Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 30, 2021 | |
Cover [Abstract] | ||
Entity Address, Address Line One | 6701 Koll Center Parkway, Suite 120 | |
Entity File Number | 000-33001 | |
Entity Incorporation, State or Country Code | DE | |
Document Transition Report | false | |
Document Quarterly Report | true | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | NTUS | |
Security Exchange Name | NASDAQ | |
Entity Small Business | false | |
Entity Registrant Name | NATUS MEDICAL INC | |
Entity Central Index Key | 0000878526 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 34,078,412 | |
Entity Emerging Growth Company | false | |
Entity Tax Identification Number | 77-0154833 | |
Entity Address, City or Town | Pleasanton | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94566 | |
City Area Code | 925 | |
Local Phone Number | 223-6700 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value MeasurementsASC 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 derivative financial instruments described in Note 14 are measured at fair value on a recurring basis and are presented on the consolidated balance sheets at fair value. We estimate the fair value of the interest rate swaps by calculating the present value of the expected future cash flows of each swap. The calculation incorporates the contractual terms of the derivatives, observable market interest rates which are considered to be Level 2 inputs, and credit risk adjustments, if any, to reflect the counterpart's as well as our nonperformance risk. As of March 31, 2021, there have been no events of default under the interest rate swap agreement. The table below presents the fair value of the derivative financial instruments as well as the classification on the consolidated balance sheet (in thousands): December 31, 2020 Additions Payments Adjustments March 31, 2021 Liabilities: Interest rate swap $ 277 $ — $ — $ (90) $ 187 Total $ 277 $ — $ — $ (90) $ 187 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 80,549 | $ 82,082 |
Accounts receivable, net of allowance for doubtful accounts of $6,085 in 2021 and $6,213 in 2020 | 91,326 | 93,133 |
Inventories | 69,467 | 75,650 |
Prepaid expenses and other current assets | 24,477 | 20,837 |
Total current assets | 265,819 | 271,702 |
Property and equipment, net | 23,282 | 24,516 |
Operating lease right-of-use assets | 10,776 | 11,669 |
Intangible assets, net | 85,001 | 92,741 |
Goodwill | 149,761 | 151,299 |
Deferred income tax | 26,321 | 27,563 |
Other assets | 20,408 | 20,904 |
Total assets | 581,368 | 600,394 |
Current liabilities: | ||
Accounts payable | 24,486 | 23,429 |
Current portion of long-term debt | 36,523 | 50,000 |
Accrued liabilities | 45,792 | 44,236 |
Deferred revenue | 23,669 | 21,308 |
Current portion of operating lease liabilities | 6,006 | 6,779 |
Total current liabilities | 136,476 | 145,752 |
Liabilities, Noncurrent [Abstract] | ||
Other liabilities | 17,864 | 18,451 |
Operating lease liabilities | 8,181 | 8,959 |
Long-term debt, net of current portion | 0 | 5,840 |
Deferred income tax | 9,915 | 10,298 |
Total liabilities | 172,436 | 189,300 |
Stockholders’ equity: | ||
Common stock, $0.001 par value, 120,000,000 shares authorized; shares issued and outstanding 34,096,895 in 2021 and 33,911,703 in 2020 | 344,696 | 342,828 |
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding in 2021 and 2020 | 0 | 0 |
Retained earnings | 73,705 | 71,309 |
Accumulated other comprehensive loss | (9,469) | (3,043) |
Total stockholders’ equity | 408,932 | 411,094 |
Total liabilities and stockholders’ equity | $ 581,368 | $ 600,394 |
Consolidated Balance Sheets (un
Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 6,085 | $ 6,213 |
Common Stock, par value (dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, shares authorized (in shares) | 120,000,000 | 120,000,000 |
Common Stock, shares issued (in shares) | 34,096,895 | 33,911,703 |
Common Stock, shares outstanding (in shares) | 34,096,895 | 33,911,703 |
Preferred Stock, par value (dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued (in shares) | 0 | 0 |
Preferred Stock, shares outstanding (in shares) | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Revenue | $ 114,927 | $ 109,383 |
Cost of revenue | 46,688 | 44,933 |
Intangibles amortization | 1,751 | 1,668 |
Gross profit | 66,488 | 62,782 |
Operating expenses: | ||
Marketing and selling | 28,971 | 30,730 |
Research and development | 14,040 | 17,569 |
General and administrative | 14,855 | 13,182 |
Intangibles amortization | 3,897 | 3,661 |
Restructuring | 205 | 871 |
Total operating expenses | 61,968 | 66,013 |
Income (loss) from operations | 4,520 | (3,231) |
Other expense, net | (1,656) | (1,494) |
Income (loss) before benefit from income tax | 2,864 | (4,725) |
Provision for (benefit from) income taxes | 468 | (1,128) |
Net income (loss) | $ 2,396 | $ (3,597) |
Net income (loss) per share: | ||
Basic (dollars per share) | $ 0.07 | $ (0.11) |
Diluted (dollars per share) | $ 0.07 | $ (0.11) |
Weighted average shares used in the calculation of net income (loss) per share: | ||
Basic (in shares) | 33,611 | 33,800 |
Diluted (in shares) | 33,782 | 33,800 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (unaudited) Condensed Consolidated Statements of Comprehensive Income (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 2,396 | $ (3,597) |
Other comprehensive loss, net of tax: | ||
Foreign currency translation adjustment | (6,494) | (4,018) |
Interest rate swap designated as a cash flow hedge | 68 | (175) |
Other comprehensive loss, net of tax | (6,426) | (4,193) |
Comprehensive loss | $ (4,030) | $ (7,790) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating activities: | ||
Net income (loss) | $ 2,396 | $ (3,597) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Provision for losses on accounts receivable | 101 | 522 |
Depreciation and amortization | 7,257 | 6,994 |
Loss on disposal of property and equipment | 8 | 42 |
Warranty reserve | 341 | 704 |
Share-based compensation | 3,114 | 2,291 |
Impairment of intangible assets | 6 | 295 |
Loss on equity method investment | 136 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 4,962 | 15,612 |
Inventories | 4,139 | (3,443) |
Prepaid expenses and other assets | (4,028) | (1,060) |
Accounts payable | 1,303 | 6,038 |
Accrued liabilities | 1,172 | (9,329) |
Deferred revenue | 2,732 | 2,190 |
Deferred income tax | 1,064 | 103 |
Net cash provided by operating activities | 24,703 | 17,362 |
Investing activities: | ||
Purchase of property and equipment | (731) | (3,575) |
Net cash used in investing activities | (731) | (3,575) |
Financing activities: | ||
Repurchase of common stock | 0 | (10,495) |
Taxes paid related to net share settlement of equity awards | (1,150) | (1,883) |
Principal payments of financing lease liability | (125) | (133) |
Proceeds from borrowings | 0 | 60,000 |
Payments on borrowings | (20,000) | (15,000) |
Net cash provided by (used in) financing activities | (21,275) | 32,489 |
Exchange rate changes effect on cash and cash equivalents | (4,230) | (2,557) |
Net increase (decrease) in cash and cash equivalents | (1,533) | 43,719 |
Cash and cash equivalents, beginning of period | 82,082 | 63,297 |
