Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 16, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 1-13165 | ||
Entity Registrant Name | ARTIVION, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 59-2417093 | ||
Entity Address, Address Line One | 1655 Roberts Boulevard N.W. | ||
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 | AORT | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 666,252,083 | ||
Entity Common Stock, Shares Outstanding | 41,225,138 | ||
Documents Incorporated by Reference | Documents Incorporated By Reference Document Parts Into Which Incorporated Proxy Statement for the Annual Meeting of Stockholders to be filed within 120 days after December 31, 2023 Part III | ||
Document Fiscal Year Focus | 2023 | ||
Entity Central Index Key | 0000784199 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Name | Ernst & Young LLP |
Auditor Location | Atlanta, Georgia |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 58,940 | $ 39,351 |
Trade receivables, net | 71,796 | 61,820 |
Other receivables | 2,342 | 7,764 |
Inventories, net | 81,976 | 74,478 |
Deferred preservation costs, net | 49,804 | 46,371 |
Prepaid expenses and other | 15,810 | 17,550 |
Total current assets | 280,668 | 247,334 |
Goodwill | 247,337 | 243,631 |
Acquired technology, net | 142,593 | 151,263 |
Operating lease right-of-use assets, net | 43,822 | 41,859 |
Property and equipment, net | 38,358 | 38,674 |
Other intangibles, net | 29,638 | 31,384 |
Deferred income taxes | 1,087 | 1,314 |
Other long-term assets | 8,894 | 7,339 |
Total assets | 792,397 | 762,798 |
Current liabilities: | ||
Accounts payable | 13,318 | 12,004 |
Accrued compensation | 18,715 | 13,810 |
Accrued expenses | 12,732 | 12,374 |
Taxes payable | 3,840 | 2,635 |
Current maturities of operating leases | 3,395 | 3,308 |
Current portion of long-term debt | 1,451 | 1,608 |
Accrued procurement fees | 1,439 | 2,111 |
Current portion of finance lease obligation | 582 | 513 |
Other | 2,390 | 1,312 |
Total current liabilities | 57,862 | 49,675 |
Long-term debt | 305,531 | 306,499 |
Contingent consideration | 63,890 | 40,400 |
Non-current maturities of operating leases | 43,977 | 41,257 |
Deferred income taxes | 21,851 | 24,499 |
Deferred compensation liability | 6,760 | 5,468 |
Non-current finance lease obligations | 3,405 | 3,644 |
Other | 7,341 | 7,027 |
Total liabilities | 510,617 | 478,469 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Preferred stock $0.01 par value per share, 5,000 shares authorized, no shares issued | 0 | 0 |
Common stock $0.01 par value per share, 75,000 shares authorized, 42,569 and 41,830 shares issued as of December 31, 2023 and 2022, respectively | 426 | 418 |
Additional paid-in capital | 355,919 | 337,385 |
Retained deficit | (47,907) | (17,217) |
Accumulated other comprehensive loss | (12,010) | (21,609) |
Treasury stock at cost, 1,487 shares as of December 31, 2023 and 2022 | (14,648) | (14,648) |
Total shareholders' equity | 281,780 | 284,329 |
Total liabilities and shareholders' equity | $ 792,397 | $ 762,798 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 42,569,000 | 41,830,000 |
Treasury stock at cost (in shares) | 1,487,000 | 1,487,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues: | |||
Total revenues | $ 354,004 | $ 313,789 | $ 298,836 |
Cost of products and preservation services: | |||
Total cost of products and preservation services | 124,828 | 111,266 | 101,322 |
Gross margin | 229,176 | 202,523 | 197,514 |
Operating expenses: | |||
General, administrative, and marketing | 208,977 | 157,443 | 169,774 |
Research and development | 28,707 | 38,879 | 35,546 |
Total operating expenses | 237,684 | 196,322 | 205,320 |
Gain from sale of non-financial assets | 14,250 | 0 | 15,923 |
Operating income | 5,742 | 6,201 | 8,117 |
Interest expense | 25,299 | 18,224 | 16,887 |
Interest income | (1,077) | (147) | (79) |
Other expense, net | 3,106 | 3,108 | 6,136 |
Loss before income taxes | (21,586) | (14,984) | (14,827) |
Income tax expense | 9,104 | 4,208 | 7 |
Net loss | $ (30,690) | $ (19,192) | $ (14,834) |
Loss per share: | |||
Basic (in dollars per share) | $ (0.75) | $ (0.48) | $ (0.38) |
Diluted (in dollars per share) | $ (0.75) | $ (0.48) | $ (0.38) |
Weighted-average common shares outstanding: | |||
Basic (in shares) | 40,743 | 40,032 | 38,983 |
Diluted (in shares) | 40,743 | 40,032 | 38,983 |
Net loss | $ (30,690) | $ (19,192) | $ (14,834) |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | 9,599 | (11,722) | (16,630) |
Comprehensive loss | (21,091) | (30,914) | (31,464) |
Products | |||
Revenues: | |||
Total revenues | 261,185 | 230,353 | 221,597 |
Cost of products and preservation services: | |||
Total cost of products and preservation services | 84,595 | 72,166 | 65,196 |
Preservation services | |||
Revenues: | |||
Total revenues | 92,819 | 83,436 | 77,239 |
Cost of products and preservation services: | |||
Total cost of products and preservation services | $ 40,233 | $ 39,100 | $ 36,126 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net cash flows from operating activities: | |||
Net loss | $ (30,690) | $ (19,192) | $ (14,834) |
Adjustments to reconcile net loss to net cash from operating activities: | |||
Change in fair value of contingent consideration | 23,490 | (9,000) | 8,870 |
Depreciation and amortization | 23,076 | 22,442 | 23,977 |
Non-cash compensation | 14,422 | 12,344 | 10,711 |
Non-cash lease expense | 7,354 | 7,432 | 7,521 |
Fair value adjustment of long-term loan | 5,000 | 0 | 409 |
Write-down of inventories and deferred preservation costs | 4,785 | 4,374 | 5,377 |
Non-cash interest expense | 1,858 | 1,832 | 2,005 |
Write-off of Endospan Option | 0 | 0 | 4,944 |
Deferred income taxes | (1,385) | (1,717) | (4,470) |
Gain from sale of non-financial assets | (14,250) | 0 | (15,923) |
Other | 1,358 | 2,268 | 2,060 |
Changes in operating assets and liabilities: | |||
Accounts payable, accrued expenses, and other liabilities | 1,682 | (1,958) | (1,893) |
Prepaid expenses and other assets | 535 | (2,234) | (1,404) |
Receivables | (4,050) | (13,340) | (11,560) |
Inventories and deferred preservation costs | (14,360) | (8,404) | (18,375) |
Net cash flows provided by (used in) operating activities | 18,825 | (5,153) | (2,585) |
Net cash flows from investing activities: | |||
Proceeds from sale of non-financial assets, net | 14,250 | 0 | 19,000 |
Payments for Endospan agreement | (5,000) | 0 | 0 |
Capital expenditures | (7,430) | (9,016) | (13,091) |
Other | (2,322) | (1,699) | (249) |
Net cash flows (used in) provided by investing activities | (502) | (10,715) | 5,660 |
Net cash flows from financing activities: | |||
Proceeds from exercise of stock options and issuance of common stock | 3,955 | 3,368 | 3,756 |
Proceeds from financing insurance premiums | 3,558 | 0 | 0 |
Payment of contingent consideration | 0 | 0 | (8,200) |
Payment of debt issuance costs | (249) | 0 | (2,219) |
Redemption and repurchase of stock to cover tax withholdings | (559) | (1,795) | (1,914) |
Principal payments on short-term notes payable | (2,531) | 0 | (299) |
Repayment of debt | (2,772) | (2,753) | (2,786) |
Other | (537) | (459) | (561) |
Net cash flows provided by (used in) financing activities | 865 | (1,639) | (12,223) |
Effect of exchange rate changes on cash and cash equivalents | 401 | 1,848 | 2,200 |
Increase (decrease) in cash and cash equivalents | 19,589 | (15,659) | (6,948) |
Cash and cash equivalents, beginning of year | 39,351 | 55,010 | 61,958 |
Cash and cash equivalents, end of year | $ 58,940 | $ 39,351 | $ 55,010 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid In Capital | Additional Paid In Capital Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings (Deficit) | Retained Earnings (Deficit) Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Beginning balance, treasury stock (in shares) | (1,487) | ||||||||
Balance, shares at Dec. 31, 2020 | 40,394 | ||||||||
Balance at Dec. 31, 2020 | $ 328,713 | $ (19,639) | $ 404 | $ 316,192 | $ (16,426) | $ 20,022 | $ (3,213) | $ 6,743 | |
Beginning balance, treasury stock at Dec. 31, 2020 | $ (14,648) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (14,834) | (14,834) | |||||||
Other comprehensive income (loss), net of tax | (16,630) | (16,630) | |||||||
Stock issued (in shares) | 553 | ||||||||
Stock issued | 10,000 | $ 6 | 9,994 | ||||||
Equity compensation (in shares) | 260 | ||||||||
Equity compensation | 11,277 | $ 3 | 11,274 | ||||||
Exercise of options (in shares) | 179 | ||||||||
Exercise of options | $ 2,146 | $ 1 | 2,145 | ||||||
Employee stock purchase plan (in shares) | 87 | 87 | |||||||
Employee stock purchase plan | $ 1,609 | $ 1 | 1,608 | ||||||
Redemption and repurchase of stock to cover tax withholdings (in shares) | (76) | ||||||||
Redemption and repurchase of stock to cover tax withholdings | (1,914) | $ (1) | (1,913) | ||||||
Balance, shares at Dec. 31, 2021 | 41,397 | ||||||||
Balance at Dec. 31, 2021 | $ 300,728 | $ 414 | 322,874 | 1,975 | (9,887) | ||||
Ending balance, treasury stock (in shares) at Dec. 31, 2021 | (1,487) | ||||||||
Ending balance, treasury stock at Dec. 31, 2021 | $ (14,648) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Accounting Standards Update [Extensible Enumeration] | ASU 2020-06 | ||||||||
Beginning balance, treasury stock (in shares) | (1,487) | ||||||||
Net loss | $ (19,192) | (19,192) | |||||||
Other comprehensive income (loss), net of tax | (11,722) | (11,722) | |||||||
Equity compensation (in shares) | 282 | ||||||||
Equity compensation | 12,942 | $ 3 | 12,939 | ||||||
Exercise of options (in shares) | 151 | ||||||||
Exercise of options | $ 1,789 | $ 1 | 1,788 | ||||||
Employee stock purchase plan (in shares) | 95 | 95 | |||||||
Employee stock purchase plan | $ 1,579 | $ 1 | 1,578 | ||||||
Redemption and repurchase of stock to cover tax withholdings (in shares) | (95) | ||||||||
Redemption and repurchase of stock to cover tax withholdings | (1,795) | $ (1) | (1,794) | ||||||
Balance, shares at Dec. 31, 2022 | 41,830 | ||||||||
Balance at Dec. 31, 2022 | $ 284,329 | $ 418 | 337,385 | (17,217) | (21,609) | ||||
Ending balance, treasury stock (in shares) at Dec. 31, 2022 | (1,487) | (1,487) | |||||||
Ending balance, treasury stock at Dec. 31, 2022 | $ 14,648 | $ (14,648) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Beginning balance, treasury stock (in shares) | (1,487) | (1,487) | |||||||
Net loss | $ (30,690) | (30,690) | |||||||
Other comprehensive income (loss), net of tax | 9,599 | 9,599 | |||||||
Equity compensation (in shares) | 412 | ||||||||
Equity compensation | 15,146 | $ 4 | 15,142 | ||||||
Exercise of options (in shares) | 226 | ||||||||
Exercise of options | $ 2,502 | $ 3 | 2,499 | ||||||
Employee stock purchase plan (in shares) | 141 | 141 | |||||||
Employee stock purchase plan | $ 1,453 | $ 2 | 1,451 | ||||||
Redemption and repurchase of stock to cover tax withholdings (in shares) | (40) | ||||||||
Redemption and repurchase of stock to cover tax withholdings | (559) | $ (1) | (558) | ||||||
Balance, shares at Dec. 31, 2023 | 42,569 | ||||||||
Balance at Dec. 31, 2023 | $ 281,780 | $ 426 | $ 355,919 | $ (47,907) | $ (12,010) | ||||
Ending balance, treasury stock (in shares) at Dec. 31, 2023 | (1,487) | (1,487) | |||||||
Ending balance, treasury stock at Dec. 31, 2023 | $ 14,648 | $ (14,648) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Beginning balance, treasury stock (in shares) | (1,487) | (1,487) |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Nature of Business Artivion, Inc. (“Artivion,” the “Company,” “we,” or “us”), is a leader in the manufacturing, processing, and distribution of medical devices and implantable human tissues used in cardiac and vascular surgical procedures for patients with aortic disease. We have four major product families: aortic stent grafts, surgical sealants, On-X mechanical heart valves and related surgical products (“On-X” products), and implantable cardiac and vascular human tissues. Aortic stent grafts include aortic arch stent grafts, abdominal stent grafts, and synthetic vascular grafts. Aortic arch stent grafts include our E-vita Open NEO, E-vita Open Plus, the Ascyrus Medical Dissection Stent (“AMDS”) hybrid prosthesis, the NEXUS endovascular stent graft system (“NEXUS”), the NEXUS DUO TM aortic arch stent graft (“NEXUS DUO”), and E-vita Thoracic 3G products. Abdominal stent grafts include our E-xtra Design Engineering (including Artivex), E-nside, E-tegra, E-ventus BX, and E-liac products. Surgical sealants include our BioGlue Surgical Adhesive products (“BioGlue”). In addition to these four major product families, we sell or distribute PhotoFix bovine surgical patches (“PhotoFix”) and CardioGenesis cardiac laser therapy (prior to our abandonment of the business as of June 30, 2023). We began to manufacture and supply PerClot hemostatic powder (“PerClot”) during the second quarter of 2023 (as part of the Transitional Manufacturing and Supply Agreement (“TMSA”) of the Baxter Transaction, described below). Basis of Presentation and Principles of Consolidation We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The accompanying consolidated financial statements include the accounts of the Company and our wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain prior-year amounts have been reclassified to conform to the current year presentation. Foreign Currencies Our revenues and expenses transacted in foreign currencies are remeasured as they occur at exchange rates in effect at the time of each transaction. Realized and unrealized gains and losses on foreign currency transactions are recorded as a component of Other expense, net on our Consolidated Statements of Operations and Comprehensive Loss. Realized and unrealized gains and losses were a gain of $2.1 million, a loss of $3.1 million, and a loss of $5.5 million for the years ended December 31, 2023, 2022, and 2021, respectively. Our assets and liabilities denominated in foreign currencies are recognized at the exchange rate in effect at the time of each transaction. At period end, the assets and liabilities are translated at the exchange rate in effect as of the balance sheet date and are recorded as a separate component of Accumulated other comprehensive loss in the shareholders' equity section of our Consolidated Balance Sheets. Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with US GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Estimates and assumptions are used when accounting for allowance for doubtful accounts, inventory, deferred preservation costs, acquired assets or businesses, intangible assets, deferred income taxes, commitments and contingencies (including product and tissue processing liability claims, claims incurred but not reported, and amounts recoverable from insurance companies), stock based compensation, certain accrued liabilities (including accrued procurement fees, income taxes, and financial instruments including contingent consideration), and other items as appropriate. Revenue Recognition Contracts with Customers We routinely enter into contracts with customers that include general commercial terms and conditions, notification requirements for price increases, shipping terms and, in most cases, prices for the products and services that we offer. These agreements, however, do not obligate us to provide goods or services to the customer, and there is no consideration promised to us at the onset of these arrangements. For customers without separate agreements, we have a standard list price established by geography and by currency for all products and services, and our invoices contain standard terms and conditions that are applicable to those customers where a separate agreement is not controlling. Our performance obligations are established when a customer submits a purchase order notification (in writing, electronically or verbally) for goods and services, and we accept the order. We identify performance obligations as the delivery of the requested product or service in appropriate quantities and to the location specified in the customer’s contract and/or purchase order. We generally recognize revenue upon the satisfaction of these criteria when control of the product or service has been transferred to the customer at which time we have an unconditional right to receive payment. Our prices are fixed and are not affected by contingent events that could impact the transaction price. We do not offer price concessions and do not accept payment that is less than the price stated when we accept the purchase order. We do not have any material performance obligations where we are acting as an agent for another entity. Revenues for products, including: a ortic stent grafts, surgical sealants, On-X products, and other medical devices, are typically recognized at the time the product is shipped, at which time the title passes to the customer, and there are no further performance obligations. Revenues from consignment are recognized when we receive a notification of implantation. We recognize revenues for preservation services when tissue is shipped to the customer. Significant Judgments in the Application of the Guidance in ASC 606 There are no significant judgments associated with the satisfaction of our performance obligations. We generally satisfy performance obligations upon shipment of the product or service obligation to the customer. This is consistent with the time in which the customer obtains control of the product or service. Performance obligations are also generally settled quickly after the purchase order acceptance, therefore, the value of unsatisfied performance obligations at the end of any reporting period is immaterial. We consider variable consideration in establishing the transaction price. Forms of variable consideration potentially applicable to our arrangements include sales returns, rebates, volume-based bonuses, and prompt pay discounts. We use historical information along with an analysis of the expected value to properly calculate and to consider the need to constrain estimates of variable consideration. Such amounts are included as a reduction to revenue from the sale of products and services in the periods in which the related revenue is recognized and adjusted in future periods as necessary. Commissions and Contract Costs Sales commissions are earned upon completion of each performance obligation, and therefore, are expensed when incurred. These costs are included in General, administrative, and marketing expenses in the Consolidated Statements of Operations and Comprehensive Loss. We generally do not incur incremental charges associated with securing agreements with customers which would require capitalization and recovery over the life of the agreement. Practical Expedients Our payment terms for sales direct to customers are substantially less than the one-year collection period that falls within the practical expedient in the determination of whether a significant financing component exists. Shipping and Handling Charges Fees charged to customers for shipping and handling of products and tissues are included in product and preservation service revenues. The costs for shipping and handling of products and tissues are included as a component of cost of products and cost of preservation services. Taxes Collected from Customers Taxes collected on the value of transaction revenue are excluded from product and service revenues and cost of sales and are accrued in current liabilities until remitted to governmental authorities . Advertising Costs The costs to develop, produce, and communicate our advertising are expensed as incurred and are classified as General, administrative, and marketing expenses. The total amount of advertising expense included in our Consolidated Statements of Operations and Comprehensive Loss was $1.9 million, $1.6 million, and $1.0 million for the years ended December 31, 2023, 2022, and 2021, respectively. Stock-Based Compensation We have stock option and stock incentive plans for employees and non-employee directors that provide for grants of restricted stock awards (“RSA”s), restricted stock units (“RSU”s), performance stock units (“PSU”s), and options to purchase shares of our common stock at exercise prices generally equal to the fair values 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 the right 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. The RSAs, RSUs, PSUs, and stock options granted by us typically vest over a one We value our RSAs, RSUs, and PSUs based on the stock price on the date of grant. We expense the related compensation cost of RSAs and RSUs using the straight-line method over the vesting period. We expense the related compensation cost of PSUs based on the number of shares expected to be issued, if achievement of the performance component is probable, using a straight-line method over each vesting tranche of the award which results in accelerated recognition of expenses. The amount of compensation costs expensed related to PSUs is adjusted as needed if we deem that achievement of the performance component is no longer probable or if our expectation of the number of shares to be issued changes. We use a Black-Scholes model to value our stock option grants and expense the related compensation cost using the straight-line method over the vesting period. The fair value of our ESPP options is also determined using a Black-Scholes model and is expensed over the vesting period. The fair value of stock options and ESPP options is determined on the grant date using assumptions for the expected term, volatility, dividend yield, and the risk-free interest rate. The expected term is primarily based on the contractual term of the option and our data related to historic exercise and post-vesting forfeiture patterns, which is adjusted based on our expectations of future results. Our anticipated volatility level is primarily based on the historic volatility of our common stock, adjusted to remove the effects of certain periods of unusual volatility not expected to recur, and adjusted based on our expectations of future volatility, for the life of the option or option group. Our model includes a zero-dividend yield assumption and we do not anticipate paying dividends in the future. The risk-free interest rate is based on recent US Treasury note auction results with a similar life to that of the option. Our model does not include a discount for post-vesting restrictions, as we have not issued awards with such restrictions. The period expense for our stock compensation is determined based on the valuations discussed above and forfeitures are accounted for in the period awards are forfeited. Accumulated Other Comprehensive Loss Accumulated other comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The Other comprehensive income/loss, net of tax for the years presented includes foreign currency cumulative translation adjustment and unrealized gain/loss from intra-entity foreign currency loans that are of long term investment nature with no specific repayment terms. The unrealized gains from foreign currency intra-entity loans that are of long term investment nature were $2.7 million and $9.1 million for the years ended December 31, 2023 and 2021, respectively. The unrealized loss from foreign currency intra-entity loans that are of long term investment nature was $6.4 million for the year ended December 31, 2022. Income Per Common Share Income per common share is computed using the two-class method, which requires us to include unvested RSAs that contain non-forfeitable rights to dividends (whether paid or unpaid) as participating securities in the income per common share calculation. Under the two-class method, net income is allocated to the weighted-average number of common shares outstanding during the period and the weighted-average participating securities outstanding during the period. The portion of net income that is allocated to the participating securities is excluded from basic and dilutive net income per common share. Diluted net income per share is computed using the weighted-average number of common shares outstanding plus the dilutive effects of outstanding stock options and awards and other dilutive instruments as appropriate. Financial Instruments Our financial instruments include cash equivalents, accounts receivable, notes receivable, accounts payable, and debt obligations. The financial assets’ and liabilities’, such as receivables and accounts payable, carrying values approximate their fair value due to their short-term duration, and the carrying value of their debt obligations approximate fair value as they contain variable interest rates that approximate market values. Other financial instruments are recorded as discussed in the sections below. Fair Value Measurements We record certain financial instruments, including cash equivalents, at fair value on a recurring basis. We may make an irrevocable election to measure other financial instruments at fair value on an instrument-by-instrument basis. Fair value financial instruments are recorded in accordance with the fair value measurement framework. We also measure certain assets and liabilities at fair value on a non-recurring basis. These non-recurring valuations include evaluating assets such as certain financial assets, long-lived assets, and indefinite lived intangible assets for impairment, allocating value to assets in an acquired asset group, applying accounting for business combinations, and the initial recognition of liabilities such as contingent consideration. We use the fair value measurement framework to value these assets and liabilities and report these fair values in the periods in which they are recorded or written down. The fair value measurement framework includes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair values in their broad levels. These levels from highest to lowest priority are as follows: • Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities; • Level 2: Quoted prices in active markets for similar assets or liabilities or observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and • Level 3: Unobservable inputs or valuation techniques that are used when little or no market data is available. The determination of fair value and the assessment of a measurement’s placement within the hierarchy requires judgment. Level 3 valuations often involve a higher degree of judgment and complexity. Level 3 valuations may require the use of various cost, market, or income valuation methodologies applied to our unobservable estimates and assumptions. Our assumptions could vary depending on the asset or liability value and the valuation method used. Such assumptions could include: estimates of prices, earnings, costs, actions of market participants, market factors, or the weighting of various valuation methods. We may also engage external advisors to assist in determining fair value as appropriate. Although we believe that the recorded fair values of our financial instruments are appropriate, these fair values may not be indicative of net realizable value or reflective of future fair values. Fair Value Measurements - Contingent Consideration Contingent consideration represents a recurring fair value estimate of potential future payments. The fair value of the contingent consideration liability is estimated by discounting to present value the contingent payments expected to be made based on a probability-weighted scenario approach. A discount rate is applied based on our unsecured credit spread and the term commensurate risk-free rate to the additional consideration to be paid, and then we apply a risk-based estimate of the probability of achieving each scenario to calculate the fair value of the contingent consideration. This fair value measurement is based on unobservable inputs, including management estimates and assumptions about the future achievement of milestones and future estimate of revenues, and is, therefore, classified as Level 3 within the fair value hierarchy. Cash and Cash Equivalents Cash and cash equivalents consist primarily of highly liquid investments at the time of acquisition. The carrying value of cash equivalents approximates fair value. We maintain depository accounts with certain financial institutions. Although these depository accounts may exceed government insured depository limits, we have evaluated the credit worthiness of these applicable financial institutions and determined the risk of material financial loss due to the exposure of such credit risk to be minimal. Cash Flow Supplemental Disclosures Supplemental disclosures of cash flow information for the years ended December 31 (in thousands): 2023 2022 2021 Cash paid during the year for: Interest $ 23,332 $ 14,243 $ 14,407 Income taxes 4,865 9,244 5,483 Non-cash investing and financing activities: Operating lease right-of-use assets $ 6,181 $ 1,803 $ 31,726 Issuance of common stock for contingent consideration — — 10,000 Accounts Receivable and Allowance for Doubtful Accounts Our accounts receivable are primarily from hospitals and distributors that either use or distribute our products and tissues. We assess the likelihood of collection based on a number of factors, including past transaction history and the credit worthiness of the customer, as well as the potential increased risks related to international customers and large distributors. We determine the allowance for doubtful accounts based upon specific reserves for known collection issues, as well as a non-specific reserve based upon aging buckets. We charge off uncollectible amounts against the reserve in the period in which we determine they are uncollectible. Our accounts receivable balances are reported net of allowance for doubtful accounts of $1.9 million and $1.3 million as of December 31, 2023 and 2022, respectively. Inventories, net Inventories, net are comprised of finished goods for our product lines including: a ortic stent grafts; surgical sealants; On-X products; other medical devices; work-in-process; and raw materials. Inventories for finished goods are valued at the lower of cost or net realizable value on a first-in, first-out basis and raw materials are valued on a moving average cost basis. Typically, upon shipment or upon notification of implant of a medical device on consignment, revenue is recognized, and the related inventory costs are expensed as cost of products. Cost of products also includes, as applicable, lower of cost or net realizable value of write-downs and impairments for products not deemed to be recoverable and, as incurred, idle facility expense, excessive spoilage, extra freight, and re-handling costs. Inventory costs for manufactured products consist primarily of direct labor and materials (including salary and fringe benefits, raw materials, and supplies) and indirect costs (including allocations of costs from departments that support manufacturing activities and facility allocations). The allocation of fixed production overhead costs is based on actual production levels, to the extent that they are within the range of the facility’s normal capacity. Inventory costs for products purchased for resale or manufactured under contract consist primarily of the purchase cost, freight-in charges, and indirect costs as appropriate. We regularly evaluate our inventory to determine if the costs are appropriately recorded at the lower of cost or net realizable value. We also evaluate our inventory for costs not deemed to be recoverable, including inventory not expected to ship prior to its expiration. Lower of cost or net realizable value write-downs are recorded if the book value exceeds the estimated net realizable value of the inventory, based on recent sales prices at the time of the evaluation. Impairment write-downs are recorded based on the book value of inventory deemed to be impaired. Actual results may differ from these estimates. Write-downs of inventory are expensed as cost of products, and these write-downs are permanent impairments that create a new cost basis, which cannot be restored to its previous levels if our estimates change. We recorded write-downs to our inventory totaling $4.4 million, $4.0 million, and $4.8 million for the years ended December 31, 2023, 2022, and 2021, respectively. The 2023 write-downs were primarily related to raw materials, aortic stent grafts inventory, and On-X ascending aortic prosthesis (“AAP”) inventory. The 2022 and 2021 write-downs were primarily related to aortic stent grafts inventory and On-X AAP inventory. Deferred Preservation Costs, net Deferred preservation costs include costs of cardiac and vascular tissues available for shipment, tissues currently in active processing, and tissues held in quarantine pending release to implantable status. By federal law, human tissues cannot be bought or sold; therefore, the tissues we preserve are not held as inventory. The costs we incur to procure and process cardiac and vascular tissues are instead accumulated and deferred. Deferred preservation costs are stated at the lower of cost or net realizable value on a first-in, first-out basis and are deferred until revenue is recognized. Upon shipment of tissue to an implanting facility, revenue is recognized, and the related deferred preservation costs are expensed as cost of preservation services. Cost of preservation services also includes, as applicable, lower of cost or net realizable value write-downs and impairments for tissues not deemed to be recoverable, and includes, as incurred, excessive spoilage, extra freight, and re-handling costs. The calculation of deferred preservation costs involves judgment and complexity and uses the same principles as inventory costing. Donated human tissue is procured from deceased human donors by organ and tissue procurement organizations (“OPOs”) and tissue banks that provide the tissue to us for processing, preservation, and distribution. Deferred preservation costs consist primarily of the procurement fees charged by the OPOs and tissue banks, direct labor and materials (including salary and fringe benefits, laboratory supplies and expenses, and freight-in charges), and indirect costs (including allocations of costs from support departments and facility allocations). Fixed production overhead costs are allocated based on actual tissue processing levels, to the extent that they are within the range of the facility’s normal capacity. These costs are then allocated among the tissues processed during the period based on cost drivers, such as the number of donors or number of tissues processed. We apply a yield estimate to all tissues in process and in quarantine to estimate the portion of tissues that will ultimately become implantable. We estimate quarantine and in process yields based on our historical yield experience with similar tissues and re-evaluate these estimates periodically. Actual yields could differ significantly from our estimates, which could result in a change in tissues available for shipment and could increase or decrease the balance of deferred preservation costs. These changes could result in additional cost of preservation services expense or could increase per tissue preservation costs, which would impact gross margins on tissue preservation services in future periods. We regularly evaluate our deferred preservation costs to determine if the costs are appropriately recorded at the lower of cost or net realizable value. We also evaluate our deferred preservation costs for costs not deemed to be recoverable, including tissues not expected to ship prior to the expiration date of their packaging. Lower of cost or net realizable value write-downs are recorded if the tissue processing costs incurred exceed the estimated market value of the tissue services, based on recent average service fees at the time of the evaluation. Impairment write-downs are recorded based on the book value of tissues deemed to be impaired. Actual results may differ from these estimates. Write-downs of deferred preservation costs are expensed as cost of preservation services, and these write-downs are permanent impairments that create a new cost basis, which cannot be restored to its previous levels if our estimates change. We recorded write-downs to our deferred preservation costs totaling $393,000, $369,000, and $575,000 for the years ended December 31, 2023, 2022, and 2021, respectively, primarily due to tissues not expected to ship prior to the expiration date of the packaging. Property and Equipment, net Property and equipment, net is stated at cost less depreciation. Depreciation expense is recorded over the estimated useful lives of the assets, generally three Property and equipment, net balance for the years ended December 31 was as follows (in thousands): 2023 2022 Equipment and software $ 66,618 $ 72,480 Leasehold improvements 49,107 47,384 Furniture and fixtures 7,555 7,148 Total property and equipment 123,280 127,012 Less accumulated depreciation and amortization (84,922) (88,338) Property and equipment, net $ 38,358 $ 38,674 Depreciation expense for the years ended December 31 was as follows (in thousands): 2023 2022 2021 Depreciation expense $ 7,878 $ 7,132 $ 7,157 Goodwill and Other Intangible Assets Our intangible assets consist of goodwill, acquired technology, customer lists and relationships, patents, and other intangible assets, as discussed in Note 7. Our goodwill is attributable to a segment or segments of our business, as appropriate, as the related acquired business that generated the goodwill is integrated into our operations. Upon divestiture of a component of our business, the goodwill related to the segment is allocated to the divested business using the relative fair value allocation method. We evaluate our goodwill and other indefinite lived 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 October 31, 2023 and 2022 our indefinite lived intangible assets consisted of goodwill, in-process research and development, and acquired procurement contracts and agreements. We performed a qualitative analysis of our indefinite lived intangible assets as of October 31, 2023 and determined that the fair value of the asset groups and the fair value of the reporting unit more likely than not exceeded their associated carrying values and were, therefore, not impaired. Our definite lived intangible assets consist of acquired technologies, customer lists and relationships, distribution and manufacturing rights and know-how, patents, and other intangible assets. We amortize our definite lived intangible assets over their expected useful lives using the straight-line method, which we believe approximates the period of economic benefits of the related assets. Our indefinite lived intangible assets do not amortize but are instead subject to periodic impairment testing as discussed in “Impairments of Long-Lived Assets and Indefinite Lived Intangible Assets” below. Impairments of Long and Indefinite Lived Intangible Assets Long-Lived Assets We assess the potential impairment of our: (i) net property and equipment, (ii) amortizing intangible long-lived assets to be held and used and (iii) operating lease right-of-use assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that could trigger an impairment review include, but are not limited to, the following: • Significant underperformance relative to expected historical or projected future operating results; • Significant negative industry or economic trends; • Significant decline in our stock price for a sustained period; or • Significant decline in our market capitalization relative to net book value. If we determine that an impairment review is necessary, we will evaluate the assets or asset groups by comparing their carrying values to the sum of the undiscounted future cash flows expected to result from their use and eventual disposition. If the carrying values exceed the future cash flows, then the asset or asset group is considered impaired, and we will write down the value of the asset or asset group to its concluded fair value. For the years ended December 31, 2023, 2022, and 2021 we did not record an impairment of our long-lived assets as there were no indicators of impairment or the sum of the undiscounted future cash flows exceeded the carrying value of the long-lived asset (asset group). Accrued Procurement Fees Donated tissue is procured from deceased human donors by OPOs and tissue banks that provide the tissue to us for processing, preservation, and distribution. We reimburse the OPOs and tissue banks for their costs to recover the tissue and include these costs as part of deferred preservation costs, as discussed above. We accrue estimated procurement fees due to the OPOs and tissue banks at the time tissues are received based on contractual agreements between us and the OPOs and tissue banks. 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, as discussed in Note 9. Certain of our leases contain escalation clauses, rent concessions, and renewal options for additional periods. We exercise judgment in the determination of whether a financial arrangement includes a lease and in determining the appropriate discount rates to be applied to leases based on our general collateralized credit standing and the geographical market considerations impacting lease rates across all locations. When available, we use the implicit discount rate in the lease contract to discount lease payments to present value. If an implicit discount rate is not available in the lease contract, we use our incremental borrowing rate. We elected the package of practical expedients that allow us to omit leases with initial terms of 12 months or less from our balance sheet, which are expensed on a straight-line basis over the life of the lease. We have elected not to separate lease and non-lease components for future leases. Our leases do not include terms or conditions which would result in variable lease payments other than for small office equipment leases with an additional charge for volume of usage. These incremental payments are excluded from our calculation of lease liability and the related right-of-use asset. We do not include option terms in the determination of lease liabilities and the related right-of-use assets unless we determine at lease commencement that the exercise of the option is reasonably certain. Our leases do not contain residual value guarantee provisions or other restrictions or financial covenant provisions. Debt Issuance Costs Debt issuance costs related to our t |
Sale of PerClot
Sale of PerClot | 12 Months Ended |
Dec. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Sale of PerClot | Sale of PerClot Overview On July 28, 2021 we entered into an asset purchase agreement, Transitional Manufacturing and Supply Agreement (“TMSA”), and other ancillary agreements related to the sale of PerClot ® , a polysaccharide hemostatic agent used in surgery (“PerClot”), to a subsidiary of Baxter International, Inc. (“Baxter”) and an agreement to terminate all of our material agreements with Starch Medical, Inc. (“SMI”) related to PerClot (collectively the “Baxter Transaction”). Under the terms of the Baxter Transaction, Baxter will pay an aggregate of up to $54.5 million in consideration (we will receive up to $41.0 million and SMI will receive up to $13.5 million), consisting of (i) $25.0 million at closing, of which $6.0 million was paid to SMI; (ii) $18.8 million upon our receipt of Premarket Approval (“PMA”) from the US Food and Drug Administration (the “FDA”) for PerClot and our transfer of the PMA to Baxter, of which $4.5 million was paid to SMI; and (iii) up to $10.0 million upon Baxter’s achievement of certain cumulative worldwide net sales of PerClot prior to December 31, 2026 and December 31, 2027, of which up to $3.0 million is payable to SMI. In addition, at the conclusion of our manufacturing and supply services for Baxter, Baxter will pay $780,000 upon transfer of our PerClot manufacturing equipment. Under the terms of the Baxter Transaction, we will continue to provide to Baxter certain transition services relating to the sale of SMI PerClot outside of the US. Within the terms of the TMSA, we will manufacture and supply PerClot for Baxter post PMA for a contractual period of 21 months, subject to short-term renewal provisions. Accounting for the Transaction Upon closing of the Baxter Transaction, we received $25.0 million from Baxter and paid $6.0 million to SMI. We derecognized intangible assets with a carrying value of $1.6 million and wrote-off $1.5 million of prepaid royalties previously recorded on our Consolidated Balance Sheets related to PerClot. Under the terms of the agreement, Baxter acquired intellectual property related to our development efforts for PerClot. We recorded a pre-tax gain of $15.9 million, included as Gain from sale of non-financial assets within the Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2021. The PerClot product line was included as part of our Medical Devices segment. PerClot PMA On May 23, 2023 the FDA granted PMA of PerClot for use to control bleeding in certain open and laparoscopic surgical procedures. Pursuant to the terms of the TMSA of the Baxter Transaction, we transferred the ownership of the PMA to Baxter following approval. In May 2023 we received a payment of $18.8 million from Baxter, of which $4.5 million was paid to SMI. As a result, we recorded a pre-tax gain of $14.3 million as the assets were derecognized upon closing of the Baxter Transaction in fiscal year 2021, which was included as Gain from sale of non-financial assets within the Consolidated Statements of Operations and Comprehensive Loss for the twelve months ended December 31, 2023. Following receipt of the PMA, under the terms of the TMSA, we began manufacturing and supplying PerClot for Baxter and recorded $5.1 million of PerClot revenues on the Consolidated Statements of Operations and Comprehensive Loss during the twelve months ended December 31, 2023. The Company accounted for this TMSA in accordance with the provision of ASU 2016-02, Leases Topic 842 (“ASC 842”) by bifurcating the lease and non-lease components and recognizing each component based on ASC 842 and ASU 2014-09, Revenue from Contracts with Customers Topic 606 . The amount of lease revenue was $278,000 for the twelve months ended December 31, 2023. |
Acquisition of Ascyrus
Acquisition of Ascyrus | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | |
Acquisition of Ascyrus | Acquisition of Ascyrus Overview On September 2, 2020 we entered into a Securities Purchase Agreement (the “Ascyrus Agreement”) to acquire 100% of the outstanding equity interests of Ascyrus Medical LLC (“Ascyrus”). Ascyrus developed the AMDS, the world’s first aortic arch remodeling device for use in the treatment of acute Type A aortic dissections. Under the terms of the Ascyrus Agreement, we will pay an aggregate of up to $200.0 million in consideration, consisting of: (i) a cash payment of approximately $60.0 million and the issuance of $20.0 million in shares of Artivion common stock, in each case, that were delivered at the closing of the acquisition, (ii) a cash payment of $10.0 million and the issuance of $10.0 million in shares of Artivion common stock upon FDA approval of the Investigational Device Exemption (“IDE”) application for the AMDS in 2021, (iii) if the FDA approves PMA application submitted for the AMDS, a cash payment of $25.0 million, (iv) if regulatory approval of the AMDS is obtained in Japan on or before June 30, 2027, a cash payment of $10.0 million, (v) if regulatory approval of the AMDS is obtained in China on or before June 30, 2027, a cash payment of $10.0 million and (vi) a potential additional consideration cash payment capped at $55.0 million (or up to $65.0 million to $75.0 million if the Japanese or Chinese approvals are not secured on or before June 30, 2027 and those approval milestone payments are added to the potential additional consideration cash payment cap) calculated as two times the incremental worldwide sales of the AMDS (or any other acquired technology or derivatives of such acquired technology) outside of the European Union during the three-year period following the date the FDA approves a PMA application submitted for the AMDS. Accounting for the Transaction As part of the acquisition, we may be required to pay additional consideration up to $100.0 million to the former shareholders of Ascyrus upon the achievement of certain milestones and the sales-based additional earnout described above. On September 2, 2020 t he fair value of the total potential purchase consideration of $200.0 million included the total purchase consideration, as well as the contingent consideration liability discussed below. Our allocation of the purchase consideration was allocated to Ascyrus’s tangible and identifiable intangible assets acquired and liabilities assumed, based on their estimated fair values as of September 2, 2020. The contingent consideration represents the estimated fair value of future potential payments. The fair value of the contingent consideration liability was estimated by discounting to present value the contingent payments expected to be made based on a probability-weighted scenario approach. We applied a discount rate based on our unsecured credit spread and the term commensurate risk-free rate to the additional consideration to be paid, and then applied a risk-based estimate of the probability of achieving each scenario to calculate the fair value of the contingent consideration. This fair value measurement was based on unobservable inputs, including management estimates and assumptions about the future achievement of milestones and future estimate of revenues, and is, therefore, classified as Level 3 within the fair value hierarchy presented in Note 5. We used a discount rate of approximat ely 7% a nd estimated future achievement of milestone dates between 2025 and 2026 to calculate the fair value of contingent consideration as of December 31, 2023. We will remeasure this liability at each reporting date and will record changes in the fair value of the contingent consideration in General, administrative, and marketing expenses on the Consolidated Statements of Operations and Comprehensive Loss. Increases or decreases in the fair value of the contingent consideration liability can result from changes in passage of time, discount rates, the timing and amount of our revenue estimates, and the timing and expectation of regulatory approvals. We performed an assessment of the fair value of the contingent consideration and rec orded a fair value increase of $23.5 million and a fair value reduction of $9.0 million for the twelve months ended December 31, 2023 and 2022, respectively, in General, administrative, and marketing expenses on the Consolidated Statements of Operations and Comprehensive Loss, as a result of this assessment. In December 2021 the FDA approved our IDE application for AMDS. Upon the approval, we funded a cash payment of $10.0 million and issued $10.0 million in shares of Artivion common stock pursuant to the Ascyrus Agreement. The contingent consideration liability of $63.9 million and $40.4 million was included in Ot her long-term liabilities as of December 31, 2023 and 2022, respectively, in the Consolidated Balance Sheets. |
Agreements with Endospan
Agreements with Endospan | 12 Months Ended |
Dec. 31, 2023 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |
Agreements with Endospan | Agreements with Endospan Exclusive Distribution Agreement and Securities Purchase Option Agreement On September 11, 2019 Artivion’s wholly owned subsidiary, 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 NEXUS, and under a subsequent amendment, the NEXUS DUO (collectively the “NEXUS Products”) and accessories in certain countries in Europe in exchange for a fixed distribution fee of $9.0 million paid in September 2019. We also entered into a securities purchase option agreement (“Endospan Option”) with Endospan for $1.0 million paid in September 2019. The Endospan Option Agreement provides Artivion 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 after 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 Artivion and Endospan also entered into a loan agreement (“Endospan Loan”), dated September 11, 2019, in which Artivion 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. In September 2020 we funded the second tranche payment of $5.0 million upon the certification of the NEXUS IDE from the FDA. In May 2023 we funded the third tranche payment of $5.0 million upon the certification of enrollment of 50% of the required number of patients in the primary arm of the FDA approved clinical trial for NEXUS. 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 initial 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. The second tranche payment of $5.0 million was funded in September 2020. An additional $5.0 million was funded in May 2023 as part of the third tranche payment described above. We evaluated Endospan for VIE classification as of December 31, 2023 and determined that Endospan meets the criteria of a non-consolidating VIE. Our payments to date, including any loans, guarantees, and other subordinated financial support related to this VIE, totaled $25.0 million as of December 31, 2023, 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 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 of 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 in Other long-term assets in the Consolidated Balance Sheets as of December 31, 2019. The value of the Endospan Distribution Agreement of $1.8 million and $3.5 million was included in Other intangibles, net in the Consolidated Balance Sheets as of December 31, 2023 and 2022, 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 and determined that the loan fair value decreased and had no value as of December 31, 2021. As a result of this fair value adjustment, we recorded an expense of $409,000 in Other expense, net on the Consolidated Statements of Operations and Comprehensive Loss during twelve months ended December 31, 2021. In May 2023 we funded a $5.0 million third tranche payment and determined that the loan continued to have no fair value. Consequently, we recorded an expense of $5.0 million in Other expense, net on the Consolidated Statements of Operations and Comprehensive Loss during the twelve months ended December 31, 2023. We did not record a loan fair value adjustment during the twelve months ended December 31, 2022. In the fourth quarter of December 31, 2021 we fully impaired the value of the Endospan Option primarily driven by a decrease in forecasted operating results. We recorded $4.9 million impairment expense included in General, administrative, and marketing expense on the Consolidated Statements of Operations and Comprehensive Loss during the twelve months ended |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | Financial Instruments A summary of financial instruments measured at fair value was as follows (in thousands): December 31, 2023 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 22,802 $ — $ — $ 22,802 Certificates of deposit 3,968 — — 3,968 Total assets $ 26,770 $ — $ — $ 26,770 Long-term liabilities: Contingent consideration — — (63,890) (63,890) Total liabilities $ — $ — $ (63,890) $ (63,890) December 31, 2022 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 10,098 $ — $ — $ 10,098 Total assets $ 10,098 $ — $ — $ 10,098 Long-term liabilities: Contingent consideration — — (40,400) (40,400) Total liabilities $ — $ — $ (40,400) $ (40,400) We used prices quoted from our investment advisors to determine the Level 1 valuation of our investments in money market funds. The estimated market value of all cash equivalents is equal to cost basis as there were no gross realized gains or losses on cash equivalents for the years ended December 31, 2023, 2022, and 2021. The fair value of the contingent consideration component of the Ascyrus acquisition was updated using Level 3 inputs. See Note 3 for further discussion of the Ascyrus acquisition. Changes in fair value of Level 3 assets and liabilities are listed in the tables below (in thousands): Contingent Consideration Balance as of December 31, 2022 $ (40,400) Change in valuation (23,490) Balance as of December 31, 2023 $ (63,890) |
Inventories and Deferred Preser
Inventories and Deferred Preservation Costs, net | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories and Deferred Preservation Costs, net | Inventories and Deferred Preservation Costs, net Inventories, net at December 31, 2023 and 2022 were comprised of the following (in thousands): 2023 2022 Raw materials and supplies $ 36,907 $ 36,715 Work-in-process 12,687 10,476 Finished goods 32,382 27,287 Total inventories, net $ 81,976 $ 74,478 Deferred preservation costs, net at December 31, 2023 and 2022 were comprised of the following (in thousands): 2023 2022 Cardiac tissues $ 24,823 $ 21,799 Vascular tissues 24,981 24,572 Total deferred preservation costs, net $ 49,804 $ 46,371 To facilitate product usage, we maintain consignment inventory of our On-X heart valves at domestic hospital locations and On-X heart valves, aortic stent grafts, and AMDS products at international hospital locations. We retain title and control over this consignment inventory until notice of implantation is received, at which time we invoice the hospital and recognize revenue. As of December 31, 2023 we had $10.7 million in consignment inventory, with approximately 44% in domestic locations and 56% in foreign locations. As of December 31, 2022 we had $12.7 million in consignment inventory, with approximately 41% in domestic locations and 59% in foreign locations. Inventory and deferred preservation costs obsolescence reserves were $3.0 million and $2.2 million as of December 31, 2023 and 2022, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Indefinite Lived Intangible Assets As of December 31, 2023 and 2022 the carrying values of our indefinite lived intangible assets were as follows (in thousands): 2023 2022 Goodwill $ 247,337 $ 243,631 In-process R&D 2,154 2,080 Procurement contracts and agreements 2,013 2,013 We monitor the phases of development of our acquired in-process research and development 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 research and development projects are reviewed for impairment annually, or more frequently, if events or changes in circumstances indicate that the asset might be impaired. We evaluate our goodwill and indefinite lived 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. We did not record any impairment of indefinite lived intangible assets, including goodwill, during the twelve months ended December 31, 2023, 2022, and 2021. In-process research and development, procurement contracts and agreements are included in Other intangibles, net on the Consolidated Balance Sheets as of December 31, 2023 and 2022. 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. As of December 31, 2023 and 2022 the value of our goodwill, all of which was related to our Medical Devices segment, was as follows (in thousands): Medical Devices Segment 2023 2022 Balance as of January 1, $ 243,631 $ 250,000 Foreign currency translation 3,706 (6,369) Balance as of December 31, $ 247,337 $ 243,631 Definite Lived Intangible Assets The definite lived intangible assets balance includes balances related to acquired technology, customer relationships, distribution and manufacturing rights and know-how, patents, and other definite lived intangible assets. As of December 31, 2023 and 2022 the gross carrying values, accumulated amortization, and approximate amortization period of our definite lived intangible assets were as follows (in thousands, except weighted average useful life): December 31, 2023 Gross Carrying Accumulated Net Carrying Weighted Average Acquired technology $ 201,897 $ 59,304 $ 142,593 18.2 Other intangibles: Customer lists and relationships 28,729 10,334 18,395 21.6 Distribution and manufacturing rights and know-how 9,608 7,807 1,801 5.0 Patents 4,365 3,225 1,140 17.0 Other 7,815 3,680 4,135 5.0 Total other intangibles $ 50,517 $ 25,046 $ 25,471 10.0 December 31, 2022 Gross Carrying Accumulated Net Carrying Weighted Average Acquired technology $ 198,420 $ 47,157 $ 151,263 18.2 Other intangibles: Customer lists and relationships 31,030 11,100 19,930 20.5 Distribution and manufacturing rights and know-how 9,274 5,796 3,478 5.0 Patents 4,246 3,180 1,066 17.0 Other 5,360 2,543 2,817 4.4 Total other intangibles $ 49,910 $ 22,619 $ 27,291 10.3 Amortization Expense Amortization expense recorded in General, administrative, and marketing expenses on our Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31 was as follows (in thousands): 2023 2022 2021 Amortization expense $ 15,198 $ 15,310 $ 16,820 As of December 31, 2023 scheduled amortization of intangible assets for the next five years is as follows (in thousands): 2024 2025 2026 2027 2028 Total Amortization expense $ 15,121 $ 13,200 $ 12,972 $ 12,866 $ 12,644 $ 66,803 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income Tax Expense Loss before income taxes consisted of the following (in thousands): 2023 2022 2021 Domestic $ (24,658) $ (13,798) $ (10,263) Foreign 3,072 (1,186) (4,564) Loss before income taxes $ (21,586) $ (14,984) $ (14,827) Income tax expense consisted of the following (in thousands): 2023 2022 2021 Current: Federal $ 5,573 $ 1,606 $ 1,896 State 1,004 367 551 Foreign 3,851 3,120 3,391 10,428 5,093 5,838 Deferred: Federal $ 222 $ 236 $ (2,801) State 157 234 (307) Foreign (1,703) (1,355) (2,723) (1,324) (885) (5,831) Income tax expense $ 9,104 $ 4,208 $ 7 Our income tax expense in 2023, 2022, and 2021 included our federal, state, and foreign tax obligations. Our effective income tax rate was a tax expense of 42% and 28% for the year ended December 31, 2023 and 2022, respectively. Our effective income tax rate was break-even for the year ended December 31, 2021. Our income tax rate for the year ended December 31, 2023 was primarily affected by an increase in the valuation allowance on our deferred tax assets, nondeductible executive compensation, income taxes in certain profitable foreign jurisdictions, and additional tax expense for uncertain tax positions, partially offset by the research and development tax credit and foreign derived intangible income deduction. Our income tax rate for the year ended December 31, 2022 was primarily affected by an increase in the valuation allowance on our deferred tax assets, nondeductible executive compensation, and additional tax expense for uncertain tax positions, partially offset by the research and development tax credit. Our income tax rate for the year ended December 31, 2021 was primarily affected by an increase in the valuation allowance on our deferred tax assets, foreign expense items, nondeductible executive compensation, and additional tax expense for uncertain tax positions, partially offset by the reduction of a valuation allowance on prior year items, the research and development tax credit, and releases of uncertain tax positions. The income tax benefit amounts differ from the amounts computed by applying the US federal statutory income tax rate of 21% for the years ended December 31, 2023, 2022, and 2021 to pretax income as a result of the following (in thousands): 2023 2022 2021 Tax benefit at statutory rate $ (4,533) $ (3,147) $ (3,114) Increase (reduction) in income taxes resulting from: Valuation allowance change 9,964 4,779 1,566 Foreign income taxes 2,969 415 1,138 Nondeductible executive compensation 989 878 1,075 Equity compensation 872 472 (477) Net change in uncertain tax positions 652 527 762 State income taxes, net of federal benefit 281 484 73 Nondeductible entertainment expenses 262 117 65 Foreign interest disallowance — 151 307 Foreign deferred items — (112) 53 Foreign derived intangible income deduction (501) (133) (144) Research and development credit (800) (961) (959) Provision to return adjustments (937) 336 63 Other (114) 402 (401) Total income tax expense $ 9,104 $ 4,208 $ 7 Deferred Taxes We generate deferred tax assets primarily as a result of finance and operating leases, net operating losses, excess interest carryforward, accrued compensation, stock compensation, capitalizable research and development costs, unrealized foreign exchange losses, and capital leases. Our deferred tax liabilities are primarily comprised of intangible assets acquired in previous years, finance and operating leases, and capital leases. The tax effects of temporary differences which give rise to deferred tax assets and liabilities at December 31 were as follows (in thousands): 2023 2022 Deferred tax assets: Finance and operating leases $ 13,254 $ 12,581 Excess interest carryforward 6,438 5,559 Unrealized gains and losses 5,424 — Loan revaluation 3,859 2,633 Loss carryforwards 3,205 9,660 Stock compensation 2,761 2,463 Accrued expenses 2,567 1,734 Deferred compensation 1,790 1,317 Property 1,786 1,310 Credit carryforwards 336 503 Inventory and deferred preservation costs write-downs 302 764 Other 1,422 1,650 Less valuation allowance (32,860) (17,942) Total deferred tax assets, net 10,284 22,232 2023 2022 Deferred tax liabilities: Unrealized gains and losses — (6,624) Prepaid items (370) (323) Debt costs (626) (818) Finance and operating leases (12,777) (12,217) Intangible assets (16,106) (24,601) Other (1,169) (834) Total deferred tax liabilities (31,048) (45,417) Total deferred tax liabilities, net $ (20,764) $ (23,185) We regularly assess the realizability of deferred tax assets and establish valuation allowances if it is more likely than not that some or all deferred tax assets will not be realized. A summary of valuation allowances against deferred tax assets was as follows (in thousands): 2023 2022 2021 Beginning balance $ 17,942 $ 13,282 $ 7,170 Additions in estimates recorded to deferred income tax expense, net 9,809 4,660 1,505 Additions related to Other comprehensive income, net 5,109 — 4,607 Ending balance $ 32,860 $ 17,942 $ 13,282 As of December 31, 2023 and 2022 we maintained a net deferred tax liability of $20.8 million and $23.2 million, respectively. As of December 31, 2023 and 2022 we maintained valuation allowances against our deferred tax assets of $32.9 million and $17.9 million, respectively, primarily related to net operating loss carryforwards and disallowed excess interest carryforwards. As of December 31, 2023 we had approximately $1.3 million of federal net operating loss carryforwards related to the acquisitions of Cardiogenesis and Hemosphere for which we have a full valuation allowance against, approximately $1.5 million of state net operating loss carryforwards that will continue to expire in 2024, approximately $443,000 of foreign net operating loss carryforwards that will begin to expire in 2025, and approximately $293,000 in research and development tax credit carryforwards that will begin to expire in 2030, and approximately $81,000 in credits from other jurisdictions that mostly expire in 2027. As of December 31, 2023 we had a deferred tax asset of $6.4 million of disallowed interest expense deduction carryforwards as a result of the interest deductibility rule imposed by the “Tax Cuts and Jobs Act” of 2017 (“Tax Act”), and later modified by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). This deferred tax asset can be carried forward indefinitely. This rule disallows interest expense to the extent it exceeds 30% of adjusted taxable income. For the years ended December 31, 2023 and 2022 our interest deduction was limited to $20.4 million and $8.1 million, respectively. We believe that the realizability of our acquired net operating loss carryforwards will be limited in future periods due to a change in control of our former subsidiaries Hemosphere, Inc. (“Hemosphere”) and Cardiogenesis Corporation (“Cardiogenesis”), as mandated by Section 382 of the Internal Revenue Code of 1986, as amended. We believe that our acquisitions of these companies each constituted a change in control as defined in Section 382 and that, prior to our acquisition, Hemosphere had experienced other equity ownership changes that should be considered such a change in control. The deferred tax assets recorded on our Consolidated Balance Sheets exclude amounts that we expect will not be realizable due to changes in control. A portion of the acquired net operating loss carryforwards is related to state income taxes for which we believe it is more likely than not that some will not be realized. Therefore, we recorded a valuation allowance against these state net operating loss carryforwards. In addition, during the year, the realizability of a portion of our net operating loss carryforwards and other deferred tax assets was limited. We recorded a valuation allowance against these deferred tax assets. Reinvestment of Unremitted Earnings We intend to reinvest substantially all of the unremitted earnings of our non-US subsidiaries to fund working capital, strategic investments, and debt repayment and postpone their remittance indefinitely. Accordingly, no provision for state and local taxes or foreign withholding taxes was recorded on these unremitted earnings in the accompanying Consolidated Statements of Operations and Comprehensive Loss. The Company is permanently reinvested with respect to the outside basis differences in its significant non-US subsidiaries. As of December 31, 2023 we had a deferred tax liability of $119,000 for the tax effects of this outside basis difference in the Consolidated Statements of Operations and Comprehensive Loss. Uncertain Tax Positions A reconciliation of the beginning and ending balances of our uncertain tax position liability, excluding interest and penalties, was as follows (in thousands): 2023 2022 2021 Beginning balance $ 4,508 $ 4,089 $ 2,574 Increase related to current year tax positions 2,728 847 1,661 Increase (decrease) for foreign exchange differences 116 (145) (121) Increase related to prior year tax positions 26 20 386 Decrease due to the lapsing of statutes of limitations (158) (200) (241) Decrease related to prior year tax positions (508) (103) (170) Decrease due to settlements of prior year tax positions (1,880) — — Ending balance $ 4,832 $ 4,508 $ 4,089 We recorded non-current liabilities of $372,000 and $358,000 related to interest and penalties on uncertain tax positions on our Consolidated Balance Sheets as of December 31, 2023 and 2022, respectively. We included expense of $6,500 for December 31, 2023, expense of $145,000 for December 31, 2022, and income of $35,000 for December 31, 2021, respectively, for interest and penalties related to unrecognized tax benefits in our Consolidated Statements of Operations and Comprehensive Loss. As of December 31, 2023 our uncertain tax liability of $5.2 million, including interest and penalties, was recorded as a reduction to deferred tax assets of $100,000, and a non-current liability of $5.1 million on our Consolidated Balance Sheets. The amount of uncertain tax liabilities that are expected to affect our tax rate if recognized were $4.4 million, $3.6 million, and $3.2 million for the years ended December 31, 2023, 2022, and 2021, respectively. As of December 31, 2022 our total uncertain tax liability, including interest and penalties of $4.9 million, was recorded as a reduction to deferred tax assets of $100,000 and as a non-current liability of $4.8 million on our Consolidated Balance Sheets. We believe it is reasonably possible that approximately $100,000 of our uncertain tax liability will be recognized in 2024 due to the lapsing of various federal and state and foreign statutes of limitations, of which substantially all would affect the tax rate. Other Our tax years 2020 and forward generally remain open to examination by the major taxing jurisdictions to which we are subject. However, certain returns from years prior to 2020, in which net operating losses and tax credits have arisen, are still open for examination by the tax authorities. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | 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. Information related to leases included in the Consolidated Balance Sheets was as follows (in thousands, except lease term and discount rate): Operating leases: December 31, 2023 December 31, 2022 Operating lease right-of-use assets, net $ 43,822 $ 41,859 Current maturities of operating leases $ 3,395 $ 3,308 Non-current maturities of operating leases 43,977 41,257 Total operating lease liabilities $ 47,372 $ 44,565 Finance leases: Property and equipment, at cost $ 6,862 $ 6,408 Accumulated amortization (3,136) (2,498) Property and equipment, net $ 3,726 $ 3,910 Current maturities of finance leases $ 582 $ 513 Non-current maturities of finance leases 3,405 3,644 Total finance lease liabilities $ 3,987 $ 4,157 Weighted average remaining lease term (in years): Operating leases 10.4 11.9 Finance leases 6.8 7.8 Weighted average discount rate: Operating leases 6.3% 5.9% Finance leases 2.2% 2.1% Current maturities of finance leases are included as a component of Other current liabilities on our Consolidated Balance Sheets. A summary of lease expenses for our finance and operating leases included in General, administrative, and marketing expenses on our Consolidated Statements of Operations and Comprehensive Loss was as follows (in thousands): December 31, 2023 December 31, 2022 Amortization of property and equipment $ 542 $ 518 Interest expense on finance leases 84 89 Total finance lease expense 626 607 Operating lease expense a 7,354 7,432 Sublease income (278) (306) Total lease expense $ 7,702 $ 7,733 ______________________ a Total rental expense for operating leases was $7.5 million in 2021. The operating lease expense included right-of-use asset amortization and interest expense on the lease liability. A summary of our cash flow information related to leases was as follows (in thousands): Cash paid for amounts included in the measurement of lease liabilities: 2023 2022 Operating cash flows for operating leases $ 7,263 $ 6,927 Financing cash flows for finance leases 539 507 Operating cash flows for finance leases 84 90 Future minimum lease payments are as follows (in thousands): Finance Operating 2024 $ 655 $ 6,302 2025 648 7,085 2026 627 6,539 2027 617 6,058 2028 599 5,862 Thereafter 1,136 33,920 Total minimum lease payments $ 4,282 $ 65,766 Less amount representing interest (295) (18,394) Present value of net minimum lease payments 3,987 47,372 Less current maturities (582) (3,395) Lease obligations, less current maturities $ 3,405 $ 43,977 |
