Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 21, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | BABY | ||
Entity Registrant Name | NATUS MEDICAL INC | ||
Entity Central Index Key | 878,526 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 33,160,428 | ||
Entity Public Float | $ 1,236,474,075 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 88,950 | $ 213,551 |
Short-term investments | 0 | 34,019 |
Accounts receivable, net of allowance for doubtful accounts of $8,978 and $4,182 | 126,809 | 86,638 |
Inventories | 71,529 | 49,587 |
Prepaid expenses and other current assets | 18,340 | 22,004 |
Total current assets | 305,628 | 405,799 |
Property and equipment, net | 22,071 | 17,333 |
Intangible assets, net | 172,582 | 77,165 |
Goodwill | 172,998 | 113,112 |
Deferred income tax | 10,709 | 14,915 |
Other assets | 25,931 | 20,688 |
Total assets | 709,919 | 649,012 |
Current liabilities: | ||
Accounts payable | 25,242 | 18,700 |
Accrued liabilities | 51,738 | 37,895 |
Deferred revenue | 15,157 | 23,346 |
Total current liabilities | 92,137 | 79,941 |
Long-term liabilities: | ||
Other liabilities | 21,995 | 8,013 |
Long-term debt | 154,283 | 140,000 |
Deferred income tax | 19,407 | 3,684 |
Total liabilities | 287,822 | 231,638 |
Commitments and contingencies (Note 20) | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value; 120,000,000 shares authorized; shares issued and outstanding 33,134,101 in 2017 and 32,920,246 in 2016 | 316,577 | 312,986 |
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding in 2017 and in 2016 | 0 | 0 |
Retained earnings | 129,115 | 149,408 |
Accumulated other comprehensive loss | (23,595) | (45,020) |
Total stockholders’ equity | 422,097 | 417,374 |
Total liabilities and stockholders’ equity | $ 709,919 | $ 649,012 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 8,978 | $ 4,182 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 120,000,000 | 120,000,000 |
Common Stock, shares issued | 33,134,101 | 32,920,246 |
Common Stock, shares outstanding | 33,134,101 | 32,920,246 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Revenue | $ 500,970 | $ 381,892 | $ 375,865 |
Cost of revenue | 213,376 | 144,632 | 145,492 |
Intangibles amortization | 6,380 | 2,327 | 2,836 |
Gross profit | 281,214 | 234,933 | 227,537 |
Operating expenses: | |||
Marketing and selling | 126,166 | 84,834 | 87,675 |
Research and development | 51,822 | 33,443 | 30,434 |
General and administrative | 74,424 | 50,877 | 46,363 |
Intangibles amortization | 19,171 | 8,983 | 7,447 |
Restructuring | 914 | 1,536 | 2,145 |
Total operating expenses | 272,497 | 179,673 | 174,064 |
Income from operations | 8,717 | 55,260 | 53,473 |
Other income (expense), net | (3,567) | (357) | (1,064) |
Income before provision for income tax | 5,150 | 54,903 | 52,409 |
Provision for income tax | 25,443 | 12,309 | 14,485 |
Net income (loss) | $ (20,293) | $ 42,594 | $ 37,924 |
Net income (loss) per share: | |||
Basic | $ (0.62) | $ 1.31 | $ 1.17 |
Diluted (in dollars per share) | $ (0.62) | $ 1.29 | $ 1.14 |
Weighted average shares used in the calculation of net income (loss) per share: | |||
Basic (shares) | 32,564 | 32,460 | 32,348 |
Diluted (shares) | 32,564 | 33,056 | 33,241 |
Other Comprehensive income: | |||
Unrealized losses on available-for-sale investments | $ (45) | $ (168) | $ 0 |
Foreign currency translation adjustment | 21,470 | (5,003) | (8,378) |
Total other comprehensive income | 21,425 | (5,171) | (8,378) |
Comprehensive income | $ 1,132 | $ 37,423 | $ 29,546 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance at Dec. 31, 2014 | $ 352,715 | $ 315,296 | $ 68,890 | $ (31,471) |
Beginning balance (shares) at Dec. 31, 2014 | 32,649,158 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Tax benefit of options exercises | 7,104 | $ 7,104 | ||
Vesting of restricted stock units | 0 | |||
Vesting of restricted stock units (shares) | 21,619 | |||
Net issuance of restricted stock awards | 0 | |||
Net issuance of restricted stock awards (shares) | 199,620 | |||
Employee stock purchase plan | 1,251 | $ 1,251 | ||
Employee stock purchase plan (shares) | 35,467 | |||
Stock-based compensation expense | 6,953 | $ 6,953 | ||
Repurchase of company stock | (11,526) | $ (11,526) | ||
Repurchase of company stock (shares) | (281,915) | |||
Taxes paid related to net share settlement of equity awards | (4,341) | $ (4,341) | ||
Taxes paid related to net share settlement of equity awards (shares) | (102,112) | |||
Exercise of stock options | 9,008 | $ 9,008 | ||
Exercise of stock options (shares) | 631,663 | |||
Other comprehensive income | (8,378) | (8,378) | ||
Net loss | 37,924 | 37,924 | ||
Ending balance at Dec. 31, 2015 | 390,710 | $ 323,745 | 106,814 | (39,849) |
Ending balance (shares) at Dec. 31, 2015 | 33,153,500 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Vesting of restricted stock units | 0 | |||
Vesting of restricted stock units (shares) | 20,937 | |||
Net issuance of restricted stock awards | 0 | |||
Net issuance of restricted stock awards (shares) | 191,492 | |||
Employee stock purchase plan | 1,360 | $ 1,360 | ||
Employee stock purchase plan (shares) | 45,515 | |||
Stock-based compensation expense | 9,008 | $ 9,008 | ||
Repurchase of company stock | (19,289) | $ (19,289) | ||
Repurchase of company stock (shares) | (545,109) | |||
Taxes paid related to net share settlement of equity awards | (4,107) | $ (4,107) | ||
Taxes paid related to net share settlement of equity awards (shares) | (97,231) | |||
Exercise of stock options | 2,269 | $ 2,269 | ||
Exercise of stock options (shares) | 151,142 | |||
Other comprehensive income | (5,171) | (5,171) | ||
Net loss | 42,594 | 42,594 | ||
Ending balance at Dec. 31, 2016 | 417,374 | $ 312,986 | 149,408 | (45,020) |
Ending balance (shares) at Dec. 31, 2016 | 32,920,246 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Vesting of restricted stock units | 0 | |||
Vesting of restricted stock units (shares) | 35,929 | |||
Net issuance of restricted stock awards | 0 | |||
Net issuance of restricted stock awards (shares) | 249,366 | |||
Employee stock purchase plan | 1,581 | $ 1,581 | ||
Employee stock purchase plan (shares) | 48,470 | |||
Stock-based compensation expense | 9,445 | $ 9,445 | ||
Stock-based compensation expense (shares) | 0 | |||
Repurchase of company stock | (2,268) | $ (2,268) | ||
Repurchase of company stock (shares) | (60,800) | |||
Taxes paid related to net share settlement of equity awards | (7,052) | $ (7,052) | ||
Taxes paid related to net share settlement of equity awards (shares) | (193,212) | |||
Exercise of stock options | $ 1,885 | $ 1,885 | ||
Exercise of stock options (shares) | 134,102 | 134,102 | ||
Other comprehensive income | $ 21,425 | 21,425 | ||
Net loss | (20,293) | (20,293) | ||
Ending balance at Dec. 31, 2017 | $ 422,097 | $ 316,577 | $ 129,115 | $ (23,595) |
Ending balance (shares) at Dec. 31, 2017 | 33,134,101 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities: | |||
Net loss | $ (20,293) | $ 42,594 | $ 37,924 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for losses on accounts receivable | 10,017 | 1,123 | 1,496 |
Excess tax benefit on the exercise of stock options | 0 | (7,104) | |
Depreciation and amortization | 30,098 | 16,879 | 15,987 |
Gain on disposal of property and equipment | (21) | (29) | (5) |
Impairment of intangible assets | 1,674 | 0 | 0 |
Warranty reserve | 5,370 | 2,934 | 10,729 |
Stock-based compensation | 9,445 | 9,008 | 6,953 |
Changes in operating assets and liabilities, net of assets and liabilities acquired in acquisitions: | |||
Accounts receivable | (30,473) | 19,723 | (15,272) |
Inventories | 7,581 | (7,668) | (12,232) |
Other assets | 5,492 | (11,387) | 858 |
Accounts payable | (1,385) | (4,965) | 3,270 |
Accrued liabilities | 5,421 | (6,967) | (6,177) |
Deferred revenue | (7,232) | 13,879 | (1,118) |
Deferred taxes | 4,032 | (2,437) | 1,543 |
Net cash provided by operating activities | 19,726 | 72,687 | 36,852 |
Investing activities: | |||
Acquisition of businesses, net of cash acquired | (190,888) | (15,849) | (14,284) |
Acquisition of property and equipment | (4,066) | (3,186) | (4,068) |
Acquisition of intangible assets | 0 | (210) | (1,126) |
Purchases of short-term investments | 0 | (34,019) | 0 |
Sales of short-term investments | 34,019 | 0 | 0 |
Net cash used in investing activities | (160,935) | (53,264) | (19,478) |
Financing activities: | |||
Proceeds from stock option exercises and ESPP | 3,466 | 3,630 | 10,258 |
Excess tax benefit on the exercise of stock options | 0 | 0 | 7,104 |
Repurchase of company stock | (2,268) | (19,289) | (11,525) |
Taxes paid related to net share settlement of equity awards | (7,052) | (4,107) | (4,341) |
Proceeds from short-term borrowings | 0 | 16,000 | 0 |
Proceeds from long-term borrowings | 60,000 | 140,000 | 0 |
Deferred debt issuance costs | (354) | (533) | 0 |
Contingent consideration earn-out | (2,966) | (1,284) | (664) |
Payments on borrowings | (45,000) | (16,000) | 0 |
Net cash provided by financing activities | 5,826 | 118,417 | 832 |
Exchange rate effect on cash and cash equivalents | 10,782 | (6,758) | (2,295) |
Net increase (decrease) in cash and cash equivalents | (124,601) | 131,082 | 15,911 |
Cash and cash equivalents, beginning of year | 213,551 | 82,469 | 66,558 |
Cash and cash equivalents, end of year | 88,950 | 213,551 | 82,469 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 4,464 | 41 | 0 |
Cash paid for income taxes | 5,740 | 16,344 | 10,164 |
Non-cash investing activities: | |||
Property and equipment included in accounts payable | 148 | 134 | 289 |
Inventory transferred to property and equipment | $ 1,006 | $ 1,303 | $ 1,056 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Organization and Significant Accounting Policies | ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Organization Natus Medical Incorporated (“Natus”, the “Company”) was incorporated in California in May 1987 and reincorporated in Delaware in August 2000. Natus is a leading provider of newborn care, neurology, and hearing and balance assessment healthcare products and services used for the screening, diagnosis, detection, treatment, monitoring and tracking of common medical ailments in newborn care, hearing impairment, neurological dysfunction, epilepsy, sleep disorders, neuromuscular diseases and balance and mobility disorders. Product offerings include computerized neurodiagnostic systems for audiology, neurology, polysomnography, and neonatology, as well as newborn care products such as hearing screening systems, phototherapy devices for the treatment of newborn jaundice, head-cooling products for the treatment of brain injury in newborns, incubators to control the newborn’s environment, software systems for managing and tracking disorders and diseases for public health laboratories, computer-based audiological, otoneurologic and vestibular instrumentation and sound rooms for hearing and balance care professionals. Basis of Presentation and Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain reclassifications to the prior periods have been made to conform to the current period presentation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities in the Consolidated Financial Statements and the reported amount of revenue and expenses during the reporting period. Such estimates include allowances for potentially uncollectible accounts receivable, valuation of inventory, intangible assets, goodwill, share-based compensation, deferred income taxes, reserves for warranty obligations, and the provision for income taxes. Actual results could differ from those estimates. Revenue recognition Revenue, net of discounts, is recognized from sales of medical devices and supplies, including sales to distributors, when the following conditions have been met: a purchase order has been received, title has transferred, the selling price is fixed or determinable, and collection of the resulting receivable is reasonably assured. Terms of sale for most domestic sales are FOB origin, reflecting that title and risk of loss are assumed by the purchaser at the shipping point; however, terms of sale for some neurology, sleep-diagnostic, and head cooling systems are FOB destination, reflecting that title and risk of loss are assumed by the purchaser upon delivery. Terms of sales to international distributors are generally EXW, reflecting that goods are shipped “ex works,” in which title and risk of loss are assumed by the distributor at the shipping point. For products shipped under FOB origin or EXW terms, delivery is generally considered to have occurred when the product is shipped. Freight charges billed to customers are included in revenue and freight-related expenses are charged to cost of revenue. The Company generally does not provide rights of return on products. For products containing embedded software, the Company has determined that the hardware and software components function together to deliver the products’ essential functionality, and therefore, the revenue from the sale of these products does not fall within the scope of the software revenue recognition rules. The Company's revenue recognition policies for sales of these products are substantially the same as for other tangible products. Revenue from sales of certain products that remain within the scope of the software revenue recognition rules under ASC Subtopic 985-605 is not significant. Revenue from extended service and maintenance agreements, for both medical devices and data management systems, is recognized ratably over the service period. Revenue from installation or training services is deferred until such time service is provided. Hearing screening and ambulatory EEG monitoring revenue is recorded when the procedure is performed at the estimated net realizable value based on contractual agreements with payers and historical collections. Certain revenue transactions include multiple element arrangements. The Company allocates revenue in these arrangements to each unit of accounting using the relative selling price method. The selling prices used during the allocation process are based on vendor specific objective evidence (“VSOE”) if available, third party evidence (“TPE”) if VSOE is not available, or estimated selling price (“ESP”) if neither VSOE or TPE is available. Group purchasing organization (“GPOs”) negotiate volume purchase prices for member hospitals, group practices, and other clinics. The Company's agreements with GPOs typically contain preferential terms for the GPO and its members, including provisions for some, if not all, of the following: • Payment of marketing fees by Natus to the GPO, usually based on purchasing experience of group members; and • Non-recourse cancellation provisions. Natus does not sell products to GPOs. Hospitals, group practices, and other clinics that are members of a GPO purchase products directly from the Company under the terms negotiated by the GPO. Negotiated pricing and discounts are recognized as a reduction of the selling price of products at the time of the sale. Revenue from sales to members of GPOs is otherwise consistent with general revenue recognition policies as previously described. Inventory Inventories are carried at the lower of cost or market, with cost being determined using the first-in, first-out method. The carrying value of the Company's inventories is reduced for any difference between cost and estimated market value of inventories that is determined to be obsolete or unmarketable, based upon assumptions about future demand and market conditions. Adjustments to the value of inventory establish a new cost basis and are considered permanent even if circumstances later suggest that increased carrying amounts are recoverable. If demand is higher than expected, Natus may sell inventory that had previously been impaired. Carrying value of intangible assets and goodwill The Company amortizes intangible assets with finite lives over the useful lives; any future changes that would limit the useful lives or any determination that these assets are carried at amounts greater than the estimated fair value could result in additional charges. Goodwill is not amortized but is subject to an annual impairment analysis, which is performed as of October 1st; this assessment is also performed whenever there is a change in circumstances that indicates the carrying value of goodwill may be impaired. In 2017, 2016 and 2015, the Company performed a qualitative assessment to test goodwill for impairment. Qualitative factors considered in this assessment include industry and market considerations, overall financial performance and other relevant events and factors affecting each reporting unit. Based on the qualitative assessment, the Company determined that the fair value was more likely than not to be greater than its carrying amount, and no further analysis was needed. If the fair value was less than its carrying amount, the Company would perform a two-step impairment test on goodwill. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit to its carrying value, including goodwill. The Company uses a projected discounted cash flow model to determine the fair value of a reporting unit. