorized under the 2007 ESPP and certain other amendments require the approval of stockholders. | ||||||||||||||
The Company issued 13,620 shares of common stock in 2014, 12,970 shares of common stock in 2013, and 18,346 shares of common stock in 2012 to employees participating in the 2007 ESPP. The Company recorded approximately $0.1 million of stock-based compensation expense related to the 2007 ESPP in each of the years ended December 31, 2014, 2013 and 2012. | ||||||||||||||
Restricted Stock Units | ||||||||||||||
In the year ended December 31, 2014, the Company awarded 366,529 restricted stock units to certain employees and directors. The restricted stock units were granted under the 2007 Plan and vest annually over three to four years from the grant date. The restricted stock units granted have a weighted average fair value of $43.60 per share based on the closing price of the Company’s common stock on the date of grant. The restricted stock units granted during the year ended December 31, 2014 were valued at approximately $16.0 million on their grant date, and the Company is recognizing the compensation expense over the vesting period. Approximately $14.7 million, $8.0 million and $5.1 million of stock-based compensation expense related to the vesting of restricted stock units was recognized in the years ended December 31, 2014, 2013 and 2012, respectively. Approximately $17.3 million of the fair value of the restricted stock units remained unrecognized as of December 31, 2014, and will be recognized over a weighted average period of 1.1 years. Under the terms of the award, the Company will issue shares of common stock on each of the vesting dates. | ||||||||||||||
The following table summarizes the status of the Company’s restricted stock units: | ||||||||||||||
Number of | Weighted | |||||||||||||
Shares (#) | Average | |||||||||||||
Fair Value ($) | ||||||||||||||
Balance, December 31, 2013 | 1,011,893 | $ | 22.11 | |||||||||||
Granted | 366,529 | 43.6 | ||||||||||||
Vested | (523,240 | ) | 25.96 | |||||||||||
Forfeited | (108,570 | ) | 27.47 | |||||||||||
Balance, December 31, 2014 | 746,612 | $ | 31.4 | |||||||||||
Included in the 366,529 restricted stock units granted during the year ended December 31, 2014, 34,500 restricted stock units were subject to the achievement of performance conditions (performance-based restricted stock units). For performance-based restricted stock units, if the performance conditions are achieved, these restricted stock units will then be subject to service-based vesting requirements over a three year period. The number of performance-based restricted stock units granted during the year ended December 31, 2014 that are expected to vest may vary based on the Company's quarterly evaluation of the probability of the performance criteria being achieved. The Company does not expect that any of the performance-based restricted stock units granted in 2014 will be earned based on its evaluation of the performance criteria at December 31, 2014. Accordingly, the Company has recorded no stock compensation expense related to the 2014 performance-based stock units in the year ended December 31, 2014. | ||||||||||||||
Shareholder Rights Plan | ||||||||||||||
In November 2008, the Board of Directors of the Company adopted a shareholder rights plan (the "Shareholder Rights Plan”), as set forth in the Shareholder Rights Agreement between the Company and the rights agent, the purpose of which is, among other things, to enhance the ability of the Board of Directors to protect shareholder interests and to ensure that shareholders receive fair treatment in the event any coercive takeover attempt of the Company is made in the future. The Shareholder Rights Plan could make it more difficult for a third party to acquire, or could discourage a third party from acquiring the Company or a large block of the Company’s common stock. | ||||||||||||||
In connection with the adoption of the Shareholder Rights Plan, the Board of Directors of the Company declared a dividend distribution of one preferred stock purchase right (a “Right”) for each outstanding share of common stock to stockholders of record as of the close of business on November 15, 2008. In addition, one Right will automatically attach to each share of common stock issued between November 15, 2008 and the distribution date. The Rights currently are not exercisable and are attached to and trade with the outstanding shares of common stock. Under the Shareholder Rights Plan, the Rights become exercisable if a person or group becomes an “acquiring person” by acquiring 15% or more of the outstanding shares of common stock or if a person or group commences a tender offer that would result in that person or group owning 15% or more of the common stock. If a person or group becomes an “acquiring person,” each holder of a Right (other than the acquiring person) would be entitled to purchase, at the then-current exercise price, such number of shares of the Company’s preferred stock which are equivalent to shares of common stock having a value of twice the exercise price of the Right. If the Company is acquired in a merger or other business combination transaction after any such event, each holder of a Right would then be entitled to purchase, at the then-current exercise price, shares of the acquiring company’s common stock having a value of twice the exercise price of the Right. |
Defined_Contribution_Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |
Defined Contribution Plan | Defined Contribution Plan |
The Insulet 401(k) Retirement Plan (the “401(k) Plan”) is a defined contribution plan in the form of a qualified 401(k) plan, in which substantially all employees are eligible to participate upon the first day of the month following 30 days of service. Eligible employees may elect to contribute 100% of their eligible compensation up to the IRS maximum. The Company has the option of making both matching contributions and discretionary profit-sharing contributions to the 401(k) Plan. Since 2011, the Company has offered a discretionary match of 50% for the first 6% of an employee’s salary that was contributed to the 401(k) Plan. The Company match vests over a four-year period (25% per year). The total amount contributed by the Company under the 401(k) Plan was $1.2 million, $1.0 million, and $1.0 million for the years ended December 31, 2014, 2013 and 2012, respectively. |
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Income Taxes | Income Taxes | |||||||||||
The Company accounts for income taxes under ASC 740. Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. | ||||||||||||
Income tax expense consists of the following (in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current | $ | 61 | $ | 16 | $ | 121 | ||||||
Deferred | 81 | 84 | 91 | |||||||||
Total income tax expense | $ | 142 | $ | 100 | $ | 212 | ||||||
For the years ended December 31, 2014, 2013, and 2012, the current portion of income tax expense is primarily related to state and foreign taxes. For the years ended December 31, 2014, 2013 and 2012, the deferred portion of tax expense primarily related to the U.S. Federal and State amounts. | ||||||||||||
The following table reconciles the federal statutory income rate to the Company's effective income tax rate: | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Tax at U.S. statutory rate | 34 | % | 34 | % | 34 | % | ||||||
State taxes, net of federal benefit | 4.04 | (4.21 | ) | (1.18 | ) | |||||||
Tax credits | 1.26 | 4.98 | 0.5 | |||||||||
Permanent items | 0.71 | (5.49 | ) | (1.37 | ) | |||||||
Change in valuation allowance | (38.79 | ) | (29.32 | ) | (32.34 | ) | ||||||
Other | (1.50 | ) | (0.18 | ) | (0.01 | ) | ||||||
Effective income tax rate | (0.28 | )% | (0.22 | )% | (0.40 | )% | ||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting and the amounts used for income tax purposes as well as federal and state net operating losses and tax credit carryforwards. Significant components of the Company’s deferred tax assets (liabilities) consists of the following (in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Deferred tax assets: | ||||||||||||
Net operating loss carryforwards | $ | 161,888 | $ | 154,872 | ||||||||
Start up expenditures | 1,416 | 1,672 | ||||||||||
Tax credits | 6,968 | 9,841 | ||||||||||
Provision for bad debts | 2,174 | 2,679 | ||||||||||
Depreciation | 897 | 1,675 | ||||||||||
Other | 9,777 | 6,357 | ||||||||||
Total deferred tax assets | $ | 183,120 | $ | 177,096 | ||||||||
Deferred tax liabilities: | ||||||||||||
Prepaids | $ | (935 | ) | $ | (310 | ) | ||||||
Amortization of acquired intangibles | (5,218 | ) | (6,734 | ) | ||||||||
Amortization of debt discount | (11,947 | ) | (11,214 | ) | ||||||||
Goodwill | (304 | ) | (223 | ) | ||||||||
Other | — | (515 | ) | |||||||||
Total deferred tax liabilities | $ | (18,404 | ) | $ | (18,996 | ) | ||||||
Valuation allowance | $ | (165,020 | ) | $ | (158,323 | ) | ||||||
Net deferred tax liabilities | $ | (304 | ) | $ | (223 | ) | ||||||
A valuation allowance is required to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After consideration of the available evidence, both positive and negative, the Company has determined that a $165.0 million valuation allowance at December 31, 2014 is necessary to reduce the deferred tax assets to the amount that will more likely than not be realized. The Company provided a valuation allowance for the full amount of its net deferred tax asset for the years ended December 31, 2014 and 2013 because it is not more likely than not that the future tax benefit will be realized. In the year ended December 31, 2014, the Company’s valuation allowance increased by $6.7 million to $165.0 million from the balance at December 31, 2013 of $158.3 million. The change in the valuation allowance is primarily attributable to the deferred tax liabilities related to amortization of debt discount, offset by an increase in net operating loss carryfowards. | ||||||||||||
At December 31, 2014, the Company had approximately $500.6 million, $246.7 million and $7.0 million of federal net operating loss carryforwards, state net operating loss carryforwards and research and development and other tax credits, respectively. If not utilized, these federal carryforwards will begin to expire in 2020 and will continue to expire through 2034, and the state carryforwards will continue to expire through 2034. At December 31, 2013, the Company had approximately $461.7 million, $217.5 million and $9.8 million of federal net operating loss carryforwards, state net operating loss carryforwards and research and development and other tax credits, respectively. The utilization of such net operating loss carryforwards and the realization of tax benefits in future years depends predominantly upon having taxable income. Under the provisions of the Internal Revenue Code, certain substantial changes in the Company's ownership may result in a limitation on the amount of net operating loss carryforwards which may be used in future years. There will be a yearly limitation placed on the amount of net operating loss available for use in future years. Additionally, it is probable that a portion of the research and development tax credit carryforward may not be available to offset future income. | ||||||||||||
