Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Mar. 27, 2015 | Jun. 28, 2013 |
Document And Entity Information [Abstract] | |||
Document Type | 10-K/A | ||
Amendment Flag | TRUE | ||
Amendment Description | "Orthofix International N.V. (together with its respective consolidated subsidiaries and affiliates, the “Company,†sometimes referred to as “we,†“us,†or “ourâ€) is filing this amendment (this “Amendment†or “Form 10-K/Aâ€) to its Annual Report on Form 10-K for the fiscal year ended December 31, 2013, which was originally filed on March 31, 2014 (the “Original Form 10-Kâ€). The Original Form 10-K reflected and described the effects of the restatement of the Company’s previously issued consolidated financial statements for the fiscal years ended December 31, 2012 and 2011. In addition, the Original Form 10-K included restated consolidated financial information for the fiscal years ended December 31, 2010 and 2009 in Part II, Item 6, “Selected Financial Data.†The error corrections contained in these restated financial statements, which we refer to herein as the “Original Restatement,†were prepared following an independent review by the Audit Committee (the “Audit Committeeâ€) of the Company’s Board of Directors into certain accounting matters (the “Independent Reviewâ€), which is further described herein. In connection with the Company’s preparation of its consolidated interim quarterly financial statements for the fiscal quarter ended June 30, 2014, the Company determined that certain entries with respect to the previously filed financial statements contained in the Original Form 10-K were not properly accounted for under U.S. generally accepted accounting principles (“US GAAPâ€). As further described below, these additional errors affect the fiscal years ended December 31, 2013, 2012 and 2011, as well as the fiscal quarter ended March 31, 2014. Due to these errors, the Company determined in August 2014 to restate its consolidated financial statements for the fiscal years ended December 31, 2013, 2012 and 2011 (including the interim quarterly periods therein) and the fiscal quarter ended March 31, 2014, and that the previously filed consolidated financial statements for these periods should no longer be relied upon. Contemporaneously with the filing of this Form 10-K/A, the Company is filing (i) an amendment to its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2014 (the “Amended 2014 First Quarter Form 10-Qâ€), which amendment contains restated consolidated interim financial statements for the fiscal quarters ended March 31, 2014 and 2013, and (ii) its delayed Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2014 (the “2014 Second Quarter Form 10-Qâ€), which report contains restated consolidated interim financial statements for the fiscal quarter ended June 30, 2013. Restated consolidated interim financial statements for the fiscal quarter ended September 30, 2013 will also be contained in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2014, which the Company expects to file on or prior to November 10, 2014. The corrections of the additional errors in this Form 10-K/A and the Amended 2014 First Quarter Form 10-Q are referred to herein as the “Further Restatement.†" | ||
Document Period End Date | 31-Dec-13 | ||
Document Fiscal Year Focus | 2013 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | OFIX | ||
Entity Registrant Name | ORTHOFIX INTERNATIONAL N V | ||
Entity Central Index Key | 884624 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | No | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 18,754,831 | ||
Entity Public Float | $497.50 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, unless otherwise specified | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $28,924 | $30,767 | $32,743 | $13,561 | ||||||
Restricted cash | 23,761 | 21,314 | ||||||||
Trade accounts receivable, less allowances of $9,111 and $6,673 at December 31, 2013 and 2012, respectively | 70,811 | 103,802 | ||||||||