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, and the second step of the impairment test is not required. The second step, if required, compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. The fair value of a reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the price paid to acquire the reporting unit. If the carrying amount of the reporting unit’s goodwill exceeds its implied fair value, an impairment charge is recognized in an amount equal to that excess. Prior to the assignment of definite lives to trade names in the second quarter of 2015 (See Note 6 - Intangible Assets ), the Company tested indefinite lived intangibles for impairment by comparing the carrying value of those assets to be fair value as of the assessment date. The Company used the relief from royalty method to determine the fair value of the assets. This analysis is dependent upon a number of quantitative and qualitative factors including estimates of forecasted revenue, royalty rate, and taxes. The discount rate applied also has an impact on the estimates of fair value, as use of a higher rate will result in a lower estimate of fair value. Long lived assets The Company continually monitors events and changes in circumstances that could indicate that carrying amounts of its long-lived assets, including property and equipment and intangible assets, may not be recoverable. When such events or changes in circumstances occur, the Company assess the recoverability by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying amount of these assets, the Company will recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. Liability for product warranties The Company provides a warranty for products that is generally one year in length. In some cases, regulations may require the Company to provide repair or remediation beyond the typical warranty period. If any products contain defects, the Company may be required to incur additional repair and remediation costs. Service for domestic customers is provided by Company-owned service centers that perform all service, repair, and calibration services. Service for international customers is provided by a combination of Company-owned facilities and vendors on a contract basis. A warranty reserve is included in accrued liabilities for the expected future costs of servicing products. Additions to the reserve are based on management’s best estimate of probable liability. The Company considers a combination of factors including material and labor costs, regulatory requirements, and other judgments in determining the amount of the reserve. The reserve is reduced as costs are incurred to honor existing warranty and regulatory obligations. Share-based compensation The Company recognizes share-based compensation expense associated with employee stock options under the single-option straight line method over the requisite service period, which is generally a four -year vesting period and ten -year contractual term pursuant to ASC Topic 718, Compensation-Stock Compensation . See Note 14 of the Consolidated Financial Statements. For employee stock options, the value of each option is estimated on the date of grant using the Black-Scholes option pricing model, which was developed for use in estimating the value of freely traded options. Similar to other option pricing models, the Black-Scholes method requires the input of highly subjective assumptions, including stock price volatility. Changes in the subjective input assumptions can materially affect the estimated fair value of the employee stock options. The Company recognizes share-based compensation associated with Restricted Stock Awards (“RSA”) and Restricted Stock Units (“RSU”). RSAs and RSUs vest ratably over a three -year period for employees. RSAs and RSUs for executives vest over a four -year period; 50% on the second anniversary of the awarded date and 25% on each of the third and fourth anniversaries. RSAs and RSUs for non employees (Board of Directors) vest over a one -year period; 100% on the first anniversary. The value is estimated based on the market value of Natus common stock on the date of issuance pursuant to ASC Topic 718, Compensation-Stock Compensation. The Company issues new shares of common stock upon the exercise of stock options and the vesting of RSAs and RSUs. Forfeitures of employee stock options and awards are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. Share-based compensation expense is recorded net of estimated forfeitures, such that expense is recorded only for those share-based awards that are expected to vest. Cash Equivalents and Short-term Investments All highly liquid investments purchased with an original maturity of three months or less are classified as cash equivalents. Investments with maturities greater than one year are classified as current because management considers all investments to be available for current operations. Cash equivalents and investments are stated at amounts that approximate fair value based on quoted market prices. The Company's investments have been classified and accounted for as available-for-sale. Such investments are recorded at fair value and unrealized holding gains and losses are reported as a separate component of comprehensive income until realized. Realized gains and losses on sales of investments, if any, are determined on the specific identification method and are reclassified from accumulated other comprehensive loss to results of operations as other income (expense). Allowance for Doubtful Accounts The Company estimates the allowance for potentially uncollectible accounts receivable based on historical collection experience within the markets in which the Company operates and other customer-specific information, such as bankruptcy filings or customer liquidity problems. When all internal efforts have been exhausted to collect the receivable, it is written off and relieved from the reserve. Fair Value of Financial Instruments Financial instruments include cash and cash equivalents, investments, accounts receivable, and accounts payable. Cash is reported at its fair value on the balance sheet dates. The recorded carrying amounts of investments, accounts receivable and accounts payable approximate the fair values due to the short-term maturities. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed using the straight-line method over estimated useful lives of the respective assets, which are three to ten years for office furniture and equipment, three to five years or the length of the license for computer software and hardware, three to five years for demonstration and loaned equipment, and 30 to 40 years for buildings. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life. Land is not depreciated. Costs associated with acquiring and installing software to be used for internal purposes are capitalized and amortized on a straight-line basis over three years. Research & Development Costs Costs incurred in research and development are charged to operations as incurred. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records net deferred tax assets to the extent it is more likely than not that the assets will be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. To the extent that previously reserved deferred tax assets are estimated to be realizable, the Company adjusts the valuation allowance which reduces the provision for income taxes. The Company recognizes the tax benefit of uncertain tax positions in the financial statements as defined in ASC Topic 740, Income Tax. When the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50 percent likely of being ultimately realized upon settlement, as defined in ASC 740-10-05. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740, Income Taxes . In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. Foreign Currency The functional currency of the Company's subsidiaries outside of North America is generally the local currency of the country where the subsidiary is located. Accordingly, foreign currency translation adjustments relating to the translation of foreign subsidiary financial statements are included as a component of accumulated other comprehensive loss. The Company recorded $21.5 million , $(5.0) million , and $(8.4) million of foreign currency translation gains (losses) for the years ended December 31, 2017, 2016 and 2015, respectively. Gains and losses from transactions denominated in currencies other than the functional currencies are included in other income and expense. In 2017, 2016, and 2015, net foreign currency transaction gains (losses) were $1.0 million, $(0.4) million, and $(1.4) million, respectively. Foreign currency gains and losses result primarily from fluctuations in the exchange rate between the U.S. Dollar, Canadian Dollar, Euro, Argentine Peso, British Pound, and Danish Kroner. Comprehensive Income The Company reports by major components and as a single total the change in net assets during the period from non-owner sources as defined in ASC Topic 220, Comprehensive Income. The consolidated statement of comprehensive income has been included with the consolidated statements of operations. Accumulated other comprehensive income consists of translation gains and losses on foreign subsidiary financial statements as well as unrealized gains and losses on investments. Basic and Diluted Net Income per Share Natus computes net income per share as defined in ASC Topic 260, Earnings per Share. Basic net income per share is based upon the weighted average number of common shares outstanding during the period. Diluted net income per share is based upon the weighted average number of common shares outstanding and dilutive common stock equivalents outstanding during the period. Common stock equivalents are options granted and shares of restricted stock issued under the stock awards plans and are calculated under the treasury stock method. Common equivalent shares from unexercised stock options and restricted stock are excluded from the computation when there is a loss as the effect is anti-dilutive, or if the exercise price of such options is greater than the average market price of the stock for the period. Recent Adopted Accounting Pronouncements In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330). This standard requires an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is estimated selling prices in the ordinary course of business, less reasonable predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted ASU 2015-11in January 2017 and no impact was recorded by the Company. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805). This update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisition (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. ASU 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those periods, and must be applied prospectively. The Company will apply this guidance to business combinations that occur on or after the effective date. Recent Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance. The standard's core principle is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard creates a five-step model to achieve its core principle: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction's price to the separate performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In addition, entities must disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative and quantitative disclosures are required about: (i) the entity's contracts with customers; (ii) the significant judgments, and changes in judgments, made in applying the guidance to those contracts; and (iii) any assets recognized from the costs to obtain or fulfill a contract with a customer. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 616) - Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to interim and annual periods beginning January 1, 2018. The standard allows entities to apply the standard retrospectively to each prior period presented (“full retrospective adoption”) or retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application (“modified retrospective adoption”). The Company adopted the modified retrospective approach of this guidance on January 1, 2018 and has determined that its adoption will not have a material effect on its financial position or results of operations. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This standard requires a lessee to recognize the lease assets and lease liabilities arising from operating leases in the statement of financial position. Qualitative along with specific quantitative disclosures are required by lessees to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 including interim periods within those fiscal years. The Company is currently evaluating the impact that will result from adopting ASU 2016-02. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). This update modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Because these amendments eliminate a step from the goodwill impairment test, they should reduce the cost and complexity of evaluating goodwill for impairment. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company will adopt ASU 2017-04 to goodwill impairment testing on the effective date. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that year, and must be applied prospectively to an award modified on or after the adoption date. The Company will adopt this guidance and will apply to all future share-based modifications. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Combinations | BUSINESS COMBINATIONS The assets acquired and liabilities assumed at the date of acquisition are recorded in the Consolidated Financial Statements at the respective fair values as of the acquisition date. The excess of the purchase price over the fair value of the acquired net assets is recorded as goodwill. The determination of estimated fair value of acquired assets and liabilities requires management to make significant estimates and assumptions. The Company determines the fair value by applying established valuation techniques, based on information that management believes to be relevant to this determination. The Company also utilizes independent third parties to assist in the valuation of goodwill and intangible assets. The results of operations from acquisitions are included in the Consolidated Financial Statements from the date of the acquisition. Integra On October 6, 2017, the Company acquired certain neurosurgery business assets from Integra LifeSciences (“Integra” or “Neurosurgery”) for $46.4 million in cash. As part of the acquisition, the Company acquired a global product line, including the manufacturing facility it leases from a third party and the U.S. rights related to four other product lines. The total purchase price has been preliminarily allocated to $12.5 million of tangible assets, $19.5 million of intangible assets with an associated weighted average life of 9 years being amortized on the straight line method, and $15.5 million of goodwill, offset by $1.1 million of net liabilities. Purchase price allocation is considered preliminary at this time although no material adjustments are anticipated. Pro form financial information for the Integra acquisition is not presented as the data necessary to present pro forma net income and pro forma earnings per share is not available. However, pro forma revenue assuming the acquisition occurred on January 1, 2016 would be $539.1 million and $432.4 million for the years ended December 31, 2017 and 2016, respectively. Otometrics On January 3, 2017, the Company acquired the Otometrics business from GN Store Nord A/S for a cash purchase price of $149.2 million , which includes a $4.2 million net working capital adjustment. Otometrics is a manufacturer of hearing diagnostics and balance assessment equipment, disposables and software. Otometrics provides computer-based audiological, otoneurologic and vestibular instrumentation and sound rooms to hearing and balance care professionals worldwide. Otometrics has a complete product and brand portfolio known for its sophisticated design technology in the hearing and balance assessment markets. The following table summarizes the purchase price allocation of the fair value of the assets acquired and liabilities assumed at the date of acquisition, (in thousands): Cash and cash equivalents $ 5,604 Accounts receivable 26,851 Inventories 22,182 Property and equipment 2,256 Intangible assets 90,913 Goodwill 39,355 Other assets 1,748 Accounts payable (7,655 ) Accrued liabilities (16,069 ) Deferred revenue (745 ) Deferred income tax (15,193 ) Total purchase price $ 149,247 The goodwill recorded represents the future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized. The goodwill recorded as part of the acquisition of Otometrics is not amortized and includes the following: • The expected synergies and other benefits that the Company believes will result from combining the operations of Otometrics with the operations of Natus; • Any intangible assets that did not qualify for separate recognition, as well as future, yet unidentified projects and products; and • The value of the going-concern element of Otometrics's existing businesses (the higher rate of return on the assembled collection of net assets versus if Natus has acquired all of the net assets separately). Management worked with an independent valuation firm to determine fair values of the identifiable intangible assets. The Company used a combination of income approaches including relief from royalty and multi-period excess earnings methods. The valuation models were based on estimates of future operating projections of the acquired business and rights to sell products as well as judgments on the discount rates used and other variables. The Company determined the forecasts based on a number of factors, included their best estimate of near-term net sales expectations and long-term projections, which included review of internal and independent market analyses. Otometrics's revenue of $114.2 million and loss from operations of $1.0 million are included in the condensed consolidated statement of operations for the period from January 3, 2017 (acquisition date) to December 31, 2017 . The unaudited pro forma financial results presented below for the twelve months ended December 31, 2017 and December 31, 2016 , include the effects of pro forma adjustments as if the acquisition occurred on January 1, 2016. The pro forma results were prepared using the acquisition method of accounting and combine the historical results of Natus and Otometrics for the twelve months ended December 31, 2017 and December 31, 2016 , including the effects of the business combination, primarily amortization expense related to the fair value of identifiable intangible assets acquired, interest expense associated with the financing obtained by Natus in connection with the acquisition, and the elimination of acquisition-related costs incurred. The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the earliest period presented, nor is it intended to be a projection of future results. Unaudited Pro forma Financial Information (in thousands) Year Ended December 31, 2017 2016 Revenue $ 500,970 $ 491,994 Net income (loss) $ (15,965 ) $ 17,385 Earnings (loss) per share: Basic $ (0.49 ) $ 0.54 Diluted $ (0.49 ) $ 0.53 Weighted average shares used in the calculation of earnings per share: Basic 32,564 32,460 Diluted 32,564 33,056 The pro forma results for the year ended December 31, 2017 were adjusted to exclude $4.3 million of nonrecurring expense related to the fair value adjustment of acquisition-date inventory. The pro forma results for the year ended December 31, 2016 were adjusted to include $3.0 million of amortization of intangible assets, and $4.6 million of interest expense. RetCam On July 6, 2016, the Company acquired the portfolio of RetCam Imaging Systems (“RetCam”) from Clarity Medical Systems, Inc. for $10.6 million in cash. RetCam is an imaging system used to diagnose and monitor a range of ophthalmic maladies in premature infants. The purchase agreement also included a holdback of $2.0 million which was paid on February 16, 2017. Subsequent to the acquisition, an additional $1.1 million was paid by the Company to Clarity Medical Systems as a result of a working capital adjustment. Results of operations for RetCam are included in the consolidated financial statements from the date of acquisition. The total purchase price was allocated $7.2 million to tangible assets, $4.9 million to intangible assets with an assigned weighted average life of 5 years being amortized on the straight line method, and $1.7 million to goodwill, offset by $2.0 million to net liabilities. Pro forma financial information for the RetCam acquisition is not presented as it is not considered material. NeuroQuest On March 2, 2016, the Company acquired NeuroQuest, LLC (“NeuroQuest”) through an asset purchase. NeuroQuest complements the Global Neuro-Diagnostics (“GND”) and Monarch Medical Diagnostics, LLC (“Monarch”) acquisitions which offer patients a convenient way to complete routine-electroencephalography and extended video electronencephalography (“VEEG”) testing. The cash consideration for NeuroQuest was $4.6 million . The purchase agreement included a consideration holdback of $0.5 million which was paid on April 30, 2017. The total purchase price was allocated to $0.5 million of tangible assets, $1.3 million of intangible assets with an assigned weighted average life of 5 years being amortized on the straight line method, and $3.5 million of goodwill, offset by $0.1 million of net liabilities. Pro forma financial information for the NeuroQuest acquisition is not presented as it is not considered material. Monarch The Company acquired Monarch Medical Diagnostics, LLC (“Monarch”) through an asset purchase on November 13, 2015. Monarch's service compliments the Global Neuro-Diagnostics acquisition which offers patients a more convenient way to complete routine diagnostic electroencephalography and video electromyography testing which can be performed at the home, hospital or physician's office. The service also provides comprehensive reporting and support to the physician. The cash consideration for Monarch was $2.7 million . The purchase agreement also included contingent consideration which was paid on January 11, 2016 of $1.0 million . The total purchase price was allocated to $112,000 of tangible assets, $1.2 million of intangible assets with an assigned weighted average life of 5 years being amortized on the straight line method, and $2.4 million of goodwill. Pro forma financial information for the Monarch acquisition is not presented as it is not considered material. Global Neuro-Diagnostics The Company acquired GND through an equity purchase on January 23, 2015. GND's service offers patients a more convenient way to complete routine EEG and EMG testing which can be performed at the home, hospital or physician's office. The service also provides comprehensive reporting and support to the physician. The cash consideration for GND was $11.4 million , which consists primarily of $1.5 million of tangible assets, $4.8 million of intangible assets with an assigned weighted average life of 5 years being amortized on the straight line method, and $8.9 million of goodwill, offset by $0.5 million of net liabilities. The purchase agreement also included an earn-out condition which was originally estimated to be $3.2 million . The earn-out condition was subsequently not achieved. Pro forma financial information for the GND acquisition is not presented as it is not considered material. NicView On January 2, 2015, the Company purchased the assets of NicView. NicView provides streaming video for families with babies in the neonatal intensive care unit. The cash consideration for NicView was $1.1 million , of which $0.3 million was allocated to tangible assets and $2.7 million to goodwill, offset by $0.6 million allocated to net liabilities. The asset purchase agreement included an earn-out condition contingent upon orders received in and installed by February 28, 2016. The Company settled this earnout for $1.3 million in March 2016. Pro forma financial information for the NicView acquisition is not presented as it is not considered material. |