Cash and cash equivalents, end of period | 80,549 | 107,016 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 513 | 637 |
Cash paid for income taxes | (320) | 3,492 |
Non-cash investing activities: | ||
Property and equipment included in accounts payable | 39 | 131 |
Inventory transferred to property and equipment | 94 | 196 |
Transfer of leased assets to sales-type leases | $ 13 | $ 663 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Stockholders' Equity (unaudited) Condensed Consolidated Statement of Stockholders' Equity (unaudited) - USD ($) $ in Thousands | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Beginning of period (shares) at Dec. 31, 2019 | 34,148,700 | |||
Beginning of period at Dec. 31, 2019 | $ 416,123 | $ 344,476 | $ 87,922 | $ (16,275) |
Vesting Of Restricted Stock Units Shares | 14,033 | |||
Net issuance of restricted stock awards (in shares) | 162,212 | |||
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture | 2,198 | $ 2,198 | ||
Stock Repurchased During Period, Shares | (465,117) | |||
Stock Repurchased During Period, Value | (10,495) | $ (10,495) | ||
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation | (57,695) | |||
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation | (1,883) | $ (1,883) | ||
Other Comprehensive Income (Loss), Net of Tax | (4,193) | |||
Other Comprehensive Income (Loss) Excluding Impact Of New Accounting Pronouncement | (4,193) | (4,193) | ||
Net income (loss) | (3,597) | (3,597) | ||
End of period (shares) at Mar. 31, 2020 | 33,802,133 | |||
End of period at Mar. 31, 2020 | 398,153 | $ 334,296 | 84,325 | (20,468) |
Beginning of period (shares) at Dec. 31, 2020 | 33,911,703 | |||
Beginning of period at Dec. 31, 2020 | 411,094 | $ 342,828 | 71,309 | (3,043) |
Vesting Of Restricted Stock Units Shares | 19,650 | |||
Net issuance of restricted stock awards (in shares) | 222,899 | |||
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture | 3,018 | $ 3,018 | ||
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation | (57,357) | |||
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation | (1,150) | $ (1,150) | ||
Other Comprehensive Income (Loss), Net of Tax | (6,426) | (6,426) | ||
Net income (loss) | 2,396 | 2,396 | ||
End of period (shares) at Mar. 31, 2021 | 34,096,895 | |||
End of period at Mar. 31, 2021 | $ 408,932 | $ 344,696 | $ 73,705 | $ (9,469) |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation and Significant Accounting Policies The accompanying interim condensed consolidated financial statements of Natus Medical Incorporated (“we,” “us,” or “our”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Except where noted below within Note 1, the accounting policies followed in the preparation of the interim condensed consolidated financial statements are consistent in all material respects with those presented in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. Interim financial reports are prepared in accordance with the rules and regulations of the Securities and Exchange Commission; accordingly, the reports do not include all of the information and notes required by GAAP for annual financial statements. The interim financial information is unaudited, and reflects all normal adjustments that are, in the opinion of management, necessary for the fair presentation of our financial position, results of operations, and cash flows for the interim periods presented. We have made certain reclassifications to the prior period to conform to current period presentation. The consolidated balance sheet as of December 31, 2020 was derived from audited financial statements but does not include all disclosures required by GAAP. The accompanying financial statements should be read in conjunction with the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. The accompanying condensed consolidated financial statements include our accounts and our wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Impact of COVID-19 on Our Financial Statements The global spread and unprecedented impact of COVID-19 is complex and rapidly-evolving. On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic and recommended extensive containment and mitigation measures worldwide. The outbreak has reached all of the regions in which we do business, and governmental authorities around the world have implemented numerous measures attempting to contain and mitigate the effects of the virus, including travel bans and restrictions, border closings, quarantines, shelter-in-place orders, shutdowns, limitations or closures of non-essential businesses, school closures, and social distancing requirements. The global spread of COVID-19 and actions taken in response to the virus have negatively affected workforces, customers, consumer confidence, financial markets, employment rates, consumer spending, credit markets and housing demand, caused significant economic and business disruption, volatility and financial uncertainty, and led to a significant economic downturn, including in the markets where we operate. Various government programs have been established to provide financial relief for businesses affected by COVID-19 including the Canada Emergency Wage Subsidy ("CEWS") under the COVID-19 Economic Response Plan in Canada. We received $2.9 million for payroll subsidies under CEWS during the three months ended March 31, 2021. Our policy is to account for these subsidies in the same manner as an offset to the expense they relate to in the period in which we are reasonably assured to receive payment. For the three months ended March 31, 2021 we recognized reductions of $0.4 million in cost of sales, $1.3 million in marketing and selling expense, and $1.2 million in research and development expense in the condensed consolidated statements of operations for these subsidies. No payroll subsidies were received or recognized under CEWS in prior periods. As of March 31, 2021 we have collected all amounts recorded and continue to seek additional relief as applicable. We have assessed various accounting estimates and other matters, including those that require consideration of forecasted financial information, in context of the unknown future impacts of COVID-19 using information that is reasonably available to us at this time. The accounting estimates and other matters we assessed include, but were not limited to, our allowance for doubtful accounts, inventory and warranty reserves, stock-based compensation, goodwill and other long-lived assets, financial assets, valuation allowances for tax assets and revenue recognition. While based on our current assessment of these estimates there was not a material impact to our consolidated financial statements as of and for the three months ended March 31, 2021, as additional information becomes available to us, our future assessment of these estimates, including our expectations at the time regarding the duration, scope and severity of the pandemic, as well as other factors, could materially and adversely impact our consolidated financial statements in future reporting periods. Recently Adopted Accounting Pronouncements None. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Unbilled accounts receivable (“AR”) for the periods presented primarily represent the difference between revenue recognized based on the relative selling price of the related performance obligations and the contractual billing terms in the arrangements. Deferred revenue for the periods presented primarily relates to extended service contracts, installation, and training, for which the service fees are billed in advance. The associated deferred revenue is generally recognized ratably over the extended service period or when installation and training are complete. The following table summarizes the changes in the unbilled AR and deferred revenue balances for the three months ended March 31, 2021 (in thousands): Unbilled AR, December 31, 2020 $ 1,925 Additions 69 Transferred to trade receivable (8) Unbilled AR, March 31, 2021 $ 1,986 Deferred revenue, December 31, 2020 $ 25,723 Additions 11,032 Revenue recognized (8,332) Deferred revenue, March 31, 2021 $ 28,423 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The components of basic and diluted EPS, and shares excluded from the calculation of diluted loss per share because the effect would have been anti-dilutive, are as follows (in thousands, except per share amounts): Three Months Ended 2021 2020 Net income (loss) $ 2,396 $ (3,597) Weighted average common shares 33,611 33,800 Dilutive effect of stock based awards 171 — Diluted shares 33,782 33,800 Basic earnings per share $ 0.07 $ (0.11) Diluted earnings per share $ 0.07 $ (0.11) Shares excluded from calculation of diluted EPS — 85 |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts | 3 Months Ended |
Mar. 31, 2021 | |
Credit Loss [Abstract] | |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts We estimate the lifetime allowance for doubtful, potentially uncollectible, accounts receivable upon their inception based on historical collection experience within the markets in which we operate, customer-specific information such as bankruptcy filings or customer liquidity problems, current conditions, and reasonable and supportable forecasts about the future. Our allowance for doubtful accounts is presented as a reduction to accounts receivable on our consolidated balance sheet. When all internal efforts have been exhausted to collect the receivable, it is written off and relieved from the reserve. The details of activity in allowance for doubtful accounts are as follows (in thousands): Three Months Ended 2021 2020 Balance, beginning of period $ 6,213 $ 7,384 Additions charged to expense 101 522 Write-offs charged against allowance (229) (614) Balance, end of period $ 6,085 $ 7,292 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following (in thousands): March 31, 2021 December 31, 2020 Raw materials and subassemblies $ 18,874 $ 22,583 Work in process 3,327 2,294 Finished goods 61,977 65,695 Total inventories 84,178 90,572 Less: Non-current inventories (14,711) (14,922) Inventories, current $ 69,467 $ 75,650 As of March 31, 2021 and December 31, 2020, we have classified $14.7 million and $14.9 million, respectively, of inventories as other assets. This inventory consists primarily of service components used to repair products held by customers pursuant to warranty obligations and extended service contracts, including service components for products we no longer sell, inventory purchased for lifetime buys, and inventory that is turning over at a slow rate. We believe these inventories will be utilized for their intended purpose. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
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): March 31, 2021 December 31, 2020 Gross Accumulated Accumulated Net Book Gross Accumulated Accumulated Net Book Intangible assets with definite lives: Technology $ 110,356 $ (12,458) $ (65,079) $ 32,819 $ 112,138 $ (12,480) $ (64,203) $ 35,455 Customer related 92,411 (50) (52,499) 39,862 94,526 (50) (51,247) 43,229 Trade names 46,481 (3,592) (33,047) 9,842 47,058 (3,677) (31,890) 11,491 Internally developed software 13,281 — (12,895) 386 13,281 — (12,845) 436 Patents 2,748 (133) (2,615) — 2,810 (133) (2,677) — Service agreements 1,190 — (1,129) 61 1,190 — (1,119) 71 Definite-lived intangible assets $ 266,467 $ (16,233) $ (167,264) $ 82,970 $ 271,003 $ (16,340) $ (163,981) $ 90,682 Intangible assets with indefinite lives: Intellectual Property $ 2,031 $ — $ — $ 2,031 $ 2,059 $ — $ — $ 2,059 Total intangible assets $ 268,498 $ (16,233) $ (167,264) $ 85,001 $ 273,062 $ (16,340) $ (163,981) $ 92,741 Finite-lived intangible assets are amortized over their weighted average lives, which are 14 years for technology, 10 years for customer related intangibles, 7 years for trade names, 6 years for internally developed software, 13 years for patents, 2 years for service agreements and 11 years weighted average in total. Internally developed software consists of $11.1 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 definite lives was as follows (in thousands): Three Months Ended 2021 2020 Technology $ 1,795 $ 1,712 Customer related 2,360 2,140 Trade names 1,483 1,466 Internally developed software 50 69 Service agreements $ 10 $ 10 Total amortization $ 5,698 $ 5,397 The amortization expense amounts shown above include internally developed software not held for sale of $24 thousand and $24 thousand for the three months ended March 31, 2021 and March 31, 2020, respectively, which is recorded within our income statement as a general and administrative operating expense. The amortization expense amounts shown above include internally developed software held for sale of $26 thousand and $45 thousand for the three months ended March 31, 2021 and March 31, 2020, respectively, which is recorded within our income statement as cost of goods sold. Expected amortization expense related to definite-lived amortizable intangible assets is as follows (in thousands): Nine months ending December 31, 2021 $ 16,276 2022 17,940 2023 15,169 2024 13,233 2025 12,619 2026 2,422 Thereafter 5,311 Total expected amortization expense $ 82,970 |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The carrying amount of goodwill and the changes in the balance are as follows (in thousands): December 31, 2020 $ 151,299 Foreign currency translation (1,538) March 31, 2021 $ 149,761 |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment, net consist of the following (in thousands): March 31, 2021 December 31, 2020 Land $ 1,786 $ 1,792 Buildings 7,144 7,365 Leasehold improvements 7,378 8,050 Finance lease right-of-use assets 2,512 2,555 Equipment and furniture 20,581 22,148 Computer software and hardware 10,257 10,246 Demonstration and loaned equipment 3,175 3,086 52,833 55,242 Accumulated depreciation (29,551) (30,726) Total $ 23,282 $ 24,516 |
Reserve for Product Warranties
Reserve for Product Warranties | 3 Months Ended |
Mar. 31, 2021 | |
Product Warranties Disclosures [Abstract] | |