Inventories | 72,678 | 69,813 | ||||||||
Deferred income taxes | 39,999 | 38,487 | ||||||||
Prepaid expenses and other current assets | 28,933 | 36,449 | ||||||||
Total current assets | 265,106 | 300,632 | ||||||||
Property, plant and equipment, net | 54,372 | 52,793 | ||||||||
Patents and other intangible assets, net | 9,046 | 7,290 | ||||||||
Goodwill | 53,565 | 72,758 | 74,388 | 73,094 | ||||||
Deferred income taxes | 22,394 | 21,523 | ||||||||
Other long-term assets | 7,492 | 7,920 | ||||||||
Total assets | 411,975 | 415,524 | 446,321 | 464,153 | 464,546 | 528,174 | 520,848 | 680,596 | ||
Current liabilities: | ||||||||||
Bank borrowings | 16 | |||||||||
Trade accounts payable | 20,674 | 22,575 | ||||||||
Other current liabilities | 49,676 | 42,742 | ||||||||
Total current liabilities | 70,350 | 65,333 | ||||||||
Long-term debt | 20,000 | 20,000 | ||||||||
Deferred income taxes | 13,026 | 11,350 | ||||||||
Other long-term liabilities | 12,736 | 11,424 | ||||||||
Total liabilities | 116,112 | 108,531 | 114,175 | 103,178 | 108,107 | 195,755 | 207,927 | 382,051 | ||
Contingencies (Note 17) | ||||||||||
Shareholders' equity: | ||||||||||
Common shares $0.10 par value; 50,000,000 shares authorized; 18,102,335 and 19,339,329 issued and outstanding as of December 31, 2013 and 2012, respectively | 1,810 | 1,934 | ||||||||
Additional paid-in capital | 216,653 | 246,306 | ||||||||
Retained earnings | 73,897 | 102,709 | ||||||||
Accumulated other comprehensive income | 3,503 | 5,490 | ||||||||
Total shareholders' equity | 295,863 | 306,993 | 332,146 | 360,975 | 356,439 | 332,419 | 312,921 | 298,545 | 280,304 | |
Total liabilities and shareholders' equity | $411,975 | $415,524 | $446,321 | $464,153 | $464,546 | $528,174 | $520,848 | $680,596 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowances | $9,111 | $6,673 |
Common shares, par value | $0.10 | $0.10 |
Common shares, authorized | 50,000,000 | 50,000,000 |
Common shares, issued | 18,102,335 | 19,339,329 |
Common shares, outstanding | 18,102,335 | 19,339,329 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Income Statement [Abstract] | |||||||||||||
Product sales | $349,552 | $393,647 | $398,695 | ||||||||||
Marketing service fees | 48,059 | 46,542 | 36,824 | ||||||||||
Net sales | 105,886 | 91,806 | 97,640 | 102,279 | 115,607 | 105,818 | 111,601 | 107,163 | 397,611 | 440,189 | 435,519 | ||
Cost of sales | 34,123 | 25,064 | 21,884 | 25,841 | 26,751 | 24,887 | 24,943 | 24,145 | 106,912 | 100,726 | 96,415 | ||
Gross profit | 71,763 | 66,742 | 75,756 | 76,438 | 88,856 | 80,931 | 86,658 | 83,018 | 290,699 | 339,463 | 339,104 | ||
Operating expenses | |||||||||||||
Sales and marketing | 175,468 | 178,771 | 185,156 | ||||||||||
General and administrative | 64,830 | 53,650 | 64,785 | ||||||||||
Research and development | 26,768 | 28,577 | 22,861 | ||||||||||
Amortization of intangible assets | 2,687 | 2,298 | 2,550 | ||||||||||
Costs related to the accounting review and restatement | 12,945 | ||||||||||||
Impairment of goodwill | 19,193 | 19,193 | |||||||||||
Charges related to U.S. Government resolutions (Note 17) | 1,295 | 57,141 | |||||||||||
Total operating expenses | 81,842 | 80,843 | 68,836 | 70,370 | 62,338 | 63,988 | 70,036 | 68,229 | 301,891 | 264,591 | 332,493 | ||
Operating (loss) income | -10,079 | -14,101 | 6,920 | 6,068 | 26,518 | 16,943 | 16,622 | 14,789 | -11,192 | 74,872 | 6,611 | ||
Other income and (expense) | |||||||||||||
Interest expense, net | -1,827 | -4,161 | -5,441 | ||||||||||
Other income (expense) | 2,416 | -1,646 | -2,533 | ||||||||||
Total other income (expense) | 589 | -5,807 | -7,974 | ||||||||||
(Loss) income before income taxes | -10,603 | 69,065 | -1,363 | ||||||||||
Income tax expense | -7,602 | -23,944 | -14,443 | 6,028 | |||||||||
Net (loss) income from continuing operations | -9,639 | -16,504 | 2,012 | 5,926 | 17,518 | 9,312 | 11,421 | 6,870 | -18,205 | 45,121 | -15,806 | ||
Discontinued operations (Note 16) | |||||||||||||
Gain on sale of Breg, Inc., net of tax | 1,345 | ||||||||||||