Cash, Cash Equivalents, and Sho
Cash, Cash Equivalents, and Short-term Investments | 12 Months Ended |
Dec. 31, 2017 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents, and Short-term Investments | CASH, CASH EQUIVALENTS, AND SHORT-TERM INVESTMENTS The Company has invested its excess cash in highly liquid marketable securities such as corporate debt instruments, U.S. government agency securities and asset-backed securities. Investments with maturities greater than one year are classified as current because management considers all investments to be available for current operations. The Company's investments are designed to provide liquidity, preserve capital and maximize total return on invested assets with a focus on high credit-quality securities. The Company's investments have been classified and accounted for as available-for-sale. Such investments are recorded at fair value, and unrealized holding gains and losses are reported as a separate component of accumulated other comprehensive income (loss) in stockholders' equity until realized. Realized gains and losses on sales of investments, if any, are determined on the specific identification method and are reclassified from accumulated other comprehensive income (loss) to results of operations as other income (expense). The Company, to date, has not determined that any of the unrealized losses on its investments are considered to be other-than-temporary. The Company reviews its investment portfolio to determine if any security is other-than-temporarily impaired, which would require the Company to record an impairment charge in the period any such determination is made. In making this judgment, the Company evaluates, among other things: the duration and extent to which the fair value of a security is less than its cost; the financial condition of the issuer and any changes thereto; and the Company's intent and ability to hold its investment for a period of time sufficient to allow for any anticipated recovery in market value, or whether the Company will more likely than not be required to sell the security before recovery of its aggregated cost basis. Cash, cash equivalents and short-term investments consisted of the following (in thousands): December 31, 2017 December 31, 2016 Cash and cash equivalents: Cash 88,950 213,551 Short-term investments: U.S. investment grade bonds — 24,477 Developed investment grade bonds — 9,542 Total short-term investments — 34,019 Total cash, cash equivalents and short-term investments 88,950 247,570 Short-term investments by investment type are as follows (in thousands): December 31, 2017 December 31, 2016 Aggregated Cost Basis Gross Unrealized Gains Gross Unrealized Losses Aggregated Fair Value Aggregated Cost Basis Gross Unrealized Gains Gross Unrealized Losses Aggregated Fair Value U.S. investment grade bonds — — — — 24,531 — (54 ) 24,477 Developed investment grade bonds — — — — 9,567 — (25 ) 9,542 Total short-term investments $ — $ — $ — $ — $ 34,098 $ — $ (79 ) $ 34,019 Short-term investments by contractual maturity are as follows (in thousands): December 31, 2017 December 31, 2016 Investments Investments Due in one year or less $ — $ 21,655 Due after one year through five years — 12,364 Total short-term investment $ — $ 34,019 See Note 21 to these Consolidated Financial Statements for additional discussion regarding the fair value of the Company's short-term investments. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES Inventories consist of (in thousands): December 31, 2017 2016 Raw materials and subassemblies $ 44,699 $ 28,245 Work in process 3,788 1,507 Finished goods 43,488 34,908 Total Inventories 91,975 64,660 Less: Non-current Inventories (20,446 ) (15,073 ) Inventories $ 71,529 $ 49,587 At December 31, 2017 and 2016 , the Company has classified $20.4 million and $15.1 million , respectively, of inventories as non-current. This inventory consists of service components used to repair products held by customers pursuant to warranty obligations and extended service contracts, including service components for products that the Company no longer sells, inventory purchased for lifetime buys, and inventory that is turning at a slow rate. The Company believes that these inventories will be utilized for the intended purpose. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | PROPERTY AND EQUIPMENT Property and equipment consist of (in thousands): December 31, 2017 2016 Land $ 2,815 $ 2,856 Buildings 5,096 5,219 Leasehold improvements 3,295 2,386 Office furniture and equipment 25,612 18,398 Computer software and hardware 9,760 9,100 Demonstration and loaned equipment 11,932 11,393 58,510 49,352 Accumulated depreciation (36,439 ) (32,019 ) Total $ 22,071 $ 17,333 Depreciation expense of property and equipment was $4.1 million , $3.7 million , and $4.2 million in the years ending December 31, 2017 , 2016 and 2015 , respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | INTANGIBLE ASSETS The following table summarizes the components of gross and net intangible asset balances (in thousands): December 31, 2017 December 31, 2016 Gross Accumulated Accumulated Net Book Gross Accumulated Accumulated Net Book Technology $ 101,045 (1,058 ) $ (42,048 ) $ 57,939 $ 62,563 — $ (34,683 ) $ 27,880 Customer related 108,074 (50 ) (28,972 ) 79,052 38,087 — (17,610 ) 20,477 Trade names 49,313 (3,916 ) (13,273 ) 32,124 32,106 (3,290 ) (7,135 ) 21,681 Internally developed software 15,610 — (12,293 ) 3,317 16,978 — (10,220 ) 6,758 Patents 2,778 (133 ) (2,495 ) 150 2,620 — (2,251 ) 369 Total Definite-lived intangible assets 276,820 (5,157 ) (99,081 ) 172,582 152,354 (3,290 ) (71,899 ) 77,165 Finite lived intangible assets are amortized over their weighted average lives, which are 13 years for patents, 14 years for technology, 10 years for customer-related intangibles, 10 years for trade names, and 6 years for internally developed software. Internally developed software consists of $14.8 million relating to costs incurred for development of internal use computer software and $2.2 million for development of software to be sold. Amortization expense related to intangible assets with finite lives was as follows (in thousands): Years Ended December 31, 2017 2016 2015 Technology $ 7,705 $ 3,407 $ 3,916 Customer related 10,945 3,452 2,938 Trade names 6,479 4,115 3,159 Internally developed software 2,117 2,069 1,620 Patents 244 112 112 Total amortization $ 27,490 $ 13,155 $ 11,745 Expected annual amortization expense related to amortizable intangible assets is as follows (in thousands): 2018 $ 27,014 2019 25,836 2020 23,634 2021 22,210 2022 18,564 Thereafter 55,324 Total expected amortization expense $ 172,582 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | GOODWILL The carrying amount of goodwill and the changes in those balances are as follows (in thousands): As of December 31, 2015 $ 107,466 Acquisitions/Purchase Accounting Adjustments 6,705 Foreign currency translation (1,059 ) As of December 31, 2016 $ 113,112 Acquisitions/Purchase Accounting Adjustments 54,746 Foreign currency translation 5,140 As of December 31, 2017 $ 172,998 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | ACCRUED LIABILITIES Accrued liabilities consist of (in thousands): December 31, 2017 2016 Compensation and related benefits $ 22,816 $ 16,064 Accrued federal, state, and local taxes 8,155 4,160 Warranty reserve 10,995 10,670 Accrued amounts due to customers 2,424 1,625 Accrued professional fees 2,280 1,191 Accrued selling expenses 1,704 292 Contingent consideration 147 3,043 Accrued travel 338 — Deferred rent 161 132 Other 2,718 718 Total $ 51,738 $ 37,895 |
Long-Term Other Liabilities
Long-Term Other Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Long-Term Other Liabilities | LONG-TERM OTHER LIABILITIES Long-term other liabilities consist of (in thousands): December 31, 2017 2016 Contingent tax obligations $ 17,934 $ 6,125 Non-current deferred revenue 4,039 1,885 Other 22 3 Total $ 21,995 $ 8,013 |
Debt and Credit Arrangements
Debt and Credit Arrangements | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt and Credit Arrangements | DEBT AND CREDIT ARRANGEMENTS The Company has a Credit Agreement with JP Morgan Chase Bank ("JP Morgan") and Citibank, NA (“Citibank”). The Credit Agreement provides for an aggregate $150 million of secured revolving credit facility. In the third quarter of 2017, the Company exercised the right to increase the amount available under the facility by $75.0 million , bringing the aggregate revolving credit facility to $225.0 million . The Credit Agreement contains covenants relating to maintenance of books and records, financial reporting and notification, compliance with laws, maintenance of properties and insurance, and limitations on guaranties, investments, issuance of debt, lease obligations and capital expenditures, and is secured by virtually all of the Company's assets. The Credit Agreement provides for events of default, including failure to pay any principal or interest when due, failure to perform or observe covenants, bankruptcy or insolvency events and the occurrence of a material adverse effect. The Company has no other significant credit facilities. In addition to the customary restrictive covenants listed above, the Credit Agreement also contains financial covenants that require the Company to maintain a certain leverage ratio and fixed charge coverage ratio, each as defined in the Credit Agreement: • Leverage Ratio, as defined, to be no higher than 2.75 to 1.00. • Interest Coverage Ratio, as defined, to be at least 1.75 to 1.00 at all times. As of December 31, 2017 , the Company was in compliance with the Leverage Ratio at 2.44 to 1.00 and the Interest Coverage Ratio at 10.16 to 1.00. As of December 31, 2017 , the Company had $155 million outstanding under the Credit Agreement. Pursuant to the terms of the Credit Agreement, the outstanding principal balance will bear interest at either (a) a fluctuating rate per annum equal to the Applicable Rate, as defined in the Credit Agreement, depending on the leverage ratio plus the higher of (i) the federal funds rate plus one-half of one percent per annum; (ii) the prime rate in effect on such a day; and (iii) the LIBOR rate plus one percent, or (b) a fluctuating rate per annum of LIBOR Rate plus the Applicable Rate, which ranges between 1.75% to 2.75% . The effective interest rate during the twelve months ended December 31, 2017 was 3.34% . The Credit Agreement matures on September 23, 2021, at which time all principal amounts outstanding under the Credit Agreement will be due and payable. Long-term debt consists of (in thousands): December 31, 2017 2016 Revolving credit facility $ 155,000 $ 140,000 Debt issuance costs (717 ) — Less: current portion of long-term debt — — Total long-term debt $ 154,283 $ 140,000 Maturities of long-term debt as of December 31, 2017 are as follows (in thousands): December 31, 2017 2016 2018 $ — $ — 2019 — — 2020 — — Thereafter 154,283 140,000 Total $ 154,283 $ 140,000 As of December 31, 2017 , the carrying value of the total debt approximated fair market value. |
Reserve for Product Warranties
Reserve for Product Warranties | 12 Months Ended |
Dec. 31, 2017 | |
Product Warranties Disclosures [Abstract] | |
Reserve for Product Warranties | RESERVE FOR PRODUCT WARRANTIES The Company provides a warranty for products that is generally one year in length and in some cases, regulations may require them to provide repair or remediation beyond the typical warranty period. If any of the products contain defects, the Company may be required to incur additional repair and remediation costs. Service for domestic customers is provided by Company-owned service centers that perform all service, repair and calibration services. Service for international customers is provided by a combination of Company-owned facilities and vendors on a contract basis. A warranty reserve is included in accrued liabilities for the expected future costs of servicing products. Additions to the reserve are based on management's best estimate of probable liability. The Company considers a combination of factors including material and labor costs, regulatory requirements, and other judgments in determining the amount of reserve. The reserve is reduced as costs are incurred to honor existing warranty and regulatory obligations. As of December 31, 2017 , the Company has accrued $5.4 million to bring certain NeoBLUE ® phototherapy products into U.S. regulatory compliance. The Company's estimate of the costs associated with bringing the NeoBLUE ® phototherapy products into compliance is primarily based upon the number of units outstanding that may require the repair, costs associated with shipping and repairing the product, and the assumption that the FDA will approve the Company's plan for compliance. The details of activity in the warranty reserve are as follows (in thousands): Balance at Beginning of Period Assumed Through Acquisitions Additions Charged to Expense Reductions Balance at End of Period December 31, 2017 $ 10,670 $ 1,159 $ 5,370 $ (6,204 ) $ 10,995 December 31, 2016 $ 10,386 $ 222 $ 2,711 $ (2,649 ) $ 10,670 December 31, 2015 $ 2,753 $ — $ 10,729 $ (3,096 ) $ 10,386 The estimates the Company uses in projecting future product warranty costs may prove to be incorrect. Any future determination that product warranty reserves are understated could result in increases to cost of sales and reductions in operating profits and results of operations. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Common Stock —The Company has 120,000,000 shares of common stock authorized at a par value or $0.001 per share. Preferred Stock —The Company has 10,000,000 shares of preferred stock authorized at a par value of $0.001 per share. In accordance with the terms of the amended and restated certificate of incorporation, the Board of Directors is authorized to provide for the issuance of one or more series of preferred stock, including increases or decreases to the series. The Board of Directors has the authority to set the rights, preferences, and terms of such shares. As of December 31, 2017 , no shares of preferred stock were issued and outstanding. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE The components of basic and diluted EPS are as follows (in thousands, except per share amounts): December 31, 2017 2016 2015 Net income (loss) $ (20,293 ) $ 42,594 $ 37,924 Weighted average common shares 32,564 32,460 32,348 Dilutive effect of stock based awards — 596 893 Diluted Shares 32,564 33,056 33,241 Basic earnings per share $ (0.62 ) $ 1.31 $ 1.17 Diluted earnings per share $ (0.62 ) $ 1.29 $ 1.14 Shares excluded from calculation of diluted EPS 565 2 — |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION Share-Based Compensation Expense —The Company accounts for share-based compensation in accordance with ASC Topic 718, Compensation—Stock Compensation . Share-based compensation was recognized as follows in the consolidated statement of income (in thousands): December 31, 2017 2016 2015 Cost of revenue $ 232 $ 219 $ 156 Marketing and selling 540 821 808 Research and development 1,332 1,515 1,264 General and administrative 7,341 6,453 4,725 Total expense 9,445 9,008 6,953 Stock Awards Plans —Natus' 2011 Stock Awards Plan (the “Plan”) provides for the granting of the following: • Incentive stock options to employees; • Non-statutory stock options to employees, directors and consultants; • Restricted stock awards and restricted stock units; • Stock bonuses; and • Stock appreciation rights. As of December 31, 2017 , there were 779,298 shares available for future awards under the plan. Under the Plan, stock options may be issued at not less than the fair market value of the common stock on the date of grant, as determined by the Board of Directors. Options issued under the Plan become exercisable as determined by the Board of Directors and expire no more than six years after the date of grant. Most options vest ratably over four years. Stock Option Activity —Stock option activity under the stock awards plans for the year ended December 31, 2017 is summarized as follows: Number of Shares Weighted Average Exercise Price Outstanding, December 31, 2016 (816,691 shares exercisable at a weighted average exercise price of $14.54 per share) 933,096 $ 15.02 Granted — $ — Exercised (134,102 ) $ 14.06 Forfeited (1,317 ) $ 13.83 Expired (2,592 ) $ 16.31 Outstanding, December 31, 2017 (790,573 shares exercisable at a weighted average exercise price of $15.14 per share) 795,085 $ 15.18 As of December 31, 2017 , unrecognized compensation related to the unvested portion of stock options was approximately $1.0 thousand , which is expected to be recognized at the beginning of 2018. The intrinsic value of options exercised, representing the difference between the closing stock price of common stock on the date of the exercise and the exercise price, in the years ended December 31, 2017 , 2016 and 2015 was $3.1 million , $3.4 million , and $17.7 million , respectively. As of December 31, 2017 , there were: (i) 795,085 options vested and expected to vest with a weighted average exercise price of $15.18 , an intrinsic value of $18.3 million , and a weighted average remaining contractual term of 1.2 years; and (ii) 790,573 options exercisable with a weighted average exercise price of $15.14 , an intrinsic value of $18.2 million , and a weighted average remaining contractual term of 1.2 years. The expected life of options is based primarily on historical share option exercise experience of the employees for options granted by the Company. All options are treated as a single group in the determination of expected life, as the Company does not currently expect substantially different exercise or post-vesting termination behavior among the employee population. The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of the awards in effect at the time of grant. Expected volatility is based primarily on historical volatility data of the Company's common stock. The Company has no history or expectation of paying dividends on common stock. Share-based compensation expense associated with options is based on awards ultimately expected to vest. At the time of an option grant, the Company estimates the expected future rate of forfeitures based on historical experience. These estimates are revised, if necessary, in subsequent periods if actual forfeiture rates differ from those estimates. If the actual forfeiture rate is lower than estimated the Company will record additional expense and if the actual forfeiture is higher than estimated the Company will record a recovery of prior expense. Restricted Stock Awards Activity —The following table summarizes the activity for restricted stock awards during the year ended December 31, 2017 : Shares Weighted Average Grant Date Fair Value Unvested at December 31, 2016 506,389 $ 34.82 Granted 265,449 $ 34.94 Vested (391,947 ) $ 32.41 Forfeited (16,083 ) $ 35.87 Unvested at December 31, 2017 363,808 $ 37.46 As of December 31, 2017 , unrecognized compensation related to the unvested portion of stock awards was $10.8 million , which is expected to be recognized over a weighted average period of 2.3 years. The fair market value of outstanding restricted stock awards at December 31, 2017 was $13.9 million . For the restricted stock awards units that vested during the years ended December 31, 2017 , 2016 , and 2015 , the total intrinsic value was $14.3 million , $9.0 million , and $10.3 million , respectively. Restricted Stock Units Activity —The following table summarizes restricted stock units activity for the year ended December 31, 2017 : Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2016 29,903 $ 34.39 Awarded 55,176 $ 35.16 Released (35,929 ) $ 33.65 Forfeited (25,006 ) $ 34.47 Outstanding at December 31, 2017 24,144 $ 37.17 As of December 31, 2017 , unrecognized compensation related to the unvested portion of stock units was $0.9 million , which is expected to be recognized over a weighted average period of 1.8 years. The aggregate intrinsic value of outstanding restricted stock units at December 31, 2017 was $0.9 million . For the restricted stock units that vested during the years ended December 31, 2017 , 2016 , and 2015 , the total intrinsic value was $1.3 million , $0.9 million , and $0.9 million , respectively. Employee Stock Purchase Plan —Under Natus' 2011 Employee Stock Purchase Plan (the “ESPP”), U.S. employees can elect to have salary withholdings of up to 15% of eligible compensation to a maximum of $10,625 per offering period, to purchase shares of common stock on April 30 and October 31 of each year. The purchase price for shares acquired under the ESPP is 85% of the fair market value on the last day of the offering period. As of December 31, 2017 , there were 117,270 shares reserved for future issuance under the ESPP. Because the ESPP does not have a “look back” feature, the compensation expense associated with the Plan is not measured by the use of the Black-Scholes pricing model, but rather by measuring the difference between the fair market value of common stock on the last day of the offering period and the purchase price for the offering period, which is 85% of the fair market value. Compensation expense associated with the ESPP for the years ended December 31, 2017 , 2016 and 2015 , respectively, was $0.3 million , $0.2 million , and $0.2 million . |
Restructuring Reserve
Restructuring Reserve | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Reserve | RESTRUCTURING RESERVE The Company has historically incurred an ongoing level of restructuring-type activities to maintain a competitive cost structure, including manufacturing and workforce optimization resulting from acquisitions. The balance of the restructuring reserve is included in accrued liabilities on the accompanying consolidated balance sheets. Employee termination benefits are included as a part of restructuring expenses. Activity in the restructuring reserves for these plans for the years ended December 31, 2017 , 2016 and 2015 is as follows (in thousands): Personnel Related Facility Related Total Balance as of December 31, 2014 $ 368 — $ 368 Additions 1,905 156 2,061 Reversals (124 ) — (124 ) Payments (473 ) (156 ) (629 ) Balance as of December 31, 2015 1,676 — 1,676 Additions 1,093 725 1,818 Reversals (436 ) — (436 ) Payments (1,990 ) (573 ) (2,563 ) Balance as of December 31, 2016 343 152 495 Additions 431 — 431 Reversals (182 ) — (182 ) Payments (631 ) (93 ) (724 ) Balance as of December 31, 2017 $ (39 ) 59 $ 20 |
Other Income (Expense), Net
Other Income (Expense), Net | 12 Months Ended |
Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense), Net | OTHER INCOME (EXPENSE), NET Other income (expense), net consists of (in thousands): Years Ended December 31, 2017 2016 2015 Interest income $ 425 $ 315 $ 27 Interest expense (5,081 ) (430 ) (352 ) Foreign currency gain (loss) 1,013 (359 ) (1,415 ) Other 76 117 676 Total other income (expense), net $ (3,567 ) $ (357 ) $ (1,064 ) |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Income before provision for income tax is as follows (in thousands): Years Ended December 31, 2017 2016 2015 U.S. $ (18,059 ) $ 68 $ 20,507 Foreign 23,209 54,835 31,902 Income before provision for income tax $ 5,150 $ 54,903 $ 52,409 The components of income tax expense for the years ended December 31, 2017 , 2016 and 2015 (in thousands): Years Ended December 31, 2017 2016 2015 Current U.S. Federal $ 10,110 $ (1,388 ) $ 13,497 U.S. State and local 1,079 692 1,984 Non-U.S. 12,764 15,069 2,239 Total current tax expense 23,953 14,373 17,720 Deferred U.S. Federal 6,345 (1,534 ) (3,410 ) U.S. State and local (1,333 ) (378 ) (385 ) Non-U.S. (3,522 ) (152 ) 560 Total deferred tax benefit 1,490 (2,064 ) (3,235 ) Total income tax expense $ 25,443 $ 12,309 $ 14,485 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of deferred tax assets and liabilities as of December 31, 2017 and 2016 are as follows (in thousands): December 31, 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 3,958 $ 6,557 Credit carryforwards 4,466 2,512 Accruals deductible in different periods 11,969 16,157 Employee benefits 1,085 2,389 Total deferred tax assets 21,478 27,615 Valuation allowance (5,862 ) (3,706 ) Total net deferred tax assets $ 15,616 $ 23,909 Deferred tax liabilities: Basis difference in fixed and intangible assets (23,934 ) (12,678 ) Foreign earnings to be repatriated (380 ) — Total deferred tax liabilities (24,314 ) (12,678 ) Total net deferred tax assets $ (8,698 ) $ 11,231 The income tax expense in the accompanying statements of income differs from the provision calculated by applying the U.S. federal statutory income tax rate of 35% in 2017 , 2016 , and 2015 to income before taxes due to the following: Years Ended December 31, 2017 2016 2015 Federal statutory tax expense $ 1,802 $ 19,216 $ 18,343 State tax expense (318 ) 188 1,249 Foreign taxes at rates less than U.S. rates (3,101 ) (6,838 ) (1,760 ) Deferred charges on sales of U.S. intellectual property 980 980 (5,878 ) Equity compensation 606 (530 ) 204 Tax credits (1,498 ) (911 ) (935 ) Uncertain tax position 2,048 485 3,897 Lapse of statute (1,521 ) (495 ) (784 ) Change of valuation allowance on foreign tax credit 314 — — Earnout adjustment (190 ) (1,184 ) — Repatriation tax net of foreign tax credits 16,564 — — Net deferred tax asset re-measurement 3,883 — — Tax audits 726 543 — Withholding taxes 2,880 — — Return to provision 711 — — AMT on acquisition 621 — — Other 936 855 149 Total expense $ 25,443 $ 12,309 $ 14,485 On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a modified territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of US GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. The Company has calculated its best estimate of the impact of the Act in its year end income tax provision in accordance with its understanding of the Act and guidance available as of the date of this filing. As a result, the Company has recorded $20.5 million as an additional income tax expense in the fourth quarter of 2017, the period in which the legislation was enacted. The provisional amount related to the re-measurement of certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future was $3.9 million . The provisional amount related to the one-time transition tax on the mandatory deemed repatriation of foreign earnings, net of foreign tax credits was $16.6 million based on cumulative foreign earnings of $181.0 million . In accordance with SAB 118, the Company has determined that the $16.6 million of current tax expense recorded in connection with the transition tax on the mandatory deemed repatriation of foreign earnings was a provisional amount and a reasonable estimate at December 31, 2017. Additional work is necessary to do a more detailed analysis of historical foreign earnings as well as potential correlative adjustments. Any subsequent adjustment to these amounts will be recorded to current tax expense in the quarter of 2018 when the analysis is complete. As of December 31, 2017, the Company has not assessed the impact of the changes arising from the Act that are effective in tax year 2018 and onward and will be included in the 2018 as interpreted guidance is further released. The Company has also not yet made a policy election with respect to its treatment of potential global intangible low-taxed income (“GILTI”). Companies can either account for taxes on GILTI as incurred or recognize deferred taxes when basis differences exist that are expected to affect the amount of the GILTI inclusion upon reversal. The Company is still in the process of analyzing the provisions of the Act associated with GILTI and the expected impact of GILTI on the Company in the future. At December 31, 2017 , the Company had deferred tax assets attributable to U.S. state net operating loss carryforwards of $1.2 million , which will begin to expire in 2018 . At December 31, 2017 , the Company had U.S. state R&D credit carryforwards of $0.4 million , which will begin to expire in 2021. At December 31, 2017 , the Company had $4.2 million of U.S. foreign tax credit carryforwards that can be used to offset future U.S. tax liabilities related to foreign source taxable income. The foreign tax credits will start to expire in 2022. At December 31, 2017 , certain foreign subsidiaries had deferred tax assets attributable to net operating loss carryforwards as follows: $0.03 million in Germany, $1.4 million in France, $0.5 million in Canada, and $0.5 million in Denmark. These foreign net operating loss carryforwards, if not utilized to offset taxable income in future periods, will expire in various amounts beginning in 2028. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Accordingly, valuation allowances of $5.9 million and $3.7 million were recorded at December 31, 2017 and 2016 , respectively. The increase of $2.2 million in valuation allowance was primarily due to a valuation allowance recorded against the Company's current year generation of the Foreign Tax Credit in U.S. The realizability of the deferred tax assets is primarily dependent on the Company's ability to generate sufficient taxable income in future periods. The Company's management weighed the aggregate effect of all positive evidence and negative evidence in determining the likelihood of realization of the deferred tax assets. The factors used by management to collect evidence included historical earnings of the applicable taxing jurisdiction, the cash refund opportunity to utilize the tax losses, and the future forecast of profitability in the jurisdiction. Weighing all the positive and negative evidence, the Company has recorded a valuation allowance related primarily to net operating losses in certain foreign jurisdictions and U.S. foreign tax credits where it is more likely than not that the tax benefit of the net operating losses and tax credits will not be realized. There are no changes to the position on the Company's permanent reinvestment of its earnings from foreign operations, with the exception of Excel-Tech and Natus Ireland. As of December 31, 2017 , the Company intends to distribute all of the earnings from Excel-Tech and Natus Ireland in excess of their operational needs. The Company has recorded a deferred tax liability of $0.4 million accordingly for 5% Canadian withholding tax on the expected Excel-Tech distribution to Natus Ireland. Natus Ireland has 0% withholding tax under domestic exemption and therefore, no liability has been recorded. The Company intends on permanently reinvesting the earnings of its remaining foreign subsidiaries. The other remaining foreign subsidiaries have both the intent and ability to indefinitely reinvest its undistributed earnings. Uncertain Tax Positions A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest and penalties) is as follows (in thousands): Balance at January 1, 2015 $ 3,395 Increases for tax positions related to prior years 281 Increases for tax positions related to the current year 3,302 Lapse of statutes of limitations (664 ) Balance at January 1, 2016 $ 6,314 Increases for tax positions related to prior years 174 Increases for tax positions related to the current year 70 Lapse of statutes of limitations (475 ) Foreign exchange difference (185 ) Balance at January 1, 2017 $ 5,898 Increases for tax positions related to prior years 747 Increases for tax positions related to the current year 1,712 Lapse of statutes of limitations (1,393 ) Foreign exchange difference 53 Balance at December 31, 2017 $ 7,017 For the year ended December 31, 2017 , unrecognized tax benefits increased by $1.1 million and $0.6 million of tax expense in the income tax provision were recorded. The increase was primarily attributable to the increase in uncertain tax positions related to the current year in certain jurisdictions. The unrecognized tax benefits for the tax years ended December 31, 2017 , 2016 and 2015 were $7.0 million , $5.9 million and $6.3 million , respectively which include $4.0 million , $2.5 million and $2.4 million , respectively that would impact the effective tax rate if recognized. The Company expects a range from zero to $0.9 million of unrecognized tax benefit that will impact the effective tax rate in the next 12 months due to the lapse of statute of limitations provided that no taxing authority conducts a new examination. At December 31, 2017 , 2016 and 2015 , the Company had cumulatively accrued $0.6 million , $0.6 million , and $0.4 million for estimated interest and penalties related to uncertain tax positions. The Company records interest and penalties related to recognized tax positions as a component of income tax expense (benefit), which totaled approximately $(0.01) million , $0.2 million , and $0.1 million for the years ended December 31, 2017 , 2016 , and 2015 , respectively. The Company is currently unaware of any uncertain tax positions that could result in significant additional payments, accruals, or other material deviation in this estimate over the next 12 months . The Company's tax returns remain open to examination as follows: U.S. federal, 2014 through 2017 ; U.S. states, generally 2013 through 2017 ; and significant foreign jurisdictions, generally 2013 through 2017 . |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2017 | |
Defined Contribution Plan [Abstract] | |
Employee Benefit Plan | EMPLOYEE BENEFIT PLAN The Company offers pre-tax and after-tax 401(k) savings plan options under which eligible U.S. employees may elect to have a portion of their salary deferred and contributed to the plan. Employer matching contributions are determined by management and are discretionary. Employer matching contributions were $2.5 million , $1.5 million , and $1.3 million respectively, in the years ended December 31, 2017 , 2016 , and 2015 . For new hires, employer contributions vest ratably over the first two years of employment. |
Segment, Customer and Geographi
Segment, Customer and Geographic Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment, Customer and Geographic Information | SEGMENT, CUSTOMER, AND GEOGRAPHIC INFORMATION The Company operates in one reportable segment, which is presented as the aggregation of the Neurology, Newborn Care, and Otometrics operating segments. Through the one reportable segment the Company is organized on the basis of the healthcare products and services provided which are used for the screening, detection, treatment, monitoring and tracking of common medical ailments in newborn care, hearing impairment, neurological dysfunction, epilepsy, and sleep disorders. End-users customer base includes hospitals, clinics, laboratories, physicians, nurses, audiologists, and governmental agencies. Most of the Company's international sales are to distributors who resell products to end users or sub-distributors. The Company's foreign countries’ revenue is determined based on the customer’s billing address. Revenue and long-lived asset information by geographic region is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Consolidated Revenue: United States $ 270,860 $ 250,694 $ 242,050 Foreign countries 230,110 131,198 133,815 $ 500,970 $ 381,892 $ 375,865 Revenue by End Market: Neuro Devices and Systems $ 171,315 $ 168,200 $ 168,776 Supplies 59,955 58,681 60,205 Services 11,886 11,641 8,320 Total Neurology Revenue $ 243,156 $ 238,522 $ 237,301 Newborn Care Devices and Systems $ 77,573 $ 72,562 $ 72,669 Supplies 43,732 47,674 49,982 Services 22,325 23,134 15,913 Total Newborn Care Revenue $ 143,630 $ 143,370 $ 138,564 Otometrics Devices and Systems $ 86,920 $ — $ — Supplies 27,264 — — Services — — — Total Otometrics Revenue $ 114,184 $ — $ — Total Revenue $ 500,970 $ 381,892 $ 375,865 Property and equipment, net: United States $ 10,128 $ 7,024 Canada 5,068 4,941 Argentina 1,591 2,121 Ireland 3,178 2,530 Denmark 1,158 17 Other foreign countries 948 700 $ 22,071 $ 17,333 During the years ended December 31, 2017 , 2016 and 2015 , no single customer or foreign country contributed to more than 10% of revenue. |
Commitments And Contingencies