Leases | 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. Information related to leases included in the Consolidated Balance Sheets was as follows (in thousands, except lease term and discount rate): Operating leases: December 31, 2023 December 31, 2022 Operating lease right-of-use assets, net $ 43,822 $ 41,859 Current maturities of operating leases $ 3,395 $ 3,308 Non-current maturities of operating leases 43,977 41,257 Total operating lease liabilities $ 47,372 $ 44,565 Finance leases: Property and equipment, at cost $ 6,862 $ 6,408 Accumulated amortization (3,136) (2,498) Property and equipment, net $ 3,726 $ 3,910 Current maturities of finance leases $ 582 $ 513 Non-current maturities of finance leases 3,405 3,644 Total finance lease liabilities $ 3,987 $ 4,157 Weighted average remaining lease term (in years): Operating leases 10.4 11.9 Finance leases 6.8 7.8 Weighted average discount rate: Operating leases 6.3% 5.9% Finance leases 2.2% 2.1% Current maturities of finance leases are included as a component of Other current liabilities on our Consolidated Balance Sheets. A summary of lease expenses for our finance and operating leases included in General, administrative, and marketing expenses on our Consolidated Statements of Operations and Comprehensive Loss was as follows (in thousands): December 31, 2023 December 31, 2022 Amortization of property and equipment $ 542 $ 518 Interest expense on finance leases 84 89 Total finance lease expense 626 607 Operating lease expense a 7,354 7,432 Sublease income (278) (306) Total lease expense $ 7,702 $ 7,733 ______________________ a Total rental expense for operating leases was $7.5 million in 2021. The operating lease expense included right-of-use asset amortization and interest expense on the lease liability. A summary of our cash flow information related to leases was as follows (in thousands): Cash paid for amounts included in the measurement of lease liabilities: 2023 2022 Operating cash flows for operating leases $ 7,263 $ 6,927 Financing cash flows for finance leases 539 507 Operating cash flows for finance leases 84 90 Future minimum lease payments are as follows (in thousands): Finance Operating 2024 $ 655 $ 6,302 2025 648 7,085 2026 627 6,539 2027 617 6,058 2028 599 5,862 Thereafter 1,136 33,920 Total minimum lease payments $ 4,282 $ 65,766 Less amount representing interest (295) (18,394) Present value of net minimum lease payments 3,987 47,372 Less current maturities (582) (3,395) Lease obligations, less current maturities $ 3,405 $ 43,977 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 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 Artivion 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. The Credit Agreement and its subsequent amendments contain 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. On June 2, 2021 we entered into an amendment to our Credit Agreement to extend the maturity dates of both our Term Loan and its Revolving Credit Facility. As part of the amendment, the maturity dates of both our Term Loan and its Revolving Credit Facility were each extended by two and one-half years, until June 1, 2027 and June 1, 2025, respectively, subject to earlier springing maturities if our 4.25% Convertible Senior Notes, described below, remain outstanding on April 1, 2025 and December 31, 2024, respectively. With respect to the Term Loan, if the Convertible Senior Notes remained outstanding on April 1, 2025, the Term Loan’s maturity date would be April 1, 2025, or, if the Convertible Senior Notes’ own maturity date had been extended, the earlier of (i) 91 days prior to the Convertible Senior Notes’ new maturity date and (ii) June 1, 2027. In the case of the Revolving Credit Facility, if the Convertible Senior Notes are still outstanding on December 31, 2024, the Revolving Credit Facility’s maturity date will be either December 31, 2024 or, if the Convertible Senior Notes’ own maturity date has been extended, the earlier of (i) 182 days prior to the Convertible Senior Notes’ new maturity date and (ii) June 1, 2025. In connection with this amendment, we paid debt issuance costs of $2.1 million , of which $1.8 million will be amortized over the life of the term loan facility and included in current and long-term debt on the Consolidated Balance Sheets. The remaining $361,000 of debt issuance costs and $474,000 of non-cash debt extinguishment costs were recorded in Interest expense on the Consolidated Statements of Operations and Comprehensive Loss. On December 19, 2022 in accordance with adopting ASU 2020-04 and 2021-01, we entered into an amendment to our Credit Agreement to replace the LIBOR based benchmark interest rate with the Secured Overnight Financing Rate (“SOFR”) based benchmark interest rate for our Term Loan Facility and our Revolving Credit Facility. Based on historical analysis of the differences between the benchmark rates, SOFR is adjusted to arrive at a Term SOFR rate that serves as the replacement base rate for LIBOR under our amended credit facilities. Under this amendment, at the maturity of our existing LIBOR-based loan on December 30, 2022, the interest rate at the repricing of our Term Loan Facility was calculated as Term SOFR plus a fixed percentage credit spread of 3.50%. The loan under the Revolving Credit Facility bears interest at Term SOFR plus a margin of between 4.00% and 4.25%, depending on our consolidated net leverage ratio. As of December 31, 2023 the aggregate interest rate of the Credit Agreement was 8.97% per annum. On January 18, 2024 we entered into a credit and guaranty agreement with Ares Management Credit funds to borrow up to $350.0 million senior secured, interest-only, credit facilities. Upon closing, we borrowed a total of $220.0 million which we used, along with cash on hand, to pay off outstanding debt related to the Credit Agreement and related fees and expenses. See Note 17 for further discussion of our new Credit and Guaranty Agreement. Convertible Senior Notes On June 18, 2020 we issued $100.0 million aggregate principal amount of 4.25% Convertible Senior Notes with a maturity date of July 1, 2025 (the “Convertible Senior Notes”). The net proceeds from this offering, after deducting initial purchasers’ discounts and costs directly related to this offering, were approximately $96.5 million. On January 1, 2021 we adopted ASU 2020-06 and adjusted the carrying balance of the Convertible Senior Notes to notional. The Convertible Senior Notes balance was $100.0 million recorded in Long-term debt on the Consolidated Balance Sheets as of December 31, 2023. The Convertible Senior Notes may be settled in cash, stock, or a combination thereof, solely at our discretion. The initial conversion rate of the Convertible Senior Notes is 42.6203 shares per $1,000 principal amount, which is equivalent to a conversion price of approximately $23.46 per share, subject to adjustments. We use the if-converted method for assumed conversion of the Convertible Senior Notes for the diluted earnings per share calculation. The fair value and the effective interest rate of the Convertible Senior Notes as of December 31, 2023 was approximately $106.4 million and 5.05%, respectively. The fair value was based on market prices observable for similar instruments and is considered Level 2 in the fair value hierarchy. The interest expense recognized on the Convertible Senior Notes includes approximately $5.0 million for the aggregate of the contractual coupon interest and the amortization of the debt issuance costs during the twelve months ended December 31, 2023. The interest expense recognized on the Convertible Senior Notes includes approximately $4.9 million for the aggregate of the contractual coupon interest and the amortization of the debt issuance costs for the twelve months ended December 31, 2022 and 2021. Interest on the Convertible Senior Notes began accruing upon issuance and is payable semi-annually. There were $1.1 million and $1.9 million of unamortized debt issuance costs related to convertible senior notes as of December 31, 2023 and 2022, respectively. Holders of the Convertible Senior Notes may convert their notes at their option at any time prior to January 1, 2025 but only under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (iii) we give a notice of redemption with respect to any or all of the notes, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (iv) upon the occurrence of specified corporate events. On or after January 1, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes at any time, regardless of the foregoing circumstances. We became eligible to redeem the Convertible Senior Notes beginning on July 5, 2023, following the expiration of their non-redemption period. We are able to redeem the Convertible Senior Notes in whole or in part, at our option, if the last reported sale price per share of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption. We may redeem for cash all or part of the Convertible Senior Notes at a redemption price equal to 100% of the principal amount of the redeemable Convertible Senior Notes, plus accrued and unpaid interest to, but excluding, the redemption date. No principal payments are due on the Convertible Senior Notes prior to maturity. Other than restrictions relating to certain fundamental changes and consolidations, mergers or asset sales and customary anti-dilution adjustments, the Convertible Senior Notes do not contain any financial covenants and do not restrict us from conducting significant restructuring transactions or issuing or repurchasing any of our other securities. As of December 31, 2023 and 2022 we are not aware of any current events or market conditions that would allow holders to convert the Convertible Senior Notes. Government Supported Bank Debt In April 2014 JOTEC obtained the first loan Sparkasse Zollernalb, which is government sponsored by the Kreditanstalt für Wiederaufbau Bank (KFW). The first loan bears an interest rate of 2.45% and is scheduled to mature during the first quarter of 2024. In December 2015 JOTEC obtained the second loan Sparkasse Zollernalb sponsored by KFW. The second loan bears an interest rate of 1.40% and is scheduled to mature during the third quarter of 2025. The short-term and long-term balances of our term loans were as follows (in thousands): As of December 31, 2023 2022 Term loan balance $ 211,500 $ 213,750 Convertible senior notes 100,000 100,000 2.45% Sparkasse Zollernalb (KFW Loan 1) 61 296 1.40% Sparkasse Zollernalb (KFW Loan 2) 484 733 Total loan balance 312,045 314,779 Less unamortized loan origination costs (5,063) (6,672) Net borrowings 306,982 308,107 Less short-term loan balance, net (1,451) (1,608) Long-term loan balance, net $ 305,531 $ 306,499 At December 31, 2023 the aggregate maturities of long-term debt for the next five years are as follows (in thousands): 2024 2025 2026 2027 Thereafter Total Maturities $ 2,588 $ 102,458 $ 2,250 $ 204,749 $ — $ 312,045 Our aggregate maturity schedule is subject to change due to a provision within the Credit Agreement that requires us to make annual prepayments based on an excess cash flow calculation. On April 19, 2023 we issued payable notes in the aggregate of $3.6 million to finance our insurance premiums. The notes have a term of one year and bear an interest rate of 6.65% per annum. The notes payable balance was $1.0 million recorded in Other current liabilities on the Consolidated Balance Sheet as of December 31, 2023. Interest Expense |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Liability Claims In the normal course of business, we are made aware of adverse events involving our products and tissues. Future adverse events could ultimately give rise to a lawsuit against us, and liability claims may be asserted against us in the future based on past events that we are not aware of at the present time. We maintain claims-made insurance policies to mitigate our financial exposure to product and tissue processing liability claims. Claims-made insurance policies generally cover only those asserted claims and incidents that are reported to the insurance carrier while the policy is in effect. The amounts recorded in these Consolidated Financial Statements as of December 31, 2023 and 2022 represent our estimate of the probable losses and anticipated recoveries for incurred but not reported claims related to products sold and services performed prior to the balance sheet date. 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. PROACT Xa Clinical Trial Termination On September 23, 2022 we announced that we were stopping the PROACT Xa clinical trial as recommended by the trial's independent Data and Safety Monitoring Board. The PROACT Xa clinical trial was a prospective, randomized, trial designed to determine if patients with On-X mechanical aortic valves could be maintained safely and effectively on apixaban rather than on warfarin. As a result of PROACT Xa's early termination, we recorded $4.5 million of termination and wind-down expenses that are included in Research and development operating expenses on the Consolidated Statements of Operations and Comprehensive Loss for the twelve months ended December 31, 2022. The majority of these costs include administrative costs, that we paid during the fourth quarter of 2022 and the first quarter of 2023, as well as the estimated cost of clinical drugs purchased for patients participating in the study that are not expected to be recovered. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans 401(k) Plan We have a 401(k) savings plan (“401(k) Plan”) providing retirement benefits to all US employees who have completed at least three months of service. We made matching contributions of each participant's contribution up to 4.0% of each participant’s salary in 2023, 2022 and 2021. Our contributions approximated $2.6 million, $2.6 million, and $2.1 million for the years ended 2023, 2022, and 2021, respectively. We may make discretionary contributions to the 401(k) Plan; however, no discretionary contributions were made in any of the past three years. Deferred Compensation Plan Our Deferred Compensation Plan (“Deferred Plan”) allows certain of our US employees to defer receipt of a portion of their salary and cash bonus. The Deferred Plan provides for tax-deferred growth of deferred compensation. Pursuant to the terms of the Deferred Plan, we agree to return the deferred amounts plus gains and losses, based on investment fund options chosen by each respective participant, to the plan participants upon distribution. All deferred amounts and deemed earnings thereon are vested at all times. We have no current plans to match any contributions. Amounts owed to plan participants are unsecured obligations of the Company. We have established a rabbi trust in which it will make contributions to fund our obligations under the Deferred Plan. Pursuant to the terms of the trust, we will be required to make contributions each year to fully match our obligations under the Deferred Plan. The trust’s funds are primarily invested in Company Owned Life Insurance (“COLI”), and we plan to hold the policies until the deaths of the insured. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of Revenue Revenues are disaggregated by following geographic regions: • North America: consists of US and Canada. We market our medical device products and preservation services (predominantly in the US), primarily to physicians through our direct sales representatives who are managed by region managers. • Europe, the Middle East, and Africa (“EMEA”): we market approved medical device products to physicians, hospitals, and distributors through our direct sales force in certain countries. In countries where there are no direct sales forces, regional sales managers market to distributors who buy medical device products directly from us and sell to hospitals in their respective countries. • Asia Pacific (“APAC”): we market medical device products that are approved in each country to distributors in the region. • Latin America (“LATAM”): we market medical device products that are approved in each country to distributors in the region except for Brazil where we sell directly to end customers and distributors. Net revenues by geographic location based on the location of the customer for the years ended December 31, 2023, 2022, and 2021 were as follows (in thousands): 2023 2022 2021 North America 187,603 167,542 157,881 EMEA 114,814 104,119 109,081 APAC 33,577 27,973 21,696 LATAM 18,010 14,155 10,178 Total revenue $ 354,004 $ 313,789 $ 298,836 CardioGenesis cardiac laser therapy business abandonment: In February 2023 our supplier of CardioGenesis cardiac laser therapy handpieces informed us that it was exiting the business and will no longer be supplying handpieces effective immediately because the sole-source manufacturer of tubing used in the handpiece assembly had gone out of business and a new supplier had yet to be identified and qualified. We evaluated the impact of this disruption on our CardioGenesis cardiac laser therapy business and possible avenues for resumption of supply including the evaluation of alternate suppliers and handpiece manufacturers. As of June 30, 2023 we were unable to identify an alternative source of supply or handpiece manufacturer and do not foresee a resumption of this business in the future. As a result, we wrote-off all of our CardioGenesis cardiac laser therapy assets and recorded an expense of $390,000 during the twelve months ended December 31, 2023 on our Consolidated Statements of Operations and Comprehensive Loss. Also see segment disclosure in Note 16 below. |
Stock Compensation
Stock Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Compensation | Stock Compensation Overview We are currently authorized to grant and have available for grant the following number of shares under our stock plans as of December 31, 2023 and 2022: Authorized Available for Grant Plan 2023 2022 1996 Discounted Employee Stock Purchase Plan, as amended 2,900,000 826,000 967,000 2020 Equity and Cash Incentive Plan 7,145,000 3,281,000 999,000 Total 10,045,000 4,107,000 1,966,000 During 2020 the Shareholders approved a new 2020 Equity and Cash Incentive Plan (“ECIP”) and funded it with 2.7 million of newly issuable shares. On August 11, 2020 4.1 million shares were registered under the 2020 ECIP, consisting of the newly issuable shares as well as 1.4 million of the shares that remained available for grant under the 2009 ECIP as of that date. On May 16, 2023 the Shareholders approved additional 3.0 million shares to be registered under the 2020 ECIP. Stock Awards In 2023 the Compensation Committee of our Board of Directors (the “Committee”) authorized awards from approved stock incentive plans of RSAs to non-employee directors and RSUs and PSUs to certain employees and Company officers, which, counting PSUs at target levels, together totaled 681,000 shares and had an aggregate grant date market value of $9.7 million. Two types of PSUs were granted in 2023, an annual grant with a one one During 2019 the Committee authorized, and we granted, an LTIP PSU (the “Original LTIP”), which has multiple performance periods over a five-year period. If the highest performance thresholds were met, the Original LTIP represents 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 Original LTIP was based on attaining specified levels of adjusted revenue growth and gross margin, as defined in the Original LTIP grant document, for the years 2019 through 2023. During 2020 we determined that the threshold performance under the first performance period (2019 through 2021) of the Original LTIP was unlikely to be achieved which resulted in a reversal of $1.9 million in expense in the fourth quarter of 2020. During 2022 the second performance period of the Original LTIP earned approximately 136% and 108% to a certain key executive of target number of shares of common stock. During 2023 the third performance period of the Original LTIP earned approximately 213% and 142% to a certain key executive of target number of shares of common stock. In 2022 the Committee authorized awards from approved stock incentive plans of RSAs to non-employee Directors and RSUs and PSUs to certain employees and Company officers, which, counting PSUs at target levels, together totaled 871,000 shares and had an aggregate grant date market value of $13.5 million. Two types of PSUs were granted in 2022, an annual grant with a one one In 2021 the Committee authorized awards from approved stock incentive plans of RSUs to certain employees, RSAs to non-employee Directors, and RSAs and PSUs to certain Company officers, which, counting PSUs at target levels, together totaled 500,000 shares and had an aggregate grant date market value of $12.6 million. Two types of PSUs were granted in 2021, an Annual PSU and a special LTIP PSU (the “2021 LTIP PSU”), each with a one A summary of stock grant activity for the years ended December 31, 2023, 2022, and 2021 for RSAs, RSUs, and PSUs, based on the target number of shares, was as follows: RSAs Shares Weighted Unvested at December 31, 2020 258,000 $ 25.08 Granted 140,000 25.68 Vested (130,000) 22.40 Forfeited (33,000) 27.39 Unvested at December 31, 2021 235,000 26.59 Granted 64,000 17.91 Vested (89,000) 28.60 Unvested at December 31, 2022 210,000 23.09 Granted 78,000 15.45 Vested (128,000) 22.02 Forfeited (4,000) 24.90 Unvested at December 31, 2023 156,000 20.11 RSUs Shares Weighted Aggregate Unvested at December 31, 2020 212,000 1.02 $ 5,015,000 Granted 144,000 Vested (93,000) Forfeited (39,000) Unvested at December 31, 2021 224,000 0.94 4,558,000 Granted 643,000 Vested (100,000) Forfeited (33,000) Unvested at December 31, 2022 734,000 2.02 8,895,000 Granted 327,000 Vested (125,000) Forfeited (57,000) Unvested at December 31, 2023 879,000 1.41 15,711,000 Vested and expected to vest 879,000 1.41 $ 15,711,000 PSUs Shares Weighted Aggregate Unvested at December 31, 2020 331,000 1.64 $ 7,805,000 Granted 215,000 Vested (60,000) Forfeited (114,000) Unvested at December 31, 2021 372,000 0.90 7,579,000 Granted 182,000 Vested (117,000) Forfeited (97,000) Unvested at December 31, 2022 340,000 0.67 4,121,000 Granted 308,000 Vested (213,000) Forfeited (169,000) Unvested at December 31, 2023 266,000 0.54 4,749,000 Vested and expected to vest 266,000 0.54 $ 4,749,000 During the years ended December 31, 2023, 2022, and 2021 the total fair value of $6.4 million, $5.8 million, and $7.3 million, respectively, in combined RSAs, RSUs, and PSUs vested. Stock Options The Compensation Committee of our Board of Directors authorized grants of stock options from approved stock incentive plans to certain Company officers and employees totaling 110,000, 1,031,000, and 226,000 shares in 2023, 2022, and 2021, respectively, with exercise prices equal to the stock prices on the respective grant dates. A summary of our stock option activity for the years ended December 31, 2023, 2022, and 2021 was as follows: Shares Weighted Weighted Aggregate Outstanding at December 31, 2020 1,241,000 $ 18.16 3.38 $ 8,215,000 Granted 226,000 24.90 Exercised (179,000) 12.02 Forfeited (42,000) 26.00 Outstanding at December 31, 2021 1,246,000 20.00 3.20 4,039,000 Granted 1,031,000 13.29 Exercised (151,000) 11.85 Forfeited (3,000) 21.55 Outstanding at December 31, 2022 2,123,000 17.31 4.56 1,150,000 Granted 110,000 17.54 Exercised (226,000) 11.05 Forfeited (93,000) 12.59 Expired (36,000) 25.55 Outstanding at December 31, 2023 1,878,000 18.16 4.12 4,678,000 Vested and expected to vest 1,878,000 $ 18.16 4.12 $ 4,678,000 Exercisable at December 31, 2023 1,080,000 $ 20.59 3.03 $ 1,714,000 Other information concerning stock options for the years ended December 31 was as follows: 2023 2022 2021 Weighted-average fair value of options granted $ 7.87 $ 5.31 $ 8.82 Intrinsic value of options exercised 695,000 1,120,000 2,716,000 Employees purchased common stock totaling 141,000, 95,000, and 87,000 shares in 2023, 2022, and 2021, respectively, through our ESPP. Stock Compensation Expense The following weighted-average assumptions were used to determine the fair value of options: 2023 2022 2021 Stock ESPP Stock ESPP Stock ESPP Expected life of options 5.00 Years 0.50 Years 5.00 Years 0.50 Years 5.00 Years 0.50 Years Expected stock price volatility 0.45 0.57 0.40 0.40 0.40 0.45 Risk-free interest rate 4.11% 5.03% 3.58% 1.34% 0.57% 0.07% The following table summarizes stock compensation expense (in thousands): 2023 2022 2021 RSA, RSU, and PSU expense $ 11,875 $ 10,351 $ 9,023 Stock option and ESPP option expense 3,271 2,591 2,254 Total stock compensation expense $ 15,146 $ 12,942 $ 11,277 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 our 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 $724,000, $598,000, and $566,000 in the years ended December 31, 2023, 2022, and 2021, respectively, of the stock compensation expense into our inventory costs and deferred preservation costs. As of December 31, 2023 we had total unrecognized compensation expense of $9.1 million related to RSAs, RSUs, and PSUs and $3.1 million related to unvested stock options. As of December 31, 2023 this expense is expected to be recognized over a weighted-average period of 1.66 years for RSUs, 1.55 years for stock options, 0.51 years for PSUs, and 0.30 years for RSAs. |
Loss Per Common Share