The Company had no unrecognized tax benefits December 31, 2014 and 2013, respectively. | ||||||||||||
The Company currently intends to reinvest the total amount of its unremitted earnings in the local international jurisdiction. As such, the Company has not provided for U.S. Federal income taxes on the unremitted earnings of its international subsidiary. |
Quarterly_Data_Unaudited
Quarterly Data (Unaudited) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Data (Unaudited) [Abstract] | ||||||||||||||||
Quarterly Financial Information | Quarterly Data (Unaudited) | |||||||||||||||
2014 Quarters ended | ||||||||||||||||
December 31 | September 30 | June 30 | March 31 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Revenue | $ | 72,561 | $ | 74,985 | $ | 72,013 | $ | 69,161 | ||||||||
Gross profit | $ | 36,673 | $ | 38,042 | $ | 35,765 | $ | 32,808 | ||||||||
Net loss | $ | (5,400 | ) | $ | (10,845 | ) | $ | (29,111 | ) | $ | (6,144 | ) | ||||
Net loss per share | $ | (0.10 | ) | $ | (0.19 | ) | $ | (0.53 | ) | $ | (0.11 | ) | ||||
2013 Quarters ended | ||||||||||||||||
December 31 | September 30 | 30-Jun | March 31 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Revenue | $ | 68,533 | $ | 61,103 | $ | 60,092 | $ | 57,356 | ||||||||
Gross profit | $ | 33,018 | $ | 27,395 | $ | 26,833 | $ | 25,155 | ||||||||
Net loss | $ | (2,500 | ) | $ | (21,290 | ) | $ | (10,519 | ) | $ | (10,665 | ) | ||||
Net loss per share | $ | (0.04 | ) | $ | (0.39 | ) | $ | (0.20 | ) | $ | (0.20 | ) | ||||
Net loss in the second quarter of 2014 includes $1.4 million of other expense related to the reversal of the mark to market fair value of the call feature on the modified portion of the Company's 3.75% Notes originally recognized as other income in the fourth quarter of 2013. |
Schedule_II_Valuation_And_Qual
Schedule II - Valuation And Qualifying Accounts | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||
Schedule II - Valuation And Qualifying Accounts | SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS | |||||||||||||||
The following table sets forth activities in our accounts receivable reserve and deferred tax valuation allowance accounts: | ||||||||||||||||
Description | Balance at | Additions | Deductions | Balance at | ||||||||||||
Beginning of | Charged to | End | ||||||||||||||
Period | Costs and | of Period | ||||||||||||||
Expenses | ||||||||||||||||
(In thousands) | ||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||
Allowance for doubtful accounts | $ | 7,133 | $ | 3,254 | $ | 4,550 | $ | 5,837 | ||||||||
Deferred tax valuation allowance | $ | 158,323 | $ | 21,070 | $ | 14,373 | $ | 165,020 | ||||||||
Year Ended December 31, 2013 | ||||||||||||||||
Allowance for doubtful accounts | $ | 6,627 | $ | 4,741 | $ | 4,235 | $ | 7,133 | ||||||||
Deferred tax valuation allowance | $ | 145,927 | $ | 32,050 | $ | 19,654 | $ | 158,323 | ||||||||
Year Ended December 31, 2012 | ||||||||||||||||
Allowance for doubtful accounts | $ | 7,021 | $ | 3,409 | $ | 3,803 | $ | 6,627 | ||||||||
Deferred tax valuation allowance | $ | 129,223 | $ | 20,972 | $ | 4,268 | $ | 145,927 | ||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Use of Estimates in Preparation of Financial Statements | Use of Estimates in Preparation of Financial Statements | |
The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting periods. The most significant estimates used in these financial statements include the valuation of stock-based compensation expense, accounts receivable, inventories, goodwill, deferred revenue, and equity instruments, the lives of property and equipment and intangible assets, as well as warranty and doubtful accounts allowance reserve calculations. Actual results may differ from those estimates. | ||
Principles of Consolidation | Principles of Consolidation | |
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. | ||
Certain Risks and Uncertainties | Certain Risks and Uncertainties | |
The Company is subject to risks common to companies in the medical device industry, including, but not limited to, development by the Company or its competitors of new technological innovations, dependence on key personnel, reliance on third party manufacturers, protection of proprietary technology, and compliance with regulatory requirements. | ||
Fair Value Measurements | Fair Value Measurements | |
The Company adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”) related to the fair value measurement of certain of its assets and liabilities. ASC 820 defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. When estimating fair value, depending on the nature and complexity of the asset or liability, the Company may use one or all of the following approaches: | ||
• | Market approach, which is based on market prices and other information from market transactions involving identical or comparable assets or liabilities. | |
• | Cost approach, which is based on the cost to acquire or construct comparable assets less an allowance for functional and/or economic obsolescence. | |
• | Income approach, which is based on the present value of the future stream of net cash flows. | |
FASB ASC 820 also describes three levels of inputs that may be used to measure the fair value: | ||
Level 1 — quoted prices in active markets for identical assets or liabilities | ||
Level 2 — observable inputs other than quoted prices in active markets for identical assets or liabilities | ||
Level 3 — unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions | ||
The assets and liabilities subject to fair value measurement standards at December 31, 2014 and 2013 are cash equivalents, consisting of money market funds, and long-term debt which are both based on Level 1 inputs. In addition, the June 2014 call feature of the modified portion of the 3.75% Notes (as defined below) was subject to fair value measurement standards at December 31, 2013 based on Level 3 inputs. | ||
Certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other liabilities are carried at cost, which approximates their fair value because of the short-term maturity of these financial instruments. | ||
Cash and Cash Equivalents | Cash and Cash Equivalents | |
For the purposes of the financial statement classification, the Company considers all highly liquid investment instruments with original maturities of 90 days or less, when purchased, to be cash equivalents. Cash equivalents consist of money market funds and are carried at cost which approximates their fair value. Outstanding letters of credit, relating to security deposits for lease obligations, totaled $1.2 million and $0.1 million at December 31, 2014 and 2013, respectively. | ||
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts | |
Accounts receivable consist of amounts due from third-party payors, patients, third-party distributors, and government agencies. The allowance for doubtful accounts is recorded at the time potential collection risk is identified. The Company estimates its allowance based on historical experience, assessment of specific risk, discussions with individual customers and various assumptions and estimates that are believed to be reasonable under the circumstances. | ||
Inventories | Inventories | |
Inventories are held at the lower of cost or market, determined under the first-in, first-out method. Inventory has been recorded at cost at December 31, 2014 and 2013. Work in process is calculated based upon a build up in the stage of completion using estimated labor inputs for each stage in production. The Company periodically reviews inventories for net realizable value based on quantities on hand and expectations of future use. | ||
Property and Equipment | Property and Equipment | |
Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the respective assets. Leasehold improvements are amortized over their useful life or the life of the lease, whichever is shorter. Assets acquired under capital leases are amortized in accordance with the respective class of owned assets and the amortization is included with depreciation expense. Maintenance and repair costs are expensed as incurred. | ||
Intangibles and Other Long-Lived Assets | Intangibles and Other Long-Lived Assets | |
The Company’s finite-lived intangible assets are stated at cost less accumulated amortization. The Company assesses its intangible and other long-lived assets for impairment whenever events or changes in circumstances suggest that the carrying value of an asset may not be recoverable. The Company recognizes an impairment loss for intangibles and other finite-lived assets if the carrying amount of a long-lived asset is not recoverable based on its undiscounted future cash flows. Any such impairment loss is measured as the difference between the carrying amount and the fair value of the asset. The estimation of useful lives and expected cash flows requires the Company to make significant judgments regarding future periods that are subject to some factors outside its control. Changes in these estimates can result in significant revisions to the carrying value of these assets and may result in material charges to the results of operations. The estimated life of the acquired tradename asset is 15 years. The estimated useful life of the acquired customer relationship asset is 10 years. Intangible assets with determinable estimated lives are amortized over these lives. | ||
Goodwill | Goodwill | |
Goodwill represents the excess of the cost of the acquired Neighborhood Diabetes businesses over the fair value of identifiable net assets acquired. The Company follows the provisions of FASB ASC 350-20, Intangibles - Goodwill and Other (“ASC 350-20”). The Company performs an assessment of its goodwill for impairment on at least an annual basis or whenever events or changes in circumstances indicate there might be impairment. | ||
The Company continues to operate in one segment, which is considered to be the sole reporting unit and therefore, goodwill was tested for impairment at the enterprise level. To test for impairment, the Company has elected to first assess the qualitative factors to determine whether it is more likely than not that the fair value of its sole reporting unit is less than its carrying amount. This qualitative analysis is used as a basis for determining whether it is necessary to perform the two-step goodwill impairment analysis. If the Company determines that it is more likely than not that its fair value is less than its carrying amount, then the two-step goodwill impairment test will be performed. The first step compares the carrying value of the reporting unit to its fair value using a discounted cash flow analysis. If the reporting unit’s carrying value exceeds its fair value, the Company would record an impairment loss to the extent that the carrying value of goodwill exceeds its implied fair value. No goodwill impairment was recorded in the year ended December 31, 2014 or 2013. | ||
Warranty | Warranty | |
The Company provides a four-year warranty on its PDMs and may replace any OmniPods that do not function in accordance with product specifications. The Company estimates its warranty at the time the product is shipped based on historical experience and the estimated cost to service the claims. Cost to service the claims reflects the current product cost which has been decreasing over time. As these estimates are based on historical experience, and the Company continues to introduce new products and new versions of existing products, the Company also considers the anticipated performance of the product over its warranty period in estimating warranty reserves. | ||
