Document and Entity Information
Document and Entity Information Document - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 29, 2019 | Feb. 20, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 29, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 001-35065 | ||
Entity Registrant Name | WRIGHT MEDICAL GROUP N.V. | ||
Entity Incorporation, State or Country Code | P7 | ||
Entity Tax Identification Number | 98-0509600 | ||
Entity Address, Address Line One | Prins Bernhardplein 200 | ||
Entity Address, Address Line Two | 1097 JB | ||
Entity Address, City or Town | Amsterdam, | ||
Entity Address, Country | NL | ||
Entity Address, Postal Zip Code | None | ||
City Area Code | 20 | ||
Local Phone Number | 521 4777 | ||
Title of 12(b) Security | Ordinary shares, par value €0.03 per share | ||
Trading Symbol | WMGI | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3.7 | ||
Entity Common Stock, Shares Outstanding | 128,733,780 | ||
Documents Incorporated by Reference | Part III of this Annual Report on Form 10-K incorporates by reference certain portions of the registrant’s definitive proxy statement for its Extraordinary General Meeting of Shareholders (“Proxy Statement”) anticipated to be filed with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year covered by this report. Except as expressly incorporated by reference, the registrant’s Proxy Statement shall not be deemed to be part of this report. | ||
Entity Central Index Key | 0001492658 | ||
Current Fiscal Year End Date | --12-29 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 | ||
Current assets: | ||||
Cash and cash equivalents | $ 166,856 | $ 191,351 | [1] | |
Accounts receivable, net | 147,400 | 141,019 | ||
Inventories | 198,374 | 180,690 | ||
Prepaid expenses | 16,031 | 11,823 | ||
Other current assets | [2] | 214,997 | 78,349 | |
Total current assets | 743,658 | 603,232 | ||
Property, plant and equipment, net | 251,922 | 224,929 | ||
Goodwill | 1,260,967 | 1,268,954 | ||
Intangible assets, net | 257,382 | 282,332 | ||
Deferred income taxes | 1,012 | 942 | ||
Other assets | [2] | 70,699 | 314,012 | |
Total assets | 2,585,640 | 2,694,401 | ||
Current liabilities: | ||||
Accounts payable | 32,121 | 48,359 | ||
Accrued expenses and other current liabilities | [2] | 387,025 | 217,081 | |
Current portion of long-term obligations | [2] | 430,862 | 201,686 | |
Total current liabilities | 850,008 | 467,126 | ||
Long-term debt and finance lease obligations | [2] | 737,167 | 913,441 | |
Deferred income taxes | 10,384 | 13,146 | ||
Other liabilities | [2] | 96,288 | 368,229 | |
Total liabilities | 1,693,847 | 1,761,942 | ||
Stockholders' equity: | ||||
Ordinary shares, €0.03 par value, authorized: 320,000,000 shares; issued and outstanding: 128,614,026 shares at December 29, 2019 and 125,555,751 shares at December 30, 2018 | 4,691 | 4,589 | ||
Additional paid-in capital | 2,608,939 | 2,514,295 | ||
Accumulated other comprehensive loss | (29,499) | (8,083) | ||
Accumulated deficit | (1,692,338) | (1,578,342) | ||
Total shareholders’ equity | 891,793 | 932,459 | ||
Total liabilities and shareholders’ equity | $ 2,585,640 | $ 2,694,401 | ||
[1] | 1 As of December 25, 2016, we had $150.0 million in restricted cash to secure our obligations under a Master Settlement Agreement (MSA) that WMT entered into in connection with the metal-on-metal hip litigation as described in Note 17 . The accompanying notes are an integral part of these consolidated financial statements. | |||
[2] | As of December 29, 2019 , the closing price of our ordinary shares was greater than 130% of the 2021 Notes conversion price for 20 or more of the 30 consecutive trading days preceding the quarter-end; and, therefore, the holders of the 2021 Notes may convert the notes during the succeeding quarterly period. Due to the ability of the holders of the 2021 Notes to convert the notes during this period, the carrying value of the 2021 Notes and the fair value of the 2021 Notes Conversion Derivative were classified as current liabilities, and the fair value of the 2021 Notes Hedges were classified as current assets as of December 29, 2019 . The respective balances were classified as long-term as of December 30, 2018 . See Note 6 and Note 10 . |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - € / shares | 12 Months Ended | |
Dec. 29, 2019 | Dec. 30, 2018 | |
Consolidated Balance Sheet Parenthetical [Abstract] | ||
Threshold for conversion, conversion price, ordinary shares | 130.00% | |
Debt instrument, convertible, minimum consecutive period | 20 days | |
Debt instrument, convertible, trading period | 30 days | |
Common stock, par value (in usd per share) | € 0.03 | € 0.03 |
Common stock, shares authorized (in shares) | 320,000,000 | 320,000,000 |
Common stock, shares issued (in shares) | 128,614,026 | 125,555,751 |
Common stock, shares outstanding (in shares) | 128,614,026 | 125,555,751 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | ||||
Income Statement [Abstract] | ||||||
Net sales | $ 920,900 | $ 836,190 | $ 744,989 | |||
Cost of sales | 188,641 | [1] | 180,153 | [1] | 160,947 | [2] |
Gross profit | 732,259 | 656,037 | 584,042 | |||
Operating expenses: | ||||||
Selling, general and administrative | 614,666 | [1] | 577,961 | [1] | 525,222 | [2] |
Research and development | 74,085 | [1] | 59,142 | [1] | 50,115 | [2] |
Amortization of intangible assets | 31,921 | 26,730 | 28,396 | |||
Total operating expenses | 720,672 | 663,833 | 603,733 | |||
Operating income (loss) | 11,587 | (7,796) | (19,691) | |||
Interest expense, net | 80,849 | 80,247 | 74,644 | |||
Other expense, net | 9,904 | 81,797 | 5,570 | |||
Loss from continuing operations before income taxes | (79,166) | (169,840) | (99,905) | |||
Total provision (benefit) for income taxes | 12,968 | (536) | (34,968) | |||
Net loss from continuing operations | (92,134) | (169,304) | (64,937) | |||
Loss from discontinued operations | (22,091) | (201) | (137,661) | |||
Net loss | $ (114,225) | $ (169,505) | $ (202,598) | |||
Net income (loss) per share: | ||||||
Net loss from continuing operations per share - basic and diluted (in usd per share) | $ (0.73) | $ (1.50) | $ (0.62) | |||
Net (loss) income from discontinued operations per share - basic and diluted (in usd per share) | (0.17) | 0 | (1.32) | |||
Net loss per share - basic and diluted (in usd per share) | $ (0.90) | $ (1.51) | $ (1.94) | |||
Weighted-average number of ordinary shares outstanding - basic and diluted (in shares) | 126,601 | 112,592 | 104,531 | |||
[1] | 1 These line items include the following amounts of non-cash, share-based compensation expense for the periods indicated: Three months ended Fiscal year ended December 29, 2019 December 30, 2018 December 29, 2019 December 30, 2018Cost of sales$186 $133 $600 $585Selling, general and administrative8,079 7,112 29,185 23,608Research and development822 539 2,782 1,927 | |||||
[2] | These line items include the following amounts of non-cash, share-based compensation expense for the periods indicated: Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Cost of sales $ 600 $ 585 $ 565 Selling, general and administrative 29,185 23,608 17,705 Research and development 2,782 1,927 1,123 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Share-based compensation expense | $ 32,600 | $ 26,100 | $ 19,400 |
Cost of sales | |||
Share-based compensation expense | 600 | 585 | 565 |
Selling, general and administrative | |||
Share-based compensation expense | 29,185 | 23,608 | 17,705 |
Research and development | |||
Share-based compensation expense | $ 2,782 | $ 1,927 | $ 1,123 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (114,225) | $ (169,505) | $ (202,598) |
Changes in foreign currency translation | (21,416) | (30,373) | 41,751 |
Other comprehensive (loss) income | (21,416) | (30,373) | 41,751 |
Comprehensive loss | $ (135,641) | $ (199,878) | $ (160,847) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | ||||
Operating activities: | ||||||
Net loss | $ (114,225) | $ (169,505) | $ (202,598) | |||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation | 64,149 | 59,497 | 56,832 | |||
Share-based compensation expense | 32,567 | 26,120 | 19,393 | |||
Amortization of intangible assets | 31,921 | 26,730 | 28,396 | |||
Amortization of deferred financing costs and debt discount | 54,461 | 54,630 | 50,379 | |||
Deferred income taxes | (2,464) | (4,543) | (13,791) | |||
Provision for excess and obsolete inventory | 13,126 | 20,913 | 19,171 | |||
Net loss on exchange or extinguishment of debt | 14,274 | 39,935 | 0 | |||
Amortization of inventory step-up adjustment | 1,057 | 352 | 0 | |||
Non-cash adjustment to derivative fair value | (10,962) | 35,934 | (4,797) | |||
Non-cash asset impairment | 5,597 | 0 | 0 | |||
Mark-to-market adjustment for CVRs | (420) | 140 | 5,320 | |||
Other | 7,322 | (1,617) | 1,385 | |||
Changes in assets and liabilities (net of acquisitions): | ||||||
Accounts receivable | (6,989) | (8,223) | 2,483 | |||
Inventories | (32,866) | (35,887) | (29,526) | |||
Prepaid expenses and other assets | 7,106 | 45,712 | (22,744) | |||
Accounts payable | (15,866) | 6,022 | 6,260 | |||
Accrued expenses and other liabilities | 27,822 | (14,839) | (21,834) | |||
CVR product sales milestone payment | 0 | (42,044) | 0 | |||
Metal-on-metal product liabilities | (34,003) | (103,056) | (79,139) | |||
Net cash provided by (used in) operating activities | 41,607 | (63,729) | (184,810) | |||
Investing activities: | ||||||
Capital expenditures | (99,286) | (71,467) | (63,474) | |||
Payments to Acquire Businesses, Net of Cash Acquired | 722 | (434,289) | (44,128) | |||
Purchase of intangible assets | (8,448) | (2,483) | (2,099) | |||
Other investing | 3,766 | (2,000) | 280 | |||
Net cash used in investing activities | (103,246) | (510,239) | (109,421) | |||
Financing activities: | ||||||
Issuance of ordinary shares | 52,076 | 21,618 | 27,551 | |||
Proceeds from equity offering | 0 | 448,924 | 0 | |||
Payment of equity offering costs | 0 | (25,896) | 0 | |||
Issuance of stock warrants | 21,210 | 102,137 | 0 | |||
Payment of notes hedge options | (30,144) | (141,278) | 0 | |||
Repurchase of stock warrants | (11,026) | (23,972) | 0 | |||
Payment of notes premium | 0 | (55,643) | 0 | |||
Proceeds from notes hedge options | 16,849 | 34,553 | 0 | |||
Proceeds from exchangeable senior notes | 0 | 675,000 | 0 | |||
Proceeds from other debt | 4,511 | 25,243 | 34,901 | |||
Payments of debt | (4,695) | (38,637) | (11,517) | |||
Redemption of convertible senior notes | 0 | (400,911) | 0 | |||
Payments of financing costs | (2,981) | (14,701) | 0 | |||
Payment of equity issuance costs | (350) | (1,870) | 0 | |||
Payment of contingent consideration | (207) | (919) | (1,429) | |||
Payments of finance lease obligations | (7,837) | (5,508) | (2,690) | |||
Net cash provided by financing activities | 37,406 | 598,140 | 46,816 | |||
Effect of exchange rates on cash and cash equivalents | (262) | (561) | 2,890 | |||
Net (decrease) increase in cash, cash equivalents, and restricted cash | (24,495) | 23,611 | (244,525) | |||
Cash, cash equivalents, restricted cash, restricted cash equivalents, beginning balance | [1] | 191,351 | 167,740 | 412,265 | ||
Cash, cash equivalents, restricted cash, restricted cash equivalents, ending balance | $ 166,856 | $ 191,351 | [1] | $ 167,740 | [1] | |
[1] | 1 As of December 25, 2016, we had $150.0 million in restricted cash to secure our obligations under a Master Settlement Agreement (MSA) that WMT entered into in connection with the metal-on-metal hip litigation as described in Note 17 . The accompanying notes are an integral part of these consolidated financial statements. |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Paranthetical) $ in Millions | Dec. 25, 2016USD ($) |
Statement of Cash Flows [Abstract] | |
Restricted cash | $ 150 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional paid-in capital | Accumulated other comprehensive (loss) income | Accumulated deficit | IMASCAP SAS | IMASCAP SASCommon Stock | IMASCAP SASAdditional paid-in capital |
Common stock, shares outstanding, beginning balance (in shares) at Dec. 25, 2016 | 103,400,995 | |||||||
Stockholders' equity attributable to parent, beginning balance at Dec. 25, 2016 | $ 686,864 | $ 3,815 | $ 1,908,749 | $ (1,206,239) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (202,598) | (202,598) | ||||||
Foreign currency translation | 41,751 | |||||||
Issuances of ordinary shares (in shares) | 1,352,549 | 661,753 | ||||||
Issuances of ordinary shares | 27,551 | $ 45 | 27,506 | $ 15,643 | $ 23 | $ 15,620 | ||
Vesting of restricted stock units (in shares) | 392,127 | |||||||
Vesting of restricted stock units | $ 13 | (13) | ||||||
Stock-based compensation | 19,485 | 19,485 | ||||||
Common stock, shares outstanding, ending balance (in shares) at Dec. 31, 2017 | 105,807,424 | |||||||
Stockholders' equity attributable to parent, ending balance at Dec. 31, 2017 | 588,696 | $ 3,896 | 1,971,347 | $ 22,290 | (1,408,837) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (169,505) | (169,505) | ||||||
Foreign currency translation | (30,373) | |||||||
Issuances of ordinary shares (in shares) | 1,043,685 | |||||||
Issuances of ordinary shares | 21,618 | $ 36 | 21,582 | |||||
Vesting of restricted stock units (in shares) | 455,710 | |||||||
Vesting of restricted stock units | $ 16 | (16) | ||||||
Stock-based compensation | 26,039 | 26,039 | ||||||
Stock issued during period (in shares) | 18,248,932 | |||||||
Stock issued during period | 423,028 | $ 641 | 422,387 | |||||
Issuance of stock warrants, net of repurchases and equity issuance costs | $ 72,956 | 72,956 | ||||||
Common stock, shares outstanding, ending balance (in shares) at Dec. 30, 2018 | 125,555,751 | 125,555,751 | ||||||
Stockholders' equity attributable to parent, ending balance at Dec. 30, 2018 | $ 932,459 | $ 4,589 | 2,514,295 | (8,083) | (1,578,342) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (114,225) | (114,225) | ||||||
Foreign currency translation | (21,416) | |||||||
Issuances of ordinary shares (in shares) | 2,469,729 | |||||||
Issuances of ordinary shares | 52,076 | $ 82 | 51,994 | |||||
Vesting of restricted stock units (in shares) | 588,546 | |||||||
Vesting of restricted stock units | $ 20 | (20) | ||||||
Stock-based compensation | 32,836 | 32,836 | ||||||
Cumulative impact of lease accounting adoption (Note 9) | 229 | 229 | ||||||
Issuance of stock warrants, net of repurchases and equity issuance costs | $ 9,834 | 9,834 | ||||||
Common stock, shares outstanding, ending balance (in shares) at Dec. 29, 2019 | 128,614,026 | 128,614,026 | ||||||
Stockholders' equity attributable to parent, ending balance at Dec. 29, 2019 | $ 891,793 | $ 4,691 | $ 2,608,939 | $ (29,499) | $ (1,692,338) |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Wright Medical Group N.V. is a global medical device company focused on extremities and biologics products. We are committed to delivering innovative, value-added solutions improving quality of life for patients worldwide and are a recognized leader of surgical solutions for the upper extremities (shoulder, elbow, wrist and hand), lower extremities (foot and ankle) and biologics markets, three of the fastest growing segments in orthopaedics. We market our products in approximately 50 countries worldwide. Our global corporate headquarters are located in Amsterdam, the Netherlands. We also have significant operations located in Memphis, Tennessee (U.S. headquarters, research and development, sales and marketing administration, and administrative activities); Bloomington, Minnesota (upper extremities sales and marketing and warehousing operations); Arlington, Tennessee (manufacturing and warehousing operations); Franklin, Tennessee (manufacturing and warehousing operations); Columbia City, Indiana (research and development); Alpharetta, Georgia (manufacturing and warehousing operations); Montbonnot, France (manufacturing and warehousing operations); Plouzané, France (research and development); and Macroom, Ireland (manufacturing). In addition, we have local sales and distribution offices in Canada, Australia, Asia, Latin America, and throughout Europe. For purposes of this report, references to “international” or “foreign” relate to non-U.S. matters while references to “domestic” relate to U.S. matters. Our common stock is traded on the Nasdaq Global Select Market under the symbol “WMGI.” On November 4, 2019, we entered into a definitive agreement with Stryker and its subsidiary, Stryker B.V. Under the terms of the purchase agreement, and upon the terms and subject to the conditions thereof, Stryker B.V. has commenced a tender offer to purchase all of the outstanding ordinary shares of Wright for $30.75 per share, without interest and less applicable withholding taxes, in cash (the Offer). The Offer is currently scheduled to expire at 9:00 a.m., Eastern Time, on February 27, 2020, but may be extended in accordance with the terms of the purchase agreement between Stryker and Wright. The closing of the transaction is subject to receipt of applicable regulatory approvals, the adoption of certain resolutions relating to the transaction at an extraordinary general meeting of Wright’s shareholders, completion of the tender offer, and other customary closing conditions. Our fiscal year-end is generally determined on a 52-week basis and runs from the Monday nearest to the 31st of December of a year, and ends on the Sunday nearest to the 31st of December of the following year. Every few years, it is necessary to add an extra week to the year making it a 53-week period. The fiscal years ended December 29, 2019 and December 30, 2018 were 52-week periods. The fiscal year ended December 31, 2017 was a 53-week period. References in this report to a particular year generally refer to the applicable fiscal year. Accordingly, references to “ 2019 ” or “the year ended December 29, 2019 ” mean the fiscal year ended December 29, 2019 . The consolidated financial statements and accompanying notes present our consolidated results for each of the fiscal years in the three-year period ended December 29, 2019 , December 30, 2018 , and December 31, 2017 . All amounts are presented in U.S. dollars ($), except where expressly stated as being in other currencies, e.g., Euros (€). References in these notes to consolidated financial statements to “we,” “our” and “us” refer to Wright Medical Group N.V. and its subsidiaries after the Wright/Tornier merger and Wright Medical Group, Inc. and its subsidiaries before the Wright/Tornier merger. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 29, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of consolidation. The accompanying consolidated financial statements include our accounts and those of our controlled subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. Use of estimates. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The most significant areas requiring the use of management estimates relate to revenue recognition, the determination of allowances for doubtful accounts and excess and obsolete inventories, accounting for business combinations and the evaluation of goodwill and long-lived assets, valuation of in-process research and development, product liability claims, product liability insurance recoveries and other litigation, income taxes, and share-based compensation. Discontinued operations. On January 9, 2014, pursuant to an Asset Purchase Agreement, dated as of June 18, 2013 (the MicroPort Agreement), by and among us and MicroPort, we completed the divestiture and sale of our business operations operating under our prior OrthoRecon operating segment (the OrthoRecon Business) to MicroPort. Pursuant to the terms of the MicroPort Agreement, the purchase price (as defined in the agreement) for the OrthoRecon Business was approximately $283.0 million (including a working capital adjustment), which MicroPort paid in cash. All historical operating results for the OrthoRecon business are reflected within discontinued operations in the consolidated statements of operations. See Note 4 for further discussion of discontinued operations. Other than Note 4 , unless otherwise stated, all discussion of assets and liabilities in these Notes to the Consolidated Financial Statements reflect the assets and liabilities held and used in our continuing operations, and all discussion of revenues and expenses reflect those associated with our continuing operations. Cash and cash equivalents. Cash and cash equivalents include all cash balances and short-term investments with original maturities of three months or less. Any such investments are readily convertible into known amounts of cash, and are so near their maturity that they present insignificant risk of changes in value because of interest rate variation. Inventories. Our inventories are valued at the lower of cost or market on a FIFO basis. Inventory costs include material, labor costs, and manufacturing overhead. We regularly review inventory quantities on hand for excess and obsolete inventory, and, when circumstances indicate, we incur charges to write down inventories to their net realizable value. Historically, our excess and obsolete inventory reserve was based on both the current age of kit inventory as compared to its estimated life cycle and our forecasted product demand and production requirements for other inventory items for the next 36 months. During the quarter ended September 29, 2019, we changed our estimate of excess and obsolete inventory reserves to better reflect the future usage for inventory in excess of estimated three-year demand. The impact of this change in estimate was approximately $26 million . We reduce our inventory reserve and recognize an offset to cost of sales as the related inventory is sold based on an estimated inventory turnover period of 2.5 years. Total charges incurred to write down excess and obsolete inventory to net realizable value included in “Cost of sales” were approximately $13.1 million , $20.9 million , and $19.2 million for the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 , respectively. Our 2019 excess and obsolete charges included a $5.2 million favorable adjustment as a result of our change in accounting estimate of reserves for excess and obsolete inventory, as such inventory was sold. During the fiscal years ended December 30, 2018 and December 31, 2017 , our excess and obsolete charges included product rationalization initiative adjustments of $4.4 million and $3.1 million , respectively. Product liability claims and related insurance recoveries and other litigation. We are involved in legal proceedings involving product liability claims as well as contract, patent protection, and other matters. See Note 17 for additional information regarding product liability claims, product liability insurance recoveries, and other litigation. We make provisions for claims specifically identified for which we believe the likelihood of an unfavorable outcome is probable and the amount of loss can be estimated. For unresolved contingencies with potentially material exposure that are deemed reasonably possible, we evaluate whether a potential loss or range of loss can be reasonably estimated. Our evaluation of these matters is the result of a comprehensive process designed to ensure that recognition of a loss or disclosure of these contingencies is made in a timely manner. In determining whether a loss should be accrued or a loss contingency disclosed, we evaluate a number of factors including: the procedural status of each lawsuit; any opportunities for dismissal of the lawsuit before trial; the amount of time remaining before trial date; the status of discovery; the status of settlement; arbitration or mediation proceedings; and management’s estimate of the likelihood of success prior to or at trial. The estimates used to establish a range of loss and the amounts to accrue are based on previous settlement experience, consultation with legal counsel, and management’s settlement strategies. If the estimate of a probable loss is in a range and no amount within the range is more likely, we accrue the minimum amount of the range. We recognize legal fees as an expense in the period incurred. These expenses are reflected in either continuing or discontinued operations depending on the product associated with the claim. We record insurance recoveries from product liability insurance that is in force when they are realized or realizable, when we believe it is probable that the insurance carrier will settle the claim. Property, plant and equipment. Our property, plant and equipment is stated at cost. Depreciation, which includes amortization of assets under finance lease, is generally provided on a straight-line basis over the estimated useful lives generally based on the following categories: Land improvements 15 to 25 years Buildings and building improvements 10 to 40 years Machinery and equipment 3 to 14 years Furniture, fixtures and office equipment 3 to 14 years Surgical instruments 6 years Expenditures for major renewals and betterments, including leasehold improvements, that extend the useful life of the assets are capitalized and depreciated over the remaining life of the asset or lease term, if shorter. Maintenance and repair costs are charged to expense as incurred. Upon sale or retirement, the asset cost and related accumulated depreciation are eliminated from the respective accounts and any resulting gain or loss is included in income. Valuation of long-lived assets. Management periodically evaluates carrying values of long-lived assets, including property, plant and equipment and finite-lived intangible assets, when events and circumstances indicate that these assets may have been impaired. We account for the impairment of long-lived assets in accordance with FASB ASC 360 . Accordingly, we evaluate impairment of our long-lived assets based upon an analysis of estimated undiscounted future cash flows. If it is determined that a change is required in the useful life of an asset, future depreciation and amortization is adjusted accordingly. Alternatively, should we determine that an asset is impaired, an adjustment would be charged to income based on the difference between the asset’s fair market value and the asset’s carrying value. Intangible assets and goodwill. Goodwill is recognized for the excess of the purchase price over the fair value of net assets of businesses acquired. FASB ASC 350-30-35-18 requires companies to evaluate for impairment intangible assets not subject to amortization, such as our IPRD assets, if events or changes in circumstances indicate than an asset might be impaired. Further, FASB ASC 350-20-35-30 requires companies to evaluate goodwill and intangibles not subject to amortization for impairment between annual impairment tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Unless circumstances otherwise dictate, the annual impairment test is performed on October 1 each year. See Note 8 for discussion of our 2019 goodwill impairment analysis. Our intangible assets with estimable useful lives are amortized on a straight-line basis over their respective estimated useful lives to their estimated residual values. This method of amortization approximates the expected future cash flow generated from their use. Finite-lived intangibles are reviewed for impairment in accordance with FASB ASC Section 360, Property, Plant and Equipment (FASB ASC 360). The weighted average amortization periods for our intangible assets are as follows: Completed technology 10 years Trademarks 5 years Licenses 10 years Customer relationships 17 years Non-compete agreements 4 years Other intangible assets 6 years Allowances for doubtful accounts. We experience credit losses on our accounts receivable; and accordingly, we must make estimates related to the ultimate collection of our accounts receivable. Specifically, we analyze our accounts receivable, historical bad debt experience, customer concentrations, customer creditworthiness, and current economic trends when evaluating the adequacy of our allowance for doubtful accounts. The majority of our accounts receivable are from hospitals and surgery centers. Our collection history has been favorable with minimal bad debts from these customers. We write-off accounts receivable when we determine that the accounts receivable are uncollectible, typically upon customer bankruptcy or the customer’s non-response to repeated collection efforts. Our allowance for doubtful accounts totaled $3.4 million and $3.0 million at December 29, 2019 and December 30, 2018 , respectively. Concentration of credit risk. Financial instruments that potentially subject us to concentrations of credit risk consist principally of accounts receivable. Management attempts to minimize credit risk by reviewing customers’ credit history before extending credit and by monitoring credit exposure on a regular basis. Collateral or other security is generally not required for accounts receivable. Concentrations of supply of raw material . We rely on a limited number of suppliers for certain components and materials used in our products. Our reconstructive joint devices are produced from various surgical grades of titanium, cobalt chrome, stainless steel, various grades of high-density polyethylenes and ceramics. We rely on one source to supply us with a certain grade of cobalt chrome alloy, one supplier for the silicone elastomer used in some of our extremities products, one supplier for our pyrocarbon products, and one supplier to provide a key ingredient of AUGMENT ® Bone Graft. In April 2016, we entered into a commercial supply agreement with FUJIFILM Diosynth Biotechnologies U.S.A., Inc. pursuant to which Fujifilm agreed to manufacture and sell to us and we agreed to purchase recombinant human platelet-derived growth factor (rhPDGF-BB) for use in AUGMENT ® Bone Graft. The agreement reflects the culmination of a technology transfer from our former supplier to Fujifilm which began in December 2013 when we were notified that our former supplier was exiting the rhPDGF-BB business. Pursuant to our supply agreement with Fujifilm, commercial production of rhPDGF-BB is expected to begin in 2020. Although we believe that our current supply of rhPDGF-BB from our former supplier should be sufficient to last until after rhPDGF-BB becomes available under the new agreement, no assurance can be provided that it will be sufficient. In addition, since Fujifilm has not previously manufactured rhPDGF-BB, its ability to do so and perform its obligations under the agreement are not yet fully proven. Our biologic product line includes one current supplier for our GRAFTJACKET ® family of soft tissue repair and graft containment products. We had previously contracted with two suppliers for this product, but ended our relationship with one of the suppliers at the end of 2019. We can continue selling the remaining inventory from this supplier until the inventory is depleted. In addition, certain biologic products depend upon a single supplier as our source for demineralized bone matrix (DBM) and cancellous bone matrix (CBM), and any failure to obtain DBM and CBM from this source in a timely manner will deplete levels of on-hand raw materials inventory and could interfere with our ability to process and distribute allograft products. In addition, we rely on a single supplier of soft tissue graft for BIOTAPE ® XM and a single supplier for the calcium sulfate used in our PRO-DENSE™ Injectable Regenerative Graft (PRO-DENSE™). We cannot be sure that our supply of these single source materials will continue to be available at current levels or will be sufficient to meet our needs, or that future suppliers of such materials will be free from FDA regulatory action impacting their sale of such materials. Income taxes. Income taxes are accounted for pursuant to the provisions of FASB ASC Section 740, Income Taxes (FASB ASC 740). Our effective tax rate is based on income by tax jurisdiction, statutory rates, and tax saving initiatives available to us in the various jurisdictions in which we operate. Significant judgment is required in determining our effective tax rate and evaluating our tax positions. This process includes assessing temporary differences resulting from differing recognition of items for income tax and financial accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheet. The measurement of deferred tax assets is reduced by a valuation allowance if, based upon available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. See Note 12 for further discussion of our consolidated deferred tax assets and liabilities, and the associated valuation allowance. We provide for unrecognized tax benefits based upon our assessment of whether a tax position is “more-likely-than-not” to be sustained upon examination by the tax authorities. If a tax position meets the more-likely-than-not standard, then the related tax benefit is measured based on a cumulative probability analysis of the amount that is more-likely-than-not to be realized upon ultimate settlement or disposition of the underlying tax position. In December 2017, the United States enacted new legislation under the 2017 Tax Act. We recognized the income tax effects of the 2017 Tax Act in our 2017 financial statements in accordance with Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allowed us to record provisional amounts under a one-year measurement period. We finalized our accounting for the provisions of the 2017 Tax Act in the fourth quarter 2018 with no material impact on our financial statements. During 2018, we have adopted ASU 2018-02, Reclassification of Certain Income Tax Effects from Accumulated Other Comprehensive Income , issued in February 2018, allowing the reclassification of income tax effects of the 2017 Tax Act, referred to as “stranded tax effects” by FASB, from accumulated other comprehensive income (AOCI) to retained earnings. This adoption did not have a material impact on our financial statements. Other taxes. Taxes assessed by a governmental authority that are imposed concurrent with our revenue transactions with customers are presented on a net basis in our consolidated statements of operations. Revenue recognition. Our revenues are primarily generated through two types of customers, hospitals and surgery centers and stocking distributors, with the majority of our revenue derived from sales to hospitals and surgery centers. Our products are sold through a network of employee and independent sales representatives in the United States and by a combination of employee sales representatives, independent sales representatives, and stocking distributors outside the United States. We record revenues from sales to hospitals and surgery centers upon transfer of control of promised products in an amount that reflects the consideration we expect to receive in exchange for those products, which is generally when the product is surgically implanted in a patient. We record revenues from sales to our stocking distributors at a point in time upon transfer of control of promised products to the distributor. Our stocking distributors, who sell the products to their customers, take control of the products and assume all risks of ownership upon transfer. Our stocking distributors are obligated to pay us within specified terms regardless of when, if ever, they sell the products. In general, our stocking distributors do not have any rights of return or exchange; however, in limited situations, we have repurchase agreements with certain stocking distributors. Those certain agreements require us to repurchase a specified percentage of the inventory purchased by the distributor within a specified period of time prior to the expiration of the contract. During those specified periods, we defer the applicable percentage of the sales. An insignificant amount of sales related to these types of agreements was deferred and not yet recognized as revenue as of December 29, 2019 and December 30, 2018 . Shipping and handling costs . We incur shipping and handling costs associated with the shipment of goods to customers, independent distributors, and our subsidiaries. Amounts billed to customers for shipping and handling of products are included in net sales. Costs incurred related to shipping and handling of products to customers are included in selling, general and administrative expenses. Shipping and handling costs within selling, general and administrative expenses totaled $53.1 million , $52.0 million , and $49.4 million for the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 , respectively. These amounts include instrument depreciation which totaled $30.6 million , $28.4 million , and $27.1 million for the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 , respectively. All other shipping and handling costs are included in cost of sales. Research and development costs. Research and development costs are charged to expense as incurred. Foreign currency translation. The financial statements of our subsidiaries whose functional currency is the local currency are translated into U.S. dollars using the exchange rate at the balance sheet date for assets and liabilities and the weighted average exchange rate for the applicable period for revenues, expenses, gains, and losses. Translation adjustments are recorded as a separate component of comprehensive loss in shareholders’ equity. Gains and losses resulting from transactions denominated in a currency other than the local functional currency are included in “ Other expense, net ” in our consolidated statements of operations. Comprehensive income. Comprehensive income is defined as the change in equity during a period related to transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. The difference between our net loss and our comprehensive loss is attributable to foreign currency translation. Share-based compensation. We account for share-based compensation in accordance with FASB ASC Section 718, Compensation — Stock Compensation (FASB ASC 718). Under the fair value recognition provisions of FASB ASC 718, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. The determination of the fair value of share-based payment awards, such as options, on the date of grant using an option-pricing model is affected by our stock price, as well as assumptions regarding a number of complex and subjective variables, which include the expected life of the award, the expected stock price volatility over the expected life of the awards, expected dividend yield, and risk-free interest rate. The determination of the fair value of performance-based share-based payment awards, such as performance share units, is based on the estimated achievement of the established performance criteria on the date of grant and updated at the end of each reporting period until the performance period ends. Share-based compensation expense is only recognized for performance share units that we expect to vest, which we estimate based upon an assessment of the probability that the performance criteria will be achieved. We recorded share-based compensation expense of $32.6 million , $26.1 million , and $19.4 million during the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 , respectively, within our results of continuing operations. See Note 15 for further information regarding our share-based compensation assumptions and expenses. Derivative instruments. We account for derivative instruments and hedging activities under FASB ASC Section 815, Derivatives and Hedging (FASB ASC 815). Accordingly, all of our derivative instruments are recorded in the accompanying consolidated balance sheets as either an asset or liability and measured at fair value. The changes in the derivative’s fair value are recognized currently in earnings unless specific hedge accounting criteria are met. During 2017, we employed a derivative program using foreign currency forward contracts to mitigate the risk of currency fluctuations on our intercompany receivable and payable balances that were denominated in foreign currencies. These forward contracts were expected to offset the transactional gains and losses on the related intercompany balances. These forward contracts were not designated as hedging instruments under FASB ASC 815. Accordingly, the changes in the fair value and the settlement of the contracts were recognized in the period incurred in the accompanying consolidated statements of operations. We discontinued our foreign currency forward contracts derivative program in 2018. We recorded a net loss of approximately $4.6 million on our foreign currency contracts for the fiscal year ended December 31, 2017. These losses substantially offset translation gains recorded on our intercompany receivable and payable balances, and are also included in “ Other expense, net .” On February 13, 2015, May 20, 2016, and June 28, 2018, we issued the 2020 Notes, 2021 Notes, and 2023 Notes (collectively, the Notes), respectively, as defined and described in Note 10 . The 2020 Notes Conversion Derivatives, 2021 Notes Conversion Derivatives, and 2023 Notes Conversion Derivatives each as defined and described in Note 6 , require bifurcation from the 2020 Notes, 2021 Notes, and 2023 Notes in accordance with ASC Topic 815, and are accounted for as derivative liabilities. We also entered into 2020, 2021, and 2023 Notes Hedges, as defined and described in Note 6 , in connection with the issuance of the 2020, 2021, and 2023 Notes. The 2020, 2021, and 2023 Notes Hedges, which are cash-settled, are intended to reduce our exposure to potential cash payments that we are required to make upon conversion of the 2020, 2021, and 2023 Notes in excess of the principal amount of converted notes if our ordinary share price exceeds the conversion price. The 2020, 2021, and 2023 Notes Hedges are accounted for as derivative assets in accordance with ASC Topic 815. Supplemental cash flow information. Cash paid for interest and income taxes was as follows (in thousands): Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Interest $ 28,523 $ 30,552 $ 24,641 Income taxes $ 6,084 $ 6,254 $ 7,359 Recent Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers , and has subsequently issued several supplemental and/or clarifying ASUs (collectively ASC 606). Accounting Standards Codification (ASC) 606 prescribes a single common revenue standard that replaces most existing US GAAP revenue recognition guidance. ASC 606 outlines a five-step model, under which we recognize revenue as performance obligations within a customer contract are satisfied. ASC 606 is intended to provide more consistent interpretation and application of the principles outlined in the standard across filers in multiple industries and within the same industries compared to current practices, which should improve comparability. We adopted ASC 606 during 2018. Revenue is recognized at a point in time, generally upon surgical implantation or shipment of products to distributors. Therefore, adoption of ASC 606 did not have a material effect on our consolidated financial statements except for the additional disclosures included within Note 19 . On February 25, 2016, the FASB issued ASU 2016-02, Leases , and has subsequently issued several supplemental and/or clarifying ASUs (collectively ASC 842). ASC 842 introduced a lessee model that brings most leases on the balance sheet. The new standard also aligns many of the underlying principles of the new lessor model with those in FASB ASC 606, the FASB’s new revenue recognition standard (e.g., those related to evaluating when profit can be recognized). Furthermore, ASC 842 addresses other concerns related to the current leases model. We adopted ASC 842 during 2019 using the hindsight practical expedient, the practical expedient for short-term leases, and the practical expedient package which primarily limited the need for reassessing lease classification on existing leases and allowed us to issue our financial statements showing comparative lease disclosures under previous GAAP. See additional details related to the impact of this adoption in Note 9 . On June 16, 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments and has subsequently issued several supplemental and/or clarifying ASUs. The new standard adds an impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. The ASU will be effective for us beginning in fiscal year 2020. We do not believe this guidance will have a significant impact on our consolidated financial statements. On August 29, 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) to provide guidance on implementation costs incurred in a cloud computing arrangement (CCA) that is a service contract. Specifically, the ASU amends ASC 350 to include in its scope implementation costs of a CCA that is a service contract and clarifies that a customer should apply ASC 350-40, Internal Use Software , to determine which implementation costs should be capitalized in such a CCA. The ASU will be effective for us beginning in fiscal year 2020. We do not believe this guidance will have a significant impact on our consolidated financial statements. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 29, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Cartiva On October 10, 2018, we completed the acquisition of Cartiva, an orthopaedic medical device company focused on treatment of osteoarthritis of the great toe. Under the terms of the agreement with Cartiva, we acquired 100% of the outstanding equity on a fully diluted basis of Cartiva for a total price of $435.0 million in cash, subject to certain adjustments which totaled $1.1 million , as set forth in the purchase agreement, $0.7 million of which was refunded in 2019. We funded the acquisition with the proceeds from a registered underwritten public offering of 18.2 million ordinary shares which resulted in net proceeds of $423.0 million . See Note 14 for additional details related to the public offering. This acquisition added a differentiated PMA approved technology for a high-volume foot and ankle procedure and further accelerated growth opportunities in our global extremities business. The results of operations of Cartiva is included in our consolidated financial statements for all periods after completion of the acquisition. The acquired business contributed net sales of $29.8 million and operating income of $5.8 million to our consolidated results of operations for the fiscal year ended December 29, 2019 , which included $1.0 million of inventory step-up amortization, $2.6 million of transition costs, and $9.1 million of intangible asset amortization. The acquired business contributed net sales of $9.5 million and operating income of $2.4 million to our consolidated results of operations for the fiscal year ended December 30, 2018 , which included $0.4 million of inventory step-up amortization and $1.9 million of intangible asset amortization but excluded the acquisition-related transaction costs discussed below. Cartiva Transaction Related Costs In conjunction with the Cartiva transaction, we incurred approximately $6.5 million of acquisition-related transaction costs during the fiscal year ended December 30, 2018 , which was recognized within selling, general and administrative expense in our consolidated statements of operations. These expenses primarily related to advisory fees, legal fees, and accounting and tax professional fees. Purchase Consideration and Net Assets Acquired The following presents the allocation of the purchase consideration to the assets acquired and liabilities assumed on October 10, 2018 (in thousands): Cash and cash equivalents $ 309 Accounts receivable 4,352 Inventories 2,686 Other current assets 486 Property, plant and equipment 1,446 Intangible assets 81,000 Total assets acquired 90,279 Current liabilities (4,226 ) Deferred income taxes (3,622 ) Total liabilities assumed (7,848 ) Net assets acquired $ 82,431 Goodwill 351,445 Total purchase consideration $ 433,876 The purchase consideration was allocated to the net assets acquired based on their estimated fair values at the acquisition date. The fair values were based on management’s analysis, including work performed by third-party valuation specialists. Trade receivables and payables, as well as certain other current assets and property, plant and equipment, were valued at the existing carrying values as they approximated the fair value of those items at the acquisition date, based on management’s judgments and estimates. Trade receivables included gross contractual amounts of $5.8 million and our best estimate of $1.4 million which represented contractual cash flows not expected to be collected at the acquisition date. Inventory was recorded at estimated selling price less costs of disposal and a reasonable selling profit. The resulting inventory step-up adjustment was recognized in cost of sales as the related inventory was sold. In determining the fair value of intangibles, we used an income method which was based on forecasts of the expected future cash flows attributable to the respective assets. Significant estimates and assumptions inherent in the valuations included a consideration of other marketplace participants, the amount and timing of future cash flows (including expected growth rates and profitability), technology life cycles, customer attrition rates, and the discount rate applied to the cash flows. Of the $81.0 million of acquired intangible assets, $52.0 million was assigned to customer relationships ( 15 year life), $28.0 million was assigned to developed technology ( 7 year life), and $1.0 million was assigned to in-process research and development. The excess of the cost of the acquisition over the fair value of the net assets acquired was recorded as goodwill. The goodwill was primarily attributable to strategic opportunities that arose from the acquisition of Cartiva. The goodwill was not deductible for tax purposes. Pro Forma Condensed Combined Financial Information (Unaudited) The following unaudited pro forma combined financial information summarizes the results of operations for the periods indicated as if the Cartiva acquisition had been completed as of December 26, 2016, the first day of the 2017 fiscal year. Pro forma information reflects adjustments that are expected to have a continuing impact on our results of operations and are directly attributable to the acquisition. The unaudited pro forma results include adjustments to reflect the amortization of the inventory step-up and the incremental intangible asset amortization to be incurred based on the values of each identifiable intangible asset. The pro forma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisition had occurred as of December 26, 2016 or that may be obtained in the future, and do not reflect future synergies, integration costs, or other such costs or savings. (in thousands) Fiscal year ended December 30, 2018 December 31, 2017 Net sales $ 861,475 $ 769,111 Net loss from continuing operations (179,800 ) (68,722 ) IMASCAP On December 14, 2017, we completed the acquisition of IMASCAP, a leader in the development of software-based solutions for preoperative planning of shoulder replacement surgery. The intent of this transaction was to ensure exclusive access to breakthrough software enabling technology and patents to further differentiate our product portfolio and to further accelerate growth opportunities in our global extremities business. Under the terms of the agreement with IMASCAP, we acquired 100% of IMASCAP’s outstanding equity on a fully diluted basis for an initial payment of €52.9 million , or approximately $62.3 million , consisting of approximately €39.7 million , or approximately $46.7 million , in cash and approximately €13.2 million , or approximately $15.6 million , representing 661,753 Wright ordinary shares, payable at closing. Additionally, the purchase price included an estimated €15.1 million , or approximately $17.8 million , of contingent consideration related to the achievement of certain technical milestones and sales earnouts. The technical milestones involve the development and approval of a next generation reverse shoulder implant system and new software modules. The sales earnouts relate to certain guides and the next generation reverse shoulder implant system. Purchase Consideration and Net Assets Acquired The following presents the allocation of the purchase consideration to the assets acquired and liabilities assumed on December 14, 2017 (in thousands): Cash and cash equivalents $ 2,559 Accounts receivable 102 Other current assets 925 Property, plant and equipment 20 Intangible assets 10,865 Total assets acquired 14,471 Current liabilities (2,173 ) Long-term debt (886 ) Deferred income taxes (2,343 ) Total liabilities assumed (5,402 ) Net assets acquired $ 9,069 Goodwill 71,064 Total purchase consideration $ 80,133 The purchase consideration was allocated to the net assets acquired based on their estimated fair values at the acquisition date. The fair values were based on management’s analysis, including work performed by third-party valuation specialists. Operating assets and liabilities were valued at their existing carrying values as they approximated the fair value of those items at the acquisition date, based on management’s judgments and estimates. In determining the fair value of intangibles, we used an income method which was based on forecasts of the expected future cash flows attributable to the respective assets. Significant estimates and assumptions inherent in the valuations included a consideration of other marketplace participants, the amount and timing of future cash flows (including expected growth rates and profitability), technology life cycles, and the discount rate applied to the cash flows. Of the $10.9 million of acquired intangible assets, $5.6 million was assigned to developed technology ( 6 year life) and $5.3 million was assigned to in-process research and development. The excess of the cost of the acquisition over the fair value of the net assets acquired was recorded as goodwill. The goodwill was primarily attributable to strategic opportunities that arose from the acquisition of IMASCAP. The goodwill was not deductible for tax purposes. During 2018, we revised opening balances acquired as a result of the IMASCAP acquisition, primarily for accounts receivable; other current assets; accrued expenses and other current liabilities; and deferred tax liabilities which resulted in a $0.9 million |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 29, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations For the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 , our loss from discontinued operations, net of tax, totaled $22.1 million , $0.2 million , and $137.7 million , respectively. Cash used in discontinued operations totaled $52.6 million , $88.6 million , and $228.1 million for the years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 , respectively. Our operating results from discontinued operations and cash used in discontinued operations during 2019, 2018 and 2017 were attributable primarily to litigation and claims expenses, net of insurance recoveries, associated with legacy Wright’s former OrthoRecon business as described in Note 17 . OrthoRecon Business On January 9, 2014, legacy Wright completed the divestiture and sale of its OrthoRecon business to MicroPort. Pursuant to the terms of the agreement, the purchase price (as defined in the agreement) was approximately $283.0 million (including a working capital adjustment), which MicroPort paid in cash. Certain liabilities associated with the OrthoRecon business, including product liability claims associated with hip and knee products sold by legacy Wright prior to the closing, were not assumed by MicroPort. Charges associated with these product liability claims, including legal defense, settlements and judgments, income associated with product liability insurance recoveries, and changes to any contingent liabilities associated with the OrthoRecon business have been reflected within results of discontinued operations, and we will continue to reflect these within results of discontinued operations in future periods. All current and historical operating results for the OrthoRecon business are reflected within discontinued operations in the consolidated financial statements. The following table summarizes the results of discontinued operations for the OrthoRecon business (in thousands): Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Net sales $ — $ — $ — Selling, general and administrative 22,091 (746 ) 135,235 (Loss) income from discontinued operations before income taxes (22,091 ) 746 (135,235 ) Provision (benefit) for income taxes — 221 (1,707 ) Total (loss) income from discontinued operations, net of tax $ (22,091 ) $ 525 $ (133,528 ) Our loss from discontinued operations for the year ended December 29, 2019 and December 30, 2018 was net of $18.5 million in insurance recoveries recognized in 2019 and a $30.75 million insurance recovery recognized in 2018. See Note 17 for further discussion regarding our retained contingent liabilities associated with the OrthoRecon business. During the fiscal year ended 2017, the majority of our loss from discontinued operations was the result of our retained metal-on-metal product liability claims. During the fiscal year ended December 31, 2017 , we recognized charges, net of insurance proceeds, of $94.0 million within discontinued operations related to the retained metal-on-metal product liability claims associated with the OrthoRecon business (see Note 17 for additional discussion). We will incur continuing cash outflows associated with legal defense costs and the ultimate resolution of these contingent liabilities, net of insurance proceeds, until these liabilities are resolved. |
Inventories
Inventories | 12 Months Ended |
Dec. 29, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following (in thousands): December 29, 2019 December 30, 2018 Raw materials $ 12,681 $ 9,612 Work-in-process 27,528 26,839 Finished goods 158,165 144,239 $ 198,374 $ 180,690 Finished goods inventories held as of December 30, 2018 included an inventory fair value step-up of $1.0 million related to the acquisition of Cartiva, which was fully amortized in 2019. Total step-up related to the Cartiva acquisition was $1.4 million , of which $0.4 million was amortized in the fourth quarter of 2018. |
Derivatives and Fair Value of F
Derivatives and Fair Value of Financial Instruments | 12 Months Ended |
Dec. 29, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments and Derivatives | Fair Value of Financial Instruments and Derivatives We account for derivatives in accordance with FASB ASC 815, which establishes accounting and reporting standards requiring that derivative instruments be recorded on the balance sheet as either an asset or liability measured at fair value. Additionally, changes in the derivatives’ fair value shall be recognized currently in earnings unless specific hedge accounting criteria are met. FASB ASC Section 820, Fair Value Measurement requires fair value measurements be classified and disclosed in one of the following three categories: Level 1: Financial instruments with unadjusted, quoted prices listed on active market exchanges. Level 2: Financial instruments determined using prices for recently traded financial instruments with similar underlying terms as well as directly or indirectly observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3: Financial instruments that are not actively traded on a market exchange. This category includes situations where there is little, if any, market activity for the financial instrument. The prices are determined using significant unobservable inputs or valuation techniques. As of December 29, 2019 , we have convertible notes outstanding that are due in 2020, 2021, and 2023. See Note 10 of the consolidated financial statements for additional information about the convertible notes. These notes are cash settled upon conversion for the principal amount of the notes plus a conversion premium (valued at the amount our ordinary share price exceeds the respective conversion price of the notes). The conversion premium is a conversion derivative feature that requires bifurcation from the notes in accordance with ASC Topic 815 and is accounted for as a derivative liability (Notes Conversion Derivative). At the time of issuance of the notes, we entered into hedges with certain option counterparties to reduce our exposure to potential cash payments required for these conversion premiums (Notes Hedges). Upon conversion of the notes, the option counterparties would settle these hedges with us in cash, valued in the same manner as the conversion premiums. The Notes Hedges are accounted for as a derivative asset in accordance with ASC Topic 815. In connection with certain events, including in connection with the Offer as further described in Note 1 , our option counterparties have the discretion to make certain adjustments to the Note Hedges, which may reduce the effectiveness of the Note Hedges. The Notes Hedges and Notes Conversion Derivatives are classified consistently with the corresponding Notes as described in Note 10 . The following table summarizes the fair values and the presentation in our consolidated balance sheets (in thousands) of our Notes Hedges and our Notes Conversion Derivatives: December 29, 2019 December 30, 2018 Location on consolidated balance sheet Amount Location on consolidated balance sheet Amount 2023 Notes Hedges Other assets $ 39,240 Other assets $ 115,923 2023 Notes Conversion Derivative Other liabilities $ 31,555 Other liabilities $ 116,833 2021 Notes Hedges Other current assets $ 183,437 Other assets $ 188,301 2021 Notes Conversion Derivative Accrued expenses and other current liabilities $ 179,478 Other liabilities $ 187,539 2020 Notes Hedges Other current assets $ 1,969 Other current assets $ 17,822 2020 Notes Conversion Derivative Accrued expenses and other current liabilities $ 1,666 Accrued expenses and other current liabilities $ 17,386 Neither the Notes Conversion Derivatives nor the Notes Hedges qualify for hedge accounting; thus, any changes in the fair value of the derivatives are recognized immediately in other expense, net on our consolidated statements of operations. The following table summarizes the net gain (loss) on changes in fair value (in thousands) related to the Notes Hedges and Notes Conversion Derivatives: Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 2023 Notes Hedges $ (106,827 ) $ (25,355 ) $ — 2023 Notes Conversion Derivative 114,153 7,792 — 2021 Notes Hedges (4,864 ) 61,238 (32,032 ) 2021 Notes Conversion Derivative 8,061 (61,391 ) 35,453 2020 Notes Hedges 996 7,342 (32,199 ) 2020 Notes Conversion Derivative (557 ) (28,897 ) 33,626 Net gain (loss) on changes in fair value $ 10,962 $ (39,271 ) $ 4,848 In addition to the above net gain (loss) on changes in fair value, we also recognized a $12.6 million net loss on the Notes Conversion Derivatives during the year ended December 29, 2019 as part of the additional 2023 Notes exchange as described in Note 10 . The Notes Hedges and the Notes Conversion Derivative are measured at fair value using Level 3 inputs. These instruments are not actively traded and are valued using an option pricing model that uses observable and unobservable market data for inputs. To determine the fair value of the embedded conversion option in the 2020, 2021, and 2023 Notes Conversion Derivatives, a trinomial lattice model was used. A trinomial stock price lattice generates three possible outcomes of stock price - one up, one down, and one stable. This lattice generates a distribution of stock prices at the maturity date and throughout the life of the 2020, 2021, and 2023 Notes. Using this stock price lattice, a convertible note lattice was created where the value of the embedded conversion option was estimated by comparing the value produced in a convertible note lattice with the option to convert against the value without the ability to convert. In each case, the convertible note lattice first calculates the possible convertible note values at the maturity date, using the distribution of stock prices, which equals the maximum of (x) the remaining bond cash flows and (y) stock price times the conversion price. The values of the 2020, 2021, and 2023 Notes Conversion Derivatives at the valuation date were estimated using the values at the maturity date and moving back in time on the lattices (both for the lattice with the conversion option and without the conversion option). Specifically, at each node, if the 2020, 2021, or 2023 Notes are eligible for early conversion, the value at this node is the maximum of (i) converting to stock, which is the stock price times the conversion price, and (ii) holding onto the 2020, 2021, and 2023 Notes, which is the discounted and probability-weighted value from the three possible outcomes at the future nodes plus any accrued but unpaid coupons that are not considered at the future nodes. If the 2020, 2021, or 2023 Notes are not eligible for early conversion, the value of the conversion option at this node equals to (ii). In the lattice, a credit adjustment was applied to the discount for each cash flow in the model as the embedded conversion option, as well as the coupon and notional payments, is settled with cash instead of shares. To estimate the fair value of the 2020, 2021 and 2023 Notes Hedges, we used the Black-Scholes formula combined with credit adjustments, as the option counterparties have credit risk and the call options are cash settled. We assumed that the call options will be exercised at maturity since our ordinary shares do not pay any dividends and management does not expect to declare dividends in the near term. The following assumptions were used in the fair market valuations as of December 29, 2019 : 2020 Notes Conversion Derivative 2020 Notes 2021 Notes Conversion Derivative 2021 Notes Hedge 2023 Notes Conversion Derivative 2023 Notes Hedge Black Stock Volatility (1) 14.92% 14.92% 21.89% 21.89% 9.99% 9.99% Credit Spread for Wright (2) 0.83% N/A 0.83% N/A 0.42% N/A Credit Spread for Deutsche Bank AG (3) N/A 0.27% N/A N/A N/A 0.49% Credit Spread for Wells Fargo Securities, LLC (3) N/A 0.12% N/A N/A N/A N/A Credit Spread for JPMorgan Chase Bank (3) N/A 0.13% N/A 0.19% N/A 0.22% Credit Spread for Bank of America (3) N/A N/A N/A 0.19% N/A 0.21% (1) Volatility selected based on historical and implied volatility of ordinary shares of Wright Medical Group N.V. (2) Credit spread implied from traded price. (3) Credit spread of each bank is estimated using CDS curves. Source: Bloomberg. The black stock volatility rates used in the valuations for our Notes Hedges and Notes Conversion Derivatives is one of the most significant assumptions. The change in the fair value of Notes Conversion Derivatives resulting from a change in the black stock volatility would have a direct impact on net profit, with an increase in volatility resulting in an increase in the net loss and a decrease in volatility resulting in a decrease in the net loss for the period. The change in the fair value of Notes Hedges resulting from a change in the black stock volatility would have an indirect impact on net profit, with an increase in volatility resulting in a decrease in the net loss and a decrease in volatility resulting in an increase in the net loss for the period. The impact on profit due to volatility of Notes Hedges would be offset by a similar change in volatility of the Notes Conversion Derivatives. Derivatives not Designated as Hedging Instruments As a result of the acquired business of IMASCAP in 2017, we have recorded the estimated fair value of future contingent consideration of approximately €25.1 million or approximately $28.0 million , related to the achievement of certain technical milestones and sales earnouts as of December 29, 2019 . The contingent consideration liability related to technical milestones totaled $20.8 million and $12.7 million as of December 29, 2019 and December 30, 2018 , respectively, and is contingent upon the development and approval of a next generation reverse shoulder implant system and new software modules. The contingent consideration liability related to sales earnouts totaled $7.2 million and $6.5 million as of December 29, 2019 and December 30, 2018 , respectively, and is contingent upon the sale of certain guides and the next generation reverse shoulder implant system. Changes in the fair value of contingent consideration is recorded within other expense, net on our consolidated statements of operations. The fair values of the sales earn out contingent consideration as of December 29, 2019 and December 30, 2018 were determined using a discounted cash flow model and probability adjusted estimates of the future earnings and are classified in Level 3. The discount rate is 12% for the sales earnout contingent consideration. The contingent consideration related to technical milestones is based on meeting certain developmental milestones for new software modules and for the FDA and CE approval for the next generation reverse shoulder implant system. The fair value of this contingent consideration as of December 29, 2019 and December 30, 2018 was determined using probability adjusted estimates of the future payments and is classified in Level 3. The discount rate is approximately 6% for the contingent consideration related to technical milestones. A change in the discount rate would have limited impact on our profits or the fair value of this contingent consideration. On March 1, 2013, as part of our acquisition of BioMimetic Therapeutics, Inc. (BioMimetic), we issued Contingent Value Rights (CVRs) as part of the merger consideration. Among other things, the CVR agreement provided for a revenue milestone payment equal to $1.50 per share, or $42 million , to be paid if, prior to March 1, 2019 , sales of AUGMENT ® Bone Graft reached $40 million over 12 consecutive months. Sales for AUGMENT ® Bone Graft reached $40 million for the 12 months ended October 28, 2018, and this milestone payment was paid during the fourth quarter of 2018. The CVR agreement also provided for a second revenue milestone equal to $1.50 per share, or $42 million , if, prior to March 1, 2019, sales of AUGMENT ® Bone Graft reach $70 million over 12 consecutive months. This milestone was not met before the termination of the CVRs. There were no CVRs outstanding as of December 29, 2019 , as the agreement terminated on March 1, 2019. The fair value of the CVRs outstanding at December 30, 2018 was $0.4 million and was determined using the closing price of the security in the active market (Level 1), and is reflected within “Accrued expenses and other current liabilities” on our consolidated balance sheet. The carrying value of cash and cash equivalents, accounts receivable, and accounts payable approximates the fair value of these financial instruments at December 29, 2019 and December 30, 2018 due to their short maturities and variable rates. The following tables summarize the valuation of our financial instruments (in thousands): Total Quoted prices in active markets (Level 1) Prices with other observable inputs (Level 2) Prices with unobservable inputs (Level 3) December 29, 2019 Assets Cash and cash equivalents $ 166,856 $ 166,856 $ — $ — 2020 Notes Hedges 1,969 — — 1,969 2021 Notes Hedges 183,437 — — 183,437 2023 Notes Hedges 39,240 — — 39,240 Total $ 391,502 $ 166,856 $ — $ 224,646 Liabilities 2020 Notes Conversion Derivative $ 1,666 $ — $ — $ 1,666 2021 Notes Conversion Derivative 179,478 — — 179,478 2023 Notes Conversion Derivative 31,555 — — 31,555 Contingent consideration 28,077 — — 28,077 Total $ 240,776 $ — $ — $ 240,776 Total Quoted prices Prices with Prices with December 30, 2018 Assets Cash and cash equivalents $ 191,351 $ 191,351 $ — $ — 2020 Notes Hedges 17,822 — — 17,822 2021 Notes Hedges 188,301 — — 188,301 2023 Notes Hedges 115,923 — — 115,923 Total $ 513,397 $ 191,351 $ — $ 322,046 Liabilities 2020 Notes Conversion Derivative $ 17,386 $ — $ — $ 17,386 2021 Notes Conversion Derivative 187,539 — — 187,539 2023 Notes Conversion Derivative 116,833 — — 116,833 Contingent consideration 19,248 — — 19,248 Contingent consideration (CVRs) 420 420 — — Total $ 341,426 $ 420 $ — $ 341,006 The following is a roll forward of our assets and liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) (in thousands): Balance at December 30, 2018 Additions Transfers into Level 3 Gain/(loss) on fair value adjustments included in earnings Gain/(loss) on issuance/settlement included in earnings Settlements Currency Balance at December 29, 2019 2020 Notes Hedges $ 17,822 — — 996 — (16,849 ) — $ 1,969 2020 Notes Conversion Derivative $ (17,386 ) — — (557 ) 16,277 — — $ (1,666 ) 2021 Notes Hedges $ 188,301 — — (4,864 ) — — — $ 183,437 2021 Notes Conversion Derivative $ (187,539 ) — — 8,061 — — — $ (179,478 ) 2023 Notes Hedges $ 115,923 30,144 — (106,827 ) — — — $ 39,240 2023 Notes Conversion Derivative $ (116,833 ) — — 114,153 (28,875 ) — — $ (31,555 ) Contingent consideration $ (19,248 ) — — (9,532 ) — 207 496 $ (28,077 ) |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 29, 2019 | |
Property, Plant and Equipment, Net [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment, net consists of the following (in thousands): December 29, 2019 December 30, 2018 Land and land improvements $ 2,154 $ 2,127 Buildings 60,205 43,087 Machinery and equipment 102,014 82,445 Furniture, fixtures and office equipment 185,145 161,614 Construction in progress 17,259 14,113 Surgical instruments 281,541 230,980 648,318 534,366 Less: Accumulated depreciation (396,396 ) (309,437 ) $ 251,922 $ 224,929 |
Goodwill and Intangibles
Goodwill and Intangibles | 12 Months Ended |
Dec. 29, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangibles Assets | Goodwill and Intangible Assets Changes in the carrying amount of goodwill occurring during the fiscal years ended December 29, 2019 and December 30, 2018 are as follows (in thousands): U.S. Lower Extremities & Biologics U.S. Upper Extremities International Extremities & Biologics Total Balance at December 31, 2017 $ 218,525 $ 630,650 $ 84,487 $ 933,662 Goodwill associated with Cartiva acquisition 351,445 — — 351,445 Goodwill adjustment associated with IMASCAP acquisition — (917 ) — (917 ) Foreign currency translation — (1,883 ) (13,353 ) (15,236 ) Balance at December 30, 2018 $ 569,970 $ 627,850 $ 71,134 $ 1,268,954 Foreign currency translation — (1,924 ) (6,063 ) (7,987 ) Balance at December 29, 2019 $ 569,970 $ 625,926 $ 65,071 $ 1,260,967 Goodwill is recognized for the excess of the purchase price over the fair value of net assets of businesses acquired. Goodwill is required to be tested for impairment at least annually. As of October 1, 2019 , we performed a qualitative analysis to test goodwill for impairment and determined that it is not more likely than not that the carrying value of our U.S. Lower Extremities & Biologics, U.S. Upper Extremities, and International Extremities & Biologics reporting units exceeded their respective fair values, indicating that goodwill was not impaired. On October 10, 2018, we completed the acquisition of Cartiva. As part of the purchase price allocation, we acquired $81.0 million of intangible assets related to completed technology, in-process research and development, and customer relationships and $351.4 million of goodwill. Of the $81.0 million of acquired intangible assets, $52.0 million was assigned to customer relationships ( 15 year life), $28.0 million was assigned to developed technology ( 7 year life), and $1.0 million was assigned to in-process research and development. On December 14, 2017, we completed the acquisition of IMASCAP. As part of the preliminary purchase price allocation, we acquired $10.9 million of intangible assets related to completed technology and in-process research and development and $72.0 million of goodwill. Of the $10.9 million of acquired intangible assets, $5.6 million was assigned to developed technology ( 6 year life) and $5.3 million was assigned to in-process research and development. During 2018, we revised opening balances acquired as a result of the IMASCAP acquisition, primarily for accounts receivable; other current assets; accrued expenses and other current liabilities; and deferred tax liabilities which resulted in a $0.9 million decrease in the preliminary value of goodwill determined as of December 14, 2017. See Note 3 for additional discussion of these adjustments. Following the December 2017 IMASCAP acquisition, foreign currency translation has been reported within the U.S. Upper Extremities segment. While the IMASCAP offices are located in France and the majority of their operations have a functional currency of the euro, the results of the IMASCAP business are managed by the U.S. Upper Extremities segment. The components of our identifiable intangible assets, net, are as follows (in thousands): December 29, 2019 December 30, 2018 Cost Accumulated amortization Cost Accumulated amortization Indefinite life intangibles: IPRD technology $ 6,238 $ — $ 6,262 $ — Finite life intangibles: Completed technology 172,111 72,140 174,596 55,114 Licenses 9,247 2,835 6,547 1,851 Customer relationships 181,094 41,389 179,605 30,935 Trademarks 14,002 11,834 14,048 11,564 Non-compete agreements 5,713 4,090 3,252 2,514 Other 2,022 757 764 764 Total finite life intangibles 384,189 $ 133,045 378,812 $ 102,742 Total intangibles 390,427 385,074 Less: Accumulated amortization (133,045 ) (102,742 ) Intangible assets, net $ 257,382 $ 282,332 Based on the total finite life intangible assets held at December 29, 2019 , we expect amortization expense of approximately $31 million in 2020 , $30 million in 2021 , $30 million in 2022 , $30 million in 2023 , and $27 million in 2024 |
Leases
Leases | 12 Months Ended |
Dec. 29, 2019 | |
Leases [Abstract] | |
Leases | Leases We lease various manufacturing, warehousing and distribution facilities, administrative and sales offices as well as equipment under operating leases. We evaluate our contracts to identify leases, which are generally deemed to exist if there is an identified asset over which we have the right to direct its use and from which we obtain substantially all of the economic benefit from its use. Certain of our lease agreements contain rent escalation clauses, rent holidays, and other lease concessions. We recognize our minimum rental expense on a straight-line basis over the term of the lease beginning with the date of initial control of the asset. With the adoption of ASC 842, we recognized all operating leases with terms greater than twelve months in duration on our consolidated balance sheet as of December 31, 2018 as right-of-use assets and lease liabilities which totaled approximately $20 million. Additionally, we recorded a cumulative adjustment of $0.2 million to our accumulated deficit upon adoption. We adopted the standard using the prospective approach and did not retrospectively apply it to prior periods. We have made certain assumptions and judgments when applying ASC 842, the most significant of which are: • We elected the package of practical expedients available for transition which allows us to not reassess whether expired or existing contracts contain leases under the new definition of a lease, lease classification for expired or existing leases and whether previously capitalized initial direct costs would qualify for capitalization under ASC 842. • We elected to use hindsight when considering judgments and estimates such as assessments of lessee options to extend or terminate a lease or purchase the underlying asset. • For all asset classes, we elected to not recognize a right-of-use asset and lease liability for short-term leases. • For all asset classes, we elected to not separate non-lease components from lease components to which they relate and have accounted for the combined lease and non-lease components as a single lease component. • The determination of the discount rate used in a lease is our incremental borrowing rate which is based on what we would normally pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. Our net ROU assets under operating leases are included within Other Assets on our consolidated balance sheet and include the following (in thousands): December 29, 2019 Buildings $ 17,331 Machinery and equipment 1,720 Furniture, fixtures and office equipment 943 $ 19,994 At December 29, 2019 , the present value of the future minimum lease payments under operating lease obligations are included within Accrued expenses and other current liabilities and Other liabilities as follows (in thousands): 2020 $ 7,420 2021 5,632 2022 3,878 2023 2,239 2024 1,356 Thereafter 4,036 Total minimum payments 24,561 Less amount representing interest (3,806 ) Present value of minimum lease payments 20,755 Current portion (6,608 ) Long-term portion $ 14,147 Prior to the adoption of ASC 842, operating leases were expensed ratably over the lease period and were not reflected within our consolidated balance sheet as of December 30, 2018 . Rental expense under operating leases approximated $11.1 million and $8.9 million for the fiscal years ended December 30, 2018 and December 31, 2017 , respectively. Future minimum lease payments, by year and in the aggregate, under non-cancelable operating leases with initial or remaining lease terms of one year or more, were reported in our Annual Report on Form 10-K for the fiscal year ended December 30, 2018 as follows (in thousands), and included a total of $7.8 million for future lease payments to our 51% -owned subsidiary: 2019 $ 9,606 2020 7,498 2021 6,019 2022 4,433 2023 2,678 Thereafter 10,998 Total minimum payments $ 41,232 The components of property, plant and equipment recorded under finance leases consist of the following (in thousands): December 29, 2019 December 30, 2018 Buildings $ 12,017 $ 12,017 Machinery and equipment 30,733 24,331 Furniture, fixtures and office equipment 671 559 43,421 36,907 Less: Accumulated depreciation (16,726 ) (11,906 ) $ 26,695 $ 25,001 Future minimum lease payments under finance lease obligations, together with the present value of the net minimum lease payments, are as follows (in thousands): December 29, 2019 2020 $ 7,912 2021 6,166 2022 5,156 2023 3,337 2024 1,614 Thereafter 3,330 Total minimum payments 27,515 Less amount representing interest (2,429 ) Present value of minimum lease payments 25,086 Current portion (7,011 ) Long-term portion $ 18,075 Amounts recorded within our consolidated statement of operations for the fiscal year ended December 29, 2019 related to leased assets are as follows (in thousands): Fiscal year ended December 29, 2019 Lease cost Finance lease cost: Depreciation $ 5,688 Interest on lease liabilities 1,104 Operating lease cost 9,843 Short-term lease cost 128 Variable lease cost 500 Total lease cost $ 17,263 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 1,104 Operating cash flows from operating leases $ 9,247 Financing cash flows from finance leases $ 7,837 Weighted-average remaining lease term - finance leases 4.56 Weighted-average remaining lease term - operating leases 4.87 Weighted-average discount rate - finance leases 4.63 % Weighted-average discount rate - operating leases 7.06 % |
Debt and Finance Lease Obligati
Debt and Finance Lease Obligations | 12 Months Ended |
Dec. 29, 2019 | |
Debt Disclosure [Abstract] | |