Loss Per Common Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Loss Per Common Share | 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): Basic loss per common share 2023 2022 2021 Net loss $ (30,690) $ (19,192) $ (14,834) Net loss allocated to participating securities 123 98 94 Net loss allocated to common shareholders $ (30,567) $ (19,094) $ (14,740) Basic weighted-average common shares outstanding 40,743 40,032 38,983 Basic loss per common share $ (0.75) $ (0.48) $ (0.38) Diluted loss per common share 2023 2022 2021 Net loss $ (30,690) $ (19,192) $ (14,834) Net loss allocated to participating securities 123 98 94 Net loss allocated to common shareholders $ (30,567) $ (19,094) $ (14,740) Diluted weighted-average common shares outstanding 40,743 40,032 38,983 Diluted loss per common share $ (0.75) $ (0.48) $ (0.38) |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic 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 aortic stent grafts, On-X, surgical sealants, and other product revenues. Aortic stent grafts include aortic arch stent grafts, abdominal stent grafts, and synthetic vascular grafts. Aortic arch stent grafts include our E-vita Open NEO, E-vita Open Plus, AMDS, the NEXUS Products, and E-vita Thoracic 3G. Abdominal stent grafts include our E-xtra Design Engineering, E-nside, E-tegra, E-ventus BX, and E-liac products. Surgical sealants include BioGlue Surgical Adhesive products. 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 reportable segments (in thousands): 2023 2022 2021 Revenues: Medical devices $ 261,185 $ 230,353 $ 221,597 Preservation services 92,819 83,436 77,239 Total revenues 354,004 313,789 298,836 Cost of products and preservation services: Medical devices 84,595 72,166 65,196 Preservation services 40,233 39,100 36,126 Total cost of products and preservation services 124,828 111,266 101,322 Gross margin: Medical devices 176,590 158,187 156,401 Preservation services 52,586 44,336 41,113 Total gross margin $ 229,176 $ 202,523 $ 197,514 Net revenues by product for the years ended December 31, 2023, 2022, and 2021 were as follows (in thousands): 2023 2022 2021 Products: Aortic stent grafts $ 107,469 $ 92,752 $ 85,387 On-X 74,528 63,904 57,363 Surgical sealants 68,016 65,379 70,714 Other 11,172 8,318 8,133 Total products 261,185 230,353 221,597 Preservation services: 92,819 83,436 77,239 Total revenues $ 354,004 $ 313,789 $ 298,836 Net revenues by geographic location attributed to countries based on the location of the customer for the years ended December 31, 2023, 2022, and 2021 were as follows (in thousands): 2023 2022 2021 US $ 179,485 $ 161,113 $ 151,151 International 174,519 152,676 147,685 Total revenues $ 354,004 $ 313,789 $ 298,836 Revenues attributed to customers in Germany accounted for 8% of total revenues for the year ended December 31, 2023, 9% for the year ended December 31, 2022, and 10% for the year ended December 31, 2021 . At December 31, 2023 and 2022 $17.5 million and $18.0 million of our long-lived assets were held in the US, respectively, where the corporate headquarters and a portion of our manufacturing facilities are located. Our long-lived international assets were $20.9 million and $20.7 million as of December 31, 2023 and 2022, respectively, of which 97% were located in Hechingen, Germany. At December 31, 2023 and 2022 $247.3 million and $243.6 million, respectively, of our goodwill was allocated entirely to our Medical Devices segment. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Debt Refinancing On January 18, 2024 we entered into a credit and guaranty agreement with Ares Management Credit funds for $350.0 million of senior secured, interest-only, credit facilities, consisting of a $190.0 million term loan facility (the “Initial Term Loan Facility”), a $100.0 million delayed draw term loan facility (the “Delayed Draw Term Loan Facility” and, together with the Initial Term Loan Facility, the “Term Loan Facilities”) and a $60.0 million “senior-priority” revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facilities, the “Credit Facilities”) which has a priority claim ahead of the other secured facilities. The final scheduled maturity date of the Credit Facilities is January 18, 2030. There are no scheduled repayments of principal required to be made prior to the final maturity date. The Credit Facilities are 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. Upon closing, we borrowed $190.0 million under the Initial Term Loan Facility and $30.0 million under the Revolving Credit Facility. The proceeds of the initial borrowings were used along with cash on hand to pay off our existing debt related to our Credit Agreement and related fees and expenses. The $30.0 million of undrawn availability under the Revolving Credit Facility may be drawn for working capital, capital expenditures, and other general corporate purposes. The proceeds of borrowings under the Delayed Draw Term Loan Facility may be used solely to repurchase or repay our outstanding 4.25% Convertible Senior Notes due July 1, 2025 and to pay related fees and expenses. Subject to the satisfaction of a specified maximum total net leverage ratio and other customary conditions, we may borrow under the Delayed Draw Term Loan Facility at any time and from time to time on or prior to the maturity date of the convertible bonds on July 1, 2025. Loans borrowed under the Delayed Draw Term Loan Facility have the same terms as the loans under the Initial Term Loan Facility. The Credit Facilities contain 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 covenants include a financial maintenance that requires the company’s total net leverage ratio, as defined in the agreement, to be not greater than 6.25x for the test periods from the second quarter of fiscal year 2024 through the fourth quarter of fiscal year 2024 and not greater than 5.75x from the first quarter of fiscal year 2025 and thereafter. The Revolving Credit Facilities bear interest, at our option, at a floating annual rate equal to either the base rate, plus a margin of 3.0%, or Adjusted Term SOFR Rate, plus a margin of 4.0%. The Term Loan Facilities initially bear interest, at our option, at a floating annual rate equal to either the base rate plus a margin of 5.5%, or Adjusted Term SOFR Rate plus a margin of 6.5%. If, after the second quarter of fiscal year 2025 the company reports Total Net Leverage, as defined in the credit facilities, of less than 3.75x the interest margins applicable to the Term Loan Facilities will be reduced by 25 basis points, to 5.25% and 6.25%, for base rate and Adjusted Term SOFR loans, respectively. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) Attributable to Parent | $ (30,690) | $ (19,192) | $ (14,834) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 12 Months Ended |
Dec. 31, 2023 shares | Dec. 31, 2023 shares | |
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On December 14, 2023 Andrew Green, our Vice President, Regulatory Affairs, adopted a Rule 10b5-1 trading arrangement, pursuant to which he may sell up to 5,456 shares of the Company's common stock. The trading arrangement is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. The duration of the trading arrangement is from March 14, 2024 to June 14, 2024. | |
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Andrew Green [Member] | ||
Trading Arrangements, by Individual | ||
Name | Andrew Green | |
Title | Vice President, Regulatory Affairs, | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | December 14, 2023 | |
Aggregate Available | 5,456 | 5,456 |
J. Patrick Mackin [Member] | ||
Trading Arrangements, by Individual | ||
Arrangement Duration | 92 days |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Nature of Business Artivion, Inc. (“Artivion,” the “Company,” “we,” or “us”), is a leader in the manufacturing, processing, and distribution of medical devices and implantable human tissues used in cardiac and vascular surgical procedures for patients with aortic disease. We have four major product families: aortic stent grafts, surgical sealants, On-X mechanical heart valves and related surgical products (“On-X” products), and implantable cardiac and vascular human tissues. Aortic stent grafts include aortic arch stent grafts, abdominal stent grafts, and synthetic vascular grafts. Aortic arch stent grafts include our E-vita Open NEO, E-vita Open Plus, the Ascyrus Medical Dissection Stent (“AMDS”) hybrid prosthesis, the NEXUS endovascular stent graft system (“NEXUS”), the NEXUS DUO TM aortic arch stent graft (“NEXUS DUO”), and E-vita Thoracic 3G products. Abdominal stent grafts include our E-xtra Design Engineering (including Artivex), E-nside, E-tegra, E-ventus BX, and E-liac products. Surgical sealants include our BioGlue |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The accompanying consolidated financial statements include the accounts of the Company and our wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain prior-year amounts have been reclassified to conform to the current year presentation. |
Foreign Currencies | Foreign Currencies Our revenues and expenses transacted in foreign currencies are remeasured as they occur at exchange rates in effect at the time of each transaction. Realized and unrealized gains and losses on foreign currency transactions are recorded as a component of Other expense, net on our Consolidated Statements of Operations and Comprehensive Loss. Realized and unrealized gains and losses were a gain of $2.1 million, a loss of $3.1 million, and a loss of $5.5 million for the years ended December 31, 2023, 2022, and 2021, respectively. Our assets and liabilities denominated in foreign currencies are recognized at the exchange rate in effect at the time of each transaction. At period end, the assets and liabilities are translated at the exchange rate in effect as of the balance sheet date and are recorded as a separate component of Accumulated other comprehensive loss in the shareholders' equity section of our Consolidated Balance Sheets. |
Use of Estimates | Use of Estimates |
Revenue Recognition | Revenue Recognition Contracts with Customers We routinely enter into contracts with customers that include general commercial terms and conditions, notification requirements for price increases, shipping terms and, in most cases, prices for the products and services that we offer. These agreements, however, do not obligate us to provide goods or services to the customer, and there is no consideration promised to us at the onset of these arrangements. For customers without separate agreements, we have a standard list price established by geography and by currency for all products and services, and our invoices contain standard terms and conditions that are applicable to those customers where a separate agreement is not controlling. Our performance obligations are established when a customer submits a purchase order notification (in writing, electronically or verbally) for goods and services, and we accept the order. We identify performance obligations as the delivery of the requested product or service in appropriate quantities and to the location specified in the customer’s contract and/or purchase order. We generally recognize revenue upon the satisfaction of these criteria when control of the product or service has been transferred to the customer at which time we have an unconditional right to receive payment. Our prices are fixed and are not affected by contingent events that could impact the transaction price. We do not offer price concessions and do not accept payment that is less than the price stated when we accept the purchase order. We do not have any material performance obligations where we are acting as an agent for another entity. Revenues for products, including: a ortic stent grafts, surgical sealants, On-X products, and other medical devices, are typically recognized at the time the product is shipped, at which time the title passes to the customer, and there are no further performance obligations. Revenues from consignment are recognized when we receive a notification of implantation. We recognize revenues for preservation services when tissue is shipped to the customer. Significant Judgments in the Application of the Guidance in ASC 606 There are no significant judgments associated with the satisfaction of our performance obligations. We generally satisfy performance obligations upon shipment of the product or service obligation to the customer. This is consistent with the time in which the customer obtains control of the product or service. Performance obligations are also generally settled quickly after the purchase order acceptance, therefore, the value of unsatisfied performance obligations at the end of any reporting period is immaterial. We consider variable consideration in establishing the transaction price. Forms of variable consideration potentially applicable to our arrangements include sales returns, rebates, volume-based bonuses, and prompt pay discounts. We use historical information along with an analysis of the expected value to properly calculate and to consider the need to constrain estimates of variable consideration. Such amounts are included as a reduction to revenue from the sale of products and services in the periods in which the related revenue is recognized and adjusted in future periods as necessary. Commissions and Contract Costs Sales commissions are earned upon completion of each performance obligation, and therefore, are expensed when incurred. These costs are included in General, administrative, and marketing expenses in the Consolidated Statements of Operations and Comprehensive Loss. We generally do not incur incremental charges associated with securing agreements with customers which would require capitalization and recovery over the life of the agreement. Practical Expedients Our payment terms for sales direct to customers are substantially less than the one-year collection period that falls within the practical expedient in the determination of whether a significant financing component exists. Shipping and Handling Charges Fees charged to customers for shipping and handling of products and tissues are included in product and preservation service revenues. The costs for shipping and handling of products and tissues are included as a component of cost of products and cost of preservation services. Taxes Collected from Customers Taxes collected on the value of transaction revenue are excluded from product and service revenues and cost of sales and are accrued in current liabilities until remitted to governmental authorities . |
Advertising Costs | Advertising Costs |
Stock-Based Compensation | Stock-Based Compensation We have stock option and stock incentive plans for employees and non-employee directors that provide for grants of restricted stock awards (“RSA”s), restricted stock units (“RSU”s), performance stock units (“PSU”s), and options to purchase shares of our common stock at exercise prices generally equal to the fair values 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 the right 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. The RSAs, RSUs, PSUs, and stock options granted by us typically vest over a one We value our RSAs, RSUs, and PSUs based on the stock price on the date of grant. We expense the related compensation cost of RSAs and RSUs using the straight-line method over the vesting period. We expense the related compensation cost of PSUs based on the number of shares expected to be issued, if achievement of the performance component is probable, using a straight-line method over each vesting tranche of the award which results in accelerated recognition of expenses. The amount of compensation costs expensed related to PSUs is adjusted as needed if we deem that achievement of the performance component is no longer probable or if our expectation of the number of shares to be issued changes. We use a Black-Scholes model to value our stock option grants and expense the related compensation cost using the straight-line method over the vesting period. The fair value of our ESPP options is also determined using a Black-Scholes model and is expensed over the vesting period. The fair value of stock options and ESPP options is determined on the grant date using assumptions for the expected term, volatility, dividend yield, and the risk-free interest rate. The expected term is primarily based on the contractual term of the option and our data related to historic exercise and post-vesting forfeiture patterns, which is adjusted based on our expectations of future results. Our anticipated volatility level is primarily based on the historic volatility of our common stock, adjusted to remove the effects of certain periods of unusual volatility not expected to recur, and adjusted based on our expectations of future volatility, for the life of the option or option group. Our model includes a zero-dividend yield assumption and we do not anticipate paying dividends in the future. The risk-free interest rate is based on recent US Treasury note auction results with a similar life to that of the option. Our model does not include a discount for post-vesting restrictions, as we have not issued awards with such restrictions. The period expense for our stock compensation is determined based on the valuations discussed above and forfeitures are accounted for in the period awards are forfeited. |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Accumulated other comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The Other comprehensive income/loss, net of tax for the years presented includes foreign currency cumulative translation adjustment and unrealized gain/loss from intra-entity foreign currency loans that are of long term investment nature with no specific repayment terms. The unrealized gains from foreign currency intra-entity loans that are of long term investment nature were $2.7 million and $9.1 million for the years ended December 31, 2023 and 2021, respectively. |
Income Per Common Share | Income Per Common Share Income per common share is computed using the two-class method, which requires us to include unvested RSAs that contain non-forfeitable rights to dividends (whether paid or unpaid) as participating securities in the income per common share calculation. |
Financial Instruments | Financial Instruments Our financial instruments include cash equivalents, accounts receivable, notes receivable, accounts payable, and debt obligations. The financial assets’ and liabilities’, such as receivables and accounts payable, carrying values approximate their fair value due to their short-term duration, and the carrying value of their debt obligations approximate fair value as they contain variable interest rates that approximate market values. Other financial instruments are recorded as discussed in the sections below. |
Fair Value Measurements | Fair Value Measurements We record certain financial instruments, including cash equivalents, at fair value on a recurring basis. We may make an irrevocable election to measure other financial instruments at fair value on an instrument-by-instrument basis. Fair value financial instruments are recorded in accordance with the fair value measurement framework. We also measure certain assets and liabilities at fair value on a non-recurring basis. These non-recurring valuations include evaluating assets such as certain financial assets, long-lived assets, and indefinite lived intangible assets for impairment, allocating value to assets in an acquired asset group, applying accounting for business combinations, and the initial recognition of liabilities such as contingent consideration. We use the fair value measurement framework to value these assets and liabilities and report these fair values in the periods in which they are recorded or written down. The fair value measurement framework includes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair values in their broad levels. These levels from highest to lowest priority are as follows: • Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities; • Level 2: Quoted prices in active markets for similar assets or liabilities or observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and • Level 3: Unobservable inputs or valuation techniques that are used when little or no market data is available. The determination of fair value and the assessment of a measurement’s placement within the hierarchy requires judgment. Level 3 valuations often involve a higher degree of judgment and complexity. Level 3 valuations may require the use of various cost, market, or income valuation methodologies applied to our unobservable estimates and assumptions. Our assumptions could vary depending on the asset or liability value and the valuation method used. Such assumptions could include: estimates of prices, earnings, costs, actions of market participants, market factors, or the weighting of various valuation methods. We may also engage external advisors to assist in determining fair value as appropriate. Although we believe that the recorded fair values of our financial instruments are appropriate, these fair values may not be indicative of net realizable value or reflective of future fair values. Fair Value Measurements - Contingent Consideration |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist primarily of highly liquid investments at the time of acquisition. The carrying value of cash equivalents approximates fair value. We maintain depository accounts with certain financial institutions. Although these depository accounts may exceed government insured depository limits, we have evaluated the credit worthiness of these applicable financial institutions and determined the risk of material financial loss due to the exposure of such credit risk to be minimal. |
Cash Flow Supplemental Disclosures | Cash Flow Supplemental Disclosures Supplemental disclosures of cash flow information for the years ended December 31 (in thousands): 2023 2022 2021 Cash paid during the year for: Interest $ 23,332 $ 14,243 $ 14,407 Income taxes 4,865 9,244 5,483 Non-cash investing and financing activities: Operating lease right-of-use assets $ 6,181 $ 1,803 $ 31,726 Issuance of common stock for contingent consideration — — 10,000 |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts |
Inventories, net | Inventories, net Inventories, net are comprised of finished goods for our product lines including: a ortic stent grafts; surgical sealants; On-X products; other medical devices; work-in-process; and raw materials. Inventories for finished goods are valued at the lower of cost or net realizable value on a first-in, first-out basis and raw materials are valued on a moving average cost basis. Typically, upon shipment or upon notification of implant of a medical device on consignment, revenue is recognized, and the related inventory costs are expensed as cost of products. Cost of products also includes, as applicable, lower of cost or net realizable value of write-downs and impairments for products not deemed to be recoverable and, as incurred, idle facility expense, excessive spoilage, extra freight, and re-handling costs. Inventory costs for manufactured products consist primarily of direct labor and materials (including salary and fringe benefits, raw materials, and supplies) and indirect costs (including allocations of costs from departments that support manufacturing activities and facility allocations). The allocation of fixed production overhead costs is based on actual production levels, to the extent that they are within the range of the facility’s normal capacity. Inventory costs for products purchased for resale or manufactured under contract consist primarily of the purchase cost, freight-in charges, and indirect costs as appropriate. We regularly evaluate our inventory to determine if the costs are appropriately recorded at the lower of cost or net realizable value. We also evaluate our inventory for costs not deemed to be recoverable, including inventory not expected to ship prior to its expiration. Lower of cost or net realizable value write-downs are recorded if the book value exceeds the estimated net realizable value of the inventory, based on recent sales prices at the time of the evaluation. Impairment write-downs are recorded based on the book value of inventory deemed to be impaired. Actual results may differ from these estimates. Write-downs of inventory are expensed as cost of products, and these write-downs are permanent impairments that create a new cost basis, which cannot be restored to its previous levels if our estimates change. |
Deferred Preservation Costs, net | Deferred Preservation Costs, net Deferred preservation costs include costs of cardiac and vascular tissues available for shipment, tissues currently in active processing, and tissues held in quarantine pending release to implantable status. By federal law, human tissues cannot be bought or sold; therefore, the tissues we preserve are not held as inventory. The costs we incur to procure and process cardiac and vascular tissues are instead accumulated and deferred. Deferred preservation costs are stated at the lower of cost or net realizable value on a first-in, first-out basis and are deferred until revenue is recognized. Upon shipment of tissue to an implanting facility, revenue is recognized, and the related deferred preservation costs are expensed as cost of preservation services. Cost of preservation services also includes, as applicable, lower of cost or net realizable value write-downs and impairments for tissues not deemed to be recoverable, and includes, as incurred, excessive spoilage, extra freight, and re-handling costs. The calculation of deferred preservation costs involves judgment and complexity and uses the same principles as inventory costing. Donated human tissue is procured from deceased human donors by organ and tissue procurement organizations (“OPOs”) and tissue banks that provide the tissue to us for processing, preservation, and distribution. Deferred preservation costs consist primarily of the procurement fees charged by the OPOs and tissue banks, direct labor and materials (including salary and fringe benefits, laboratory supplies and expenses, and freight-in charges), and indirect costs (including allocations of costs from support departments and facility allocations). Fixed production overhead costs are allocated based on actual tissue processing levels, to the extent that they are within the range of the facility’s normal capacity. These costs are then allocated among the tissues processed during the period based on cost drivers, such as the number of donors or number of tissues processed. We apply a yield estimate to all tissues in process and in quarantine to estimate the portion of tissues that will ultimately become implantable. We estimate quarantine and in process yields based on our historical yield experience with similar tissues and re-evaluate these estimates periodically. Actual yields could differ significantly from our estimates, which could result in a change in tissues available for shipment and could increase or decrease the balance of deferred preservation costs. These changes could result in additional cost of preservation services expense or could increase per tissue preservation costs, which would impact gross margins on tissue preservation services in future periods. We regularly evaluate our deferred preservation costs to determine if the costs are appropriately recorded at the lower of cost or net realizable value. We also evaluate our deferred preservation costs for costs not deemed to be recoverable, including tissues not expected to ship prior to the expiration date of their packaging. Lower of cost or net realizable value write-downs are recorded if the tissue processing costs incurred exceed the estimated market value of the tissue services, based on recent average service fees at the time of the evaluation. Impairment write-downs are recorded based on the book value of tissues deemed to be impaired. Actual results may differ from these estimates. Write-downs of deferred preservation costs are expensed as cost of preservation services, and these write-downs are permanent impairments that create a new cost basis, which cannot be restored to its previous levels if our estimates change. |