Reserve for Product Warranties | Reserve for Product Warranties We provide a warranty for products that is generally one year in length. In some cases, regulations may require us to provide repair or remediation beyond the typical warranty period. If any of the products contain defects, we may incur additional repair and remediation costs. Service, repair and calibration services are provided by a combination of our owned facilities and vendors on a contract basis. We accrue estimated product warranty costs at the time of sale based on historical experience. 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. We consider 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. As of March 31, 2021, we have accrued $4.8 million for product related warranties. Our estimate of these costs is primarily based upon the number of units outstanding that may require repair and costs associated with shipping. The details of activity in the warranty reserve are as follows (in thousands): Three Months Ended 2021 2020 Balance, beginning of period $ 5,195 $ 6,404 Additions charged to expense 341 704 Utilizations (740) (1,271) Balance, end of period $ 4,796 $ 5,837 Our estimate of future product warranty costs may vary from actual product warranty costs, and any variance from estimates could impact our cost of sales, operating profits and results of operations. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation As of March 31, 2021, we have two active share-based compensation plans, the 2018 Equity Incentive Plan and the 2011 Employee Stock Purchase Plan. The terms of all awards granted during the three months ended March 31, 2021 and the methods for determining grant-date fair value of the awards are consistent with those described in the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. Details of share-based compensation expense are as follows (in thousands): Three Months Ended 2021 2020 Cost of revenue $ 100 $ 75 Marketing and selling 640 469 Research and development 355 254 General and administrative 1,923 1,400 Total $ 3,018 $ 2,198 As of March 31, 2021, unrecognized compensation expense related to the unvested portion of stock options and other stock awards was approximately $20.2 million, which is expected to be recognized over a weighted average period of 2.6 years. |
Other Income (Expense), net
Other Income (Expense), net | 3 Months Ended |
Mar. 31, 2021 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense), net | Other Income (Expense), net Other income (expense), net consists of (in thousands): Three Months Ended 2021 2020 Interest income $ 3 $ 24 Interest expense (766) (717) Foreign currency loss (731) (801) Other expense (162) — Total other (expense), net $ (1,656) $ (1,494) |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our tax provision for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete events arising in each respective quarter. During each interim period, we update the estimated annual effective tax rate which is subject to significant volatility due to several factors, including our ability to accurately predict the income (loss) before provision for income taxes in multiple jurisdictions, the effects of acquisitions, the integration of those acquisitions, and changes in tax law. In circumstances where we are unable to predict income (loss) in multiple jurisdictions, the actual year to date effective tax rate may be the best estimate of the annual effective tax rate for purposes of determining the interim provision for income tax. We recorded income tax expense of $0.5 million and income tax benefit of $1.1 million for the three months ended March 31, 2021 and March 31, 2020, respectively. The effective tax rate was 16.4% and 23.9% for the three months ended March 31, 2021 and March 31, 2020, respectively. The decrease in the effective tax rate for the three months ended March 31, 2021 compared with the three months ended March 31, 2020, is primarily attributable to changes in mix of income among jurisdictions with varying tax rates and discrete items. Other significant factors impacting the current period effective tax rate included Federal and California research and development credits and non-deductible executive compensation expenses. We recorded no changes related to unrecognized tax benefits for the three months ended March 31, 2021. Within the next twelve months, it is possible that the uncertain tax positions may change with a range of approximately zero to $0.2 million. Our tax returns remain open to examination as follows: U.S Federal, 2017 through 2020, U.S. states, 2016 through 2020, and significant foreign jurisdictions, generally 2016 through 2020. |
Debt and Credit Arrangements
Debt and Credit Arrangements | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt and Credit Arrangements | Debt and Credit Arrangements We have a Credit Agreement with JP Morgan Chase Bank ("JP Morgan"), Citibank, NA (“Citibank”), and Wells Fargo Bank, National Association (“Wells Fargo”). During the third quarter of 2020 we amended the terms of the Credit Agreement to extend the maturity date of the original agreement, reduce the aggregate value of the revolving facility, and amend certain covenants. The amended Credit Agreement provides for an aggregate $150.0 million of secured revolving credit facility. The Credit Agreement contains covenants, including 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 our 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 the event has a material adverse effect. We have no other significant credit facilities. In addition to the customary restrictive covenants listed above, the Credit Agreement also contains financial covenants that require us 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 3.25 to 1.00. • Interest Coverage Ratio, as defined, to be at least 1.75 to 1.00 at all times. At March 31, 2021, we were in compliance with the Leverage Ratio and the Interest Coverage Ratio covenants as defined in the Credit Agreement. During the first quarter of 2020 we drew an additional $60.0 million on our credit line as a precaution to ensure we have the necessary capital to continue to reliably serve our customers during an extended period of uncertainty of which $43.0 million was repaid by December 31, 2020. During the first quarter of 2021, we repaid $20.0 million of our outstanding debt and at March 31, 2021, we had $37.0 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 our 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 2.25% to 3.50%. The effective interest rate during the three months ended March 31, 2021 was 3.05%. The Credit Agreement matures on September 25, 2023, at which time all principal amounts outstanding under the Credit Agreement will be due and payable. As of March 31, 2021, we have classified the full outstanding debt balance of $37.0 million as short-term on our balance sheet due to our intent to repay this portion over the next twelve months. Long-term debt consists of (in thousands): March 31, 2021 December 31, 2020 Revolving credit facility $ 37,000 $ 57,000 Debt issuance costs (477) (1,160) Less: current portion of long-term debt 36,523 50,000 Total long-term debt $ — $ 5,840 Maturities of long-term debt as of March 31, 2021 are as follows (in thousands): March 31, 2021 December 31, 2020 2021 $ — $ — 2022 — — 2023 37,000 57,000 Thereafter — — Total $ 37,000 $ 57,000 As of March 31, 2021, the carrying value of total debt approximated fair market value. |
Financial Instruments and Deriv