Impairment of Assets | Impairment of Assets | |
In connection with its efforts to pursue improved gross margins, leverage operational efficiencies and better pursue opportunities for low-cost supplier sourcing, the Company periodically performs an evaluation of its manufacturing processes and reviews the carrying value of its property and equipment to assess the recoverability of these assets whenever events indicate that impairment may have occurred. As part of this assessment, the Company reviews the future undiscounted operating cash flows expected to be generated by those assets. If impairment is indicated through this review, the carrying amount of the asset would be reduced to its estimated fair value. This review of manufacturing processes and equipment can result in an impairment of assets based on current net book value and potential future use of the assets. In the year ended December 31, 2013 in connection with the transition to the new OmniPod System, the Company recorded a $2.5 million charge to expense the value of manufacturing equipment that was no longer expected to be used in its manufacturing process. In the year ended December 31, 2014 the Company recorded no impairment expense as there were no indicators of impairment. | ||
Revenue Recognition | Revenue Recognition | |
The Company generates nearly all of its revenue from sales of its OmniPod System and other diabetes related products including blood glucose testing supplies, traditional insulin pumps, pump supplies and pharmaceuticals to customers and third-party distributors who resell the products to patients with diabetes. | ||
Revenue recognition requires that persuasive evidence of a sales arrangement exists, delivery of goods occurs through transfer of title and risk and rewards of ownership, the selling price is fixed or determinable and collectibility is reasonably assured. With respect to these criteria: | ||
• | The evidence of an arrangement generally consists of a physician order form, a patient information form and, if applicable, third-party insurance approval for sales directly to patients or a purchase order for sales to a third-party distributor. | |
• | Transfer of title and risk and rewards of ownership are passed to the patient or third-party distributor upon shipment of the products. | |
• | The selling prices for all sales are fixed and agreed with the patient or third-party distributor and, if applicable, the patient’s third-party insurance provider(s) prior to shipment and are based on established list prices or, in the case of certain third-party insurers, contractually agreed upon prices. Provisions for discounts and rebates to customers are established as a reduction to revenue in the same period the related sales are recorded. | |
The Company offers a 45-day right of return for its OmniPod System sales to new patients and defers revenue to reflect estimated sales returns in the same period that the related product sales are recorded. Returns are estimated through a comparison of the Company’s historical return data to its related sales. Historical rates of return are adjusted for known or expected changes in the marketplace when appropriate. When doubt exists about reasonable assuredness of collectibility from specific customers, the Company defers revenue from sales of products to those customers until payment is received. | ||
In June 2011, the Company entered into a development agreement with a U.S. based pharmaceutical company (the "Development Agreement”). Under the Development Agreement, the Company was required to perform design, development, regulatory, and other services to support the pharmaceutical company as it works to obtain regulatory approval to use the Company’s drug delivery technology as a delivery method for its pharmaceutical. Over the term of the Development Agreement, the Company has invoiced amounts based upon meeting certain deliverable milestones. Revenue on the Development Agreement was recognized using a proportional performance methodology based on efforts incurred and total payments under the agreement. The impact of changes in the expected total effort or contract payments were recognized as a change in estimate using the cumulative catch-up method. | ||
The Company deferred revenue of $1.6 million and $0.9 million as of December 31, 2014 and 2013, respectively. The deferred revenue recorded was primarily comprised of product-related revenue. | ||
International sales accounted for 18%, 10%, and 8% of total revenue during the years ended December 31, 2014 and 2013, and 2012, respectively. | ||
Shipping and Handling Costs | Shipping and Handling Costs | |
The Company does not typically charge its customers for shipping and handling costs associated with shipping its product to its customers. These shipping and handling costs are included in general and administrative expenses. | ||
Concentration of Credit Risk | Concentration of Credit Risk | |
Financial instruments that subject the Company to credit risk primarily consist of cash and cash equivalents. The Company maintains the majority of its cash with two accredited financial institutions. | ||
The Company purchases complete OmniPods from Flextronics International Ltd., its single source supplier. As of December 31, 2014 and 2013, liabilities from this vendor represented approximately 24% and 36% of the combined balance of accounts payable, accrued expenses and other current liabilities, respectively. | ||
In the year ended December 31, 2014 revenue from two customers represented 15% and 11% of total revenue, respectively. In the years ended December 31, 2013 and 2012, revenue from one customer represented 13% and 11% of total revenue, respectively. | ||
Research and Development Expenses | Research and Development Expenses | |
The Company’s research and development expenses consist of engineering, product development, quality assurance, clinical and regulatory expenses. These expenses are primarily related to employee compensation, including salary, benefits and stock-based compensation. The Company also incurs expenses related to consulting fees, materials and supplies, and clinical studies, including data management and associated travel expenses. Research and development costs are expensed as incurred. | ||
General and Administrative Expenses | General and Administrative Expenses | |
General and administrative expenses are primarily comprised of salaries and benefits associated with finance, legal and other administrative personnel, overhead and occupancy costs, outside legal costs, and other general and administrative costs. | ||
Sales and Marketing Expenses | Sales and Marketing Expenses | |
Sales and marketing expenses are primarily comprised of salaries and benefits associated with sales and marketing personnel, outside marketing expenses including commercial product samples, tradeshows and advertising expenses. | ||
Segment Reporting | Segment Reporting | |
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision-maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance of the segment. The Company’s current product offering primarily consists of diabetes supplies, including the OmniPod System as well as other diabetes related products and supplies such as blood glucose testing supplies, traditional insulin pumps, pump supplies, and pharmaceuticals. The Company’s current product offering is marketed to a single customer type. As the Company sells a single product type, management operates the business as a single entity. | ||
Income Taxes | Income Taxes | |
The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates that will be in effect in the years in which the differences are expected to reverse. A valuation allowance is required to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company reviews its deferred tax assets for recoverability considering historical profitability, projected future taxable income, and the expected timing of the reversals of existing temporary differences and tax planning strategies. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. | ||
The Company follows the provisions of FASB ASC 740-10, Income Taxes (“ASC 740-10”) on accounting for uncertainty in income taxes recognized in its financial statements. ASC 740-10 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In addition, ASC 740-10 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company had no unrecognized tax benefits as of December 31, 2014 and 2013, respectively. The Company recognizes estimated interest and penalties for uncertain tax positions in income tax expense. | ||
The Company files federal, state and foreign tax returns. These returns are generally open to examination by the relevant tax authorities from three to four years from the date they are filed. The tax filings relating to the Company’s federal and state tax returns are currently open to examination for tax years 2011 through 2013 and 2010 through 2013, respectively. In addition, the Company has generated tax losses since its inception in 2000. These years may be subject to examination if the losses are carried forward and utilized in future years. | ||
Stock-Based Compensation | Stock-Based Compensation | |
The Company accounts for stock-based compensation under the provisions of FASB ASC 718-10, Compensation — Stock Compensation (“ASC 718-10”), which requires all share-based payments to employees, including grants of employee stock options and restricted stock units, to be recognized in the income statement based on their fair values. Share-based payments that contain performance conditions are recognized when such conditions are probable of being achieved. | ||
The Company uses the Black-Scholes option pricing model to determine the weighted-average fair value of options granted. The Company determines the intrinsic value of restricted stock and restricted stock units based on the closing price of its common stock on the date of grant. The Company recognizes the compensation expense of share-based awards on a straight-line basis for awards with only service conditions and on an accelerated method for awards with performance conditions. Compensation expense is recognized over the vesting period of the awards. | ||
The determination of the fair value of share-based payment awards utilizing the Black-Scholes model is affected by the stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. The expected life of the awards is estimated based on the midpoint scenario, which combines historical exercise data with hypothetical exercise data for outstanding options. The risk-free interest rate assumption is based on observed interest rates appropriate for the terms of the awards. The dividend yield assumption is based on Company history and the expectation of paying no dividends. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Stock-based compensation expense recognized in the financial statements is based on awards that are ultimately expected to vest. The Company evaluates the assumptions used to value the awards on a quarterly basis and if factors change and different assumptions are utilized, stock-based compensation expense may differ significantly from what has been recorded in the past. If there are any modifications or cancellations of the underlying unvested securities, the Company may be required to accelerate, increase or cancel any remaining unearned stock-based compensation expense. | ||