Property and Equipment, net | Property and Equipment, net Property and equipment, net is stated at cost less depreciation. Depreciation expense is recorded over the estimated useful lives of the assets, generally three |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Our intangible assets consist of goodwill, acquired technology, customer lists and relationships, patents, and other intangible assets, as discussed in Note 7. Our goodwill is attributable to a segment or segments of our business, as appropriate, as the related acquired business that generated the goodwill is integrated into our operations. Upon divestiture of a component of our business, the goodwill related to the segment is allocated to the divested business using the relative fair value allocation method. We evaluate our goodwill and other indefinite lived 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 October 31, 2023 and 2022 our indefinite lived intangible assets consisted of goodwill, in-process research and development, and acquired procurement contracts and agreements. We performed a qualitative analysis of our indefinite lived intangible assets as of October 31, 2023 and determined that the fair value of the asset groups and the fair value of the reporting unit more likely than not exceeded their associated carrying values and were, therefore, not impaired. Our definite lived intangible assets consist of acquired technologies, customer lists and relationships, distribution and manufacturing rights and know-how, patents, and other intangible assets. We amortize our definite lived intangible assets over their expected useful lives using the straight-line method, which we believe approximates the period of economic benefits of the related assets. Our indefinite lived intangible assets do not amortize but are instead subject to periodic impairment testing as discussed in “Impairments of Long-Lived Assets and Indefinite Lived Intangible Assets” below. |
Impairments of Long and Indefinite Lived Intangible Assets | Impairments of Long and Indefinite Lived Intangible Assets Long-Lived Assets We assess the potential impairment of our: (i) net property and equipment, (ii) amortizing intangible long-lived assets to be held and used and (iii) operating lease right-of-use assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that could trigger an impairment review include, but are not limited to, the following: • Significant underperformance relative to expected historical or projected future operating results; • Significant negative industry or economic trends; • Significant decline in our stock price for a sustained period; or • Significant decline in our market capitalization relative to net book value. |
Accrued Procurement Fees | Accrued Procurement Fees Donated tissue is procured from deceased human donors by OPOs and tissue banks that provide the tissue to us for processing, preservation, and distribution. We reimburse the OPOs and tissue banks for their costs to recover the tissue and include these costs as part of deferred preservation costs, as discussed above. We accrue estimated procurement fees due to the OPOs and tissue banks at the time tissues are received based on contractual agreements between us and the OPOs and tissue banks. |
Leases | 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, as discussed in Note 9. Certain of our leases contain escalation clauses, rent concessions, and renewal options for additional periods. We exercise judgment in the determination of whether a financial arrangement includes a lease and in determining the appropriate discount rates to be applied to leases based on our general collateralized credit standing and the geographical market considerations impacting lease rates across all locations. When available, we use the implicit discount rate in the lease contract to discount lease payments to present value. If an implicit discount rate is not available in the lease contract, we use our incremental borrowing rate. We elected the package of practical expedients that allow us to omit leases with initial terms of 12 months or less from our balance sheet, which are expensed on a straight-line basis over the life of the lease. We have elected not to separate lease and non-lease components for future leases. |
Debt Issuance Costs | Debt Issuance Costs |
Liability Claims | Liability Claims In the normal course of business, we are made aware of adverse events involving our products and tissues. Future adverse events could ultimately give rise to a lawsuit against us, and liability claims may be asserted against us in the future based on past events that we are not aware of at the present time. We maintain claims-made insurance policies to mitigate our financial exposure to product and tissue processing liability claims. Claims-made insurance policies generally cover only those asserted claims and incidents that are reported to the insurance carrier while the policy is in effect. Thus, a claims-made policy does not generally represent a transfer of risk for claims and incidents that have been incurred but not reported to the insurance carrier during the policy period. Any punitive damage components of claims are uninsured. We engage external advisors to assist us in estimating our liability and any related amount recoverable under our insurance policies as of each balance sheet date. We use a frequency-severity approach to estimate our unreported product and tissue processing liability claims, whereby projected losses are calculated by multiplying the estimated number of claims by the estimated average cost per claim. The estimated claims are determined based on the reported claim development method and the Bornhuetter-Ferguson method using a blend of our historical claim experience and industry data. The estimated cost per claim is calculated using a lognormal claims model blending our historical average cost per claim with industry claims data. We use a number of assumptions in order to estimate the unreported loss liability including: the future claim reporting time lag, the frequency of reported claims, the average cost per claim, and the maximum liability per claim. We believe that the assumptions we use provide a reasonable basis for our calculation. However, the accuracy of the estimates is limited by various factors, including, but not limited to, our specific conditions, uncertainties surrounding the assumptions used, and the scarcity of industry data directly relevant to our business activities. Due to these factors, actual results may differ significantly from our assumptions and from the amounts accrued. 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 amounts as a component of Other long-term assets. The amounts recorded represent our estimate of the probable losses and anticipated recoveries for unreported claims related to products sold and services performed prior to the balance sheet date. |
Legal Contingencies | Legal Contingencies |
Uncertain Tax Positions | Uncertain Tax Positions |
Deferred Income Taxes | Deferred Income Taxes Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and tax return purposes. We assess the recoverability of our deferred tax assets and provide a valuation allowance against our deferred tax assets when, as a result of this analysis, we believe it is more likely than not that some portion or all of our deferred tax assets will not be realized. Assessing the recoverability of deferred tax assets involves judgment and complexity including the consideration of prudent and feasible tax planning. Estimates and judgments used in the determination of the need for a valuation allowance and in calculating the amount of a needed valuation allowance include, but are not limited to, the following: • The ability to carry back deferred tax asset attributes to a prior tax year; • Timing of the anticipated reversal of book/tax temporary differences; • Projected future operating results; • Anticipated future state tax apportionment; • Timing and amounts of anticipated future taxable income; • Evaluation of statutory limits regarding usage of certain tax assets; and • Evaluation of the statutory periods over which certain tax assets can be utilized. |
New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted In March 2020 the Financial Accounting Standards Board (the “FASB”) issued Accounting Standard Update (“ASU”) 2020-04, Reference Rate Reform Topic 848 (“ASC 848”). The amendments in this ASU were put forth in response to the market transition from the LIBOR and other interbank offered rates to alternative reference rates. US GAAP requires entities to evaluate whether a contract modification, such as the replacement or change of a reference rate, results in the establishment of a new contract or continuation of an existing contract. ASC 848 allows an entity to elect not to apply certain modification accounting requirements to contracts affected by reference rate reform. The standard provides this temporary election through December 31, 2022 and cannot be applied to contract modifications that occur after December 31, 2022. In January 2021 the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848) . The objective of the new reference rate reform standard is to clarify the scope of Topic 848 and provide explicit guidance to help companies applying optional expedients and exceptions. We adopted ASU 2020-04 and ASU 2021-01 on a prospective basis in fiscal year 2022. The adoption of ASU 2020-04 and ASU 2021-01 did not have a material impact on our financial condition or results of operations. Not Yet Effective In December 2023 the FASB issued ASU 2023-09, Income Taxes Topic 740 - Improvements to Income Tax Disclosures . This amendment is expected to enhance the transparency and decision usefulness of income tax disclosures by requiring public business entities, on an annual basis, to disclose specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold and certain information about income taxes paid. This revised guidance is effective for financial statements issued for fiscal years beginning after December 15, 2024. We are currently evaluating the impacts of the new standard. In November 2023 the FASB issued ASU 2023-07, Segment Reporting Topic 280- Improvements to Reportable Segment Disclosures. This amendment requires disclosure of incremental segment information on an annual and interim basis. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. We are currently evaluating the impacts of the new standard. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Supplemental Disclosures of Cash Flow Information | Supplemental disclosures of cash flow information for the years ended December 31 (in thousands): 2023 2022 2021 Cash paid during the year for: Interest $ 23,332 $ 14,243 $ 14,407 Income taxes 4,865 9,244 5,483 Non-cash investing and financing activities: Operating lease right-of-use assets $ 6,181 $ 1,803 $ 31,726 Issuance of common stock for contingent consideration — — 10,000 |
Schedule of Property and Equipment and Depreciation Expense | Property and equipment, net balance for the years ended December 31 was as follows (in thousands): 2023 2022 Equipment and software $ 66,618 $ 72,480 Leasehold improvements 49,107 47,384 Furniture and fixtures 7,555 7,148 Total property and equipment 123,280 127,012 Less accumulated depreciation and amortization (84,922) (88,338) Property and equipment, net $ 38,358 $ 38,674 Depreciation expense for the years ended December 31 was as follows (in thousands): 2023 2022 2021 Depreciation expense $ 7,878 $ 7,132 $ 7,157 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Instruments Measured at Fair Value | A summary of financial instruments measured at fair value was as follows (in thousands): December 31, 2023 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 22,802 $ — $ — $ 22,802 Certificates of deposit 3,968 — — 3,968 Total assets $ 26,770 $ — $ — $ 26,770 Long-term liabilities: Contingent consideration — — (63,890) (63,890) Total liabilities $ — $ — $ (63,890) $ (63,890) December 31, 2022 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 10,098 $ — $ — $ 10,098 Total assets $ 10,098 $ — $ — $ 10,098 Long-term liabilities: Contingent consideration — — (40,400) (40,400) Total liabilities $ — $ — $ (40,400) $ (40,400) |
Schedule of Reconciliation Of Changes In Fair Value Of Level 3 Liabilities | Changes in fair value of Level 3 assets and liabilities are listed in the tables below (in thousands): Contingent Consideration Balance as of December 31, 2022 $ (40,400) Change in valuation (23,490) Balance as of December 31, 2023 $ (63,890) |
Inventories and Deferred Pres_2
Inventories and Deferred Preservation Costs, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories, net at December 31, 2023 and 2022 were comprised of the following (in thousands): 2023 2022 Raw materials and supplies $ 36,907 $ 36,715 Work-in-process 12,687 10,476 Finished goods 32,382 27,287 Total inventories, net $ 81,976 $ 74,478 |
Schedule of Deferred Preservation Costs | Deferred preservation costs, net at December 31, 2023 and 2022 were comprised of the following (in thousands): 2023 2022 Cardiac tissues $ 24,823 $ 21,799 Vascular tissues 24,981 24,572 Total deferred preservation costs, net $ 49,804 $ 46,371 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Carrying Values of Indefinite Lived Intangible Assets | As of December 31, 2023 and 2022 the carrying values of our indefinite lived intangible assets were as follows (in thousands): 2023 2022 Goodwill $ 247,337 $ 243,631 In-process R&D 2,154 2,080 Procurement contracts and agreements 2,013 2,013 |
Schedule of Goodwill by Reportable Segment | As of December 31, 2023 and 2022 the value of our goodwill, all of which was related to our Medical Devices segment, was as follows (in thousands): Medical Devices Segment 2023 2022 Balance as of January 1, $ 243,631 $ 250,000 Foreign currency translation 3,706 (6,369) Balance as of December 31, $ 247,337 $ 243,631 |
Schedule of Gross Carrying Values, Accumulated Amortization, and Approximate Amortization Period of Definite Lived Intangible Assets | December 31, 2023 Gross Carrying Accumulated Net Carrying Weighted Average Acquired technology $ 201,897 $ 59,304 $ 142,593 18.2 Other intangibles: Customer lists and relationships 28,729 10,334 18,395 21.6 Distribution and manufacturing rights and know-how 9,608 7,807 1,801 5.0 Patents 4,365 3,225 1,140 17.0 Other 7,815 3,680 4,135 5.0 Total other intangibles $ 50,517 $ 25,046 $ 25,471 10.0 December 31, 2022 Gross Carrying Accumulated Net Carrying Weighted Average Acquired technology $ 198,420 $ 47,157 $ 151,263 18.2 Other intangibles: Customer lists and relationships 31,030 11,100 19,930 20.5 Distribution and manufacturing rights and know-how 9,274 5,796 3,478 5.0 Patents 4,246 3,180 1,066 17.0 Other 5,360 2,543 2,817 4.4 Total other intangibles $ 49,910 $ 22,619 $ 27,291 10.3 |
Summary of Amortization Expense | Amortization expense recorded in General, administrative, and marketing expenses on our Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31 was as follows (in thousands): 2023 2022 2021 Amortization expense $ 15,198 $ 15,310 $ 16,820 |
Scheduled Amortization of Intangible Assets For Next Five Years | As of December 31, 2023 scheduled amortization of intangible assets for the next five years is as follows (in thousands): 2024 2025 2026 2027 2028 Total Amortization expense $ 15,121 $ 13,200 $ 12,972 $ 12,866 $ 12,644 $ 66,803 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of (Loss) Income Before Income Taxes | Loss before income taxes consisted of the following (in thousands): 2023 2022 2021 Domestic $ (24,658) $ (13,798) $ (10,263) Foreign 3,072 (1,186) (4,564) Loss before income taxes $ (21,586) $ (14,984) $ (14,827) |
Schedule of Income Tax Expense Benefit | Income tax expense consisted of the following (in thousands): 2023 2022 2021 Current: Federal $ 5,573 $ 1,606 $ 1,896 State 1,004 367 551 Foreign 3,851 3,120 3,391 10,428 5,093 5,838 Deferred: Federal $ 222 $ 236 $ (2,801) State 157 234 (307) Foreign (1,703) (1,355) (2,723) (1,324) (885) (5,831) Income tax expense $ 9,104 $ 4,208 $ 7 |
Schedule of Effective Income Tax Rate Reconciliation | The income tax benefit amounts differ from the amounts computed by applying the US federal statutory income tax rate of 21% for the years ended December 31, 2023, 2022, and 2021 to pretax income as a result of the following (in thousands): 2023 2022 2021 Tax benefit at statutory rate $ (4,533) $ (3,147) $ (3,114) Increase (reduction) in income taxes resulting from: Valuation allowance change 9,964 4,779 1,566 Foreign income taxes 2,969 415 1,138 Nondeductible executive compensation 989 878 1,075 Equity compensation 872 472 (477) Net change in uncertain tax positions 652 527 762 State income taxes, net of federal benefit 281 484 73 Nondeductible entertainment expenses 262 117 65 Foreign interest disallowance — 151 307 Foreign deferred items — (112) 53 Foreign derived intangible income deduction (501) (133) (144) Research and development credit (800) (961) (959) Provision to return adjustments (937) 336 63 Other (114) 402 (401) Total income tax expense $ 9,104 $ 4,208 $ 7 |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences which give rise to deferred tax assets and liabilities at December 31 were as follows (in thousands): 2023 2022 Deferred tax assets: Finance and operating leases $ 13,254 $ 12,581 Excess interest carryforward 6,438 5,559 Unrealized gains and losses 5,424 — Loan revaluation 3,859 2,633 Loss carryforwards 3,205 9,660 Stock compensation 2,761 2,463 Accrued expenses 2,567 1,734 Deferred compensation 1,790 1,317 Property 1,786 1,310 Credit carryforwards 336 503 Inventory and deferred preservation costs write-downs 302 764 Other 1,422 1,650 Less valuation allowance (32,860) (17,942) Total deferred tax assets, net 10,284 22,232 2023 2022 Deferred tax liabilities: Unrealized gains and losses — (6,624) Prepaid items (370) (323) Debt costs (626) (818) Finance and operating leases (12,777) (12,217) Intangible assets (16,106) (24,601) Other (1,169) (834) Total deferred tax liabilities (31,048) (45,417) Total deferred tax liabilities, net $ (20,764) $ (23,185) |
Summary of Valuation Allowance Deferred Tax Assets | A summary of valuation allowances against deferred tax assets was as follows (in thousands): 2023 2022 2021 Beginning balance $ 17,942 $ 13,282 $ 7,170 Additions in estimates recorded to deferred income tax expense, net 9,809 4,660 1,505 Additions related to Other comprehensive income, net 5,109 — 4,607 Ending balance $ 32,860 $ 17,942 $ 13,282 |
Schedule of Uncertain Tax Position Liability and Liability for Interest and Penalties on Uncertain Tax Positions | A reconciliation of the beginning and ending balances of our uncertain tax position liability, excluding interest and penalties, was as follows (in thousands): 2023 2022 2021 Beginning balance $ 4,508 $ 4,089 $ 2,574 Increase related to current year tax positions 2,728 847 1,661 Increase (decrease) for foreign exchange differences 116 (145) (121) Increase related to prior year tax positions 26 20 386 Decrease due to the lapsing of statutes of limitations (158) (200) (241) Decrease related to prior year tax positions (508) (103) (170) Decrease due to settlements of prior year tax positions (1,880) — — Ending balance $ 4,832 $ 4,508 $ 4,089 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information Related to Leases | Information related to leases included in the Consolidated Balance Sheets was as follows (in thousands, except lease term and discount rate): Operating leases: December 31, 2023 December 31, 2022 Operating lease right-of-use assets, net $ 43,822 $ 41,859 Current maturities of operating leases $ 3,395 $ 3,308 Non-current maturities of operating leases 43,977 41,257 Total operating lease liabilities $ 47,372 $ 44,565 Finance leases: Property and equipment, at cost $ 6,862 $ 6,408 Accumulated amortization (3,136) (2,498) Property and equipment, net $ 3,726 $ 3,910 Current maturities of finance leases $ 582 $ 513 Non-current maturities of finance leases 3,405 3,644 Total finance lease liabilities $ 3,987 $ 4,157 Weighted average remaining lease term (in years): Operating leases 10.4 11.9 Finance leases 6.8 7.8 Weighted average discount rate: Operating leases 6.3% 5.9% Finance leases 2.2% 2.1% |
Summary of Lease Costs | A summary of lease expenses for our finance and operating leases included in General, administrative, and marketing expenses on our Consolidated Statements of Operations and Comprehensive Loss was as follows (in thousands): December 31, 2023 December 31, 2022 Amortization of property and equipment $ 542 $ 518 Interest expense on finance leases 84 89 Total finance lease expense 626 607 Operating lease expense a 7,354 7,432 Sublease income (278) (306) Total lease expense $ 7,702 $ 7,733 ______________________ a Total rental expense for operating leases was $7.5 million in 2021. The operating lease expense included right-of-use asset amortization and interest expense on the lease liability. |
Schedule of Supplemental Cash Flow Information Related to Leases | A summary of our cash flow information related to leases was as follows (in thousands): Cash paid for amounts included in the measurement of lease liabilities: 2023 2022 Operating cash flows for operating leases $ 7,263 $ 6,927 Financing cash flows for finance leases 539 507 Operating cash flows for finance leases 84 90 |
Schedule of Minimum Lease Payments for Finance, Operating, and Sublease Income Leases | Future minimum lease payments are as follows (in thousands): Finance Operating 2024 $ 655 $ 6,302 2025 648 7,085 2026 627 6,539 2027 617 6,058 2028 599 5,862 Thereafter 1,136 33,920 Total minimum lease payments $ 4,282 $ 65,766 Less amount representing interest (295) (18,394) Present value of net minimum lease payments 3,987 47,372 Less current maturities (582) (3,395) Lease obligations, less current maturities $ 3,405 $ 43,977 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Short-Term and Long-Term Balances of Term Loan | The short-term and long-term balances of our term loans were as follows (in thousands): As of December 31, 2023 2022 Term loan balance $ 211,500 $ 213,750 Convertible senior notes 100,000 100,000 2.45% Sparkasse Zollernalb (KFW Loan 1) 61 296 1.40% Sparkasse Zollernalb (KFW Loan 2) 484 733 Total loan balance 312,045 314,779 Less unamortized loan origination costs (5,063) (6,672) Net borrowings 306,982 308,107 Less short-term loan balance, net (1,451) (1,608) Long-term loan balance, net $ 305,531 $ 306,499 |
Schedule of Debt Maturities | At December 31, 2023 the aggregate maturities of long-term debt for the next five years are as follows (in thousands): 2024 2025 2026 2027 Thereafter Total Maturities $ 2,588 $ 102,458 $ 2,250 $ 204,749 $ — $ 312,045 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Net revenues by geographic location based on the location of the customer for the years ended December 31, 2023, 2022, and 2021 were as follows (in thousands): 2023 2022 2021 North America 187,603 167,542 157,881 EMEA 114,814 104,119 109,081 APAC 33,577 27,973 21,696 LATAM 18,010 14,155 10,178 Total revenue $ 354,004 $ 313,789 $ 298,836 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Shares Available for Grant | We are currently authorized to grant and have available for grant the following number of shares under our stock plans as of December 31, 2023 and 2022: Authorized Available for Grant Plan 2023 2022 1996 Discounted Employee Stock Purchase Plan, as amended 2,900,000 826,000 967,000 2020 Equity and Cash Incentive Plan 7,145,000 3,281,000 999,000 Total 10,045,000 4,107,000 1,966,000 |
Schedule of Stock Grant Activity for RSAs | A summary of stock grant activity for the years ended December 31, 2023, 2022, and 2021 for RSAs, RSUs, and PSUs, based on the target number of shares, was as follows: RSAs Shares Weighted Unvested at December 31, 2020 258,000 $ 25.08 Granted 140,000 25.68 Vested (130,000) 22.40 Forfeited (33,000) 27.39 Unvested at December 31, 2021 235,000 26.59 Granted 64,000 17.91 Vested (89,000) 28.60 Unvested at December 31, 2022 210,000 23.09 Granted 78,000 15.45 Vested (128,000) 22.02 Forfeited (4,000) 24.90 Unvested at December 31, 2023 156,000 20.11 |
Schedule of Stock Grant Activity for RSUs | RSUs Shares Weighted Aggregate Unvested at December 31, 2020 212,000 1.02 $ 5,015,000 Granted 144,000 Vested (93,000) Forfeited (39,000) Unvested at December 31, 2021 224,000 0.94 4,558,000 Granted 643,000 Vested (100,000) Forfeited (33,000) Unvested at December 31, 2022 734,000 2.02 8,895,000 Granted 327,000 Vested (125,000) Forfeited (57,000) Unvested at December 31, 2023 879,000 1.41 15,711,000 Vested and expected to vest 879,000 1.41 $ 15,711,000 |
Schedule of Stock Grant Activity for PSUs | PSUs Shares Weighted Aggregate Unvested at December 31, 2020 331,000 1.64 $ 7,805,000 Granted 215,000 Vested (60,000) Forfeited (114,000) Unvested at December 31, 2021 372,000 0.90 7,579,000 Granted 182,000 Vested (117,000) Forfeited (97,000) Unvested at December 31, 2022 340,000 0.67 4,121,000 Granted 308,000 Vested (213,000) Forfeited (169,000) Unvested at December 31, 2023 266,000 0.54 4,749,000 Vested and expected to vest 266,000 0.54 $ 4,749,000 |
Summary of Stock Option Activity | A summary of our stock option activity for the years ended December 31, 2023, 2022, and 2021 was as follows: Shares Weighted Weighted Aggregate Outstanding at December 31, 2020 1,241,000 $ 18.16 3.38 $ 8,215,000 Granted 226,000 24.90 Exercised (179,000) 12.02 Forfeited (42,000) 26.00 Outstanding at December 31, 2021 1,246,000 20.00 3.20 4,039,000 Granted 1,031,000 13.29 Exercised (151,000) 11.85 Forfeited (3,000) 21.55 Outstanding at December 31, 2022 2,123,000 17.31 4.56 1,150,000 Granted 110,000 17.54 Exercised (226,000) 11.05 Forfeited (93,000) 12.59 Expired (36,000) 25.55 Outstanding at December 31, 2023 1,878,000 18.16 4.12 4,678,000 Vested and expected to vest 1,878,000 $ 18.16 4.12 $ 4,678,000 Exercisable at December 31, 2023 1,080,000 $ 20.59 3.03 $ 1,714,000 |
Summary of Other Information Concerning Stock Options | Other information concerning stock options for the years ended December 31 was as follows: 2023 2022 2021 Weighted-average fair value of options granted $ 7.87 $ 5.31 $ 8.82 Intrinsic value of options exercised 695,000 1,120,000 2,716,000 |
Schedule of Weighted-Average Assumptions Used to Determine the Fair Value of Options | The following weighted-average assumptions were used to determine the fair value of options: 2023 2022 2021 Stock ESPP Stock ESPP Stock ESPP Expected life of options 5.00 Years 0.50 Years 5.00 Years 0.50 Years 5.00 Years 0.50 Years Expected stock price volatility 0.45 0.57 0.40 0.40 0.40 0.45 Risk-free interest rate 4.11% 5.03% 3.58% 1.34% 0.57% 0.07% |
