Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 24, 2020 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Current Fiscal Year End Date | --12-31 | |
Document Transition Report | false | |
Entity File Number | 1-13165 | |
Entity Registrant Name | CRYOLIFE INC. | |
Entity Incorporation, State or Country Code | FL | |
Entity Tax Identification Number | 59-2417093 | |
Entity Address, Address Line One | 1655 Roberts Boulevard, NW | |
Entity Address, City or Town | Kennesaw | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30144 | |
City Area Code | 770 | |
Local Phone Number | 419-3355 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | CRY | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 37,740,425 | |
Document Fiscal Year Focus | 2020 | |
Entity Central Index Key | 0000784199 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Statements Of Oper
Consolidated Statements Of Operations And Comprehensive (Loss) Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues: | ||
Total revenues | $ 66,429 | $ 67,505 |
Cost of products and preservation services: | ||
Total cost of products and preservation services | 22,258 | 23,232 |
Gross margin | 44,171 | 44,273 |
Operating expenses: | ||
General, administrative, and marketing | 39,002 | 36,520 |
Research and development | 6,356 | 5,548 |
Total operating expenses | 45,358 | 42,068 |
Operating (loss) income | (1,187) | 2,205 |
Interest expense | 3,388 | 3,894 |
Interest income | (102) | (116) |
Other expense, net | 3,662 | 77 |
Loss before income taxes | (8,135) | (1,650) |
Income tax benefit | (1,470) | (1,353) |
Net loss | $ (6,665) | $ (297) |
Loss per common share: | ||
Basic | $ (0.18) | $ (0.01) |
Diluted | $ (0.18) | $ (0.01) |
Weighted-average common shares outstanding: | ||
Basic | 37,390 | 36,778 |
Diluted | 37,390 | 36,778 |
Net loss | $ (6,665) | $ (297) |
Foreign currency translation adjustments | (4,463) | (3,781) |
Comprehensive loss | (11,128) | (4,078) |
Products [Member] | ||
Revenues: | ||
Total revenues | 46,420 | 48,401 |
Cost of products and preservation services: | ||
Total cost of products and preservation services | 13,040 | 13,826 |
Preservation Services [Member] | ||
Revenues: | ||
Total revenues | 20,009 | 19,104 |
Cost of products and preservation services: | ||
Total cost of products and preservation services | $ 9,218 | $ 9,406 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 63,383 | $ 33,766 |
Restricted securities | 494 | 528 |
Trade receivables, net | 48,723 | 52,940 |
Other receivables | 2,951 | 2,921 |
Inventories | 54,300 | 53,071 |
Deferred preservation costs | 32,918 | 32,551 |
Prepaid expenses and other | 11,313 | 11,613 |
Total current assets | 214,082 | 187,390 |
Property and equipment, net | 31,878 | 32,150 |
Operating lease right-of-use assets, net | 20,423 | 21,994 |
Goodwill | 184,014 | 186,697 |
Acquired technology, net | 111,136 | 115,415 |
Other intangibles, net | 41,242 | 42,319 |
Deferred income taxes | 4,769 | 5,481 |
Other assets | 13,489 | 14,208 |
Total assets | 621,033 | 605,654 |
Current liabilities: | ||
Accounts payable | 10,453 | 9,796 |
Accrued compensation | 9,783 | 12,260 |
Accrued procurement fees | 4,030 | 4,362 |
Current portion of finance lease obligation | 569 | 597 |
Current maturities of operating leases | 5,442 | 5,487 |
Current portion of long-term debt | 1,155 | 1,164 |
Taxes payable | 2,692 | 2,984 |
Accrued expenses and other | 10,130 | 9,142 |
Total current liabilities | 43,685 | 45,195 |
Long-term debt | 244,227 | 214,571 |
Deferred income taxes | 24,268 | 25,844 |
Non-current maturities of operating leases | 16,411 | 17,918 |
Non-current finance lease obligations | 5,147 | 5,415 |
Deferred compensation liability | 4,084 | 4,434 |
Other | 11,749 | 11,996 |
Total liabilities | 344,424 | 319,958 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Preferred stock | ||
Common stock (issued shares of 39,219 in 2020 and 39,018 in 2019) | 392 | 390 |
Additional paid-in capital | 273,821 | 271,782 |
Retained earnings | 30,039 | 36,704 |
Accumulated other comprehensive loss | (13,052) | (8,589) |
Treasury stock at cost (shares of 1,484 in each of 2020 and 2019) | (14,591) | (14,591) |
Total shareholders' equity | 276,609 | 285,696 |
Total liabilities and shareholders' equity | $ 621,033 | $ 605,654 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | Mar. 31, 2020 | Dec. 31, 2019 |
Shareholders' equity: | ||
Common stock, shares issued | 39,219,000 | 39,018,000 |
Treasury stock at cost, shares | 1,484,000 | 1,484,000 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net cash flows from operating activities: | ||
Net loss | $ (6,665) | $ (297) |
Adjustments to reconcile net loss to net cash from operating activities: | ||
Depreciation and amortization | 4,898 | 4,351 |
Non-cash compensation | 2,564 | 1,850 |
Deferred income taxes | (265) | (424) |
Other non-cash adjustments to net loss | 2,927 | 737 |
Changes in operating assets and liabilities: | ||
Receivables | 3,557 | (3,292) |
Inventories and deferred preservation costs | (2,874) | 1,396 |
Prepaid expenses and other assets | 982 | 627 |
Accounts payable, accrued expenses, and other liabilities | (2,489) | (3,787) |
Net cash flows provided by operating activities | 2,635 | 1,161 |
Net cash flows from investing activities: | ||
Capital expenditures | (2,539) | (1,194) |
Other | (364) | (233) |
Net cash flows used in investing activities | (2,903) | (1,427) |
Net cash flows from financing activities: | ||
Proceeds from revolving line of credit | 30,000 | |
Repayment of term loan | (691) | (696) |
Proceeds from exercise of stock options and issuance of common stock | 1,064 | 2,029 |
Redemption and repurchase of stock to cover tax withholdings | (1,712) | (2,376) |
Other | (146) | (172) |
Net cash flows provided by (used in) financing activities | 28,515 | (1,215) |
Effect of exchange rate changes on cash, cash equivalents, and restricted securities | 1,336 | 320 |
Increase (decrease) in cash, cash equivalents, and restricted securities | 29,583 | (1,161) |
Cash, cash equivalents, and restricted securities, beginning of year | 34,294 | 42,236 |
Cash, cash equivalents, and restricted securities, end of year | $ 63,877 | $ 41,075 |
Consolidated Statements Of Shar
Consolidated Statements Of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Treasury Stock [Member] | Total |
Balance at Dec. 31, 2018 | $ 385 | $ 260,361 | $ 34,984 | $ (6,072) | $ (14,591) | $ 275,067 |
Balance, shares at Dec. 31, 2018 | 38,463 | (1,484) | ||||
Net loss | (297) | (297) | ||||
Foreign currency translation adjustment | (3,781) | (3,781) | ||||
Comprehensive loss | (4,078) | |||||
Equity compensation | $ 2 | 1,978 | 1,980 | |||
Equity compensation, shares | 205 | |||||
Exercise of options | $ 1 | 1,450 | 1,451 | |||
Exercise of options, shares | 145 | |||||
Employee stock purchase plan | 578 | 578 | ||||
Employee stock purchase plan, shares | 25 | |||||
Redemption and repurchase of stock to cover tax withholdings | (2,376) | (2,376) | ||||
Redemption and repurchase of stock to cover tax withholdings, shares | (82) | |||||
Balance at Mar. 31, 2019 | $ 388 | 261,991 | 34,687 | (9,853) | $ (14,591) | 272,622 |
Balance, shares at Mar. 31, 2019 | 38,756 | (1,484) | ||||
Balance at Dec. 31, 2019 | $ 390 | 271,782 | 36,704 | (8,589) | $ (14,591) | 285,696 |
Balance, shares at Dec. 31, 2019 | 39,018 | (1,484) | ||||
Net loss | (6,665) | (6,665) | ||||
Foreign currency translation adjustment | (4,463) | (4,463) | ||||
Comprehensive loss | (11,128) | |||||
Equity compensation | $ 2 | 2,687 | 2,689 | |||
Equity compensation, shares | 208 | |||||
Exercise of options | 376 | 376 | ||||
Exercise of options, shares | 33 | |||||
Employee stock purchase plan | 688 | 688 | ||||
Employee stock purchase plan, shares | 30 | |||||
Redemption and repurchase of stock to cover tax withholdings | (1,712) | (1,712) | ||||
Redemption and repurchase of stock to cover tax withholdings, shares | (70) | |||||
Balance at Mar. 31, 2020 | $ 392 | $ 273,821 | $ 30,039 | $ (13,052) | $ (14,591) | $ 276,609 |
Balance, shares at Mar. 31, 2020 | 39,219 | (1,484) |
Basis Of Presentation
Basis Of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Basis Of Presentation [Abstract] | |
Basis Of Presentation | 1. Basis of Presentation Overview The accompanying summary consolidated financial statements include the accounts of CryoLife, Inc. and its subsidiaries (“CryoLife,” the “Company,” “we,” or “us”). All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying Summary Consolidated Balance Sheet as of December 31, 2019 has been derived from audited financial statements. The accompanying unaudited summary consolidated financial statements as of, and for the three months ended, March 31, 2020 and 2019 have been prepared in accordance with (i) accounting principles generally accepted in the U.S. for interim financial information and (ii) the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, such statements do not include all the information and disclosures that are required by accounting principles generally accepted in the U.S. for a complete presentation of financial statements. In the opinion of management, all adjustments (including those of a normal, recurring nature) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. These summary consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in CryoLife’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 19, 2020. New Accounting Standards Recently Adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASC Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) . The purpose of Update No. 2016-13 is to replace the current incurred loss impairment methodology for financial assets measured at amortized cost with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information, including forecasted information, to develop credit loss estimates. Update No. 2016-13 is effective for annual periods beginning after December 15, 2019. The Company adopted this new guidance on January 1, 2020. The adoption of ASU 2016-13 did not result in a material effect on the Company’s financial condition, results of operations, or cash flows. |
Agreements With Endospan
Agreements With Endospan | 3 Months Ended |
Mar. 31, 2020 | |
Agreements With Endospan [Abstract] | |