In the years ended December 31, 2014, 2013, and 2012, the Company recorded $22.5 million, $12.7 million, and $9.9 million of stock-based compensation expense, respectively. | ||
See Footnote 13 for a summary of the stock option activity under the Company’s stock-based employee compensation plan. | ||
Recent Accounting Pronouncements | Recent Accounting Pronouncements Not Yet Adopted | |
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 requires that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Under this guidance, a company may make additional estimates regarding performance conditions and the allocation of variable consideration. The guidance is effective in fiscal years beginning after January 1, 2017, with early adoption permitted. The Company is currently evaluating the impact of ASU 2014-09. | ||
In June 2014, the FASB issued ASU No. 2014-12, Compensation - Stock Compensation (Topic 718), Accounting for Share-Based Payments when the terms of an award provide that a performance target could be achieve after the requisite service period ("ASU 2014-12"). ASU 2014-12 clarifies the period over which compensation cost would be recognized in awards with a performance target that affects vesting and that could be achieved after the requisite service period. Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective in fiscal years beginning after January 1, 2016, with early adoption permitted. The Company is currently evaluating the impact of ASU 2014-12. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair Value, Assets Measured on Recurring and Nonrecurring Basis | The following table provides a summary of financial assets that are measured at fair value on a recurring basis as of December 31, 2014, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands): | |||||||||||||||
Fair Value Measurements | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets | ||||||||||||||||
Cash Equivalents - Money Market Funds | $ | 123,141 | $ | 123,141 | $ | — | $ | — | ||||||||
The following table provides a summary of financial assets that are measured at fair value on a recurring basis as of December 31, 2013, aggregated by the level in the fair value hierarchy within those those measurements fall (in thousands): | ||||||||||||||||
Fair Value Measurements | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets | ||||||||||||||||
Cash Equivalents - Money Market Funds | $ | 128,308 | $ | 128,308 | $ | — | $ | — | ||||||||
Other Asset - Call feature on 3.75% Notes | $ | 1,351 | $ | — | $ | — | $ | 1,351 | ||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques | The key assumptions used in the lattice model valuation for the call feature at December 31, 2013 were as follows: | |||||||||||||||
Term to Maturity (years) | 2.46 | |||||||||||||||
Bond Inputs: | ||||||||||||||||
Bond Yield | 8.61% | |||||||||||||||
Coupon Rate | 3.75% | |||||||||||||||
Conversion Price | $26.20 | |||||||||||||||
Bond Call Strike Price | $100.00 | |||||||||||||||
Stock Inputs: | ||||||||||||||||
Stock Price | $37.10 | |||||||||||||||
Risk Free Rate | 0.56% | |||||||||||||||
Volatility | 38.00% | |||||||||||||||
Dividend Yield | —% | |||||||||||||||
Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis | The carrying amounts and the estimated fair values of financial instruments as of December 31, 2014 and 2013, are as follows (in thousands): | |||||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||||
Carrying | Estimated Fair | Carrying | Estimated Fair | |||||||||||||
Value | Value | Value | Value | |||||||||||||
2% Convertible Senior Notes | $ | 168,994 | $ | 237,475 | $ | — | $ | — | ||||||||
3.75% Convertible Senior Notes | $ | — | $ | — | $ | 113,651 | $ | 211,370 | ||||||||
Debt_Tables
Debt (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Debt Disclosure [Abstract] | ||||||||||||
Outstanding Convertible Debt and Related Deferred Financing Costs | At December 31, 2014 and 2013, the Company had outstanding convertible debt and related deferred financing costs on its balance sheet as follows (in thousands): | |||||||||||
As of December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Principal amount of the 3.75% Convertible Senior Notes | $ | — | $ | 143,750 | ||||||||
Principal amount of the 2% Convertible Senior Notes | 201,250 | — | ||||||||||
Unamortized discount | (32,256 | ) | (30,099 | ) | ||||||||
Long-term debt, net of discount | $ | 168,994 | $ | 113,651 | ||||||||
Deferred financing costs, net | $ | 4,974 | $ | 1,414 | ||||||||
Interest Expense | Interest expense related to the 5.375% Senior Notes (as defined below), the 3.75% Senior Notes, and the 2% Notes was included in interest and other expense on the consolidated statements of operations as follows (in thousands): | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Contractual coupon interest | $ | 4,657 | $ | 5,704 | $ | 6,197 | ||||||
Accretion of debt discount | 8,007 | 10,492 | 9,619 | |||||||||
Loss on debt extinguishment | 23,203 | 325 | — | |||||||||
Amortization of deferred financing costs | 895 | 590 | 593 | |||||||||
Total interest and other expense | $ | 36,762 | $ | 17,111 | $ | 16,409 | ||||||
Capital_Lease_Obligations_Tabl
Capital Lease Obligations (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Leases [Abstract] | |||||||
Schedule of Capital Leased Assets | Assets held under capital leases consist of the following (in thousands): | ||||||
As of December 31, | |||||||
2014 | 2013 | ||||||
Manufacturing equipment | $ | 7,984 | $ | 6,510 | |||
Less: Accumulated amortization | (1,885 | ) | (582 | ) | |||
Total | $ | 6,099 | $ | 5,928 | |||
Schedule of Future Minimum Lease Payments for Capital Leases | The aggregate future minimum lease payments related to these capital leases as of December 31, 2014, are as follows (in thousands): | ||||||
Year Ending | Minimum Lease Payments | ||||||
December 31, | |||||||
2015 | $ | 4,068 | |||||
2016 | 2,408 | ||||||
Total future minimum lease payments | 6,476 | ||||||
Interest expense | (833 | ) | |||||
Total capital lease obligations | $ | 5,643 | |||||
Net_Loss_Per_Share_Tables
Net Loss Per Share (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Disclosure Potential Common Shares Excluded From Computation Of Diluted Net Loss Per Share [Abstract] | |||||||||
Potential Common Shares Excluded from Computation of Diluted Net Loss Per Share | Potential dilutive common share equivalents consist of the following: | ||||||||
Year Ended December 31, | |||||||||
2014 | 2013 | 2012 | |||||||
5.375% Convertible Senior Notes | — | — | 702,701 | ||||||
3.75% Convertible Senior Notes | — | 5,487,642 | 5,487,642 | ||||||
2% Convertible Senior Notes | 4,327,257 | — | — | ||||||
Unvested restricted stock units | 746,612 | 1,011,893 | 825,068 | ||||||
Outstanding options | 1,847,669 | 1,828,613 | 2,502,190 | ||||||
Outstanding warrants | — | — | 62,752 | ||||||
Total dilutive common shares | 6,921,538 | 8,328,148 | 9,580,353 | ||||||
Accounts_Receivable_Tables
Accounts Receivable (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Receivables [Abstract] | ||||||||
Components of Accounts Receivable | The components of accounts receivable are as follows (in thousands): | |||||||
As of December 31, | ||||||||
2014 | 2013 | |||||||
Trade receivables | $ | 45,719 | $ | 40,200 | ||||
Allowance for doubtful accounts | (5,837 | ) | (7,133 | ) | ||||
Total accounts receivable | $ | 39,882 | $ | 33,067 | ||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Disclosure Components Of Inventories [Abstract] | ||||||||
Components of Inventories | Inventories consist of the following (in thousands): | |||||||
As of December 31, | ||||||||
2014 | 2013 | |||||||
Raw materials | $ | 853 | $ | 399 | ||||
Work-in-process | 254 | 1,671 | ||||||
Finished goods | 11,992 | 7,394 | ||||||
Total inventories | $ | 13,099 | $ | 9,464 | ||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||
Components of Property and Equipment | Property and equipment consist of the following (in thousands): | |||||||||
Estimated | As of | |||||||||
Useful Life | December 31, | |||||||||
(Years) | 2014 | 2013 | ||||||||
Machinery and equipment | 5-Feb | $ | 35,690 | $ | 48,814 | |||||
Lab equipment | 3-Feb | 1,585 | 1,481 | |||||||
Computers | 3 | 4,511 | 3,796 | |||||||
Software | 3 | 5,618 | 4,813 | |||||||
Office furniture and fixtures | 5-Mar | 1,253 | 2,048 | |||||||
Leasehold improvement | * | 826 | 2,971 | |||||||
Construction in process | — | 10,502 | 2,895 | |||||||
Total property and equipment | $ | 59,985 | $ | 66,818 | ||||||
Less: accumulated depreciation | (22,916 | ) | (34,462 | ) | ||||||
Total property and equipment | $ | 37,069 | $ | 32,356 | ||||||
_________________________ | ||||||||||
* Lesser of lease term or useful life of asset |
Other_Intangible_Assets_Tables
Other Intangible Assets (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||
Components of Other Intangible Assets | Other intangible assets consist of the following (in thousands): | |||||||||||||||||||||||
As of December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Cost | Accumulated | NBV | Cost | Accumulated | NBV | |||||||||||||||||||
Amortization | Amortization | |||||||||||||||||||||||
Customer relationships | $ | 30,100 | $ | (18,167 | ) | $ | 11,933 | $ | 30,100 | $ | (14,378 | ) | $ | 15,722 | ||||||||||
Tradename | 2,800 | (669 | ) | 2,131 | 2,800 | (482 | ) | 2,318 | ||||||||||||||||
Total intangible assets | $ | 32,900 | $ | (18,836 | ) | $ | 14,064 | $ | 32,900 | $ | (14,860 | ) | $ | 18,040 | ||||||||||
Amortization Expense Expected for Next Five Years | Amortization expense expected for the next five years is as follows (in thousands): | |||||||||||||||||||||||
Amortization Expense | ||||||||||||||||||||||||
Year Ending December 31, | Customer | Tradename | Total | |||||||||||||||||||||
Relationships | ||||||||||||||||||||||||
2015 | $ | 3,064 | $ | 187 | $ | 3,251 | ||||||||||||||||||
2016 | 2,478 | 187 | 2,665 | |||||||||||||||||||||
2017 | 2,003 | 187 | 2,190 | |||||||||||||||||||||
2018 | 1,619 | 187 | 1,806 | |||||||||||||||||||||
2019 | 1,309 | 187 | 1,496 | |||||||||||||||||||||
Thereafter | 1,460 | 1,196 | 2,656 | |||||||||||||||||||||
Total | $ | 11,933 | $ | 2,131 | $ | 14,064 | ||||||||||||||||||
Accrued_Expenses_and_Other_Cur1
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accrued Liabilities and Other Liabilities [Abstract] | ||||||||
Components of Accrued Liabilities and other current liabilities | Accrued expenses and other current liabilities consist of the following (in thousands): | |||||||
As of | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Employee compensation and related items | $ | 10,243 | $ | 6,887 | ||||
Professional and consulting services | 4,373 | 2,437 | ||||||
Sales and use tax | 3,843 | 3,928 | ||||||
Supplier charges | 1,852 | 1,850 | ||||||
Interest | 168 | 225 | ||||||
Warranty | 981 | 1,173 | ||||||
Training | 770 | 717 | ||||||