Debt and Finance Lease Obligations | Debt and Finance Lease Obligations Debt and finance lease obligations consist of the following (in thousands): Maturity by fiscal year December 29, 2019 December 30, 2018 Finance lease obligations ( Note 9 ) 2020-2026 $ 25,086 $ 25,539 Convertible Notes 1.625% Notes 2023 695,748 548,076 2.25% Notes 1 2021 344,635 321,286 2.0% Notes 2 2020 55,997 173,533 Term loan facility 2021 19,296 18,979 Asset-based line of credit 3 2021 20,652 17,761 Other debt 2020-2024 6,615 9,953 1,168,029 1,115,127 Less: Current portion 1, 2, 3 (430,862 ) (201,686 ) Long-term debt and finance lease obligations ( Note 9 ) $ 737,167 $ 913,441 _______________________ 1 As of December 29, 2019 , the sale price condition (as defined below) for the 2021 Notes was satisfied and, therefore, the 2021 Notes are convertible at any time during the succeeding quarterly period. As a result, the carrying value of the 2021 Notes was classified as a current liability as of December 29, 2019 . The respective balances were classified as long-term as of December 30, 2018 . 2 The holders of the 2020 Notes may convert their notes at any time on or after August 15, 2019. Due to the ability of the holders of the 2020 Notes to convert their notes within the next year, the carrying value of the 2020 Notes was classified as a current liability as of December 30, 2018 . The 2020 Notes were classified as a current liability as of December 29, 2019 as they matured on February 15, 2020. 3 We have reflected this debt as a current liability on our consolidated balance sheets as of December 29, 2019 and December 30, 2018 , as required by US GAAP due to the weekly lockbox repayment/re-borrowing arrangement underlying the agreement, as well as the ability for the lenders to accelerate the repayment of the debt under certain circumstances as described below. Convertible Notes The components of the Notes were as follows (in thousands): December 29, 2019 December 30, 2018 Principal amount of 2023 Notes $ 814,556 $ 675,000 Unamortized debt discount (107,916 ) (114,554 ) Unamortized debt issuance costs (10,892 ) (12,370 ) Net carrying amount of 2023 Notes $ 695,748 $ 548,076 Principal amount of 2021 Notes $ 395,000 $ 395,000 Unamortized debt discount (47,405 ) (69,382 ) Unamortized debt issuance costs (2,960 ) (4,332 ) Net carrying amount of 2021 Notes $ 344,635 $ 321,286 Principal amount of 2020 Notes $ 56,455 $ 186,589 Unamortized debt discount (408 ) (11,642 ) Unamortized debt issuance costs (50 ) (1,414 ) Net carrying amount of 2020 Notes $ 55,997 $ 173,533 The 2021 Notes were issued by us and the 2020 Notes and the 2023 Notes were issued by Wright Medical Group, Inc. (WMG) and are fully and unconditionally guaranteed by Wright Medical Group N.V. The holders of the Notes may convert their notes solely into cash at their option at any time prior to the Early Conversion date (as defined below) only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of our ordinary shares for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day (the sale price condition); (2) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our ordinary shares and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events, including in connection with the Offer as further described below and within Note 1 . The terms of conversion are set forth below: 2020 Notes 2021 Notes 2023 Notes Conversion rate 33.39487 46.8165 29.9679 Conversion price $ 29.94 $ 21.36 $ 33.37 Early Conversion date August 15, 2019 May 15, 2021 December 15, 2022 Maturity date February 15, 2020 November 15, 2021 June 15, 2023 On or after the Early Conversion date until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes solely into cash, regardless of the foregoing circumstances. Upon conversion, a holder will receive an amount in cash, per $1,000 principal amount of the Notes, equal to the settlement amount as calculated under the Notes Indenture. If a fundamental change, as defined in the applicable Notes Indenture, occurs, subject to certain conditions, holders of the applicable series of Notes will have the option to require us to repurchase for cash all or a portion of their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date, as defined in the applicable Notes Indenture. In addition, if a make-whole fundamental change, as defined in the applicable Notes Indenture, occurs prior to the maturity date, we are required to increase the applicable conversion rate for a holder that elects to convert its Notes in connection with such make-whole fundamental change. The Notes may not be redeemed prior to the maturity date, and no “sinking fund” is available, which means that WMG is not required to redeem or retire the Notes periodically. On November 4, 2019, we entered into a definitive agreement with Stryker and its subsidiary, Stryker B.V. Under the terms of the agreement, and upon the terms and subject to the conditions thereof, Stryker B.V. will commence a tender offer to purchase all of the outstanding ordinary shares of Wright for $30.75 per share, without interest and less applicable withholding taxes, in cash. The obligation of Stryker and Stryker B.V. to consummate the Offer is subject to the tender of a minimum number of our outstanding shares in the related tender offer, the adoption of certain resolutions relating to the transaction at an extraordinary general meeting of Wright’s shareholders, receipt of applicable regulatory approvals and other customary conditions. If these conditions are satisfied and the Offer closes, Stryker may acquire any remaining shares through a post-offer reorganization. Wright expects that a fundamental change and a make-whole fundamental change will occur at the time Stryker B.V. accepts for purchase and pays for all shares validly tendered pursuant to the Offer. Wright also expects that the Offer will trigger certain conversion rights under each of the Notes Indentures prior to the closing of the proposed acquisition by Stryker. The 2021 Notes and our guarantee of the 2020 and 2023 Notes is our senior unsecured obligation that ranks: (i) senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the guarantee; (ii) equal in right of payment to any of our unsecured indebtedness that is not so subordinated; (iii) effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and (iv) structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries. Because the 2020 Notes and the 2023 Notes were issued by WMG, they are structurally senior to all indebtedness and other liabilities of Wright Medical Group N.V. The estimated fair value of the 2020, 2021 and 2023 Notes was approximately $57.3 million , $575.5 million , and $864.0 million , respectively, at December 29, 2019 , based on a quoted price in an active market (Level 1). The Notes Conversion Derivatives require bifurcation from the Notes in accordance with ASC Topic 815, Derivatives and Hedging , and are accounted for as a derivative liability. See Note 6 for additional information regarding the Notes Conversion Derivative. The fair value of the Notes Conversion Derivative at the time of issuance is also recorded as the original debt discount for purposes of accounting for the debt component of the Convertible Notes. This discount is amortized as interest expense using the effective interest method over the term of the Convertible Notes. As of December 29, 2019 , our effective interest rates for the 2020, 2021, and 2023 Notes were 8.54% , 9.72% , and 5.76% , respectively. The following table summarizes the interest expense related to the amortization of the debt discount (in thousands): Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 2023 Notes $ 23,522 $ 10,071 $ — 2021 Notes 21,977 19,950 18,110 2020 Notes 3,804 19,165 27,331 The following table summarizes the interest expense related to the amortization of the deferred financing costs (in thousands): Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 2023 Notes $ 2,381 $ 1,148 $ — 2021 Notes 1,372 1,284 1,131 2020 Notes 462 2,333 3,320 As further described below, during 2019, we exchanged 2023 Notes for 2020 Notes which was recognized as a debt modification and resulted in us recognizing a net loss of approximately $14.3 million , primarily due to the Notes Conversion Derivatives and debt modification costs, within “Other expense, net” in our consolidated statements of operations. As further described below, during 2018, we had a notes exchange recognized as a debt extinguishment which resulted in us recognizing approximately $39.9 million for the write-off of related pro-rata unamortized deferred financing fees and debt discount within “Other expense, net” in our consolidated statements of operations. In connection with the issuance of each series of Convertible Notes, we and WMG entered in cash-settled convertible note hedge transactions with certain option counterparties (the Note Hedges), which are generally intended to reduce exposure to potential cash payments that we or WMG, as applicable, would be required to make if holders elect to convert the Convertible Notes at a time when our ordinary share price exceeds the conversion price. We also entered into warrant transactions (the Warrants) in connection with the issuance of each series of Convertible Notes in which we sold warrants that are initially exercisable in the same number of shares as are issuable upon conversion of the applicable series of Convertible Notes at the initial conversion rate. The strike price of the Note Hedge for each series of Convertible Notes is equal to the conversion price of the applicable series of Convertible Notes and the exercise prices for the Warrants issued with the 2020, 2021 and 2023 Notes are $38.80 , $30.00 , and $40.86 , respectively. The strike prices of the Notes Hedges and exercise prices of the Warrants are subject to adjustment upon the occurrence of certain events including in connection with the Offer as further described above and within Note 1 . In connection with certain events, including, among others, (i) a merger or other make-whole fundamental change, including in connection with the Offer as further described above and within Note 1 ; (ii) certain hedging disruption events, which may include changes in tax laws, an increase in the cost of borrowing our ordinary shares in the market or other material increases in the cost to the option counterparties of hedging the Note Hedges; (iii) our failure to perform certain obligations under the Notes Indenture or under the Notes Hedges; (iv) certain defaults on our, or any of our other subsidiary’s indebtedness in excess of $25 million ; (v) if we, or any of our significant subsidiaries become insolvent or otherwise become subject to bankruptcy proceedings or (vi) if we repurchase Convertible Notes in the open market, through a tender or exchange offer or in individually negotiated transactions, the option counterparties have the discretion to terminate the Notes Hedges, which may reduce the effectiveness of the Notes Hedges. In addition, the option counterparties have broad discretion to make certain adjustments to the Notes Hedges and Warrants upon the occurrence of certain other events, including, among others, (i) upon the announcement of certain significant corporate events, including events that may give rise to a termination event as described above, such as the announcement of a third-party tender offer, including in connection with the Offer as further described above and within Note 1 ; or (ii) solely with respect to the Notes Hedges, any adjustment to the conversion rate of the Notes. Any such adjustment may also reduce the effectiveness of the Note Hedges and further the dilutive effect of the Warrants. Aside from the initial premiums paid to the option counterparties and subject to the right of the option counterparties to terminate the Notes Hedges and Warrants in certain circumstances, we do not generally expect to be required to make any cash payments to the option counterparties under the Notes Hedges and Warrants and expect to be entitled to receive from the option counterparties cash, generally equal to the amount by which the market price per ordinary share exceeds the strike price of the applicable Note Hedge during the relevant valuation period. The Warrants are expected to be net-share settled and exercisable over a certain trading period after the Convertible Notes mature as detailed below: 2020 Notes 2021 Notes 2023 Notes Exercisable period 200 trading day period beginning on May 15, 2020 100 trading day period beginning on February 15, 2022 120 trading day period beginning on September 15, 2023 If the market value per ordinary share exceeds the strike price on any settlement date under the applicable Warrant, we will generally be obligated to issue to the Warrant holders in the aggregate, a number of shares equal in value to the amount by which the then-current market value of one ordinary share exceeds the then-effective strike price of each Warrant, multiplied by the number of Warrants exercised. As a result, the Warrants will have a dilutive effect on our ordinary shares to the extent that the market value per ordinary share during such period exceeds the applicable strike price of the Warrants. As of December 29, 2019 , we had warrants outstanding related to the 2020 Notes, 2021 Notes and 2023 Notes which were exercisable for 1.9 million ordinary shares, 18.5 million ordinary shares, and 24.4 million ordinary shares, respectively. As of December 30, 2018 , we had warrants outstanding related to the 2020 Notes, 2021 Notes and 2023 Notes which were exercisable for 6.2 million ordinary shares, 18.5 million ordinary shares, and 20.2 million ordinary shares, respectively. As of December 31, 2017 , we had warrants outstanding related to the 2020 Notes and 2021 Notes which were exercisable for 19.6 million ordinary shares and 18.5 million ordinary shares, respectively. 2023 Notes On June 28, 2018 , WMG issued $675 million aggregate principal amount of the 2023 Notes pursuant to an indenture (2023 Notes Indenture), dated as of June 28, 2018 , with The Bank of New York Mellon Trust Company, N.A., as trustee. The 2023 Notes require interest to be paid at an annual rate of 1.625% semi-annually in arrears on each June 15 and December 15 and will mature on June 15, 2023 unless earlier converted or repurchased. As a result of the issuance of the 2023 Notes, we recorded deferred financing charges of approximately $13.5 million . The fair value of the 2023 Notes Conversion Derivative at the time of issuance of the 2023 Notes was $124.6 million and was recorded as original debt discount for purposes of accounting for the debt component of the 2023 Notes. We and WMG entered into 2023 Notes Hedges in connection with the issuance of the 2023 Notes which had an aggregate cost of $141.3 million and is accounted for as a derivative asset in accordance with ASC Topic 815. See Note 6 of the consolidated financial statements for additional information regarding the 2023 Notes Hedges and the 2023 Notes Conversion Derivative. We also entered into warrant transactions in which we sold warrants that are initially exercisable into 20.2 million ordinary shares to the option counterparties, subject to adjustment upon the occurrence of certain events, for an aggregate of $102.1 million . As described in more detail below, concurrently with the issuance and sale of the 2023 Notes, certain holders of the 2020 Notes exchanged their 2020 Notes for the 2023 Notes, a pro rata portion of the 2020 Notes Hedges were settled and a pro rata portion of the Warrants associated with the 2020 Notes were repurchased. On February 7, 2019, WMG issued an additional $139.6 million aggregate principal amount of 2023 Notes in exchange for $130.1 million aggregate principal amount of 2020 Notes. For each $1,000 principal amount of 2020 Notes validly submitted for exchange, we delivered $1,072.40 principal amount of 2023 Notes to the exchanging investor (subject, in each case, to rounding to the nearest $1,000 aggregate principal amount for each such exchanging investor). This debt modification resulted in a pro rata share of the 2020 Notes discount and deferred financing costs, which totaled $7.4 million and $0.9 million , respectively, being transferred to the 2023 Notes discount and deferred financing costs. Additionally, the 2023 Notes discount was adjusted in order for net debt to remain the same subsequent to the exchange. The discount and deferred financing costs will be amortized over the remaining term of the 2023 Notes using the effective interest method. The fair value of the 2023 Notes Conversion Derivative associated with the additional $139.6 million of 2023 Notes was $28.9 million at the time of issuance, and the pro rata share of the 2020 Notes Conversion Derivative that was settled as part of the additional 2023 Notes exchange had a fair value of $16.3 million immediately prior to issuance of the additional 2023 Notes. As the exchange was accounted for as a debt modification, the net amount of $12.6 million was recognized as a loss during 2019. On January 30, 2019 and January 31, 2019, we entered into additional Note Hedge and Warrant transactions with the same strike and exercise prices as set forth above for the 2023 Notes. We paid approximately $30.1 million in the aggregate to the option counterparties for the additional Note Hedge, and received approximately $21.2 million in the aggregate from the option counterparties for the Warrants, resulting in a net cost to us of approximately $8.9 million . In addition, we settled a pro rata share of the 2020 Notes Hedges corresponding to the amount of the 2020 Notes exchanged pursuant to the above-described exchange. We received proceeds of approximately $16.8 million related to the 2020 Notes Hedges and paid $11.0 million related to the 2020 Warrants, generating net proceeds of $5.8 million . 2021 Notes On May 20, 2016 , we issued $395 million aggregate principal amount of the 2021 Notes pursuant to an indenture (2021 Notes Indenture), dated as of May 20, 2016 between us and The Bank of New York Mellon Trust Company, N.A., as trustee. The 2021 Notes require interest to be paid at an annual rate of 2.25% semi-annually in arrears on each May 15 and November 15 , and will mature on November 15, 2021 unless earlier converted or repurchased. As a result of the issuance of the 2021 Notes, we recorded deferred financing charges of approximately $7.3 million . The fair value of the 2021 Notes Conversion Derivative at the time of issuance of the 2021 Notes was $117.2 million and was recorded as original debt discount for purposes of accounting for the debt component of the 2021 Notes. This discount is amortized as interest expense using the effective interest method over the term of the 2021 Notes. We entered into 2021 Notes Hedges in connection with the issuance of the 2021 Notes which had an aggregate cost of $99.8 million and is accounted for as a derivative asset in accordance with ASC Topic 815. See Note 6 of the consolidated financial statements for additional information regarding the 2021 Notes Hedges and the 2021 Notes Conversion Derivative. We also entered into warrant transactions in which we sold warrants for an aggregate of 18.5 million ordinary shares to the option counterparties, subject to adjustment, for an aggregate of $54.6 million . As described in more detail below, concurrently with the issuance and sale of the 2021 Notes, certain holders of the 2020 Notes exchanged their 2020 Notes for the 2021 Notes, a pro rata portion of the 2020 Notes Hedges were settled and a pro rata portion of the Warrants associated with the 2020 Notes were repurchased. In the first quarter of 2017, third calendar quarter of 2018, second calendar quarter of 2019, and the fourth calendar quarter of 2019, the sale price condition (as defined above) for the 2021 Notes was satisfied and, therefore, the 2021 Notes are convertible at any time during the succeeding quarterly period. There were no conversions during the second quarter of 2017, fourth quarter of 2018 or the third quarter of 2019. 2020 Notes On February 13, 2015 , WMG issued $632.5 million aggregate principal amount of the 2020 Notes pursuant to an indenture (2020 Notes Indenture), dated as of February 13, 2015 between WMG and The Bank of New York Mellon Trust Company, N.A., as trustee. The 2020 Notes required interest to be paid semi-annually on each February 15 and August 15 at an annual rate of 2.00% , and matured and were repaid in full on February 15, 2020 . The 2020 Notes were initially issued whereby they were convertible at the option of the holder, during certain periods and subject to certain conditions described below, solely into cash at an initial conversion rate of 32.3939 shares of WMG common stock per $1,000 principal amount of the 2020 Notes, subject to adjustment upon the occurrence of certain events, which represented an initial conversion price of approximately $30.87 per share of WMG common stock. In conjunction with the issuance of the 2020 Notes, we recorded deferred financing charges of approximately $18.1 million . The fair value of the 2020 Notes Conversion Derivative at the time of issuance of the 2020 Notes was $117.2 million and was recorded as original debt discount for purposes of accounting for the debt component of the 2020 Notes. We entered into 2020 Notes Hedges in connection with the issuance of the 2020 Notes which had an aggregate cost of $144.8 million and is accounted for as a derivative asset in accordance with ASC Topic 815. See Note 6 of the consolidated financial statements for additional information regarding the 2020 Notes Hedges and the 2020 Notes Conversion Derivative. WMG also entered into warrant transactions in which it sold warrants for an aggregate of 20.5 million shares of WMG common stock to the option counterparties, subject to adjustment. The strike price of the warrants was initially $40 per share of WMG common stock. On November 24, 2015, Wright Medical Group N.V. executed a supplemental indenture, fully and unconditionally guaranteeing, on a senior unsecured basis, WMG’s obligations relating to the 2020 Notes, changing the underlying reference securities from WMG common stock to Wright Medical Group N.V. ordinary shares and making a corresponding adjustment to the conversion price. From and after the effective time of the Wright/Tornier merger, (i) all calculations and other determinations with respect to the 2020 Notes previously based on references to WMG common stock were calculated or determined by reference to our ordinary shares, and (ii) the conversion rate (as defined in the 2020 Notes Indenture) for the 2020 Notes was adjusted to a conversion rate of 33.39487 ordinary shares (subject to adjustment as provided in the 2020 Notes Indenture) per $1,000 principal amount of the 2020 Notes, which represents a conversion price of approximately $29.94 per ordinary share (subject to, and in accordance with, the settlement provisions of the 2020 Notes Indenture). On November 24, 2015, Wright Medical Group N.V. assumed WMG’s obligations pursuant to the warrants. Following the assumption, the warrants became exercisable for 21.1 million Wright Medical Group N.V. ordinary shares and the strike price of the warrants was adjusted to $38.8010 per ordinary share. Concurrently with the issuance and sale of the 2021 Notes, in 2016, certain holders of the 2020 Notes exchanged approximately $45.0 million aggregate principal amount of their 2020 Notes for the 2021 Notes. For each $1,000 principal amount of 2020 Notes validly submitted for exchange, we delivered $990.00 principal amount of the 2021 Notes (subject to rounding down to the nearest $1,000 principal amount of the 2021 Notes, the difference being referred as the rounded amount) to the investor plus an amount of cash equal to the unpaid interest on the 2020 Notes and the rounded amount. During the second quarter of 2016, we also settled a pro rata portion of the 2020 Notes Hedges and repurchased a pro rata portion of the warrants associated with the 2020 Notes, generating net proceeds of approximately $0.6 million . Subsequent to this partial settlement, we had warrants which were exercisable for 19.6 million ordinary shares and the strike price of the warrants remained $38.8010 per ordinary share as of December 31, 2017 . Concurrently with the issuance and sale of the 2023 Notes, in 2018, certain holders of the 2020 Notes exchanged approximately $400.9 million aggregate principal amount of their 2020 Notes for the 2023 Notes. For each $1,000 principal amount of 2020 Notes validly submitted for exchange, we delivered $1,138.70 principal amount of the 2023 Notes (subject to rounding down to the nearest $1,000 principal amount of the 2023 Notes for each exchanging investor, the difference being referred as the rounded amount) to the investor. As a result of this note exchange and retirement of $400.9 million aggregate principal amount of the 2020 Notes, we recognized approximately $39.9 million for the write-off of related unamortized deferred financing fees and debt discount within “Other expense, net” in our consolidated statements of operations during the fiscal year ended December 30, 2018. During the second quarter of 2018, we also agreed to settle a pro rata portion of the 2020 Notes Hedges and agreed to repurchase a pro rata portion of the warrants associated with the 2020 Notes. The pricing of these 2020 Notes Hedges and warrants associated with the 2020 Notes were based on pricing between July 9, 2018 and July 27, 2018 and were settled on July 30, 2018. As a result of these settlements, we received net proceeds of approximately $10.6 million on July 30, 2018. We had warrants which were exercisable for 6.2 million ordinary shares with a strike price of $38.8010 per ordinary share as of December 30, 2018 . Concurrently with the issuance and sale of the additional 2023 Notes, on February 7, 2019, certain holders of the 2020 Notes exchanged approximately $130.1 million aggregate principal amount of 2020 Notes. For each $1,000 principal amount of 2020 Notes validly submitted for exchange, we delivered $1,072.40 principal amount of 2023 Notes to the exchanging investor (subject, in each case, to rounding to the nearest $1,000 aggregate principal amount for each such exchanging investor). As this was a debt modification, a pro rata share of the 2020 Notes discount and deferred financing costs which totaled $7.4 million and $0.9 million , respectively, was transferred to the 2023 Notes discount and deferred financing costs. Additionally, the 2023 Notes discount was adjusted in order for net debt to remain the same subsequent to the exchange. The remaining discount and deferred financing costs will be amortized over the remaining term of the 2020 Notes using the effective interest method. We recognized a $12.6 million net loss on the Notes Conversion Derivatives during the year ended December 29, 2019 as part of the additional 2023 Notes exchange. In 2019, we also settled a pro rata share of the 2020 Notes Hedges corresponding to the amount of the 2020 Notes exchanged pursuant to the above-described exchange. We received proceeds of approximately $16.8 million related to the 2020 Notes Hedges and paid $11 million related to the 2020 Warrants, generating net proceeds of $5.8 million . Subsequent to the 2019 partial settlement, we had warrants which were exercisable for 1.9 million ordinary shares and the strike price of the warrants remained $38.8010 per ordinary share as of December 29, 2019 . Credit Agreement On December 23, 2016, we, together with WMG and certain of our other wholly-owned U.S. subsidiaries (collectively, Borrowers), entered into a Credit, Security and Guaranty Agreement with Midcap Financial Trust, as administrative agent (Agent) and a lender and the additional lenders from time to time party thereto, which agreement was subsequently amended in May 2018 and February 2019 (as amended, the Credit Agreement). On May 7, 2018, we amended and restated the Credit Agreement to add a $40 million term loan facility (Term Loan Facility). In February 2019, we amended the Credit Agreement to, among other things, increase the second tranche of the Term Loan Facility from $20 million to $35 million and to increase the line of credit from $150 million to $175 million . The Credit Agreement provides for a $175.0 million senior secured asset-based line of credit, subject to the satisfaction of a borrowing base requirement (ABL Facility) and a $55 million term loan facility (Term Loan Facility). The ABL Facility may be increased by up to $75.0 million upon the Borrowers’ request, subject to the consent of the Agent and each of the other lenders providing such increase. All borrowings under the ABL Facility are subject to the satisfaction of customary conditions, including the absence of default, the accuracy of representations and warranties in all material respects and the delivery of an updated borrowing base certificate. The initial $20 million term loan tranche was funded at closing in May 2018. The Borrowers may at any time borrow the second $35.0 million term loan tranche, but are required to do so no later than May 7, 2021. All borrowings under the Term Loan Facility are subject to the satisfaction of customary conditions, including the absence of default and the accuracy of representations and warranties in all material respects. The interest rate margin applicable to borrowings under the ABL Facility is, at the option of the Borrowers, equal to either (a) 3.25% for base rate loans or (b) 4.25% for LIBOR rate loans, subject to a 0.75% LIBOR floor. In addition to paying interest on the outstanding loans under the ABL Facility, the Borrowers also are required to pay a customary unused line fee equal to .50% per annum in respect of unutilized commitments and certain other customary fees related to Agent’s administration of the ABL Facility. Beginning January 1, 2017, the Borrowers were required to maintain a minimum drawn balance on the ABL Facility equal to 20% of the average borrowing base for each month. To the extent the actual drawn balance is less than 20% , the Borrowers must pay a fee equal to the amount the lenders under the ABL Facility would have earned had the Borrowers maintained a minimum drawn balance equal to 20% of the average borrowing base for such month. The Credit Agreement requires that the Borrowers calculate the borrowing base for the ABL Facility on at least a monthly basis and each time the Borrowers make a draw on the ABL Facility in accordance with the formula set forth in the Credit Agreement. The borrowing base is subject to adjustment and the implementation of reserves by the Agent in its permitted discretion, as further described in the Credit Agreement. If at any time the outstanding drawn balance under the ABL Facility exceeds the borrowing base as in effect at such time, Borrowers will be required to prepay loans under the ABL Facility in an amount equal to such excess. Certain accounts receivables and proceeds of collateral of the Borrowers will be applied to reduce the outstanding principal amount of the ABL Facility on a periodic basis. There is no scheduled amortization under the ABL Facility and (subject to borrowing base requirements and applicable conditions to borrowing) the available revolving commitment may be borrowed, repaid, and reborrowed without restriction. All outstanding loans under the ABL Facility will be due and payable in full on the date that is the earliest to occur of (x) December 23, 2021; (y) the date that is 91 days prior to the maturity d |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 29, 2019 | |
Accumulated Other Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Income (AOCI) | Accumulated Other Comprehensive Income (AOCI) Other comprehensive income (OCI) includes certain gains and losses that under US GAAP are included in comprehensive loss but are excluded from net loss as these amounts are initially recorded as an adjustment to shareholders’ equity. Amounts in OCI may be reclassified to net loss upon the occurrence of certain events. Our 2017 , 2018 , and 2019 OCI was comprised solely of foreign currency translation adjustments. Changes in AOCI for the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 were as follows (in thousands): Currency translation adjustment Balance at December 25, 2016 $ (19,461 ) Other comprehensive income 41,751 Balance at December 31, 2017 $ 22,290 Other comprehensive loss (30,373 ) Balance at December 30, 2018 $ (8,083 ) Other comprehensive loss (21,416 ) Balance at December 29, 2019 $ (29,499 ) |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of our loss from continuing operations before income taxes are as follows (in thousands): Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 U.S. $ (69,903 ) $ (144,987 ) $ (56,808 ) Foreign (9,263 ) (24,853 ) (43,097 ) Loss from continuing operations before income taxes $ (79,166 ) $ (169,840 ) $ (99,905 ) The components of our provision (benefit) for income taxes are as follows (in thousands): Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Current (benefit) provision: U.S.: Federal $ (13 ) $ 449 $ (23,781 ) State 232 251 390 Foreign 15,213 3,307 2,214 Total current provision (benefit) 15,432 4,007 (21,177 ) Deferred provision (benefit): U.S.: Federal 154 (2,841 ) (5,098 ) State 143 (663 ) (93 ) Foreign (2,761 ) (1,039 ) (8,600 ) Total deferred benefit (2,464 ) (4,543 ) (13,791 ) Total provision (benefit) for income taxes $ 12,968 $ (536 ) $ (34,968 ) A reconciliation of the statutory U.S. federal income tax rate to our effective income tax rate for continuing operations is as follows: Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Income tax benefit at statutory rate 21.0 % 21.0 % 35.0 % State income taxes 2.2 % 3.8 % 1.5 % Change in valuation allowance (18.3 )% (22.9 )% (3.5 )% CVR fair market value adjustment 0.1 % — % (1.9 )% Foreign income tax rate differential (17.9 )% (0.6 )% (6.1 )% Changes in tax reserves (0.3 )% 0.4 % 2.9 % Effects of U.S. tax reform — % — % 6.5 % Foreign rate changes — % — % 1.7 % U.S. R&D tax credit 2.0 % 0.7 % 0.6 % Nondeductible compensation (3.2 )% (0.7 )% (1.0 )% Other, net (2.0 )% (1.4 )% (0.7 )% Total (16.4 )% 0.3 % 35.0 % The significant components of our deferred income taxes as of December 29, 2019 and December 30, 2018 are as follows (in thousands): December 29, 2019 December 30, 2018 Deferred tax assets: Net operating loss carryforwards $ 340,451 $ 330,589 General business credit carryforwards 16,131 14,598 Reserves and allowances 50,278 56,675 Deferred interest 42,016 27,322 Share-based compensation expense 12,638 14,934 Convertible debt notes and conversion options 15,272 38,368 Other 3,857 3,616 Valuation allowance (423,037 ) (400,171 ) Total deferred tax assets 57,606 85,931 Deferred tax liabilities: Depreciation 5,025 5,095 Intangible assets 50,156 58,221 Convertible notes bond hedges 11,493 34,653 Other 304 166 Total deferred tax liabilities 66,978 98,135 Net deferred tax liabilities $ (9,372 ) $ (12,204 ) The 2017 Tax Act was enacted on December 22, 2017. The law included significant changes to the United States corporate income tax system, including a federal corporate rate reduction, limitations on the deductibility of certain expenses and the transition of United States international taxation from a worldwide tax system to a territorial tax system. The 2017 Tax Act imposed a tax on global intangible low-taxed income (GILTI) earned by U.S. controlled foreign subsidiaries. In accordance with FASB Staff Q&A, Topic 740, No. 5, we have elected to account for GILTI as a period expense in the year it is incurred. At December 29, 2019, we had net operating loss carryforwards for U.S. federal income tax purposes of approximately $1.1 billion , $172.5 million of which do not expire and $964.8 million which are subject to expiration. Of the U.S. net operating loss carryforwards subject to expiration, approximately $38.7 million will expire over the next 5 years and the remaining between 2025 and 2037, with the majority expiring after 2033. State net operating loss carryforwards at December 29, 2019 totaled approximately $1.1 billion, $21.5 million of which do not expire and $1.1 billion which begin to expire in 2020 and extend through 2039. Additionally, we had general business credit carryforwards of approximately $16.1 million , which begin to expire in 2022 and extend through 2039. At December 29, 2019, we had foreign net operating loss carryforwards of approximately $187.8 million , $90.8 million of which do not expire and $97.0 million which begin to expire in 2020 and extend through 2028. At December 29, 2019 and December 30, 2018, we had a valuation allowance of $423.0 million and $400.2 million , respectively, related to certain U.S. and foreign deferred tax assets. We realized a net increase in the valuation allowance of $22.8 million during the fiscal year ended December 29, 2019. The net increase was primarily due to the valuation allowance on projected U.S., French and Dutch current year taxable losses. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax planning strategies in making this assessment. Based upon the levels of historical taxable income, projections of future taxable income and the reversal of deferred tax liabilities over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that we will realize the benefits of these deductible differences, net of the existing valuation allowance. It is our current practice and intention to reinvest the earnings of our subsidiaries in those operations. Therefore, we do not provide for deferred taxes on the excess of the financial reporting over the tax basis in our investments in subsidiaries that are essentially permanent in duration. We would recognize a deferred income tax liability if we were to determine that such earnings are no longer indefinitely reinvested. Due to the number of tax jurisdictions involved, the complexity of our legal entity structure, and the complexity of the tax laws in the relevant jurisdictions, we believe it is not practicable to estimate the amount of additional taxes which may be payable upon distribution of these earnings, however it is not expected to be significant. Further, the 2017 Tax Act imposed a mandatory transition tax on accumulated foreign earnings of our U.S. controlled foreign subsidiaries and eliminated U.S. income taxes on distributions from U.S. controlled foreign subsidiaries. As of December 29, 2019, our unrecognized tax benefits totaled approximately $4.5 million . The total amount of net unrecognized tax benefits that, if recognized, would affect the tax rate was approximately $1.3 million at December 29, 2019. While we are currently not under audit in significant tax jurisdictions, it is reasonably possible that our unrecognized tax benefits could change in the next twelve months as a result of tax periods still open for examination and expirations of the statutes of limitations. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Fiscal year ended December 29, 2019 December 30, 2018 Balance at beginning of fiscal year $ 4,610 $ 6,025 Additions from acquisitions — 109 Additions for tax positions related to current year 473 385 Additions for tax positions of prior years 172 718 Reductions for tax positions of prior years (290 ) (490 ) Settlements (406 ) (1,983 ) Foreign currency translation (48 ) (154 ) Balance at end of fiscal year $ 4,511 $ 4,610 We accrue interest required to be paid by the tax law for the underpayment of taxes on the difference between the amount claimed or expected to be claimed on the tax return and the tax benefit recognized in the financial statements. Management has made the policy election to record this interest as interest expense and penalties, that if incurred, would be recognized as penalty expense within “Other expense (income)” on our consolidated statements of operations. As of December 29, 2019, accrued interest and penalties related to our unrecognized tax benefits totaled approximately $0.1 million . We file numerous consolidated and separate company income tax returns in the United States and in many foreign jurisdictions. With few exceptions, we are subject to U.S. federal, state, and local income tax examinations for years 2016 through 2018. We are no longer subject to foreign income tax examinations by tax authorities in significant jurisdictions for years before 2015. However, U.S. and foreign tax authorities have the ability to review years prior to these to the extent that we utilize tax attributes carried forward from those prior years. |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 12 Months Ended |
Dec. 29, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Supplemental Balance Sheet Disclosures | Other Balance Sheet Information Accrued expenses and other current liabilities consist of the following (in thousands): December 29, 2019 December 30, 2018 Employee bonuses $ 25,383 $ 28,953 Other employee benefits 25,194 22,841 Royalties 13,441 12,330 Taxes other than income 13,826 7,897 Notes Conversion Derivatives ( Note 6 ) 181,144 17,386 Commissions 18,025 19,356 Professional and legal fees 14,941 10,848 Contingent consideration ( Note 6 ) 11,982 3,427 Product liability and other legal accruals ( Note 17 ) 54,107 66,918 Other 28,982 27,125 $ 387,025 $ 217,081 |
Capital Stock and Earnings per
Capital Stock and Earnings per share | 12 Months Ended |
Dec. 29, 2019 | |
Earnings Per Share [Abstract] | |