Summary of Total Stock Compensation Expenses | The following table summarizes stock compensation expense (in thousands): 2023 2022 2021 RSA, RSU, and PSU expense $ 11,875 $ 10,351 $ 9,023 Stock option and ESPP option expense 3,271 2,591 2,254 Total stock compensation expense $ 15,146 $ 12,942 $ 11,277 |
Loss Per Common Share (Tables)
Loss Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted (Loss) Income Per Common Share | The following table sets forth the computation of basic and diluted loss per common share (in thousands, except per share data): Basic loss per common share 2023 2022 2021 Net loss $ (30,690) $ (19,192) $ (14,834) Net loss allocated to participating securities 123 98 94 Net loss allocated to common shareholders $ (30,567) $ (19,094) $ (14,740) Basic weighted-average common shares outstanding 40,743 40,032 38,983 Basic loss per common share $ (0.75) $ (0.48) $ (0.38) Diluted loss per common share 2023 2022 2021 Net loss $ (30,690) $ (19,192) $ (14,834) Net loss allocated to participating securities 123 98 94 Net loss allocated to common shareholders $ (30,567) $ (19,094) $ (14,740) Diluted weighted-average common shares outstanding 40,743 40,032 38,983 Diluted loss per common share $ (0.75) $ (0.48) $ (0.38) |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Revenues, Cost of Products and Services, and Gross Margins for Operating Segments | The following table summarizes revenues, cost of products and preservation services, and gross margins for our reportable segments (in thousands): 2023 2022 2021 Revenues: Medical devices $ 261,185 $ 230,353 $ 221,597 Preservation services 92,819 83,436 77,239 Total revenues 354,004 313,789 298,836 Cost of products and preservation services: Medical devices 84,595 72,166 65,196 Preservation services 40,233 39,100 36,126 Total cost of products and preservation services 124,828 111,266 101,322 Gross margin: Medical devices 176,590 158,187 156,401 Preservation services 52,586 44,336 41,113 Total gross margin $ 229,176 $ 202,523 $ 197,514 |
Summary of Net Revenues by Product and Service | Net revenues by product for the years ended December 31, 2023, 2022, and 2021 were as follows (in thousands): 2023 2022 2021 Products: Aortic stent grafts $ 107,469 $ 92,752 $ 85,387 On-X 74,528 63,904 57,363 Surgical sealants 68,016 65,379 70,714 Other 11,172 8,318 8,133 Total products 261,185 230,353 221,597 Preservation services: 92,819 83,436 77,239 Total revenues $ 354,004 $ 313,789 $ 298,836 |
Schedule of Net Revenues by Geographic Location | Net revenues by geographic location attributed to countries based on the location of the customer for the years ended December 31, 2023, 2022, and 2021 were as follows (in thousands): 2023 2022 2021 US $ 179,485 $ 161,113 $ 151,151 International 174,519 152,676 147,685 Total revenues $ 354,004 $ 313,789 $ 298,836 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Foreign currency transaction gain (loss) | $ 2,100,000 | $ (3,100,000) | $ (5,500,000) |
Advertising expense | 1,900,000 | 1,600,000 | 1,000,000 |
Foreign currency translation adjustments | 2,700,000 | (6,400,000) | 9,100,000 |
Foreign currency translation adjustments | 9,599,000 | (11,722,000) | (16,630,000) |
Allowance for doubtful accounts | 1,900,000 | 1,300,000 | |
Write-down to inventory | 4,400,000 | 4,000,000 | 4,800,000 |
Write-downs to deferred preservation costs | 393,000 | 369,000 | 575,000 |
Impairment of long-lived assets | $ 0 | $ 0 | $ 0 |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Estimated useful lives | 3 years | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Estimated useful lives | 10 years | ||
ESPP Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
ESPP, percentage of market price for eligible employees | 85% | ||
RSAs, RSUs, PSUs and Stock Options | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 1 year | ||
RSAs, RSUs, PSUs and Stock Options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Stock Options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Period within grant date stock options granted typically expire | 7 years |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies (Schedule of Supplemental Disclosures of Cash Flow Information) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Interest | $ 23,332 | $ 14,243 | $ 14,407 |
Income taxes | 4,865 | 9,244 | 5,483 |
Non-cash investing and financing activities: | |||
Operating lease right-of-use assets | 6,181 | 1,803 | 31,726 |
Issuance of common stock for contingent consideration | $ 0 | $ 0 | $ 10,000 |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies (Schedule of Property and Equipment and Depreciation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 123,280 | $ 127,012 | |
Less accumulated depreciation and amortization | (84,922) | (88,338) | |
Property and equipment, net | 38,358 | 38,674 | |
Depreciation expense | 7,878 | 7,132 | $ 7,157 |
Equipment and software | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 66,618 | 72,480 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 49,107 | 47,384 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 7,555 | $ 7,148 |
Sale of PerClot (Details)
Sale of PerClot (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
May 23, 2023 | Jul. 28, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Proceeds from sale of non-financial assets, net | $ 14,250 | $ 0 | $ 19,000 | ||
Gain from sale of non-financial assets | 14,250 | 0 | 15,923 | ||
Total sources of revenue | 354,004 | 313,789 | $ 298,836 | ||
Sublease Income | 278 | $ 306 | |||
PerClot | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Consideration for sale of assets | $ 41,000 | ||||
Proceeds from sale of non-financial assets, net | 25,000 | ||||
Derecognition of intangible assets | 1,600 | ||||
Write off of prepaids | 1,500 | ||||
Gain (loss) on disposition of business | 15,900 | ||||
Gain from sale of non-financial assets | 14,300 | ||||
Total sources of revenue | $ 5,100 | ||||
PerClot | Transfer Of PerClot Manufacturing Equipment | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Contingent consideration receivable | 780 | ||||
PerClot | Starch Medical Inc. | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Contingent liability payment | $ 4,500 | ||||
PerClot | Artivion, Inc. And Starch Medical, Inc. | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Consideration for sale of assets | 54,500 | ||||
Proceeds from sale of non-financial assets, net | $ 18,800 | 25,000 | |||
PerClot | Artivion, Inc. And Starch Medical, Inc. | Baxter Achievement Of Worldwide Sales | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Contingent consideration receivable | 10,000 | ||||
PerClot | Starch Medical Inc. | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Consideration for sale of assets | 13,500 | ||||
Proceeds from sale of non-financial assets, net | 6,000 | ||||
PerClot | Starch Medical Inc. | Baxter Achievement Of Worldwide Sales | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Contingent consideration receivable | $ 3,000 |
Acquisition of Ascyrus (Details
Acquisition of Ascyrus (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 02, 2020 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2023 USD ($) item | Dec. 31, 2022 USD ($) | |
Business Acquisition [Line Items] | ||||
Noncurrent portion of contingent consideration | $ 63,890 | $ 40,400 | ||
Ascyrus Medical LLC | ||||
Business Acquisition [Line Items] | ||||
Equity ownership percent | 100% | |||
Cash consideration | $ 60,000 | |||
Common stock value issued in business combination | 20,000 | |||
Contingent consideration, fair value adjustment | (23,500) | 9,000 | ||
Noncurrent portion of contingent consideration | $ 63,900 | $ 40,400 | ||
Ascyrus Medical LLC | Measurement Input, Discount Rate | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration, measurement input | item | 0.07 | |||
Ascyrus Medical LLC | Maximum | ||||
Business Acquisition [Line Items] | ||||
Aggregate amount of consideration transferred | 200,000 | |||
Ascyrus Medical LLC | FDA Approval IDE for AMDS | ||||
Business Acquisition [Line Items] | ||||
Cash consideration | 10,000 | $ 10,000 | ||
Common stock value issued in business combination | 10,000 | $ 10,000 | ||
Ascyrus Medical LLC | FDA Approval PMA for AMDS | ||||
Business Acquisition [Line Items] | ||||
Cash consideration | 25,000 | |||
Ascyrus Medical LLC | AMDS Obtained In Japan | ||||
Business Acquisition [Line Items] | ||||
Cash consideration | 10,000 | |||
Ascyrus Medical LLC | AMDS Obtained In China | ||||
Business Acquisition [Line Items] | ||||
Cash consideration | 10,000 | |||
Ascyrus Medical LLC | Additional Potential Cash Payment If Japan Or China Obtains Approval | ||||
Business Acquisition [Line Items] | ||||
Cash consideration | 55,000 | |||
Ascyrus Medical LLC | Additional Potential Cash Payment If Japan Or China Obtains Approval | Maximum | ||||
Business Acquisition [Line Items] | ||||
Cash consideration | 75,000 | |||
Ascyrus Medical LLC | Additional Potential Cash Payment If Japan Or China Obtains Approval | Minimum | ||||
Business Acquisition [Line Items] | ||||
Cash consideration | $ 65,000 | |||
Ascyrus Medical LLC | Following FDA Approval For AMDS | ||||
Business Acquisition [Line Items] | ||||
Aggregate amount of consideration transferred | $ 100,000 | |||
Period of required contingent consideration | 3 years |
Agreements with Endospan (Detai
Agreements with Endospan (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Sep. 11, 2019 USD ($) | May 31, 2023 USD ($) | Sep. 30, 2020 USD ($) | Sep. 30, 2019 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2023 USD ($) tranche | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2019 USD ($) | |
Variable Interest Entity [Line Items] | |||||||||
Securities purchase option agreement, expiration period | 90 days | ||||||||
Number of tranches | tranche | 3 | ||||||||
Endospan | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Securities purchase option agreement | $ 1,000,000 | $ 1,000,000 | |||||||
Funded tranche payment | 5,000,000 | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 | |||||
Required percentage of number of patients before tranche of loan funding can be acquired | 50% | ||||||||
Investment in VIE | 15,000,000 | 25,000,000 | |||||||
Loan | $ 358,000 | ||||||||
Distribution agreements, fair value | 1,800,000 | $ 3,500,000 | |||||||
Expense from fair value adjustment | $ 5,000,000 | $ 409,000 | |||||||
Asset impairment | $ 4,900,000 | ||||||||
Endospan | Secured Debt | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Notes receivable balance | 15,000,000 | ||||||||
Endospan | Minimum | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Option to purchase outstanding securities | 350,000,000 | ||||||||
Endospan | Maximum | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Option to purchase outstanding securities | $ 450,000,000 | ||||||||
Endospan | JOTEC GmbH | |||||||||
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 | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | $ 26,770 | $ 10,098 |
Contingent consideration | (63,890) | (40,400) |
Total liabilities | (63,890) | (40,400) |
Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 22,802 | 10,098 |
Certificates of deposit | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 3,968 | |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | 26,770 | 10,098 |
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Level 1 | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 22,802 | 10,098 |
Level 1 | Certificates of deposit | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 3,968 | |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | 0 | 0 |
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 0 | 0 |
Level 2 | Certificates of deposit | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 0 | |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | 0 | 0 |
Contingent consideration | (63,890) | (40,400) |
Total liabilities | (63,890) | (40,400) |
Level 3 | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 0 | $ 0 |
Level 3 | Certificates of deposit | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | $ 0 |
Financial Instruments (Narrativ
Financial Instruments (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |||
Gross realized gains or losses on cash equivalents | $ 0 | $ 0 | $ 0 |
Financial Instruments (Schedule
Financial Instruments (Schedule ofReconciliation Of Changes In Fair Value Of Level 3 Liabilities) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | $ (40,400) | ||
Change in valuation | (23,490) | $ 9,000 | $ (8,870) |
Ending balance | $ (63,890) | $ (40,400) |
Inventories and Deferred Pres_3
Inventories and Deferred Preservation Costs, net (Schedule of Inventories) (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 36,907 | $ 36,715 |
Work-in-process | 12,687 | 10,476 |
Finished goods | 32,382 | 27,287 |
Total inventories, net | $ 81,976 | $ 74,478 |
Inventories and Deferred Pres_4
Inventories and Deferred Preservation Costs, net (Schedule of Deferred Preservation Costs) (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory [Line Items] | ||
Total deferred preservation costs, net | $ 49,804 | $ 46,371 |
Cardiac tissues | ||
Inventory [Line Items] | ||
Total deferred preservation costs, net | 24,823 | 21,799 |
Vascular tissues | ||
Inventory [Line Items] | ||
Total deferred preservation costs, net | $ 24,981 | $ 24,572 |
Inventories and Deferred Pres_5
Inventories and Deferred Preservation Costs, net (Narrative) (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory [Line Items] | ||
Consignment inventory | $ 10.7 | $ 12.7 |
Inventory valuation reserve | $ 3 | $ 2.2 |
Domestic | ||
Inventory [Line Items] | ||
Consignment inventory percentage | 44% | 41% |
Foreign | ||
Inventory [Line Items] | ||
Consignment inventory percentage | 56% | 59% |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Schedule of Carrying Values of Indefinite Lived Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Indefinite-lived Intangible Assets [Line Items] | |||
Goodwill | $ 247,337 | $ 243,631 | $ 250,000 |
In-process R&D | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Total indefinite lived intangible assets | 2,154 | 2,080 | |
Procurement contracts and agreements | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Total indefinite lived intangible assets | $ 2,013 | $ 2,013 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment of indefinite lived intangible assets | $ 0 | $ 0 | $ 0 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets (Schedule of Goodwill by Reportable Segment) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 243,631 | $ 250,000 |
Foreign currency translation | 3,706 | (6,369) |
Ending balance | $ 247,337 | $ 243,631 |
Goodwill and Other Intangible_6
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 | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Net Carrying Value | $ 142,593 | $ 151,263 |
Total other intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 50,517 | 49,910 |
Accumulated Amortization | 25,046 | 22,619 |
Net Carrying Value | $ 25,471 | $ 27,291 |
Weighted Average Useful Life (Years) | 10 years | 10 years 3 months 18 days |
Acquired technology, net | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 201,897 | $ 198,420 |
Accumulated Amortization | 59,304 | 47,157 |
Net Carrying Value | $ 142,593 | $ 151,263 |
Weighted Average Useful Life (Years) | 18 years 2 months 12 days | 18 years 2 months 12 days |
Customer lists and relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 28,729 | $ 31,030 |
Accumulated Amortization | 10,334 | 11,100 |
Net Carrying Value | $ 18,395 | $ 19,930 |
Weighted Average Useful Life (Years) | 21 years 7 months 6 days | 20 years 6 months |
Distribution and manufacturing rights and know-how | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 9,608 | $ 9,274 |
Accumulated Amortization | 7,807 | 5,796 |
Net Carrying Value | $ 1,801 | $ 3,478 |
Weighted Average Useful Life (Years) | 5 years | 5 years |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 4,365 | $ 4,246 |
Accumulated Amortization | 3,225 | 3,180 |
Net Carrying Value | $ 1,140 | $ 1,066 |
Weighted Average Useful Life (Years) | 17 years | 17 years |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 7,815 | $ 5,360 |
Accumulated Amortization | 3,680 | 2,543 |
Net Carrying Value | $ 4,135 | $ 2,817 |
Weighted Average Useful Life (Years) | 5 years | 4 years 4 months 24 days |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets (Summary of Amortization Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 15,198 | $ 15,310 | $ 16,820 |
Goodwill and Other Intangible_8
Goodwill and Other Intangible Assets (Scheduled Amortization of Intangible Assets for Next Five Years) (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 15,121 |
2025 | 13,200 |
2026 | 12,972 |
2027 | 12,866 |
2028 | 12,644 |
Total | $ 66,803 |
Income Taxes (Schedule of (Loss
Income Taxes (Schedule of (Loss) Income Before Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (24,658) | $ (13,798) | $ (10,263) |
Foreign | 3,072 | (1,186) | (4,564) |
Loss before income taxes | $ (21,586) | $ (14,984) | $ (14,827) |
Income Taxes (Schedule of Incom
Income Taxes (Schedule of Income Tax Expense Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | |||
Federal | $ 5,573 | $ 1,606 | $ 1,896 |
State | 1,004 | 367 | 551 |
Foreign | 3,851 | 3,120 | 3,391 |
Current: Income tax expense (benefit) | 10,428 | 5,093 | 5,838 |
Deferred: | |||
Federal | 222 | 236 | (2,801) |
State | 157 | 234 | (307) |
Foreign | (1,703) | (1,355) | (2,723) |
Deferred: Income tax expense (benefit) | (1,324) | (885) | (5,831) |
Income tax expense | $ 9,104 | $ 4,208 | $ 7 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Investments, Owned, Federal Income Tax Note [Line Items] | ||||
Effective income tax rate | 42% | 28% | ||
Net deferred tax liability | $ 20,764,000 | $ 23,185,000 | ||
Valuation allowances against deferred tax assets | 32,860,000 | 17,942,000 | $ 13,282,000 | $ 7,170,000 |
Federal net operating loss carryforwards related to the acquisitions of Cardiogenesis and Hemosphere | 1,300,000 | |||
State net operating loss carryforwards | 1,500,000 | |||
Foreign net operating loss carryforwards | 443,000 | |||
Research and development tax credit carryforwards | 293,000 | |||
Other tax credit | 81,000 | |||
Excess interest carryforward | 6,438,000 | 5,559,000 | ||
Interest deduction limit | 20,400,000 | 8,100,000 | ||
Non-current liabilities recorded related to interest and penalties on uncertain tax positions | 372,000 | 358,000 | ||
Penalties and interest income (expense) | 6,500 | 145,000 | (35,000) | |
Total uncertain tax liability including interest and penalties | 5,200,000 | 4,900,000 | ||
Uncertain tax liability recorded as reduction to deferred tax assets | 100,000 | 100,000 | ||
Uncertain tax liability recorded to non-current liability | 5,100,000 | 4,800,000 | ||
Approximate amount that would affect tax rate | 4,400,000 | $ 3,600,000 | $ 3,200,000 | |
Approximate amount of uncertain tax liability to be recognized | 100,000 | |||
Foreign Authority | ||||
Investments, Owned, Federal Income Tax Note [Line Items] | ||||
Net deferred tax liability | $ 119,000 |
Income Taxes (Schedule of Effec
Income Taxes (Schedule of Effective Income Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Tax benefit at statutory rate | $ (4,533) | $ (3,147) | $ (3,114) |
Increase (reduction) in income taxes resulting from: | |||
Valuation allowance change | 9,964 | 4,779 | 1,566 |
Foreign income taxes | 2,969 | 415 | 1,138 |
Nondeductible executive compensation | 989 | 878 | 1,075 |
Equity compensation | 872 | 472 | (477) |
Net change in uncertain tax positions | 652 | 527 | 762 |
State income taxes, net of federal benefit | 281 | 484 | 73 |
Nondeductible entertainment expenses | 262 | 117 | 65 |
Foreign interest disallowance | 0 | 151 | 307 |
Foreign deferred items | 0 | (112) | 53 |
Foreign derived intangible income deduction | (501) | (133) | (144) |
Research and development credit | (800) | (961) | (959) |
Provision to return adjustments | (937) | 336 | 63 |
Other | (114) | 402 | (401) |
Income tax expense | $ 9,104 | $ 4,208 | $ 7 |
Income Taxes (Schedule of Defer
Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||||
Finance and operating leases | $ 13,254 | $ 12,581 | ||
Excess interest carryforward | 6,438 | 5,559 | ||
Unrealized gains and losses | 5,424 | 0 | ||
Loan revaluation | 3,859 | 2,633 | ||
Loss carryforwards | 3,205 | 9,660 | ||
Stock compensation | 2,761 | 2,463 | ||
Accrued expenses | 2,567 | 1,734 | ||
Deferred compensation | 1,790 | 1,317 | ||
Property | 1,786 | 1,310 | ||
Credit carryforwards | 336 | 503 | ||
Inventory and deferred preservation costs write-downs | 302 | 764 | ||
Other | 1,422 | 1,650 | ||
Less valuation allowance | (32,860) | (17,942) | $ (13,282) | $ (7,170) |
Total deferred tax assets, net | 10,284 | 22,232 | ||
Deferred tax liabilities: | ||||
Unrealized gains and losses | 0 | (6,624) | ||
Prepaid items | (370) | (323) | ||
Debt costs | (626) | (818) | ||
Finance and operating leases | (12,777) | (12,217) | ||
Intangible assets | (16,106) | (24,601) | ||
Other | (1,169) | (834) | ||
Total deferred tax liabilities | (31,048) | (45,417) | ||
Total deferred tax liabilities, net | $ (20,764) | $ (23,185) |
Income Taxes (Summary of Valuat
Income Taxes (Summary of Valuation Allowance Deferred Tax Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred Tax Assets, Valuation Allowance [Roll Forward] | |||
Beginning balance | $ 17,942 | $ 13,282 | $ 7,170 |
Additions in estimates recorded to deferred income tax expense, net | 9,809 | 4,660 | 1,505 |
Additions related to Other comprehensive income, net | 5,109 | 0 | 4,607 |
Ending balance | $ 32,860 | $ 17,942 | $ 13,282 |
Income Taxes (Schedule of Uncer
Income Taxes (Schedule of Uncertain Tax Position Liability and Liability for Interest And Penalties On Uncertain Tax Positions) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance | $ 4,508 | $ 4,089 | $ 2,574 |
Increase related to current year tax positions | 2,728 | 847 | 1,661 |
Increases for foreign exchange differences | 116 | ||
Decreases for foreign exchange differences | (145) | (121) | |
Increase related to prior year tax positions | 26 | 20 | 386 |
Decrease due to the lapsing of statutes of limitations | (158) | (200) | (241) |
Decrease related to prior year tax positions | (508) | (103) | (170) |
Decrease due to settlements of prior year tax positions | (1,880) | 0 | 0 |
Ending balance | $ 4,832 | $ 4,508 | $ 4,089 |
Leases (Schedule of Supplementa
Leases (Schedule of Supplemental Balance Sheet Information Related to Leases) (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Operating leases: | ||
Operating lease right-of-use assets, net | $ 43,822 | $ 41,859 |
Current maturities of operating leases | 3,395 | 3,308 |
Non-current maturities of operating leases | 43,977 | 41,257 |
Total operating lease liabilities | 47,372 | 44,565 |
Finance leases: | ||
Property and equipment, at cost | 6,862 | 6,408 |
Accumulated amortization | (3,136) | (2,498) |
Property and equipment, net | 3,726 | 3,910 |
Current maturities of finance leases | 582 | 513 |
Non-current maturities of finance leases | 3,405 | 3,644 |
Total finance lease liabilities | $ 3,987 | $ 4,157 |
Weighted average remaining lease term (in years): Operating leases | 10 years 4 months 24 days | 11 years 10 months 24 days |
Weighted average remaining lease term (in years): Finance leases | 6 years 9 months 18 days | 7 years 9 months 18 days |
Weighted average discount rate: Operating leases | 6.30% | 5.90% |
Weighted average discount rate: Finance leases | 2.20% | 2.10% |
Leases (Summary of Lease Costs)
Leases (Summary of Lease Costs) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Amortization of property and equipment | $ 542 | $ 518 | |
Interest expense on finance leases | 84 | 89 | |
Total finance lease expense | 626 | 607 | |
Operating lease expense | 7,354 | 7,432 | $ 7,500 |
Sublease income | (278) | (306) | |
Total lease expense | $ 7,702 | $ 7,733 |
Leases (Schedule of Supplemen_2
Leases (Schedule of Supplemental Cash Flow Information Related to Leases) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Operating cash flows for operating leases | $ 7,263 | $ 6,927 |
Financing cash flows for finance leases | 539 | 507 |
Operating cash flows for finance leases | $ 84 | $ 90 |
Leases (Schedule of Minimum Lea
Leases (Schedule of Minimum Lease Payments for Finance, Operating, Leases) (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Finance Leases | ||
2024 | $ 655 | |
2025 | 648 | |
2026 | 627 | |
2027 | 617 | |
2028 | 599 | |
Thereafter | 1,136 | |
Total minimum lease payments | 4,282 | |
Less amount representing interest | (295) | |
Present value of net minimum lease payments | 3,987 | $ 4,157 |
Less current maturities | (582) | (513) |
Lease obligations, less current maturities | 3,405 | 3,644 |
Operating Leases | ||
2024 | 6,302 | |
2025 | 7,085 | |
2026 | 6,539 | |
2027 | 6,058 | |
2028 | 5,862 | |
Thereafter | 33,920 | |
Total minimum lease payments | 65,766 | |
Less amount representing interest | (18,394) | |
Present value of net minimum lease payments | 47,372 | 44,565 |
Less current maturities | (3,395) | (3,308) |
Lease obligations, less current maturities | $ 43,977 | $ 41,257 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | 12 Months Ended | ||||||||||
Jan. 18, 2024 USD ($) | Apr. 19, 2023 USD ($) | Dec. 19, 2022 | Jun. 02, 2021 USD ($) | Jun. 18, 2020 USD ($) $ / shares | Dec. 31, 2023 USD ($) tradingDay businessDay | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 01, 2017 USD ($) | Dec. 31, 2015 | Apr. 30, 2014 | |