Financial Instruments and Derivatives | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments and Derivatives | Financial Instruments and Derivatives We use interest rate swap derivative instruments to reduce earnings volatility and manage cash flow exposure resulting from changes in interest rates. These interest rate swaps apply a fixed interest rate on a portion of our expected LIBOR-indexed floating-rate borrowings. We held the following interest rate swaps as of March 31, 2021 (in thousands): Hedged Item Current Notional Amount Designation Date Effective Date Termination Date Fixed Interest Rate Floating Rate Estimated Fair Value 1-month USD LIBOR Loan $ 15,000 May 31, 2018 June 1, 2018 September 23, 2021 2.611% 1-month USD LIBOR $ 187 Total interest rate derivatives designated as cash flow hedge $ 15,000 $ 187 We have designated these derivative instruments as cash flow hedges. We assess the effectiveness of these derivative instruments and record the change in the fair value of a derivative instrument designated as a cash flow hedge as unrealized gains or losses in accumulated other comprehensive income (“AOCI”), net of tax. Once the hedged item affects earnings, the effective portion of any gain or loss will be reclassified to earnings. If the hedged cash flow does not occur, or if it becomes probable that it will not occur, we will reclassify the amount of any gain or loss on the related cash flow hedge to interest expense at that time. |
Segment, Customer and Geographi
Segment, Customer and Geographic Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment, Customer and Geographic Information | Segment, Customer and Geographic InformationWe operate in one reportable segment in which we provide medical device solutions focused on the diagnosis and treatment of central nervous and sensory system disorders for patients of all ages. End-user customer base includes hospitals, clinics, laboratories, physicians, audiologists, and governmental agencies. Most of our international sales are to distributors who resell products to end users or sub-distributors. The following tables present revenue by end market and geographic region and long-lived asset information by geographic region. Revenue is based on the destination of the shipments and long-lived assets are based on the physical location of the assets (in thousands): Three Months Ended 2021 2020 Consolidated Revenue: United States $ 67,772 $ 68,338 International 47,155 41,045 Total $ 114,927 $ 109,383 Three Months Ended 2021 2020 Revenue by End Market: Neuro Products Devices and Systems $ 53,341 $ 49,426 Supplies 15,714 15,924 Total Neuro Revenue 69,055 65,350 Newborn Care Products Devices and Systems 13,772 11,124 Supplies 8,403 9,691 Services 3,764 3,417 Total Newborn Care Revenue 25,939 24,232 Hearing & Balance Products Devices and Systems 18,771 18,560 Supplies 1,162 1,241 Total Hearing & Balance Revenue 19,933 19,801 Total Revenue $ 114,927 $ 109,383 March 31, 2021 December 31, 2020 Property and equipment, net: United States $ 10,115 $ 10,998 Ireland 6,647 6,716 Canada 3,713 3,775 Denmark 1,613 1,787 Other countries 1,194 1,240 Total $ 23,282 $ 24,516 During the three months ended March 31, 2021 and 2020, no single customer and no country outside the United States contributed more than 10% of our consolidated revenue. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying interim condensed consolidated financial statements of Natus Medical Incorporated (“we,” “us,” or “our”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Except where noted below within Note 1, the accounting policies followed in the preparation of the interim condensed consolidated financial statements are consistent in all material respects with those presented in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. Interim financial reports are prepared in accordance with the rules and regulations of the Securities and Exchange Commission; accordingly, the reports do not include all of the information and notes required by GAAP for annual financial statements. The interim financial information is unaudited, and reflects all normal adjustments that are, in the opinion of management, necessary for the fair presentation of our financial position, results of operations, and cash flows for the interim periods presented. We have made certain reclassifications to the prior period to conform to current period presentation. The consolidated balance sheet as of December 31, 2020 was derived from audited financial statements but does not include all disclosures required by GAAP. The accompanying financial statements should be read in conjunction with the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. The accompanying condensed consolidated financial statements include our accounts and our wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements None. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of contract assets and liabilities | The following table summarizes the changes in the unbilled AR and deferred revenue balances for the three months ended March 31, 2021 (in thousands): Unbilled AR, December 31, 2020 $ 1,925 Additions 69 Transferred to trade receivable (8) Unbilled AR, March 31, 2021 $ 1,986 Deferred revenue, December 31, 2020 $ 25,723 Additions 11,032 Revenue recognized (8,332) Deferred revenue, March 31, 2021 $ 28,423 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | The components of basic and diluted EPS, and shares excluded from the calculation of diluted loss per share because the effect would have been anti-dilutive, are as follows (in thousands, except per share amounts): Three Months Ended 2021 2020 Net income (loss) $ 2,396 $ (3,597) Weighted average common shares 33,611 33,800 Dilutive effect of stock based awards 171 — Diluted shares 33,782 33,800 Basic earnings per share $ 0.07 $ (0.11) Diluted earnings per share $ 0.07 $ (0.11) Shares excluded from calculation of diluted EPS — 85 |
Allowance for Doubtful Accoun_2
Allowance for Doubtful Accounts (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Credit Loss [Abstract] | |
Schedule of Allowance for Credit Losses | The details of activity in allowance for doubtful accounts are as follows (in thousands): Three Months Ended 2021 2020 Balance, beginning of period $ 6,213 $ 7,384 Additions charged to expense 101 522 Write-offs charged against allowance (229) (614) Balance, end of period $ 6,085 $ 7,292 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories consist of the following (in thousands): March 31, 2021 December 31, 2020 Raw materials and subassemblies $ 18,874 $ 22,583 Work in process 3,327 2,294 Finished goods 61,977 65,695 Total inventories 84,178 90,572 Less: Non-current inventories (14,711) (14,922) Inventories, current $ 69,467 $ 75,650 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Amortization expense related to intangible assets with definite lives | The following table summarizes the components of gross and net intangible asset balances (in thousands): March 31, 2021 December 31, 2020 Gross Accumulated Accumulated Net Book Gross Accumulated Accumulated Net Book Intangible assets with definite lives: Technology $ 110,356 $ (12,458) $ (65,079) $ 32,819 $ 112,138 $ (12,480) $ (64,203) $ 35,455 Customer related 92,411 (50) (52,499) 39,862 94,526 (50) (51,247) 43,229 Trade names 46,481 (3,592) (33,047) 9,842 47,058 (3,677) (31,890) 11,491 Internally developed software 13,281 — (12,895) 386 13,281 — (12,845) 436 Patents 2,748 (133) (2,615) — 2,810 (133) (2,677) — Service agreements 1,190 — (1,129) 61 1,190 — (1,119) 71 Definite-lived intangible assets $ 266,467 $ (16,233) $ (167,264) $ 82,970 $ 271,003 $ (16,340) $ (163,981) $ 90,682 Intangible assets with indefinite lives: Intellectual Property $ 2,031 $ — $ — $ 2,031 $ 2,059 $ — $ — $ 2,059 Total intangible assets $ 268,498 $ (16,233) $ (167,264) $ 85,001 $ 273,062 $ (16,340) $ (163,981) $ 92,741 |