Commitments And Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | COMMITMENTS AND CONTINGENCIES Leases —The Company has entered into noncancelable operating leases for some of the facilities including related office equipment located in the U.S. and Europe through 2024. Minimum lease payments under noncancelable operating leases as of December 31, 2017 are as follows (in thousands): Operating Leases Year Ending December 31, 2018 $ 7,038 2019 5,732 2020 4,609 2021 3,392 2022 2,457 Thereafter 6,850 Total minimum lease payments $ 30,078 Rent expense, which is recorded on the straight-line method from commencement over the period of the lease, totaled $6.7 million , $5.3 million and $4.4 million in 2017 , 2016 , and 2015 , respectively. Purchase commitments —The Company has various purchase obligations for goods or services totaling $47.8 million at December 31, 2017 , which are expected to be paid within the next year. Indemnifications —Under the bylaws, the Company has agreed to indemnify the officers and directors for certain events or occurrences arising as a result of the officer or director serving in such capacity. The Company has a director and officer liability insurance policy that limits the exposure under these indemnifications and enables them to recover a portion of any future loss arising out of them. In addition, the Company entered into indemnification agreements with other parties in the ordinary course of business. The Company has determined that these agreements fall within the scope of ASC 460, Guarantees . In some cases liability insurance is obtained to provide coverage that limits its exposure for these other indemnified matters. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. The Company believes the estimated fair value of these indemnification agreements is minimal and have not recorded a liability for these agreements as of December 31, 2017 . Legal matters —The Company may from time to time become a party to various legal proceedings or claims that arise in the ordinary course of business. The Company does not believe that any current legal or administrative proceedings are likely to have a material effect on business, financial condition, or results of operations. In January 2017, a putative class action lawsuit (Badger v. Natus Medical Incorporation, et al., No. 17-cv-00458-JSW) alleging violations of federal securities laws was filed in the United States District Court for the Northern District of California, naming as defendants the Company and certain officers and a director. In July 2017, plaintiffs filed an amended complaint with a new lead plaintiff (Costabile v. Natus Medical Incorporation, et al., No. 17-cv-00458-JSW) alleging violations of federal securities laws based on allegedly false and misleading statements. The defendants moved to dismiss the Amended Complaint, and in February 2018 the motion to dismiss was granted with leave to amend. The Company believes that the plaintiffs’ allegations are without merit, and intends to vigorously defend against the claims. In July 2017, a putative shareholder derivative action was filed in California Superior Court (Mortman v. Gunst, et. al., No. RG17867679) against certain of the Company’s officers and directors and naming the Company as a nominal defendant. The action is based on allegations similar to those in the securities class action litigation described above. The Company believes the likelihood of an unfavorable outcome from these actions is remote. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined under ASC 820 as the exit price associated with the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes the following three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value: Level 1 —Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2— Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 —Unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. The Company does not have any financial assets or liabilities measured at fair value on a recurring basis. The following financial instruments are not measured at fair value on the consolidated balance sheet as of December 31, 2017 and 2016 , but require disclosure of fair values: cash and cash equivalents, accounts receivable, and accounts payable. The carrying value of these financial instruments approximates fair values because of the relatively short maturity. During the third quarter of 2014, the Company listed the facility in Mundelein, Illinois for sale. This asset was measured at fair value less cost to sell as of September 30, 2014 based on market price and Level 2 inputs. The book value of this asset on June 30, 2014 was $3.6 million . The Company expensed $2.2 million during the third quarter of 2014 for this impairment. As of December 31, 2017 the Company is carrying the asset as held for sale its fair value of $1.4 million . The Company also has contingent consideration associated with earnouts from acquisitions. Contingent consideration liabilities are classified as Level 3 liabilities, as the Company use unobservable inputs to value them, which is a probability-based income approach. Contingent considerations are classified as accrued liabilities on the consolidated balance sheets. Subsequent changes in the fair value of contingent consideration liabilities are recorded within the income statement as an operating expense. Contingent consideration associated with earnouts from acquisitions is as follows (in thousands): December 31, 2016 Additions Payments Adjustments December 31, 2017 Liabilities: Contingent consideration $ 3,043 $ 693 $ (2,966 ) $ (623 ) $ 147 Total $ 3,043 $ 693 $ (2,966 ) $ (623 ) $ 147 The significant unobservable inputs used in the fair value measurement of contingent consideration related to the acquisitions are annualized revenue forecasts developed by the Company considering the probability of achievement of those revenue forecasts. Significant increases (decreases) in these unobservable inputs in isolation would result in a significantly lower (higher) fair value measurement. The Company's Level 2 securities are valued using third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spread, benchmark securities, prepayment/default projections based on historical data and other observable inputs. The Company validates the prices provided by its third-party pricing services by understanding the models used, obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming those securities traded in active markets. See Note 4 to these Consolidated Financial Statements for further information regarding the Company's financial instruments. |
Schedule II_ Valuation And Qual
Schedule II: Valuation And Qualifying Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II: of Valuation and Qualifying Accounts | SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS For the years ended December 31, 2017 , 2016 and 2015 (In thousands) Balance at Additions Deductions Balance Year ended December 31, 2017 Allowance for doubtful accounts $ 4,182 $ 10,017 $ (5,221 ) $ 8,978 Valuation allowance 3,706 2,156 — 5,862 Year ended December 31, 2016 Allowance for doubtful accounts $ 4,686 $ 1,123 $ (1,627 ) $ 4,182 Valuation allowance 3,972 — (266 ) 3,706 Year ended December 31, 2015 Allowance for doubtful accounts $ 4,324 $ 1,496 $ (1,134 ) $ 4,686 Valuation allowance 3,151 821 — 3,972 |
Organization and Significant 29
Organization and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities in the Consolidated Financial Statements and the reported amount of revenue and expenses during the reporting period. Such estimates include allowances for potentially uncollectible accounts receivable, valuation of inventory, intangible assets, goodwill, share-based compensation, deferred income taxes, reserves for warranty obligations, and the provision for income taxes. Actual results could differ from those estimates. |
Revenue recognition | Revenue recognition Revenue, net of discounts, is recognized from sales of medical devices and supplies, including sales to distributors, when the following conditions have been met: a purchase order has been received, title has transferred, the selling price is fixed or determinable, and collection of the resulting receivable is reasonably assured. Terms of sale for most domestic sales are FOB origin, reflecting that title and risk of loss are assumed by the purchaser at the shipping point; however, terms of sale for some neurology, sleep-diagnostic, and head cooling systems are FOB destination, reflecting that title and risk of loss are assumed by the purchaser upon delivery. Terms of sales to international distributors are generally EXW, reflecting that goods are shipped “ex works,” in which title and risk of loss are assumed by the distributor at the shipping point. For products shipped under FOB origin or EXW terms, delivery is generally considered to have occurred when the product is shipped. Freight charges billed to customers are included in revenue and freight-related expenses are charged to cost of revenue. The Company generally does not provide rights of return on products. For products containing embedded software, the Company has determined that the hardware and software components function together to deliver the products’ essential functionality, and therefore, the revenue from the sale of these products does not fall within the scope of the software revenue recognition rules. The Company's revenue recognition policies for sales of these products are substantially the same as for other tangible products. Revenue from sales of certain products that remain within the scope of the software revenue recognition rules under ASC Subtopic 985-605 is not significant. Revenue from extended service and maintenance agreements, for both medical devices and data management systems, is recognized ratably over the service period. Revenue from installation or training services is deferred until such time service is provided. Hearing screening and ambulatory EEG monitoring revenue is recorded when the procedure is performed at the estimated net realizable value based on contractual agreements with payers and historical collections. Certain revenue transactions include multiple element arrangements. The Company allocates revenue in these arrangements to each unit of accounting using the relative selling price method. The selling prices used during the allocation process are based on vendor specific objective evidence (“VSOE”) if available, third party evidence (“TPE”) if VSOE is not available, or estimated selling price (“ESP”) if neither VSOE or TPE is available. Group purchasing organization (“GPOs”) negotiate volume purchase prices for member hospitals, group practices, and other clinics. The Company's agreements with GPOs typically contain preferential terms for the GPO and its members, including provisions for some, if not all, of the following: • Payment of marketing fees by Natus to the GPO, usually based on purchasing experience of group members; and • Non-recourse cancellation provisions. Natus does not sell products to GPOs. Hospitals, group practices, and other clinics that are members of a GPO purchase products directly from the Company under the terms negotiated by the GPO. Negotiated pricing and discounts are recognized as a reduction of the selling price of products at the time of the sale. Revenue from sales to members of GPOs is otherwise consistent with general revenue recognition policies as previously described. |
Inventory | Inventory Inventories are carried at the lower of cost or market, with cost being determined using the first-in, first-out method. The carrying value of the Company's inventories is reduced for any difference between cost and estimated market value of inventories that is determined to be obsolete or unmarketable, based upon assumptions about future demand and market conditions. Adjustments to the value of inventory establish a new cost basis and are considered permanent even if circumstances later suggest that increased carrying amounts are recoverable. If demand is higher than expected, Natus may sell inventory that had previously been impaired. |
Carrying value of intangible assets and goodwill | Carrying value of intangible assets and goodwill The Company amortizes intangible assets with finite lives over the useful lives; any future changes that would limit the useful lives or any determination that these assets are carried at amounts greater than the estimated fair value could result in additional charges. Goodwill is not amortized but is subject to an annual impairment analysis, which is performed as of October 1st; this assessment is also performed whenever there is a change in circumstances that indicates the carrying value of goodwill may be impaired. In 2017, 2016 and 2015, the Company performed a qualitative assessment to test goodwill for impairment. Qualitative factors considered in this assessment include industry and market considerations, overall financial performance and other relevant events and factors affecting each reporting unit. Based on the qualitative assessment, the Company determined that the fair value was more likely than not to be greater than its carrying amount, and no further analysis was needed. If the fair value was less than its carrying amount, the Company would perform a two-step impairment test on goodwill. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit to its carrying value, including goodwill. The Company uses a projected discounted cash flow model to determine the fair value of a reporting unit. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, and the second step of the impairment test is not required. The second step, if required, compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. The fair value of a reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the price paid to acquire the reporting unit. If the carrying amount of the reporting unit’s goodwill exceeds its implied fair value, an impairment charge is recognized in an amount equal to that excess. Prior to the assignment of definite lives to trade names in the second quarter of 2015 (See Note 6 - Intangible Assets ), the Company tested indefinite lived intangibles for impairment by comparing the carrying value of those assets to be fair value as of the assessment date. The Company used the relief from royalty method to determine the fair value of the assets. This analysis is dependent upon a number of quantitative and qualitative factors including estimates of forecasted revenue, royalty rate, and taxes. The discount rate applied also has an impact on the estimates of fair value, as use of a higher rate will result in a lower estimate of fair value. |
Long lived assets | Long lived assets The Company continually monitors events and changes in circumstances that could indicate that carrying amounts of its long-lived assets, including property and equipment and intangible assets, may not be recoverable. When such events or changes in circumstances occur, the Company assess the recoverability by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying amount of these assets, the Company will recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. |
Liability for product warranties | Liability for product warranties The Company provides a warranty for products that is generally one year in length. In some cases, regulations may require the Company to provide repair or remediation beyond the typical warranty period. If any products contain defects, the Company may be required to incur additional repair and remediation costs. Service for domestic customers is provided by Company-owned service centers that perform all service, repair, and calibration services. Service for international customers is provided by a combination of Company-owned facilities and vendors on a contract basis. A warranty reserve is included in accrued liabilities for the expected future costs of servicing products. Additions to the reserve are based on management’s best estimate of probable liability. The Company considers a combination of factors including material and labor costs, regulatory requirements, and other judgments in determining the amount of the reserve. The reserve is reduced as costs are incurred to honor existing warranty and regulatory obligations. |
Share-based compensation | Share-based compensation The Company recognizes share-based compensation expense associated with employee stock options under the single-option straight line method over the requisite service period, which is generally a four -year vesting period and ten -year contractual term pursuant to ASC Topic 718, Compensation-Stock Compensation . See Note 14 of the Consolidated Financial Statements. For employee stock options, the value of each option is estimated on the date of grant using the Black-Scholes option pricing model, which was developed for use in estimating the value of freely traded options. Similar to other option pricing models, the Black-Scholes method requires the input of highly subjective assumptions, including stock price volatility. Changes in the subjective input assumptions can materially affect the estimated fair value of the employee stock options. The Company recognizes share-based compensation associated with Restricted Stock Awards (“RSA”) and Restricted Stock Units (“RSU”). RSAs and RSUs vest ratably over a three -year period for employees. RSAs and RSUs for executives vest over a four -year period; 50% on the second anniversary of the awarded date and 25% on each of the third and fourth anniversaries. RSAs and RSUs for non employees (Board of Directors) vest over a one -year period; 100% on the first anniversary. The value is estimated based on the market value of Natus common stock on the date of issuance pursuant to ASC Topic 718, Compensation-Stock Compensation. The Company issues new shares of common stock upon the exercise of stock options and the vesting of RSAs and RSUs. Forfeitures of employee stock options and awards are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. Share-based compensation expense is recorded net of estimated forfeitures, such that expense is recorded only for those share-based awards that are expected to vest. |
Cash Equivalents | Cash Equivalents and Short-term Investments All highly liquid investments purchased with an original maturity of three months or less are classified as cash equivalents. |
Short-term Investments | Short-term Investments All highly liquid investments purchased with an original maturity of three months or less are classified as cash equivalents. Investments with maturities greater than one year are classified as current because management considers all investments to be available for current operations. Cash equivalents and investments are stated at amounts that approximate fair value based on quoted market prices. The Company's investments have been classified and accounted for as available-for-sale. Such investments are recorded at fair value and unrealized holding gains and losses are reported as a separate component of comprehensive income until realized. Realized gains and losses on sales of investments, if any, are determined on the specific identification method and are reclassified from accumulated other comprehensive loss to results of operations as other income (expense). |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company estimates the allowance for potentially uncollectible accounts receivable based on historical collection experience within the markets in which the Company operates and other customer-specific information, such as bankruptcy filings or customer liquidity problems. When all internal efforts have been exhausted to collect the receivable, it is written off and relieved from the reserve. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial instruments include cash and cash equivalents, investments, accounts receivable, and accounts payable. Cash is reported at its fair value on the balance sheet dates. The recorded carrying amounts of investments, accounts receivable and accounts payable approximate the fair values due to the short-term maturities. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed using the straight-line method over estimated useful lives of the respective assets, which are three to ten years for office furniture and equipment, three to five years or the length of the license for computer software and hardware, three to five years for demonstration and loaned equipment, and 30 to 40 years for buildings. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life. Land is not depreciated. Costs associated with acquiring and installing software to be used for internal purposes are capitalized and amortized on a straight-line basis over three years. |