Agreements With Endospan | 2. Agreements with Endospan Exclusive Distribution Agreement and Securities Purchase Option Agreement On September 11, 2019 CryoLife, Inc.’s wholly owned subsidiary, JOTEC GmbH, (“JOTEC”), entered into an exclusive distribution agreement (“Endospan Distribution Agreement”) with Endospan Ltd. (“Endospan”) an Israeli corporation, pursuant to which JOTEC obtained exclusive distribution rights for Endospan’s Nexus stent graft system (“NEXUS”) and accessories in certain countries in Europe in exchange for a fixed distribution fee of $ 9.0 million paid in September 2019. CryoLife also entered into a securities purchase option agreement (“Endospan Option Agreement”) with Endospan for $ 1.0 million paid in September 2019. The Endospan Option Agreement provides CryoLife the option to purchase all the outstanding securities of Endospan from Endospan’s securityholders at the time of acquisition, or the option to acquire all of Endospan’s assets, in each case, for a price between $ 350.0 and $ 450.0 million before or within a certain period of time or after U.S. Food and Drug Administration (“FDA”) approval of NEXUS, with such option expiring if not exercised within 90 days after receiving notice that Endospan has received approval from the FDA for NEXUS. Loan Agreement CryoLife and Endospan also entered into a loan agreement (“Endospan Loan”), dated September 11, 2019, in which CryoLife agreed to provide Endospan a secured loan of up to $ 15.0 million to be funded in three tranches of $ 5.0 million each. The first tranche of the Endospan Loan was funded upon execution of the agreement in September 2019. The second tranche is required to be funded generally under the same terms as the first tranche, upon certification of Investigational Device Exemption (“IDE”) approval from the FDA of NEXUS, and the third tranche is required to be funded upon certification of enrollment of at least 50 % of the required number of patients in the primary arm of the FDA approved clinical trial for NEXUS, in each case subject to Endospan’s continued compliance with the Endospan Loan and certain other conditions. If a termination fee becomes payable by Endospan under the Endospan Distribution Agreement, it will be added to the amount payable to CryoLife under the Endospan Loan. Variable Interest Entity We consolidate the results of a variable interest entity ("VIE") when it is determined that we are the primary beneficiary. Based on our evaluation of Endospan and the related agreements with Endospan, we determined that Endospan is a VIE. Although the arrangement with Endospan resulted in our holding a variable interest, it did not empower us to direct those activities of Endospan that most significantly impact the VIE economic performance. Therefore, we are not the primary beneficiary, and we have not consolidated Endospan into our financial results. Our payments to Endospan in September 2019 totaled $ 15.0 million which included a $ 9.0 million distribution fee, a $ 1.0 million securities purchase option, and $ 5.0 million for the first tranche of the Endospan Loan. No additional amounts have been paid to Endospan under these agreements during the three months ended March 31, 2020. Our payments to date, including any loans, guarantees, and other subordinated financial support related to this VIE, totaled $ 15.0 million as of March 31, 2020, representing our maximum exposure to loss and were not individually significant to our consolidated financial statements. Valuation The agreements with Endospan were entered into concurrently and had certain terms that are interrelated. In our evaluation of the initial relative fair value of each of the Endospan agreements to determine the amount to record, we utilized discounted cash flows to estimate the fair market value for the Endospan Loan and for the Endospan Distribution Agreement. We estimated the fair value of the Endospan Option Agreement utilizing the Monte Carlo simulation. Inputs in our valuation of the Endospan agreements included cash payments and anticipated payments based on the executed agreements with Endospan, projected discounted cash flows in connection with the Endospan transaction, our expected internal rate of return and discount rates, and our assessed probability and timing of receipt of certification that certain approvals and milestones in obtaining FDA approval. Based on the initial fair value of the Endospan Loan and the relative fair values of the Endospan Distribution Agreement and Endospan Option Agreement, we recorded the Endospan Loan value of $ 358,000 and the Endospan Option Agreement of $ 4.8 million in Other long-term assets in the Summary Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019. We recorded the Endospan Distribution Agreement of $ 8.5 million and $ 9.8 million in Other intangibles, net in the Summary Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019, respectively. We elected the fair value option for recording the Endospan Loan. We assess the fair value of the Endospan Loan based on quantitative and qualitative characteristics, and adjust the amount recorded to its current fair market value at each reporting period. We performed an assessment of the fair value of the Endospan Loan as of March 31, 2020 and concluded that an adjustment to the fair value as a result of this assessment was not material. |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Financial Instruments [Abstract] | |
Financial Instruments | 3. Financial Instruments The following is a summary of our financial instruments measured at fair value on a recurring basis (in thousands): March 31, 2020 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 1,478 $ -- $ -- $ 1,478 Restricted securities: Money market funds 494 -- -- 494 Endospan Loan -- -- 358 358 Total assets $ 1,972 $ -- $ 358 $ 2,330 December 31, 2019 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 1,472 $ -- $ -- $ 1,472 Restricted securities: Money market funds 528 -- -- 528 Endospan Loan -- -- 358 358 Total assets $ 2,000 $ -- $ 358 $ 2,358 We used prices quoted from our investment advisors to determine the Level 1 valuation of our investments in money market funds . We recorded the Endospan Loan, classified as Level 3, as a result of an agreement with Endospan in September 2019. See Note 2 for further discussion of the Endospan Loan. Changes in fair value of Level 3 assets are listed in the table below (in thousands): Endospan Loan Balance as of December 31, 2019 $ 358 Change in valuation of Endospan Loan -- Balance as of March 31, 2020 $ 358 |
Cash Equivalents And Restricted
Cash Equivalents And Restricted Cash And Securities | 3 Months Ended |
Mar. 31, 2020 | |
Cash Equivalents And Restricted Cash And Securities [Abstract] | |
Cash Equivalents And Restricted Cash And Securities | 4. Cash Equivalents and Restricted Securities The following is a summary of cash equivalents and restricted securities (in thousands): Unrealized Estimated Holding Market March 31, 2020 Cost Basis Gains Value Cash equivalents: Money market funds $ 1,478 $ -- $ 1,478 Restricted securities: Money market funds 494 -- 494 Total $ 1,972 $ -- $ 1,972 Unrealized Estimated Holding Market December 31, 2019 Cost Basis Gains Value Cash equivalents: Money market funds $ 1,472 $ -- $ 1,472 Restricted securities: Money market funds 528 -- 528 Total $ 2,000 $ -- $ 2,000 As of March 31, 2020 and December 31, 2019 all money market funds were designated as short-term restricted securities due to a contractual commitment to hold the securities as pledged collateral relating primarily to international tax obligations. There were no gross realized gains or losses on cash equivalents and restricted securities in the three months ended March 31, 2020 and 2019. As of March 31, 2020 $ 494,000 of our restricted securities had a maturity date within three months . As of December 31, 2019 $ 528,000 of our restricted securities had a maturity date within three months . |
Inventories And Deferred Preser
Inventories And Deferred Preservation Costs | 3 Months Ended |
Mar. 31, 2020 | |
Inventories And Deferred Preservation Costs [Abstract] | |
Inventories And Deferred Preservation Costs | 5. Inventories and Deferred Preservation Costs Inventories at March 31, 2020 and December 31, 2019 were comprised of the following (in thousands): March 31, December 31, 2020 2019 Raw materials and supplies $ 22,414 $ 21,180 Work-in-process 6,059 5,127 Finished goods 25,827 26,764 Total inventories $ 54,300 $ 53,071 Deferred preservation costs at March 31, 2020 and December 31, 2019 were comprised of the following (in thousands): March 31, December 31, 2020 2019 Cardiac tissues $ 15,477 $ 15,365 Vascular tissues 17,441 17,186 Total deferred preservation costs $ 32,918 $ 32,551 To facilitate product usage, we maintain consignment inventory of our On-X heart valves at domestic hospital locations and both On-X heart valves and JOTEC products at international hospital locations. We retain title and control over this consignment inventory until the device is implanted, at which time we invoice the hospital and recognize revenue. As of March 31, 2020 we had $ 12.0 million in consignment inventory, with approximately 50 % in domestic locations and 50 % in international locations. As of December 31, 2019 we had $ 12.0 million in consignment inventory, with approximately 51 % in domestic locations and 49 % in international locations. |
Goodwill And Other Intangible A
Goodwill And Other Intangible Assets | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill And Other Intangible Assets [Abstract] | |
Goodwill And Other Intangible Assets | 6. Goodwill and Other Intangible Assets Indefinite Lived Intangible Assets As of March 31, 2020 and December 31, 2019 the carrying values of our indefinite lived intangible assets were as follows (in thousands): March 31, December 31, 2020 2019 Goodwill $ 184,014 $ 186,697 In-process R&D 2,136 2,190 Procurement contracts and agreements 2,013 2,013 Trademarks 765 844 We monitor the phases of development of our acquired in-process R&D projects, including the risks associated with further development and the amount and timing of benefits expected to be derived from the completed projects. Incremental costs associated with development are charged to expense as incurred. Capitalized costs are amortized over the estimated useful life of the developed asset once completed. Our in-process R&D projects are reviewed for impairment annually, or more frequently, if events or changes in circumstances indicate that the asset might be impaired. Based on our experience with similar agreements, we believe that our acquired procurement contracts and agreements have indefinite useful lives, as we expect to continue to renew these contracts for the foreseeable future. We believe that our trademarks have indefinite useful lives as we currently anticipate that our trademarks will contribute to our cash flows indefinitely. We evaluate our goodwill and non-amortizing intangible assets for impairment on an annual basis during the fourth quarter of the year, and, if necessary, during interim periods if factors indicate that an impairment review is warranted. As of March 31, 2020 we concluded that our assessment of current factors do not indicate that goodwill or non-amortizing intangible assets are more likely than not to be impaired. We will continue to evaluate the recoverability of these non-amortizing intangible assets in future periods as necessary. As of March 31, 2020 and December 31, 2019 our entire goodwill balance was related to our Medical Devices segment. Medical Devices Segment Balance as of December 31, 2019 $ 186,697 Revaluation of goodwill denominated in foreign currency ( 2,683 ) Balance as of March 31, 2020 $ 184,014 Definite Lived Intangible Assets As of March 31, 2020 and December 31, 2019 the gross carrying values, accumulated amortization, and approximate amortization period of our definite lived intangible assets were as follows (in thousands): Gross Carrying Accumulated Amortization March 31, 2020 Value Amortization Period Acquired technology $ 137,676 $ 26,540 11 – 22 Years Customer lists and relationships 31,082 6,954 13 – 22 Years Distribution and manufacturing rights and know-how 13,585 3,508 5 – 15 Years Patents 3,745 3,090 17 Years Other 2,135 667 3 – 10 Years Gross Carrying Accumulated Amortization December 31, 2019 Value Amortization Period Acquired technology $ 140,193 $ 24,778 11 – 22 Years Customer lists and relationships 31,131 6,581 13 – 22 Years Distribution and manufacturing rights and know-how 13,826 3,005 5 – 15 Years Patents 3,664 3,074 17 Years Other 1,919 608 3 – 5 Years Amortization Expense The following is a summary of amortization expense as recorded in general, administrative, and marketing expenses on our Summary Consolidated Statement of Operations and Comprehensive Loss (in thousands): Three Months Ended March 31, 2020 2019 Amortization expense $ 3,033 $ 2,579 As of March 31, 2020 scheduled amortization of intangible assets for the next five years is as follows (in thousands): Remainder of 2020 2021 2022 2023 2024 2025 Total Amortization expense $ 9,057 $ 12,208 $ 11,662 $ 11,153 $ 10,927 $ 8,993 $ 64,000 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Taxes [Abstract] | |