Amortization expense | Amortization expense related to intangible assets with definite lives was as follows (in thousands): Three Months Ended 2021 2020 Technology $ 1,795 $ 1,712 Customer related 2,360 2,140 Trade names 1,483 1,466 Internally developed software 50 69 Service agreements $ 10 $ 10 Total amortization $ 5,698 $ 5,397 |
Expected amortization expense related to amortizable intangible assets | Expected amortization expense related to definite-lived amortizable intangible assets is as follows (in thousands): Nine months ending December 31, 2021 $ 16,276 2022 17,940 2023 15,169 2024 13,233 2025 12,619 2026 2,422 Thereafter 5,311 Total expected amortization expense $ 82,970 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Carrying amount of Goodwill | The carrying amount of goodwill and the changes in the balance are as follows (in thousands): December 31, 2020 $ 151,299 Foreign currency translation (1,538) March 31, 2021 $ 149,761 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment net | Property and equipment, net consist of the following (in thousands): March 31, 2021 December 31, 2020 Land $ 1,786 $ 1,792 Buildings 7,144 7,365 Leasehold improvements 7,378 8,050 Finance lease right-of-use assets 2,512 2,555 Equipment and furniture 20,581 22,148 Computer software and hardware 10,257 10,246 Demonstration and loaned equipment 3,175 3,086 52,833 55,242 Accumulated depreciation (29,551) (30,726) Total $ 23,282 $ 24,516 |
Reserve for Product Warranties
Reserve for Product Warranties (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Product Warranties Disclosures [Abstract] | |
Reserve for Product Warranties | The details of activity in the warranty reserve are as follows (in thousands): Three Months Ended 2021 2020 Balance, beginning of period $ 5,195 $ 6,404 Additions charged to expense 341 704 Utilizations (740) (1,271) Balance, end of period $ 4,796 $ 5,837 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation Expense | Details of share-based compensation expense are as follows (in thousands): Three Months Ended 2021 2020 Cost of revenue $ 100 $ 75 Marketing and selling 640 469 Research and development 355 254 General and administrative 1,923 1,400 Total $ 3,018 $ 2,198 |
Other Income (Expense), net (Ta
Other Income (Expense), net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense), net | Other income (expense), net consists of (in thousands): Three Months Ended 2021 2020 Interest income $ 3 $ 24 Interest expense (766) (717) Foreign currency loss (731) (801) Other expense (162) — Total other (expense), net $ (1,656) $ (1,494) |
Debt and Credit Arrangements (T
Debt and Credit Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term debt | Long-term debt consists of (in thousands): March 31, 2021 December 31, 2020 Revolving credit facility $ 37,000 $ 57,000 Debt issuance costs (477) (1,160) Less: current portion of long-term debt 36,523 50,000 Total long-term debt $ — $ 5,840 |
Schedule of Maturities of Long-term Debt | Maturities of long-term debt as of March 31, 2021 are as follows (in thousands): March 31, 2021 December 31, 2020 2021 $ — $ — 2022 — — 2023 37,000 57,000 Thereafter — — Total $ 37,000 $ 57,000 |
Financial Instruments and Der_2
Financial Instruments and Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of interest rate swaps | We held the following interest rate swaps as of March 31, 2021 (in thousands): Hedged Item Current Notional Amount Designation Date Effective Date Termination Date Fixed Interest Rate Floating Rate Estimated Fair Value 1-month USD LIBOR Loan $ 15,000 May 31, 2018 June 1, 2018 September 23, 2021 2.611% 1-month USD LIBOR $ 187 Total interest rate derivatives designated as cash flow hedge $ 15,000 $ 187 |
Segment, Customer and Geograp_2
Segment, Customer and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Revenue and Long-lived Asset Information by Geographic Region | Revenue is based on the destination of the shipments and long-lived assets are based on the physical location of the assets (in thousands): Three Months Ended 2021 2020 Consolidated Revenue: United States $ 67,772 $ 68,338 International 47,155 41,045 Total $ 114,927 $ 109,383 Three Months Ended 2021 2020 Revenue by End Market: Neuro Products Devices and Systems $ 53,341 $ 49,426 Supplies 15,714 15,924 Total Neuro Revenue 69,055 65,350 Newborn Care Products Devices and Systems 13,772 11,124 Supplies 8,403 9,691 Services 3,764 3,417 Total Newborn Care Revenue 25,939 24,232 Hearing & Balance Products Devices and Systems 18,771 18,560 Supplies 1,162 1,241 Total Hearing & Balance Revenue 19,933 19,801 Total Revenue $ 114,927 $ 109,383 March 31, 2021 December 31, 2020 Property and equipment, net: United States $ 10,115 $ 10,998 Ireland 6,647 6,716 Canada 3,713 3,775 Denmark 1,613 1,787 Other countries 1,194 1,240 Total $ 23,282 $ 24,516 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair value of the derivative financial instrument | The table below presents the fair value of the derivative financial instruments as well as the classification on the consolidated balance sheet (in thousands): December 31, 2020 Additions Payments Adjustments March 31, 2021 Liabilities: Interest rate swap $ 277 $ — $ — $ (90) $ 187 Total $ 277 $ — $ — $ (90) $ 187 |
Basis of Presentation (Details)
Basis of Presentation (Details) - COVID-19 $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Unusual or Infrequent Item, or Both [Line Items] | |
Income from Canada Emergency Wage Subsidy (CEWS) | $ 2.9 |
Cost of sales | |
Unusual or Infrequent Item, or Both [Line Items] | |
Income from Canada Emergency Wage Subsidy (CEWS) | 0.4 |
Marketing and selling expense | |
Unusual or Infrequent Item, or Both [Line Items] | |
Income from Canada Emergency Wage Subsidy (CEWS) | 1.3 |
Research and development expense | |
Unusual or Infrequent Item, or Both [Line Items] | |
Income from Canada Emergency Wage Subsidy (CEWS) | $ 1.2 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) $ in Millions | Mar. 31, 2021USD ($) |
Revenue from Contract with Customer [Abstract] | |
Short-term contract liability | $ 23.7 |
Long-term contract liability | 4.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 20.1 |
Expected timing of satisfaction for remaining performance obligation | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 5.5 |
Expected timing of satisfaction for remaining performance obligation | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 1.5 |
Expected timing of satisfaction for remaining performance obligation | 3 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 0.9 |