Other | 2,473 | 2,261 | ||||||
Total accrued expenses and other current liabilities | $ | 24,703 | $ | 19,478 | ||||
Reconciliation of Changes in Company's Product Warranty Liability | A reconciliation of the changes in the Company’s product warranty liability is as follows (in thousands): | |||||||
Year Ended | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Balance at the beginning of year | $ | 3,090 | $ | 1,992 | ||||
Warranty expense | 1,665 | 4,065 | ||||||
Warranty claims settled | (2,141 | ) | (2,967 | ) | ||||
Balance at the end of the year | $ | 2,614 | $ | 3,090 | ||||
As of | ||||||||
31-Dec-14 | 31-Dec-13 | |||||||
Composition of balance: | ||||||||
Short-term | $ | 981 | $ | 1,173 | ||||
Long-term | 1,633 | 1,917 | ||||||
Total warranty balance | $ | 2,614 | $ | 3,090 | ||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Aggregate Future Minimum Lease Payments | The aggregate future minimum lease payments of these leases as of December 31, 2014, are as follows (in thousands): | |||
Year Ending December 31, | Minimum | |||
Lease Payments | ||||
2015 | $ | 2,226 | ||
2016 | 2,196 | |||
2017 | 2,284 | |||
2018 | 2,290 | |||
2019 | 2,181 | |||
Thereafter | 6,080 | |||
Total | $ | 17,257 | ||
Equity_Tables
Equity (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Equity [Abstract] | ||||||||||||||
Stock Option Activity | The following summarizes the activity under the Company’s stock option plans: | |||||||||||||
Number of | Weighted | Aggregate | ||||||||||||
Options(#) | Average | Intrinsic | ||||||||||||
Exercise | Value($) | |||||||||||||
Price($) | ||||||||||||||
(In thousands) | ||||||||||||||
Balance, December 31, 2013 | 1,828,613 | $ | 16.46 | |||||||||||
Granted | 838,846 | 38.97 | ||||||||||||
Exercised | (754,522 | ) | 14.69 | $ | 20,418 | (1 | ) | |||||||
Canceled | (65,268 | ) | 28.22 | |||||||||||
Balance, December 31, 2014 | 1,847,669 | $ | 26.99 | $ | 35,361 | |||||||||
Vested, December 31, 2014 | 927,900 | $ | 19.59 | $ | 24,597 | (2 | ) | |||||||
Vested and expected to vest, December 31, 2014 (3) | 1,754,359 | $ | 34,437 | (2 | ) | |||||||||
_________________________ | ||||||||||||||
-1 | The aggregate intrinsic value was calculated based on the positive difference between the estimated fair value of the Company’s common stock as of the date of exercise and the exercise price of the underlying options. The aggregate intrinsic value of options exercised in the years ended December 31, 2014, 2013 and 2012, was $20.4 million, $17.8 million and $9.0 million, respectively. | |||||||||||||
-2 | The aggregate intrinsic value was calculated based on the positive difference between the estimated fair value of the Company’s common stock as of December 31, 2014, and the exercise price of the underlying options. | |||||||||||||
-3 | Represents the number of vested options as of December 31, 2014, plus the number of unvested options expected to vest as of December 31, 2014, based on the unvested options outstanding at December 31, 2014, adjusted for the estimated forfeitures. | |||||||||||||
Employee Stock Options Calculated using the Black-Scholes Option Pricing Model | The estimated grant date fair values of the employee stock options were calculated using the Black-Scholes option pricing model, based on the following assumptions: | |||||||||||||
Year Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Risk-free interest rate | 0.12% - 1.98% | 0.93% - 1.91% | 0.80% - 1.16% | |||||||||||
Expected term (in years) | 1.0 - 6.25 | 6.25 | 6.25 | |||||||||||
Dividend yield | — | — | — | |||||||||||
Expected volatility | 37% - 63% | 63% - 66% | 67% - 71% | |||||||||||
Summary of Restricted Stock Units | The following table summarizes the status of the Company’s restricted stock units: | |||||||||||||
Number of | Weighted | |||||||||||||
Shares (#) | Average | |||||||||||||
Fair Value ($) | ||||||||||||||
Balance, December 31, 2013 | 1,011,893 | $ | 22.11 | |||||||||||
Granted | 366,529 | 43.6 | ||||||||||||
Vested | (523,240 | ) | 25.96 | |||||||||||
Forfeited | (108,570 | ) | 27.47 | |||||||||||
Balance, December 31, 2014 | 746,612 | $ | 31.4 | |||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Income Tax benefit (expense) | Income tax expense consists of the following (in thousands): | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current | $ | 61 | $ | 16 | $ | 121 | ||||||
Deferred | 81 | 84 | 91 | |||||||||
Total income tax expense | $ | 142 | $ | 100 | $ | 212 | ||||||
Reconciliation of Income Tax Expense (Benefit) at the Statutory Federal Income Tax Rate | The following table reconciles the federal statutory income rate to the Company's effective income tax rate: | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Tax at U.S. statutory rate | 34 | % | 34 | % | 34 | % | ||||||
State taxes, net of federal benefit | 4.04 | (4.21 | ) | (1.18 | ) | |||||||
Tax credits | 1.26 | 4.98 | 0.5 | |||||||||
Permanent items | 0.71 | (5.49 | ) | (1.37 | ) | |||||||
Change in valuation allowance | (38.79 | ) | (29.32 | ) | (32.34 | ) | ||||||
Other | (1.50 | ) | (0.18 | ) | (0.01 | ) | ||||||
Effective income tax rate | (0.28 | )% | (0.22 | )% | (0.40 | )% | ||||||
Components of the Company's Deferred Tax Assets (Liabilities) | Significant components of the Company’s deferred tax assets (liabilities) consists of the following (in thousands): | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Deferred tax assets: | ||||||||||||
Net operating loss carryforwards | $ | 161,888 | $ | 154,872 | ||||||||
Start up expenditures | 1,416 | 1,672 | ||||||||||
Tax credits | 6,968 | 9,841 | ||||||||||
Provision for bad debts | 2,174 | 2,679 | ||||||||||
Depreciation | 897 | 1,675 | ||||||||||
Other | 9,777 | 6,357 | ||||||||||
Total deferred tax assets | $ | 183,120 | $ | 177,096 | ||||||||
Deferred tax liabilities: | ||||||||||||
Prepaids | $ | (935 | ) | $ | (310 | ) | ||||||
Amortization of acquired intangibles | (5,218 | ) | (6,734 | ) | ||||||||
Amortization of debt discount | (11,947 | ) | (11,214 | ) | ||||||||
Goodwill | (304 | ) | (223 | ) | ||||||||
Other | — | (515 | ) | |||||||||
Total deferred tax liabilities | $ | (18,404 | ) | $ | (18,996 | ) | ||||||
Valuation allowance | $ | (165,020 | ) | $ | (158,323 | ) | ||||||
Net deferred tax liabilities | $ | (304 | ) | $ | (223 | ) |
Quarterly_Data_Unaudited_Table
Quarterly Data (Unaudited) (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Data (Unaudited) [Abstract] | ||||||||||||||||
Selected Quarterly Data | ||||||||||||||||
2014 Quarters ended | ||||||||||||||||
December 31 | September 30 | June 30 | March 31 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Revenue | $ | 72,561 | $ | 74,985 | $ | 72,013 | $ | 69,161 | ||||||||
Gross profit | $ | 36,673 | $ | 38,042 | $ | 35,765 | $ | 32,808 | ||||||||
Net loss | $ | (5,400 | ) | $ | (10,845 | ) | $ | (29,111 | ) | $ | (6,144 | ) | ||||
Net loss per share | $ | (0.10 | ) | $ | (0.19 | ) | $ | (0.53 | ) | $ | (0.11 | ) | ||||
2013 Quarters ended | ||||||||||||||||
December 31 | September 30 | 30-Jun | March 31 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Revenue | $ | 68,533 | $ | 61,103 | $ | 60,092 | $ | 57,356 | ||||||||
Gross profit | $ | 33,018 | $ | 27,395 | $ | 26,833 | $ | 25,155 | ||||||||
Net loss | $ | (2,500 | ) | $ | (21,290 | ) | $ | (10,519 | ) | $ | (10,665 | ) | ||||
Net loss per share | $ | (0.04 | ) | $ | (0.39 | ) | $ | (0.20 | ) | $ | (0.20 | ) |
Nature_of_the_Business_Nature_
Nature of the Business Nature of the Business (Details) | Dec. 31, 2014 |
in | |
Nature of the Business [Abstract] | |
Number of Inches of Tubing in conventional insulin pump | 42 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Customer | Customer | ||
Location | |||
Significant Accounting Policies [Line Items] | |||
Number of Operating Segments | 1 | ||
Return Period | 45 days | ||
Product Warranty Term | 4 years | ||
Deferred revenue | $1,554,000 | $900,000 | |
Impairment and other charges | 0 | 2,511,000 | 0 |
Goodwill, Impairment Loss | 0 | 0 | |
Restricted cash | 1,200,000 | 100,000 | |
Number of accredited financial institutions which the Company maintains the majority of its cash | 2 | ||
Number of Single Source Suppliers | 1 | 1 | |
Combined balance of accounts payable | 24.00% | 36.00% | |
Segment Reporting, Disclosure of Major Customers | 2 | 1 | 1 |
Unrecognized tax benefits | 0 | 0 | |
Stock-based compensation expense | 22,500,000 | 12,700,000 | 9,900,000 |
Tradename | |||
Significant Accounting Policies [Line Items] | |||
Estimated Useful Life | 15 years | ||
Customer relationships | |||
Significant Accounting Policies [Line Items] | |||
Estimated Useful Life | 10 years | ||
Neighborhood Diabetes | Tradename | |||
Significant Accounting Policies [Line Items] | |||
Estimated Useful Life | 15 years | ||
Neighborhood Diabetes | Customer relationships | |||
Significant Accounting Policies [Line Items] | |||
Estimated Useful Life | 10 years | ||
Minimum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Number of Open Tax Years | 3 years | ||
Maximum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Maturity period for all highly liquid investment instruments | 90 days | 90 days | |
Number of Open Tax Years | 4 years | ||
Machinery and equipment | |||
Significant Accounting Policies [Line Items] | |||
Impairment and other charges | $0 | $2,500,000 | |
International Sales [Member] | |||
Significant Accounting Policies [Line Items] | |||
Percent of Revenue | 18.00% | 10.00% | 8.00% |
One Customer [Member] | |||
Significant Accounting Policies [Line Items] | |||
Percent of Revenue | 15.00% | 13.00% | 11.00% |
Customer Two [Member] | |||
Significant Accounting Policies [Line Items] | |||
Percent of Revenue | 11.00% |
Fair_Value_Measurements_Schedu
Fair Value Measurements - Schedule of Assets Measured on a Recurring and Nonrecurring Basis (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents - Money Market Funds | $123,141 | $128,308 |
Other Asset - Call feature on 3.75% Notes | 1,351 | |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents - Money Market Funds | 123,141 | 128,308 |
Other Asset - Call feature on 3.75% Notes | 0 | |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents - Money Market Funds | 0 | 0 |
Other Asset - Call feature on 3.75% Notes | 0 | |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents - Money Market Funds | 0 | 0 |
Other Asset - Call feature on 3.75% Notes | $1,351 |
Fair_Value_Measurements_Schedu1
Fair Value Measurements - Schedule of Liabilities Measure on Recurring and Nonrecurring Basis (Details) (Level 1, USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Estimate of Fair Value Measurement [Member] | 2% Convertible Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
2% Convertible Senior Notes | $237,475 | $0 |
Estimate of Fair Value Measurement [Member] | 3.75% Convertible Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
2% Convertible Senior Notes | 0 | 211,370 |
Reported Value Measurement [Member] | 2% Convertible Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
2% Convertible Senior Notes | 168,994 | 0 |
Reported Value Measurement [Member] | 3.75% Convertible Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
2% Convertible Senior Notes | $0 | $113,651 |
Fair_Value_Measurements_Fair_V
Fair Value Measurements - Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Fair Value Disclosures [Abstract] | |