Income Taxes | 7. Income Taxes Income Tax Expense Our effective income tax rate was a benefit of 18 % and 82 % for the three months ended March 31, 2020 and 2019, respectively. The change in the tax rate for the three months ended March 31, 2020 is primarily due to a change in pre-tax book loss, as well as a reduction in the excess tax benefit related to stock compensation for the three months ended March 31, 2020, as compared to the three months ended March 31, 2019. The income tax rate for the three months ended March 31, 2020 was impacted by excess tax benefit deductions related to stock compensation, which increased income tax benefits by approximately $ 250,000 . These factors were partially offset by unfavorable impacts of non-deductible operating expenses and executive compensation expenses. The income tax rate for the three months ended March 31, 2019 was impacted by excess tax benefit deductions related to stock compensation, the research and development tax credit, and losses in high rate jurisdictions. These factors were partially offset by impacts of non-deductible operating expenses and executive compensation expenses. Deferred Income Taxes We generate deferred tax assets primarily as a result of write-downs of inventory and deferred preservation costs, accruals for product and tissue processing liability claims, investment and asset impairments, and operating losses. We acquired significant deferred tax assets, primarily net operating loss carryforwards, from our acquisitions of JOTEC and its subsidiaries in 2017, On-X in 2016, Hemosphere, Inc. in 2012, and Cardiogenesis Corporation in 2011. We believe utilization of these net operating losses will not have a material impact on income taxes for the 2020 tax year. As of March 31, 2020 we maintained a total of $ 3.4 million in valuation allowances against deferred tax assets, primarily related to state and foreign net operating loss carryforwards, and a net deferred tax liability of $ 19.5 million. As of December 31, 2019 we maintained a total of $ 3.2 million in valuation allowances against deferred tax assets, primarily related to state and foreign net operating loss carryforwards, and a net deferred tax liability of $ 20.4 million. The Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) In response to the novel coronavirus disease (“COVID-19”) pandemic, the US government enacted the CARES Act on March 27, 2020. The CARES Act provides various forms of relief and assistance to US businesses. The Company recorded a reduction to income taxes payable and deferred tax assets of approximately $ 1.3 million for the anticipated change to the 2019 Section 163(j) interest expense deduction limitation. The Company will continue to analyze the impacts of the CARES Act as interpretations are published. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | 8. Leases We have operating and finance lease obligations resulting from the lease of land and buildings that comprise our corporate headquarters and various manufacturing facilities; leases related to additional manufacturing, office, and warehouse space; leases on Company vehicles; and leases on a variety of office and other equipment. We sublease, on an operating lease basis, two unused office space facilities near our corporate office. Total annual sub-lease rental income for these facilities is approximately $ 905,000 . Supplemental consolidated balance sheet information related to leases was as follows (in thousands, except lease term and discount rate): Operating leases: March 31, 2020 December 31, 2019 Operating lease right-of-use assets $ 26,714 $ 27,007 Accumulated amortization ( 6,291 ) ( 5,013 ) Operating lease right-of-use assets, net $ 20,423 $ 21,994 Current maturities of operating leases $ 5,442 $ 5,487 Non-current maturities of operating lease 16,411 17,918 Total operating lease liabilities $ 21,853 $ 23,405 Finance leases: Property and equipment, at cost $ 6,984 $ 7,161 Accumulated amortization ( 1,408 ) ( 1,279 ) Property and equipment, net $ 5,576 $ 5,882 Current maturities of finance leases $ 569 $ 597 Non-current maturities of finance leases 5,147 5,415 Total finance lease liabilities $ 5,716 $ 6,012 Weighted average remaining lease term (in years): Operating leases 6.5 5.5 Finance leases 10.4 10.6 Weighted average discount rate: Operating leases 4.3 % 5.4 % Finance leases 2.0 % 2.0 % Current maturities of finance leases are included as a component of Accrued Expenses and Other and non-current maturities of finance leases are included as a component of Other Long-Term Liabilities on our Summary Consolidated Balance Sheets. A summary of lease expenses for our finance and operating leases included in General, Administrative, and Marketing Expenses on our Summary Consolidated Statements of Operations and Comprehensive Loss are as follows (in thousands): Three Months Ended Three Months Ended March 31, 2020 March 31, 2019 Amortization of property and equipment $ 162 $ 211 Interest expense on finance leases 29 32 Total finance lease expense 191 243 Operating lease expense 1,748 1,550 Sublease income ( 226 ) ( 228 ) Total lease expense $ 1,713 $ 1,565 A summary of our supplemental cash flow information is as follows (in thousands): Three Months Ended Three Months Ended Cash paid for amounts included in the measurement of lease liabilities: March 31, 2020 March 31, 2019 Operating cash flows for finance leases $ 29 $ 32 Operating cash flows for operating leases 1,745 1,636 Financing cash flows for finance leases 147 172 Future minimum lease payments and sublease rental income are as follows (in thousands): Finance Operating Sublease Leases Leases Income Remainder of 2020 $ 519 $ 4,833 $ 679 2021 642 6,289 905 2022 598 3,834 306 2023 597 2,547 -- 2024 595 2,539 -- Thereafter 3,380 4,919 -- Total minimum lease payments $ 6,331 $ 24,961 $ 1,890 Less amount representing interest ( 615 ) ( 3,108 ) Present value of net minimum lease payments 5,716 21,853 Less current maturities ( 569 ) ( 5,442 ) Lease liabilities, less current maturities $ 5,147 $ 16,411 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt [Abstract] | |
Debt | 9. Debt Credit Agreement On December 1, 2017 we entered into a credit and guaranty agreement for a $ 255.0 million senior secured credit facility, consisting of a $ 225.0 million secured term loan facility (the “Term Loan Facility”) and a $ 30.0 million secured revolving credit facility (“the Revolving Credit Facility” and, together with the Term Loan Facility, the “Credit Agreement”). We and each of our existing domestic subsidiaries (subject to certain exceptions and exclusions) guarantee the obligations under the Credit Agreement (the “Guarantors”). The Credit Agreement is secured by a security interest in substantially all existing and after-acquired real and personal property (subject to certain exceptions and exclusions) of us and the Guarantors. On December 1, 2017 we borrowed the entire $ 225.0 million Term Loan Facility. The proceeds of the Term Loan Facility were used along with cash on hand and shares of CryoLife common stock to (i) fund the acquisition of JOTEC and its subsidiaries (the “JOTEC Acquisition”), (ii) pay certain fees and expenses related to the JOTEC Acquisition and the Credit Agreement, and (iii) pay the outstanding balance of our prior credit facility. The Revolving Credit Facility may be used for working capital, capital expenditures, acquisitions permitted under the Credit Agreement, and other general corporate purposes pursuant to the terms of the Credit Agreement. The loan under the Term Loan Facility is repayable on a quarterly basis according to the amortization provisions set forth in the Credit Agreement. We have the right to repay the loan under the Credit Agreement in whole or in part at any time. Amounts repaid in respect of the loan under the Term Loan Facility may not be reborrowed. Amounts repaid in respect of the loan under the Revolving Credit Facility may be reborrowed. All outstanding principal and interest in respect of (i) the Term Loan Facility must be repaid on or before December 1, 2024 and (ii) the Revolving Credit Facility must be repaid on or before December 1, 2022 . In October 2018 we finalized an amendment to the Credit Agreement to reprice interest rates, resulting in a reduction in the interest rate margins over base rates on the Term Loan Facility. The loan under the Term Loan Facility bears interest, at our option, at a floating annual rate equal to either the base rate, plus a margin of 2.25 %, or LIBOR, plus a margin of 3.25 %. Prior to the repricing, the optional floating annual rate was equal to either the base rate plus a margin of 3.00 %, or LIBOR, plus a margin of 4.00 %. The loan under the Revolving Credit Facility bears interest, at our option, at a floating annual rate equal to either the base rate, plus a margin of between 3.00 % and 3.25 %, depending on our consolidated leverage ratio, or LIBOR, plus a margin of between 4.00 % and 4.25 %, depending on our consolidated leverage ratio. While a payment event of default or bankruptcy event of default exists, we are obligated to pay a per annum default rate of interest of 2.00 % in excess of the interest rate otherwise payable with respect to the overdue principal amount of any loans outstanding and overdue interest payments and other overdue fees and amounts. As of March 31, 2020 the aggregate interest rate was 4.70 % per annum. We are obligated to pay an unused commitment fee equal to 0.50 % of the