Research & Development Costs | Research & Development Costs Costs incurred in research and development are charged to operations as incurred. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records net deferred tax assets to the extent it is more likely than not that the assets will be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. To the extent that previously reserved deferred tax assets are estimated to be realizable, the Company adjusts the valuation allowance which reduces the provision for income taxes. The Company recognizes the tax benefit of uncertain tax positions in the financial statements as defined in ASC Topic 740, Income Tax. When the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50 percent likely of being ultimately realized upon settlement, as defined in ASC 740-10-05. |
Foreign Currency | Foreign Currency The functional currency of the Company's subsidiaries outside of North America is generally the local currency of the country where the subsidiary is located. Accordingly, foreign currency translation adjustments relating to the translation of foreign subsidiary financial statements are included as a component of accumulated other comprehensive loss. The Company recorded $21.5 million , $(5.0) million , and $(8.4) million of foreign currency translation gains (losses) for the years ended December 31, 2017, 2016 and 2015, respectively. Gains and losses from transactions denominated in currencies other than the functional currencies are included in other income and expense. In 2017, 2016, and 2015, net foreign currency transaction gains (losses) were $1.0 million, $(0.4) million, and $(1.4) million, respectively. Foreign currency gains and losses result primarily from fluctuations in the exchange rate between the U.S. Dollar, Canadian Dollar, Euro, Argentine Peso, British Pound, and Danish Kroner. |
Comprehensive Income | Comprehensive Income The Company reports by major components and as a single total the change in net assets during the period from non-owner sources as defined in ASC Topic 220, Comprehensive Income. The consolidated statement of comprehensive income has been included with the consolidated statements of operations. Accumulated other comprehensive income consists of translation gains and losses on foreign subsidiary financial statements as well as unrealized gains and losses on investments. |
Basic and Diluted Net Income per Share | Basic and Diluted Net Income per Share Natus computes net income per share as defined in ASC Topic 260, Earnings per Share. Basic net income per share is based upon the weighted average number of common shares outstanding during the period. Diluted net income per share is based upon the weighted average number of common shares outstanding and dilutive common stock equivalents outstanding during the period. Common stock equivalents are options granted and shares of restricted stock issued under the stock awards plans and are calculated under the treasury stock method. Common equivalent shares from unexercised stock options and restricted stock are excluded from the computation when there is a loss as the effect is anti-dilutive, or if the exercise price of such options is greater than the average market price of the stock for the period. |
Recent Accounting Pronouncements | Recent Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance. The standard's core principle is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard creates a five-step model to achieve its core principle: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction's price to the separate performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In addition, entities must disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative and quantitative disclosures are required about: (i) the entity's contracts with customers; (ii) the significant judgments, and changes in judgments, made in applying the guidance to those contracts; and (iii) any assets recognized from the costs to obtain or fulfill a contract with a customer. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 616) - Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to interim and annual periods beginning January 1, 2018. The standard allows entities to apply the standard retrospectively to each prior period presented (“full retrospective adoption”) or retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application (“modified retrospective adoption”). The Company adopted the modified retrospective approach of this guidance on January 1, 2018 and has determined that its adoption will not have a material effect on its financial position or results of operations. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This standard requires a lessee to recognize the lease assets and lease liabilities arising from operating leases in the statement of financial position. Qualitative along with specific quantitative disclosures are required by lessees to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 including interim periods within those fiscal years. The Company is currently evaluating the impact that will result from adopting ASU 2016-02. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). This update modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Because these amendments eliminate a step from the goodwill impairment test, they should reduce the cost and complexity of evaluating goodwill for impairment. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company will adopt ASU 2017-04 to goodwill impairment testing on the effective date. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that year, and must be applied prospectively to an award modified on or after the adoption date. The Company will adopt this guidance and will apply to all future share-based modifications. |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation | The following table summarizes the purchase price allocation of the fair value of the assets acquired and liabilities assumed at the date of acquisition, (in thousands): Cash and cash equivalents $ 5,604 Accounts receivable 26,851 Inventories 22,182 Property and equipment 2,256 Intangible assets 90,913 Goodwill 39,355 Other assets 1,748 Accounts payable (7,655 ) Accrued liabilities (16,069 ) Deferred revenue (745 ) Deferred income tax (15,193 ) Total purchase price $ 149,247 |
Pro Forma Financial Information | The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the earliest period presented, nor is it intended to be a projection of future results. Unaudited Pro forma Financial Information (in thousands) Year Ended December 31, 2017 2016 Revenue $ 500,970 $ 491,994 Net income (loss) $ (15,965 ) $ 17,385 Earnings (loss) per share: Basic $ (0.49 ) $ 0.54 Diluted $ (0.49 ) $ 0.53 Weighted average shares used in the calculation of earnings per share: Basic 32,564 32,460 Diluted 32,564 33,056 |
Cash, Cash Equivalents, and S31
Cash, Cash Equivalents, and Short-term Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Short-term Investments | Cash, cash equivalents and short-term investments consisted of the following (in thousands): December 31, 2017 December 31, 2016 Cash and cash equivalents: Cash 88,950 213,551 Short-term investments: U.S. investment grade bonds — 24,477 Developed investment grade bonds — 9,542 Total short-term investments — 34,019 Total cash, cash equivalents and short-term investments 88,950 247,570 |
Unrealized Gain (Loss) on Investments | Short-term investments by investment type are as follows (in thousands): December 31, 2017 December 31, 2016 Aggregated Cost Basis Gross Unrealized Gains Gross Unrealized Losses Aggregated Fair Value Aggregated Cost Basis Gross Unrealized Gains Gross Unrealized Losses Aggregated Fair Value U.S. investment grade bonds — — — — 24,531 — (54 ) 24,477 Developed investment grade bonds — — — — 9,567 — (25 ) 9,542 Total short-term investments $ — $ — $ — $ — $ 34,098 $ — $ (79 ) $ 34,019 |
Investments Classified by Contractual Maturity Date | Short-term investments by contractual maturity are as follows (in thousands): December 31, 2017 December 31, 2016 Investments Investments Due in one year or less $ — $ 21,655 Due after one year through five years — 12,364 Total short-term investment $ — $ 34,019 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consist of (in thousands): December 31, 2017 2016 Raw materials and subassemblies $ 44,699 $ 28,245 Work in process 3,788 1,507 Finished goods 43,488 34,908 Total Inventories 91,975 64,660 Less: Non-current Inventories (20,446 ) (15,073 ) Inventories $ 71,529 $ 49,587 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consist of (in thousands): December 31, 2017 2016 Land $ 2,815 $ 2,856 Buildings 5,096 5,219 Leasehold improvements 3,295 2,386 Office furniture and equipment 25,612 18,398 Computer software and hardware 9,760 9,100 Demonstration and loaned equipment 11,932 11,393 58,510 49,352 Accumulated depreciation (36,439 ) (32,019 ) Total $ 22,071 $ 17,333 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Components of Gross and Net Intangible Asset Balances | The following table summarizes the components of gross and net intangible asset balances (in thousands): December 31, 2017 December 31, 2016 Gross Accumulated Accumulated Net Book Gross Accumulated Accumulated Net Book Technology $ 101,045 (1,058 ) $ (42,048 ) $ 57,939 $ 62,563 — $ (34,683 ) $ 27,880 Customer related 108,074 (50 ) (28,972 ) 79,052 38,087 — (17,610 ) 20,477 Trade names 49,313 (3,916 ) (13,273 ) 32,124 32,106 (3,290 ) (7,135 ) 21,681 Internally developed software 15,610 — (12,293 ) 3,317 16,978 — (10,220 ) 6,758 Patents 2,778 (133 ) (2,495 ) 150 2,620 — (2,251 ) 369 Total Definite-lived intangible assets 276,820 (5,157 ) (99,081 ) 172,582 152,354 (3,290 ) (71,899 ) 77,165 |
Amortization expense related to intangible assets with definite lives | Amortization expense related to intangible assets with finite lives was as follows (in thousands): Years Ended December 31, 2017 2016 2015 Technology $ 7,705 $ 3,407 $ 3,916 Customer related 10,945 3,452 2,938 Trade names 6,479 4,115 3,159 Internally developed software 2,117 2,069 1,620 Patents 244 112 112 Total amortization $ 27,490 $ 13,155 $ 11,745 |
Expected annual amortization expense related to amortizable intangible assets | Expected annual amortization expense related to amortizable intangible assets is as follows (in thousands): 2018 $ 27,014 2019 25,836 2020 23,634 2021 22,210 2022 18,564 Thereafter 55,324 Total expected amortization expense $ 172,582 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | The carrying amount of goodwill and the changes in those balances are as follows (in thousands): As of December 31, 2015 $ 107,466 Acquisitions/Purchase Accounting Adjustments 6,705 Foreign currency translation (1,059 ) As of December 31, 2016 $ 113,112 Acquisitions/Purchase Accounting Adjustments 54,746 Foreign currency translation 5,140 As of December 31, 2017 $ 172,998 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued liabilities consist of (in thousands): December 31, 2017 2016 Compensation and related benefits $ 22,816 $ 16,064 Accrued federal, state, and local taxes 8,155 4,160 Warranty reserve 10,995 10,670 Accrued amounts due to customers 2,424 1,625 Accrued professional fees 2,280 1,191 Accrued selling expenses 1,704 292 Contingent consideration 147 3,043 Accrued travel 338 — Deferred rent 161 132 Other 2,718 718 Total $ 51,738 $ 37,895 |
Long-Term Other Liabilities (Ta
Long-Term Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Long-Term Other Liabilities | Long-term other liabilities consist of (in thousands): December 31, 2017 2016 Contingent tax obligations $ 17,934 $ 6,125 Non-current deferred revenue 4,039 1,885 Other 22 3 Total $ 21,995 $ 8,013 |
Debt and Credit Arrangements (T
Debt and Credit Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consists of (in thousands): December 31, 2017 2016 Revolving credit facility $ 155,000 $ 140,000 Debt issuance costs (717 ) — Less: current portion of long-term debt — — Total long-term debt $ 154,283 $ 140,000 |
Schedule of Maturities of Long-term Debt | Maturities of long-term debt as of December 31, 2017 are as follows (in thousands): December 31, 2017 2016 2018 $ — $ — 2019 — — 2020 — — Thereafter 154,283 140,000 Total $ 154,283 $ 140,000 |
Reserve for Product Warranties
Reserve for Product Warranties (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Product Warranties Disclosures [Abstract] | |
Reserves for Product Warranties | The details of activity in the warranty reserve are as follows (in thousands): Balance at Beginning of Period Assumed Through Acquisitions Additions Charged to Expense Reductions Balance at End of Period December 31, 2017 $ 10,670 $ 1,159 $ 5,370 $ (6,204 ) $ 10,995 December 31, 2016 $ 10,386 $ 222 $ 2,711 $ (2,649 ) $ 10,670 December 31, 2015 $ 2,753 $ — $ 10,729 $ (3,096 ) $ 10,386 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Components of Basic and Diluted EPS | The components of basic and diluted EPS are as follows (in thousands, except per share amounts): December 31, 2017 2016 2015 Net income (loss) $ (20,293 ) $ 42,594 $ 37,924 Weighted average common shares 32,564 32,460 32,348 Dilutive effect of stock based awards — 596 893 Diluted Shares 32,564 33,056 33,241 Basic earnings per share $ (0.62 ) $ 1.31 $ 1.17 Diluted earnings per share $ (0.62 ) $ 1.29 $ 1.14 Shares excluded from calculation of diluted EPS 565 2 — |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation Expense | Share-based compensation was recognized as follows in the consolidated statement of income (in thousands): December 31, 2017 2016 2015 Cost of revenue $ 232 $ 219 $ 156 Marketing and selling 540 821 808 Research and development 1,332 1,515 1,264 General and administrative 7,341 6,453 4,725 Total expense 9,445 9,008 6,953 |
Stock Options Activity | Stock Option Activity —Stock option activity under the stock awards plans for the year ended December 31, 2017 is summarized as follows: Number of Shares Weighted Average Exercise Price Outstanding, December 31, 2016 (816,691 shares exercisable at a weighted average exercise price of $14.54 per share) 933,096 $ 15.02 Granted — $ — Exercised (134,102 ) $ 14.06 Forfeited (1,317 ) $ 13.83 Expired (2,592 ) $ 16.31 Outstanding, December 31, 2017 (790,573 shares exercisable at a weighted average exercise price of $15.14 per share) 795,085 $ 15.18 |
Restricted Stock Awards Activity | The following table summarizes the activity for restricted stock awards during the year ended December 31, 2017 : Shares Weighted Average Grant Date Fair Value Unvested at December 31, 2016 506,389 $ 34.82 Granted 265,449 $ 34.94 Vested (391,947 ) $ 32.41 Forfeited (16,083 ) $ 35.87 Unvested at December 31, 2017 363,808 $ 37.46 |
Restricted Stock Units Activity | The following table summarizes restricted stock units activity for the year ended December 31, 2017 : Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2016 29,903 $ 34.39 Awarded 55,176 $ 35.16 Released (35,929 ) $ 33.65 Forfeited (25,006 ) $ 34.47 Outstanding at December 31, 2017 24,144 $ 37.17 |
Restructuring Reserve (Tables)
Restructuring Reserve (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Detail of Activity in the Restructuring Reserve | Activity in the restructuring reserves for these plans for the years ended December 31, 2017 , 2016 and 2015 is as follows (in thousands): Personnel Related Facility Related Total Balance as of December 31, 2014 $ 368 — $ 368 Additions 1,905 156 2,061 Reversals (124 ) — (124 ) Payments (473 ) (156 ) (629 ) Balance as of December 31, 2015 1,676 — 1,676 Additions 1,093 725 1,818 Reversals (436 ) — (436 ) Payments (1,990 ) (573 ) (2,563 ) Balance as of December 31, 2016 343 152 495 Additions 431 — 431 Reversals (182 ) — (182 ) Payments (631 ) (93 ) (724 ) Balance as of December 31, 2017 $ (39 ) 59 $ 20 |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |
Other income (expense), net | Other income (expense), net consists of (in thousands): Years Ended December 31, 2017 2016 2015 Interest income $ 425 $ 315 $ 27 Interest expense (5,081 ) (430 ) (352 ) Foreign currency gain (loss) 1,013 (359 ) (1,415 ) Other 76 117 676 Total other income (expense), net $ (3,567 ) $ (357 ) $ (1,064 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income (loss) before provision (benefit) for income tax | Income before provision for income tax is as follows (in thousands): Years Ended December 31, 2017 2016 2015 U.S. $ (18,059 ) $ 68 $ 20,507 Foreign 23,209 54,835 31,902 Income before provision for income tax $ 5,150 $ 54,903 $ 52,409 |
Summary of components of income tax expense | The components of income tax expense for the years ended December 31, 2017 , 2016 and 2015 (in thousands): Years Ended December 31, 2017 2016 2015 Current U.S. Federal $ 10,110 $ (1,388 ) $ 13,497 U.S. State and local 1,079 692 1,984 Non-U.S. 12,764 15,069 2,239 Total current tax expense 23,953 14,373 17,720 Deferred U.S. Federal 6,345 (1,534 ) (3,410 ) U.S. State and local (1,333 ) (378 ) (385 ) Non-U.S. (3,522 ) (152 ) 560 Total deferred tax benefit 1,490 (2,064 ) (3,235 ) Total income tax expense $ 25,443 $ 12,309 $ 14,485 |
Deferred tax assets and liabilities | Significant components of deferred tax assets and liabilities as of December 31, 2017 and 2016 are as follows (in thousands): December 31, 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 3,958 $ 6,557 Credit carryforwards 4,466 2,512 Accruals deductible in different periods 11,969 16,157 Employee benefits 1,085 2,389 Total deferred tax assets 21,478 27,615 Valuation allowance (5,862 ) (3,706 ) Total net deferred tax assets $ 15,616 $ 23,909 Deferred tax liabilities: Basis difference in fixed and intangible assets (23,934 ) (12,678 ) Foreign earnings to be repatriated (380 ) — Total deferred tax liabilities (24,314 ) (12,678 ) Total net deferred tax assets $ (8,698 ) $ 11,231 |
Reconciliation of effective income tax rate | The income tax expense in the accompanying statements of income differs from the provision calculated by applying the U.S. federal statutory income tax rate of 35% in 2017 , 2016 , and 2015 to income before taxes due to the following: Years Ended December 31, 2017 2016 2015 Federal statutory tax expense $ 1,802 $ 19,216 $ 18,343 State tax expense (318 ) 188 1,249 Foreign taxes at rates less than U.S. rates (3,101 ) (6,838 ) (1,760 ) Deferred charges on sales of U.S. intellectual property 980 980 (5,878 ) Equity compensation 606 (530 ) 204 Tax credits (1,498 ) (911 ) (935 ) Uncertain tax position 2,048 485 3,897 Lapse of statute (1,521 ) (495 ) (784 ) Change of valuation allowance on foreign tax credit 314 — — Earnout adjustment (190 ) (1,184 ) — Repatriation tax net of foreign tax credits 16,564 — — Net deferred tax asset re-measurement 3,883 — — Tax audits 726 543 — Withholding taxes 2,880 — — Return to provision 711 — — AMT on acquisition 621 — — Other 936 855 149 Total expense $ 25,443 $ 12,309 $ 14,485 |