Capital Stock and Earnings Per Share | Capital Stock and Earnings Per Share Our articles of association provide an authorized capital of €9.6 million divided into 320 million ordinary shares, each with a par value of three Euro cents ( €0.03 ). We had 128.6 million and 125.6 million ordinary shares issued and outstanding as of December 29, 2019 and December 30, 2018 , respectively. On November 4, 2019, we entered into a definitive agreement with Stryker and its subsidiary, Stryker B.V. Under the terms of the agreement, and upon the terms and subject to the conditions thereof, Stryker B.V. has commenced a tender offer to purchase all of the outstanding ordinary shares of Wright for $30.75 per share, without interest and less applicable withholding taxes, in cash. The obligation of Stryker and Stryker B.V. to consummate the Offer is subject to the tender of a minimum number of our outstanding shares in the related tender offer, the adoption of certain resolutions relating to the transaction at an extraordinary general meeting of Wright’s shareholders, receipt of applicable regulatory approvals and other customary conditions. At our 2019 annual general meeting of shareholders, our shareholders authorized our board of directors until June 28, 2021 to issue, or grant rights to purchase or subscribe for, our unissued ordinary shares up to 20% of our issued and outstanding shares at the time of issue, which is further divided into 10% for general corporate purposes (including potential mergers and acquisitions) and an additional 10% only for potential mergers and acquisitions. On August 27, 2018, we entered into an underwriting agreement with J.P. Morgan, relating to the registered public offering of 18.2 million ordinary shares, at an initial price to the public of $24.60 per share, for a total price of $448.9 million . The net proceeds to us were $423.0 million , after deducting underwriting discounts and commissions of $25.4 million and offering costs of $0.5 million . The offering closed on August 30, 2018. The proceeds were used to fund the purchase price of the Cartiva acquisition which closed on October 10, 2018, as well as costs and expenses related thereto. See Note 3 for additional details related to the Cartiva acquisition. FASB ASC Topic 260, Earnings Per Share, requires the presentation of basic and diluted earnings per share. Basic earnings per share is calculated based on the weighted-average number of ordinary shares outstanding during the period. Diluted earnings per share is calculated to include any dilutive effect of our ordinary share equivalents. For the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 , our ordinary share equivalents consisted of stock options, restricted stock units, performance share units, and warrants. The dilutive effect of the stock options, restricted stock units, performance share units, and warrants is calculated using the treasury-stock method. We had outstanding options to purchase 8.9 million ordinary shares, 1.2 million restricted stock units, and 0.8 million performance share units, assuming maximum performance, at December 29, 2019 ; outstanding options to purchase 9.9 million ordinary shares, 1.3 million restricted stock units, and 0.5 million performance share units, assuming maximum performance, at December 30, 2018 ; and outstanding options to purchase $10.0 million ordinary shares, $1.3 million restricted stock units, and 0.2 million performance share units, assuming maximum performance, at December 31, 2017 . We had outstanding net-share settled warrants on the 2020 Notes of 1.9 million , 6.2 million , 19.6 million ordinary shares at December 29, 2019 , December 30, 2018 , and December 31, 2017 , respectively. We also had net-share settled warrants on the 2021 Notes of 18.5 million ordinary shares at December 29, 2019 , December 30, 2018 , and December 31, 2017 . Finally, we had net-share settled warrants on the 2023 Notes of 24.4 million and 20.2 million ordinary shares at December 29, 2019 and December 30, 2018 , respectively. None of the options, restricted stock units, performance share units, or warrants were included in the calculation of diluted net loss from continuing operations per share, diluted loss from discontinued operations per share, and diluted net loss per share for the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 , because we recorded a net loss from continuing operations for all periods. Including these instruments would be anti-dilutive as the net loss from continuing operations is the control number in determining whether those potential common shares are dilutive or anti-dilutive. The weighted-average number of ordinary shares outstanding for basic and diluted earnings per share purposes is as follows (in thousands): Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Weighted-average number of ordinary shares outstanding-basic and diluted 126,601 112,592 104,531 |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 29, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation | Share-Based Compensation We currently have two share-based compensation plans under which share-based awards may be granted - the Wright Medical Group N.V. Amended and Restated 2017 Equity and Incentive Plan and the Wright Medical Group N.V. Amended and Restated Employee Stock Purchase Plan, which are described below. In addition, we have the Wright Medical Group N.V. Amended and Restated 2010 Incentive Plan and several legacy Wright and legacy Tornier share-based compensation plans and non-plan agreements under which stock options and restricted stock units are outstanding, but no future share-based awards may be granted. Amounts recognized in the consolidated financial statements with respect to share-based compensation are as follows: Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Total cost of share-based arrangements $ 32,836 $ 26,039 $ 19,485 Amounts capitalized into inventory (870 ) (507 ) (669 ) Amortization of capitalized amounts 601 588 577 Impact to net loss $ 32,567 $ 26,120 $ 19,393 Impact to basic and diluted loss per share $ 0.26 $ 0.23 $ 0.19 Weighted-average number of shares outstanding - basic and diluted 126,601 112,592 104,531 The compensation costs related to share-based awards were as follows: Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Stock options $ 13,116 $ 11,177 $ 8,988 Restricted stock units 12,651 11,514 9,373 Performance share units 6,166 2,538 441 Employee stock purchase plan 903 810 683 Total compensation cost for share-based awards $ 32,836 $ 26,039 $ 19,485 As of December 29, 2019 , we had $56.4 million of total unrecognized share-based compensation cost related to unvested share-based compensation arrangements. On November 4, 2019, we entered into a definitive agreement with Stryker and its subsidiary, Stryker B.V. Under the terms of the agreement, and upon the terms and subject to the conditions thereof, Stryker B.V. has commenced a tender offer to purchase all of the outstanding ordinary shares of Wright for $30.75 per share, without interest and less applicable withholding taxes, in cash. The obligation of Stryker and Stryker B.V. to consummate the Offer is subject to the tender of a minimum number of our outstanding shares in the related tender offer, the adoption of certain resolutions relating to the transaction at an extraordinary general meeting of Wright’s shareholders, receipt of applicable regulatory approvals and other customary conditions. Until the proposed transaction with Stryker closes, equity awards will continue to vest according to their terms. Unexercised options that are in-the-money, both vested and unvested, will fully vest at close and will be cancelled in exchange for a cash payment. All unvested restricted stock units and performance share units will vest at close and be cancelled in exchange for a cash payment as well. Equity Incentive Plans and Non-Plan Inducement Agreement The Wright Medical Group N.V. Amended and Restated 2017 Equity and Incentive Plan (the 2017 Plan), which is an amended and restated version of the Wright Medical Group N.V. 2017 Equity and Incentive Plan, was approved by our shareholders on June 28, 2019. The 2017 Plan authorizes us to grant a wide variety of share-based and cash-based awards, including incentive and non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance awards, cash-based awards, and other share-based awards. To date, only stock options, restricted stock units (RSUs), and performance share units (PSUs) have been granted. The options and RSUs granted to our employees generally have graded vesting periods of 4 years. The options and RSUs granted to our non-executive directors cliff vest on the one-year anniversary of the date of grant. All options are granted with exercise prices equal to the closing price of our ordinary shares on the date of grant, as reported by the Nasdaq Global Select Market, and expire 10 years after the grant date. The PSUs granted to our executive officers cliff vest after a three-year performance period only if certain minimum pre-established performance criteria are achieved and the number shares issued upon vesting depends upon the level of achievement of the performance criteria, with a cap of 200% of target levels. In recognition of the changed circumstances created by the Stryker acquisition and to encourage retention during the pendency of the acquisition, the compensation committee determined that all outstanding PSU awards will be deemed to have achieved the maximum performance criteria at 200% of target. The 2017 Plan reserves for issuance a number of ordinary shares equal to the sum of (i) 11,200,000 shares; (ii) 1,329,648 shares, which was the number of shares available for grant under the Wright Medical Group N.V. Amended and Restated 2010 Incentive Plan (the 2010 Plan) as of June 23, 2017, the date of shareholder approval of the Wright Medical Group N.V. 2017 Equity and Incentive Plan, but not subject to outstanding awards; and (iii) up to 6,405,992 shares subject to awards outstanding under the 2010 Plan as of June 23, 2017 that are subsequently forfeited or cancelled or expire or otherwise terminate without the issuance of such shares (the Carryover Shares). As of June 28, 2019, 520,656 of the 6,405,992 Carryover Shares under the 2010 Plan were carried over to the 2017 Plan. As of December 29, 2019 , 6,735,115 ordinary shares remained available for future grant of equity awards under the 2017 Plan, assuming maximum PSU payouts. As of December 29, 2019 , there were 10,444,606 ordinary shares covering awards outstanding under all of our equity incentive plans, including the 2017 Plan, the 2010 Plan and legacy Wright and legacy Tornier plans and one legacy Wright non-plan agreement, assuming maximum PSU payouts. The legacy Wright and legacy Tornier plans and the non-plan agreement include the Wright Medical Group, Inc. 2009 Equity Incentive Plan, as amended and restated, the Wright Medical Group, Inc. 1999 Equity Incentive Plan, as amended and restated, the Tornier N.V. Stock Option Plan, as amended and restated, and one legacy Wright non-plan inducement option agreement. All of these plans and the non-plan agreement were terminated with respect to future awards, and thus, no future share-based awards may be granted under any of these legacy plans and the non-plan agreement. All of the options issued under the legacy Wright plans and the non-plan agreement expire after 10 years from the date of grant. All outstanding awards under the legacy Wright plans and the non-plan agreement automatically vested on October 1, 2015 as a result of the Wright/Tornier merger; therefore, there are no restricted stock awards or RSUs outstanding at December 29, 2019 under these plans. However, there were 1,891,240 stock options outstanding as of December 29, 2019 under the legacy Wright plans and the non-plan agreement. Stock options We estimate the fair value of stock options using the Black-Scholes valuation model. The Black-Scholes option-pricing model requires the input of estimates, including the expected life of stock options, expected stock price volatility, the risk-free interest rate and the expected dividend yield. The expected life of options was estimated based on historical option exercise and employee termination data. The expected stock price volatility assumption was estimated based upon historical volatility of our ordinary shares for the combined company after the Wright/Tornier merger. The risk-free interest rate was determined using U.S. Treasury rates where the term is consistent with the expected life of the stock options. Expected dividend yield is not considered as we have never paid dividends and have no plans of doing so in the future. We are required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. We use historical data to estimate pre-vesting forfeitures and record share-based compensation expense only for those awards that are expected to vest. The fair value of stock options is amortized on a straight-line basis over the respective requisite service period, which is generally the vesting period. The weighted-average grant date fair value of stock options granted to employees in 2019, 2018, and 2017 was $9.33 per share, $9.32 per share, and $9.80 per share, respectively. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option valuation model using the following assumptions: Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Risk-free interest rate 1.5% - 2.4% 2.6% - 2.9% 1.9% - 2.0% Expected option life 6 years 7 years 6 years Expected price volatility 31% 32% 33% During 2019, 2018, and 2017, we did not grant any stock options to non-employees (other than our non-executive directors who received such grants in consideration of their director service). A summary of our stock option activity during 2019 is as follows: Shares (000’s) Weighted-average exercise price Weighted-average remaining contractual life Aggregate intrinsic value* ($000’s) Outstanding at December 30, 2018 9,203 $ 22.89 Granted 1,593 27.77 Exercised (2,152) 21.52 Forfeited or expired (236) 25.29 Outstanding at December 29, 2019 8,408 $ 24.10 6.52 $ 54,473 Exercisable at December 29, 2019 5,426 $ 22.86 5.24 $ 41,885 ________________________________ * The aggregate intrinsic value is calculated as the difference between the market value of our ordinary shares as of December 29, 2019 and the respective exercise prices of the options. The market value as of December 29, 2019 was $30.58 per share, which is the closing sale price of our ordinary shares on December 27, 2019 , the last trading day prior to December 29, 2019 , as reported by the Nasdaq Global Select Market. The total intrinsic value of options exercised during 2019, 2018, and 2017 was $17.9 million , $4.9 million , and $9.1 million , respectively. A summary of our stock options outstanding and exercisable at December 29, 2019 is as follows (shares in thousands): Options outstanding Options exercisable Range of exercise prices Number outstanding Weighted-average remaining Weighted-average exercise Number exercisable Weighted-average exercise $2.00 - $20.00 609 3.60 $ 17.89 556 $ 17.73 $20.01 - $21.00 1,708 5.36 20.63 1,675 20.64 $21.01 - $25.00 2,850 6.46 23.01 1,905 22.59 $25.01 - $32.00 3,241 7.72 28.06 1,290 28.36 8,408 6.52 $ 24.10 5,426 $ 22.86 Restricted stock units We calculate the grant date fair value of RSUs using the closing sale price of our ordinary shares on the grant date, as reported by the Nasdaq Global Select Market. We are required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. We use historical data to estimate pre-vesting forfeitures and record share-based compensation expense only for those awards that are expected to vest. The fair value of the unvested restricted stock units is recognized on a straight-line basis over the respective requisite service period, which is generally the vesting period. During 2019, 2018, and 2017, we granted 0.6 million , 0.6 million , 0.5 million RSUs to employees with weighted-average grant-date fair values of $27.90 , $24.05 , and $27.83 per share, respectively. During 2019, 2018, and 2017, we did not grant any RSUs to non-employees (other than our non-executive directors who received such grants in consideration of their director service). A summary of our RSU activity during 2019 is as follows: Shares (000’s) Weighted-average grant-date fair value Aggregate intrinsic value* ($000’s) Unvested at December 30, 2018 1,322 $ 23.90 Granted 598 27.90 Vested (589 ) 22.97 Forfeited (82 ) 25.51 Unvested at December 29, 2019 1,249 $ 26.16 $ 38,196 ___________________ * The aggregate intrinsic value is calculated as the market value of our ordinary shares as of December 29, 2019 . The market value as of December 29, 2019 was $30.58 per share, which is the closing sale price of our ordinary shares on December 27, 2019 , the last trading day prior to December 29, 2019 , as reported by the Nasdaq Global Select Market. The total fair value of shares underlying RSUs vested during 2019, 2018, and 2017 was $18.0 million , $12.2 million , and $9.0 million , respectively. Performance share units We calculate the grant date fair value of PSUs as the closing sale price of our ordinary shares on the grant date, as reported by the Nasdaq Global Select Market. Share-based compensation expense associated with outstanding PSUs is measured using the grant date fair value and is based on the estimated achievement of the established performance criteria at the end of each reporting period until the performance period ends, recognized on a straight-line basis over the performance period. Share-based compensation expense is only recognized for PSUs that we expect to vest, which we estimate based upon an assessment of the probability that the performance criteria will be achieved. The PSUs granted during the fiscal years ended December 29, 2019 , December 30, 2018, and December 31, 2017 have a three -year performance-based metric measured over a performance period from July 1, 2019 to June 26, 2022 , July 2, 2018 to June 25, 2021 , and June 26, 2017 to June 28, 2020 , respectively. Share-based compensation expense associated with outstanding PSUs is updated for actual forfeitures. In recognition of the changed circumstances created by the Stryker acquisition and to encourage retention during the pendency of the acquisition, the compensation committee determined that all outstanding PSU awards will be deemed to have achieved the maximum performance criteria at 200% of target. During 2019, 2018, and 2017, we granted 0.3 million , 0.3 million , and 0.2 million PSUs (based on an assumed maximum level of performance) to employees with a weighted-average grant-date fair value of $27.84 , $24.49 , and $27.86 per share, respectively. During 2019, 2018, and 2017, we did not grant any PSUs to non-employees. A summary of our PSU activity (based on an assumed maximum level of performance) during 2019 is as follows: Shares (000’s) Weighted-average grant-date fair value Aggregate intrinsic value* ($000’s) Unvested at December 30, 2018 466 $ 26.00 Granted 321 27.84 Vested — — Forfeited — — Unvested at December 29, 2019 787 $ 26.75 $ 24,076 ___________________ * The aggregate intrinsic value is calculated as the market value of our ordinary shares as of December 29, 2019 . The market value as of December 29, 2019 was $30.58 per share, which is the closing sale price of our ordinary shares on December 27, 2019 , the last trading day prior to December 29, 2019 , as reported by the Nasdaq Global Select Market. Non-plan inducement stock options On occasion, legacy Wright granted stock options under a non-plan inducement stock option agreement, in order to induce a candidate to commence employment with legacy Wright as a member of the executive management team. These options, which are fully vested, vested over a service period ranging from 3 to 4 years. All of the options granted under these non-plan agreements will expire 10 years from the date of grant. A summary of our non-plan inducement stock option activity during 2019 is as follows: Shares (000’s) Weighted-average exercise price Weighted-average remaining contractual life Aggregate intrinsic value* ($000’s) Outstanding at December 30, 2018 693 $ 15.66 Granted — — Exercised (209 ) 15.91 Forfeited or expired — — Outstanding at December 29, 2019 484 $ 15.55 1.72 $ 7,272 Exercisable at December 29, 2019 484 $ 15.55 1.72 $ 7,272 ________________________________ * The aggregate intrinsic value is calculated as the difference between the market value of our ordinary shares as of December 29, 2019 and the respective exercise prices of the options. The market value as of December 29, 2019 was $30.58 per share, which is the closing sale price of our ordinary shares on December 27, 2019 , the last trading day prior to December 29, 2019 , as reported by the Nasdaq Global Select Market. The total intrinsic value of options exercised during 2019, 2018, and 2017 was $2.9 million , $1.6 million , and $0.3 million , respectively. A summary of our non-plan inducement stock options outstanding and exercisable at December 29, 2019 is as follows (shares in thousands): Options outstanding Options exercisable Range of exercise prices Number outstanding Weighted-average remaining Weighted-average exercise Number exercisable Weighted-average exercise $15.00 - $18.00 484 1.72 $ 15.55 484 $ 15.55 Employee Stock Purchase Plan The Wright Medical Group N.V. Amended and Restated Employee Stock Purchase Plan (the ESPP), which is an amended and restated version of the Tornier N.V. 2010 Employee Stock Purchase Plan, was approved by our shareholders on June 28, 2016. Under the ESPP, we are authorized to issue and sell up to the sum of (i) 333,333 ordinary shares registered previously under the Tornier N.V. 2010 Employee Stock Purchase Plan and (ii) 216,667 additional ordinary shares approved under the ESPP. The total of 550,000 ordinary shares are authorized to be issued to employees of our company and certain designated subsidiaries who work at least 20 hours per week. Under the ESPP, there are two six-month offering periods during each calendar year, one beginning January 1 and ending on June 30, and the other beginning July 1 and ending on December 31. Under the terms of the ESPP, each eligible employee can choose each offering period to have up to 20% of his or her eligible earnings withheld to purchase up to 1,000 ordinary shares. The purchase price of the shares is 85% of the market price on the first or last trading day of the offering period, whichever is lower. As a result of the then pending Stryker acquisition, we suspended the operation of the ESPP effective as of December 31, 2019, which was the last day of the offering period that was in effect as of the date of the Stryker purchase agreement. As of December 29, 2019 , there were 214,225 ordinary shares available for future issuance under the ESPP. In applying the Black-Scholes methodology to purchase rights granted under the ESPP, we used the following assumptions: Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Risk-free interest rate 1.5% - 2.3% 2.3% - 2.8% 1.3% - 1.9% Expected life 6 months 6 months 6 months Expected price volatility 30% 31% 24% |
Retirement Plan Benefits
Retirement Plan Benefits | 12 Months Ended |
Dec. 29, 2019 | |
Postemployment Benefits [Abstract] | |
Retirement Benefit Plans | Retirement Benefit Plans During the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 , we offered a defined contribution retirement benefit plan for our U.S. based employees. Our defined contribution plan under Section 401(k) of the Internal Revenue Code of 1986, as amended (Code), covers U.S. employees who are 18 years of age and over. Under this plan, we have elected to make matching contributions to all eligible participants in an amount equal to 100% of the first three percent of eligible compensation, and 50% of the next two percent of eligible compensation, contributed to the Plan as deferral contributions. Employees are 100% vested in their rollover contributions, employer non-elective contributions, employer matching contributions, qualified non-elective contributions, deferral contributions, safe harbor matching employer contributions and any earnings thereon. The expense related to this plan recognized within our results from continuing operations was $7.2 million in 2019 , $6.2 million in 2018 , and $5.5 million in 2017 . |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 29, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Obligations We have entered into eight supply agreements for our products which include minimum purchase obligations. As of December 29, 2019 , we have minimum purchase obligations of $7.8 million for 2020, $7.3 million for each year 2021 through 2024, and $3.6 million for 2025 and 2026. Legal Contingencies The legal contingencies described in this footnote relate primarily to WMT, an indirect subsidiary of Wright Medical Group N.V., and are not necessarily applicable to Wright Medical Group N.V. or other affiliated entities. Maintaining separate legal entities within our corporate structure is intended to ring-fence liabilities. We believe our ring-fenced structure should preclude corporate veil-piercing efforts against entities whose assets are not associated with particular claims. As described below, our business is subject to various contingencies, including patent and other litigation and product liability claims. These contingencies could result in losses, including damages, fines, or penalties, any of which could be substantial. Although such matters are inherently unpredictable, and negative outcomes or verdicts can occur, we believe we have significant defenses in all of them and are vigorously defending all of them. However, we could incur judgments, pay settlements, or revise our expectations regarding the outcome of any matter. Such developments, if any, could have a material adverse effect on our results of operations in the period in which applicable amounts are accrued, or on our cash flows in the period in which amounts are paid, however, unless otherwise indicated, we do not believe any of them will have a material adverse effect on our financial position. Our legal contingencies are subject to significant uncertainties and, therefore, determining the likelihood of a loss or the measurement of a loss can be complex. We have accrued for losses that are both probable and reasonably estimable. Unless otherwise indicated, we are unable to estimate the range of reasonably possible loss in excess of amounts accrued. Our assessment process relies on estimates and assumptions that may prove to be incomplete or inaccurate. Unanticipated events and circumstances may occur that could cause us to change our estimates and assumptions. Patent Litigation On March 23, 2018, WMT filed suit against Paragon 28, Inc. (Paragon 28) in the United States District Court for the District of Colorado, alleging infringement of ten patents concerning orthopaedic plates, plating systems and instruments, and related methods of use. Our complaint seeks damages, injunctive relief and attorneys’ fees. On June 4, 2018, Paragon 28 filed an amended answer and counterclaim seeking declaratory judgment of non-infringement and invalidity of the patent-in-suit, and attorneys’ fees. On September 28, 2018, WMT filed an amended complaint adding claims against Paragon 28 for misappropriation of trade secrets and related wrongdoing. Paragon 28 filed a motion to dismiss those trade secret-related claims, which WMT opposed. On September 30, 2019, the Court issued an order granting in part and denying in part the motion to dismiss, leaving intact the majority of the trade secret-related claims. A motion for clarification of the order remains pending. In March 2019, Paragon 28 filed four petitions with the Patent Trial and Appeal Board seeking Inter Partes Reviews of the patents in question, which WMT opposed. On September 25, 2019 and October 4, 2019, the Patent Trial and Appeal Board granted Paragon 28’s petitions. Oral arguments are expected to be held in June 2020; after which time, the Patent Trial and Appeal Board will render a substantive decision on the merits of the petitions. Product Liability We have received claims for personal injury against us associated with fractures of the PROFEMUR ® titanium modular neck product (PROFEMUR ® Claims). As of December 29, 2019 , there were approximately 22 unresolved pending U.S. lawsuits and approximately 50 unresolved pending non-U.S. lawsuits alleging such claims ( 44 of which are part of a single consolidated class action lawsuit in Canada). The overall fracture rate for the product is low and the fractures appear, at least in part, to relate to patient demographics. In 2009, we began offering a cobalt-chrome version of the PROFEMUR ® modular neck, which has greater strength characteristics than the alternative titanium version. However, during the fiscal quarter ended September 30, 2011, as a result of an increase in the number and monetary amount of these claims, management estimated our liability to patients in the United States and Canada who have previously required a revision following a fracture of a PROFEMUR ® titanium modular neck, or who may require a revision in the future. As of December 29, 2019 , our accrual for PROFEMUR ® Claims totaled $12.1 million , of which $8.8 million is included in our consolidated balance sheet within “Accrued expenses and other current liabilities” and $3.3 million is included within “Other liabilities.” As of December 30, 2018 , our accrual for PROFEMUR ® Claims totaled $17.5 million , of which $12.3 million is included in our consolidated balance sheet within “Accrued expenses and other current liabilities” and $5.2 million is included within “Other liabilities.” We expect to pay the majority of these claims within the next two years . Any claims associated with this product outside of the United States and Canada, or for any other products, will be managed as part of our standard product liability accrual methodology on a case-by-case basis. We are aware that MicroPort has recalled a certain size of its cobalt chrome modular neck product as a result of alleged fractures. As of December 29, 2019 , there were seven pending U.S. lawsuits and seven pending non-U.S. lawsuits against us alleging personal injury resulting from the fracture of a cobalt chrome modular neck. These claims will be managed as part of our standard product liability accrual methodology on a case-by-case basis. Claims for personal injury have also been made against us associated with metal-on-metal hip products (primarily the CONSERVE ® product line). The pre-trial management of certain of these claims was consolidated in the federal court system, in the United States District Court for the Northern District of Georgia under multi-district litigation (MDL) and certain other claims by the Judicial Counsel Coordinated Proceedings in state court in Los Angeles County, California (JCCP and, together with the MDL, the Consolidated Metal-on-Metal Claims). Pursuant to previously disclosed settlement agreements with the Court-appointed attorneys representing plaintiffs in the MDL and JCCP described below (the MoM Settlement Agreements), the MDL and JCCP were closed to new cases effective October 18, 2017 and October 31, 2017, respectively. Excluding claims resolved in the MoM Settlement Agreements, as of December 29, 2019 , there were approximately 205 unresolved metal-on-metal hip cases pending in the U.S. This number includes cases ineligible for settlement under the MoM Settlement Agreements, cases which opted out of such settlements, post-settlement cases, tolled cases, and existing state court cases that were not part of the MDL or JCCP. As of December 29, 2019 , we estimate there also were pending approximately 27 unresolved non-U.S. metal-on metal hip cases, 9 unresolved U.S. modular neck cases alleging claims related to the release of metal ions, and zero non-U.S. modular neck cases with metal ion allegations. We also estimate that as of December 29, 2019 , there were approximately 514 non-revision claims either dismissed or awaiting dismissal from the MDL and JCCP, which dismissal is a condition of the MoM Settlement Agreements. Although there is a limited time period during which dismissed non-revision claims may be refiled, it is presently unclear how many non-revision claimants will elect to do so. As of December 29, 2019 , no dismissed non-revision cases have been refiled. We believe we have data that supports the efficacy and safety of these hip products. Every hip implant case, including metal-on-metal hip cases, involves fundamental issues of law, science, and medicine that often are uncertain, that continue to evolve, and which present contested facts and issues that can differ significantly from case to case. Such contested facts and issues include medical causation, individual patient characteristics, surgery specific factors, statutes of limitation, and the existence of actual, provable injury. As previously disclosed, between November 2016 and October 2017, WMT entered into three MoM Settlement Agreements with Court-appointed attorneys representing plaintiffs in the MDL and JCCP to settle a total of 1,974 cases that met the eligibility requirements of the MoM Settlement Agreements and were either pending in the MDL or JCCP, or subject to court-approved tolling agreements in the MDL or JCCP, for an aggregate sum of $339.2 million . As of December 29, 2019 , we had funded $333.4 million under the MoM Settlement Agreements. We, the indirect parent company of WMT, have guaranteed WMT’s obligations under the MoM Settlement Agreements. The MoM Settlement Agreements contain specific eligibility requirements and establish procedures for proof and administration of claims, negotiation, and execution of individual settlement agreements, determination of the final total settlement amount, and funding of individual settlement amounts by WMT. Eligibility requirements include, without limitation, that the claimant has a claim pending or tolled in the MDL or JCCP, that, with limited exceptions, the claimant has undergone a revision surgery within eight years of the original implantation surgery, and that the claim has not been identified by WMT as having possible statute of limitation issues. Claimants who have had bilateral revision surgeries will be counted as two claims but only to the extent both claims separately satisfy all eligibility criteria. The MoM Settlement Agreements were entered into solely as a compromise of the disputed claims being settled and are not evidence that any claim has merit nor are they an admission of wrongdoing or liability by WMT. WMT will continue to vigorously defend metal-on-metal hip claims not settled pursuant to the MoM Settlement Agreements. As of December 29, 2019 , our accrual for metal-on-metal claims totaled $40.5 million , of which $33.0 million is included in our consolidated balance sheet within “Accrued expenses and other current liabilities” and $7.5 million is included within “Other liabilities.” As of December 30, 2018 , our accrual for metal-on-metal claims totaled $74.5 million , of which $51.9 million was included in our consolidated balance sheet within “Accrued expenses and other current liabilities” and $22.6 million was included within “Other liabilities.” Our accrual is based on (i) case by case accruals for specific cases where facts and circumstances warrant, and (ii) the implied settlement values for eligible claims under the MoM Settlement Agreements. We are unable to reasonably estimate the high-end of a possible range of loss for claims which elected to opt out of the MoM Settlement Agreements. Claims we can confirm would meet the eligibility criteria set forth in the MoM Settlement Agreements but are excluded from the settlements due to the maximum settlement cap, or because they are cases not part of the MDL or JCCP, have been accrued consistent with the respective settlement rates. Due to the general uncertainties surrounding all metal-on metal claims as noted above, as well as insufficient information about individual claims, we are presently unable to reasonably estimate a range of loss for future claims; hence we have not accrued for these claims at the present time. We continue to believe the high-end of a possible range of loss for existing revision claims that do not meet eligibility criteria of the MoM Settlement Agreements will not, on an average per case basis, exceed the average per case accrual we take for revision claims we can confirm do meet eligibility criteria of the applicable settlement agreement. Future claims will be evaluated for accrual on a case by case basis using the accrual methodologies described above (which could change if future facts and circumstances warrant). We have maintained product liability insurance coverage on a claims-made basis. During the fiscal quarter ended September 30, 2012, we received a customary reservation of rights from Federal, our then primary product liability insurance carrier, asserting that certain present and future claims which allege certain types of injury related to the CONSERVE ® metal-on-metal hip products (CONSERVE ® Claims) would be covered as a single occurrence under the policy year the first such claim was asserted. The effect of this coverage position would have been to place CONSERVE ® Claims into a single prior policy year in which applicable claims-made coverage was available, subject to the overall policy limits then in effect. We notified Federal that we disputed its characterization of the CONSERVE ® Claims as a single occurrence, which resulted in multi-year insurance coverage litigation (the Tennessee Coverage Litigation) that has recently been resolved as discussed below. As previously disclosed, we entered into settlement agreements with all seven insurance carriers with whom metal-on-metal hip coverage was in dispute - Columbia Casualty Company, Travelers, AXIS Surplus Lines Insurance Company, Federal, Catlin Specialty Insurance Company, Catlin Underwriting Agencies Limited for and on behalf of Syndicate 2003 at Lloyd’s of London, and Lexington Insurance Company (Lexington), thus resolving in full the Tennessee Coverage Litigation and the separate litigation and arbitration proceedings with Lexington. As of December 29, 2019 , our insurance carriers have paid an aggregate of $120.4 million of insurance proceeds related to the metal-on-metal claims, including amounts received under the above referenced settlement agreements, of which $113.7 million has been paid directly to us and $6.7 million has been paid directly to claimants. Except as provided in such settlement agreements, our acceptance of the insurance proceeds was not a waiver of any other claim we may have against the insurance carriers unrelated to metal-on-metal coverage and our disputes with carriers relating thereto. Given the substantial or indeterminate amounts sought in these matters, and the inherent unpredictability of such matters, an adverse outcome in these matters in excess of the amounts included in our accrual for contingencies could have a material adverse effect on our financial condition, results of operations and cash flow. Future revisions to our estimates of these provisions could materially impact our results of operations and financial position. We use the best information available to determine the level of accrued product liabilities, and believe our accruals are adequate. Stryker Acquisition Related Litigation On January 15, 2020, John Thompson, a purported shareholder of our company, filed a putative class action lawsuit against us, members of our board of directors, Stryker B.V. and Stryker Corporation in the United States District Court for the District of Delaware, captioned Thompson v. Wright Medical Group N.V., et al., Case No. 1:20-cv-00061 (Thompson Complaint). The Thompson Complaint alleges that we and the members of our board of directors violated federal securities laws and regulations by failing to disclose material information in the Schedule 14D-9 filed in connection with the transactions contemplated by the Stryker purchase agreement, which they allege rendered the Schedule 14D-9 false and misleading. In addition, the Thompson Complaint alleges that members of our board of directors and Stryker acted as controlling persons of the company within the meaning and in violation of Section 20(a) of the Exchange Act to influence and control the dissemination of the allegedly defective Solicitation/Recommendation Statement. The Thompson Complaint seeks, among other things, an order enjoining consummation of the transactions contemplated by the Stryker purchase agreement; rescission of such transactions if they have already been consummated and rescissory damages; an order directing our board of directors to file a Solicitation/Recommendation Statement that does not contain any untrue statements of material fact and that states all material facts required in it or necessary to make the statements contained therein not misleading; a declaration that the defendants violated certain federal securities laws and regulations; and an award of plaintiff’s costs, including reasonable allowance for attorneys’ fees and experts’ fees. On January 31, 2020, William Grubb, a purported shareholder of our company, filed a putative class action lawsuit against us and members of our board of directors in the United States District Court for the Eastern District of New York, captioned Grubb v. Wright Medical Group N.V., et al., Case No. 1:20-cv-00553 (Grubb Complaint). The Grubb Complaint alleges that we and the members of our board of directors violated federal securities laws and regulations by failing to disclose material information in the Schedule 14D-9 filed in connection with the transactions contemplated by the Stryker purchase agreement, which the Grubb Complaint alleges rendered the Schedule 14D-9 false and misleading. In addition, the Grubb Complaint alleges that members of our board of directors acted as controlling persons of the company within the meaning and in violation of Section 20(a) of the Exchange Act to influence and control the dissemination of the allegedly defective Schedule 14D-9. The Grubb Complaint seeks, among other things, an order enjoining consummation of the transactions contemplated by the Stryker purchase agreement; rescission of such transactions if they have already been consummated and rescissory damages; a declaration that the defendants violated certain federal securities laws and regulations; and an award of plaintiff’s costs, including counsel fees and expenses and expert fees. Other In addition to those noted above, we are subject to various other legal proceedings, product liability claims, corporate governance, and other matters which arise in the ordinary course of business. |
Quarterly Results of Operations
Quarterly Results of Operations | 12 Months Ended |