unutilized portion of the revolving loans. In addition, we are also obligated to pay other customary fees for a credit facility of this size and type. The Credit Agreement contains certain customary affirmative and negative covenants, including covenants that limit our ability and the ability of our subsidiaries to, among other things, grant liens, incur debt, dispose of assets, make loans and investments, make acquisitions, make certain restricted payments (including cash dividends), merge or consolidate, change business or accounting or reporting practices, in each case subject to customary exceptions for a credit facility of this size and type. The Credit Agreement includes certain customary events of default that include, among other things, non-payment of principal, interest, or fees; inaccuracy of representations and warranties; breach of covenants; cross-default to certain material indebtedness; bankruptcy and insolvency; and change of control. Upon the occurrence and during the continuance of an event of default, the lenders may declare all outstanding principal and accrued but unpaid interest under the Credit Agreement immediately due and payable and may exercise the other rights and remedies provided under the Credit Agreement and related loan documents. In March 2020 as a precautionary measure to increase cash and maintain maximum financial flexibility during the current uncertainty in global markets resulting from the COVID-19 pandemic, we borrowed the entire amount available under our $ 30.0 million Revolving Credit Facility at an aggregate interest rate of 5.20 %. Under the terms of the Credit Agreement at the time of borrowing and as of March 31, 2020, because the principal amount of loans outstanding under the Revolving Credit Facility was in excess of 25 % of the entire amount of the Revolving Credit Facility on the last day of the fiscal quarter ending March 31, 2020, the Credit Agreement required us to comply with a maximum first lien net leverage ratio of 5.25 x bank EBITDA as of the end of such fiscal quarter and any subsequent fiscal quarter if the principal amount of the loans remains in excess of such threshold as of the last day of such fiscal quarter. A breach of the 5.25 x leverage ratio would become an event of default only to the extent that this leverage level occurs when the Revolving Credit Facility balance exceeds 25 %, or $ 7.5 million, at the end of a test period. See “Subsequent Events” included in Part I, Item 1 of this form 10-Q for a discussion of an amendment of the Credit Agreement affecting the Revolving Credit Facility and the maximum first lien net leverage ratio covenant. Government Supported Bank Debt In June 2015 JOTEC obtained two loans from Sparkasse Zollernalb, which are government sponsored by the Kreditanstalt für Wiederaufbau Bank (“KFW”). Both KFW loans have a term of nine years and the interest rates are 2.45 % and 1.40 %. Loan Balances The short-term and long-term balances of our term loan and other borrowings were as follows (in thousands): March 31, December 31, 2020 2019 Term loan balance $ 219,938 $ 220,500 Revolving credit facility 30,000 -- 2.45% Sparkasse Zollernalb (KFW Loan 1) 974 1,061 1.40% Sparkasse Zollernalb (KFW Loan 2) 1,506 1,615 Total loan balance 252,418 223,176 Less unamortized loan origination costs ( 7,036 ) ( 7,441 ) Net borrowings 245,382 215,735 Less short-term loan balance ( 1,155 ) ( 1,164 ) Long-term loan balance $ 244,227 $ 214,571 Interest Expense Interest expense was $ 3.4 million for the three months ended March 31, 2020, as compared to $ 3.9 million for the three months ended March 31, 2019. Interest expense includes interest on debt and uncertain tax positions in both periods. |
Commitments And Contingencies
Commitments And Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies [Abstract] | |
Commitments And Contingencies | 10. Commitments and Contingencies Liability Claims Our estimated unreported loss liability was $ 1.9 million as of March 31, 2020 and December 31, 2019. As of March 31, 2020 and December 31, 2019, the related recoverable insurance amounts were $ 962,000 and $ 935,000 , respectively. We accrue our estimate of unreported product and tissue processing liability claims as a component of other long - term liabilities and record the related recoverable insurance amount as a component of other long - term assets, as appropriate. Further analysis indicated that the estimated liability as of March 31, 2020 could have been as high as $ 3.7 million, after including a reasonable margin for statistical fluctuations calculated based on actuarial simulation techniques. Employment Agreements The employment agreement of our Chairman, President, and Chief Executive Officer (“CEO”), Mr. J. Patrick Mackin, provides for a severance payment, which would become payable upon the occurrence of certain employment termination events, including termination by us without cause. PerClot Technology On September 28, 2010 we entered into a worldwide distribution agreement (the “Distribution Agreement”) and a license and manufacturing agreement (the “License Agreement”) with Starch Medical, Inc. (“SMI”), for PerClot ® , a polysaccharide hemostatic agent used in surgery. The Distribution Agreement has a term of 15 years but can be terminated for any reason before the expiration date by us by providing 180 days’ notice. The Distribution Agreement also contains minimum purchase requirements that expire upon the termination of the Distribution Agreement or following U.S. regulatory approval for PerClot. Separate and apart from the terms of the Distribution Agreement, pursuant to the License Agreement, as amended by a September 2, 2011 technology transfer agreement, we can manufacture and sell PerClot, assuming appropriate regulatory approvals, in the U.S. and certain other jurisdictions and may be required to pay royalties to SMI at certain rates on net revenues of products. We may make contingent payments to SMI of up to $ 1.0 million if certain U.S. regulatory and certain commercial milestones are achieved. We are conducting our pivotal clinical trial to gain approval to commercialize PerClot for surgical indications in the U.S. Enrollment was completed in January 2019. We anticipate Premarket Approval (“PMA”) submission to the FDA in the second half of 2020. As of March 31, 2020 we had $ 1.5 million in prepaid royalties, $ 2.0 million in intangible assets, net, and $ 1.2 million in property and equipment, net, on our Summary Consolidated Balance Sheets related to the PerClot product line. If we do not ultimately pursue or receive FDA approval to commercialize PerClot in the U.S., these assets could be materially impaired in future periods. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | 11. Revenue Recognition Sources of Revenue We have identified the following revenues disaggregated by revenue source: Domestic Hospitals – direct sales of products and preservation services. International Hospitals – direct sales of products and preservation services. International Distributors – generally these contracts specify a geographic area that the distributor will service, terms and conditions of the relationship, and purchase targets for the next calendar year. CardioGenesis Cardiac Laser Console Trials and Sales – CardioGenesis cardiac trialed laser consoles are delivered under separate agreements. For the three months ended March 31, 2020 and 2019 the sources of revenue were as follows (in thousands): Three Months Ended March 31, 2020 2019 (Unaudited) Domestic hospitals $ 36,336 $ 35,611 International hospitals 19,737 20,570 International distributors 10,245 9,610 CardioGenesis cardiac laser therapy 111 1,714 Total sources of revenue $ 66,429 $ 67,505 Also see segment disaggregation information in Note 14 below. Contract Balances We may generate contract assets during the pre-delivery design and manufacturing stage of E-xtra DESIGN ENGINEERING product order fulfillment. We assess the balance related to any arrangements in process and determine if the enforceable right to payment creates a material contract asset requiring disclosure. No material arrangements in process existed as of March 31, 2020 and 2019. We also incur contract obligations on general customer purchase orders that have been accepted but unfulfilled. Due to the short duration of time between order acceptance and delivery of the related product or service, we have determined that the balance related to these contract obligations is generally immaterial at any point in time. We monitor the value of orders accepted but unfulfilled at the close of each reporting period to determine if disclosure is appropriate. The value of orders accepted but unfulfilled as of March 31, 2020 and 2019 was not material. |
Stock Compensation
Stock Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Stock Compensation [Abstract] | |
Stock Compensation | 12. Stock Compensation Overview We have stock option and stock incentive plans for employees and non-employee Directors that provide for grants of restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance stock units (“PSUs”), and options to purchase shares of our common stock at exercise prices generally equal to the fair value of such stock at the dates of grant. We also maintain a shareholder-approved Employee Stock Purchase Plan (the “ESPP”) for the benefit of our employees. The ESPP allows eligible employees to purchase common stock on a regular basis at the lower of 85 % of the market price at the beginning or end of each offering period. Equity Grants During the three months ended March 31, 2020 the Compensation Committee of our Board of Directors (the “Committee”) authorized awards from approved stock incentive plans of RSUs to certain employees and RSAs and PSUs to certain Company officers, which, assuming that performance under the PSUs were to be achieved at target levels, together totaled 255,000 shares and had an aggregate grant date market value of $ 6.6 million. The PSUs granted in 2020 represent the right to receive from 60 % to 150 % of the target number of shares of common stock. The performance component of PSU awards granted in 2020 is based on attaining specified levels of adjusted EBITDA, as defined in the PSU grant documents, for the 2020 calendar year. During the three months ended March 31, 2019 the Committee authorized awards from approved stock incentive plans of RSUs to certain employees, and RSAs and PSUs to certain Company officers, which, assuming that performance under the PSUs were to be achieved at target levels, together totaled 453,000 shares and had an aggregate grant date market value of $ 13.4 million. Two types of PSUs were granted in 2019, an annual grant with a one year performance period (“Annual PSU”) and a special Long-Term Incentive Program PSU grant (“LTIP”), which has multiple performance periods over a five year period. If the highest performance threshold is met, the Annual PSU granted in 2019 represented the right to receive up to 150 % of the target number of shares of common stock. The performance component of the Annual PSU awards granted in 2019 was based on attaining specified levels of adjusted earnings before interest, taxes, depreciation, and amortization, (“EBITDA”), as defined in the Annual PSU grant documents, for the 2019 calendar year. The Annual PSU granted in 2019 earned approximately 83 % of the target number of shares. If the highest performance thresholds are met, the PSUs granted in 2019 under the LTIP represent the right to receive up to 288 %, and up to 192 % for a certain key executive, of the target number of shares of common stock. The performance component of the LTIP awards granted in 2019 is based on attaining specified levels of adjusted revenue growth and gross margin, as defined in the LTIP grant document, for the years 2019 through 2023. The first performance period under the LTIP will not conclude until December 31, 2021. The Committee authorized, from approved stock incentive plans, grants of stock options to purchase a total of 212,000 and 169,000 shares to certain Company officers during the three months ended March 31, 2020 and 2019, respectively. The exercise prices of the options were equal to the closing stock prices on their respective grant dates. Employees purchased common stock totaling 30,000 shares and 24,000 shares in the three months ended March 31, 2020 and 2019, respectively, through the ESPP. Stock Compensation Expense The following weighted - average assumptions were used to determine the fair value of options and shares purchased under the ESPP: Three Months Ended Three Months Ended March 31, 2020 March 31, 2019 Stock Options ESPP Stock Options ESPP Expected life 5.0 Years 0.5 Years 5.0 Years 0.5 Years Expected stock price volatility 0.35 0.31 0.40 0.39 Risk-free interest rate 1.41 % 1.57 % 2.54 % 2.56 % The following table summarizes total stock compensation expenses prior to the capitalization of amounts into deferred preservation and inventory costs (in thousands): Three Months Ended March 31, 2020 2019 RSA, RSU, and PSU expense $ 2,156 $ 1,510 Stock option and ESPP expense 533 471 Total stock compensation expense $ 2,689 $ 1,981 Included in the total stock compensation expense, as applicable in each period, were expenses related to RSAs, RSUs, PSUs, and stock options issued in each respective year, as well as those issued in prior periods that continue to vest during the period, and compensation related to the ESPP. These amounts were recorded as stock compensation expense and were subject to our normal allocation of expenses to inventory costs and deferred preservation costs. We capitalized $ 125,000 in the three months ended March 31, 2020, and $ 132,000 in the three months ended March 31, 2019, of the stock compensation expense into our inventory costs and deferred preservation costs. As of March 31, 2020 we had total unrecognized compensation costs of $ 16.2 million related to RSAs, RSUs, and PSUs and $ 3.4 million related to unvested stock options. As of March 31, 2020 this expense is expected to be recognized over a weighted-average period of 2.4 years for PSUs, 2.3 years for stock options, 2.1 years for RSUs, and 1.6 years for RSAs. |
Loss Per Common Share
Loss Per Common Share | 3 Months Ended |
Mar. 31, 2020 | |
Loss Per Common Share [Abstract] | |
Loss Per Common Share | 13. Loss Per Common Share The following table sets forth the computation of basic and diluted loss per common share (in thousands, except per share data): Three Months Ended March 31, Basic loss per common share 2020 2019 Net loss $ ( 6,665 ) $ ( 297 ) Net loss allocated to participating securities 43 2 Net loss allocated to common shareholders $ ( 6,622 ) $ ( 295 ) Basic weighted-average common shares outstanding 37,390 36,778 Basic loss per common share $ ( 0.18 ) $ ( 0.01 ) Three Months Ended March 31, Diluted loss per common share 2020 2019 Net loss $ ( 6,665 ) $ ( 297 ) Net loss allocated to participating securities 43 2 Net loss allocated to common shareholders $ ( 6,622 ) $ ( 295 ) Basic weighted-average common shares outstanding 37,390 36,778 Effect of dilutive stock options and awards -- -- Diluted weighted-average common shares outstanding 37,390 36,778 Diluted loss per common share $ ( 0.18 ) $ ( 0.01 ) We excluded stock options from the calculation of diluted weighted-average common shares outstanding if the per share value, including the sum of (i) the exercise price of the options and (ii) the amount of the compensation cost attributed to future services and not yet recognized, was greater than the average market price of the shares because the inclusion of these stock options would be antidilutive to loss per common share. Accordingly, for the three months ended March 31, 2020 and 2019 all stock options and awards were excluded from the calculation of diluted weighted-average common shares outstanding as these would be antidilutive due to the net loss. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2020 | |
Segment Information [Abstract] | |
Segment Information | 14. Segment Information We have two reportable segments organized according to our products and services: Medical Devices and Preservation Services. The Medical Devices segment includes external revenues from product sales of BioGlue, JOTEC, On-X, CardioGenesis cardiac laser therapy, PerClot, PhotoFix, and NEXUS. The Preservation Services segment includes external services revenues from the preservation of cardiac and vascular tissues. There are no intersegment revenues. The primary measure of segment performance, as viewed by our management, is segment gross margin or net external revenues less cost of products and preservation services. We do not segregate assets by segment; therefore, asset information is excluded from the segment disclosures below. The following table summarizes revenues, cost of products and preservation services, and gross margins for our operating segments (in thousands): Three Months Ended March 31, 2020 2019 Revenues: Medical devices $ 46,420 $ 48,401 Preservation services 20,009 19,104 Total revenues 66,429 67,505 Cost of products and preservation services: Medical devices 13,040 13,826 Preservation services 9,218 9,406 Total cost of products and preservation services 22,258 23,232 Gross margin: Medical devices 33,380 34,575 Preservation services 10,791 9,698 Total gross margin $ 44,171 $ 44,273 The following table summarizes net revenues by product and service (in thousands): Three Months Ended March 31, 2020 2019 Products: BioGlue $ 16,737 $ 17,222 JOTEC 15,268 15,954 On-X 12,202 11,731 PhotoFix 1,042 730 PerClot 860 1,050 NEXUS 200 -- CardioGenesis cardiac laser therapy 111 1,714 Total products 46,420 48,401 Preservation services: Cardiac tissue 10,033 8,930 Vascular tissue 9,976 10,174 Total preservation services 20,009 19,104 Total revenues $ 66,429 $ 67,505 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events Credit Agreement Amendment On April 29, 2020 we entered into an amendment to our Credit Agreement. As part of the amendment we obtained a waiver of our maximum first lien net leverage ratio covenant through the end of 2020. In addition, the amendment to our Credit Agreement provides that EBITDA, for covenant testing purposes, in each quarter of 2020 will be deemed equal to a fixed value, equal to our bank covenant EBITDA in the fourth quarter of 2019, when our first lien net leverage was 3.4 x. As a result of these changes, we are subject to a new minimum liquidity covenant and restrictions on certain payments, including cash dividends. We are required to maintain a minimum liquidity of at least $ 12.0 million as of the last day of any month in 2020, and as of the last day of any quarter through the third quarter of 2021 when our Revolving Credit Facility is drawn in excess of 25 % (or $ 7.5 million) of the amount available as of the last day of any fiscal quarter during that period. Beginning in 2021, if we repay borrowings under our Revolving Credit Facility to 25 % or less, no financial maintenance covenants, including the minimum liquidity covenant and the maximum first lien net leverage ratio covenant, are applicable. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Financial Instruments [Abstract] | |
Summary Of Financial Instruments Measured At Fair Value | March 31, 2020 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 1,478 $ -- $ -- $ 1,478 Restricted securities: Money market funds 494 -- -- 494 Endospan Loan -- -- 358 358 Total assets $ 1,972 $ -- $ 358 $ 2,330 December 31, 2019 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 1,472 $ -- $ -- $ 1,472 Restricted securities: Money market funds 528 -- -- 528 Endospan Loan -- -- 358 358 Total assets $ 2,000 $ -- $ 358 $ 2,358 |
Reconciliation Of Changes In Fair Value Of Level 3 Liabilities | Endospan Loan Balance as of December 31, 2019 $ 358 Change in valuation of Endospan Loan -- Balance as of March 31, 2020 $ 358 |
Cash Equivalents And Restrict_2
Cash Equivalents And Restricted Cash And Securities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Cash Equivalents And Restricted Cash And Securities [Abstract] | |
Summary Of Cash Equivalents And Restricted Securities | Unrealized Estimated Holding Market March 31, 2020 Cost Basis Gains Value Cash equivalents: Money market funds $ 1,478 $ -- $ 1,478 Restricted securities: Money market funds 494 -- 494 Total $ 1,972 $ -- $ 1,972 Unrealized Estimated Holding Market December 31, 2019 Cost Basis Gains Value Cash equivalents: Money market funds $ 1,472 $ -- $ 1,472 Restricted securities: Money market funds 528 -- 528 Total $ 2,000 $ -- $ 2,000 |
Inventories And Deferred Pres_2
Inventories And Deferred Preservation Costs (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventories And Deferred Preservation Costs [Abstract] | |
Schedule Of Inventories | March 31, December 31, 2020 2019 Raw materials and supplies $ 22,414 $ 21,180 Work-in-process 6,059 5,127 Finished goods 25,827 26,764 Total inventories $ 54,300 $ 53,071 |
Schedule Of Deferred Preservation Costs | March 31, December 31, 2020 2019 Cardiac tissues $ 15,477 $ 15,365 Vascular tissues 17,441 17,186 Total deferred preservation costs $ 32,918 $ 32,551 |
Goodwill And Other Intangible_2
Goodwill And Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill And Other Intangible Assets [Abstract] | |
Schedule Of Carrying Values Of Indefinite Lived Intangible Assets | March 31, December 31, 2020 2019 Goodwill $ 184,014 $ 186,697 In-process R&D 2,136 2,190 Procurement contracts and agreements 2,013 2,013 Trademarks 765 844 |
Schedule Of Goodwill By Reportable Segment | Medical Devices Segment Balance as of December 31, 2019 $ 186,697 Revaluation of goodwill denominated in foreign currency ( 2,683 ) Balance as of March 31, 2020 $ 184,014 |