Uncertain Tax Positions | A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest and penalties) is as follows (in thousands): Balance at January 1, 2015 $ 3,395 Increases for tax positions related to prior years 281 Increases for tax positions related to the current year 3,302 Lapse of statutes of limitations (664 ) Balance at January 1, 2016 $ 6,314 Increases for tax positions related to prior years 174 Increases for tax positions related to the current year 70 Lapse of statutes of limitations (475 ) Foreign exchange difference (185 ) Balance at January 1, 2017 $ 5,898 Increases for tax positions related to prior years 747 Increases for tax positions related to the current year 1,712 Lapse of statutes of limitations (1,393 ) Foreign exchange difference 53 Balance at December 31, 2017 $ 7,017 |
Segment, Customer and Geograp45
Segment, Customer and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Revenue and long-lived asset information by geographic region | Revenue and long-lived asset information by geographic region is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Consolidated Revenue: United States $ 270,860 $ 250,694 $ 242,050 Foreign countries 230,110 131,198 133,815 $ 500,970 $ 381,892 $ 375,865 Revenue by End Market: Neuro Devices and Systems $ 171,315 $ 168,200 $ 168,776 Supplies 59,955 58,681 60,205 Services 11,886 11,641 8,320 Total Neurology Revenue $ 243,156 $ 238,522 $ 237,301 Newborn Care Devices and Systems $ 77,573 $ 72,562 $ 72,669 Supplies 43,732 47,674 49,982 Services 22,325 23,134 15,913 Total Newborn Care Revenue $ 143,630 $ 143,370 $ 138,564 Otometrics Devices and Systems $ 86,920 $ — $ — Supplies 27,264 — — Services — — — Total Otometrics Revenue $ 114,184 $ — $ — Total Revenue $ 500,970 $ 381,892 $ 375,865 Property and equipment, net: United States $ 10,128 $ 7,024 Canada 5,068 4,941 Argentina 1,591 2,121 Ireland 3,178 2,530 Denmark 1,158 17 Other foreign countries 948 700 $ 22,071 $ 17,333 |
Commitments And Contingencies (
Commitments And Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Minimum Future Leases Payments Receivable | Minimum lease payments under noncancelable operating leases as of December 31, 2017 are as follows (in thousands): Operating Leases Year Ending December 31, 2018 $ 7,038 2019 5,732 2020 4,609 2021 3,392 2022 2,457 Thereafter 6,850 Total minimum lease payments $ 30,078 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Changes in fair value of contingent consideration | Contingent consideration associated with earnouts from acquisitions is as follows (in thousands): December 31, 2016 Additions Payments Adjustments December 31, 2017 Liabilities: Contingent consideration $ 3,043 $ 693 $ (2,966 ) $ (623 ) $ 147 Total $ 3,043 $ 693 $ (2,966 ) $ (623 ) $ 147 |
Organization and Significant 48
Organization and Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Recorded foreign currency translation gains (losses) | $ 21,470 | $ (5,003) | $ (8,378) | |
Net foreign currency transaction gains (losses) | $ 1,013 | $ (359) | $ (1,415) | $ (1,400) |
Office furniture and equipment [Member] | Minimum [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of property and equipment | 3 years | |||
Office furniture and equipment [Member] | Maximum [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of property and equipment | 10 years | |||
Computer software and hardware [Member] | Minimum [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of property and equipment | 3 years | |||
Computer software and hardware [Member] | Maximum [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of property and equipment | 5 years | |||
Demonstration and loaned equipment [Member] | Maximum [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of property and equipment | 5 years | |||
Buildings [Member] | Minimum [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of property and equipment | 30 years | |||
Buildings [Member] | Maximum [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of property and equipment | 40 years | |||
Software for internal purposes [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Estimated useful lives of property and equipment | 3 years | |||
Employee Stock Option [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Vesting period | 4 years | |||
Share based compensation, expiration period | 10 years | |||
Employee Stock Option [Member] | Director [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Vesting period | 4 years | |||
Share based compensation, expiration period | 6 years | |||
Restricted Stock Awards [Member] | Employees [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Vesting period | 3 years | |||
Restricted Stock Awards [Member] | Executives RSAs and RSUs [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Vesting period | 4 years | |||
Restricted Stock Awards [Member] | Executives RSAs and RSUs [Member] | Vest on second anniversary of the vesting start date [Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Vesting percentage | 50.00% | |||
Restricted Stock Awards [Member] | Executives RSAs and RSUs [Member] | On each of the third and fourth anniversaries of the vesting date[Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Vesting percentage | 25.00% | |||
Restricted Stock Awards [Member] | Director [Member] | On each of the third and fourth anniversaries of the vesting date[Member] | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | ||||
Vesting period | 1 year | |||
Vesting percentage | 100.00% |
Business Combinations - Integra
Business Combinations - Integra Acquisition (Details) - USD ($) $ in Thousands | Oct. 06, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 172,998 | $ 113,112 | $ 107,466 | |
Integra [Member] | ||||
Business Acquisition [Line Items] | ||||
Purchase price paid in cash to acquire entity | $ 46,400 | |||
Tangible assets acquired | 12,500 | |||
Intangible assets acquired | $ 19,500 | |||
Identifiable intangible assets acquired, average useful life | 9 years | |||
Goodwill | $ 15,500 | |||
Liabilities assumed in acquisition | $ 1,100 | |||
Revenue | $ 539,100 | $ 432,400 |
Business Combinations - Otometr
Business Combinations - Otometrics Acquisition Narrative (Details) - USD ($) $ in Thousands | Jan. 03, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||||
Revenue | $ 500,970 | $ 381,892 | $ 375,865 | ||
Income from operations | (8,717) | (55,260) | $ (53,473) | ||
Otometrics [Member] | |||||
Business Acquisition [Line Items] | |||||
Purchase price paid in cash to acquire entity | $ 149,200 | ||||
Inventory purchase commitment | $ 4,200 | ||||
Revenue | $ 114,200 | ||||
Income from operations | $ 1,000 | ||||
Pro Forma [Member] | Otometrics [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquisition related costs | $ 4,300 | ||||
Amortization of intangible assets | 3,000 | ||||
Interest expense | $ 4,600 |
Business Combinations - Summary
Business Combinations - Summary of Purchase Price Allocation of Fair Value of Assets Acquired and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jan. 03, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 172,998 | $ 113,112 | $ 107,466 | |
Otometrics [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 5,604 | |||
Accounts receivable | 26,851 | |||
Inventories | 22,182 | |||
Property and equipment | 2,256 | |||
Intangible assets | 90,913 | |||
Goodwill | 39,355 | |||
Other assets | 1,748 | |||
Accounts payable | (7,655) | |||
Accrued liabilities | (16,069) | |||
Deferred revenue | (745) | |||
Deferred income tax | (15,193) | |||
Total purchase price | $ 149,247 |
Business Combinations - Schedul
Business Combinations - Schedule of Pro Forma Financial (Details) - Otometrics [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | ||
Revenue | $ 500,970 | $ 491,994 |
Net income (loss) | $ (15,965) | $ 17,385 |
Earnings (loss) per share: | ||
Basic (USD per share) | $ (0.49) | $ 0.54 |
Diluted (USD per share) | $ (0.49) | $ 0.53 |
Weighted average shares used in the calculation of earnings per share: | ||
Basic (shares) | 32,564 | 32,460 |
Diluted (shares) | 32,564 | 33,056 |
Business Combinations - RetCam
Business Combinations - RetCam Acquisition (Details) - USD ($) $ in Thousands | Jul. 06, 2016 | Sep. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||||
Contingent consideration | $ 147 | $ 3,043 | |||
Goodwill | $ 172,998 | $ 113,112 | $ 107,466 | ||
RetCam [Member] | |||||
Business Acquisition [Line Items] | |||||
Purchase price paid in cash to acquire entity | $ 10,600 | ||||
Contingent consideration | 2,000 | ||||
Adjustments to consideration transferred | $ 1,100 | ||||
Tangible assets acquired | 7,200 | ||||
Intangible assets acquired | $ 4,900 | ||||
Identifiable intangible assets acquired, average useful life | 5 years | ||||
Goodwill | $ 1,700 | ||||
Liabilities assumed in acquisition | $ 2,000 |
Business Combinations - NeuroQu
Business Combinations - NeuroQuest Acquisition (Details) - USD ($) $ in Thousands | Mar. 02, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||
Contingent consideration | $ 147 | $ 3,043 | ||
Goodwill | $ 172,998 | $ 113,112 | $ 107,466 | |
NeuroQuest [Member] | ||||
Business Acquisition [Line Items] | ||||
Purchase price paid in cash to acquire entity | $ 4,600 | |||
Contingent consideration | 500 | |||
Tangible assets acquired | 500 | |||
Intangible assets acquired | $ 1,300 | |||
Identifiable intangible assets acquired, average useful life | 5 years | |||
Goodwill | $ 3,500 | |||
Liabilities assumed in acquisition | $ 100 |
Business Combinations - Monarch
Business Combinations - Monarch Acquisition (Details) - USD ($) $ in Thousands | Jan. 11, 2016 | Nov. 13, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 172,998 | $ 113,112 | $ 107,466 | ||
Monarch Medical Diagnostics, LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Purchase price paid in cash to acquire entity | $ 2,700 | ||||
Contingent consideration | $ 1,000 | ||||
Property and equipment | 112 | ||||
Intangible assets acquired | $ 1,200 | ||||
Identifiable intangible assets acquired, average useful life | 5 years | ||||
Goodwill | $ 2,400 |
Business Combinations - Global
Business Combinations - Global Neuro-Diagnostics Acquisition (Details) - USD ($) $ in Thousands | Jan. 23, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 172,998 | $ 113,112 | $ 107,466 | |
Global Neuro-Diagnostics [Member] | ||||
Business Acquisition [Line Items] | ||||
Purchase price paid in cash to acquire entity | $ 11,400 | |||
Tangible assets acquired | 1,500 | |||
Intangible assets acquired | $ 4,800 | |||
Identifiable intangible assets acquired, average useful life | 5 years | |||
Goodwill | $ 8,900 | |||
Net liabilities | 500 | |||
Contingent consideration | $ 3,200 |
Business Combinations - NicView
Business Combinations - NicView Acquisition (Details) - USD ($) $ in Thousands | Jan. 02, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 172,998 | $ 113,112 | $ 107,466 | |
Contingent consideration | $ 147 | $ 3,043 | ||
NicView [Member] | ||||
Business Acquisition [Line Items] | ||||
Purchase price paid in cash to acquire entity | $ 1,100 | |||
Property and equipment | 300 | |||
Goodwill | 2,700 | |||
Net liabilities | 600 | |||
Contingent consideration | $ 1,300 |
Cash, Cash Equivalents, and S58
Cash, Cash Equivalents, and Short-term Investments - Schedule of cash, cash equivalents and short-term investments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Cash and cash equivalents: | ||||
Cash and Cash Equivalents, at Carrying Value | $ 88,950 | $ 213,551 | $ 82,469 | $ 66,558 |
Short-term investments: | ||||
Total short-term investment | 0 | 34,019 | ||
Total cash, cash equivalents and short-term investments | 88,950 | 247,570 | ||
U.S. investment grade bonds | ||||
Short-term investments: | ||||
Total short-term investment | 0 | 24,477 | ||
Developed investment grade bonds | ||||
Short-term investments: | ||||
Total short-term investment | $ 0 | $ 9,542 |
Cash, Cash Equivalents, and S59
Cash, Cash Equivalents, and Short-term Investments - Unrealized Gain (Loss) on Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Aggregated Cost Basis | $ 0 | $ 34,098 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | (79) |
Aggregated Fair Value | 0 | 34,019 |
U.S. investment grade bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Aggregated Cost Basis | 0 | 24,531 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | (54) |
Aggregated Fair Value | 0 | 24,477 |
Developed investment grade bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Aggregated Cost Basis | 0 | 9,567 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | (25) |
Aggregated Fair Value | $ 0 | $ 9,542 |
Cash, Cash Equivalents, and S60
Cash, Cash Equivalents, and Short-term Investments - Investments Classified by Contractual Maturity Date (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Cash and Cash Equivalents [Abstract] | ||
Due in one year or less | $ 0 | $ 21,655 |
Due after one year through five years | 0 | 12,364 |
Total short-term investment | $ 0 | $ 34,019 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials and subassemblies | $ 44,699 | $ 28,245 |
Work in process | 3,788 | 1,507 |
Finished goods | 43,488 | 34,908 |
Total Inventories | 91,975 | 64,660 |
Less: Non-current Inventories | (20,446) | (15,073) |
Inventories | $ 71,529 | $ 49,587 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Non-current Inventories | $ 20,446 | $ 15,073 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | $ 58,510 | $ 49,352 |
Accumulated depreciation | (36,439) | (32,019) |
Total | 22,071 | 17,333 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 2,815 | 2,856 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 5,096 | 5,219 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 3,295 | 2,386 |
Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 25,612 | 18,398 |
Computer software and hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 9,760 | 9,100 |
Demonstration and loaned equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | $ 11,932 | $ 11,393 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment, Net [Abstract] | |||
Depreciation expense | $ 4.1 | $ 3.7 | $ 4.2 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Costs incurred for development of internal use computer software | $ 14.8 |
Costs incurred for development of software to be sold | $ 2.2 |
Patents [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted average life of intangible assets | 13 years |
Technology [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted average life of intangible assets | 14 years |
Customer related [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted average life of intangible assets | 10 years |
Trade names [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted average life of intangible assets | 10 years |
Internally developed software [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted average life of intangible assets | 6 years |
Intangible Assets - Components
Intangible Assets - Components of Gross and Net Intangible Asset Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 276,820 | $ 152,354 |
Impairment of Intangible Assets Defined Lived (excluding Goodwill) | (5,157) | (3,290) |
Accumulated Amortization | (99,081) | (71,899) |
Total expected amortization expense | 172,582 | 77,165 |
Technology [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 101,045 | 62,563 |
Impairment of Intangible Assets Defined Lived (excluding Goodwill) | (1,058) | |
Accumulated Amortization | (42,048) | (34,683) |
Total expected amortization expense | 57,939 | 27,880 |
Customer related [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 108,074 | 38,087 |
Impairment of Intangible Assets Defined Lived (excluding Goodwill) | (50) | |
Accumulated Amortization | (28,972) | (17,610) |
Total expected amortization expense | 79,052 | 20,477 |
Trade Names [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 49,313 | 32,106 |
Impairment of Intangible Assets Defined Lived (excluding Goodwill) | (3,916) | (3,290) |
Accumulated Amortization | (13,273) | (7,135) |
Total expected amortization expense | 32,124 | 21,681 |
Internally Developed Software [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 15,610 | 16,978 |
Accumulated Amortization | (12,293) | (10,220) |
Total expected amortization expense | 3,317 | 6,758 |
Patents [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,778 | 2,620 |
Impairment of Intangible Assets Defined Lived (excluding Goodwill) | (133) | |
Accumulated Amortization | (2,495) | (2,251) |
Total expected amortization expense | $ 150 | $ 369 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | $ 27,490 | $ 13,155 | $ 11,745 |
Technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | 7,705 | 3,407 | 3,916 |
Customer related [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | 10,945 | 3,452 | 2,938 |
Trade names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | 6,479 | 4,115 | 3,159 |
Internally Developed Software [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | 2,117 | 2,069 | 1,620 |
Patents [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Total amortization | $ 244 | $ 112 | $ 112 |
Intangible Assets - Expected An
Intangible Assets - Expected Annual Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2,018 | $ 27,014 | |
2,019 | 25,836 | |
2,020 | 23,634 | |
2,021 | 22,210 | |
2,022 | 18,564 | |
Thereafter | 55,324 | |
Total expected amortization expense | $ 172,582 | $ 77,165 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | ||
Beginning Balance | $ 113,112 | $ 107,466 |
Acquisitions/Purchase Accounting Adjustments | 54,746 | 6,705 |
Foreign currency translation | 5,140 | (1,059) |
Ending Balance | $ 172,998 | $ 113,112 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Compensation and related benefits | $ 22,816 | $ 16,064 |
Accrued federal, state, and local taxes | 8,155 | 4,160 |
Warranty reserve | 10,995 | 10,670 |
Accrued amounts due to customers | 2,424 | 1,625 |
Accrued professional fees | 2,280 | 1,191 |
Accrued selling expenses | 1,704 | 292 |
Contingent consideration | 147 | 3,043 |
Accrued travel | 338 | 0 |
Deferred rent | 161 | 132 |
Other | 2,718 | 718 |
Total | $ 51,738 | $ 37,895 |
Long-Term Other Liabilities (De
Long-Term Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Other Liabilities Disclosure [Abstract] | ||
Contingent tax obligations | $ 17,934 | $ 6,125 |
Non-current deferred revenue | 4,039 | 1,885 |
Other | 22 | 3 |
Total | $ 21,995 | $ 8,013 |
Debt and Credit Arrangements -
Debt and Credit Arrangements - Narrative (Details) | 3 Months Ended | 12 Months Ended |
Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Revolving credit facility [Member] | Line of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Revolving credit facility with Wells Fargo Bank | $ 150,000,000 | |
Available amount under credit facility | $ 155,000,000 | |
Credit Agreement [Member] | Citibank, National Association [Member] | ||
Debt Instrument [Line Items] | ||
Revolving credit facility with Wells Fargo Bank | $ 225,000,000 | |
Line of Credit Facility, Increase (Decrease), Net | $ 75,000,000 | |
Ratio of Indebtedness to Net Capital | 2.44 | |