Term to Maturity (years) | 2 years 5 months 15 days |
Bond Yield | 8.61% |
Coupon Rate | 3.75% |
Conversion Price | $26.20 |
Bond Call Strike Price | $100 |
Stock Price | $37.10 |
Risk Free Rate | 0.56% |
Volatility | 38.00% |
Dividend Yield | 0.00% |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other Asset - Call feature on 3.75% Notes | $1,351,000 | ||
Debt discount | 30,100,000 | ||
Unamortized discount | 32,256,000 | 30,099,000 | |
Change in Call feature on 3.75% Notes | $1,400,000 | $1,400,000 |
Debt_Outstanding_Convertible_D
Debt - Outstanding Convertible Debt and Related Deferred Financing Costs (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2008 | Jun. 30, 2011 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | |||||
Debt Instrument [Line Items] | |||||
Unamortized discount | ($32,256) | ($30,099) | |||
Long-term debt, net of discount | 168,994 | 113,651 | |||
Deferred financing costs, net | 4,974 | 1,414 | |||
5.375% Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Principal amount of Senior Notes | 85,000 | ||||
3.75% Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Principal amount of Senior Notes | 0 | 143,750 | 143,800 | ||
Long-term debt, net of discount | 0 | ||||
2% Convertible Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Principal amount of Senior Notes | 201,250 | 0 | 201,300 | ||
Unamortized discount | ($35,600) |
Debt_Interest_Expense_Detail
Debt - Interest Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Debt Instrument [Line Items] | |||
Contractual coupon interest | $4,657 | $5,704 | $6,197 |
Accretion of debt discount | 8,007 | 10,492 | 9,619 |
Loss on debt extinguishment | 23,203 | 325 | 0 |
Amortization of deferred financing costs | 895 | 590 | 593 |
Total interest and other expense | $36,762 | $17,111 | $16,409 |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | ||||||
Jul. 31, 2014 | Jun. 30, 2013 | 31-May-13 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2008 | Jun. 30, 2011 | Jun. 30, 2014 | |
Debt Instrument [Line Items] | |||||||||
Expected Cash Interest Payments, 2015 | $4,000,000 | ||||||||
Expected Cash Interest Payments, 2016 | 4,000,000 | ||||||||
Expected Cash Interest Payments, 2017 | 4,000,000 | ||||||||
Expected Cash Interest Payments, 2018 | 4,000,000 | ||||||||
Expected Cash Interest Payments, 2019 | 1,800,000 | ||||||||
Expected Future Principal Payments, 2019 | 201,300,000 | ||||||||
Payments of long-term debt | 189,521,000 | 2,000,000 | 0 | ||||||
Unamortized discount | 32,256,000 | 30,099,000 | |||||||
Other Asset - Call feature on the modified portion of the 3.75% Notes | 1,351,000 | ||||||||
Principal amount of debt converted | 12,564,000 | 13,000,000 | 0 | ||||||
Shares Issued with Debt Conversion | 348,535 | 26,523 | 620,122 | ||||||
Issuance of common stock pursuant to conversion of debt | 12,600,000 | 12,564,000 | 13,326,000 | ||||||
Cash paid for interest | 4,567,000 | 5,704,000 | 6,197,000 | ||||||
Loss on debt extinguishment | 23,203,000 | 325,000 | 0 | ||||||
Non-cash interest | 10,253,000 | 9,731,000 | 10,212,000 | ||||||
Long-term debt, net of discount | 168,994,000 | 113,651,000 | |||||||
Investor | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal Amount Of Modified Debt Held | 73,000,000 | ||||||||
5.375% Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount of Notes | 85,000,000 | ||||||||
Debt, maturity date | 15-Jun-13 | ||||||||
Debt, interest rate | 5.38% | ||||||||
Frequency of interest payment | semi-annually | ||||||||
Debt conversion rate | 46.8467 | ||||||||
Principal amount per note used in conversion rate | 1,000 | ||||||||
Principal amount of debt converted | 13,000,000 | ||||||||
Cash paid for interest | 300,000 | ||||||||
Repayment of remaining prinicpal amount including interest | 2,100,000 | ||||||||
Interest expense related to Notes | 0 | 300,000 | 800,000 | ||||||
Non-cash interest | 0 | 300,000 | 600,000 | ||||||
5.375% Convertible Notes | Investor | |||||||||
Debt Instrument [Line Items] | |||||||||
Payments of long-term debt | 85,100,000 | ||||||||
Principal amount of Notes | 70,000,000 | ||||||||
Unamortized discount | 10,500,000 | ||||||||
Repurchase premium | 21.50% | ||||||||
Principal Amount Of Modified Debt Held | 13,500,000 | ||||||||
5.375% Convertible Notes | Semi Annual Payment, First Payment | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest payment date | -3 | ||||||||
5.375% Convertible Notes | Semi Annual Payment, Second Payment | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest payment date | -9 | ||||||||
3.75% Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Payments of long-term debt | 160,700,000 | ||||||||
Principal amount of Notes | 0 | 143,750,000 | 143,800,000 | ||||||
Debt, maturity date | 15-Jun-16 | ||||||||
Debt Instrument, Repurchased Face Amount | 114,900,000 | ||||||||
Debt, interest rate | 3.75% | ||||||||
Frequency of interest payment | semi-annually | ||||||||
Debt conversion rate | 38.1749 | ||||||||
Principal amount per note used in conversion rate | 1,000 | ||||||||
Conversion price, per share | $26.20 | ||||||||
Deferred financing costs, amortization period | 5 years | ||||||||
Principal amount of debt converted | 28,500,000 | ||||||||
Total Consideration Paid | 41,100,000 | ||||||||
Debt Instrument, Redemption, Principal Amount | 300,000 | ||||||||
Repayment of remaining prinicpal amount including interest | 300,000 | ||||||||
Interest expense related to Notes | 2,400,000 | 5,400,000 | 5,400,000 | ||||||
Non-cash interest | 4,900,000 | 10,800,000 | 9,600,000 | ||||||
Percentage required of the last reported sale price per share of the Company's common stock for redemption | 130.00% | ||||||||
Number of trading days | 20 days | ||||||||
Number of consecutive trading days | 30 days | ||||||||
Debt Conversion, Original Debt, Amount | 28,500,000 | ||||||||
Long-term debt, net of discount | 0 | ||||||||
Debt Instrument repurchase premium in dollars | 45,800,000 | ||||||||
Principal Amount Of Old Debt Held | 80,000,000 | ||||||||
Amount allocated to debt | 27,900,000 | 140,300,000 | 112,400,000 | ||||||
Amount allocated to equity | 13,500,000 | 48,300,000 | |||||||
3.75% Convertible Notes | Investor | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal Amount Of Modified Debt Held | 59,500,000 | ||||||||
3.75% Convertible Notes | Debt discount related to premium payment in connection with the purchase | |||||||||
Debt Instrument [Line Items] | |||||||||
Unamortized discount | 15,100,000 | ||||||||
3.75% Convertible Notes | Debt discount related to the increase in the value of the conversion feature. | |||||||||
Debt Instrument [Line Items] | |||||||||
Unamortized discount | 200,000 | ||||||||
3.75% Convertible Notes | Modified Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Unamortized discount | 25,800,000 | ||||||||
Debt Instrument, Interest Rate, Effective Percentage | 16.50% | ||||||||
Debt discount amortization period | 5 years | ||||||||
Transaction fees | 2,000,000 | ||||||||
3.75% Convertible Notes | New Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Unamortized discount | 26,600,000 | ||||||||
Debt Instrument, Interest Rate, Effective Percentage | 12.40% | ||||||||
Debt discount amortization period | 5 years | ||||||||
Deferred financing costs | 2,800,000 | ||||||||
Finance costs reclassified against equity | 900,000 | ||||||||
Principal debt amount issued to new investors | 84,300,000 | ||||||||
3.75% Convertible Notes | Semi Annual Payment, First Payment | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest payment date | -3 | ||||||||
3.75% Convertible Notes | Semi Annual Payment, Second Payment | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest payment date | -9 | ||||||||
2% Convertible Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount of Notes | 201,250,000 | 0 | 201,300,000 | ||||||
Debt, maturity date | 15-Jun-19 | ||||||||
Debt, interest rate | 2.00% | ||||||||
Frequency of interest payment | semi-annually | ||||||||
Debt conversion rate | 21.5019 | ||||||||
Principal amount per note used in conversion rate | 1,000 | ||||||||
Conversion price, per share | $46.51 | ||||||||
Unamortized discount | 35,600,000 | ||||||||
Debt Instrument, Interest Rate, Effective Percentage | 6.20% | ||||||||
Debt discount amortization period | 5 years | ||||||||
Deferred Finance Costs, Gross | 6,700,000 | ||||||||
Finance costs reclassified against equity | 1,200,000 | ||||||||
Interest expense related to Notes | 2,300,000 | ||||||||
Non-cash interest | 4,000,000 | ||||||||
Portion of 2% Notes purchased by 3.75% holders | $98,200,000 | ||||||||
2% Convertible Senior Notes | Semi Annual Payment, First Payment | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest payment date | December 15 | ||||||||
2% Convertible Senior Notes | Semi Annual Payment, Second Payment | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest payment date | June 15 |
Capital_Lease_Obligations_Addi
Capital Lease Obligations - Additional Information (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Capital Leased Assets [Line Items] | |||
Purchases of property and equipment under capital lease | $1,474,000 | $9,021,000 | $0 |
Repayment Period for Capital Lease Obligations | 36 months | ||
Capital Leases of Lessee, Contingent Rentals, Effective Interest Rate | 17.00% | ||
Impairment and other charges | 0 | 2,511,000 | 0 |
Machinery and equipment | |||
Capital Leased Assets [Line Items] | |||
Manufacturing equipment | 7,984,000 | 6,510,000 | |
Estimated useful life | 5 years | ||
Impairment and other charges | 0 | 2,500,000 | |
Amortization Expense | 1,300,000 | 600,000 | 0 |
Interest Expense | $1,200,000 | $400,000 | $0 |
Capital_Lease_Obligations_Sche
Capital Lease Obligations - Schedule of Capital Leased Assets (Details) (Machinery and equipment, USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Machinery and equipment | ||
Capital Leased Assets [Line Items] | ||
Manufacturing equipment | $7,984 | $6,510 |
Less: Accumulated amortization | -1,885 | -582 |
Total | $6,099 | $5,928 |
Capital_Lease_Obligations_Sche1
Capital Lease Obligations - Schedule of Future Minimum Lease Payments for Capital Leases (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Leases [Abstract] | |
2015 | $4,068 |
2016 | 2,408 |
Total future minimum lease payments | 6,476 |
Interest expense | -833 |
Total capital lease obligations | $5,643 |
Net_Loss_Per_Share_Potential_C
Net Loss Per Share - Potential Common Shares Excluded from Computation of Diluted Net Loss Per Share (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 6,921,538 | 8,328,148 | 9,580,353 |
5.375% Convertible Senior Notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 0 | 0 | 702,701 |
3.75% Convertible Senior Notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 0 | 5,487,642 | 5,487,642 |
2% Convertible Senior Notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 4,327,257 | 0 | 0 |
Unvested restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 746,612 | 1,011,893 | 825,068 |
Outstanding options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 1,847,669 | 1,828,613 | 2,502,190 |
Outstanding warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 0 | 0 | 62,752 |
Accounts_Receivable_Additional