Loss from discontinued operations | -15,510 | -3,494 | -2,705 | ||||||||||
Income tax benefit | 4,903 | -120 | 813 | ||||||||||
Net loss from discontinued operations | -10,607 | -2,269 | -1,892 | ||||||||||
Net (loss) income | -10,412 | -18,836 | -3,011 | 3,447 | 22,954 | 3,747 | 8,802 | 7,349 | -28,812 | 42,852 | -17,698 | ||
Net (loss) income per common share-basic: | |||||||||||||
Net (loss) income from continuing operations | ($0.53) | ($0.91) | $0.11 | $0.31 | $0.91 | $0.49 | $0.61 | $0.37 | ($0.97) | $2.38 | ($0.87) | ||
Net loss from discontinued operations | ($0.57) | ($0.12) | ($0.10) | ||||||||||
Net (loss) income per common share-basic | ($0.58) | ($1.04) | ($0.16) | $0.18 | $1.19 | $0.20 | $0.47 | $0.39 | ($1.54) | $2.26 | ($0.97) | ||
Net (loss) income per common share-diluted: | |||||||||||||
Net (loss) income from continuing operations | ($0.53) | ($0.91) | $0.10 | $0.30 | $0.89 | $0.48 | $0.59 | $0.36 | ($0.97) | $2.33 | ($0.87) | ||
Net loss from discontinued operations | ($0.57) | ($0.12) | ($0.10) | ||||||||||
Net (loss) income per common share-diluted | ($0.58) | ($1.04) | ($0.16) | $0.18 | $1.17 | $0.19 | $0.46 | $0.38 | ($1.54) | $2.21 | ($0.97) | ||
Weighted average number of common shares: | |||||||||||||
Basic | 18,697,228 | 18,977,263 | 18,219,343 | ||||||||||
Diluted | 18,697,228 | 19,390,413 | 18,219,343 | ||||||||||
Other comprehensive (loss) income , before tax: | |||||||||||||
Translation adjustment | -1,708 | 1,131 | -1,897 | ||||||||||
Unrealized gain (loss) on derivative instrument | -443 | 416 | -693 | ||||||||||
Other comprehensive income (loss), before tax | -2,151 | 1,547 | -2,590 | ||||||||||
Income tax related to components of other comprehensive income | 164 | -153 | 164 | 164 | -153 | 256 | |||||||
Other comprehensive income (loss), net of tax | -1,987 | 1,394 | -2,334 | ||||||||||
Comprehensive (loss) income | ($30,799) | $44,246 | ($20,032) |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Shareholders' Equity (USD $) | Total | Common Shares [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] |
In Thousands, except Share data | |||||
Balance, Amount at Dec. 31, 2010 | $293,918 | $1,772 | $195,597 | $90,119 | $6,430 |
Balance, Shares at Dec. 31, 2010 | 17,726,645 | ||||
Cumulative effect of adjustments on opening balance | -12,564 | -12,564 | |||
Balance, Amount (Restated) | 281,354 | 1,772 | 195,597 | 77,555 | 6,430 |
Balance, Shares (Restated) | 17,726,645 | ||||
Net income (loss) | -17,698 | -17,698 | |||
Unrealized gain (loss) on derivative instrument | -437 | -437 | |||
Translation adjustment | -1,897 | -1,897 | |||
Purchase of minority interest | -517 | -517 | |||
Tax benefit on exercise of stock options | 1,737 | 1,737 | |||
Reclassification for tax benefit on exercise of stock options | -8,999 | -8,999 | |||
Share-based compensation expense | 6,648 | 6,648 | |||
Common shares issued | 20,113 | 74 | 20,039 | ||
Common shares issued, Shares | 738,799 | ||||
Balance, Amount at Dec. 31, 2011 | 280,304 | 1,846 | 214,505 | 59,857 | 4,096 |
Balance, Shares at Dec. 31, 2011 | 18,465,444 | ||||
Net income (loss) | 42,852 | 42,852 | |||
Unrealized gain (loss) on derivative instrument | 263 | 263 | |||
Translation adjustment | 1,131 | 1,131 | |||
Share-based compensation expense | 6,303 | 6,303 | |||
Common shares issued | 25,586 | 88 | 25,498 | ||
Common shares issued, Shares | 873,885 | ||||
Balance, Amount at Dec. 31, 2012 | 356,439 | 1,934 | 246,306 | 102,709 | 5,490 |
Balance, Shares at Dec. 31, 2012 | 19,339,329 | 19,339,329 | |||
Net income (loss) | -28,812 | -28,812 | |||
Unrealized gain (loss) on derivative instrument | -279 | -279 | |||
Translation adjustment | -1,708 | -1,708 | |||
Share-based compensation expense | 6,267 | 6,267 | |||
Common shares issued | 3,450 | 20 | 3,430 | ||
Common shares issued, Shares | 200,584 | ||||
Retirement of repurchased common stock | -39,494 | -144 | -39,350 | ||
Retirement of repurchased common stock, Shares | -1,437,578 | ||||