Ratio of Interest Coverage | 10.16 | |
Debt Instrument, Interest Rate, Effective Percentage | 3.34% | |
Maximum [Member] | Credit Agreement [Member] | Citibank, National Association [Member] | ||
Debt Instrument [Line Items] | ||
Ratio of Indebtedness to Net Capital | 2.75 | |
Minimum [Member] | Credit Agreement [Member] | Citibank, National Association [Member] | ||
Debt Instrument [Line Items] | ||
Ratio of Interest Coverage | 1.75 | |
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | Credit Agreement [Member] | Citibank, National Association [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 2.75% | |
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | Credit Agreement [Member] | Citibank, National Association [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 1.75% |
Debt and Credit Arrangements 73
Debt and Credit Arrangements - Schedule of Long Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Revolving credit facility | $ 155,000 | $ 140,000 |
Debt Issuance Costs, Net | (717) | 0 |
Less: current portion of long-term debt | 0 | 0 |
Total long-term debt | $ 154,283 | $ 140,000 |
Debt and Credit Arrangements 74
Debt and Credit Arrangements - Schedule of Maturities of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
2,018 | $ 0 | $ 0 |
2,019 | 0 | 0 |
2,020 | 0 | 0 |
Thereafter | 154,283 | 140,000 |
Long-term Debt | $ 154,283 | $ 140,000 |
Reserve for Product Warrantie75
Reserve for Product Warranties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Product Warranties Disclosures [Abstract] | |||
Product warranty period | 1 year | ||
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | |||
Balance at Beginning of Period | $ 10,670 | $ 10,386 | $ 2,753 |
Assumed Through Acquisitions | 1,159 | 222 | 0 |
Additions Charged to Expense | 5,370 | 2,711 | 10,729 |
Reductions | (6,204) | (2,649) | (3,096) |
Balance at End of Period | 10,995 | $ 10,670 | $ 10,386 |
Certain NeoBLUE Phototherapy Products [Member] | |||
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | |||
Balance at End of Period | $ 5,400 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Equity [Abstract] | ||
Common Stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock issued | 0 | 0 |
Preferred stock outstanding | 0 | 0 |
Earnings Per Share - Components
Earnings Per Share - Components of Basic and Diluted EPS (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||
Net loss | $ (20,293) | $ 42,594 | $ 37,924 |
Weighted average common shares | 32,564 | 32,460 | 32,348 |
Dilutive effect of stock based awards | 0 | 596 | 893 |
Diluted Shares (in dollars per share) | 32,564 | 33,056 | 33,241 |
Basic earnings per share (in dollars per share) | $ (0.62) | $ 1.31 | $ 1.17 |
Diluted earnings per share (in dollars per share) | $ (0.62) | $ 1.29 | $ 1.14 |
Shares excluded from calculations of diluted EPS | 565 | 2 | 0 |
Share-Based Compensation - Shar
Share-Based Compensation - Share-based Compensation Expense Allocation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total expense | $ 9,445 | $ 9,008 | $ 6,953 |
Cost of revenue [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total expense | 232 | 219 | 156 |
Marketing and sales [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total expense | 540 | 821 | 808 |
Research and development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total expense | 1,332 | 1,515 | 1,264 |
General and administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total expense | $ 7,341 | $ 6,453 | $ 4,725 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for future awards | 779,298 | ||
Unrecognized compensation expense related to unvested portion of stock options | $ 1,000 | ||
Intrinsic value of options exercised | $ 3,100,000 | $ 3,400,000 | $ 17,700,000 |
Weighted average vested options | 795,085 | ||
Weighted average exercise price of vested stock | $ 15.18 | ||
Intrinsic value of options vested and expected to vest | $ 14,300,000 | ||
Weighted average remaining contractual term | 1 year 2 months | ||
Weighted average exercise price (in dollars per share) | $ 15.14 | ||
Intrinsic value of options exercisable | $ 18,200,000 | ||
Weighted average remaining contractual term, exercisable | 1 year 2 months | ||
Compensation expense associated with the ESPP | $ 300,000 | 200,000 | 200,000 |
Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation, expiration period | 10 years | ||
Share based compensation, vesting period | 4 years | ||
Intrinsic value of options vested and expected to vest | $ 18,300,000 | ||
Restricted Stock Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of options vested and expected to vest | 9,000,000 | 10,300,000 | |
Weighted average shares exercisable | 790,573 | ||
Unrecognized compensation of unvested awards | $ 10,800,000 | ||
Weighted average period of recognition of unrecognized compensation expense | 2 years 3 months | ||
Fair market value of outstanding awards | $ 13,900,000 | ||
Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of options vested and expected to vest | 1,300,000 | $ 900,000 | $ 900,000 |
Unrecognized compensation of unvested awards | $ 900,000 | ||
Weighted average period of recognition of unrecognized compensation expense | 1 year 9 months | ||
Aggregate intrinsic value of outstanding restricted stock units | $ 900,000 | ||
Employee Stock Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee maximum withholding rate (percent) | 15.00% | ||
Eligible compensation of employees | $ 10,625 | ||
Purchase price for shares acquired | 85.00% | ||
Shares reserved for future issuance | 117,270 | ||
Offering price, percentage of fair market value | 85.00% | ||
Director [Member] | Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation, expiration period | 6 years | ||
Share based compensation, vesting period | 4 years |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Option Activity (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Number of Shares | |
Outstanding, beginning of period (shares) | shares | 933,096 |
Granted (shares) | shares | 0 |
Exercised (shares) | shares | (134,102) |
Cancelled (shares) | shares | (1,317) |
Expired (shares) | shares | (2,592) |
Outstanding, end of period (shares) | shares | 795,085 |
Weighted Average Exercise Price | |
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 15.02 |
Granted (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 14.06 |
Cancelled (in dollars per share) | $ / shares | 13.83 |
Expired (in dollars per share) | $ / shares | 16.31 |
Outstanding, end of period (in dollars per share) | $ / shares | $ 15.18 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Award Activity (Details) - Restricted Stock Awards [Member] | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Shares | |
Unvested, beginning of period, Shares | shares | 506,389 |
Granted, Shares | shares | 265,449 |
Vested, Shares | shares | (391,947) |
Forfeited, Shares | shares | (16,083) |
Unvested, end of period, Shares | shares | 363,808 |
Weighted Average Grant Date Fair Value | |
Unvested, beginning of period, Weighted - average grant date fair value | $ / shares | $ 34.82 |
Granted, Weighted - average grant date fair value | $ / shares | 34.94 |
Vested, Weighted - average grant date fair value | $ / shares | 32.41 |
Forfeited, Weighted - average grant date fair value | $ / shares | 35.87 |
Unvested, end of period, Weighted - average grant date fair value | $ / shares | $ 37.46 |
Share-Based Compensation - Re82
Share-Based Compensation - Restricted Unit Activity (Details) - Restricted Stock Units [Member] | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Shares | |
Unvested, beginning of period, Shares | shares | 29,903 |
Awarded, units | shares | 55,176 |
Release, units | shares | (35,929) |
Forfeited, units | shares | (25,006) |
Unvested, end of period, Shares | shares | 24,144 |
Weighted Average Grant Date Fair Value | |
Unvested, beginning of period, Weighted - average grant date fair value | $ / shares | $ 34.39 |
Granted, Weighted - average grant date fair value | $ / shares | 35.16 |
Vested, Weighted - average grant date fair value | $ / shares | 33.65 |
Forfeited, Weighted - average grant date fair value | $ / shares | 34.47 |
Unvested, end of period, Weighted - average grant date fair value | $ / shares | $ 37.17 |
Restructuring Reserve (Details)
Restructuring Reserve (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Reserve [Roll Forward] | |||
Beginning balance | $ 495 | $ 1,676 | $ 368 |
Restructuring | 914 | 1,536 | 2,145 |
Additions | 431 | 1,818 | 2,061 |
Reversals | (182) | (436) | (124) |
Payments | (724) | (2,563) | (629) |
Ending balance | 20 | 495 | 1,676 |
Personnel Related [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 343 | 1,676 | 368 |
Additions | 431 | 1,093 | 1,905 |
Reversals | (182) | (436) | (124) |
Payments | (631) | (1,990) | (473) |
Ending balance | (39) | 343 | 1,676 |
Facility Closing [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 152 | 0 | 0 |
Restructuring | 0 | 725 | 156 |
Reversals | 0 | 0 | 0 |
Payments | (93) | (573) | (156) |
Ending balance | $ 59 | $ 152 | $ 0 |
Other Income (Expense), Net (De
Other Income (Expense), Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other expense, net | ||||
Interest income | $ 425 | $ 315 | $ 27 | |
Interest expense | (5,081) | (430) | (352) | |
Foreign currency gain (loss) | 1,013 | (359) | (1,415) | $ (1,400) |
Other | 76 | 117 | 676 | |
Total other income (expense), net | $ (3,567) | $ (357) | $ (1,064) |
Income Taxes - Income Loss befo
Income Taxes - Income Loss before Provision (Benefit) for Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ (18,059) | $ 68 | $ 20,507 |
Foreign | 23,209 | 54,835 | 31,902 |
Income before provision for income tax | $ 5,150 | $ 54,903 | $ 52,409 |
Income Taxes - Component of Inc
Income Taxes - Component of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current | |||
U.S. Federal | $ 10,110 | $ (1,388) | $ 13,497 |
U.S. State and local | 1,079 | 692 | 1,984 |
Non-U.S. | 12,764 | 15,069 | 2,239 |
Total current tax expense | 23,953 | 14,373 | 17,720 |
Deferred | |||
U.S. Federal | 6,345 | (1,534) | (3,410) |
U.S. State and local | (1,333) | (378) | (385) |
Non-U.S. | (3,522) | (152) | 560 |
Total deferred tax expense (benefit) | 1,490 | (2,064) | (3,235) |
Total expense | $ 25,443 | $ 12,309 | $ 14,485 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Asset and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 3,958 | $ 6,557 |
Credit carryforwards | 4,466 | 2,512 |
Accruals deductible in different periods | 11,969 | 16,157 |
Employee benefits | 1,085 | 2,389 |
Total deferred tax assets | 21,478 | 27,615 |
Valuation allowance | (5,862) | (3,706) |
Total net deferred tax assets | 15,616 | 23,909 |
Deferred tax liabilities: | ||
Basis difference in fixed and intangible assets | (23,934) | (12,678) |
Foreign Earnings Repatriated | (380) | 0 |
Total deferred tax liabilities | (24,314) | (12,678) |
Deferred tax liabilities, net | $ (8,698) | |
Total net deferred tax assets | $ 11,231 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule Of Income Taxes [Line Items] | |||||
Statutory tax rate | 35.00% | 35.00% | 35.00% | ||
Provisional income tax expense as a result of Tax Cuts 2017 | $ 20,500,000 | ||||
Provisional income tax expense from re-remeasurement of deferred tax assets and liabilities | 3,900,000 | ||||
Provisional income tax related to one-time transition tax on mandatory deemed repatriation of foreign earnings | 16,600,000 | ||||
Undistributed earnings | 181,000,000 | $ 181,000,000 | |||
Tax net operating loss carryforwards | 1,200,000 | 1,200,000 | |||
Valuation allowances | 5,862,000 | 5,862,000 | $ 3,706,000 | ||
Increase in valuation allowance | 2,200,000 | ||||
Deferred tax liabilities related to foreign earnings | 400,000 | 400,000 | |||
Increase in unrecognized tax benefits | 1,100,000 | ||||
Increases for tax positions related to the current year | 1,712,000 | 70,000 | $ 3,302,000 | ||
Unrecognized Tax Benefits | 7,017,000 | 7,017,000 | 5,898,000 | 6,314,000 | $ 3,395,000 |
Unrecognized tax would impact effective tax rate | 4,000,000 | 4,000,000 | 2,500,000 | 2,400,000 | |
Lapse of statutes of limitations | 1,393,000 | 475,000 | 664,000 | ||
Interest and penalties related to uncertain tax positions | 600,000 | 600,000 | 600,000 | 400,000 | |
Total Interest and penalties related to uncertain tax positions | (10,000) | $ 200,000 | $ 100,000 | ||
Income Tax Provision [Member] | |||||
Schedule Of Income Taxes [Line Items] | |||||
Increases for tax positions related to the current year | 600,000 | ||||
Minimum [Member] | |||||
Schedule Of Income Taxes [Line Items] | |||||
Lapse of statutes of limitations | 0 | ||||
Maximum [Member] | |||||
Schedule Of Income Taxes [Line Items] | |||||
Lapse of statutes of limitations | 900,000 | ||||
Germany [Member] | |||||
Schedule Of Income Taxes [Line Items] | |||||
Tax net operating loss carryforwards | 30,000 | 30,000 | |||
France [Member] | |||||
Schedule Of Income Taxes [Line Items] | |||||
Tax net operating loss carryforwards | 1,400,000 | 1,400,000 | |||
Canada [Member] | |||||
Schedule Of Income Taxes [Line Items] | |||||
Tax net operating loss carryforwards | 500,000 | 500,000 | |||
Denmark [Member] | |||||
Schedule Of Income Taxes [Line Items] | |||||
Tax net operating loss carryforwards | 500,000 | 500,000 | |||
Significant foreign jurisdictions [Member] | |||||
Schedule Of Income Taxes [Line Items] | |||||
Tax credits carryforwards | 4,200,000 | 4,200,000 | |||
Research Tax Credit Carryforward [Member] | |||||
Schedule Of Income Taxes [Line Items] | |||||
Tax credits carryforwards | $ 400,000 | $ 400,000 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income tax Expense from Continuous Operation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory tax expense | $ 1,802 | $ 19,216 | $ 18,343 |
State tax expense | (318) | 188 | 1,249 |
Foreign taxes at rates less than U.S. rates | (3,101) | (6,838) | (1,760) |
Deferred charges on sales of U.S. intellectual property | 980 | 980 | (5,878) |
Equity compensation | 606 | (530) | 204 |
Tax credits | (1,498) | (911) | (935) |
Uncertain tax position | 2,048 | 485 | 3,897 |
Lapse of statute | (1,521) | (495) | (784) |
Change of valuation allowance on foreign tax credit | 314 | 0 | 0 |
Earnout adjustment | (190) | (1,184) | 0 |
Repatriation tax net of foreign tax credits | 16,564 | 0 | 0 |
Net deferred tax asset re-measurement | 3,883 | 0 | 0 |
Withholding taxes | 726 | 543 | 0 |
Withholding taxes | 2,880 | 0 | 0 |
Return to provision | 711 | 0 | 0 |
AMT on acquisition | 621 | 0 | 0 |
Other | 936 | 855 | 149 |
Total expense | $ 25,443 | $ 12,309 | $ 14,485 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning-Unrecognized Tax Benefits | $ 5,898 | $ 6,314 | $ 3,395 |
Increases for tax positions related to prior years | 747 | 174 | 281 |
Increases for tax positions related to the current year | 1,712 | 70 | 3,302 |
Lapse of statutes of limitations | (1,393) | (475) | (664) |
Foreign exchange difference | (185) | ||
Foreign exchange difference | 53 | ||
Ending-Unrecognized Tax Benefits | $ 7,017 | $ 5,898 | $ 6,314 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Contribution Plan [Abstract] | |||
Employer matching contributions | $ 2.5 | $ 1.5 | $ 1.3 |
Segment, Customer and Geograp92
Segment, Customer and Geographic Information - Narrative (Details) | 12 Months Ended |
Dec. 31, 2017Segment | |
Segment Reporting [Abstract] | |
Number of reporting segments | 1 |
Segment, Customer and Geograp93
Segment, Customer and Geographic Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 500,970 | $ 381,892 | $ 375,865 |
Long-lived assets | 22,071 | 17,333 | |
Neurology Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 243,156 | 238,522 | 237,301 |
Neurology Products [Member] | Devices and Systems [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 171,315 | 168,200 | 168,776 |
Neurology Products [Member] | Supplies [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 59,955 | 58,681 | 60,205 |
Neurology Products [Member] | Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 11,886 | 11,641 | 8,320 |
Newborn Care Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 143,630 | 143,370 | 138,564 |
Newborn Care Products [Member] | Devices and Systems [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 77,573 | 72,562 | 72,669 |
Newborn Care Products [Member] | Supplies [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 43,732 | 47,674 | 49,982 |
Newborn Care Products [Member] | Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 22,325 | 23,134 | 15,913 |
OtometricsProducts [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 114,184 | 0 | 0 |
OtometricsProducts [Member] | Devices and Systems [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 86,920 | 0 | 0 |
OtometricsProducts [Member] | Supplies [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 27,264 | 0 | 0 |
OtometricsProducts [Member] | Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 0 | 0 | 0 |
United States [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 270,860 | 250,694 | 242,050 |
Long-lived assets | 10,128 | 7,024 | |
Foreign countries [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 230,110 | 131,198 | $ 133,815 |
Canada [Member] | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | 5,068 | 4,941 | |
Argentina [Member] | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | 1,591 | 2,121 | |
Ireland [Member] | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | 3,178 | 2,530 | |
Denmark [Member] | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | 1,158 | 17 | |
Other Foreign countries [Member] | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | $ 948 | $ 700 |
Commitments And Contingencies -
Commitments And Contingencies - Minimum Lease Payment under Non Cancelable Operating Lease (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 7,038 |
2,019 | 5,732 |
2,020 | 4,609 |
2,021 | 3,392 |
2,022 | 2,457 |
Thereafter | 6,850 |
Total minimum lease payments | $ 30,078 |
Commitments And Contingencies95
Commitments And Contingencies - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense | $ 6.7 | $ 5.3 | $ 4.4 |
Purchase commitments for inventory, total | $ 47.8 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - Mundelein Facility [Member] - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2017 | Jun. 30, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Book value of asset | $ 3.6 | ||
Impairment of asset | $ 2.2 | ||
Asset held-for-sale at fair value | $ 1.4 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Contingent consideration, beginning balance | $ 3,043 |
Additions | 693 |
Payments | (2,966) |
Adjustments | (623) |
Contingent consideration, ending balance | 147 |
Contingent Consideration [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Contingent consideration, beginning balance | 3,043 |
Additions | 693 |
Payments | (2,966) |
Adjustments | (623) |
Contingent consideration, ending balance | $ 147 |
Schedule II_ Valuation And Qu98
Schedule II: Valuation And Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 3,706 | $ 3,972 | $ 3,151 |
Additions Charged to Expense | 2,156 | 0 | 821 |
Deductions | 0 | (266) | 0 |
Balance at End of Period | 5,862 | 3,706 | 3,972 |
Allowance for Doubtful Accounts [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 4,182 | 4,686 | 4,324 |
Additions Charged to Expense | 10,017 | 1,123 | 1,496 |
Deductions | (5,221) | (1,627) | (1,134) |
Balance at End of Period | $ 8,978 | $ 4,182 | $ 4,686 |