Accounts Receivable - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Customer | Customer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of customers that accounted for more than 10% of gross accounts receivable | 2 | 2 | |
Provision for bad debts | $3,254 | $4,741 | $3,409 |
One Customer [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Percentage of gross accounts receivable for major customer | 19.00% | 12.00% | |
Customer Two [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Percentage of gross accounts receivable for major customer | 10.00% | 10.00% |
Accounts_Receivable_Components
Accounts Receivable - Components of Accounts Receivable (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Disclosure Components Of Accounts Receivable [Abstract] | ||
Trade receivables | $45,719 | $40,200 |
Allowance for doubtful accounts | -5,837 | -7,133 |
Total accounts receivable | $39,882 | $33,067 |
Inventories_Components_of_Inve
Inventories - Components of Inventories (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Disclosure Components Of Inventories [Abstract] | ||
Raw materials | $853 | $399 |
Work-in-process | 254 | 1,671 |
Finished goods | 11,992 | 7,394 |
Total inventories | $13,099 | $9,464 |
Property_and_Equipment_Compone
Property and Equipment - Component Property and Equipment (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | ||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, gross | $59,985 | $66,818 | ||
Less: Accumulated depreciation | -22,916 | -34,462 | ||
Total property and equipment | 37,069 | 32,356 | ||
Machinery and equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life | 5 years | |||
Property, plant and equipment, gross | 35,690 | 48,814 | ||
Machinery and equipment | Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life | 2 years | |||
Machinery and equipment | Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life | 5 years | |||
Lab equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, gross | 1,585 | 1,481 | ||
Lab equipment | Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life | 2 years | |||
Lab equipment | Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life | 3 years | |||
Computers | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life | 3 years | |||
Property, plant and equipment, gross | 4,511 | 3,796 | ||
Software | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life | 3 years | |||
Property, plant and equipment, gross | 5,618 | 4,813 | ||
Office furniture and fixtures | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, gross | 1,253 | 2,048 | ||
Office furniture and fixtures | Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life | 3 years | |||
Office furniture and fixtures | Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life | 5 years | |||
Leasehold improvement | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, gross | 826 | [1] | 2,971 | [1] |
Construction in process | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, gross | $10,502 | $2,895 | ||
[1] | Lesser of lease term or useful life of asset |
Property_and_Equipment_Additio
Property and Equipment - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $8,200,000 | $6,900,000 | $5,000,000 |
Capitalized interest | 200,000 | 300,000 | 600,000 |
Fully depreciated assets written off | 19,800,000 | ||
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Manufacturing equipment | $7,984,000 | $6,510,000 |
Other_Intangible_Assets_Compon
Other Intangible Assets - Components of Other Intangible Assets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets cost | $32,900 | $32,900 |
Less: Accumulated amortization | -18,836 | -14,860 |
Total | 14,064 | 18,040 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets cost | 30,100 | 30,100 |
Less: Accumulated amortization | -18,167 | -14,378 |
Total | 11,933 | 15,722 |
Tradename | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets cost | 2,800 | 2,800 |
Less: Accumulated amortization | -669 | -482 |
Total | $2,131 | $2,318 |
Other_Intangible_Assets_Amorti
Other Intangible Assets - Amortization Expense Expected for Next Five Years (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Expected Amortization Expense [Line Items] | ||
2015 | $3,251 | |
2016 | 2,665 | |
2017 | 2,190 | |
2018 | 1,806 | |
2019 | 1,496 | |
Thereafter | 2,656 | |
Total | 14,064 | 18,040 |
Customer relationships | ||
Expected Amortization Expense [Line Items] | ||
2015 | 3,064 | |
2016 | 2,478 | |
2017 | 2,003 | |
2018 | 1,619 | |
2019 | 1,309 | |
Thereafter | 1,460 | |
Total | 11,933 | 15,722 |
Tradename | ||
Expected Amortization Expense [Line Items] | ||
2015 | 187 | |
2016 | 187 | |
2017 | 187 | |
2018 | 187 | |
2019 | 187 | |
Thereafter | 1,196 | |
Total | $2,131 | $2,318 |
Other_Intangible_Assets_Additi
Other Intangible Assets - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Other intangible assets cost | $32,900,000 | ||
Accumulated amortization | 18,836,000 | 14,860,000 | |
Amortization of other intangible assets | 4,000,000 | 4,900,000 | 6,000,000 |
Intangible asset,weighted average amortization period | 7 years | ||
Customer relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life | 10 years | ||
Accumulated amortization | 18,167,000 | 14,378,000 | |
Tradename | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life | 15 years | ||
Accumulated amortization | $669,000 | $482,000 |
Accrued_Expenses_and_Other_Cur2
Accrued Expenses and Other Current Liabilities - Component of Accrued Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Disclosure Component Of Accrued Liabilities and Other Current Liabilities [Abstract] | ||
Employee compensation and related items | $10,243 | $6,887 |
Professional and consulting services | 4,373 | 2,437 |
Sales and use tax | 3,843 | 3,928 |
Supplier charges | 1,852 | 1,850 |
Interest | 168 | 225 |
Warranty | 981 | 1,173 |
Training | 770 | 717 |
Other | 2,473 | 2,261 |
Total accrued expenses and other current liabilities | $24,703 | $19,478 |
Accrued_Expenses_and_Other_Cur3
Accrued Expenses and Other Current Liabilities - Additional Information (Detail) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Disclosure Accrued Expenses Additional Information [Abstract] | |
Management Transition Costs | $10.40 |
Product Warranty Term | 4 years |
Accrued_Expenses_and_Other_Cur4
Accrued Expenses and Other Current Liabilities - Reconciliation of Changes in Product Warranty Liability (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Disclosure Reconciliation Of Changes In Product Warranty Liability [Abstract] | ||
Balance at the beginning of year | $3,090 | $1,992 |
Warranty expense | 1,665 | 4,065 |
Warranty claims settled | -2,141 | -2,967 |
Balance at the end of the year | 2,614 | 3,090 |
Composition of balance: | ||
Short-term | 981 | 1,173 |
Long-term | 1,633 | 1,917 |
Total warranty balance | $2,614 | $3,090 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating Leased Assets [Line Items] | |||
Rent expense | $1.50 | $1.60 | $1.70 |
Billerica, Massachusetts | |||
Operating Leased Assets [Line Items] | |||
Lease Expiration Month And Year | 2022-10 | ||
Lease facility area | 90,000 | ||
Billerica Massachusetts, New Location - Warehouse [Member] | |||
Operating Leased Assets [Line Items] | |||
Lease Expiration Month And Year | 2019-09 | ||
Singapore | |||
Operating Leased Assets [Line Items] | |||
Lease Expiration Month And Year | 2015-07 | ||
Florida | |||
Operating Leased Assets [Line Items] | |||
Lease Expiration Month And Year | 2015-12 | ||
New York | |||
Operating Leased Assets [Line Items] | |||
Lease Expiration Month And Year | 2019-01 |
Commitments_and_Contingencies_2
Commitments and Contingencies - Aggregate Future Minimum Lease Payments (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Minimum Lease Payments | |
2014 | $2,226 |
2015 | 2,196 |
2016 | 2,284 |
2017 | 2,290 |
2018 | 2,181 |
Thereafter | 6,080 |
Total | $17,257 |
Commitments_and_Contingencies_3
Commitments and Contingencies Legal Proceedings (Details) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Becton Dickinson And Company [Member] | |
Loss Contingencies [Line Items] | |
Litigation Settlement, Amount | $7 |
Office of the Massachusetts Attorney General [Member] | |
Loss Contingencies [Line Items] | |
Litigation Settlement, Amount | 1.5 |
Medtronic Inc [Member] | |
Loss Contingencies [Line Items] | |
Litigation Settlement, Amount | $10 |
Equity_Additional_Information_
Equity - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | ||||||||
Jul. 31, 2014 | Jun. 30, 2013 | 31-May-13 | Jan. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | 31-May-07 | Nov. 30, 2013 | Nov. 15, 2008 | Jun. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award Additional Expense | $900,000 | ||||||||||
Principal amount of debt converted | 12,564,000 | 13,000,000 | 0 | ||||||||
Proceeds from issuance of common stock | 97,800,000 | 92,812,000 | |||||||||
Stock-based compensation expense | 22,500,000 | 12,700,000 | 9,900,000 | ||||||||
Total unrecognized compensation expense | 29,900,000 | ||||||||||
Options outstanding, shares | 1,847,669 | 1,828,613 | |||||||||
Options outstanding, weighted average exercise price | $26.99 | $16.46 | |||||||||
Options outstanding, weighted average remaining contractual life | 7 years 5 months 0 days | ||||||||||
Options exercisable, shares | 927,900 | ||||||||||
Options exercisable, weighted average exercise price | $19.59 | ||||||||||
Options exercisable, weighted average remaining contractual life | 5 years 9 months 0 days | ||||||||||
Weighted average grant date fair value of options granted | $15.88 | $15.42 | $12.04 | ||||||||
Shares Issued with Debt Conversion | 348,535 | 26,523 | 620,122 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award Accelerated Compensation Cost | 5,200,000 | ||||||||||
Stock Option Plan 2000 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vesting period | 4 years | ||||||||||
Expiration period | 10 years | ||||||||||
Restriction period | 4 years | ||||||||||
Employee Stock Purchase Plan, 2007 Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock-based compensation expense | 100,000 | 100,000 | 100,000 | ||||||||
Shares reserved for issuance under the plan | 380,000 | ||||||||||
Threshold percentage of voting power, not eligible to purchase shares under the plan | 5.00% | ||||||||||
Offering period term | 6 months | ||||||||||
Maximum employee subscription rate | 10.00% | ||||||||||
Discount market price on the last day of the offering period | 85.00% | ||||||||||
Maximum value of shares of common stock an employee is able to purchase at the start of the purchase period under the plan in any calendar year | 25,000 | ||||||||||
Shares issued for employee stock purchase plan | 13,620 | 12,970 | 18,346 | ||||||||
Employee Stock Purchase Plan, 2007 Plan | Minimum [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Employment period with the Company for eligibility for the plan | 20 days | ||||||||||
Customary employment time per week for eligibility for the plan | 20 hours | ||||||||||
Number of offerings under the plan | 1 | ||||||||||
Shareholder Rights Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Dividend distribution for a preferred stock purchase right for each outstanding share of common stock | 1 | ||||||||||
Miminum percentage for rights to become exercisable | 15.00% | ||||||||||