Schedule Of Gross Carrying Values, Accumulated Amortization, And Approximate Amortization Period Of Definite Lived Intangible Assets | Gross Carrying Accumulated Amortization March 31, 2020 Value Amortization Period Acquired technology $ 137,676 $ 26,540 11 – 22 Years Customer lists and relationships 31,082 6,954 13 – 22 Years Distribution and manufacturing rights and know-how 13,585 3,508 5 – 15 Years Patents 3,745 3,090 17 Years Other 2,135 667 3 – 10 Years Gross Carrying Accumulated Amortization December 31, 2019 Value Amortization Period Acquired technology $ 140,193 $ 24,778 11 – 22 Years Customer lists and relationships 31,131 6,581 13 – 22 Years Distribution and manufacturing rights and know-how 13,826 3,005 5 – 15 Years Patents 3,664 3,074 17 Years Other 1,919 608 3 – 5 Years |
Summary Of Amortization Expense | Three Months Ended March 31, 2020 2019 Amortization expense $ 3,033 $ 2,579 |
Scheduled Amortization Of Intangible Assets For Next Five Years | Remainder of 2020 2021 2022 2023 2024 2025 Total Amortization expense $ 9,057 $ 12,208 $ 11,662 $ 11,153 $ 10,927 $ 8,993 $ 64,000 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule Of Supplemental Balance Sheet Information Related To Leases | Operating leases: March 31, 2020 December 31, 2019 Operating lease right-of-use assets $ 26,714 $ 27,007 Accumulated amortization ( 6,291 ) ( 5,013 ) Operating lease right-of-use assets, net $ 20,423 $ 21,994 Current maturities of operating leases $ 5,442 $ 5,487 Non-current maturities of operating lease 16,411 17,918 Total operating lease liabilities $ 21,853 $ 23,405 Finance leases: Property and equipment, at cost $ 6,984 $ 7,161 Accumulated amortization ( 1,408 ) ( 1,279 ) Property and equipment, net $ 5,576 $ 5,882 Current maturities of finance leases $ 569 $ 597 Non-current maturities of finance leases 5,147 5,415 Total finance lease liabilities $ 5,716 $ 6,012 Weighted average remaining lease term (in years): Operating leases 6.5 5.5 Finance leases 10.4 10.6 Weighted average discount rate: Operating leases 4.3 % 5.4 % Finance leases 2.0 % 2.0 % |
Summary Of Lease Costs | Three Months Ended Three Months Ended March 31, 2020 March 31, 2019 Amortization of property and equipment $ 162 $ 211 Interest expense on finance leases 29 32 Total finance lease expense 191 243 Operating lease expense 1,748 1,550 Sublease income ( 226 ) ( 228 ) Total lease expense $ 1,713 $ 1,565 |
Schedule Of Supplemental Cash Flow Information Related To Leases | Three Months Ended Three Months Ended Cash paid for amounts included in the measurement of lease liabilities: March 31, 2020 March 31, 2019 Operating cash flows for finance leases $ 29 $ 32 Operating cash flows for operating leases 1,745 1,636 Financing cash flows for finance leases 147 172 |
Schedule Of Minimum Lease Payments For Finance, Operating, And Sublease Income Leases | Finance Operating Sublease Leases Leases Income Remainder of 2020 $ 519 $ 4,833 $ 679 2021 642 6,289 905 2022 598 3,834 306 2023 597 2,547 -- 2024 595 2,539 -- Thereafter 3,380 4,919 -- Total minimum lease payments $ 6,331 $ 24,961 $ 1,890 Less amount representing interest ( 615 ) ( 3,108 ) Present value of net minimum lease payments 5,716 21,853 Less current maturities ( 569 ) ( 5,442 ) Lease liabilities, less current maturities $ 5,147 $ 16,411 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt [Abstract] | |
Schedule Of Short-Term And Long-Term Balances Of Term Loan | March 31, December 31, 2020 2019 Term loan balance $ 219,938 $ 220,500 Revolving credit facility 30,000 -- 2.45% Sparkasse Zollernalb (KFW Loan 1) 974 1,061 1.40% Sparkasse Zollernalb (KFW Loan 2) 1,506 1,615 Total loan balance 252,418 223,176 Less unamortized loan origination costs ( 7,036 ) ( 7,441 ) Net borrowings 245,382 215,735 Less short-term loan balance ( 1,155 ) ( 1,164 ) Long-term loan balance $ 244,227 $ 214,571 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Recognition [Abstract] | |
Disaggregation Of Revenue | Three Months Ended March 31, 2020 2019 (Unaudited) Domestic hospitals $ 36,336 $ 35,611 International hospitals 19,737 20,570 International distributors 10,245 9,610 CardioGenesis cardiac laser therapy 111 1,714 Total sources of revenue $ 66,429 $ 67,505 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Stock Compensation [Abstract] | |
Schedule Of Weighted-Average Assumptions Used To Determine The Fair Value Of Options | Three Months Ended Three Months Ended March 31, 2020 March 31, 2019 Stock Options ESPP Stock Options ESPP Expected life 5.0 Years 0.5 Years 5.0 Years 0.5 Years Expected stock price volatility 0.35 0.31 0.40 0.39 Risk-free interest rate 1.41 % 1.57 % 2.54 % 2.56 % |
Summary Of Total Stock Compensation Expenses | Three Months Ended March 31, 2020 2019 RSA, RSU, and PSU expense $ 2,156 $ 1,510 Stock option and ESPP expense 533 471 Total stock compensation expense $ 2,689 $ 1,981 |
Loss Per Common Share (Tables)
Loss Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Loss Per Common Share [Abstract] | |
Computation Of Basic And Diluted (Loss) Income Per Common Share | Three Months Ended March 31, Basic loss per common share 2020 2019 Net loss $ ( 6,665 ) $ ( 297 ) Net loss allocated to participating securities 43 2 Net loss allocated to common shareholders $ ( 6,622 ) $ ( 295 ) Basic weighted-average common shares outstanding 37,390 36,778 Basic loss per common share $ ( 0.18 ) $ ( 0.01 ) Three Months Ended March 31, Diluted loss per common share 2020 2019 Net loss $ ( 6,665 ) $ ( 297 ) Net loss allocated to participating securities 43 2 Net loss allocated to common shareholders $ ( 6,622 ) $ ( 295 ) Basic weighted-average common shares outstanding 37,390 36,778 Effect of dilutive stock options and awards -- -- Diluted weighted-average common shares outstanding 37,390 36,778 Diluted loss per common share $ ( 0.18 ) $ ( 0.01 ) |
Segment And Geographic Informat
Segment And Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Information [Abstract] | |
Revenues, Cost Of Products And Services, And Gross Margins For Operating Segments | Three Months Ended March 31, 2020 2019 Revenues: Medical devices $ 46,420 $ 48,401 Preservation services 20,009 19,104 Total revenues 66,429 67,505 Cost of products and preservation services: Medical devices 13,040 13,826 Preservation services 9,218 9,406 Total cost of products and preservation services 22,258 23,232 Gross margin: Medical devices 33,380 34,575 Preservation services 10,791 9,698 Total gross margin $ 44,171 $ 44,273 |
Summary Of Net Revenues By Product And Service | Three Months Ended March 31, 2020 2019 Products: BioGlue $ 16,737 $ 17,222 JOTEC 15,268 15,954 On-X 12,202 11,731 PhotoFix 1,042 730 PerClot 860 1,050 NEXUS 200 -- CardioGenesis cardiac laser therapy 111 1,714 Total products 46,420 48,401 Preservation services: Cardiac tissue 10,033 8,930 Vascular tissue 9,976 10,174 Total preservation services 20,009 19,104 Total revenues $ 66,429 $ 67,505 |
Basis Of Presentation (Narrativ
Basis Of Presentation (Narrative) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Basis Of Presentation [Abstract] | ||
Net present value of operating lease liability | $ 21,853 | $ 23,405 |
Agreements With Endospan (Narra
Agreements With Endospan (Narrative) (Details) - Endospan [Member] - USD ($) | Sep. 11, 2019 | Sep. 30, 2019 | Mar. 31, 2020 | Dec. 31, 2019 |
Variable Interest Entity [Line Items] | ||||
Securities purchase option agreement | $ 1,000,000 | $ 1,000,000 | ||
Securities purchase option agreement, expiration period | 90 days | |||
Per three tranches of funding | $ 5,000,000 | |||
Required percentage of number of patients before third tranche of loan funding can be acquired | 50.00% | |||
Investment in VIE | $ 15,000,000 | $ 15,000,000 | ||
Additional amounts | 0 | |||
Endospan loan, fair value | 358,000 | |||
Securities option agreement, fair value | 4,800,000 | |||
Distribution agreements, fair value | $ 8,500,000 | $ 9,800,000 | ||
Minimum [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Option to purchase outstanding securities | 350,000,000 | |||
Maximum [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Option to purchase outstanding securities | $ 450,000,000 | |||
Secured Debt [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Loan amount | 15,000,000 | |||
JOTEC [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Distribution fee | $ 9,000,000 |
Financial Instruments (Summary
Financial Instruments (Summary Of Financial Instruments Measured At Fair Value) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | $ 2,330 | $ 2,358 |
Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 1,478 | 1,472 |
Restricted securities | 494 | 528 |
Endospan Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loan | 358 | 358 |
Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | 1,972 | 2,000 |
Level 1 [Member] | Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 1,478 | 1,472 |
Restricted securities | 494 | 528 |
Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | ||
Level 2 [Member] | Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | ||
Restricted securities | ||
Level 2 [Member] | Endospan Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loan | ||
Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | 358 | 358 |
Level 3 [Member] | Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | ||
Restricted securities | ||
Level 3 [Member] | Endospan Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loan | $ 358 | $ 358 |
Financial Instruments (Reconcil
Financial Instruments (Reconciliation Of Changes In Fair Value Of Level 3 Liabilities) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Financial Instruments [Abstract] | |
Beginning balance | $ 358 |
Change in valuation of Endospan Loan | |
Ending balance | $ 358 |
Cash Equivalents And Restrict_3
Cash Equivalents And Restricted Cash And Securities (Narrative) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted securities | $ 494,000 | $ 528,000 | |
Restricted cash | 1,972,000 | 2,000,000 | |
Gross realized gains or losses on cash equivalents | 0 | $ 0 | |
Maturity Date Within Three Months [Member] | Money Market Funds [Member] | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted securities | $ 494,000 | $ 528,000 | |
Maximum [Member] | Maturity Date Within Three Months [Member] | Money Market Funds [Member] | Measurement Input, Expected Term [Member] | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted securities maturity period | 3 months | 3 months |
Cash Equivalents And Restrict_4
Cash Equivalents And Restricted Cash And Securities (Summary Of Cash Equivalents And Restricted Securities) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Cash and Cash Equivalents [Line Items] | ||||
Cash Equivalents, Cost Basis | $ 63,877 | $ 34,294 | $ 41,075 | $ 42,236 |
Cost Basis | 1,972 | 2,000 | ||
Restricted Securities, Cost Basis | 494 | 528 | ||
Unrealized Holding Gains (Losses) | ||||
Estimated Market Value | 1,972 | 2,000 | ||
Money Market Funds [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash Equivalents, Cost Basis | 1,478 | 1,472 | ||
Restricted Securities, Cost Basis | 494 | 528 | ||
Unrealized Holding Gains (Losses) | ||||
Cash Equivalents, Estimated Market Value | 1,478 | 1,472 | ||
Restricted Securities, Estimated Market Value | $ 494 | $ 528 |