Balance, Amount at Dec. 31, 2013 | $295,863 | $1,810 | $216,653 | $73,897 | $3,503 |
Balance, Shares at Dec. 31, 2013 | 18,102,335 | 18,102,335 |
Consolidated_Statements_of_Cha1
Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Statement of Stockholders' Equity [Abstract] | |||
Unrealized gain (loss) on derivative instrument, tax (benefit) | ($164) | $153 | ($256) |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | |||
Net (loss) income | ($28,812) | $42,852 | ($17,698) |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||
Depreciation and amortization | 22,822 | 20,732 | 23,182 |
Amortization of debt costs | 720 | 1,737 | 1,239 |
Amortization of exclusivity agreements | 1,546 | 1,289 | 374 |
Provision for doubtful accounts | 4,590 | 2,212 | 4,580 |
Deferred income taxes | 2,829 | 3,771 | -13,941 |
Share-based compensation | 6,267 | 6,303 | 6,648 |
Impairment of goodwill | 19,193 | ||
Gain on sale of Breg, Inc., net of tax | -1,345 | ||
Excess income tax benefit on employee stock-based awards | -82 | -1,020 | -1,737 |
Other | 4,536 | 4,798 | 2,298 |
Changes in operating assets and liabilities, net of effect of dispositions: | |||
Trade accounts receivable | 28,562 | -11,128 | 6,645 |
Inventories | -3,213 | -384 | -12,705 |
Escrow receivable | 41,537 | -32,562 | |
Prepaid expenses and other current assets | 8,764 | -14,575 | 2,382 |
Trade accounts payable | -2,280 | 4,575 | 2,322 |
Charges related to U.S. Government resolutions | -83,178 | 89,101 | |
Other current liabilities | 6,969 | -5,239 | 3,516 |
Other long-term assets | -5,329 | -3,391 | -2,317 |
Other long-term liabilities | -40 | 616 | 3,403 |
Net cash provided by operating activities | 67,042 | 10,162 | 64,730 |
Cash flows from investing activities: | |||
Capital expenditures for property, plant and equipment | -24,787 | -27,994 | -24,965 |
Capital expenditures for intangible assets | -4,891 | -780 | -793 |
Payment made in connection with acquisition | -5,250 | ||
Purchase of other investments | -1,374 | -714 | -468 |
Proceeds from sale of other investments | 878 | ||
Net proceeds from sale of Breg, Inc. | 153,773 | ||
Net cash (used in) provided by investing activities | -31,052 | 125,163 | -31,476 |
Cash flows from financing activities: | |||
Net proceeds from issuance of common shares | 3,450 | 25,586 | 20,113 |
Payment of refinancing fees and debt issuance costs | -758 | ||
Repayments of long-term debt | -16 | -188,695 | -7,500 |
Repayment of bank borrowings, net | -1,297 | -2,561 | |
Changes in restricted cash | -2,375 | 25,799 | -24,178 |
Purchase of common stock | -39,494 | ||
Cash payment for purchase of minority interest in subsidiary | -517 | ||
Excess income tax benefit on employee stock-based awards | 82 | 1,020 | 1,737 |
Net cash used in financing activities | -38,353 | -137,587 | -13,664 |
Effect of exchange rate changes on cash | 520 | 286 | -408 |
Net (decrease) increase in cash and cash equivalents | -1,843 | -1,976 | 19,182 |
Cash and cash equivalents at the beginning of the year | 30,767 | 32,743 | 13,561 |
Cash and cash equivalents at the end of the year | 28,924 | 30,767 | 32,743 |
Cash paid during the year for: | |||
Interest | 2,046 | 4,569 | 17,088 |
Income taxes | $8,773 | $18,268 | $26,227 |
Summary_of_significant_account
Summary of significant accounting policies | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Summary of significant accounting policies | 1 | Summary of significant accounting policies | |||||||||||
(a) | Basis of consolidation | ||||||||||||
The consolidated financial statements include the financial statements of the Company and its wholly owned and majority-owned subsidiaries and entities over which the Company has control. All intercompany accounts and transactions are eliminated in consolidation. | |||||||||||||
(b) | Reclassifications | ||||||||||||
The Company has reclassified certain line items to conform to the current year presentation. The reclassifications have no effect on previously reported net earnings or shareholders’ equity. | |||||||||||||