Expected timing of satisfaction for remaining performance obligation | 4 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 0.4 |
Expected timing of satisfaction for remaining performance obligation |
Revenue - Unbilled AR and Defer
Revenue - Unbilled AR and Deferred Revenue (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Movement in Deferred Revenue [Roll Forward] | |
Deferred Revenue, December 31, 2018 | $ 25,723 |
Additions | 11,032 |
Revenue Recognized | (8,332) |
Deferred Revenue, March 31, 2019 | 28,423 |
Unbilled AR | |
Movement in Unbilled AR [Roll Forward] | |
Unbilled AR, December 31, 2018 | 1,925 |
Additions | 69 |
Transferred to trade receivable | (8) |
Unbilled AR, March 31, 2019 | $ 1,986 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net income (loss) | $ 2,396 | $ (3,597) |
Weighted average common shares (in shares) | 33,611 | 33,800 |
Dilutive effect of stock based awards (in shares) | 171 | 0 |
Diluted Shares (in shares) | 33,782 | 33,800 |
Basic earnings per share (dollars per share) | $ 0.07 | $ (0.11) |
Diluted earnings per share (dollars per share) | $ 0.07 | $ (0.11) |
Diluted earnings per share (in shares) | 0 | 85 |
Allowance for Doubtful Accoun_3
Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance, beginning of period | $ 6,213 | $ 7,384 |
Additions charged to expense | 101 | 522 |
Write-offs charged against allowance | (229) | (614) |
Balance, end of period | $ 6,085 | $ 7,292 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Summary of Inventories | ||
Raw materials and subassemblies | $ 18,874 | $ 22,583 |
Work in process | 3,327 | 2,294 |
Finished goods | 61,977 | 65,695 |
Total inventories | 84,178 | 90,572 |
Less: Non-current inventories | (14,711) | (14,922) |
Inventories, current | $ 69,467 | $ 75,650 |
Intangible Assets - Components
Intangible Assets - Components of Gross and Net Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Intangible assets with definite lives: | ||
Gross Carrying Amount | $ 266,467 | $ 271,003 |
Accumulated Impairment | (16,233) | (16,340) |
Accumulated Amortization | (167,264) | (163,981) |
Net Book Value | 82,970 | 90,682 |
Intangible assets with indefinite lives: | ||
Gross Carrying Amount | 268,498 | 273,062 |
Accumulated Impairment | (16,233) | (16,340) |
Net Book Value | 85,001 | 92,741 |
Intellectual Property | ||
Intangible assets with indefinite lives: | ||
Gross Carrying Amount | 2,031 | 2,059 |
Accumulated Impairment | 0 | 0 |
Net Book Value | 2,031 | 2,059 |
Technology | ||
Intangible assets with definite lives: | ||
Gross Carrying Amount | 110,356 | 112,138 |
Accumulated Impairment | (12,458) | (12,480) |
Accumulated Amortization | (65,079) | (64,203) |
Net Book Value | 32,819 | 35,455 |
Customer related | ||
Intangible assets with definite lives: | ||
Gross Carrying Amount | 92,411 | 94,526 |
Accumulated Impairment | (50) | (50) |
Accumulated Amortization | (52,499) | (51,247) |
Net Book Value | 39,862 | 43,229 |
Trade names | ||
Intangible assets with definite lives: | ||
Gross Carrying Amount | 46,481 | 47,058 |
Accumulated Impairment | (3,592) | (3,677) |
Accumulated Amortization | (33,047) | (31,890) |
Net Book Value | 9,842 | 11,491 |
Internally developed software | ||
Intangible assets with definite lives: | ||
Gross Carrying Amount | 13,281 | 13,281 |
Accumulated Impairment | 0 | 0 |
Accumulated Amortization | (12,895) | (12,845) |
Net Book Value | 386 | 436 |
Patents | ||
Intangible assets with definite lives: | ||
Gross Carrying Amount | 2,748 | 2,810 |
Accumulated Impairment | (133) | (133) |
Accumulated Amortization | (2,615) | (2,677) |
Net Book Value | 0 | 0 |
Service agreements | ||
Intangible assets with definite lives: | ||
Gross Carrying Amount | 1,190 | 1,190 |
Accumulated Impairment | 0 | 0 |
Accumulated Amortization | (1,129) | (1,119) |
Net Book Value | $ 61 | $ 71 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life (in years) | 11 years | |
Total amortization | $ 5,698 | $ 5,397 |
Technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life (in years) | 14 years | |
Total amortization | $ 1,795 | 1,712 |
Customer related | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life (in years) | 10 years | |
Total amortization | $ 2,360 | 2,140 |
Trade names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life (in years) | 7 years | |
Total amortization | $ 1,483 | 1,466 |
Internally developed software | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life (in years) | 6 years | |
Costs incurred for development of internal use computer software | $ 11,100 | |
Costs incurred for development of software to be sold | 2,200 | |
Total amortization | $ 50 | 69 |
Patents | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life (in years) | 13 years | |
Service agreements | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life (in years) | 2 years | |
Total amortization | $ 10 | 10 |
General and administrative | Internally developed software | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total amortization | 24 | 24 |
General and administrative | Internally developed software | Assets held for sale | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total amortization | $ 26 | $ 45 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Total amortization | $ 5,698 | $ 5,397 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total amortization | 1,795 | 1,712 |
Customer related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total amortization | 2,360 | 2,140 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total amortization | 1,483 | 1,466 |
Internally developed software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total amortization | 50 | 69 |
Service agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total amortization | $ 10 | $ 10 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Expected Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Expected annual amortization expense related to amortizable intangible assets | ||
Nine months ending December 31, 2021 | $ 16,276 | |
2019 | 17,940 | |
2020 | 15,169 | |
2021 | 13,233 | |
2022 | 12,619 | |
2023 | 2,422 | |
Thereafter | 5,311 | |
Net Book Value | $ 82,970 | $ 90,682 |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Carrying amount of goodwill | |
44196 | $ 151,299 |
Foreign currency translation | (1,538) |
44286 | $ 149,761 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 52,833 | $ 55,242 | |
Finance Lease, Right-of-Use Asset | 2,512 | 2,555 | |
Accumulated depreciation | (29,551) | (30,726) | |
Total | 23,282 | 24,516 | |
Depreciation | 1,600 | $ 1,700 | |
Depreciation | 1,600 | $ 1,700 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 1,786 | 1,792 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 7,144 | 7,365 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 7,378 | 8,050 | |
Equipment and furniture | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 20,581 | 22,148 | |
Computer software and hardware | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 10,257 | 10,246 | |
Demonstration and loaned equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 3,175 | $ 3,086 |
Reserve for Product Warrantie_2