Inventories And Deferred Pres_3
Inventories And Deferred Preservation Costs (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory [Line Items] | ||
Consignment inventory | $ 12 | $ 12 |
Domestic [Member] | ||
Inventory [Line Items] | ||
Consignment inventory percentage | 50.00% | 51.00% |
Foreign [Member] | ||
Inventory [Line Items] | ||
Consignment inventory percentage | 50.00% | 49.00% |
Inventories And Deferred Pres_4
Inventories And Deferred Preservation Costs (Schedule Of Inventories) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Inventories And Deferred Preservation Costs [Abstract] | ||
Raw materials and supplies | $ 22,414 | $ 21,180 |
Work-in-process | 6,059 | 5,127 |
Finished goods | 25,827 | 26,764 |
Total inventories | $ 54,300 | $ 53,071 |
Inventories And Deferred Pres_5
Inventories And Deferred Preservation Costs (Schedule Of Deferred Preservation Costs) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Total deferred preservation costs | $ 32,918 | $ 32,551 |
Cardiac Tissues [Member] | ||
Total deferred preservation costs | 15,477 | 15,365 |
Vascular Tissues [Member] | ||
Total deferred preservation costs | $ 17,441 | $ 17,186 |
Goodwill And Other Intangible_3
Goodwill And Other Intangible Assets (Schedule Of Carrying Values Of Indefinite Lived Intangible Assets) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Indefinite-lived Intangible Assets [Line Items] | ||
Goodwill | $ 184,014 | $ 186,697 |
In Process R&D [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Total indefinite lived intangible assets | 2,136 | 2,190 |
Procurement Contracts And Agreements [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Total indefinite lived intangible assets | 2,013 | 2,013 |
Trademarks [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Total indefinite lived intangible assets | $ 765 | $ 844 |
Goodwill And Other Intangible_4
Goodwill And Other Intangible Assets (Schedule Of Goodwill By Reportable Segment) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill And Other Intangible Assets [Abstract] | |
Beginning balance | $ 186,697 |
Revaluation of goodwill denominated in foreign currency | (2,683) |
Ending balance | $ 184,014 |
Goodwill And Other Intangible_5
Goodwill And Other Intangible Assets (Schedule Of Gross Carrying Values, Accumulated Amortization, And Approximate Amortization Period Of Definite Lived Intangible Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Acquired Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 137,676 | $ 140,193 |
Accumulated amortization | 26,540 | 24,778 |
Customer Lists And Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 31,082 | 31,131 |
Accumulated amortization | 6,954 | 6,581 |
Distribution And Manufacturing Rights And Know-How [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 13,585 | 13,826 |
Accumulated amortization | 3,508 | 3,005 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 3,745 | 3,664 |
Accumulated amortization | 3,090 | 3,074 |
Other [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 2,135 | 1,919 |
Accumulated amortization | $ 667 | $ 608 |
Minimum [Member] | Acquired Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 11 years | 11 years |
Minimum [Member] | Customer Lists And Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 13 years | 13 years |
Minimum [Member] | Distribution And Manufacturing Rights And Know-How [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 5 years | 5 years |
Minimum [Member] | Other [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 3 years | 3 years |
Maximum [Member] | Acquired Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 22 years | 22 years |
Maximum [Member] | Customer Lists And Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 22 years | 22 years |
Maximum [Member] | Distribution And Manufacturing Rights And Know-How [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 15 years | 15 years |
Maximum [Member] | Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 17 years | 17 years |
Maximum [Member] | Other [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 10 years | 5 years |
Goodwill And Other Intangible_6
Goodwill And Other Intangible Assets (Summary Of Amortization Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Goodwill And Other Intangible Assets [Abstract] | ||
Amortization expense | $ 3,033 | $ 2,579 |
Goodwill And Other Intangible_7
Goodwill And Other Intangible Assets (Scheduled Amortization Of Intangible Assets For Next Five Years) (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Goodwill And Other Intangible Assets [Abstract] | |
Remainder of 2020 | $ 9,057 |
2021 | 12,208 |
2022 | 11,662 |
2023 | 11,153 |
2024 | 10,927 |
2025 | 8,993 |
Total | $ 64,000 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Income Taxes [Abstract] | |||
Effective income tax rate | 18.00% | 82.00% | |
Increase in income tax benefit | $ 250 | ||
Valuation allowances against deferred tax assets | 3,400 | $ 3,200 | |
Net deferred tax liability | 19,500 | $ 20,400 | |
Reduction to income taxes payable and deferred tax assets | $ 1,300 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020USD ($)item | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($) | |
Operating Leased Assets [Line Items] | |||
Number of subleases | item | 2 | ||
Sublease income | $ 226 | $ 228 | |
Forecast [Member] | |||
Operating Leased Assets [Line Items] | |||
Sublease income | $ 905 |
Leases (Schedule Of Supplementa
Leases (Schedule Of Supplemental Balance Sheet Information Related To Leases) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 26,714 | $ 27,007 |
Accumulated amortization | (6,291) | (5,013) |
Operating lease right-of-use assets, net | 20,423 | 21,994 |
Current maturities of operating leases | 5,442 | 5,487 |
Non-current maturities of operating lease | 16,411 | 17,918 |
Total operating lease liabilities | 21,853 | 23,405 |
Finance leases, Property and equipment, at cost | 6,984 | 7,161 |
Finance leases, Accumulated amortization | (1,408) | (1,279) |
Finance leases, property and equipment, net | 5,576 | 5,882 |
Current maturities of finance leases | 569 | 597 |
Non-current maturities of finance leases | 5,147 | 5,415 |
Total finance lease liabilities | $ 5,716 | $ 6,012 |
Weighted average remaining lease term (in years): Operating leases | 6 years 6 months | 5 years 6 months |
Weighted average remaining lease term (in years): Finance leases | 10 years 4 months 24 days | 10 years 7 months 6 days |
Weighted average discount rate: Operating leases | 4.30% | 5.40% |
Weighted average discount rate: Finance leases | 2.00% | 2.00% |
Leases (Schedule Of Assets Acqu
Leases (Schedule Of Assets Acquired Under Finance Leases) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Finance leases, Property and equipment, at cost | $ 6,984 | $ 7,161 |
Finance leases, Accumulated amortization | (1,408) | (1,279) |
Finance leases, property and equipment, net | $ 5,576 | $ 5,882 |
Leases (Summary Of Lease Costs)
Leases (Summary Of Lease Costs) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Amortization of property and equipment | $ 162 | $ 211 |
Interest expense on finance leases | 29 | 32 |
Total finance lease expense | 191 | 243 |
Operating lease expense | 1,748 | 1,550 |
Sublease income | (226) | (228) |
Total lease expense | $ 1,713 | $ 1,565 |
Leases (Schedule Of Supplemen_2
Leases (Schedule Of Supplemental Cash Flow Information Related To Leases) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Operating cash flows for finance leases | $ 29 | $ 32 |
Operating cash flows for operating leases | 1,745 | 1,636 |
Financing cash flows for finance leases | $ 147 | $ 172 |
Leases (Schedule Of Minimum Lea
Leases (Schedule Of Minimum Lease Payments For Finance, Operating, And Sublease Income Leases) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Finance Leases, Remainder of 2020 | $ 519 | |
Finance Leases, 2021 | 642 | |
Finance Leases, 2022 | 598 | |
Finance Leases, 2023 | 597 | |
Finance Leases, 2024 | 595 | |
Finance Leases, Thereafter | 3,380 | |
Finance Leases, Total minimum lease payments | 6,331 | |
Finance Leases, Less amount representing interest | 615 | |
Finance Leases, Present value of net minimum lease payments | 5,716 | $ 6,012 |
Finance Leases, Less current maturities | 569 | 597 |
Finance Leases, Lease liabilities, less current maturities | 5,147 | 5,415 |
Operating Leases, Remainder of 2020 | 4,833 | |
Operating Leases, 2021 | 6,289 | |
Operating Leases, 2022 | 3,834 | |
Operating Leases, 2023 | 2,547 | |
Operating Leases, 2024 | 2,539 | |
Operating Leases, Thereafter | 4,919 | |
Operating Leases, Total minimum lease payments | 24,961 | |
Operating Leases, Less amount representing interest | 3,108 | |
Operating Leases, Present value of net minimum lease payments | 21,853 | 23,405 |
Operating Leases, Less current maturities | 5,442 | 5,487 |
Operating Leases, Lease liabilities, less current maturities | 16,411 | $ 17,918 |
Sublease Income, Remainder of 2020 | 679 | |
Sublease Income, 2021 | 905 | |
Sublease Income, 2022 | 306 | |
Sublease Income, Total minimum lease payments | $ 1,890 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2015 | Mar. 31, 2020 | Mar. 31, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 01, 2017 | |
Line of Credit Facility [Line Items] | ||||||
Term loan balance | $ 252,418 | $ 223,176 | ||||
Restricted cash and cash equivalents | $ 1,972 | 2,000 | ||||
Credit facility default interest rate | 2.00% | |||||
Credit facility aggregate interest rate | 4.70% | |||||
Credit facility commitment fee percentage | 0.50% | |||||
Interest expense | $ 3,400 | $ 3,900 | ||||
Government Sponsored Debt [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Loan term | 9 years | |||||
2.45% Sparkasse Zollernalb (KFW Loan 1) [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Term loan balance | 974 | 1,061 | ||||
Interest rate on amounts borrowed | 2.45% | |||||
1.40% Sparkasse Zollernalb (KFW Loan 2) [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Term loan balance | 1,506 | 1,615 | ||||
Interest rate on amounts borrowed | 1.40% | |||||
Revolving Credit Facility [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility aggregate commitments | $ 30,000 | |||||
Term loan balance | $ 30,000 | |||||
Credit facility maturity date | Dec. 1, 2022 | |||||
Credit facility outstanding balance | $ 30,000 | |||||
Maximum percentage allowed for total principal amount of loans | 25.00% | |||||
Maximum leverage ratio | 5.25 | |||||
Maximum principal amount of loans outstanding | $ 7,500 | |||||
Credit facility aggregate interest rate | 5.20% | |||||
Revolving Credit Facility [Member] | Minimum [Member] | Base Rate [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility margin | 3.00% | |||||
Revolving Credit Facility [Member] | Minimum [Member] | LIBOR [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility margin | 4.00% | |||||
Revolving Credit Facility [Member] | Maximum [Member] | Base Rate [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility margin | 3.25% | |||||