(c) | Use of estimates in preparation of financial statements | ||||||||||||
The preparation of financial statements in conformity with United States generally accepted accounting principles (“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 at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate these estimates, including those related to contractual allowances, doubtful accounts, inventories, potential intangible assets and goodwill impairment, income taxes, and share-based compensation. We base our estimates on historical experience, future expectations and on other relevant assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. | |||||||||||||
(d) | Foreign currency translation | ||||||||||||
The financial statements for operations outside the United States are generally maintained in their local currency. All foreign currency denominated balance sheet accounts, except shareholders’ equity, are translated to U.S. dollars at year end exchange rates and revenue and expense items are translated at weighted average rates of exchange prevailing during the year. Gains and (losses) resulting from the translation of foreign currency are recorded in the accumulated other comprehensive income component of shareholders’ equity. Transactional foreign currency gains and (losses), including those generated from intercompany operations, are included in other expense, net and were $0.5 million loss, $0.4 million loss and $1.7 million loss for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||
(e) | Cash and cash equivalents | ||||||||||||
The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. | |||||||||||||
(f) | Restricted cash | ||||||||||||
Restricted cash consists of cash held at certain subsidiaries, the distribution or transfer of which to Orthofix International N.V. (the “Parent”) or other subsidiaries that are not parties to the credit facility described in Note 9 is restricted. The senior secured credit facility restricts the Parent and subsidiaries that are not parties to the facility from access to cash held by Orthofix Holdings, Inc. and its subsidiaries. All credit party subsidiaries have access to this cash for operational and debt repayment purposes. | |||||||||||||
(g) | Market risk | ||||||||||||
In the ordinary course of business, the Company is exposed to the impact of changes in interest rates and foreign currency fluctuations. The Company’s objective is to limit the impact of such movements on earnings and cash flows. In order to achieve this objective, the Company seeks to balance its non-U.S. dollar denominated income and expenditures. During 2013, 2012 and 2011, the Company made use of a foreign currency swap agreement to manage cash flow exposure generated from foreign currency fluctuations. | |||||||||||||
The Company generally does not require collateral on trade receivables. | |||||||||||||
(h) | Inventories | ||||||||||||
Inventories are valued at the lower of cost or estimated net realizable value, after provision for excess, obsolete or impaired items which is reviewed and updated on a periodic basis by management. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at our manufacturing facility in Italy, cost is determined on a weighted-average basis, which approximates the first-in, first-out (“FIFO”) method, due to the high turn-over rate of inventory at this location. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at our manufacturing facility in Texas, standard costs, which approximates actual cost on the FIFO method, is used to value inventory. Standard costs are reviewed annually by management, or more often in the event circumstances indicate a change in cost has occurred. The valuation of work-in-process, finished products, field inventory and consignment inventory includes the cost of materials, labor and other production costs. Field inventory represents immediately saleable finished products inventory that is in the possession of the Company’s direct sales representatives. Consignment inventory represents immediately saleable finished products located at third party customers, such as distributors and hospitals. | |||||||||||||