Dec. 29, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations (unaudited) | Quarterly Results of Operations (unaudited): The following tables present a summary of our unaudited quarterly operating results for each of the four quarters in 2019 and 2018, respectively (in thousands). This information was derived from unaudited interim financial statements that, in the opinion of management, have been prepared on a basis consistent with the financial statements contained elsewhere in this report and include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of such information when read in conjunction with our audited financial statements and related notes. The operating results for any quarter are not necessarily indicative of results for any future period. 2019 First quarter Second quarter Third quarter Fourth quarter Net sales $ 230,127 $ 229,734 $ 212,434 $ 248,605 Cost of sales 46,317 48,338 44,441 49,545 Gross profit 183,810 181,396 167,993 199,060 Operating expenses: Selling, general and administrative 153,306 152,112 152,780 156,468 Research and development 16,972 18,756 18,045 20,312 Amortization of intangible assets 7,587 7,862 8,308 8,164 Total operating expenses 177,865 178,730 179,133 184,944 Operating income (loss) 5,945 2,666 (11,140 ) 14,116 Net loss from continuing operations, net of tax (30,256 ) (18,932 ) (36,200 ) (6,746 ) (Loss) income from discontinued operations, net of tax (6,345 ) 1,120 (7,589 ) (9,277 ) Net loss $ (36,601 ) $ (17,812 ) $ (43,789 ) $ (16,023 ) Net loss, continuing operations per share, basic and diluted $ (0.24 ) $ (0.15 ) $ (0.29 ) $ (0.05 ) Net loss income per share, basic and diluted $ (0.29 ) $ (0.14 ) $ (0.35 ) $ (0.13 ) Weighted-average number of shares outstanding-basic and diluted 125,812 126,267 126,767 127,557 Our 2019 operating income (loss) included the following: • transaction and transition costs totaling $0.4 million , $0.6 million , $0.6 million , and $4.7 million during the first, second, third, and fourth quarters of 2019, respectively, associated with the Cartiva acquisition and, during the fourth quarter, the proposed acquisition by Stryker; • a non-cash asset impairment associated with the technology transfer of $5.6 million during the third quarter of 2019; and • amortization of inventory step-up of $0.4 million in the first, second, and third quarter of 2019 associated with inventory acquired from the Cartiva acquisition. Our 2019 net loss from continuing operations included the following: • the after-tax effect of the above amounts within operating income (loss); • the after-tax effects of non-cash interest expense related to the amortization of the debt discount on our 2020 Notes, 2021 Notes and 2023 Notes totaling $12.3 million , $12.1 million , $12.3 million , and $12.6 million during the first, second, third, and fourth quarters of 2019, respectively; • the after-tax effects of a $14.3 million loss on the exchange of the cash convertible notes, primarily due to settlement of related conversion derivative liabilities, recognized in the first quarter of 2019; • the after-tax effects of our mark-to-market adjustments on derivative assets and liabilities totaling a $1.0 million gain, $0.8 million gain, $0.9 million loss, and $10.1 million gain recognized in the first, second, third, and fourth quarters of 2019, respectively; • the after-tax effects of non-cash foreign currency translation charges of $0.3 million gain, $0.0 million loss, $0.7 million gain, and $0.8 million loss during the first, second, third, and fourth quarters of 2019, respectively; • the after-tax effects of our fair value adjustments to contingent consideration totaling a $0.4 million loss, $1.7 million loss, $0.9 million loss, and $6.6 million loss in the first, second, third, and fourth quarters of 2019, respectively; • the after-tax effects of our CVR mark-to-market adjustments of $0.4 million gain recognized in the first quarter of 2019. The CVR agreement expired on March 1, 2019; • a tax provision of $2.6 million , $2.6 million , $2.6 million , and $2.3 million due to a change in tax rates on income from deferred intercompany transactions in the first, second, third, and fourth quarter of 2019, respectively; and 2018 First quarter Second quarter Third quarter Fourth quarter Net sales $ 198,537 $ 205,400 $ 194,106 $ 238,147 Cost of sales 41,139 45,558 44,307 49,149 Gross profit 157,398 159,842 149,799 188,998 Operating expenses: Selling, general and administrative 137,248 140,826 139,223 160,664 Research and development 13,899 14,665 13,829 16,749 Amortization of intangible assets 7,141 6,009 5,881 7,699 Total operating expenses 158,288 161,500 158,933 185,112 Operating (loss) income (890 ) (1,658 ) (9,134 ) 3,886 Net loss from continuing operations, net of tax (19,907 ) (90,621 ) (35,829 ) (22,947 ) (Loss) income from discontinued operations, net of tax (5,607 ) 22,923 (6,696 ) (10,821 ) Net loss $ (25,514 ) $ (67,698 ) $ (42,525 ) $ (33,768 ) Net loss, continuing operations per share, basic and diluted $ (0.19 ) $ (0.85 ) $ (0.32 ) $ (0.18 ) Net loss income per share, basic and diluted $ (0.24 ) $ (0.64 ) $ (0.38 ) $ (0.27 ) Weighted-average number of shares outstanding-basic and diluted 105,904 106,095 113,043 125,323 Our 2018 operating (loss) income included the following: • transaction and transition costs totaling $0.9 million , $1.3 million , $2.0 million , and $7.8 million during the first, second, third, and fourth quarters of 2018, respectively; and • amortization of inventory step-up of $0.4 million in the fourth quarter of 2018 associated with inventory acquired from the Cartiva acquisition. Our 2018 net loss from continuing operations included the following: • the after-tax effect of the above amounts within operating (loss) income; • the after-tax effects of non-cash interest expense related to the amortization of the debt discount on our 2020 Notes, 2021 Notes and 2023 Notes totaling $12.0 million , $12.3 million , $12.3 million , and $12.6 million during the first, second, third, and fourth quarters of 2018, respectively; • the after-tax effects of a $39.9 million non-cash loss on extinguishment of debt to write-off unamortized debt discount and deferred financing fees associated with the partial settlement of the 2020 Notes during the second quarter of 2018; • the after-tax effects of our mark-to-market adjustments on derivative assets and liabilities totaling a $1.7 million loss, $32.9 million loss, $0.2 million gain, and $1.6 million loss recognized in the first, second, third, and fourth quarters of 2018, respectively; • the after-tax effects of non-cash foreign currency translation charges of $0.8 million , $1.9 million , $0.2 million , and $0.3 million during the first, second, third, and fourth quarters of 2018, respectively; • the after-tax effects of our fair value adjustments to contingent consideration totaling a $0.4 million loss, $0.4 million loss, $0.3 million loss, and $0.7 million loss in the first, second, third, and fourth quarters of 2018, respectively; • the after-tax effects of our CVR mark-to-market adjustments of $3.9 million gain, $2.5 million gain, $3.4 million loss, and $3.2 million loss recognized in the first, second, third, and fourth quarters of 2018, respectively; • a tax benefit related to the realizability of deferred tax assets as result of the Cartiva acquisition of $3.6 million in the fourth quarter of 2018; • a tax provision of $2.7 million due to a change in judgment regarding our ability to realize certain deferred tax assets in the fourth quarter of 2018; and • a U.S. tax (benefit) provision within continuing operations recorded as a result of the pre-tax gain recognized within discontinued operations due to the $30.75 million insurance settlement totaling $(6.2) million , $2.2 million , and $3.8 million in the second, third, and fourth quarters of 2018, respectively. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 29, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Our management, including our Chief Executive Officer, who is our chief operating decision maker, manages our operations as three operating business segments: U.S. Lower Extremities & Biologics, U.S. Upper Extremities, and International Extremities & Biologics. We determined that each of these operating segments represented a reportable segment. Our Chief Executive Officer reviews financial information at the operating segment level to allocate resources and to assess the operating results and performance of each segment. Our U.S. Lower Extremities & Biologics segment consists of our operations focused on the sale in the United States of our lower extremities products, such as joint implants and bone fixation devices for the foot and ankle, and our biologics products used to support treatment of damaged or diseased bone, tendons, and soft tissues or to stimulate bone growth. Our U.S. Upper Extremities segment consists of our operations focused on the sale primarily in the United States of our upper extremities products, such as joint implants and bone fixation devices for the shoulder, elbow, wrist, and hand, and products used across several anatomic sites to mechanically repair tissue-to-tissue or tissue-to-bone injuries and other ancillary products. As the IMASCAP operations are managed by the U.S. Upper Extremities management team, results of operations and assets related to IMASCAP are included within the U.S. Upper Extremities segment. Our International Extremities and Biologics segment consists of our operations focused on the sale outside the United States of all lower and upper extremities products, including associated biologics products. Management measures segment profitability using an internal operating performance measure that excludes the impact of inventory step-up amortization and transaction and transition costs associated with acquisitions, as such items are not considered representative of segment results. We have determined that each reportable segment represents a reporting unit and, in accordance with ASC 350, each reporting unit requires an allocation of goodwill. As of December 29, 2019 , we have allocated $570.0 million , $625.9 million , and $65.1 million of goodwill to the U.S. Lower Extremities & Biologics, U.S. Upper Extremities, and International Extremities & Biologics reportable segments, respectively. Our principal geographic regions consist of the United States, EMEAC (which includes Europe, the Middle East, Africa, and Canada), and Other (which principally represents Asia, Australia, and Latin America). Net sales attributed to each geographic region are based on the location in which the products were sold. Net sales by geographic region by product line are as follows (in thousands): Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 United States Lower extremities $ 276,821 $ 250,735 $ 228,044 Upper extremities 329,787 281,314 239,965 Biologics 91,450 83,077 78,361 Sports med & other 8,231 8,412 8,141 Total United States $ 706,289 $ 623,538 $ 554,511 EMEAC Lower extremities $ 46,787 $ 46,342 $ 42,333 Upper extremities 90,420 87,647 73,243 Biologics 7,921 8,312 8,445 Sports med & other 9,761 11,074 13,751 Total EMEAC $ 154,889 $ 153,375 $ 137,772 Other Lower extremities $ 16,849 $ 14,407 $ 16,140 Upper extremities 27,984 26,813 21,456 Biologics 14,100 17,445 13,831 Sports med & other 789 612 1,279 Total other $ 59,722 $ 59,277 $ 52,706 Total net sales $ 920,900 $ 836,190 $ 744,989 No single foreign country accounted for more than 10% of our total net sales during 2019 , 2018 , and 2017 . Assets in the U.S. Upper Extremities, U.S. Lower Extremities & Biologics, and International Extremities & Biologics segments are those assets used exclusively in the operations of each business segment or allocated when used jointly. Assets in the Corporate category are principally cash and cash equivalents, derivative assets, property, plant and equipment associated with our corporate headquarters, assets associated with discontinued operations, product liability insurance receivables, and assets associated with income taxes. Total assets by business segment as of December 29, 2019 and December 30, 2018 are as follows (in thousands): December 29, 2019 U.S. Lower Extremities & Biologics U.S. Upper Extremities International Extremities & Biologics Corporate Total Total assets $ 952,187 $ 914,317 $ 292,929 $ 426,207 $ 2,585,640 December 30, 2018 U.S. Lower Extremities & Biologics U.S. Upper Extremities International Extremities & Biologics Corporate Total Total assets $ 940,075 $ 923,036 $ 272,127 $ 559,163 $ 2,694,401 Selected financial information related to our segments is presented below for the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 (in thousands): Fiscal year ended December 29, 2019 U.S. Lower Extremities & Biologics U.S. Upper Extremities International Extremities & Biologics Corporate 1 Total Net sales from external customers $ 371,791 $ 334,498 $ 214,611 $ — $ 920,900 Depreciation expense 10,950 12,728 14,939 25,532 64,149 Amortization expense — — — 31,921 31,921 Segment operating income (loss) $ 103,883 $ 123,539 $ (1,895 ) $ (200,974 ) $ 24,553 Other: Inventory step-up amortization 1,057 Transaction and transition costs 6,312 Non-cash asset impairment 5,597 Operating income 11,587 Interest expense, net 80,849 Other expense, net 9,904 Loss before income taxes $ (79,166 ) Capital expenditures $ 41,585 $ 20,395 $ 25,723 $ 11,583 $ 99,286 Fiscal year ended December 30, 2018 U.S. Lower Extremities & Biologics U.S. Upper Extremities International Extremities & Biologics Corporate 1 Total Net sales from external customers $ 337,433 $ 286,105 $ 212,652 $ — $ 836,190 Depreciation expense 11,131 12,439 13,004 22,923 59,497 Amortization expense — — — 26,730 26,730 Segment operating income (loss) $ 96,153 $ 97,644 $ 1,492 $ (190,720 ) $ 4,569 Other: Inventory step-up amortization 352 Transaction and transition costs 12,013 Operating loss (7,796 ) Interest expense, net 80,247 Other expense, net 81,797 Loss before income taxes $ (169,840 ) Capital expenditures $ 21,153 $ 26,346 $ 17,566 $ 6,402 $ 71,467 Fiscal year ended December 31, 2017 U.S. Lower Extremities & Biologics U.S. Upper Extremities International Extremities & Biologics Corporate 1 Total Net sales from external customers $ 309,713 $ 244,798 $ 190,478 $ — $ 744,989 Depreciation expense 12,532 10,211 12,366 21,723 56,832 Amortization expense — — — 28,396 28,396 Segment operating income (loss) $ 79,889 $ 78,866 $ 3,631 $ (178,642 ) $ (16,256 ) Other: Transaction and transition costs 12,400 Incentive and indirect tax projects (8,965 ) Operating loss (19,691 ) Interest expense, net 74,644 Other expense, net 5,570 Loss before income taxes $ (99,905 ) Capital expenditures $ 19,355 $ 22,897 $ 19,555 $ 1,667 $ 63,474 __________________________ 1 |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 29, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SEC Schedule, 12-09, Schedule of Valuation and Qualifying Accounts Disclosure | Wright Medical Group N.V. Schedule II-Valuation and Qualifying Accounts (In thousands) Balance at Beginning of Period Charged to Cost and Expenses Deductions and Other Balance at End of Period Allowance for doubtful accounts: For the period ended: December 29, 2019 $ 3,045 $ 490 $ (90 ) $ 3,445 December 30, 2018 $ 4,328 $ 189 $ (1,472 ) $ 3,045 December 31, 2017 $ 4,469 $ 1,243 $ (1,384 ) $ 4,328 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 29, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of consolidation. The accompanying consolidated financial statements include our accounts and those of our controlled subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of estimates. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The most significant areas requiring the use of management estimates relate to revenue recognition, the determination of allowances for doubtful accounts and excess and obsolete inventories, accounting for business combinations and the evaluation of goodwill and long-lived assets, valuation of in-process research and development, product liability claims, product liability insurance recoveries and other litigation, income taxes, and share-based compensation. |
Discontinued Operations | Discontinued operations. On January 9, 2014, pursuant to an Asset Purchase Agreement, dated as of June 18, 2013 (the MicroPort Agreement), by and among us and MicroPort, we completed the divestiture and sale of our business operations operating under our prior OrthoRecon operating segment (the OrthoRecon Business) to MicroPort. Pursuant to the terms of the MicroPort Agreement, the purchase price (as defined in the agreement) for the OrthoRecon Business was approximately $283.0 million (including a working capital adjustment), which MicroPort paid in cash. All historical operating results for the OrthoRecon business are reflected within discontinued operations in the consolidated statements of operations. See Note 4 for further discussion of discontinued operations. Other than Note 4 , unless otherwise stated, all discussion of assets and liabilities in these Notes to the Consolidated Financial Statements reflect the assets and liabilities held and used in our continuing operations, and all discussion of revenues and expenses reflect those associated with our continuing operations. |
Cash and Cash Equivalents | Cash and cash equivalents. Cash and cash equivalents include all cash balances and short-term investments with original maturities of three months or less. Any such investments are readily convertible into known amounts of cash, and are so near their maturity that they present insignificant risk of changes in value because of interest rate variation. |
Inventory | Inventories. Our inventories are valued at the lower of cost or market on a FIFO basis. Inventory costs include material, labor costs, and manufacturing overhead. We regularly review inventory quantities on hand for excess and obsolete inventory, and, when circumstances indicate, we incur charges to write down inventories to their net realizable value. Historically, our excess and obsolete inventory reserve was based on both the current age of kit inventory as compared to its estimated life cycle and our forecasted product demand and production requirements for other inventory items for the next 36 months. During the quarter ended September 29, 2019, we changed our estimate of excess and obsolete inventory reserves to better reflect the future usage for inventory in excess of estimated three-year demand. The impact of this change in estimate was approximately $26 million . We reduce our inventory reserve and recognize an offset to cost of sales as the related inventory is sold based on an estimated inventory turnover period of 2.5 years. |
Commitments and Contingencies | Product liability claims and related insurance recoveries and other litigation. We are involved in legal proceedings involving product liability claims as well as contract, patent protection, and other matters. See Note 17 for additional information regarding product liability claims, product liability insurance recoveries, and other litigation. We make provisions for claims specifically identified for which we believe the likelihood of an unfavorable outcome is probable and the amount of loss can be estimated. For unresolved contingencies with potentially material exposure that are deemed reasonably possible, we evaluate whether a potential loss or range of loss can be reasonably estimated. Our evaluation of these matters is the result of a comprehensive process designed to ensure that recognition of a loss or disclosure of these contingencies is made in a timely manner. In determining whether a loss should be accrued or a loss contingency disclosed, we evaluate a number of factors including: the procedural status of each lawsuit; any opportunities for dismissal of the lawsuit before trial; the amount of time remaining before trial date; the status of discovery; the status of settlement; arbitration or mediation proceedings; and management’s estimate of the likelihood of success prior to or at trial. The estimates used to establish a range of loss and the amounts to accrue are based on previous settlement experience, consultation with legal counsel, and management’s settlement strategies. If the estimate of a probable loss is in a range and no amount within the range is more likely, we accrue the minimum amount of the range. We recognize legal fees as an expense in the period incurred. These expenses are reflected in either continuing or discontinued operations depending on the product associated with the claim. We record insurance recoveries from product liability insurance that is in force when they are realized or realizable, when we believe it is probable that the insurance carrier will settle the claim. |
Property, Plant and Equipment | Property, plant and equipment. Our property, plant and equipment is stated at cost. Depreciation, which includes amortization of assets under finance lease, is generally provided on a straight-line basis over the estimated useful lives generally based on the following categories: Land improvements 15 to 25 years Buildings and building improvements 10 to 40 years Machinery and equipment 3 to 14 years Furniture, fixtures and office equipment 3 to 14 years Surgical instruments 6 years Expenditures for major renewals and betterments, including leasehold improvements, that extend the useful life of the assets are capitalized and depreciated over the remaining life of the asset or lease term, if shorter. Maintenance and repair costs are charged to expense as incurred. Upon sale or retirement, the asset cost and related accumulated depreciation are eliminated from the respective accounts and any resulting gain or loss is included in income. |
Impairment or Disposal of Long-Lived Assets | Valuation of long-lived assets. Management periodically evaluates carrying values of long-lived assets, including property, plant and equipment and finite-lived intangible assets, when events and circumstances indicate that these assets may have been impaired. We account for the impairment of long-lived assets in accordance with FASB ASC 360 . Accordingly, we evaluate impairment of our long-lived assets based upon an analysis of estimated undiscounted future cash flows. If it is determined that a change is required in the useful life of an asset, future depreciation and amortization is adjusted accordingly. Alternatively, should we determine that an asset is impaired, an adjustment would be charged to income based on the difference between the asset’s fair market value and the asset’s carrying value. |
Goodwill and Intangible Assets | Intangible assets and goodwill. Goodwill is recognized for the excess of the purchase price over the fair value of net assets of businesses acquired. FASB ASC 350-30-35-18 requires companies to evaluate for impairment intangible assets not subject to amortization, such as our IPRD assets, if events or changes in circumstances indicate than an asset might be impaired. Further, FASB ASC 350-20-35-30 requires companies to evaluate goodwill and intangibles not subject to amortization for impairment between annual impairment tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Unless circumstances otherwise dictate, the annual impairment test is performed on October 1 each year. See Note 8 for discussion of our 2019 goodwill impairment analysis. Our intangible assets with estimable useful lives are amortized on a straight-line basis over their respective estimated useful lives to their estimated residual values. This method of amortization approximates the expected future cash flow generated from their use. Finite-lived intangibles are reviewed for impairment in accordance with FASB ASC Section 360, Property, Plant and Equipment (FASB ASC 360). The weighted average amortization periods for our intangible assets are as follows: Completed technology 10 years Trademarks 5 years Licenses 10 years Customer relationships 17 years Non-compete agreements 4 years Other intangible assets 6 years |
Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts | Allowances for doubtful accounts. We experience credit losses on our accounts receivable; and accordingly, we must make estimates related to the ultimate collection of our accounts receivable. Specifically, we analyze our accounts receivable, historical bad debt experience, customer concentrations, customer creditworthiness, and current economic trends when evaluating the adequacy of our allowance for doubtful accounts. |
Concentration Risk, Credit Risk | Concentration of credit risk. Financial instruments that potentially subject us to concentrations of credit risk consist principally of accounts receivable. Management attempts to minimize credit risk by reviewing customers’ credit history before extending credit and by monitoring credit exposure on a regular basis. Collateral or other security is generally not required for accounts receivable. |
Income Tax | Income taxes. Income taxes are accounted for pursuant to the provisions of FASB ASC Section 740, Income Taxes (FASB ASC 740). Our effective tax rate is based on income by tax jurisdiction, statutory rates, and tax saving initiatives available to us in the various jurisdictions in which we operate. Significant judgment is required in determining our effective tax rate and evaluating our tax positions. This process includes assessing temporary differences resulting from differing recognition of items for income tax and financial accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheet. The measurement of deferred tax assets is reduced by a valuation allowance if, based upon available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. See Note 12 for further discussion of our consolidated deferred tax assets and liabilities, and the associated valuation allowance. We provide for unrecognized tax benefits based upon our assessment of whether a tax position is “more-likely-than-not” to be sustained upon examination by the tax authorities. If a tax position meets the more-likely-than-not standard, then the related tax benefit is measured based on a cumulative probability analysis of the amount that is more-likely-than-not to be realized upon ultimate settlement or disposition of the underlying tax position. In December 2017, the United States enacted new legislation under the 2017 Tax Act. We recognized the income tax effects of the 2017 Tax Act in our 2017 financial statements in accordance with Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allowed us to record provisional amounts under a one-year measurement period. We finalized our accounting for the provisions of the 2017 Tax Act in the fourth quarter 2018 with no material impact on our financial statements. During 2018, we have adopted ASU 2018-02, Reclassification of Certain Income Tax Effects from Accumulated Other Comprehensive Income , issued in February 2018, allowing the reclassification of income tax effects of the 2017 Tax Act, referred to as “stranded tax effects” by FASB, from accumulated other comprehensive income (AOCI) to retained earnings. This adoption did not have a material impact on our financial statements. Other taxes. Taxes assessed by a governmental authority that are imposed concurrent with our revenue transactions with customers are presented on a net basis in our consolidated statements of operations. |
Revenue from Contract with Customer | Revenue recognition. Our revenues are primarily generated through two types of customers, hospitals and surgery centers and stocking distributors, with the majority of our revenue derived from sales to hospitals and surgery centers. Our products are sold through a network of employee and independent sales representatives in the United States and by a combination of employee sales representatives, independent sales representatives, and stocking distributors outside the United States. We record revenues from sales to hospitals and surgery centers upon transfer of control of promised products in an amount that reflects the consideration we expect to receive in exchange for those products, which is generally when the product is surgically implanted in a patient. We record revenues from sales to our stocking distributors at a point in time upon transfer of control of promised products to the distributor. Our stocking distributors, who sell the products to their customers, take control of the products and assume all risks of ownership upon transfer. Our stocking distributors are obligated to pay us within specified terms regardless of when, if ever, they sell the products. In general, our stocking distributors do not have any rights of return or exchange; however, in limited situations, we have repurchase agreements with certain stocking distributors. Those certain agreements require us to repurchase a specified percentage of the inventory purchased by the distributor within a specified period of time prior to the expiration of the contract. During those specified periods, we defer the applicable percentage of the sales. An insignificant amount of sales related to these types of agreements was deferred and not yet recognized as revenue as of December 29, 2019 and December 30, 2018 . Shipping and handling costs . We incur shipping and handling costs associated with the shipment of goods to customers, independent distributors, and our subsidiaries. Amounts billed to customers for shipping and handling of products are included in net sales. Costs incurred related to shipping and handling of products to customers are included in selling, general and administrative expenses. Shipping and handling costs within selling, general and administrative expenses totaled $53.1 million , $52.0 million , and $49.4 million for the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 , respectively. These amounts include instrument depreciation which totaled $30.6 million , $28.4 million , and $27.1 million for the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 , respectively. All other shipping and handling costs are included in cost of sales. |
Research and Development Expense | Research and development costs. Research and development costs are charged to expense as incurred. |
Foreign Currency Transactions and Translations | Foreign currency translation. The financial statements of our subsidiaries whose functional currency is the local currency are translated into U.S. dollars using the exchange rate at the balance sheet date for assets and liabilities and the weighted average exchange rate for the applicable period for revenues, expenses, gains, and losses. Translation adjustments are recorded as a separate component of comprehensive loss in shareholders’ equity. Gains and losses resulting from transactions denominated in a currency other than the local functional currency are included in “ Other expense, net ” in our consolidated statements of operations. |
Comprehensive Income | Comprehensive income. Comprehensive income is defined as the change in equity during a period related to transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. The difference between our net loss and our comprehensive loss is attributable to foreign currency translation. |
Share-based Compensation | Share-based compensation. We account for share-based compensation in accordance with FASB ASC Section 718, Compensation — Stock Compensation (FASB ASC 718). Under the fair value recognition provisions of FASB ASC 718, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. The determination of the fair value of share-based payment awards, such as options, on the date of grant using an option-pricing model is affected by our stock price, as well as assumptions regarding a number of complex and subjective variables, which include the expected life of the award, the expected stock price volatility over the expected life of the awards, expected dividend yield, and risk-free interest rate. The determination of the fair value of performance-based share-based payment awards, such as performance share units, is based on the estimated achievement of the established performance criteria on the date of grant and updated at the end of each reporting period until the performance period ends. Share-based compensation expense is only recognized for performance share units that we expect to vest, which we estimate based upon an assessment of the probability that the performance criteria will be achieved. |
Derivatives | Derivative instruments. We account for derivative instruments and hedging activities under FASB ASC Section 815, Derivatives and Hedging (FASB ASC 815). Accordingly, all of our derivative instruments are recorded in the accompanying consolidated balance sheets as either an asset or liability and measured at fair value. The changes in the derivative’s fair value are recognized currently in earnings unless specific hedge accounting criteria are met. During 2017, we employed a derivative program using foreign currency forward contracts to mitigate the risk of currency fluctuations on our intercompany receivable and payable balances that were denominated in foreign currencies. These forward contracts were expected to offset the transactional gains and losses on the related intercompany balances. These forward contracts were not designated as hedging instruments under FASB ASC 815. Accordingly, the changes in the fair value and the settlement of the contracts were recognized in the period incurred in the accompanying consolidated statements of operations. We discontinued our foreign currency forward contracts derivative program in 2018. We recorded a net loss of approximately $4.6 million on our foreign currency contracts for the fiscal year ended December 31, 2017. These losses substantially offset translation gains recorded on our intercompany receivable and payable balances, and are also included in “ Other expense, net .” On February 13, 2015, May 20, 2016, and June 28, 2018, we issued the 2020 Notes, 2021 Notes, and 2023 Notes (collectively, the Notes), respectively, as defined and described in Note 10 . The 2020 Notes Conversion Derivatives, 2021 Notes Conversion Derivatives, and 2023 Notes Conversion Derivatives each as defined and described in Note 6 , require bifurcation from the 2020 Notes, 2021 Notes, and 2023 Notes in accordance with ASC Topic 815, and are accounted for as derivative liabilities. We also entered into 2020, 2021, and 2023 Notes Hedges, as defined and described in Note 6 , in connection with the issuance of the 2020, 2021, and 2023 Notes. The 2020, 2021, and 2023 Notes Hedges, which are cash-settled, are intended to reduce our exposure to potential cash payments that we are required to make upon conversion of the 2020, 2021, and 2023 Notes in excess of the principal amount of converted notes if our ordinary share price exceeds the conversion price. The 2020, 2021, and 2023 Notes Hedges are accounted for as derivative assets in accordance with ASC Topic 815. |
New Accounting Pronouncements | Recent Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers , and has subsequently issued several supplemental and/or clarifying ASUs (collectively ASC 606). Accounting Standards Codification (ASC) 606 prescribes a single common revenue standard that replaces most existing US GAAP revenue recognition guidance. ASC 606 outlines a five-step model, under which we recognize revenue as performance obligations within a customer contract are satisfied. ASC 606 is intended to provide more consistent interpretation and application of the principles outlined in the standard across filers in multiple industries and within the same industries compared to current practices, which should improve comparability. We adopted ASC 606 during 2018. Revenue is recognized at a point in time, generally upon surgical implantation or shipment of products to distributors. Therefore, adoption of ASC 606 did not have a material effect on our consolidated financial statements except for the additional disclosures included within Note 19 . On February 25, 2016, the FASB issued ASU 2016-02, Leases , and has subsequently issued several supplemental and/or clarifying ASUs (collectively ASC 842). ASC 842 introduced a lessee model that brings most leases on the balance sheet. The new standard also aligns many of the underlying principles of the new lessor model with those in FASB ASC 606, the FASB’s new revenue recognition standard (e.g., those related to evaluating when profit can be recognized). Furthermore, ASC 842 addresses other concerns related to the current leases model. We adopted ASC 842 during 2019 using the hindsight practical expedient, the practical expedient for short-term leases, and the practical expedient package which primarily limited the need for reassessing lease classification on existing leases and allowed us to issue our financial statements showing comparative lease disclosures under previous GAAP. See additional details related to the impact of this adoption in Note 9 . On June 16, 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments and has subsequently issued several supplemental and/or clarifying ASUs. The new standard adds an impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. The ASU will be effective for us beginning in fiscal year 2020. We do not believe this guidance will have a significant impact on our consolidated financial statements. On August 29, 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) to provide guidance on implementation costs incurred in a cloud computing arrangement (CCA) that is a service contract. Specifically, the ASU amends ASC 350 to include in its scope implementation costs of a CCA that is a service contract and clarifies that a customer should apply ASC 350-40, Internal Use Software , to determine which implementation costs should be capitalized in such a CCA. The ASU will be effective for us beginning in fiscal year 2020. We do not believe this guidance will have a significant impact on our consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of Property, Plant and Equipment | Property, plant and equipment. Our property, plant and equipment is stated at cost. Depreciation, which includes amortization of assets under finance lease, is generally provided on a straight-line basis over the estimated useful lives generally based on the following categories: Land improvements 15 to 25 years Buildings and building improvements 10 to 40 years Machinery and equipment 3 to 14 years Furniture, fixtures and office equipment 3 to 14 years Surgical instruments 6 years |
Weighted Average Amortization Periods of Intangible Assets | The weighted average amortization periods for our intangible assets are as follows: Completed technology 10 years Trademarks 5 years Licenses 10 years Customer relationships 17 years Non-compete agreements 4 years Other intangible assets 6 years |
Schedule of Cash Flow, Supplemental Disclosures | Supplemental cash flow information. Cash paid for interest and income taxes was as follows (in thousands): Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Interest $ 28,523 $ 30,552 $ 24,641 Income taxes $ 6,084 $ 6,254 $ 7,359 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Business Combinations [Abstract] | |
Preliminary Allocation of the Purchase Consideration to the Assets Acquired and Liabilities Assumed | The following presents the allocation of the purchase consideration to the assets acquired and liabilities assumed on October 10, 2018 (in thousands): Cash and cash equivalents $ 309 Accounts receivable 4,352 Inventories 2,686 Other current assets 486 Property, plant and equipment 1,446 Intangible assets 81,000 Total assets acquired 90,279 Current liabilities (4,226 ) Deferred income taxes (3,622 ) Total liabilities assumed (7,848 ) Net assets acquired $ 82,431 Goodwill 351,445 Total purchase consideration $ 433,876 The following presents the allocation of the purchase consideration to the assets acquired and liabilities assumed on December 14, 2017 (in thousands): Cash and cash equivalents $ 2,559 Accounts receivable 102 Other current assets 925 Property, plant and equipment 20 Intangible assets 10,865 Total assets acquired 14,471 Current liabilities (2,173 ) Long-term debt (886 ) Deferred income taxes (2,343 ) Total liabilities assumed (5,402 ) Net assets acquired $ 9,069 Goodwill 71,064 Total purchase consideration $ 80,133 |
Business Acquisition, Pro Forma Information | The pro forma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisition had occurred as of December 26, 2016 or that may be obtained in the future, and do not reflect future synergies, integration costs, or other such costs or savings. (in thousands) Fiscal year ended December 30, 2018 December 31, 2017 Net sales $ 861,475 $ 769,111 Net loss from continuing operations (179,800 ) (68,722 ) |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The following table summarizes the results of discontinued operations for the OrthoRecon business (in thousands): Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Net sales $ — $ — $ — Selling, general and administrative 22,091 (746 ) 135,235 (Loss) income from discontinued operations before income taxes (22,091 ) 746 (135,235 ) Provision (benefit) for income taxes — 221 (1,707 ) Total (loss) income from discontinued operations, net of tax $ (22,091 ) $ 525 $ (133,528 ) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following (in thousands): December 29, 2019 December 30, 2018 Raw materials $ 12,681 $ 9,612 Work-in-process 27,528 26,839 Finished goods 158,165 144,239 $ 198,374 $ 180,690 |
Derivatives and Fair Value of_2
Derivatives and Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Derivative Assets at Fair Value | The following table summarizes the fair values and the presentation in our consolidated balance sheets (in thousands) of our Notes Hedges and our Notes Conversion Derivatives: December 29, 2019 December 30, 2018 Location on consolidated balance sheet Amount Location on consolidated balance sheet Amount 2023 Notes Hedges Other assets $ 39,240 Other assets $ 115,923 2023 Notes Conversion Derivative Other liabilities $ 31,555 Other liabilities $ 116,833 2021 Notes Hedges Other current assets $ 183,437 Other assets $ 188,301 2021 Notes Conversion Derivative Accrued expenses and other current liabilities $ 179,478 Other liabilities $ 187,539 2020 Notes Hedges Other current assets $ 1,969 Other current assets $ 17,822 2020 Notes Conversion Derivative Accrued expenses and other current liabilities $ 1,666 Accrued expenses and other current liabilities $ 17,386 |
Derivative Instruments, Gain (Loss) | The following table summarizes the net gain (loss) on changes in fair value (in thousands) related to the Notes Hedges and Notes Conversion Derivatives: Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 2023 Notes Hedges $ (106,827 ) $ (25,355 ) $ — 2023 Notes Conversion Derivative 114,153 7,792 — 2021 Notes Hedges (4,864 ) 61,238 (32,032 ) 2021 Notes Conversion Derivative 8,061 (61,391 ) 35,453 2020 Notes Hedges 996 7,342 (32,199 ) 2020 Notes Conversion Derivative (557 ) (28,897 ) 33,626 Net gain (loss) on changes in fair value $ 10,962 $ (39,271 ) $ 4,848 |