Line of Credit Facility [Line Items] | |||||||||||
Debt | $ 312,045,000 | $ 314,779,000 | |||||||||
Payments of debt issuance costs | 249,000 | 0 | $ 2,219,000 | ||||||||
Interest expense | $ 25,299,000 | 18,224,000 | 16,887,000 | ||||||||
Interest Expense | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Payments of debt issuance costs | $ 361,000 | ||||||||||
Debt extinguishment costs | 474,000 | ||||||||||
Convertible Senior Notes | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Interest rate on amounts borrowed | 4.25% | ||||||||||
Effective interest rate | 5.05% | ||||||||||
Debt instrument, face amount | $ 100,000,000 | ||||||||||
Proceeds from convertible debt | $ 96,500,000 | ||||||||||
Conversion ratio | 0.0426203 | ||||||||||
Conversion price (in dollars per share) | $ / shares | $ 23.46 | ||||||||||
Debt fair value | $ 106,400,000 | ||||||||||
Interest expense | 5,000,000 | 4,900,000 | $ 4,900,000 | ||||||||
Unamortized debt issuance costs | 1,100,000 | 1,900,000 | |||||||||
Convertible Senior Notes | Cumulative Effect, Period of Adoption, Adjustment | ASU 2020-06 | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Notes payable | $ 100,000,000 | ||||||||||
Convertible Senior Notes | Subsequent Event | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Interest rate on amounts borrowed | 4.25% | ||||||||||
Convertible Senior Notes | Circumstance I | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Conversion trading day threshold | tradingDay | 20 | ||||||||||
Conversion consecutive trading day threshold | tradingDay | 30 | ||||||||||
Conversion percentage of stock price threshold | 130% | ||||||||||
Convertible Senior Notes | Circumstance II | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Conversion trading day threshold | businessDay | 5 | ||||||||||
Conversion consecutive trading day threshold | tradingDay | 5 | ||||||||||
Conversion percentage of stock price threshold | 98% | ||||||||||
Convertible Senior Notes | Circumstance After July 5, 2023 | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Conversion trading day threshold | tradingDay | 20 | ||||||||||
Conversion consecutive trading day threshold | tradingDay | 30 | ||||||||||
Conversion percentage of stock price threshold | 130% | ||||||||||
Conversion percentage of principal amount | 100% | ||||||||||
2.45% Sparkasse Zollernalb (KFW Loan 1) | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt | $ 61,000 | 296,000 | |||||||||
Interest rate on amounts borrowed | 2.45% | 2.45% | |||||||||
1.40% Sparkasse Zollernalb (KFW Loan 2) | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt | $ 484,000 | 733,000 | |||||||||
Interest rate on amounts borrowed | 1.40% | 1.40% | |||||||||
Credit and Guaranty Agreement | Secured Debt | Subsequent Event | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Proceeds from issuance of debt | $ 220,000,000 | ||||||||||
Debt instrument, face amount | $ 350,000,000 | ||||||||||
Notes Payable Issued For Prepayment Of Insurance Premiums | IPFS Corporation | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Interest rate on amounts borrowed | 6.65% | ||||||||||
Debt instrument, face amount | $ 3,600,000 | ||||||||||
Loan term | 1 year | ||||||||||
Notes Payable, Current | $ 1,000,000 | ||||||||||
Revolving Credit Facility And Term Loan | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Payments of debt issuance costs | 2,100,000 | ||||||||||
Amortization of the debt issuance costs | $ 1,800,000 | ||||||||||
Revolving Credit Facility And Term Loan | Credit Agreement | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt | $ 255,000,000 | ||||||||||
Effective interest rate | 8.97% | ||||||||||
Debt instrument, extension period | 2 years 6 months | ||||||||||
Revolving Credit Facility And Term Loan | Amended Credit Agreement Two | Convertible Senior Notes | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Interest rate on amounts borrowed | 4.25% | ||||||||||
Term Loan | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt | $ 211,500,000 | $ 213,750,000 | 225,000,000 | ||||||||
Term Loan | SOFR | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Credit facility margin | 3.50% | ||||||||||
Term Loan | Amended Credit Agreement Two | Circumstance I | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt instrument, extension circumstance period | 91 days | ||||||||||
Term Loan | Amended Credit Agreement Two | Circumstance II | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt instrument, extension circumstance period | 182 days | ||||||||||
Revolving Credit Facility | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Credit facility aggregate commitments | $ 30,000,000 | ||||||||||
Revolving Credit Facility | SOFR | Minimum | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Credit facility margin | 4% | ||||||||||
Revolving Credit Facility | SOFR | Maximum | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Credit facility margin | 4.25% |
Debt (Schedule of Short-Term an
Debt (Schedule of Short-Term and Long-Term Balances of Term Loan) (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 01, 2017 | Dec. 31, 2015 | Apr. 30, 2014 |
Debt Instrument [Line Items] | |||||
Total loan balance | $ 312,045 | $ 314,779 | |||
Less unamortized loan origination costs | (5,063) | (6,672) | |||
Net borrowings | 306,982 | 308,107 | |||
Less short-term loan balance, net | (1,451) | (1,608) | |||
Long-term loan balance, net | 305,531 | 306,499 | |||
2.45% Sparkasse Zollernalb (KFW Loan 1) | |||||
Debt Instrument [Line Items] | |||||
Total loan balance | $ 61 | 296 | |||
Interest rate on amounts borrowed | 2.45% | 2.45% | |||
1.40% Sparkasse Zollernalb (KFW Loan 2) | |||||
Debt Instrument [Line Items] | |||||
Total loan balance | $ 484 | 733 | |||
Interest rate on amounts borrowed | 1.40% | 1.40% | |||
Term loan balance | |||||
Debt Instrument [Line Items] | |||||
Total loan balance | $ 211,500 | 213,750 | $ 225,000 | ||
Convertible senior notes | |||||
Debt Instrument [Line Items] | |||||
Total loan balance | $ 100,000 | $ 100,000 |
Debt (Schedule of Debt Maturiti
Debt (Schedule of Debt Maturities) (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 2,588 |
2025 | 102,458 |
2026 | 2,250 |
2027 | 204,749 |
Thereafter | 0 |
Total | $ 312,045 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Termination and wind-down expenses | $ 4.5 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Company's matching contribution of employees' salary | 4% | ||
Deferred compensation liability, current | $ 491,000 | ||
Deferred compensation liability, non-current | 6,760,000 | $ 5,468,000 | |
Cash surrender value of life insurance | $ 6,900,000 | $ 5,500,000 | |
401(K) | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Company's matching contribution of employees' salary | 4% | 4% | |
Company's total contributions | $ 2,600,000 | $ 2,600,000 | $ 2,100,000 |
Discretionary contributions | $ 0 | $ 0 | $ 0 |
Revenue Recognition (Disaggrega
Revenue Recognition (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Total sources of revenue | $ 354,004 | $ 313,789 | $ 298,836 |
North America | |||
Disaggregation of Revenue [Line Items] | |||
Total sources of revenue | 187,603 | 167,542 | 157,881 |
EMEA | |||
Disaggregation of Revenue [Line Items] | |||
Total sources of revenue | 114,814 | 104,119 | 109,081 |
APAC | |||
Disaggregation of Revenue [Line Items] | |||
Total sources of revenue | 33,577 | 27,973 | 21,696 |
LATAM | |||
Disaggregation of Revenue [Line Items] | |||
Total sources of revenue | $ 18,010 | $ 14,155 | $ 10,178 |
Revenue Recognition (Narrative)
Revenue Recognition (Narrative) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
CardioGenesis Cardiac Laser Therapy | |
Disaggregation of Revenue [Line Items] | |
Asset impairment | $ 390 |
Stock Compensation (Schedule of
Stock Compensation (Schedule of Shares Available for Grant) (Details) - shares | Dec. 31, 2023 | Dec. 31, 2022 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Authorized Shares | 10,045,000 | |
Available for Grant | 4,107,000 | 1,966,000 |
1996 Discounted Employee Stock Purchase Plan, as amended | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Authorized Shares | 2,900,000 | |
Available for Grant | 826,000 | 967,000 |
2020 Equity and Cash Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Authorized Shares | 7,145,000 | |
Available for Grant | 3,281,000 | 999,000 |
Stock Compensation (Narrative)
Stock Compensation (Narrative) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||
May 16, 2023 shares | Feb. 13, 2023 | Aug. 11, 2020 shares | Dec. 31, 2020 USD ($) | Dec. 31, 2023 USD ($) item shares | Dec. 31, 2022 USD ($) item shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 shares | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Total fair value | $ | $ 6,400 | $ 5,800 | $ 7,300 | ||||||
Employees purchased common stock, shares | 141,000 | 95,000 | 87,000 | ||||||
Capitalized stock compensation expense | $ | $ 724 | $ 598 | $ 566 | ||||||
RSAs, RSUs, And PSUs | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted, Shares | 681,000 | 871,000 | 500,000 | ||||||
Aggregate grant date market value | $ | $ 9,700 | $ 13,500 | $ 12,600 | ||||||
Unrecognized compensation costs | $ | $ 9,100 | ||||||||
PSUs | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted, Shares | 308,000 | 182,000 | 215,000 | ||||||
Number of performance stock unit grants | item | 2 | 2 | |||||||
Expected weighted-average period for recognizing the unrecognized compensation costs, in years | 6 months 3 days | ||||||||
Annual PSU | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award performance period | 1 year | 1 year | |||||||
Annual PSU | Share-based Payment Arrangement, Tranche One | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percentage | 148% | 51% | 110% | ||||||
Annual PSU | Maximum | Share-based Payment Arrangement, Tranche One | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percentage | 150% | 150% | |||||||
Special PSU | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award performance period | 1 year | ||||||||
Special PSU | Share-based Payment Arrangement, Tranche One | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percentage | 89% | 200% | 140% | 118% | |||||
Special PSU | Maximum | Share-based Payment Arrangement, Tranche One | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percentage | 200% | 200% | 200% | ||||||
LTIP PSU | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award performance period | 5 years | ||||||||
LTIP PSU | Share-based Payment Arrangement, Tranche One | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percentage | 213% | 136% | |||||||
LTIP PSU | Share-based Payment Arrangement, Tranche One | Executive Officer | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percentage | 142% | 108% | |||||||
LTIP PSU | Maximum | Share-based Payment Arrangement, Tranche One | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percentage | 288% | ||||||||
LTIP PSU | Maximum | Share-based Payment Arrangement, Tranche One | Executive Officer | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percentage | 192% | ||||||||
Stock Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted, Shares | 110,000 | 1,031,000 | 226,000 | ||||||
Unrecognized compensation costs | $ | $ 3,100 | ||||||||
Expected weighted-average period for recognizing the unrecognized compensation costs, in years | 1 year 6 months 18 days | ||||||||
RSUs | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted, Shares | 327,000 | 643,000 | 144,000 | ||||||
Expected weighted-average period for recognizing the unrecognized compensation costs, in years | 1 year 7 months 28 days | ||||||||
RSAs | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted, Shares | 78,000 | 64,000 | 140,000 | ||||||
Expected weighted-average period for recognizing the unrecognized compensation costs, in years | 3 months 18 days | ||||||||
2020 Equity and Cash Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Increase in shares authorized under plan | 3,000,000 | 4,100,000 | 2,700,000 | ||||||
2009 Employee Stock Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted, Shares | 1,400,000 | ||||||||
LTIP | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Reversal in expense | $ | $ 1,900 |
Stock Compensation (Schedule _2
Stock Compensation (Schedule of Stock Grant Activity for RSAs) (Details) - RSAs - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Shares | |||
Unvested, Beginning Balance, Shares | 210,000 | 235,000 | 258,000 |
Granted, Shares | 78,000 | 64,000 | 140,000 |
Vested, Shares | (128,000) | (89,000) | (130,000) |
Forfeited, Shares | (4,000) | (33,000) | |
Unvested, Ending Balance, Shares | 156,000 | 210,000 | 235,000 |
Weighted Average Grant Date Fair Value | |||
Unvested, Beginning Balance, Weighted Average Grant Date Fair Value (in dollars per share) | $ 23.09 | $ 26.59 | $ 25.08 |
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | 15.45 | 17.91 | 25.68 |
Vested, Weighted Average Grant Date Fair Value (in dollars per share) | 22.02 | 28.60 | 22.40 |
Forfeited, Weighted Average Grant Date Fair Value (in dollars per share) | 24.90 | 27.39 | |
Unvested, Ending Balance, Weighted Average Grant Date Fair Value (in dollars per share) | $ 20.11 | $ 23.09 | $ 26.59 |
Stock Compensation (Schedule _3
Stock Compensation (Schedule of Stock Grant Activity for RSUs) (Details) - RSUs - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Shares | ||||
Unvested, Beginning Balance, Shares | 734,000 | 224,000 | 212,000 | |
Granted, Shares | 327,000 | 643,000 | 144,000 | |
Vested, Shares | (125,000) | (100,000) | (93,000) | |
Forfeited, Shares | (57,000) | (33,000) | (39,000) | |
Unvested, Ending Balance, Shares | 879,000 | 734,000 | 224,000 | 212,000 |
Vested and expected to vest, Shares | 879,000 | |||
Outstanding, Weighted Average Remaining Contractual Term in Years | 1 year 4 months 28 days | 2 years 7 days | 11 months 8 days | 1 year 7 days |
Vested and expected to vest, Weighted Average Remaining Contractual Term in Years | 1 year 4 months 28 days | |||
Outstanding, Aggregate Intrinsic Value | $ 15,711,000 | $ 8,895,000 | $ 4,558,000 | $ 5,015,000 |
Vested and expected to vest, Aggregate Intrinsic Value | $ 15,711,000 |
Stock Compensation (Schedule _4
Stock Compensation (Schedule of Stock Grant Activity for PSUs) (Details) - PSUs - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Shares | ||||
Unvested, Beginning Balance, Shares | 340,000 | 372,000 | 331,000 | |
Granted, Shares | 308,000 | 182,000 | 215,000 | |
Vested, Shares | (213,000) | (117,000) | (60,000) | |
Forfeited, Shares | (169,000) | (97,000) | (114,000) | |
Unvested, Ending Balance, Shares | 266,000 | 340,000 | 372,000 | 331,000 |
Vested and expected to vest, Shares | 266,000 | |||
Outstanding, Weighted Average Remaining Contractual Term in Years | 6 months 14 days | 8 months 1 day | 10 months 24 days | 1 year 7 months 20 days |
Vested and expected to vest, Weighted Average Remaining Contractual Term in Years | 6 months 14 days | |||
Outstanding, Aggregate Intrinsic Value | $ 4,749,000 | $ 4,121,000 | $ 7,579,000 | $ 7,805,000 |
Vested and expected to vest, Aggregate Intrinsic Value | $ 4,749,000 |
Stock Compensation (Summary of
Stock Compensation (Summary of Stock Option Activity) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Shares | ||||
Expired shares | (36,000) | |||
Stock Options | ||||
Shares | ||||
Outstanding, Beginning Balance, Shares | 2,123,000 | 1,246,000 | 1,241,000 | |
Granted, Shares | 110,000 | 1,031,000 | 226,000 | |
Exercised, Shares | (226,000) | (151,000) | (179,000) | |
Forfeited, Shares | (93,000) | (3,000) | (42,000) | |
Outstanding, Ending Balance, Shares | 1,878,000 | 2,123,000 | 1,246,000 | 1,241,000 |
Weighted Average Grant Date Fair Value | ||||
Outstanding, Beginning Balance, Weighted Average Exercise Price (in dollars per share) | $ 17.31 | $ 20 | $ 18.16 | |
Granted, Weighted Average Exercise Price (in dollars per share) | 17.54 | 13.29 | 24.90 | |
Exercised, Weighted Average Exercise Price (in dollars per share) | 11.05 | 11.85 | 12.02 | |
Forfeited, Weighted Average Exercise Price (in dollars per share) | 12.59 | 21.55 | 26 | |
Expired, Weighted Average Exercise Price (in dollars per share) | 25.55 | |||
Outstanding, Ending Balance, Weighted Average Exercise Price (in dollars per share) | $ 18.16 | $ 17.31 | $ 20 | $ 18.16 |
Vested and expected to vest, Shares | 1,878,000 | |||
Exercisable, Shares | 1,080,000 | |||
Vested and expected to vest, Weighted Average Exercise Price (in dollars per share) | $ 18.16 | |||
Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 20.59 | |||
Outstanding, Weighted Average Remaining Contractual Term in years | 4 years 1 month 13 days | 4 years 6 months 21 days | 3 years 2 months 12 days | 3 years 4 months 17 days |
Vested and expected to vest, Weighted Average Remaining Contractual Term in years | 4 years 1 month 13 days | |||
Exercisable, Weighted Average Remaining Contractual Term in years | 3 years 10 days | |||
Outstanding, Aggregate Intrinsic Value | $ 4,678,000 | $ 1,150,000 | $ 4,039,000 | $ 8,215,000 |
Vested and expected to vest, Aggregate Intrinsic Value | 4,678,000 | |||
Exercisable, Aggregate Intrinsic Value | $ 1,714,000 |
Stock Compensation (Summary o_2
Stock Compensation (Summary of Other Information Concerning Stock Options) (Details) - Stock Options - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average fair value of options granted (in dollars per share) | $ 7.87 | $ 5.31 | $ 8.82 |
Intrinsic value of options exercised | $ 695,000 | $ 1,120,000 | $ 2,716,000 |
Stock Compensation (Schedule _5
Stock Compensation (Schedule of Weighted-Average Assumptions Used to Determine the Fair Value of Options) (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life of options | 5 years | 5 years | 5 years |
Expected stock price volatility | 45% | 40% | 40% |
Risk-free interest rate | 4.11% | 3.58% | 0.57% |
ESPP Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life of options | 6 months | 6 months | 6 months |
Expected stock price volatility | 57% | 40% | 45% |
Risk-free interest rate | 5.03% | 1.34% | 0.07% |
Stock Compensation (Summary o_3
Stock Compensation (Summary of Total Stock Compensation Expenses) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock compensation expense | $ 15,146 | $ 12,942 | $ 11,277 |
RSA, RSU, and PSU expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock compensation expense | 11,875 | 10,351 | 9,023 |
Stock option and ESPP option expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock compensation expense | $ 3,271 | $ 2,591 | $ 2,254 |
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 | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Basic loss per common share | |||
Net loss | $ (30,690) | $ (19,192) | $ (14,834) |
Net loss allocated to participating securities | 123 | 98 | 94 |
Net loss allocated to common shareholders | $ (30,567) | $ (19,094) | $ (14,740) |
Basic weighted-average common shares outstanding | 40,743 | 40,032 | 38,983 |
Basic loss per common share (in dollars per share) | $ (0.75) | $ (0.48) | $ (0.38) |
Diluted loss per common share | |||
Net loss | $ (30,690) | $ (19,192) | $ (14,834) |
Net loss allocated to participating securities | 123 | 98 | 94 |
Net loss allocated to common shareholders | $ (30,567) | $ (19,094) | $ (14,740) |
Diluted (in shares) | 40,743 | 40,032 | 38,983 |
Diluted loss per common share (in dollars per share) | $ (0.75) | $ (0.48) | $ (0.38) |
Segment and Geographic Inform_3
Segment and Geographic Information (Narrative) (Details) | 12 Months Ended | ||
Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Number of reportable segments | segment | 2 | ||
Total sources of revenue | $ 354,004,000 | $ 313,789,000 | $ 298,836,000 |
Goodwill | 247,337,000 | 243,631,000 | 250,000,000 |
Domestic | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total sources of revenue | 179,485,000 | 161,113,000 | 151,151,000 |
Long-lived assets | 17,500,000 | 18,000,000 | |
International | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total sources of revenue | 174,519,000 | 152,676,000 | 147,685,000 |
Long-lived assets | 20,900,000 | 20,700,000 | |
Medical devices | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Goodwill | 247,300,000 | 243,600,000 | |
Intersegment Eliminations | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total sources of revenue | $ 0 | $ 0 | $ 0 |
Revenue | Geographic Concentration Risk | Germany | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration percentage | 8% | 9% | 10% |
Long-Lived Assets | Geographic Concentration Risk | Germany | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration percentage | 97% |
Segment and Geographic Inform_4
Segment and Geographic Information (Revenues, Cost Of Products And Services, And Gross Margins For Operating Segments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Total revenues | $ 354,004 | $ 313,789 | $ 298,836 |
Total cost of products and preservation services | 124,828 | 111,266 | 101,322 |
Total gross margin | 229,176 | 202,523 | 197,514 |
Operating Segments | Medical devices | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 261,185 | 230,353 | 221,597 |
Total cost of products and preservation services | 84,595 | 72,166 | 65,196 |
Total gross margin | 176,590 | 158,187 | 156,401 |
Operating Segments | Preservation services | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 92,819 | 83,436 | 77,239 |
Total cost of products and preservation services | 40,233 | 39,100 | 36,126 |
Total gross margin | $ 52,586 | $ 44,336 | $ 41,113 |
Segment and Geographic Inform_5
Segment and Geographic Information (Summary Of Net Revenues By Product And Service) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Product Information [Line Items] | |||
Total revenues | $ 354,004 | $ 313,789 | $ 298,836 |
Products | |||
Product Information [Line Items] | |||
Total revenues | 261,185 | 230,353 | 221,597 |
Aortic stent grafts | |||
Product Information [Line Items] | |||
Total revenues | 107,469 | 92,752 | 85,387 |
On-X | |||
Product Information [Line Items] | |||
Total revenues | 74,528 | 63,904 | 57,363 |
Surgical sealants | |||
Product Information [Line Items] | |||
Total revenues | 68,016 | 65,379 | 70,714 |
Other | |||
Product Information [Line Items] | |||
Total revenues | 11,172 | 8,318 | 8,133 |
Preservation services | |||
Product Information [Line Items] | |||
Total revenues | $ 92,819 | $ 83,436 | $ 77,239 |
Segment and Geographic Inform_6
Segment and Geographic Information (Schedule Of Net Revenues By Geographic Location) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Total revenues | $ 354,004 | $ 313,789 | $ 298,836 |
US | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 179,485 | 161,113 | 151,151 |
International | |||
Segment Reporting Information [Line Items] | |||
Total revenues | $ 174,519 | $ 152,676 | $ 147,685 |
Subsequent Events (Details)
Subsequent Events (Details) | 3 Months Ended | ||||
Jan. 18, 2024 USD ($) | Jun. 30, 2025 | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jun. 18, 2020 USD ($) | |
Subsequent Event [Line Items] | |||||
Debt | $ 312,045,000 | $ 314,779,000 | |||
Convertible Senior Notes | |||||
Subsequent Event [Line Items] | |||||
Debt instrument, face amount | $ 100,000,000 | ||||
Interest rate on amounts borrowed | 4.25% | ||||
Subsequent Event | Convertible Senior Notes | |||||
Subsequent Event [Line Items] | |||||
Interest rate on amounts borrowed | 4.25% | ||||
Subsequent Event | Secured Debt | Credit and Guaranty Agreement | |||||
Subsequent Event [Line Items] | |||||
Debt instrument, face amount | $ 350,000,000 | ||||
Subsequent Event | Secured Debt | Initial Term Loan Facility | |||||
Subsequent Event [Line Items] | |||||
Debt instrument, face amount | 190,000,000 | ||||
Debt | $ 190,000,000 | ||||
Subsequent Event | Secured Debt | Initial Term Loan Facility | Base Rate | |||||
Subsequent Event [Line Items] | |||||
Credit facility margin | 5.50% | ||||
Subsequent Event | Secured Debt | Initial Term Loan Facility | SOFR | |||||
Subsequent Event [Line Items] | |||||
Credit facility margin | 6.50% | ||||
Subsequent Event | Secured Debt | Delayed Draw Term Loan Facility | |||||
Subsequent Event [Line Items] | |||||
Debt instrument, face amount | $ 100,000,000 | ||||
Subsequent Event | Secured Debt | Revolving Credit Facility | |||||
Subsequent Event [Line Items] | |||||
Debt instrument, face amount | 60,000,000 | ||||
Debt | 30,000,000 | ||||
Undrawn availability | $ 30,000,000 | ||||
Subsequent Event | Secured Debt | Revolving Credit Facility | Base Rate | |||||
Subsequent Event [Line Items] | |||||
Reduction in variable rate | 3% | ||||
Subsequent Event | Secured Debt | Revolving Credit Facility | SOFR | |||||
Subsequent Event [Line Items] | |||||
Credit facility margin | 4% | ||||
Subsequent Event | Secured Debt | Revolving Credit Facility | For Period from Second Quarter To Fourth Quarter of Fiscal Year 2024 | |||||
Subsequent Event [Line Items] | |||||
Net leverage ratio | 6.25 | ||||
Subsequent Event | Secured Debt | Revolving Credit Facility | From First Quarter of Fiscal Year 2025 and Thereafter | |||||
Subsequent Event [Line Items] | |||||
Net leverage ratio | 5.75 | ||||
Subsequent Event | Secured Debt | Term Loan Facilities | |||||
Subsequent Event [Line Items] | |||||
Credit facility margin | 0.25% | ||||
Subsequent Event | Secured Debt | Term Loan Facilities | SOFR | |||||
Subsequent Event [Line Items] | |||||
Net leverage ratio | 3.75 | ||||
Subsequent Event | Secured Debt | Term Loan Facilities | If Certain Conditions are Met After Q2, 2025 | Base Rate | |||||
Subsequent Event [Line Items] | |||||
Credit facility margin | 5.25% | ||||
Subsequent Event | Secured Debt | Term Loan Facilities | If Certain Conditions are Met After Q2, 2025 | SOFR | |||||
Subsequent Event [Line Items] | |||||
Credit facility margin | 6.25% |