Revolving Credit Facility [Member] | Maximum [Member] | LIBOR [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility margin | 4.25% | |||||
Secured Debt [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility aggregate commitments | 255,000 | |||||
Credit facility outstanding balance | 225,000 | |||||
Term Loan [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Term loan balance | $ 219,938 | $ 220,500 | $ 225,000 | |||
Credit facility maturity date | Dec. 1, 2024 | |||||
Term Loan [Member] | Base Rate [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility margin | 2.25% | 3.00% | ||||
Term Loan [Member] | LIBOR [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility margin | 3.25% | 4.00% |
Debt (Schedule Of Short-Term An
Debt (Schedule Of Short-Term And Long-Term Balances Of Term Loan) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 01, 2017 |
Debt Instrument [Line Items] | |||
Total loan balance | $ 252,418 | $ 223,176 | |
Less unamortized loan origination costs | (7,036) | (7,441) | |
Total loan balance | 245,382 | 215,735 | |
Less short-term loan balance | (1,155) | (1,164) | |
Long-term loan balance | 244,227 | 214,571 | |
2.45% Sparkasse Zollernalb (KFW Loan 1) [Member] | |||
Debt Instrument [Line Items] | |||
Total loan balance | 974 | 1,061 | |
1.40% Sparkasse Zollernalb (KFW Loan 2) [Member] | |||
Debt Instrument [Line Items] | |||
Total loan balance | 1,506 | 1,615 | |
Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Total loan balance | 219,938 | $ 220,500 | $ 225,000 |
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Total loan balance | $ 30,000 |
Commitments And Contingencies (
Commitments And Contingencies (Narrative) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Other Commitments [Line Items] | ||
Unreported loss liability | $ 1,900,000 | |
Recoverable insurance amounts | 962,000 | $ 935,000 |
Property and equipment, net | 31,878,000 | $ 32,150,000 |
PerClot [Member] | ||
Other Commitments [Line Items] | ||
Prepaid royalties | 1,500,000 | |
Net intangible assets | 2,000,000 | |
Property and equipment, net | 1,200,000 | |
Maximum [Member] | ||
Other Commitments [Line Items] | ||
Estimated loss | $ 3,700,000 | |
Starch Technology Purchase [Member] | ||
Other Commitments [Line Items] | ||
Term of distribution agreement | 15 years | |
Expected future contingent payment amounts | $ 1,000,000 | |
Number of notice days | 180 days |
Revenue Recognition (Disaggrega
Revenue Recognition (Disaggregation Of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total sources of revenue | $ 66,429 | $ 67,505 |
Domestic Hospitals [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total sources of revenue | 36,336 | 35,611 |
International Hospitals [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total sources of revenue | 19,737 | 20,570 |
International Distributors [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total sources of revenue | 10,245 | 9,610 |
CardioGenesis Cardiac Laser Therapy [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total sources of revenue | $ 111 | $ 1,714 |
Stock Compensation (Narrative)
Stock Compensation (Narrative) (Details) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020USD ($)shares | Mar. 31, 2019USD ($)shares | Dec. 31, 2019item | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Capitalized stock compensation expense | $ 125 | $ 132 | |
ESPP Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
ESPP, percentage of market price for eligible employees | 85.00% | ||
Employees purchased common stock, shares | shares | 30 | 24 | |
RSAs, RSUs, And PSUs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Authorized awards from approved stock incentive plans | shares | 255 | 453 | |
Aggregate grant date market value | $ 6,600 | $ 13,400 | |
Unrecognized compensation costs | 16,200 | ||
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation costs | $ 3,400 | ||
Expected weighted-average period for recognizing the unrecognized compensation costs, in years | 2 years 3 months 18 days | ||
Restricted Stock Awards (RSAs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected weighted-average period for recognizing the unrecognized compensation costs, in years | 1 year 7 months 6 days | ||
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected weighted-average period for recognizing the unrecognized compensation costs, in years | 2 years 1 month 6 days | ||
Performance Stock Units (PSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of performance stock unit grants | item | 2 | ||
Expected weighted-average period for recognizing the unrecognized compensation costs, in years | 2 years 4 months 24 days | ||
Short-term PSUs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of target number of shares of common stock granted as Performance Stock Units | 83.00% | ||
Short-term PSUs [Member] | Share-based Payment Arrangement, Tranche One [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 1 year | ||
Long-term PSUs [Member] | Share-based Payment Arrangement, Tranche Two [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 5 years | ||
Minimum [Member] | Performance Stock Units (PSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of target number of shares of common stock granted as Performance Stock Units | 60.00% | ||
Maximum [Member] | Performance Stock Units (PSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of target number of shares of common stock granted as Performance Stock Units | 150.00% | ||
Maximum [Member] | Short-term PSUs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of target number of shares of common stock granted as Performance Stock Units | 150.00% | ||
Maximum [Member] | Long-term PSUs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of target number of shares of common stock granted as Performance Stock Units | 288.00% | ||
Officers [Member] | Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grants of stock options | shares | 212 | 169 | |
Executive Officer [Member] | Maximum [Member] | Long-term PSUs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of target number of shares of common stock granted as Performance Stock Units | 192.00% |
Stock Compensation (Schedule Of
Stock Compensation (Schedule Of Weighted-Average Assumptions Used To Determine The Fair Value Of Options) (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life of options | 5 years | 5 years |
Expected stock price volatility | 0.35% | 0.40% |
Risk-free interest rate | 1.41% | 2.54% |
ESPP Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life of options | 6 months | 6 months |
Expected stock price volatility | 0.31% | 0.39% |
Risk-free interest rate | 1.57% | 2.56% |
Stock Compensation (Summary Of
Stock Compensation (Summary Of Total Stock Compensation Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock compensation expense | $ 2,689 | $ 1,981 |
RSA, RSU, And PSU Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock compensation expense | 2,156 | 1,510 |
Stock Option And ESPP Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock compensation expense | $ 533 | $ 471 |
Loss Per Common Share (Computat
Loss Per Common Share (Computation Of Basic And Diluted (Loss) Income Per Common Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Basic income (loss) per common share | ||
Net loss | $ (6,665) | $ (297) |
Net loss allocated to participating securities | 43 | 2 |
Net loss allocated to common shareholders | $ (6,622) | $ (295) |
Basic weighted-average common shares outstanding | 37,390 | 36,778 |
Basic loss per common share | $ (0.18) | $ (0.01) |
Diluted loss per common share | ||
Net loss | $ (6,665) | $ (297) |
Net loss allocated to participating securities | 43 | 2 |
Net loss allocated to common shareholders | $ (6,622) | $ (295) |
Basic weighted-average common shares outstanding | 37,390 | 36,778 |
Diluted weighted-average common shares outstanding | 37,390 | 36,778 |
Diluted loss per common share | $ (0.18) | $ (0.01) |
Segment Information (Narrative)
Segment Information (Narrative) (Details) | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | segment | 2 | |
Revenues | $ 66,429,000 | $ 67,505,000 |
Intersegment Eliminations [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 0 |
Segment Information (Revenues,
Segment Information (Revenues, Cost Of Products And Services, And Gross Margins For Operating Segments) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||
Total revenues | $ 66,429 | $ 67,505 | |
Total cost of products and preservation services | 22,258 | 23,232 | |
Total gross margin | 44,171 | 44,273 | |
Goodwill | 184,014 | $ 186,697 | |
Operating Segments [Member] | Medical Devices [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 46,420 | 48,401 | |
Total cost of products and preservation services | 13,040 | 13,826 | |
Total gross margin | 33,380 | 34,575 | |
Operating Segments [Member] | Preservation Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 20,009 | 19,104 | |
Total cost of products and preservation services | 9,218 | 9,406 | |
Total gross margin | $ 10,791 | $ 9,698 |
Segment Information (Summary Of
Segment Information (Summary Of Net Revenues By Product And Service) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Product Information [Line Items] | ||
Total revenues | $ 66,429 | $ 67,505 |
BioGlue [Member] | ||
Product Information [Line Items] | ||
Total revenues | 16,737 | 17,222 |
JOTEC [Member] | ||
Product Information [Line Items] | ||
Total revenues | 15,268 | 15,954 |
On-X [Member] | ||
Product Information [Line Items] | ||
Total revenues | 12,202 | 11,731 |
CardioGenesis Cardiac Laser Therapy [Member] | ||
Product Information [Line Items] | ||
Total revenues | 111 | 1,714 |
PhotoFix [Member] | ||
Product Information [Line Items] | ||
Total revenues | 1,042 | 730 |
PerClot [Member] | ||
Product Information [Line Items] | ||
Total revenues | 860 | 1,050 |
NEXUS [Member] | ||
Product Information [Line Items] | ||
Total revenues | 200 | |
Cardiac Tissues [Member] | ||
Product Information [Line Items] | ||
Total revenues | 10,033 | 8,930 |
Vascular Tissues [Member] | ||
Product Information [Line Items] | ||
Total revenues | 9,976 | 10,174 |
Preservation Services [Member] | ||
Product Information [Line Items] | ||
Total revenues | 20,009 | 19,104 |
Operating Segments [Member] | Total Products [Member] | ||
Product Information [Line Items] | ||
Total revenues | 46,420 | 48,401 |
Operating Segments [Member] | Total Preservation Services [Member] | ||
Product Information [Line Items] | ||
Total revenues | $ 20,009 | $ 19,104 |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) $ in Millions | Apr. 29, 2020USD ($) | Mar. 31, 2020USD ($) |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Maximum percentage allowed for total principal amount of loans | 25.00% | |
Maximum principal amount of loans outstanding | $ 7.5 | |
Subsequent Event [Member] | ||
Debt Instrument [Line Items] | ||
First lien net leverage ratio | 3.4 | |
Minimum liquidity requirement | $ 12 |