Fair Value Measurement Inputs and Valuation Techniques | The following assumptions were used in the fair market valuations as of December 29, 2019 : 2020 Notes Conversion Derivative 2020 Notes 2021 Notes Conversion Derivative 2021 Notes Hedge 2023 Notes Conversion Derivative 2023 Notes Hedge Black Stock Volatility (1) 14.92% 14.92% 21.89% 21.89% 9.99% 9.99% Credit Spread for Wright (2) 0.83% N/A 0.83% N/A 0.42% N/A Credit Spread for Deutsche Bank AG (3) N/A 0.27% N/A N/A N/A 0.49% Credit Spread for Wells Fargo Securities, LLC (3) N/A 0.12% N/A N/A N/A N/A Credit Spread for JPMorgan Chase Bank (3) N/A 0.13% N/A 0.19% N/A 0.22% Credit Spread for Bank of America (3) N/A N/A N/A 0.19% N/A 0.21% (1) Volatility selected based on historical and implied volatility of ordinary shares of Wright Medical Group N.V. (2) Credit spread implied from traded price. (3) Credit spread of each bank is estimated using CDS curves. Source: Bloomberg. |
Fair Value Financial Instruments | The following tables summarize the valuation of our financial instruments (in thousands): Total Quoted prices in active markets (Level 1) Prices with other observable inputs (Level 2) Prices with unobservable inputs (Level 3) December 29, 2019 Assets Cash and cash equivalents $ 166,856 $ 166,856 $ — $ — 2020 Notes Hedges 1,969 — — 1,969 2021 Notes Hedges 183,437 — — 183,437 2023 Notes Hedges 39,240 — — 39,240 Total $ 391,502 $ 166,856 $ — $ 224,646 Liabilities 2020 Notes Conversion Derivative $ 1,666 $ — $ — $ 1,666 2021 Notes Conversion Derivative 179,478 — — 179,478 2023 Notes Conversion Derivative 31,555 — — 31,555 Contingent consideration 28,077 — — 28,077 Total $ 240,776 $ — $ — $ 240,776 Total Quoted prices Prices with Prices with December 30, 2018 Assets Cash and cash equivalents $ 191,351 $ 191,351 $ — $ — 2020 Notes Hedges 17,822 — — 17,822 2021 Notes Hedges 188,301 — — 188,301 2023 Notes Hedges 115,923 — — 115,923 Total $ 513,397 $ 191,351 $ — $ 322,046 Liabilities 2020 Notes Conversion Derivative $ 17,386 $ — $ — $ 17,386 2021 Notes Conversion Derivative 187,539 — — 187,539 2023 Notes Conversion Derivative 116,833 — — 116,833 Contingent consideration 19,248 — — 19,248 Contingent consideration (CVRs) 420 420 — — Total $ 341,426 $ 420 $ — $ 341,006 The following is a roll forward of our assets and liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) (in thousands): Balance at December 30, 2018 Additions Transfers into Level 3 Gain/(loss) on fair value adjustments included in earnings Gain/(loss) on issuance/settlement included in earnings Settlements Currency Balance at December 29, 2019 2020 Notes Hedges $ 17,822 — — 996 — (16,849 ) — $ 1,969 2020 Notes Conversion Derivative $ (17,386 ) — — (557 ) 16,277 — — $ (1,666 ) 2021 Notes Hedges $ 188,301 — — (4,864 ) — — — $ 183,437 2021 Notes Conversion Derivative $ (187,539 ) — — 8,061 — — — $ (179,478 ) 2023 Notes Hedges $ 115,923 30,144 — (106,827 ) — — — $ 39,240 2023 Notes Conversion Derivative $ (116,833 ) — — 114,153 (28,875 ) — — $ (31,555 ) Contingent consideration $ (19,248 ) — — (9,532 ) — 207 496 $ (28,077 ) |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Property, Plant and Equipment, Net [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment, net consists of the following (in thousands): December 29, 2019 December 30, 2018 Land and land improvements $ 2,154 $ 2,127 Buildings 60,205 43,087 Machinery and equipment 102,014 82,445 Furniture, fixtures and office equipment 185,145 161,614 Construction in progress 17,259 14,113 Surgical instruments 281,541 230,980 648,318 534,366 Less: Accumulated depreciation (396,396 ) (309,437 ) $ 251,922 $ 224,929 |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the Carrying Amount of Goodwill | Changes in the carrying amount of goodwill occurring during the fiscal years ended December 29, 2019 and December 30, 2018 are as follows (in thousands): U.S. Lower Extremities & Biologics U.S. Upper Extremities International Extremities & Biologics Total Balance at December 31, 2017 $ 218,525 $ 630,650 $ 84,487 $ 933,662 Goodwill associated with Cartiva acquisition 351,445 — — 351,445 Goodwill adjustment associated with IMASCAP acquisition — (917 ) — (917 ) Foreign currency translation — (1,883 ) (13,353 ) (15,236 ) Balance at December 30, 2018 $ 569,970 $ 627,850 $ 71,134 $ 1,268,954 Foreign currency translation — (1,924 ) (6,063 ) (7,987 ) Balance at December 29, 2019 $ 569,970 $ 625,926 $ 65,071 $ 1,260,967 |
Components of Identifiable Assets | The components of our identifiable intangible assets, net, are as follows (in thousands): December 29, 2019 December 30, 2018 Cost Accumulated amortization Cost Accumulated amortization Indefinite life intangibles: IPRD technology $ 6,238 $ — $ 6,262 $ — Finite life intangibles: Completed technology 172,111 72,140 174,596 55,114 Licenses 9,247 2,835 6,547 1,851 Customer relationships 181,094 41,389 179,605 30,935 Trademarks 14,002 11,834 14,048 11,564 Non-compete agreements 5,713 4,090 3,252 2,514 Other 2,022 757 764 764 Total finite life intangibles 384,189 $ 133,045 378,812 $ 102,742 Total intangibles 390,427 385,074 Less: Accumulated amortization (133,045 ) (102,742 ) Intangible assets, net $ 257,382 $ 282,332 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Leases [Abstract] | |
Schedule of Operating Lease Right-of-Use Assets | Our net ROU assets under operating leases are included within Other Assets on our consolidated balance sheet and include the following (in thousands): December 29, 2019 Buildings $ 17,331 Machinery and equipment 1,720 Furniture, fixtures and office equipment 943 $ 19,994 |
Schedule of Operating Lease Liabilities, Maturities | At December 29, 2019 , the present value of the future minimum lease payments under operating lease obligations are included within Accrued expenses and other current liabilities and Other liabilities as follows (in thousands): 2020 $ 7,420 2021 5,632 2022 3,878 2023 2,239 2024 1,356 Thereafter 4,036 Total minimum payments 24,561 Less amount representing interest (3,806 ) Present value of minimum lease payments 20,755 Current portion (6,608 ) Long-term portion $ 14,147 |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments, by year and in the aggregate, under non-cancelable operating leases with initial or remaining lease terms of one year or more, were reported in our Annual Report on Form 10-K for the fiscal year ended December 30, 2018 as follows (in thousands), and included a total of $7.8 million for future lease payments to our 51% -owned subsidiary: 2019 $ 9,606 2020 7,498 2021 6,019 2022 4,433 2023 2,678 Thereafter 10,998 Total minimum payments $ 41,232 |
Schedule of Finance Lease Assets | The components of property, plant and equipment recorded under finance leases consist of the following (in thousands): December 29, 2019 December 30, 2018 Buildings $ 12,017 $ 12,017 Machinery and equipment 30,733 24,331 Furniture, fixtures and office equipment 671 559 43,421 36,907 Less: Accumulated depreciation (16,726 ) (11,906 ) $ 26,695 $ 25,001 |
Schedule of Finance Lease Liabilities, Maturities | Future minimum lease payments under finance lease obligations, together with the present value of the net minimum lease payments, are as follows (in thousands): December 29, 2019 2020 $ 7,912 2021 6,166 2022 5,156 2023 3,337 2024 1,614 Thereafter 3,330 Total minimum payments 27,515 Less amount representing interest (2,429 ) Present value of minimum lease payments 25,086 Current portion (7,011 ) Long-term portion $ 18,075 |
Schedule of Lease Cost | Amounts recorded within our consolidated statement of operations for the fiscal year ended December 29, 2019 related to leased assets are as follows (in thousands): Fiscal year ended December 29, 2019 Lease cost Finance lease cost: Depreciation $ 5,688 Interest on lease liabilities 1,104 Operating lease cost 9,843 Short-term lease cost 128 Variable lease cost 500 Total lease cost $ 17,263 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 1,104 Operating cash flows from operating leases $ 9,247 Financing cash flows from finance leases $ 7,837 Weighted-average remaining lease term - finance leases 4.56 Weighted-average remaining lease term - operating leases 4.87 Weighted-average discount rate - finance leases 4.63 % Weighted-average discount rate - operating leases 7.06 % |
Debt and Finance Lease Obliga_2
Debt and Finance Lease Obligations (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Debt and finance lease obligations consist of the following (in thousands): Maturity by fiscal year December 29, 2019 December 30, 2018 Finance lease obligations ( Note 9 ) 2020-2026 $ 25,086 $ 25,539 Convertible Notes 1.625% Notes 2023 695,748 548,076 2.25% Notes 1 2021 344,635 321,286 2.0% Notes 2 2020 55,997 173,533 Term loan facility 2021 19,296 18,979 Asset-based line of credit 3 2021 20,652 17,761 Other debt 2020-2024 6,615 9,953 1,168,029 1,115,127 Less: Current portion 1, 2, 3 (430,862 ) (201,686 ) Long-term debt and finance lease obligations ( Note 9 ) $ 737,167 $ 913,441 _______________________ 1 As of December 29, 2019 , the sale price condition (as defined below) for the 2021 Notes was satisfied and, therefore, the 2021 Notes are convertible at any time during the succeeding quarterly period. As a result, the carrying value of the 2021 Notes was classified as a current liability as of December 29, 2019 . The respective balances were classified as long-term as of December 30, 2018 . 2 The holders of the 2020 Notes may convert their notes at any time on or after August 15, 2019. Due to the ability of the holders of the 2020 Notes to convert their notes within the next year, the carrying value of the 2020 Notes was classified as a current liability as of December 30, 2018 . The 2020 Notes were classified as a current liability as of December 29, 2019 as they matured on February 15, 2020. 3 We have reflected this debt as a current liability on our consolidated balance sheets as of December 29, 2019 and December 30, 2018 , as required by US GAAP due to the weekly lockbox repayment/re-borrowing arrangement underlying the agreement, as well as the ability for the lenders to accelerate the repayment of the debt under certain circumstances as described below. |
Convertible Debt | The components of the Notes were as follows (in thousands): December 29, 2019 December 30, 2018 Principal amount of 2023 Notes $ 814,556 $ 675,000 Unamortized debt discount (107,916 ) (114,554 ) Unamortized debt issuance costs (10,892 ) (12,370 ) Net carrying amount of 2023 Notes $ 695,748 $ 548,076 Principal amount of 2021 Notes $ 395,000 $ 395,000 Unamortized debt discount (47,405 ) (69,382 ) Unamortized debt issuance costs (2,960 ) (4,332 ) Net carrying amount of 2021 Notes $ 344,635 $ 321,286 Principal amount of 2020 Notes $ 56,455 $ 186,589 Unamortized debt discount (408 ) (11,642 ) Unamortized debt issuance costs (50 ) (1,414 ) Net carrying amount of 2020 Notes $ 55,997 $ 173,533 |
Components of 2020 Convertible Debt | The terms of conversion are set forth below: 2020 Notes 2021 Notes 2023 Notes Conversion rate 33.39487 46.8165 29.9679 Conversion price $ 29.94 $ 21.36 $ 33.37 Early Conversion date August 15, 2019 May 15, 2021 December 15, 2022 Maturity date February 15, 2020 November 15, 2021 June 15, 2023 The Warrants are expected to be net-share settled and exercisable over a certain trading period after the Convertible Notes mature as detailed below: 2020 Notes 2021 Notes 2023 Notes Exercisable period 200 trading day period beginning on May 15, 2020 100 trading day period beginning on February 15, 2022 120 trading day period beginning on September 15, 2023 |
Interest Income and Interest Expense Disclosure | Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 2023 Notes $ 23,522 $ 10,071 $ — 2021 Notes 21,977 19,950 18,110 2020 Notes 3,804 19,165 27,331 The following table summarizes the interest expense related to the amortization of the deferred financing costs (in thousands): Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 2023 Notes $ 2,381 $ 1,148 $ — 2021 Notes 1,372 1,284 1,131 2020 Notes 462 2,333 3,320 |
Schedule of Maturities of Long-term Debt | Aggregate annual maturities of our current and long-term obligations at December 29, 2019 , excluding finance lease obligations, are as follows (in thousands): 2020 1, 2 $ 474,702 2021 21,423 2022 1,511 2023 814,637 2024 — Thereafter 1,005 $ 1,313,278 _______________________ 1 The 2021 Notes will mature on November 15, 2021 unless earlier converted or repurchased. As of December 29, 2019 , the sale price condition (as defined above) for the 2021 Notes was satisfied and, therefore, the 2021 Notes are convertible at any time during the succeeding quarterly period. As a result, the carrying value of the 2021 Notes was classified as a current liability as of December 29, 2019 and the gross amount of $395.0 million is included in the 2020 maturity total above. 2 All outstanding loans under the ABL Facility will be due and payable in full on December 23, 2021 or earlier under certain specified circumstances as previously described. The 2020 total above includes $20.7 million in borrowings outstanding under the ABL Facility as this debt is reflected as a current liability on our consolidated balance sheet as of December 29, 2019 due to the weekly lockbox repayment/re-borrowing arrangement underlying the agreement, as well as the ability for the lenders to accelerate the repayment of the debt under certain circumstances. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Accumulated Other Comprehensive Income [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in AOCI for the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 were as follows (in thousands): Currency translation adjustment Balance at December 25, 2016 $ (19,461 ) Other comprehensive income 41,751 Balance at December 31, 2017 $ 22,290 Other comprehensive loss (30,373 ) Balance at December 30, 2018 $ (8,083 ) Other comprehensive loss (21,416 ) Balance at December 29, 2019 $ (29,499 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax | The components of our loss from continuing operations before income taxes are as follows (in thousands): Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 U.S. $ (69,903 ) $ (144,987 ) $ (56,808 ) Foreign (9,263 ) (24,853 ) (43,097 ) Loss from continuing operations before income taxes $ (79,166 ) $ (169,840 ) $ (99,905 ) |
Schedule of Components of Income Tax Expense (Benefit) | The components of our provision (benefit) for income taxes are as follows (in thousands): Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Current (benefit) provision: U.S.: Federal $ (13 ) $ 449 $ (23,781 ) State 232 251 390 Foreign 15,213 3,307 2,214 Total current provision (benefit) 15,432 4,007 (21,177 ) Deferred provision (benefit): U.S.: Federal 154 (2,841 ) (5,098 ) State 143 (663 ) (93 ) Foreign (2,761 ) (1,039 ) (8,600 ) Total deferred benefit (2,464 ) (4,543 ) (13,791 ) Total provision (benefit) for income taxes $ 12,968 $ (536 ) $ (34,968 ) |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the statutory U.S. federal income tax rate to our effective income tax rate for continuing operations is as follows: Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Income tax benefit at statutory rate 21.0 % 21.0 % 35.0 % State income taxes 2.2 % 3.8 % 1.5 % Change in valuation allowance (18.3 )% (22.9 )% (3.5 )% CVR fair market value adjustment 0.1 % — % (1.9 )% Foreign income tax rate differential (17.9 )% (0.6 )% (6.1 )% Changes in tax reserves (0.3 )% 0.4 % 2.9 % Effects of U.S. tax reform — % — % 6.5 % Foreign rate changes — % — % 1.7 % U.S. R&D tax credit 2.0 % 0.7 % 0.6 % Nondeductible compensation (3.2 )% (0.7 )% (1.0 )% Other, net (2.0 )% (1.4 )% (0.7 )% Total (16.4 )% 0.3 % 35.0 % |
Schedule of Deferred Tax Assets and Liabilities | The significant components of our deferred income taxes as of December 29, 2019 and December 30, 2018 are as follows (in thousands): December 29, 2019 December 30, 2018 Deferred tax assets: Net operating loss carryforwards $ 340,451 $ 330,589 General business credit carryforwards 16,131 14,598 Reserves and allowances 50,278 56,675 Deferred interest 42,016 27,322 Share-based compensation expense 12,638 14,934 Convertible debt notes and conversion options 15,272 38,368 Other 3,857 3,616 Valuation allowance (423,037 ) (400,171 ) Total deferred tax assets 57,606 85,931 Deferred tax liabilities: Depreciation 5,025 5,095 Intangible assets 50,156 58,221 Convertible notes bond hedges 11,493 34,653 Other 304 166 Total deferred tax liabilities 66,978 98,135 Net deferred tax liabilities $ (9,372 ) $ (12,204 ) |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Fiscal year ended December 29, 2019 December 30, 2018 Balance at beginning of fiscal year $ 4,610 $ 6,025 Additions from acquisitions — 109 Additions for tax positions related to current year 473 385 Additions for tax positions of prior years 172 718 Reductions for tax positions of prior years (290 ) (490 ) Settlements (406 ) (1,983 ) Foreign currency translation (48 ) (154 ) Balance at end of fiscal year $ 4,511 $ 4,610 |
Supplemental Balance Sheet In_2
Supplemental Balance Sheet Information (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other current liabilities consist of the following (in thousands): December 29, 2019 December 30, 2018 Employee bonuses $ 25,383 $ 28,953 Other employee benefits 25,194 22,841 Royalties 13,441 12,330 Taxes other than income 13,826 7,897 Notes Conversion Derivatives ( Note 6 ) 181,144 17,386 Commissions 18,025 19,356 Professional and legal fees 14,941 10,848 Contingent consideration ( Note 6 ) 11,982 3,427 Product liability and other legal accruals ( Note 17 ) 54,107 66,918 Other 28,982 27,125 $ 387,025 $ 217,081 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Earnings Per Share [Abstract] | |
Weighted Average Number of Shares Outstanding for Basic and Diluted Earnings Per Share | The weighted-average number of ordinary shares outstanding for basic and diluted earnings per share purposes is as follows (in thousands): Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Weighted-average number of ordinary shares outstanding-basic and diluted 126,601 112,592 104,531 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | Amounts recognized in the consolidated financial statements with respect to share-based compensation are as follows: Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Total cost of share-based arrangements $ 32,836 $ 26,039 $ 19,485 Amounts capitalized into inventory (870 ) (507 ) (669 ) Amortization of capitalized amounts 601 588 577 Impact to net loss $ 32,567 $ 26,120 $ 19,393 Impact to basic and diluted loss per share $ 0.26 $ 0.23 $ 0.19 Weighted-average number of shares outstanding - basic and diluted 126,601 112,592 104,531 |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan | The compensation costs related to share-based awards were as follows: Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Stock options $ 13,116 $ 11,177 $ 8,988 Restricted stock units 12,651 11,514 9,373 Performance share units 6,166 2,538 441 Employee stock purchase plan 903 810 683 Total compensation cost for share-based awards $ 32,836 $ 26,039 $ 19,485 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of each option grant is estimated on the date of grant using the Black-Scholes option valuation model using the following assumptions: Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Risk-free interest rate 1.5% - 2.4% 2.6% - 2.9% 1.9% - 2.0% Expected option life 6 years 7 years 6 years Expected price volatility 31% 32% 33% |
Share-based Compensation, Stock Options, Activity | A summary of our stock option activity during 2019 is as follows: Shares (000’s) Weighted-average exercise price Weighted-average remaining contractual life Aggregate intrinsic value* ($000’s) Outstanding at December 30, 2018 9,203 $ 22.89 Granted 1,593 27.77 Exercised (2,152) 21.52 Forfeited or expired (236) 25.29 Outstanding at December 29, 2019 8,408 $ 24.10 6.52 $ 54,473 Exercisable at December 29, 2019 5,426 $ 22.86 5.24 $ 41,885 ________________________________ * The aggregate intrinsic value is calculated as the difference between the market value of our ordinary shares as of December 29, 2019 and the respective exercise prices of the options. The market value as of December 29, 2019 was $30.58 per share, which is the closing sale price of our ordinary shares on December 27, 2019 , the last trading day prior to December 29, 2019 , as reported by the Nasdaq Global Select Market. A summary of our non-plan inducement stock option activity during 2019 is as follows: Shares (000’s) Weighted-average exercise price Weighted-average remaining contractual life Aggregate intrinsic value* ($000’s) Outstanding at December 30, 2018 693 $ 15.66 Granted — — Exercised (209 ) 15.91 Forfeited or expired — — Outstanding at December 29, 2019 484 $ 15.55 1.72 $ 7,272 Exercisable at December 29, 2019 484 $ 15.55 1.72 $ 7,272 ________________________________ * The aggregate intrinsic value is calculated as the difference between the market value of our ordinary shares as of December 29, 2019 and the respective exercise prices of the options. The market value as of December 29, 2019 was $30.58 per share, which is the closing sale price of our ordinary shares on December 27, 2019 , the last trading day prior to December 29, 2019 , as reported by the Nasdaq Global Select Market. |
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range | A summary of our stock options outstanding and exercisable at December 29, 2019 is as follows (shares in thousands): Options outstanding Options exercisable Range of exercise prices Number outstanding Weighted-average remaining Weighted-average exercise Number exercisable Weighted-average exercise $2.00 - $20.00 609 3.60 $ 17.89 556 $ 17.73 $20.01 - $21.00 1,708 5.36 20.63 1,675 20.64 $21.01 - $25.00 2,850 6.46 23.01 1,905 22.59 $25.01 - $32.00 3,241 7.72 28.06 1,290 28.36 8,408 6.52 $ 24.10 5,426 $ 22.86 A summary of our non-plan inducement stock options outstanding and exercisable at December 29, 2019 is as follows (shares in thousands): Options outstanding Options exercisable Range of exercise prices Number outstanding Weighted-average remaining Weighted-average exercise Number exercisable Weighted-average exercise $15.00 - $18.00 484 1.72 $ 15.55 484 $ 15.55 |
Schedule of Other Share-based Compensation, Activity | A summary of our PSU activity (based on an assumed maximum level of performance) during 2019 is as follows: Shares (000’s) Weighted-average grant-date fair value Aggregate intrinsic value* ($000’s) Unvested at December 30, 2018 466 $ 26.00 Granted 321 27.84 Vested — — Forfeited — — Unvested at December 29, 2019 787 $ 26.75 $ 24,076 ___________________ * The aggregate intrinsic value is calculated as the market value of our ordinary shares as of December 29, 2019 . The market value as of December 29, 2019 was $30.58 per share, which is the closing sale price of our ordinary shares on December 27, 2019 , the last trading day prior to December 29, 2019 , as reported by the Nasdaq Global Select Market. A summary of our RSU activity during 2019 is as follows: Shares (000’s) Weighted-average grant-date fair value Aggregate intrinsic value* ($000’s) Unvested at December 30, 2018 1,322 $ 23.90 Granted 598 27.90 Vested (589 ) 22.97 Forfeited (82 ) 25.51 Unvested at December 29, 2019 1,249 $ 26.16 $ 38,196 ___________________ * The aggregate intrinsic value is calculated as the market value of our ordinary shares as of December 29, 2019 . The market value as of December 29, 2019 was $30.58 per share, which is the closing sale price of our ordinary shares on December 27, 2019 , the last trading day prior to December 29, 2019 , as reported by the Nasdaq Global Select Market. |
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions | In applying the Black-Scholes methodology to purchase rights granted under the ESPP, we used the following assumptions: Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Risk-free interest rate 1.5% - 2.3% 2.3% - 2.8% 1.3% - 1.9% Expected life 6 months 6 months 6 months Expected price volatility 30% 31% 24% |
Quarterly Results of Operatio_2
Quarterly Results of Operations (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | 2018 First quarter Second quarter Third quarter Fourth quarter Net sales $ 198,537 $ 205,400 $ 194,106 $ 238,147 Cost of sales 41,139 45,558 44,307 49,149 Gross profit 157,398 159,842 149,799 188,998 Operating expenses: Selling, general and administrative 137,248 140,826 139,223 160,664 Research and development 13,899 14,665 13,829 16,749 Amortization of intangible assets 7,141 6,009 5,881 7,699 Total operating expenses 158,288 161,500 158,933 185,112 Operating (loss) income (890 ) (1,658 ) (9,134 ) 3,886 Net loss from continuing operations, net of tax (19,907 ) (90,621 ) (35,829 ) (22,947 ) (Loss) income from discontinued operations, net of tax (5,607 ) 22,923 (6,696 ) (10,821 ) Net loss $ (25,514 ) $ (67,698 ) $ (42,525 ) $ (33,768 ) Net loss, continuing operations per share, basic and diluted $ (0.19 ) $ (0.85 ) $ (0.32 ) $ (0.18 ) Net loss income per share, basic and diluted $ (0.24 ) $ (0.64 ) $ (0.38 ) $ (0.27 ) Weighted-average number of shares outstanding-basic and diluted 105,904 106,095 113,043 125,323 2019 First quarter Second quarter Third quarter Fourth quarter Net sales $ 230,127 $ 229,734 $ 212,434 $ 248,605 Cost of sales 46,317 48,338 44,441 49,545 Gross profit 183,810 181,396 167,993 199,060 Operating expenses: Selling, general and administrative 153,306 152,112 152,780 156,468 Research and development 16,972 18,756 18,045 20,312 Amortization of intangible assets 7,587 7,862 8,308 8,164 Total operating expenses 177,865 178,730 179,133 184,944 Operating income (loss) 5,945 2,666 (11,140 ) 14,116 Net loss from continuing operations, net of tax (30,256 ) (18,932 ) (36,200 ) (6,746 ) (Loss) income from discontinued operations, net of tax (6,345 ) 1,120 (7,589 ) (9,277 ) Net loss $ (36,601 ) $ (17,812 ) $ (43,789 ) $ (16,023 ) Net loss, continuing operations per share, basic and diluted $ (0.24 ) $ (0.15 ) $ (0.29 ) $ (0.05 ) Net loss income per share, basic and diluted $ (0.29 ) $ (0.14 ) $ (0.35 ) $ (0.13 ) Weighted-average number of shares outstanding-basic and diluted 125,812 126,267 126,767 127,557 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Segment Reporting [Abstract] | |
Revenue from External Customers by Products and Services | Net sales by geographic region by product line are as follows (in thousands): Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 United States Lower extremities $ 276,821 $ 250,735 $ 228,044 Upper extremities 329,787 281,314 239,965 Biologics 91,450 83,077 78,361 Sports med & other 8,231 8,412 8,141 Total United States $ 706,289 $ 623,538 $ 554,511 EMEAC Lower extremities $ 46,787 $ 46,342 $ 42,333 Upper extremities 90,420 87,647 73,243 Biologics 7,921 8,312 8,445 Sports med & other 9,761 11,074 13,751 Total EMEAC $ 154,889 $ 153,375 $ 137,772 Other Lower extremities $ 16,849 $ 14,407 $ 16,140 Upper extremities 27,984 26,813 21,456 Biologics 14,100 17,445 13,831 Sports med & other 789 612 1,279 Total other $ 59,722 $ 59,277 $ 52,706 Total net sales $ 920,900 $ 836,190 $ 744,989 |
Revenue from External Customers by Geographic Areas | Net sales by geographic region by product line are as follows (in thousands): Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 United States Lower extremities $ 276,821 $ 250,735 $ 228,044 Upper extremities 329,787 281,314 239,965 Biologics 91,450 83,077 78,361 Sports med & other 8,231 8,412 8,141 Total United States $ 706,289 $ 623,538 $ 554,511 EMEAC Lower extremities $ 46,787 $ 46,342 $ 42,333 Upper extremities 90,420 87,647 73,243 Biologics 7,921 8,312 8,445 Sports med & other 9,761 11,074 13,751 Total EMEAC $ 154,889 $ 153,375 $ 137,772 Other Lower extremities $ 16,849 $ 14,407 $ 16,140 Upper extremities 27,984 26,813 21,456 Biologics 14,100 17,445 13,831 Sports med & other 789 612 1,279 Total other $ 59,722 $ 59,277 $ 52,706 Total net sales $ 920,900 $ 836,190 $ 744,989 |
Schedule of Segment Reporting Information, by Segment | Total assets by business segment as of December 29, 2019 and December 30, 2018 are as follows (in thousands): December 29, 2019 U.S. Lower Extremities & Biologics U.S. Upper Extremities International Extremities & Biologics Corporate Total Total assets $ 952,187 $ 914,317 $ 292,929 $ 426,207 $ 2,585,640 December 30, 2018 U.S. Lower Extremities & Biologics U.S. Upper Extremities International Extremities & Biologics Corporate Total Total assets $ 940,075 $ 923,036 $ 272,127 $ 559,163 $ 2,694,401 |
Net Sales and Operating Income by Product Line and Information by Geographic Region | Selected financial information related to our segments is presented below for the fiscal years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 (in thousands): Fiscal year ended December 29, 2019 U.S. Lower Extremities & Biologics U.S. Upper Extremities International Extremities & Biologics Corporate 1 Total Net sales from external customers $ 371,791 $ 334,498 $ 214,611 $ — $ 920,900 Depreciation expense 10,950 12,728 14,939 25,532 64,149 Amortization expense — — — 31,921 31,921 Segment operating income (loss) $ 103,883 $ 123,539 $ (1,895 ) $ (200,974 ) $ 24,553 Other: Inventory step-up amortization 1,057 Transaction and transition costs 6,312 Non-cash asset impairment 5,597 Operating income 11,587 Interest expense, net 80,849 Other expense, net 9,904 Loss before income taxes $ (79,166 ) Capital expenditures $ 41,585 $ 20,395 $ 25,723 $ 11,583 $ 99,286 Fiscal year ended December 30, 2018 U.S. Lower Extremities & Biologics U.S. Upper Extremities International Extremities & Biologics Corporate 1 Total Net sales from external customers $ 337,433 $ 286,105 $ 212,652 $ — $ 836,190 Depreciation expense 11,131 12,439 13,004 22,923 59,497 Amortization expense — — — 26,730 26,730 Segment operating income (loss) $ 96,153 $ 97,644 $ 1,492 $ (190,720 ) $ 4,569 Other: Inventory step-up amortization 352 Transaction and transition costs 12,013 Operating loss (7,796 ) Interest expense, net 80,247 Other expense, net 81,797 Loss before income taxes $ (169,840 ) Capital expenditures $ 21,153 $ 26,346 $ 17,566 $ 6,402 $ 71,467 Fiscal year ended December 31, 2017 U.S. Lower Extremities & Biologics U.S. Upper Extremities International Extremities & Biologics Corporate 1 Total Net sales from external customers $ 309,713 $ 244,798 $ 190,478 $ — $ 744,989 Depreciation expense 12,532 10,211 12,366 21,723 56,832 Amortization expense — — — 28,396 28,396 Segment operating income (loss) $ 79,889 $ 78,866 $ 3,631 $ (178,642 ) $ (16,256 ) Other: Transaction and transition costs 12,400 Incentive and indirect tax projects (8,965 ) Operating loss (19,691 ) Interest expense, net 74,644 Other expense, net 5,570 Loss before income taxes $ (99,905 ) Capital expenditures $ 19,355 $ 22,897 $ 19,555 $ 1,667 $ 63,474 __________________________ 1 |
Organization and Description _2
Organization and Description of Business (Details) | 12 Months Ended | |
Dec. 29, 2019segment | Nov. 04, 2019$ / shares | |
Business Acquisition [Line Items] | ||
Number of countries in which entity operates | 50 | |
Number of operating segments | segment | 3 | |
Stryker Corporation | ||
Business Acquisition [Line Items] | ||
Sale of stock, price per share (in usd per share) | $ / shares | $ 30.75 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | Jan. 09, 2014USD ($) | Dec. 29, 2019USD ($) | Sep. 29, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Jul. 01, 2018USD ($) | Apr. 01, 2018USD ($) | Dec. 29, 2019USD ($)customer | Dec. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 25, 2016USD ($) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||
Excess and obsolete inventory reserve, estimated life cycle and forecasted product demand period | 36 months | |||||||||||||||
Impact of change in estimate, excess and obsolete inventory reserve | $ 26,000 | |||||||||||||||
Estimated inventory turnover period | 2 years 6 months | |||||||||||||||
Inventory write-down | $ 13,126 | $ 20,913 | $ 19,171 | |||||||||||||
Types of customers | customer | 2 | |||||||||||||||
Selling, general and administrative | $ 156,468 | $ 152,780 | $ 152,112 | $ 153,306 | $ 160,664 | $ 139,223 | $ 140,826 | $ 137,248 | $ 614,666 | [1] | 577,961 | [1] | 525,222 | [2] | ||
Instrument depreciation expense | 30,600 | 28,400 | 27,100 | |||||||||||||
Share-based compensation expense | 32,600 | 26,100 | 19,400 | |||||||||||||
Loss on foreign currency derivative | 4,600 | |||||||||||||||
Shipping and Handling | ||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||
Selling, general and administrative | 53,100 | 52,000 | 49,400 | |||||||||||||
OrthoRecon Business | ||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||
Purchase price discontinued operations | $ 283,000 | |||||||||||||||
Continuing Operations | ||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||
Inventory write-down | 13,100 | 20,900 | 19,200 | |||||||||||||
Inventory Valuation and Obsolescence | Continuing Operations | ||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||
Inventory write-down | 4,400 | 3,100 | ||||||||||||||
SEC Schedule, 12-09, Allowance, Credit Loss | ||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||
Allowance for doubtful accounts | $ 3,445 | $ 3,045 | 3,445 | $ 3,045 | $ 4,328 | $ 4,469 | ||||||||||
Inventory Valuation and Obsolescence | Continuing Operations | ||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||
Inventory write-down | $ 5,200 | |||||||||||||||
[1] | 1 These line items include the following amounts of non-cash, share-based compensation expense for the periods indicated: Three months ended Fiscal year ended December 29, 2019 December 30, 2018 December 29, 2019 December 30, 2018Cost of sales$186 $133 $600 $585Selling, general and administrative8,079 7,112 29,185 23,608Research and development822 539 2,782 1,927 | |||||||||||||||
[2] | These line items include the following amounts of non-cash, share-based compensation expense for the periods indicated: Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Cost of sales $ 600 $ 585 $ 565 Selling, general and administrative 29,185 23,608 17,705 Research and development 2,782 1,927 1,123 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies Useful Lives (Details) | 12 Months Ended |
Dec. 29, 2019 | |
Land improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 15 years |
Land improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 25 years |
Buildings and building improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Buildings and building improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 40 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 14 years |
Furniture, fixtures and office equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Furniture, fixtures and office equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 14 years |
Surgical instruments | |
Property, Plant and Equipment [Line Items] | |
Useful life | 6 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies Amortization Period (Details) | 12 Months Ended |
Dec. 29, 2019 | |
Completed technology | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life of intangible assets | 10 years |
Trademarks | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life of intangible assets | 5 years |
Licenses | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life of intangible assets | 10 years |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life of intangible assets | 17 years |
Non-compete agreements | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life of intangible assets | 4 years |
Other intangible assets | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life of intangible assets | 6 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Interest | $ 28,523 | $ 30,552 | $ 24,641 |
Income taxes | $ 6,084 | $ 6,254 | $ 7,359 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Thousands, € in Millions | Oct. 10, 2018USD ($) | Aug. 27, 2018USD ($)shares | Dec. 14, 2017USD ($)shares | Dec. 29, 2019USD ($) | Sep. 29, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Jul. 01, 2018USD ($) | Apr. 01, 2018USD ($) | Dec. 29, 2019USD ($) | Dec. 30, 2018USD ($)shares | Dec. 31, 2017USD ($) | Dec. 14, 2017EUR (€) |
Business Acquisition [Line Items] | |||||||||||||||
Proceeds from equity offering | $ 0 | $ 448,924 | $ 0 | ||||||||||||
Net sales | $ 248,605 | $ 212,434 | $ 229,734 | $ 230,127 | $ 238,147 | $ 194,106 | $ 205,400 | $ 198,537 | 920,900 | 836,190 | 744,989 | ||||
Operating income (loss) | 14,116 | (11,140) | 2,666 | 5,945 | 3,886 | (9,134) | (1,658) | (890) | 11,587 | (7,796) | (19,691) | ||||
Transaction and transition expense | 6,312 | 12,013 | |||||||||||||
Amortization of intangible assets | $ 8,164 | 8,308 | 7,862 | 7,587 | 7,699 | $ 5,881 | $ 6,009 | $ 7,141 | 31,921 | 26,730 | 28,396 | ||||
Acquisition related costs | $ 12,400 | ||||||||||||||
Goodwill, purchase accounting adjustments | (900) | ||||||||||||||
Cartiva, Inc. | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Business acquisition, transaction costs | $ 435,000 | ||||||||||||||
Cash acquired from acquisition | 1,100 | 700 | |||||||||||||
Net sales | 29,800 | 9,500 | |||||||||||||
Operating income (loss) | 5,800 | 2,400 | |||||||||||||
Inventory step up amortization expense | $ 400 | $ 400 | $ 400 | $ 400 | 1,000 | 400 | |||||||||
Transaction and transition expense | 2,600 | ||||||||||||||
Amortization of intangible assets | $ 9,100 | 1,900 | |||||||||||||
Acquisition related costs | 6,500 | ||||||||||||||
Acquired receivables | 5,800 | ||||||||||||||
Allowance for doubtful accounts | (1,400) | ||||||||||||||
Intangible assets | 81,000 | ||||||||||||||
IMASCAP SAS | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Business acquisition, transaction costs | $ 62,300 | € 52.9 | |||||||||||||
Intangible assets | $ 10,865 | ||||||||||||||
Equity ownership acquired | 100.00% | 100.00% | |||||||||||||
Business acquisition, shares issued (in shares) | shares | 661,753 | ||||||||||||||
Contingent consideration fair value | $ 17,800 | € 15.1 | |||||||||||||
Goodwill, purchase accounting adjustments | $ (917) | ||||||||||||||
Common Stock | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Stock issued during period (in shares) | shares | 18,200,000 | 18,248,932 | |||||||||||||
Proceeds from equity offering | $ 423,000 | ||||||||||||||
Finite-Lived Intangible Assets | Customer relationships | Cartiva, Inc. | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Intangible assets | 52,000 | ||||||||||||||
Technology-Based Intangible Assets | Cartiva, Inc. | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Intangible assets | $ 28,000 | ||||||||||||||
Useful life of intangible assets | 7 years | ||||||||||||||
Technology-Based Intangible Assets | IMASCAP SAS | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Intangible assets | $ 5,600 | ||||||||||||||
Useful life of intangible assets | 6 years | ||||||||||||||
Customer relationships | Cartiva, Inc. | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Useful life of intangible assets | 15 years | ||||||||||||||
In Process Research and Development | Cartiva, Inc. | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Intangible assets | $ 1,000 | ||||||||||||||
In Process Research and Development | IMASCAP SAS | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Intangible assets | $ 5,300 | ||||||||||||||
Cash | IMASCAP SAS | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Business acquisition, transaction costs | 46,700 | 39.7 | |||||||||||||
Common Stock | IMASCAP SAS | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Business acquisition, transaction costs | $ 15,600 | € 13.2 |
Acquisitions Purchase Considera
Acquisitions Purchase Consideration and Net Assets Acquired, Cartiva (Details) - Cartiva, Inc. - USD ($) $ in Thousands | Oct. 10, 2018 | Dec. 30, 2018 |
Business Acquisition [Line Items] | ||
Cash and cash equivalents | $ 309 | |
Accounts receivable | 4,352 | |
Inventories | 2,686 | |
Other current assets | 486 | |
Property, plant and equipment | 1,446 | |
Intangible assets | 81,000 | |
Total assets acquired | 90,279 | |
Current liabilities | (4,226) | |
Deferred income taxes | (3,622) | |
Total liabilities assumed | (7,848) | |
Net assets acquired | 82,431 | |
Goodwill | 351,445 | $ 351,445 |
Total purchase consideration | $ 433,876 |
Acquisitions Pro Forma (Details
Acquisitions Pro Forma (Details) - Cartiva, Inc. - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 30, 2018 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | ||
Net sales | $ 861,475 | $ 769,111 |
Net loss from continuing operations | $ (179,800) | $ (68,722) |
Acquisitions Purchase Conside_2
Acquisitions Purchase Consideration and Net Assets Acquired, IMASCAP (Details) - IMASCAP SAS - USD ($) $ in Thousands | Dec. 14, 2017 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||
Cash and cash equivalents | $ 2,559 | |
Accounts receivable | 102 | |
Other current assets | 925 | |
Property, plant and equipment | 20 | |
Intangible assets | 10,865 | |
Total assets acquired | 14,471 | |
Current liabilities | (2,173) | |
Long-term debt | (886) | |
Deferred income taxes | (2,343) | |
Total liabilities assumed | (5,402) | |
Net assets acquired | 9,069 | |
Goodwill | 71,064 | $ 72,000 |
Total purchase consideration | $ 80,133 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | Jan. 09, 2014 | Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Loss from discontinued operations | $ (9,277) | $ (7,589) | $ 1,120 | $ (6,345) | $ (10,821) | $ (6,696) | $ 22,923 | $ (5,607) | $ (22,091) | $ (201) | $ (137,661) | |
Cash used in discontinued operations | 52,600 | 88,600 | 228,100 | |||||||||
Insurance settlements receivable | $ 18,500 | 18,500 | ||||||||||
Proceeds from legal settlements | 30,750 | |||||||||||
Metal-on-metal product liabilities | (34,003) | (103,056) | (79,139) | |||||||||
OrthoRecon Business | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Loss from discontinued operations | $ (22,091) | $ 525 | (133,528) | |||||||||
Purchase price discontinued operations | $ 283,000 | |||||||||||
Metal-on-metal product liabilities | $ 94,000 |
Discontinued Operations Discont
Discontinued Operations Discontinued Operations, OrthoRecon (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Provision (benefit) for income taxes | $ 3,800 | $ 2,200 | $ (6,200) | ||||||||
Total (loss) income from discontinued operations, net of tax | $ (9,277) | $ (7,589) | $ 1,120 | $ (6,345) | $ (10,821) | $ (6,696) | $ 22,923 | $ (5,607) | $ (22,091) | $ (201) | $ (137,661) |
OrthoRecon Business | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Net sales | 0 | 0 | 0 | ||||||||