Employee Stock Option | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock-based compensation expense | 7,700,000 | 4,600,000 | 4,800,000 | ||||||||
Total unrecognized compensation expense | 12,600,000 | ||||||||||
Total unrecognized compensation expense weighted-average period | 1 year 5 months 0 days | ||||||||||
Restricted Stock Units | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock-based compensation expense | 14,700,000 | 8,000,000 | 5,100,000 | ||||||||
Total unrecognized compensation expense | 17,300,000 | ||||||||||
Total unrecognized compensation expense weighted-average period | 1 year 1 month 0 days | ||||||||||
Shares granted during the period | 366,529 | ||||||||||
Other than options - granted in period, weighted average fair value | $43.60 | ||||||||||
Other than options - grant date fair value | 16,000,000 | ||||||||||
Other than options - vested in period | 523,240 | ||||||||||
Restricted Stock Units | Minimum [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vesting period | 3 years | ||||||||||
Restricted Stock Units | Maximum [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vesting period | 4 years | ||||||||||
Performance Shares [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock-based compensation expense | 0 | ||||||||||
Vesting period | 3 years | ||||||||||
Shares granted during the period | 34,500 | ||||||||||
Stock Option Plan 2007 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares available for future grants | 2,596,092 | ||||||||||
Stock Option Plan 2007 | Employee Stock Option | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vesting period | 4 years | ||||||||||
Expiration period | 10 years | ||||||||||
Common Stock | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares of common stock issued and sold | 4,715,000 | 4,715,000 | |||||||||
Common stock price per share | $20.75 | ||||||||||
Proceeds from issuance of common stock | 5,000 | ||||||||||
Shares issued for employee stock purchase plan | 13,620 | 12,970 | 18,346 | ||||||||
Exercise of warrants to purchase common stock | 47,392 | ||||||||||
Additional Paid-in Capital | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Proceeds from issuance of common stock | 92,807,000 | ||||||||||
Proceeds from issuance of common stock, net of underwriting discounts and offering expenses | 92,800,000 | ||||||||||
Warrant | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Exercise of warrants to purchase common stock | 47,392 | ||||||||||
Executive Officer [Member] | Employee Stock Option | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares with accelerated vesting | 83,875 | ||||||||||
Executive Officer [Member] | Restricted Stock Units | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares with accelerated vesting | 164,000 | ||||||||||
5.375% Convertible Notes | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Principal amount of debt converted | 13,000,000 | ||||||||||
Repayment of remaining principal of 5.375% Notes | 2,000,000 | ||||||||||
3.75% Convertible Notes | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Principal amount of debt converted | 28,500,000 |
Stock_Option_Activity_Detail
Stock Option Activity (Detail) (USD $) | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Number of Options | ||||
Beginning balance | 1,828,613 | |||
Granted | 838,846 | |||
Exercised | -754,522 | |||
Canceled | -65,268 | |||
Ending balance | 1,847,669 | 1,828,613 | ||
Vested, at end of period | 927,900 | |||
Vested and expected to vest, at end of period | 1,754,359 | [1] | ||
Weighted Average Exercise Price | ||||
Beginning balance | $16.46 | |||
Granted | $38.97 | |||
Exercised | $14.69 | |||
Canceled | $28.22 | |||
Ending balance | $26.99 | $16.46 | ||
Vested, at end of period | $19.59 | |||
Aggregate Intrinsic Value | ||||
Exercised | $20,418 | [2] | $17,800 | $9,000 |
Ending balance | 35,361 | |||
Vested, at end of period | 24,597 | [3] | ||
Vested and expected to vest, at end of period | $34,437 | [3] | ||
[1] | Represents the number of vested options as of December 31, 2014, plus the number of unvested options expected to vest as of December 31, 2014, based on the unvested options outstanding at December 31, 2014, adjusted for the estimated forfeitures. | |||
[2] | The aggregate intrinsic value was calculated based on the positive difference between the estimated fair value of the Company’s common stock as of the date of exercise and the exercise price of the underlying options. The aggregate intrinsic value of options exercised in the years ended December 31, 2014, 2013 and 2012, was $20.4 million, $17.8 million and $9.0 million, respectively. | |||
[3] | The aggregate intrinsic value was calculated based on the positive difference between the estimated fair value of the Company’s common stock as of December 31, 2014, and the exercise price of the underlying options. |
Employee_Stock_Options_Calcula
Employee Stock Options Calculated using Black-Scholes Option Pricing Model (Detail) (Employee Stock Option) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share based Compensation Arrangement by Share based Payment Award, Fair Value Assumptions, Method Used [Line Items] | |||
Risk-free interest rate, minimum | 0.12% | 0.93% | 0.80% |
Risk-free interest rate, maximum | 1.98% | 1.91% | 1.16% |
Expected term (in years) | 6 years 3 months | 6 years 3 months | |
Dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility, minimum | 37.00% | 63.00% | 67.00% |
Expected volatility, maximum | 63.00% | 66.00% | 71.00% |
Minimum [Member] | |||
Share based Compensation Arrangement by Share based Payment Award, Fair Value Assumptions, Method Used [Line Items] | |||
Expected term (in years) | 1 year | ||
Maximum [Member] | |||
Share based Compensation Arrangement by Share based Payment Award, Fair Value Assumptions, Method Used [Line Items] | |||
Expected term (in years) | 6 years 3 months |
Summary_of_Restricted_Stock_Un
Summary of Restricted Stock Units (Detail) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Weighted Average Fair Value | |||
Stock-based compensation expense | $22.50 | $12.70 | $9.90 |
Restricted Stock Units | |||
Number of Shares | |||
Beginning balance | 1,011,893 | ||
Granted | 366,529 | ||
Vested | -523,240 | ||
Forfeited | -108,570 | ||
Ending balance | 746,612 | 1,011,893 | |
Weighted Average Fair Value | |||
Beginning balance | $22.11 | ||
Granted | $43.60 | ||
Vested | $25.96 | ||
Forfeited | $27.47 | ||
Ending balance | $31.40 | $22.11 | |
Stock-based compensation expense | 14.7 | 8 | 5.1 |
Performance Shares [Member] | |||
Number of Shares | |||
Granted | 34,500 | ||
Vesting period | 3 years | ||
Weighted Average Fair Value | |||
Stock-based compensation expense | $0 | ||
Maximum [Member] | Restricted Stock Units | |||
Number of Shares | |||
Vesting period | 4 years | ||
Minimum [Member] | Restricted Stock Units | |||
Number of Shares | |||
Vesting period | 3 years |
Defined_Contribution_Plan_Addi
Defined Contribution Plan - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Disclosure Defined Contribution Plan Additional Information [Abstract] | |||
Minimum period of service to participate in 401(k) plan | 30 days | ||
Percentage of compensation eligible employees can contribute | 100.00% | ||
Employer contribution percentage | 6.00% | 6.00% | 6.00% |
Vesting percentage per year | 25.00% | 25.00% | 25.00% |
Employer contribution amount | $1.20 | $1 | $1 |
Percentage of discretionary match employee's salary that was contributed to the 401(k) plan | 50.00% | 50.00% | 50.00% |
Award Vesting Period | 4 years | 4 years | 4 years |
Income_Taxes_Income_Tax_Benefi
Income Taxes - Income Tax Benefit (Expense) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Disclosure Income Tax Benefit Expense [Abstract] | |||
Current | $61 | $16 | $121 |
Deferred | 81 | 84 | 91 |
Total income tax expense | $142 | $100 | $212 |
Income_Taxes_Reconciliation_of
Income Taxes - Reconciliation of Income Tax Expense (Benefit) at Statutory Federal Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Disclosure Reconciliation Of Income Tax Expense Benefit At Statutory Federal Income Tax Rate [Abstract] | |||
Tax at U.S. statutory rate | 34.00% | 34.00% | 34.00% |
State taxes, net of federal benefit | 4.04% | -4.21% | -1.18% |
Tax credits | 1.26% | 4.98% | 0.50% |
Permanent items | 0.71% | -5.49% | -1.37% |
Change in valuation allowance | -38.79% | -29.32% | -32.34% |
Other | -1.50% | -0.18% | -0.01% |
Effective income tax rate | -0.28% | -0.22% | -0.40% |
Income_Taxes_Components_of_Com
Income Taxes - Components of Company's Deferred Tax Assets (Liabilities) (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ||
Net operating loss carryforwards | $161,888 | $154,872 |
Start up expenditures | 1,416 | 1,672 |
Tax credits | 6,968 | 9,841 |
Provision for bad debts | 2,174 | 2,679 |
Depreciation | 897 | 1,675 |
Other | 9,777 | 6,357 |
Total deferred tax assets | 183,120 | 177,096 |
Deferred tax liabilities: | ||
Prepaid Expenses | -935 | -310 |
Amortization of acquired intangibles | -5,218 | -6,734 |
Amortization of debt discount | -11,947 | -11,214 |
Goodwill | -304 | -223 |
Other | 0 | -515 |
Total deferred tax liabilities | -18,404 | -18,996 |
Valuation allowance | -165,020 | -158,323 |
Net deferred tax liabilities | ($304) | ($223) |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Disclosure Income Taxes Additional Information [Abstract] | ||
Valuation allowance | ($165,020,000) | ($158,323,000) |
Increase (decrease) in valuation allowance | 6,700,000 | |
Federal net operating loss carryforwards | 500,600,000 | 461,700,000 |
State net operating loss carryforwards | 246,700,000 | 217,500,000 |
Tax credits | 6,968,000 | 9,841,000 |
Unrecognized tax benefits | $0 | $0 |
Quarterly_Data_Unaudited_Selec
Quarterly Data (Unaudited) - Selected Quarterly Data (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Disclosure Selected Quarterly Data [Abstract] | |||||||||||
Change in Call feature on 3.75% Notes | $1,400,000 | $1,400,000 | |||||||||
Revenue | 72,561,000 | 74,985,000 | 72,013,000 | 69,161,000 | 68,533,000 | 61,103,000 | 60,092,000 | 57,356,000 | 288,720,000 | 247,084,000 | 211,369,000 |
Gross profit | 36,673,000 | 38,042,000 | 35,765,000 | 32,808,000 | 33,018,000 | 27,395,000 | 26,833,000 | 25,155,000 | 143,288,000 | 112,401,000 | 92,336,000 |
Net loss | ($5,400,000) | ($10,845,000) | ($29,111,000) | ($6,144,000) | ($2,500,000) | ($21,290,000) | ($10,519,000) | ($10,665,000) | ($51,500,000) | ($44,974,000) | ($51,867,000) |
Net loss per share | ($0.10) | ($0.19) | ($0.53) | ($0.11) | ($0.04) | ($0.39) | ($0.20) | ($0.20) | ($0.93) | ($0.83) | ($1.08) |
Schedule_II_Valuation_And_Qual1
Schedule II - Valuation And Qualifying Accounts - Accounts Receivable Reserve and Deferred Tax Valuation Allowance Accounts (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for doubtful accounts | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | $7,133 | $6,627 | $7,021 |
Additions Charged to Costs and Expenses | 3,254 | 4,741 | 3,409 |
Deductions | 4,550 | 4,235 | 3,803 |
Balance at End of Period | 5,837 | 7,133 | 6,627 |
Deferred tax valuation allowance | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | 158,323 | 145,927 | 129,223 |
Additions Charged to Costs and Expenses | 21,070 | 32,050 | 20,972 |
Deductions | 14,373 | 19,654 | 4,268 |
Balance at End of Period | $165,020 | $158,323 | $145,927 |