Reserve for Product Warranties - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Product Warranties Disclosures [Abstract] | ||||
Product warranty period (in years) | 1 year | |||
Product Liability Contingency [Line Items] | ||||
Accrual of estimated costs | $ 4,796 | $ 5,195 | $ 5,837 | $ 6,404 |
Reserve for Product Warrantie_3
Reserve for Product Warranties - Schedule of Warranty Reserve (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Reserve for Product Warranties | ||
Balance, beginning of period | $ 5,195 | $ 6,404 |
Additions charged to expense | 341 | 704 |
Utilizations | (740) | (1,271) |
Balance, end of period | $ 4,796 | $ 5,837 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($)plan | |
Share-based Payment Arrangement [Abstract] | |
Number of active share based compensation plans | plan | 2 |
Unrecognized compensation expense related to unvested portion of stock options | $ | $ 20.2 |
Weighted average period of recognition of unrecognized compensation expense | 2 years 7 months 6 days |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | $ 3,018 | $ 2,198 |
Cost of revenue | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 100 | 75 |
Marketing and selling | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 640 | 469 |
Research and development | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 355 | 254 |
General and administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | $ 1,923 | $ 1,400 |
Other Income (Expense), net (De
Other Income (Expense), net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Other expense, net | ||
Interest income | $ 3 | $ 24 |
Interest expense | (766) | (717) |
Foreign currency loss | (731) | (801) |
Other expense | (162) | 0 |
Total other (expense), net | $ (1,656) | $ (1,494) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||
Provision for income tax expense (benefit) | $ 468,000 | $ (1,128,000) |
Effective income tax rate | 16.40% | 23.90% |
Minimum | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||
Possible of uncertain tax benefit within the next twelve months | $ 0 | |
Maximum | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||
Possible of uncertain tax benefit within the next twelve months | $ 200,000 |
Debt and Credit Arrangements -
Debt and Credit Arrangements - Narrative (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | |
Line of Credit Facility [Line Items] | |||
Revolving credit facility | $ 37,000,000 | $ 57,000,000 | |
Current portion of long-term debt | 36,523,000 | 50,000,000 | |
Revolving credit facility | Line of Credit | |||
Line of Credit Facility [Line Items] | |||
Proceeds from lines of credit | $ 60,000,000 | ||
Repayments of lines of credit | 20,000,000 | $ 43,000,000 | |
Revolving credit facility | 37,000,000 | ||
Citibank, National Association | Revolving credit facility | |||
Line of Credit Facility [Line Items] | |||
Aggregate secured revolving credit facility | $ 150,000,000 | ||
All-in rate | 3.05% | ||
Citibank, National Association | Revolving credit facility | Federal Funds Rate | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 0.50% | ||
Citibank, National Association | Revolving credit facility | LIBOR rate | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 1.00% | ||
Citibank, National Association | Revolving credit facility | Maximum | |||
Line of Credit Facility [Line Items] | |||
Leverage Ratio | 3.25 | ||
Citibank, National Association | Revolving credit facility | Maximum | LIBOR rate | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 350.00% | ||
Citibank, National Association | Revolving credit facility | Minimum | |||
Line of Credit Facility [Line Items] | |||
Interest Coverage Ratio | 1.75 | ||
Citibank, National Association | Revolving credit facility | Minimum | LIBOR rate | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 225.00% |
Debt and Credit Arrangements _2
Debt and Credit Arrangements - Schedule of Long-term debt (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
2021 | $ 0 | $ 0 |
2022 | 0 | 0 |
2023 | 37,000 | 57,000 |
Thereafter | 0 | 0 |
Revolving credit facility | 37,000 | 57,000 |
Debt issuance costs | (477) | (1,160) |
Less: current portion of long-term debt | 36,523 | 50,000 |
Total long-term debt | 0 | $ 5,840 |
Revolving credit facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Revolving credit facility | $ 37,000 |
Financial Instruments and Der_3
Financial Instruments and Derivatives (Details) | Mar. 31, 2021USD ($) |
Derivative [Line Items] | |
Losses associated with cash flow hedge expected to be reclassified within the next 12 months | $ 142,000 |
Designated as Hedging Instrument | Cash Flow Hedging | Interest Rate Swap | |
Derivative [Line Items] | |
Current Notional Amount | $ 15,000,000 |
Fixed Interest Rate | 2.611% |
Estimated Fair Value | $ 187,000 |
Segment, Customer and Geograp_3
Segment, Customer and Geographic Information - Narrative (Details) | 3 Months Ended |
Mar. 31, 2021segment | |
Segment Reporting [Abstract] | |
Number of reportable segments (segments) | 1 |
Segment, Customer and Geograp_4
Segment, Customer and Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Consolidated Revenue: | |||
Revenue | $ 114,927 | $ 109,383 | |
Revenue by End Market: | |||
Total Revenue | 114,927 | 109,383 | |
Property and equipment, net: | |||
Property and equipment, net | 23,282 | $ 24,516 | |
Neuro Products | |||
Revenue by End Market: | |||
Total Revenue | 69,055 | 65,350 | |
Neuro Products | Devices and Systems | |||
Revenue by End Market: | |||
Total Revenue | 53,341 | 49,426 | |
Neuro Products | Supplies | |||
Revenue by End Market: | |||
Total Revenue | 15,714 | 15,924 | |
Newborn Care Products | |||
Revenue by End Market: | |||
Total Revenue | 25,939 | 24,232 | |
Newborn Care Products | Devices and Systems | |||
Revenue by End Market: | |||
Total Revenue | 13,772 | 11,124 | |
Newborn Care Products | Supplies | |||
Revenue by End Market: | |||
Total Revenue | 8,403 | 9,691 | |
Newborn Care Products | Services | |||
Revenue by End Market: | |||
Total Revenue | 3,764 | 3,417 | |
Hearing & Balance Products | |||
Revenue by End Market: | |||
Total Revenue | 19,933 | 19,801 | |
Hearing & Balance Products | Devices and Systems | |||
Revenue by End Market: | |||
Total Revenue | 18,771 | 18,560 | |
Hearing & Balance Products | Supplies | |||
Revenue by End Market: | |||
Total Revenue | 1,162 | 1,241 | |
United States | |||
Consolidated Revenue: | |||
Revenue | 67,772 | 68,338 | |
Property and equipment, net: | |||
Property and equipment, net | 10,115 | 10,998 | |
International | |||
Consolidated Revenue: | |||
Revenue | 47,155 | $ 41,045 | |
Property and equipment, net: | |||
Property and equipment, net | 1,194 | 1,240 | |
Canada | |||
Property and equipment, net: | |||
Property and equipment, net | 3,713 | 3,775 | |
Denmark | |||
Property and equipment, net: | |||
Property and equipment, net | 1,613 | 1,787 | |
Long-Lived Assets | $ 6,647 | $ 6,716 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Derivative Financial Instruments at Fair Value (Details) - Level II - Recurring $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Derivative Liability [Roll Forward] | |
Beginning of period | $ 277 |
Additions | 0 |
Payments | 0 |
Adjustments | (90) |
End of period | $ 187 |