Selling, general and administrative | 22,091 | (746) | 135,235 | ||||||||
(Loss) income from discontinued operations before income taxes | (22,091) | 746 | (135,235) | ||||||||
Provision (benefit) for income taxes | 0 | 221 | (1,707) | ||||||||
Total (loss) income from discontinued operations, net of tax | $ (22,091) | $ 525 | $ (133,528) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Oct. 10, 2018 | |
Inventory Disclosure [Abstract] | |||||||
Raw materials | $ 9,612 | $ 12,681 | $ 9,612 | ||||
Work-in-process | 26,839 | 27,528 | 26,839 | ||||
Finished goods | 144,239 | 158,165 | 144,239 | ||||
Total Inventory | 180,690 | 198,374 | 180,690 | ||||
Cartiva, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Inventory fair value step up | 1,000 | 1,000 | $ 1,400 | ||||
Inventory step up amortization expense | $ 400 | $ 400 | $ 400 | $ 400 | $ 1,000 | $ 400 |
Derivatives and Fair Value of_3
Derivatives and Fair Value of Financial Instruments Derivative Assets at Fair Value (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 |
Other assets | 2023 Notes Hedges | ||
Derivative [Line Items] | ||
Derivative asset, fair value | $ 39,240 | $ 115,923 |
Other assets | 2021 Notes Hedges | ||
Derivative [Line Items] | ||
Derivative asset, fair value | 188,301 | |
Accrued expenses and other current liabilities | 2021 Notes Conversion Derivative | ||
Derivative [Line Items] | ||
Derivative liability, fair value | 179,478 | |
Accrued expenses and other current liabilities | 2020 Notes Conversion Derivative | ||
Derivative [Line Items] | ||
Derivative liability, fair value | 1,666 | 17,386 |
Other liabilities | 2023 Notes Conversion Derivative | ||
Derivative [Line Items] | ||
Derivative liability, fair value | 31,555 | 116,833 |
Other liabilities | 2021 Notes Conversion Derivative | ||
Derivative [Line Items] | ||
Derivative liability, fair value | 187,539 | |
Other current assets | 2021 Notes Hedges | ||
Derivative [Line Items] | ||
Derivative asset, fair value | 183,437 | |
Other current assets | 2020 Notes Hedges | ||
Derivative [Line Items] | ||
Derivative asset, fair value | $ 1,969 | $ 17,822 |
Derivatives and Fair Value of_4
Derivatives and Fair Value of Financial Instruments Derivative Instruments, Gain (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Derivative [Line Items] | |||
Net gain (loss) on changes in fair value | $ 10,962 | $ (39,271) | $ 4,848 |
2023 Notes Hedges | |||
Derivative [Line Items] | |||
Net gain (loss) on changes in fair value | (106,827) | (25,355) | 0 |
2023 Notes Conversion Derivative | |||
Derivative [Line Items] | |||
Net gain (loss) on changes in fair value | 114,153 | 7,792 | 0 |
2021 Notes Hedges | |||
Derivative [Line Items] | |||
Net gain (loss) on changes in fair value | (4,864) | 61,238 | (32,032) |
2021 Notes Conversion Derivative | |||
Derivative [Line Items] | |||
Net gain (loss) on changes in fair value | 8,061 | (61,391) | 35,453 |
2020 Notes Hedges | |||
Derivative [Line Items] | |||
Net gain (loss) on changes in fair value | 996 | 7,342 | (32,199) |
2020 Notes Conversion Derivative | |||
Derivative [Line Items] | |||
Net gain (loss) on changes in fair value | $ (557) | $ (28,897) | $ 33,626 |
Derivatives and Fair Value of_5
Derivatives and Fair Value of Financial Instruments Narrative (Details) $ / shares in Units, $ in Thousands, € in Millions | Feb. 07, 2019USD ($) | Dec. 29, 2019USD ($) | Dec. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Mar. 01, 2019USD ($)$ / shares | Dec. 29, 2019EUR (€) | Oct. 28, 2018USD ($) | Dec. 14, 2017USD ($) | Dec. 14, 2017EUR (€) |
Derivative [Line Items] | |||||||||
Derivative settlement gain or loss | $ (12,600) | ||||||||
Cash payment, contingent consideration | $ 42,000 | ||||||||
Fair value for CVRs | $ (420) | $ 140 | $ 5,320 | ||||||
2023 Notes Conversion Derivative | |||||||||
Derivative [Line Items] | |||||||||
Derivative settlement gain or loss | (28,875) | ||||||||
2020 Notes Conversion Derivative | |||||||||
Derivative [Line Items] | |||||||||
Derivative settlement gain or loss | 16,277 | ||||||||
IMASCAP SAS | |||||||||
Derivative [Line Items] | |||||||||
Contingent consideration fair value | $ 17,800 | € 15.1 | |||||||
Technical Milestones And Sales Earnouts | IMASCAP SAS | |||||||||
Derivative [Line Items] | |||||||||
Contingent consideration, liability | 28,000 | € 25.1 | |||||||
Technical Milestones | IMASCAP SAS | |||||||||
Derivative [Line Items] | |||||||||
Contingent consideration, liability | $ 20,800 | 12,700 | |||||||
Contingent consideration, liability, measurement input | 0.06 | 0.06 | |||||||
Sales Earnouts | IMASCAP SAS | |||||||||
Derivative [Line Items] | |||||||||
Contingent consideration, liability | $ 7,200 | 6,500 | |||||||
Contingent consideration, liability, measurement input | 0.12 | 0.12 | |||||||
AUGMENT Bone Graft Payment of Conditional Value Rights, Condition One | |||||||||
Derivative [Line Items] | |||||||||
Price per share of contingent consideration | $ / shares | $ 1.50 | ||||||||
Contingent Value Rights | |||||||||
Derivative [Line Items] | |||||||||
Contingent consideration, liability | 400 | ||||||||
Fair Value, Measurements, Recurring | AUGMENT Bone Graft Payment of Conditional Value Rights, Condition One | |||||||||
Derivative [Line Items] | |||||||||
Contingent consideration fair value | $ 40,000 | $ 40,000 | |||||||
Fair Value, Measurements, Recurring | AUGMENT Bone Graft Payment of Conditional Value Rights, Condition Two | |||||||||
Derivative [Line Items] | |||||||||
Contingent consideration fair value | $ 70,000 | ||||||||
Fair Value, Measurements, Recurring | Contingent Value Rights | |||||||||
Derivative [Line Items] | |||||||||
Contingent consideration fair value | $ 420 |
Derivatives and Fair Value of_6
Derivatives and Fair Value of Financial Instruments Fair Market Valuations (Details) | Dec. 29, 2019 |
2020 Notes Conversion Derivative | |
Derivative [Line Items] | |
Derivative liability, measurement input | 0.1492 |
2020 Notes Hedges | |
Derivative [Line Items] | |
Derivative asset, measurement input | 0.1492 |
2021 Notes Conversion Derivative | |
Derivative [Line Items] | |
Derivative liability, measurement input | 0.2189 |
2021 Notes Hedges | |
Derivative [Line Items] | |
Derivative asset, measurement input | 0.2189 |
2023 Notes Conversion Derivative | |
Derivative [Line Items] | |
Derivative liability, measurement input | 0.0999 |
2023 Notes Hedges | |
Derivative [Line Items] | |
Derivative asset, measurement input | 0.0999 |
Wright Medical Group, Inc. | 2020 Notes Conversion Derivative | |
Derivative [Line Items] | |
Derivative liability, measurement input | 0.0083 |
Wright Medical Group, Inc. | 2021 Notes Conversion Derivative | |
Derivative [Line Items] | |
Derivative liability, measurement input | 0.0083 |
Wright Medical Group, Inc. | 2023 Notes Conversion Derivative | |
Derivative [Line Items] | |
Derivative liability, measurement input | 0.0042 |
DEUTSCHE BANK | 2020 Notes Hedges | |
Derivative [Line Items] | |
Derivative asset, measurement input | 0.0027 |
DEUTSCHE BANK | 2023 Notes Hedges | |
Derivative [Line Items] | |
Derivative asset, measurement input | 0.0049 |
WELLS FARGO | 2020 Notes Hedges | |
Derivative [Line Items] | |
Derivative asset, measurement input | 0.0012 |
JP Morgan Chase | 2020 Notes Hedges | |
Derivative [Line Items] | |
Derivative asset, measurement input | 0.0013 |
JP Morgan Chase | 2021 Notes Hedges | |
Derivative [Line Items] | |
Derivative asset, measurement input | 0.0019 |
JP Morgan Chase | 2023 Notes Hedges | |
Derivative [Line Items] | |
Derivative asset, measurement input | 0.0022 |
Bank of America | 2021 Notes Hedges | |
Derivative [Line Items] | |
Derivative asset, measurement input | 0.0019 |
Bank of America | 2023 Notes Hedges | |
Derivative [Line Items] | |
Derivative asset, measurement input | 0.0021 |
Derivatives and Fair Value of_7
Derivatives and Fair Value of Financial Instruments Valuation of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | [1] | Dec. 25, 2016 | [1] | |
Derivative [Line Items] | |||||||
Cash and cash equivalents | $ 166,856 | $ 191,351 | [1] | $ 167,740 | $ 412,265 | ||
Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Cash and cash equivalents | 166,856 | 191,351 | |||||
Total assets | 391,502 | 513,397 | |||||
Total liabilities | 240,776 | 341,426 | |||||
Quoted prices in active markets (Level 1) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Cash and cash equivalents | 166,856 | 191,351 | |||||
Total assets | 166,856 | 191,351 | |||||
Total liabilities | 0 | 420 | |||||
Prices with other observable inputs (Level 2) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Cash and cash equivalents | 0 | 0 | |||||
Total assets | 0 | 0 | |||||
Total liabilities | 0 | 0 | |||||
Prices with unobservable inputs (Level 3) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Cash and cash equivalents | 0 | 0 | |||||
Total assets | 224,646 | 322,046 | |||||
Total liabilities | 240,776 | 341,006 | |||||
Contingent consideration | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Contingent consideration fair value | 28,077 | 19,248 | |||||
Contingent consideration | Quoted prices in active markets (Level 1) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Contingent consideration fair value | 0 | 0 | |||||
Contingent consideration | Prices with other observable inputs (Level 2) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Contingent consideration fair value | 0 | 0 | |||||
Contingent consideration | Prices with unobservable inputs (Level 3) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Contingent consideration fair value | 28,077 | 19,248 | |||||
Contingent Value Rights | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Contingent consideration fair value | 420 | ||||||
Contingent Value Rights | Quoted prices in active markets (Level 1) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Contingent consideration fair value | 420 | ||||||
Contingent Value Rights | Prices with other observable inputs (Level 2) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Contingent consideration fair value | 0 | ||||||
Contingent Value Rights | Prices with unobservable inputs (Level 3) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Contingent consideration fair value | 0 | ||||||
2020 Notes Hedges | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative asset, fair value | 17,822 | ||||||
2020 Notes Hedges | Quoted prices in active markets (Level 1) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative asset, fair value | 0 | 0 | |||||
2020 Notes Hedges | Prices with other observable inputs (Level 2) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative asset, fair value | 0 | 0 | |||||
2020 Notes Hedges | Prices with unobservable inputs (Level 3) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative asset, fair value | 1,969 | 17,822 | |||||
2021 Notes Hedges | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative asset, fair value | 183,437 | 188,301 | |||||
2021 Notes Hedges | Quoted prices in active markets (Level 1) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative asset, fair value | 0 | 0 | |||||
2021 Notes Hedges | Prices with other observable inputs (Level 2) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative asset, fair value | 0 | 0 | |||||
2021 Notes Hedges | Prices with unobservable inputs (Level 3) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative asset, fair value | 183,437 | 188,301 | |||||
2023 Notes Hedges | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative asset, fair value | 39,240 | 115,923 | |||||
2023 Notes Hedges | Quoted prices in active markets (Level 1) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative asset, fair value | 0 | 0 | |||||
2023 Notes Hedges | Prices with other observable inputs (Level 2) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative asset, fair value | 0 | 0 | |||||
2023 Notes Hedges | Prices with unobservable inputs (Level 3) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative asset, fair value | 39,240 | 115,923 | |||||
2020 Notes Conversion Derivative | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative liability, fair value | 1,666 | 17,386 | |||||
2020 Notes Conversion Derivative | Quoted prices in active markets (Level 1) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative liability, fair value | 0 | 0 | |||||
2020 Notes Conversion Derivative | Prices with other observable inputs (Level 2) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative liability, fair value | 0 | 0 | |||||
2020 Notes Conversion Derivative | Prices with unobservable inputs (Level 3) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative liability, fair value | 1,666 | 17,386 | |||||
2021 Notes Conversion Derivative | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative liability, fair value | 179,478 | 187,539 | |||||
2021 Notes Conversion Derivative | Quoted prices in active markets (Level 1) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative liability, fair value | 0 | 0 | |||||
2021 Notes Conversion Derivative | Prices with other observable inputs (Level 2) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative liability, fair value | 0 | 0 | |||||
2021 Notes Conversion Derivative | Prices with unobservable inputs (Level 3) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative liability, fair value | 179,478 | 187,539 | |||||
2023 Notes Conversion Derivative | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative liability, fair value | 31,555 | 116,833 | |||||
2023 Notes Conversion Derivative | Quoted prices in active markets (Level 1) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative liability, fair value | 0 | 0 | |||||
2023 Notes Conversion Derivative | Prices with other observable inputs (Level 2) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative liability, fair value | 0 | 0 | |||||
2023 Notes Conversion Derivative | Prices with unobservable inputs (Level 3) | Fair Value, Measurements, Recurring | |||||||
Derivative [Line Items] | |||||||
Derivative liability, fair value | $ 31,555 | $ 116,833 | |||||
[1] | 1 As of December 25, 2016, we had $150.0 million in restricted cash to secure our obligations under a Master Settlement Agreement (MSA) that WMT entered into in connection with the metal-on-metal hip litigation as described in Note 17 . The accompanying notes are an integral part of these consolidated financial statements. |
Derivatives and Fair Value of_8
Derivatives and Fair Value of Financial Instruments Assets and Liabilities Measured at Fair Value, Rollforward (Details) - USD ($) $ in Thousands | Feb. 07, 2019 | Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 29, 2019 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||||||||
Fair value, liability, gain (loss) | $ 6,600 | $ 900 | $ 1,700 | $ 400 | $ 700 | $ 300 | $ 400 | $ 400 | ||
Gain/(loss) on issuance/settlement included in earnings | $ (12,600) | |||||||||
2020 Notes Hedges | ||||||||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||||||||
Fair value, asset, beginning balance | 17,822 | $ 17,822 | ||||||||
Fair value, asset, additions | 0 | |||||||||
Fair value, asset, gain (loss) | 996 | |||||||||
Gain/(loss) on issuance/settlement included in earnings | 0 | |||||||||
Fair value, liability, settlements | (16,849) | |||||||||
Fair value, currency | 0 | |||||||||
Fair value, asset, ending balance | 1,969 | 17,822 | 1,969 | |||||||
2020 Notes Conversion Derivative | ||||||||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||||||||
Fair value, liability, beginning balance | (17,386) | (17,386) | ||||||||
Fair value, liability, purchases | 0 | |||||||||
Fair value, liability, gain (loss) | (557) | |||||||||
Gain/(loss) on issuance/settlement included in earnings | 16,277 | |||||||||
Fair value, liability, settlements | 0 | |||||||||
Fair value, currency | 0 | |||||||||
Fair value, liability, ending balance | (1,666) | (17,386) | (1,666) | |||||||
2021 Notes Hedges | ||||||||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||||||||
Fair value, asset, beginning balance | 188,301 | 188,301 | ||||||||
Fair value, asset, additions | 0 | |||||||||
Fair value, asset, gain (loss) | (4,864) | |||||||||
Gain/(loss) on issuance/settlement included in earnings | 0 | |||||||||
Fair value, liability, settlements | 0 | |||||||||
Fair value, currency | 0 | |||||||||
Fair value, asset, ending balance | 183,437 | 188,301 | 183,437 | |||||||
2021 Notes Conversion Derivative | ||||||||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||||||||
Fair value, liability, beginning balance | (187,539) | (187,539) | ||||||||
Fair value, liability, purchases | 0 | |||||||||
Fair value, liability, gain (loss) | 8,061 | |||||||||
Gain/(loss) on issuance/settlement included in earnings | 0 | |||||||||
Fair value, liability, settlements | 0 | |||||||||
Fair value, currency | 0 | |||||||||
Fair value, liability, ending balance | (179,478) | (187,539) | (179,478) | |||||||
2023 Notes Hedges | ||||||||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||||||||
Fair value, asset, beginning balance | 115,923 | 115,923 | ||||||||
Fair value, asset, additions | 30,144 | |||||||||
Fair value, asset, gain (loss) | (106,827) | |||||||||
Gain/(loss) on issuance/settlement included in earnings | 0 | |||||||||
Fair value, liability, settlements | 0 | |||||||||
Fair value, currency | 0 | |||||||||
Fair value, asset, ending balance | 39,240 | 115,923 | 39,240 | |||||||
2023 Notes Conversion Derivative | ||||||||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||||||||
Fair value, liability, beginning balance | (116,833) | (116,833) | ||||||||
Fair value, liability, purchases | 0 | |||||||||
Fair value, liability, gain (loss) | 114,153 | |||||||||
Gain/(loss) on issuance/settlement included in earnings | (28,875) | |||||||||
Fair value, liability, settlements | 0 | |||||||||
Fair value, currency | 0 | |||||||||
Fair value, liability, ending balance | (31,555) | (116,833) | (31,555) | |||||||
Contingent consideration | ||||||||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||||||||
Fair value, liability, beginning balance | $ (19,248) | (19,248) | ||||||||
Fair value, liability, purchases | 0 | |||||||||
Fair value, liability, gain (loss) | (9,532) | |||||||||
Gain/(loss) on issuance/settlement included in earnings | 0 | |||||||||
Fair value, liability, settlements | 207 | |||||||||
Fair value, currency | 496 | |||||||||
Fair value, liability, ending balance | $ (28,077) | $ (19,248) | $ (28,077) |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | $ 648,318 | $ 534,366 |
Less: Accumulated depreciation | (396,396) | (309,437) |
Property, plant and equipment, net | 251,922 | 224,929 |
Land and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | 2,154 | 2,127 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | 60,205 | 43,087 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | 102,014 | 82,445 |
Furniture, fixtures and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | 185,145 | 161,614 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | 17,259 | 14,113 |
Surgical instruments | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, at cost | $ 281,541 | $ 230,980 |
Goodwill and Intangibles (Detai
Goodwill and Intangibles (Details) - USD ($) $ in Thousands | Oct. 10, 2018 | Dec. 14, 2017 | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 29, 2019 |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill, purchase accounting adjustments | $ (900) | ||||
Expected amortization expense, 2020 | $ 31,000 | ||||
Expected amortization expense, 2021 | 30,000 | ||||
Expected amortization expense, 2022 | 30,000 | ||||
Expected amortization expense, 2023 | 30,000 | ||||
Expected amortization expense, 2024 | $ 27,000 | ||||
Cartiva, Inc. | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 81,000 | ||||
Goodwill | 351,445 | 351,445 | |||
IMASCAP SAS | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 10,865 | ||||
Goodwill | 71,064 | $ 72,000 | |||
Goodwill, purchase accounting adjustments | $ (917) | ||||
Customer relationships | Finite-Lived Intangible Assets | Cartiva, Inc. | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | 52,000 | ||||
Technology-Based Intangible Assets | Cartiva, Inc. | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 28,000 | ||||
Useful life of intangible assets | 7 years | ||||
Technology-Based Intangible Assets | IMASCAP SAS | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 5,600 | ||||
Useful life of intangible assets | 6 years | ||||
Customer relationships | Cartiva, Inc. | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 15 years | ||||
In Process Research and Development | Cartiva, Inc. | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 1,000 | ||||
In Process Research and Development | IMASCAP SAS | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 5,300 |
Goodwill and Intangibles Change
Goodwill and Intangibles Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | Oct. 10, 2018 | Dec. 14, 2017 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 |
Goodwill [Roll Forward] | |||||
Goodwill, beginning balance | $ 1,268,954 | $ 933,662 | |||
Goodwill adjustment associated with IMASCAP acquisition | (900) | ||||
Foreign currency translation | (7,987) | (15,236) | |||
Goodwill, ending balance | 1,260,967 | 1,268,954 | $ 933,662 | ||
Lower Extremities & Biologics | |||||
Goodwill [Roll Forward] | |||||
Goodwill, beginning balance | 569,970 | 218,525 | |||
Foreign currency translation | 0 | 0 | |||
Goodwill, ending balance | 569,970 | 569,970 | 218,525 | ||
Upper Extremities | |||||
Goodwill [Roll Forward] | |||||
Goodwill, beginning balance | 627,850 | 630,650 | |||
Foreign currency translation | (1,924) | (1,883) | |||
Goodwill, ending balance | 625,926 | 627,850 | 630,650 | ||
Extremities & Biologics | |||||
Goodwill [Roll Forward] | |||||
Goodwill, beginning balance | 71,134 | 84,487 | |||
Foreign currency translation | (6,063) | (13,353) | |||
Goodwill, ending balance | $ 65,071 | 71,134 | 84,487 | ||
Cartiva, Inc. | |||||
Goodwill [Roll Forward] | |||||
Goodwill associated with Cartiva acquisition | $ 351,445 | 351,445 | |||
Cartiva, Inc. | Lower Extremities & Biologics | |||||
Goodwill [Roll Forward] | |||||
Goodwill associated with Cartiva acquisition | 351,445 | ||||
Cartiva, Inc. | Upper Extremities | |||||
Goodwill [Roll Forward] | |||||
Goodwill associated with Cartiva acquisition | 0 | ||||
Cartiva, Inc. | Extremities & Biologics | |||||
Goodwill [Roll Forward] | |||||
Goodwill associated with Cartiva acquisition | 0 | ||||
IMASCAP SAS | |||||
Goodwill [Roll Forward] | |||||
Goodwill associated with Cartiva acquisition | $ 71,064 | $ 72,000 | |||
Goodwill adjustment associated with IMASCAP acquisition | (917) | ||||
IMASCAP SAS | Lower Extremities & Biologics | |||||
Goodwill [Roll Forward] | |||||
Goodwill adjustment associated with IMASCAP acquisition | 0 | ||||
IMASCAP SAS | Upper Extremities | |||||
Goodwill [Roll Forward] | |||||
Goodwill adjustment associated with IMASCAP acquisition | (917) | ||||
IMASCAP SAS | Extremities & Biologics | |||||
Goodwill [Roll Forward] | |||||
Goodwill adjustment associated with IMASCAP acquisition | $ 0 |
Goodwill and Intangibles Identi
Goodwill and Intangibles Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, accumulated amortization (Less) | $ 133,045 | $ 102,742 |
Intangible assets, gross (excluding goodwill) | 390,427 | 385,074 |
Intangible assets, net | 257,382 | 282,332 |
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 384,189 | 378,812 |
Finite-lived intangible assets, accumulated amortization (Less) | 133,045 | 102,742 |
Completed technology | Indefinite-lived Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets (excluding goodwill) | 6,238 | 6,262 |
Completed technology | Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 172,111 | 174,596 |
Finite-lived intangible assets, accumulated amortization (Less) | 72,140 | 55,114 |
Licenses | Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 9,247 | 6,547 |
Finite-lived intangible assets, accumulated amortization (Less) | 2,835 | 1,851 |
Customer relationships | Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 181,094 | 179,605 |
Finite-lived intangible assets, accumulated amortization (Less) | 41,389 | 30,935 |
Trademarks | Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 14,002 | 14,048 |
Finite-lived intangible assets, accumulated amortization (Less) | 11,834 | 11,564 |
Non-compete agreements | Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 5,713 | 3,252 |
Finite-lived intangible assets, accumulated amortization (Less) | 4,090 | 2,514 |
Other | Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 2,022 | 764 |
Finite-lived intangible assets, accumulated amortization (Less) | $ 757 | $ 764 |
Leases Narrative (Details)
Leases Narrative (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2018 |
Lessee, Lease, Description [Line Items] | |||||
Operating lease, right-of-use asset | $ 19,994 | $ 20,000 | |||
Operating lease, liability | 20,755 | $ 20,000 | |||
Impact of adoption, new accounting principle, cumulative adjustment | $ 229 | ||||
Rent expense | 11,100 | $ 8,900 | |||
Future minimum lease payments - inter-company lease | $ 7,800 | ||||
Ownership percentage | 51.00% | ||||
Retained Earnings | |||||
Lessee, Lease, Description [Line Items] | |||||
Impact of adoption, new accounting principle, cumulative adjustment | $ 200 | $ 229 |
Leases ROU Assets - Operating L
Leases ROU Assets - Operating Leases (Details) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 31, 2018 |
Lessee, Lease, Description [Line Items] | ||
Operating lease, right-of-use asset | $ 19,994 | $ 20,000 |
Buildings | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, right-of-use asset | 17,331 | |
Machinery and equipment | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, right-of-use asset | 1,720 | |
Furniture, fixtures and office equipment | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, right-of-use asset | $ 943 |
Leases Future Minimum Lease Pay
Leases Future Minimum Lease Payments - Operating Leases, Post Adoption of ASC 842 (Details) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 |
Leases [Abstract] | ||
2020 | $ 7,420 | |
2021 | 5,632 | |
2022 | 3,878 | |
2023 | 2,239 | |
2024 | 1,356 | |
Thereafter | 4,036 | |
Total minimum payments | 24,561 | |
Less amount representing interest | (3,806) | |
Present value of minimum lease payments | 20,755 | $ 20,000 |
Current portion | (6,608) | |
Long-term portion | $ 14,147 |
Leases Future Minimum Lease P_2
Leases Future Minimum Lease Payments - Prior to Adoption of ASC 842 (Details) $ in Thousands | Dec. 30, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 9,606 |
2020 | 7,498 |
2021 | 6,019 |
2022 | 4,433 |
2023 | 2,678 |
Thereafter | 10,998 |
Total minimum payments | $ 41,232 |
Leases ROU Assets - Finance Lea
Leases ROU Assets - Finance Leases (Details) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 |
Lessee, Lease, Description [Line Items] | ||
Finance lease, right-of-use asset, before accumulated amortization | $ 43,421 | |
Capital leased assets, gross | $ 36,907 | |
Less: Accumulated depreciation | (16,726) | |
Less: Accumulated depreciation | (11,906) | |
Finance lease, right-of-use asset, after accumulated amortization | 26,695 | |
Capital leased assets, net | 25,001 | |
Buildings | ||
Lessee, Lease, Description [Line Items] | ||
Finance lease, right-of-use asset, before accumulated amortization | 12,017 | |
Capital leased assets, gross | 12,017 | |
Machinery and equipment | ||
Lessee, Lease, Description [Line Items] | ||
Finance lease, right-of-use asset, before accumulated amortization | 30,733 | |
Capital leased assets, gross | 24,331 | |
Furniture, fixtures and office equipment | ||
Lessee, Lease, Description [Line Items] | ||
Finance lease, right-of-use asset, before accumulated amortization | $ 671 | |
Capital leased assets, gross | $ 559 |
Leases Future Minimum Lease P_3
Leases Future Minimum Lease Payments - Finance Leases (Details) $ in Thousands | Dec. 29, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 7,912 |
2021 | 6,166 |
2022 | 5,156 |
2023 | 3,337 |
2024 | 1,614 |
Thereafter | 3,330 |
Total minimum payments | 27,515 |
Less amount representing interest | (2,429) |
Present value of minimum lease payments | 25,086 |
Current portion | (7,011) |
Long-term portion | $ 18,075 |
Leases Lease Cost (Details)
Leases Lease Cost (Details) $ in Thousands | 12 Months Ended |
Dec. 29, 2019USD ($) | |
Leases [Abstract] | |
Depreciation | $ 5,688 |
Interest on lease liabilities | 1,104 |
Operating lease cost | 9,843 |
Short-term lease cost | 128 |
Variable lease cost | 500 |
Total lease cost | 17,263 |
Operating cash flows from finance leases | 1,104 |
Operating cash flows from operating leases | 9,247 |
Financing cash flows from finance leases | $ 7,837 |
Weighted-average remaining lease term - finance leases | 4 years 6 months 21 days |
Weighted-average remaining lease term - operating leases | 4 years 10 months 13 days |
Weighted-average discount rate - finance leases | 4.63% |
Weighted-average discount rate - operating leases | 7.06% |
Debt and Finance Lease Obliga_3
Debt and Finance Lease Obligations Debt and Finance Lease Obligations (Details) - USD ($) $ in Thousands | Feb. 07, 2019 | Dec. 29, 2019 | Dec. 30, 2018 | |
Debt Instrument [Line Items] | ||||
Derivative settlement gain or loss | $ (12,600) | |||
Debt and finance lease obligations | $ 1,168,029 | $ 1,115,127 | ||
Current portion of long-term obligations | [1] | (430,862) | (201,686) | |
Long-term debt and finance lease obligations | [1] | 737,167 | 913,441 | |
Finance Lease Obligation | ||||
Debt Instrument [Line Items] | ||||
Debt and finance lease obligations | 25,086 | 25,539 | ||
2023 Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Debt and finance lease obligations | 695,748 | 548,076 | ||
2021 Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Debt and finance lease obligations | 344,635 | 321,286 | ||
2020 Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Debt and finance lease obligations | 55,997 | 173,533 | ||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt and finance lease obligations | 19,296 | 18,979 | ||
Other Debt Obligations | ||||
Debt Instrument [Line Items] | ||||
Debt and finance lease obligations | 6,615 | 9,953 | ||
Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Asset based line of credit | $ 20,652 | $ 17,761 | ||
[1] | As of December 29, 2019 , the closing price of our ordinary shares was greater than 130% of the 2021 Notes conversion price for 20 or more of the 30 consecutive trading days preceding the quarter-end; and, therefore, the holders of the 2021 Notes may convert the notes during the succeeding quarterly period. Due to the ability of the holders of the 2021 Notes to convert the notes during this period, the carrying value of the 2021 Notes and the fair value of the 2021 Notes Conversion Derivative were classified as current liabilities, and the fair value of the 2021 Notes Hedges were classified as current assets as of December 29, 2019 . The respective balances were classified as long-term as of December 30, 2018 . See Note 6 and Note 10 . |
Components of Convertible Notes
Components of Convertible Notes (Details) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 | May 20, 2016 | Feb. 13, 2015 |
Debt Instrument [Line Items] | ||||
Debt and finance lease obligations | $ 1,168,029 | $ 1,115,127 | ||
2023 Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 814,556 | 675,000 | ||
Unamortized debt discount | (107,916) | (114,554) | ||
Unamortized debt issuance costs | (10,892) | (12,370) | ||
Debt and finance lease obligations | 695,748 | 548,076 | ||
2021 Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 395,000 | 395,000 | $ 395,000 | |
Unamortized debt discount | (47,405) | (69,382) | (117,200) | |
Unamortized debt issuance costs | (2,960) | (4,332) | $ (7,300) | |
Debt and finance lease obligations | 344,635 | 321,286 | ||
2020 Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 56,455 | 186,589 | ||
Unamortized debt discount | (408) | (11,642) | $ (117,200) | |
Unamortized debt issuance costs | (50) | (1,414) | ||
Debt and finance lease obligations | $ 55,997 | $ 173,533 |
Debt and Finance Lease Obliga_4
Debt and Finance Lease Obligations Narrative (Details) $ / shares in Units, shares in Millions | Feb. 07, 2019USD ($)shares | Jul. 30, 2018USD ($) | Jun. 28, 2018USD ($)$ / shares | May 20, 2016USD ($)$ / sharesshares | Nov. 24, 2015$ / sharesshares | Feb. 13, 2015USD ($)$ / sharesshares | May 31, 2018USD ($) | Mar. 31, 2019USD ($) | Jul. 01, 2018USD ($) | Dec. 29, 2019USD ($)$ / sharesshares | Dec. 30, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | Dec. 25, 2016USD ($) | Nov. 04, 2019$ / shares | Feb. 28, 2019USD ($) | May 07, 2018USD ($) |
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, convertible, trading period | 30 days | |||||||||||||||
Threshold for conversion, conversion price, ordinary shares | 130.00% | |||||||||||||||
Debt instrument, convertible, minimum consecutive period | 20 days | |||||||||||||||
Debt instrument, convertible, trading price multiple per $1000 principle amount | $ 1,000 | |||||||||||||||
Debt instrument, convertible, purchase price as a percent of principal amount | 100.00% | |||||||||||||||
Proceeds from issuance of warrants | $ 21,210,000 | $ 102,137,000 | $ 0 | |||||||||||||
Derivative settlement gain or loss | $ 12,600,000 | |||||||||||||||
Proceeds from notes hedge options | $ 16,849,000 | $ 34,553,000 | $ 0 | |||||||||||||
Commitment fee percentage, unused capacity | 0.50% | |||||||||||||||
Minimum borrowing capacity as percentage of available borrowing capacity | 20.00% | |||||||||||||||
Percent of debt outstanding | 85.00% | |||||||||||||||
Prepayment penalty | 1.00% | |||||||||||||||
Term loan facility, prepayment conditions, percent of cash proceeds | 100.00% | |||||||||||||||
Proceeds from collaborators | $ 10,000,000 | |||||||||||||||
Circumstance 1 | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, convertible, minimum consecutive trading period | 20 days | |||||||||||||||
Debt instrument, convertible, trading period | 30 days | |||||||||||||||
Threshold for conversion, conversion price, ordinary shares | 130.00% | |||||||||||||||
Circumstance 2 | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, convertible, minimum consecutive trading period | 5 days | |||||||||||||||
Debt instrument, convertible, minimum consecutive period | 5 days | |||||||||||||||
Debt instrument, convertible, trading price multiple per $1000 principle amount | $ 1,000 | |||||||||||||||
Threshold for conversion | 98.00% | |||||||||||||||
Stryker Corporation | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Sale of stock, price per share (in usd per share) | $ / shares | $ 30.75 | |||||||||||||||
Line of Credit | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Maximum borrowing capacity, credit agreement | $ 175,000,000 | $ 175,000,000 | $ 150,000,000 | |||||||||||||
2020 Convertible Debt | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, convertible, trading price multiple per $1000 principle amount | 1,000 | |||||||||||||||
Conversion price | $ / shares | $ 29.94 | $ 30.87 | ||||||||||||||
Long-term debt, fair value | $ 57,300,000 | |||||||||||||||
Effective interest rate | 8.54% | |||||||||||||||
Loss on debt restructuring | $ 14,300,000 | |||||||||||||||
Write off, deferred debt issuance costs | $ 39,900,000 | $ 14,300,000 | $ 39,900,000 | $ 39,900,000 | ||||||||||||
Exercise price (in usd per share) | $ / shares | $ 38.8010 | $ 40 | $ 38.80 | |||||||||||||
Extinguishment of Debt, Amount | $ 45,000,000 | |||||||||||||||
Common shares attributable to dilutive effect of options and warrants (in shares) | shares | 20.5 | 1.9 | 6.2 | 19.6 | ||||||||||||
Stated interest rate | 2.00% | |||||||||||||||
Conversion rate | 33.39487 | 32.3939 | ||||||||||||||
Number of securities | shares | 1.9 | 21.1 | 6.2 | 19.6 | ||||||||||||
Debt conversion, converted instrument, amount | $ 130,100,000 | 400,900,000 | ||||||||||||||
Debt instrument, deferred financing charges | $ 18,100,000 | |||||||||||||||
Proceeds from warrant exercises | $ 10,600,000 | |||||||||||||||
Proceeds from notes hedge options | $ 600,000 | |||||||||||||||
Long-term debt, gross | $ 56,455,000 | $ 186,589,000 | ||||||||||||||
Unamortized debt issuance costs | 50,000 | 1,414,000 | ||||||||||||||
Unamortized debt discount | 117,200,000 | $ 408,000 | $ 11,642,000 | |||||||||||||
Payment terms, days to maturity | 91 days | |||||||||||||||
2020 Convertible Debt | Reported Value Measurement | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Long-term debt, gross | 632,500,000 | |||||||||||||||
2023 Exchange | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt discount | 7,400,000 | |||||||||||||||
Debt instrument, deferred financing charges | 900,000 | |||||||||||||||
2021 Convertible Debt | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, convertible, trading price multiple per $1000 principle amount | $ 1,000 | |||||||||||||||
Conversion price | $ / shares | $ 21.36 | |||||||||||||||
Long-term debt, fair value | $ 575,500,000 | |||||||||||||||
Effective interest rate | 9.72% | |||||||||||||||
Exercise price (in usd per share) | $ / shares | $ 30 | |||||||||||||||
Common shares attributable to dilutive effect of options and warrants (in shares) | shares | 18.5 | 18.5 | 18.5 | |||||||||||||
Stated interest rate | 2.25% | |||||||||||||||
Conversion rate | 46.8165 | |||||||||||||||
Derivative, cost of hedge | $ 99,800,000 | |||||||||||||||
Number of securities | shares | 18.5 | |||||||||||||||
Proceeds from issuance of warrants | $ 54,600,000 | |||||||||||||||
Long-term debt, gross | 395,000,000 | $ 395,000,000 | $ 395,000,000 | |||||||||||||
Unamortized debt issuance costs | 7,300,000 | 2,960,000 | 4,332,000 | |||||||||||||
Unamortized debt discount | 117,200,000 | $ 47,405,000 | $ 69,382,000 | |||||||||||||
Payment terms, days to maturity | 91 days | |||||||||||||||
2021 Convertible Debt | 2020 Convertible Debt | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Extinguishment of debt, amount delivered | $ 990 | |||||||||||||||
2023 Convertible Debt | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, convertible, trading price multiple per $1000 principle amount | $ 1,072.40 | |||||||||||||||
Debt conversion, amount delivered | $ 1,138.70 | |||||||||||||||
Conversion price | $ / shares | $ 33.37 | |||||||||||||||
Effective interest rate | 5.76% | |||||||||||||||
Exercise price (in usd per share) | $ / shares | $ 40.86 | |||||||||||||||
Common shares attributable to dilutive effect of options and warrants (in shares) | shares | 24.4 | 20.2 | ||||||||||||||
Debt instrument, face amount | $ 675,000,000 | |||||||||||||||
Stated interest rate | 1.625% | |||||||||||||||
Conversion rate | 29.9679 | |||||||||||||||
Debt issuance costs, net | $ 13,500,000 | |||||||||||||||
Number of securities | shares | 20.2 | |||||||||||||||
Proceeds from issuance of warrants | 102,100,000 | |||||||||||||||
Proceeds from warrant exercises | 8,900,000 | |||||||||||||||
Long-term debt, gross | $ 814,556,000 | $ 675,000,000 | ||||||||||||||
Unamortized debt issuance costs | 10,892,000 | 12,370,000 | ||||||||||||||
Unamortized debt discount | 107,916,000 | $ 114,554,000 | ||||||||||||||
2023 Notes Hedges | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Indebtedness in excess, default | 25,000,000 | |||||||||||||||
Derivative, cost of hedge | 141,300,000 | |||||||||||||||
Payments for warrants | 30,100,000 | |||||||||||||||
Proceeds from derivatives settled | 21,200,000 | |||||||||||||||
Additional 2023 Convertible Debt | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Long-term debt, fair value | 864,000,000 | |||||||||||||||
Debt instrument, face amount | 139,600,000 | |||||||||||||||
2020 Settled Hedges | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Payments for warrants | 11,000,000 | |||||||||||||||
Net proceeds from hedge | 5,800,000 | |||||||||||||||
Proceeds from notes hedge options | 16,800,000 | |||||||||||||||
2023 Notes Conversion Derivative | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Long-term debt, fair value | $ 124,600,000 | |||||||||||||||
Derivative settlement gain or loss | (28,900,000) | |||||||||||||||
2020 Notes Conversion Derivative | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Derivative settlement gain or loss | $ (16,300,000) | |||||||||||||||
2020 Notes Hedges | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Derivative, cost of hedge | $ 144,800,000 | |||||||||||||||
Line of Credit | Term Loan | Secured Debt | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Maximum borrowing capacity, credit agreement | 55,000,000 | 40,000,000 | ||||||||||||||
Debt Instrument, Tranche 2 | Line of Credit | Term Loan | Secured Debt | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Maximum borrowing capacity, credit agreement | 35,000,000 | $ 35,000,000 | $ 20,000,000 | |||||||||||||
Debt Instrument, Tranche 1 | Line of Credit | Term Loan | Secured Debt | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Maximum borrowing capacity, credit agreement | $ 20,000,000 | |||||||||||||||
Maximum | Line of Credit | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Maximum borrowing capacity, credit agreement | $ 75,000,000 | |||||||||||||||
Minimum | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Prepayment penalty | 0.75% | |||||||||||||||
London Interbank Offered Rate (LIBOR) | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, variable rate | 0.75% | |||||||||||||||
Base Rate | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Credit facility, ending interest rate | 3.25% | |||||||||||||||
Variable Income Interest Rate | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Credit facility, ending interest rate | 4.25% | 7.85% | ||||||||||||||
Interest Rate Floor | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Credit facility, ending interest rate | 1.00% |
Debt and Finance Lease Obliga_5
Debt and Finance Lease Obligations Conversion Terms (Details) | Jun. 28, 2018$ / shares | May 20, 2016$ / shares | Nov. 24, 2015$ / shares | Dec. 29, 2019 | Feb. 13, 2015$ / shares |
2020 Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Conversion rate | 33.39487 | 32.3939 | |||
Conversion price | $ 29.94 | $ 30.87 | |||
Convertible notes trading period | 200 days | ||||
2021 Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Conversion rate | 46.8165 | ||||
Conversion price | $ 21.36 | ||||
Convertible notes trading period | 100 days | ||||
2023 Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Conversion rate | 29.9679 | ||||
Conversion price | $ 33.37 | ||||
Convertible notes trading period | 120 days |
Debt and Finance Lease Obliga_6
Debt and Finance Lease Obligations Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||||||||||
Amortization of debt discount | $ 12,600 | $ 12,300 | $ 12,100 | $ 12,300 | $ 12,600 | $ 12,300 | $ 12,300 | $ 12,000 | |||
2023 Convertible Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Amortization of debt discount | $ 23,522 | $ 10,071 | $ 0 | ||||||||
Amortization of deferred financing costs | 2,381 | 1,148 | 0 | ||||||||
2021 Convertible Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Amortization of debt discount | 21,977 | 19,950 | 18,110 | ||||||||
Amortization of deferred financing costs | 1,372 | 1,284 | 1,131 | ||||||||
2020 Convertible Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Amortization of debt discount | 3,804 | 19,165 | 27,331 | ||||||||
Amortization of deferred financing costs | $ 462 | $ 2,333 | $ 3,320 |
Debt and Finance Lease Obliga_7
Debt and Finance Lease Obligations Maturities (Details) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 | May 20, 2016 |
Debt Disclosure [Abstract] | |||
2020 | $ 474,702 | ||
2021 | 21,423 | ||
2022 | 1,511 | ||
2023 | 814,637 | ||
2024 | 0 | ||
Thereafter | 1,005 | ||
Long-term debt | 1,313,278 | ||
Secured Debt | |||
Debt Instrument [Line Items] | |||
Long-term line of credit | 20,652 | $ 17,761 | |
2021 Convertible Debt | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 395,000 | $ 395,000 | $ 395,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Stockholders' equity attributable to parent, beginning balance | $ 932,459 | $ 588,696 | $ 686,864 |
Changes in foreign currency translation | (21,416) | (30,373) | 41,751 |
Accumulated other comprehensive loss | (29,499) | (8,083) | |
Accumulated other comprehensive (loss) income | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Stockholders' equity attributable to parent, beginning balance | (8,083) | 22,290 | |
Accumulated other comprehensive (loss) income | Accumulated Foreign Currency Adjustment Attributable to Parent | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Stockholders' equity attributable to parent, beginning balance | (19,461) | ||
Changes in foreign currency translation | (21,416) | (30,373) | 41,751 |
Accumulated other comprehensive loss | $ (29,499) | $ (8,083) | $ 22,290 |
Income Taxes Income Before Taxe
Income Taxes Income Before Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ (69,903) | $ (144,987) | $ (56,808) |
Foreign | (9,263) | (24,853) | (43,097) |
Loss from continuing operations before income taxes | $ (79,166) | $ (169,840) | $ (99,905) |
Income Taxes Components of Inco
Income Taxes Components of Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Current federal tax expense (benefit) | $ (13) | $ 449 | $ (23,781) |
Current state and local tax expense (benefit) | 232 | 251 | 390 |
Current foreign tax expense (benefit) | 15,213 | 3,307 | 2,214 |
Total current provision (benefit) | 15,432 | 4,007 | (21,177) |
Deferred federal income tax expense (benefit) | 154 | (2,841) | (5,098) |
Deferred state and local income tax expense (benefit) | 143 | (663) | (93) |
Deferred foreign income tax expense (benefit) | (2,761) | (1,039) | (8,600) |
Total deferred benefit | (2,464) | (4,543) | (13,791) |
Total provision (benefit) for income taxes | $ 12,968 | $ (536) | $ (34,968) |
Income Taxes Effective Income T
Income Taxes Effective Income Tax Reconciliation (Details) | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Income tax benefit at statutory rate | 21.00% | 21.00% | 35.00% |
State income taxes | 2.20% | 3.80% | 1.50% |
Change in valuation allowance | (18.30%) | (22.90%) | (3.50%) |
CVR fair market value adjustment | 0.10% | 0.00% | (1.90%) |
Foreign income tax rate differential | (17.90%) | (0.60%) | (6.10%) |
Changes in tax reserves | (0.30%) | 0.40% | 2.90% |
Effects of U.S. tax reform | 0.00% | 0.00% | 6.50% |
Foreign rate changes | 0.00% | 0.00% | 1.70% |
U.S. R&D tax credit | 2.00% | 0.70% | 0.60% |
Nondeductible compensation | (3.20%) | (0.70%) | (1.00%) |
Other, net | (2.00%) | (1.40%) | (0.70%) |
Total | (16.40%) | 0.30% | 35.00% |
Income Taxes Deferred Tax Asset
Income Taxes Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 340,451 | $ 330,589 |
General business credit carryforwards | 16,131 | 14,598 |
Reserves and allowances | 50,278 | 56,675 |
Deferred interest | 42,016 | 27,322 |
Share-based compensation expense | 12,638 | 14,934 |
Convertible debt notes and conversion options | 15,272 | 38,368 |
Other | 3,857 | 3,616 |
Valuation allowance | (423,037) | (400,171) |
Total deferred tax assets | 57,606 | 85,931 |
Depreciation | 5,025 | 5,095 |
Intangible assets | 50,156 | 58,221 |
Convertible notes bond hedges | 11,493 | 34,653 |
Other | 304 | 166 |
Total deferred tax liabilities | 66,978 | 98,135 |
Total deferred tax liabilities | $ (9,372) | $ (12,204) |
Income Taxes Narrative (Details
Income Taxes Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards, expiration period | 5 years | ||
Valuation allowance | $ (423,037) | $ (400,171) | |
Valuation allowance, deferred tax asset, increase (decrease), amount | 22,800 | ||
Unrecognized tax benefits | 4,511 | $ 4,610 | $ 6,025 |
Unrecognized tax benefits that would impact effective tax rate | 1,300 | ||
Unrecognized tax benefits, income tax penalties and interest accrued | 100 | ||
US Federal Operating Loss | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 1,100,000 | ||
US Federal Operating Loss - do not expire | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 172,500 | ||
US Federal Operating Loss -expiring | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 964,800 | ||
US Federal Operating Loss -expiring in 5 years | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 38,700 | ||
US State Operating loss | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 1,100,000 | ||
US State Operating loss - do not expire | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 21,500 | ||
US State Operating loss - expiring | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 1,100,000 | ||
General Business Tax Credit Carryforward | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 16,100 | ||
Foreign Operating Loss | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 187,800 | ||
Foreign operating loss - do not expire | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 90,800 | ||
Foreign operating losses that will expire | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | $ 97,000 |
Income Taxes Unrecognized Tax B
Income Taxes Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 29, 2019 | Dec. 30, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits, beginning balance | $ 4,610 | $ 6,025 |
Additions from acquisitions | 0 | 109 |
Additions for tax positions related to current year | 473 | 385 |
Additions for tax positions of prior years | 172 | 718 |
Reductions for tax positions of prior years | (290) | (490) |
Settlements | (406) | (1,983) |
Foreign currency translation | (48) | (154) |
Unrecognized tax benefits, ending balance | $ 4,511 | $ 4,610 |
Supplemental Balance Sheet In_3
Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 |
Other Liabilities Disclosure [Abstract] | ||
Employee bonuses | $ 25,383 | $ 28,953 |
Other employee benefits | 25,194 | 22,841 |
Royalties | 13,441 | 12,330 |
Taxes other than income | 13,826 | 7,897 |
Notes conversion derivatives | 181,144 | 17,386 |
Commissions | 18,025 | 19,356 |
Professional and legal fees | 14,941 | 10,848 |
Contingent consideration | 11,982 | 3,427 |
Product liability and other legal accruals | 54,107 | 66,918 |
Other | 28,982 | 27,125 |
Accrued expenses and other current liabilities | $ 387,025 | $ 217,081 |
Capital Stock and Earnings pe_2
Capital Stock and Earnings per share Narrative (Details) $ / shares in Units, $ in Thousands | Aug. 27, 2018USD ($)$ / sharesshares | Feb. 13, 2015shares | Dec. 29, 2019USD ($)shares | Dec. 30, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | Dec. 29, 2019€ / shares | Nov. 04, 2019$ / shares | Dec. 30, 2018€ / sharesshares |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Common stock, value, authorized | $ | $ 9,600 | |||||||
Common stock, shares authorized (in shares) | 320,000,000 | 320,000,000 | ||||||
Common stock, par value (in usd per share) | € / shares | € 0.03 | € 0.03 | ||||||
Common stock, shares issued (in shares) | 128,614,026 | 125,555,751 | ||||||
Common stock, ordinary shares issuable, percent of outstanding stock | 20.00% | |||||||
Shares issued, price per share (in usd per share) | $ / shares | $ 24.60 | |||||||
Proceeds from equity offering | $ | $ 0 | $ 448,924 | $ 0 | |||||
Payment of equity offering costs | $ | $ 0 | $ 25,896 | $ 0 | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 8,900,000 | 9,900,000 | 10,000,000 | |||||
Antidilutive securities, non-vested shares, restricted stock units, and stock-settled phantom stock units (in shares) | 1,200,000 | 1,300,000 | 1,300,000 | |||||
Antidilutive securities, non-vested shares, performance shares (in shares) | 800,000 | 200,000 | 500,000 | |||||
Stryker Corporation | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Sale of stock, price per share (in usd per share) | $ / shares | $ 30.75 | |||||||
General Purpose | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Common stock, ordinary shares issuable, percent of outstanding stock | 10.00% | |||||||
Potential Mergers and Acquisitions | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Common stock, ordinary shares issuable, percent of outstanding stock | 10.00% | |||||||
Common Stock | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Stock issued during period (in shares) | 18,200,000 | 18,248,932 | ||||||
Proceeds from equity offering | $ | $ 423,000 | |||||||
Underwriting Discount and Commissions | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Payment of equity offering costs | $ | 25,400 | |||||||
Offering Costs, Other | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Payment of equity offering costs | $ | $ 500 | |||||||
2021 Convertible Debt | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Common shares attributable to dilutive effect of options and warrants (in shares) | 18,500,000 | 18,500,000 | 18,500,000 | |||||
2020 Convertible Debt | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Common shares attributable to dilutive effect of options and warrants (in shares) | 20,500,000 | 1,900,000 | 6,200,000 | 19,600,000 | ||||
2023 Convertible Debt | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Common shares attributable to dilutive effect of options and warrants (in shares) | 24,400,000 | 20,200,000 |
Weighted-average Shares (Detail
Weighted-average Shares (Details) - shares shares in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||||||||||
Weighted-average number of ordinary shares outstanding-basic and diluted | 127,557 | 126,767 | 126,267 | 125,812 | 125,323 | 113,043 | 106,095 | 105,904 | 126,601 | 112,592 | 104,531 |
Share-Based Compensation Share-
Share-Based Compensation Share-based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||
Total cost of share-based arrangements | $ 32,836 | $ 26,039 | $ 19,485 | ||||||||
Amounts capitalized into inventory | (870) | (507) | (669) | ||||||||
Amortization of capitalized amounts | 601 | 588 | 577 | ||||||||
Impact to net loss | $ 32,567 | $ 26,120 | $ 19,393 | ||||||||
Impact to basic and diluted loss per share | $ 0.26 | $ 0.23 | $ 0.19 | ||||||||
Weighted-average number of ordinary shares outstanding - basic and diluted (in shares) | 127,557 | 126,767 | 126,267 | 125,812 | 125,323 | 113,043 | 106,095 | 105,904 | 126,601 | 112,592 | 104,531 |
Share-Based Compensation Compen
Share-Based Compensation Compensation Related Costs, Share-based Awards (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total cost of share-based arrangements | $ 32,836 | $ 26,039 | $ 19,485 |
Employee Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total cost of share-based arrangements | 13,116 | 11,177 | 8,988 |
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total cost of share-based arrangements | 12,651 | 11,514 | 9,373 |
Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total cost of share-based arrangements | 6,166 | 2,538 | 441 |
Employee Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total cost of share-based arrangements | $ 903 | $ 810 | $ 683 |
Share-Based Compensation Narrat
Share-Based Compensation Narrative (Details) $ / shares in Units, $ in Millions | Jun. 28, 2018shares | Dec. 29, 2019USD ($)periodhour$ / sharesshares | Dec. 30, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Nov. 04, 2019$ / shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized share-based compensation costs | $ | $ 56.4 | ||||
Award service period | 4 years | ||||
Award expiration term | 10 years | ||||
Number of shares authorized (in shares) | 11,200,000 | ||||
Number of shares available for grant (in shares) | 6,735,115 | ||||
Shares, outstanding (in shares) | 10,444,606 | ||||
Intrinsic value of options exercised in period | $ | $ 17.9 | $ 4.9 | $ 9.1 | ||
Number of shares in ESOP (in shares) | 216,667 | ||||
ESPP, number of plan periods per year | period | 2 | ||||
Maximum annual contributions, percent | 20.00% | ||||
Number of shares allocated to ESOP (in shares) | 1,000 | ||||
Purchase price discount, ESPP, percent | 85.00% | ||||
Stryker Corporation | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Sale of stock, price per share (in usd per share) | $ / shares | $ 30.75 | ||||
Employee Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options forfeited or expired (in shares) | 236,000 | ||||
Weighted average grant date fair value (in usd per share) | $ / shares | $ 9.33 | $ 9.32 | $ 9.80 | ||
Expected option life | 6 years | 7 years | 6 years | ||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unvested equity instruments, granted (in shares) | 598,000 | 600,000 | 500,000 | ||
Weighted average grant date fair value, unvested equity instruments, granted (in usd per share) | $ / shares | $ 27.90 | $ 24.05 | $ 27.83 | ||
Fair value of equity instruments | $ | $ 18 | $ 12.2 | $ 9 | ||
Performance Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award service period | 3 years | ||||
Unvested equity instruments, granted (in shares) | 321,000 | 300,000 | 200,000 | ||
Weighted average grant date fair value, unvested equity instruments, granted (in usd per share) | $ / shares | $ 27.84 | $ 24.49 | $ 27.86 | ||
Inducement Grant | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Intrinsic value of options exercised in period | $ | $ 2.9 | $ 1.6 | $ 0.3 | ||
Employee Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized (in shares) | 550,000 | ||||
Number of shares available for grant (in shares) | 214,225 | ||||
ESPP eligibility requirements, minimum hours per week | hour | 20 | ||||
Expected option life | 6 months | 6 months | 6 months | ||
Director | Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award service period | 1 year | ||||
Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award service period | 4 years | ||||
Performance criteria, target level cap | 200.00% | ||||
Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award service period | 3 years | ||||
2010 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares available for grant (in shares) | 1,329,648 | ||||
Options forfeited or expired (in shares) | 6,405,992 | ||||
2017 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options forfeited or expired (in shares) | 520,656 | ||||
Wright Medical Group, Inc. | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award expiration term | 10 years | ||||
Shares, outstanding (in shares) | 1,891,240 | ||||
Tornier N.V. | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares in ESOP (in shares) | 333,333 |
Share-Based Compensation Black-
Share-Based Compensation Black-Scholes Valuation Model Assumptions (Details) | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Employee Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate, minimum | 1.50% | 2.30% | 1.30% |
Risk-free interest rate, maximum | 2.30% | 2.80% | 1.90% |
Expected option life | 6 months | 6 months | 6 months |
Expected price volatility | 30.00% | 31.00% | 24.00% |
Employee Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate, minimum | 1.50% | 2.60% | 1.90% |
Risk-free interest rate, maximum | 2.40% | 2.90% | 2.00% |
Expected option life | 6 years | 7 years | 6 years |
Expected price volatility | 31.00% | 32.00% | 33.00% |
Share-Based Compensation Stock
Share-Based Compensation Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 29, 2019USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Share price | $ 30.58 |
Inducement Grant | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Options outstanding, beginning balance (in shares) | shares | 693 |
Options exercised (in shares) | shares | (209) |
Options outstanding, ending balance (in shares) | shares | 484 |
Options exercisable, (in shares) | shares | 484 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Weighted average exercise price, options outstanding, beginning balance (in usd per share) | $ 15.66 |
Weighted average exercise price, options forfeited or expired (in usd per share) | 15.91 |
Weighted average exercise price, options outstanding, ending balance (in usd per share) | 15.55 |
Weighted average exercise price, options exercisable (in usd per share) | $ 15.55 |
Weighted-average remaining contractual life, options outstanding | 1 year 8 months 19 days |
Aggregate intrinsic value, options outstanding | $ | $ 7,272 |
Weighted-average remaining contractual life, options exercisable | 1 year 8 months 19 days |
Aggregate intrinsic value, options exercisable | $ | $ 7,272 |
Employee Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Options outstanding, beginning balance (in shares) | shares | 9,203 |
Options granted (in shares) | shares | 1,593 |
Options exercised (in shares) | shares | (2,152) |
Options forfeited or expired (in shares) | shares | (236) |
Options outstanding, ending balance (in shares) | shares | 8,408 |
Options exercisable, (in shares) | shares | 5,426 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Weighted average exercise price, options outstanding, beginning balance (in usd per share) | $ 22.89 |
Weighted average exercise price, options granted (in usd per share) | 27.77 |
Weighted average exercise price, options forfeited or expired (in usd per share) | 21.52 |
Weighted average exercise price, options exercised (in usd per share) | 25.29 |
Weighted average exercise price, options outstanding, ending balance (in usd per share) | 24.10 |
Weighted average exercise price, options exercisable (in usd per share) | $ 22.86 |
Weighted-average remaining contractual life, options outstanding | 6 years 6 months 7 days |
Aggregate intrinsic value, options outstanding | $ | $ 54,473 |
Weighted-average remaining contractual life, options exercisable | 5 years 2 months 26 days |
Aggregate intrinsic value, options exercisable | $ | $ 41,885 |
Share-Based Compensation Summar
Share-Based Compensation Summary of Stock Options (Details) shares in Thousands | 12 Months Ended |
Dec. 29, 2019$ / sharesshares | |
Employee Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of options outstanding (in shares) | shares | 8,408 |
Weighted-average remaining contractual life | 6 years 6 months 7 days |
Weighted average exercise price, options outstanding (in usd per share) | $ 24.10 |
Number of options exercisable (in shares) | shares | 5,426 |
Weighted average exercise price, options exercisable (in usd per share) | $ 22.86 |
Exercise Price Range $2.00 - $20.00 | Employee Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of options outstanding (in shares) | shares | 609 |
Weighted-average remaining contractual life | 3 years 7 months 6 days |
Weighted average exercise price, options outstanding (in usd per share) | $ 17.89 |
Number of options exercisable (in shares) | shares | 556 |
Weighted average exercise price, options exercisable (in usd per share) | $ 17.73 |
Exercise price range, lower limit (in usd per share) | 2 |
Exercise price range, upper limit (in usd per share) | $ 20 |
Exercise Price Range $2.00 - $20.00 | Inducement Grant | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of options outstanding (in shares) | shares | 484 |
Weighted-average remaining contractual life | 1 year 8 months 19 days |
Weighted average exercise price, options outstanding (in usd per share) | $ 15.55 |
Number of options exercisable (in shares) | shares | 484 |
Weighted average exercise price, options exercisable (in usd per share) | $ 15.55 |
Exercise Price Range $20.01 - $21.00 | Employee Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of options outstanding (in shares) | shares | 1,708 |
Weighted-average remaining contractual life | 5 years 4 months 9 days |
Weighted average exercise price, options outstanding (in usd per share) | $ 20.63 |
Number of options exercisable (in shares) | shares | 1,675 |
Weighted average exercise price, options exercisable (in usd per share) | $ 20.64 |
Exercise price range, lower limit (in usd per share) | 20.01 |
Exercise price range, upper limit (in usd per share) | $ 21 |
Exercise Price Range $21.01 - $25.00 | Employee Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of options outstanding (in shares) | shares | 2,850 |
Weighted-average remaining contractual life | 6 years 5 months 15 days |
Weighted average exercise price, options outstanding (in usd per share) | $ 23.01 |
Number of options exercisable (in shares) | shares | 1,905 |
Weighted average exercise price, options exercisable (in usd per share) | $ 22.59 |
Exercise price range, lower limit (in usd per share) | 21.01 |
Exercise price range, upper limit (in usd per share) | $ 25 |
Exercise Price Range $25.01 - $32.00 | Employee Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of options outstanding (in shares) | shares | 3,241 |
Weighted-average remaining contractual life | 7 years 8 months 19 days |
Weighted average exercise price, options outstanding (in usd per share) | $ 28.06 |
Number of options exercisable (in shares) | shares | 1,290 |
Weighted average exercise price, options exercisable (in usd per share) | $ 28.36 |
Exercise price range, lower limit (in usd per share) | 25.01 |
Exercise price range, upper limit (in usd per share) | 32 |
Exercise Price Range $15.00 - $18.00 | Inducement Grant | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price range, lower limit (in usd per share) | 15 |
Exercise price range, upper limit (in usd per share) | $ 18 |
Share-Based Compensation RSU an
Share-Based Compensation RSU and PSU Activity (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Unvested equity instruments, beginning balance (in shares) | 466 | ||
Unvested equity instruments, granted (in shares) | 321 | 300 | 200 |
Unvested equity instruments, vested (in shares) | 0 | ||
Unvested equity instruments, forfeited (in shares) | 0 | ||
Unvested equity instruments, ending balance (in shares) | 787 | 466 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted average grant date fair value, unvested equity instruments, beginning balance (in usd per share) | $ 26 | ||
Weighted average grant date fair value, unvested equity instruments, granted (in usd per share) | 27.84 | $ 24.49 | $ 27.86 |
Weighted average grant date fair value, unvested equity instruments, vested (in usd per share) | 0 | ||
Weighted average grant date fair value, unvested equity instruments, forefeited (in usd per share) | 0 | ||
Weighted average grant date fair value, unvested equity instruments, ending balance (in usd per share) | 26.75 | $ 26 | |
Aggregate intrinsic value, unvested equity instruments | $ 24,076,000 | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Unvested equity instruments, beginning balance (in shares) | 1,322 | ||
Unvested equity instruments, granted (in shares) | 598 | 600 | 500 |
Unvested equity instruments, vested (in shares) | (589) | ||
Unvested equity instruments, forfeited (in shares) | (82) | ||
Unvested equity instruments, ending balance (in shares) | 1,249 | 1,322 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted average grant date fair value, unvested equity instruments, beginning balance (in usd per share) | $ 23.90 | ||
Weighted average grant date fair value, unvested equity instruments, granted (in usd per share) | 27.90 | $ 24.05 | $ 27.83 |
Weighted average grant date fair value, unvested equity instruments, vested (in usd per share) | 22.97 | ||
Weighted average grant date fair value, unvested equity instruments, forefeited (in usd per share) | 25.51 | ||
Weighted average grant date fair value, unvested equity instruments, ending balance (in usd per share) | 26.16 | $ 23.90 | |
Aggregate intrinsic value, unvested equity instruments | $ 38,196,000 |
Retirement Plan Benefits (Detai
Retirement Plan Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Postemployment Benefits [Abstract] | |||
Defined contribution plan, employer matching contribution, 100% | 100.00% | ||
Defined contribution plan, employee annual compensation eligible for employer match, 3% | 3.00% | ||
Defined contribution plan, employer matching contribution, 50% | 50.00% | ||
Defined contribution plan, employee annual compensation eligible for employer match, 2% | 2.00% | ||
Defined contribution plan, cost | $ 7.2 | $ 6.2 | $ 5.5 |
Commitments and Contingencies -
Commitments and Contingencies - Product Liability Contingency (Details) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019USD ($)hourslawsuitagreementinsurer | Oct. 31, 2017lawsuitsettlement | Dec. 30, 2018USD ($) | |
Product Liability Contingency [Line Items] | |||
Number of supply agreements | agreement | 8 | ||
Purchase obligation due in 2020 | $ 7,800 | ||
Purchase obligation due in 2021 | 7,300 | ||
Purchase obligation due in 2022 | 7,300,000 | ||
Purchase obligation due in 2023 | 7,300,000 | ||
Purchase obligation due in 2024 | 7,300,000 | ||
Purchase obligation due in 2025 | 3,600 | ||
Purchase obligation due in 2026 | $ 3,600,000 | ||
Claims payment period | 2 years | ||
Number of insurance carriers | insurer | 7 | ||
CONSERVE (R) DYNASTY (R) AND LINEAGE (R) | |||
Product Liability Contingency [Line Items] | |||
Loss contingency accrual | $ 40,500 | $ 74,500 | |
PROFEMUR Titanium Modular Neck Product | |||
Product Liability Contingency [Line Items] | |||
Loss contingency accrual | 12,100 | 17,500 | |
Accrued Liabilities, Current | CONSERVE (R) DYNASTY (R) AND LINEAGE (R) | |||
Product Liability Contingency [Line Items] | |||
Loss contingency accrual | 33,000 | 51,900 | |
Accrued Liabilities, Current | PROFEMUR Titanium Modular Neck Product | |||
Product Liability Contingency [Line Items] | |||
Loss contingency accrual | 8,800 | 12,300 | |
Other Noncurrent Liabilities | CONSERVE (R) DYNASTY (R) AND LINEAGE (R) | |||
Product Liability Contingency [Line Items] | |||
Loss contingency accrual | 7,500 | 22,600 | |
Other Noncurrent Liabilities | PROFEMUR Titanium Modular Neck Product | |||
Product Liability Contingency [Line Items] | |||
Loss contingency accrual | 3,300 | $ 5,200 | |
Metal-On-Metal Claims | |||
Product Liability Contingency [Line Items] | |||
Proceeds from insurance policies | 120,400 | ||
Proceeds from insurance policies, paid directly to entity | 113,700 | ||
Proceeds from insurance policies, paid to third party claimants | 6,700 | ||
Master Settlement Agreement - MDL & JCCP | |||
Product Liability Contingency [Line Items] | |||
Number of settlement agreements | settlement | 3 | ||
Master Settlement Agreement - MDL & JCCP | CONSERVE (R) DYNASTY (R) AND LINEAGE (R) | |||
Product Liability Contingency [Line Items] | |||
Loss contingency, estimated loss | 339,200 | ||
Loss contingency, damages paid | $ 333,400 | ||
Pending Litigation | MicroPort | United States | |||
Product Liability Contingency [Line Items] | |||
Number of lawsuits | lawsuit | 7 | ||
Pending Litigation | MicroPort | Non-US | |||
Product Liability Contingency [Line Items] | |||
Number of lawsuits | lawsuit | 7 | ||
Pending Litigation | Modular Neck Cases Related to Release of Metal Ions | United States | |||
Product Liability Contingency [Line Items] | |||
Number of lawsuits | lawsuit | 9 | ||
Pending Litigation | Modular Neck Cases Related to Release of Metal Ions | Non-US | |||
Product Liability Contingency [Line Items] | |||
Number of lawsuits | lawsuit | 0 | ||
Pending Litigation | Metal-On-Metal Claims | United States | |||
Product Liability Contingency [Line Items] | |||
Number of lawsuits | lawsuit | 205 | ||
Pending Litigation | Metal-On-Metal Claims | Non-US | |||
Product Liability Contingency [Line Items] | |||
Number of lawsuits | lawsuit | 27 | ||
Pending Litigation | PROFEMUR Titanium Modular Neck Product | United States | |||
Product Liability Contingency [Line Items] | |||
Number of lawsuits | lawsuit | 22 | ||
Pending Litigation | PROFEMUR Titanium Modular Neck Product | Non-US | |||
Product Liability Contingency [Line Items] | |||
Number of lawsuits | lawsuit | 50 | ||
Pending Litigation | PROFEMUR Titanium Modular Neck Product | CANADA | |||
Product Liability Contingency [Line Items] | |||
Number of lawsuits | lawsuit | 44 | ||
Pending Litigation | Non-revision claims | |||
Product Liability Contingency [Line Items] | |||
Number of lawsuits | hours | 514 | ||
Settled Litigation | Master Settlement Agreement - MDL & JCCP | |||
Product Liability Contingency [Line Items] | |||
Number of lawsuits | lawsuit | 1,974 |
Quarterly Results of Operatio_3
Quarterly Results of Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Jun. 28, 2018 | May 08, 2018 | Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Net sales | $ 248,605 | $ 212,434 | $ 229,734 | $ 230,127 | $ 238,147 | $ 194,106 | $ 205,400 | $ 198,537 | $ 920,900 | $ 836,190 | $ 744,989 | |||||
Cost of sales | 49,545 | 44,441 | 48,338 | 46,317 | 49,149 | 44,307 | 45,558 | 41,139 | 188,641 | [1] | 180,153 | [1] | 160,947 | [2] | ||
Gross profit | 199,060 | 167,993 | 181,396 | 183,810 | 188,998 | 149,799 | 159,842 | 157,398 | 732,259 | 656,037 | 584,042 | |||||
Selling, general and administrative | 156,468 | 152,780 | 152,112 | 153,306 | 160,664 | 139,223 | 140,826 | 137,248 | 614,666 | [1] | 577,961 | [1] | 525,222 | [2] | ||
Research and development | 20,312 | 18,045 | 18,756 | 16,972 | 16,749 | 13,829 | 14,665 | 13,899 | 74,085 | [1] | 59,142 | [1] | 50,115 | [2] | ||
Amortization of intangible assets | 8,164 | 8,308 | 7,862 | 7,587 | 7,699 | 5,881 | 6,009 | 7,141 | 31,921 | 26,730 | 28,396 | |||||
Total operating expenses | 184,944 | 179,133 | 178,730 | 177,865 | 185,112 | 158,933 | 161,500 | 158,288 | 720,672 | 663,833 | 603,733 | |||||
Operating income (loss) | 14,116 | (11,140) | 2,666 | 5,945 | 3,886 | (9,134) | (1,658) | (890) | 11,587 | (7,796) | (19,691) | |||||
Net loss from continuing operations, net of tax | (6,746) | (36,200) | (18,932) | (30,256) | (22,947) | (35,829) | (90,621) | (19,907) | (92,134) | (169,304) | (64,937) | |||||
(Loss) income from discontinued operations, net of tax | (9,277) | (7,589) | 1,120 | (6,345) | (10,821) | (6,696) | 22,923 | (5,607) | (22,091) | (201) | (137,661) | |||||
Net loss | $ (16,023) | $ (43,789) | $ (17,812) | $ (36,601) | $ (33,768) | $ (42,525) | $ (67,698) | $ (25,514) | $ (114,225) | $ (169,505) | $ (202,598) | |||||
Net loss from continuing operations per share - basic and diluted (in usd per share) | $ (0.05) | $ (0.29) | $ (0.15) | $ (0.24) | $ (0.18) | $ (0.32) | $ (0.85) | $ (0.19) | $ (0.73) | $ (1.50) | $ (0.62) | |||||
Net loss per share - basic and diluted (in usd per share) | $ (0.13) | $ (0.35) | $ (0.14) | $ (0.29) | $ (0.27) | $ (0.38) | $ (0.64) | $ (0.24) | $ (0.90) | $ (1.51) | $ (1.94) | |||||
Weighted-average number of ordinary shares outstanding - basic and diluted (in shares) | 127,557 | 126,767 | 126,267 | 125,812 | 125,323 | 113,043 | 106,095 | 105,904 | 126,601 | 112,592 | 104,531 | |||||
Quarterly Financial Information [Line Items] | ||||||||||||||||
Transaction costs | $ 4,700 | $ 600 | $ 600 | $ 400 | $ 7,800 | $ 2,000 | $ 1,300 | $ 900 | ||||||||
Non-cash asset impairment | 5,600 | $ 5,597 | $ 0 | $ 0 | ||||||||||||
Amortization of debt discount | 12,600 | 12,300 | 12,100 | 12,300 | 12,600 | 12,300 | 12,300 | 12,000 | ||||||||
Non-cash adjustment to derivative fair value | (10,100) | 900 | (800) | (1,000) | 1,600 | 200 | 32,900 | 1,700 | (10,962) | 35,934 | (4,797) | |||||
Non-cash foreign currency translation charges | 800 | (700) | 0 | (300) | 300 | 200 | 1,900 | 800 | ||||||||
Fair value, liability, gain (loss) | 6,600 | 900 | 1,700 | 400 | 700 | 300 | 400 | 400 | ||||||||
Mark-to-market adjustment for CVRs | (420) | 140 | 5,320 | |||||||||||||
Tax provision, change in tax rates, deferred intercompany transaction | 2,300 | 2,600 | 2,600 | 2,600 | ||||||||||||
Valuation allowance | $ 423,037 | 400,171 | 423,037 | 400,171 | ||||||||||||
Proceeds from legal settlements | 30,750 | |||||||||||||||
Provision (benefit) for income taxes | 3,800 | 2,200 | (6,200) | |||||||||||||
Cartiva, Inc. | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Net sales | 29,800 | 9,500 | ||||||||||||||
Amortization of intangible assets | 9,100 | 1,900 | ||||||||||||||
Operating income (loss) | 5,800 | 2,400 | ||||||||||||||
Quarterly Financial Information [Line Items] | ||||||||||||||||
Inventory step up amortization expense | $ 400 | $ 400 | 400 | 400 | 1,000 | 400 | ||||||||||
Valuation allowance | 3,600 | 3,600 | ||||||||||||||
Insurance Carrier | ||||||||||||||||
Quarterly Financial Information [Line Items] | ||||||||||||||||
Proceeds from legal settlements | $ 30,750 | |||||||||||||||
SEC Schedule, 12-09, Valuation Allowance, Deferred Tax Asset | ||||||||||||||||
Quarterly Financial Information [Line Items] | ||||||||||||||||
Valuation allowance | 2,700 | 2,700 | ||||||||||||||
Contingent Value Rights | Continuing Operations | ||||||||||||||||
Quarterly Financial Information [Line Items] | ||||||||||||||||
Mark-to-market adjustment for CVRs | (400) | $ 3,200 | $ 3,400 | 2,500 | $ 3,900 | |||||||||||
2020 Convertible Debt | ||||||||||||||||
Quarterly Financial Information [Line Items] | ||||||||||||||||
Amortization of debt discount | $ 3,804 | 19,165 | $ 27,331 | |||||||||||||
Write off, deferred debt issuance costs | $ 39,900 | $ 14,300 | $ 39,900 | $ 39,900 | ||||||||||||
[1] | 1 These line items include the following amounts of non-cash, share-based compensation expense for the periods indicated: Three months ended Fiscal year ended December 29, 2019 December 30, 2018 December 29, 2019 December 30, 2018Cost of sales$186 $133 $600 $585Selling, general and administrative8,079 7,112 29,185 23,608Research and development822 539 2,782 1,927 | |||||||||||||||
[2] | These line items include the following amounts of non-cash, share-based compensation expense for the periods indicated: Fiscal year ended December 29, 2019 December 30, 2018 December 31, 2017 Cost of sales $ 600 $ 585 $ 565 Selling, general and administrative 29,185 23,608 17,705 Research and development 2,782 1,927 1,123 |
Segment Information Narrative (
Segment Information Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019USD ($) | Dec. 30, 2018USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | |||
Goodwill | $ 1,260,967 | $ 1,268,954 | $ 933,662 |
Segment | |||
Segment Reporting Information [Line Items] | |||
Number of reportable segments | 3 | ||
Lower Extremities & Biologics | |||
Segment Reporting Information [Line Items] | |||
Goodwill | $ 569,970 | 569,970 | 218,525 |
Lower Extremities & Biologics | United States | |||
Segment Reporting Information [Line Items] | |||
Goodwill | 570,000 | ||
Upper extremities | |||
Segment Reporting Information [Line Items] | |||
Goodwill | 625,926 | 627,850 | 630,650 |
Upper extremities | United States | |||
Segment Reporting Information [Line Items] | |||
Goodwill | 625,900 | ||
Extremities & Biologics | |||
Segment Reporting Information [Line Items] | |||
Goodwill | 65,071 | $ 71,134 | $ 84,487 |
International Segment | Extremities & Biologics | |||
Segment Reporting Information [Line Items] | |||
Goodwill | $ 65,100 |
Segment Information Revenue by
Segment Information Revenue by Geographic Area and Product Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 248,605 | $ 212,434 | $ 229,734 | $ 230,127 | $ 238,147 | $ 194,106 | $ 205,400 | $ 198,537 | $ 920,900 | $ 836,190 | $ 744,989 |
United States | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 706,289 | 623,538 | 554,511 | ||||||||
EMEAC | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 154,889 | 153,375 | 137,772 | ||||||||
Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 59,722 | 59,277 | 52,706 | ||||||||
Lower extremities | United States | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 276,821 | 250,735 | 228,044 | ||||||||
Lower extremities | EMEAC | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 46,787 | 46,342 | 42,333 | ||||||||
Lower extremities | Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 16,849 | 14,407 | 16,140 | ||||||||
Upper extremities | United States | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 329,787 | 281,314 | 239,965 | ||||||||
Upper extremities | EMEAC | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 90,420 | 87,647 | 73,243 | ||||||||
Upper extremities | Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 27,984 | 26,813 | 21,456 | ||||||||
Biologics | United States | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 91,450 | 83,077 | 78,361 | ||||||||
Biologics | EMEAC | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 7,921 | 8,312 | 8,445 | ||||||||
Biologics | Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 14,100 | 17,445 | 13,831 | ||||||||
Sports med & other | United States | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 8,231 | 8,412 | 8,141 | ||||||||
Sports med & other | EMEAC | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 9,761 | 11,074 | 13,751 | ||||||||
Sports med & other | Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 789 | $ 612 | $ 1,279 |
Segment Information Total Asset
Segment Information Total Assets by Business Segment (Details) - USD ($) $ in Thousands | Dec. 29, 2019 | Dec. 30, 2018 |
Segment Reporting Information [Line Items] | ||
Assets | $ 2,585,640 | $ 2,694,401 |
Corporate Segment | ||
Segment Reporting Information [Line Items] | ||
Assets | 426,207 | 559,163 |
Lower Extremities & Biologics | United States | ||
Segment Reporting Information [Line Items] | ||
Assets | 952,187 | 940,075 |
Upper Extremities | United States | ||
Segment Reporting Information [Line Items] | ||
Assets | 914,317 | 923,036 |
International Segment | Extremities & Biologics | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 292,929 | $ 272,127 |
Segment Information Segment Fin
Segment Information Segment Financial Data (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 248,605 | $ 212,434 | $ 229,734 | $ 230,127 | $ 238,147 | $ 194,106 | $ 205,400 | $ 198,537 | $ 920,900 | $ 836,190 | $ 744,989 |
Depreciation | 64,149 | 59,497 | 56,832 | ||||||||
Amortization of inventory step-up adjustment | 1,057 | 352 | 0 | ||||||||
Transaction and transition costs | 6,312 | 12,013 | |||||||||
Non-cash asset impairment | 5,600 | 5,597 | 0 | 0 | |||||||
Transaction and transition costs | 12,400 | ||||||||||
Incentive and indirect tax projects | 12,968 | (536) | (34,968) | ||||||||
Operating income (loss) | $ 14,116 | $ (11,140) | $ 2,666 | $ 5,945 | $ 3,886 | $ (9,134) | $ (1,658) | $ (890) | 11,587 | (7,796) | (19,691) |
Interest expense, net | 80,849 | 80,247 | 74,644 | ||||||||
Other expense, net | 9,904 | 81,797 | 5,570 | ||||||||
Loss from continuing operations before income taxes | (79,166) | (169,840) | (99,905) | ||||||||
Corporate Segment | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 0 | 0 | 0 | ||||||||
Depreciation | 25,532 | 22,923 | 21,723 | ||||||||
Amortization expense | 31,921 | 26,730 | 28,396 | ||||||||
Segment operating income (loss) | (200,974) | (190,720) | (178,642) | ||||||||
Capital expenditures | 11,583 | 6,402 | 1,667 | ||||||||
Segment | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Depreciation | 64,149 | 59,497 | 56,832 | ||||||||
Amortization expense | 31,921 | 26,730 | 28,396 | ||||||||
Segment operating income (loss) | 24,553 | 4,569 | (16,256) | ||||||||
Capital expenditures | 99,286 | 71,467 | 63,474 | ||||||||
Lower Extremities & Biologics | United States | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 371,791 | 337,433 | 309,713 | ||||||||
Depreciation | 10,950 | 11,131 | 12,532 | ||||||||
Amortization expense | 0 | 0 | 0 | ||||||||
Segment operating income (loss) | 103,883 | 96,153 | 79,889 | ||||||||
Capital expenditures | 41,585 | 21,153 | 19,355 | ||||||||
Upper Extremities | United States | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 334,498 | 286,105 | 244,798 | ||||||||
Depreciation | 12,728 | 12,439 | 10,211 | ||||||||
Amortization expense | 0 | 0 | 0 | ||||||||
Segment operating income (loss) | 123,539 | 97,644 | 78,866 | ||||||||
Capital expenditures | 20,395 | 26,346 | 22,897 | ||||||||
International Segment | Extremities & Biologics | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 214,611 | 212,652 | 190,478 | ||||||||
Depreciation | 14,939 | 13,004 | 12,366 | ||||||||
Amortization expense | 0 | 0 | 0 | ||||||||
Segment operating income (loss) | (1,895) | 1,492 | 3,631 | ||||||||
Capital expenditures | $ 25,723 | $ 17,566 | 19,555 | ||||||||
incentive and indirect | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Incentive and indirect tax projects | $ (8,965) |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - SEC Schedule, 12-09, Allowance, Credit Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation allowances and reserves, beginning balance | $ 3,045 | $ 4,328 | $ 4,469 |
Charged to Cost and Expenses | 490 | 189 | 1,243 |
Deductions and Other | (90) | (1,472) | (1,384) |
Valuation allowances and reserves, ending balance | $ 3,445 | $ 3,045 | $ 4,328 |