(i) | Long-lived assets, including intangibles | ||||||||||||
Property, plant and equipment is stated at cost less accumulated depreciation. Costs include all expenditures necessary to place the asset in service, including freight and sales and use taxes. Plant equipment also includes instrumentation held by customers and is generally used to facilitate the implantation of the Company’s products, the associated cost and accumulated depreciation as of December 31, 2013 was $56.7 million and ($35.4 million), respectively. Depreciation is computed on a straight-line basis over the useful lives of the assets. Depreciation of leasehold improvements is computed over the shorter of the lease term or the useful life of the asset. The useful lives are as follows: | |||||||||||||
Years | |||||||||||||
Buildings | 25 to 33 | ||||||||||||
Plant equipment and instrumentation | 2 to 10 | ||||||||||||
Furniture and fixtures | 4 to 8 | ||||||||||||
Expenditures for maintenance and repairs and minor renewals and improvements, which do not extend the lives of the respective assets, are expensed as incurred. All other expenditures for renewals and improvements are capitalized. The assets and related accumulated depreciation are adjusted for property retirements and disposals, with the resulting gain or loss included in operations. Fully depreciated assets remain in the accounts until retired from service. | |||||||||||||
Patents and other intangible assets are recorded at cost, or when acquired as a part of a business combination at estimated fair value. These assets primarily include patents and other technology agreements (“developed technologies”) and trademarks. Identifiable intangible assets which are considered definite lived are amortized over their useful lives using a method of amortization that reflects the pattern in which the economic benefit of the intangible assets is consumed. The Company’s weighted average amortization period for developed technologies is 11 years. | |||||||||||||
Intangible and long-lived assets with definite lives, such as developed technologies, are tested for impairment if any adverse conditions exist or change in circumstances have occurred that would indicate impairment or a change in the remaining useful life. If an impairment indicator exists, the Company tests the intangible asset for recoverability. For purposes of the recoverability test, the Company groups its intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset (asset group), the Company will write the carrying value down to the fair value in the period identified. | |||||||||||||
The Company generally calculates fair value of indefinite-lived intangible assets as the present value of estimated future cash flows. In determining the estimated future cash flows associated with intangible assets, the Company uses estimates and assumptions about future revenue contributions, cost structures and remaining useful lives of the asset (asset group). The use of alternative assumptions, including estimated cash flows, discount rates, and alternative estimated remaining useful lives could result in different calculations of impairment. | |||||||||||||
(j) | Goodwill | ||||||||||||
The Company tests goodwill at least annually for impairment. The Company tests more frequently if indicators are present or changes in circumstances suggest that impairment may exist. These indicators include, among others, declines in sales, earnings or cash flows, or the development of a material adverse change in the business climate. The Company assesses goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a reporting unit. The Company has identified four reporting units, which are consistent with the Company’s reporting segments: BioStim, Biologics, Extremity Fixation, and Spine Fixation. | |||||||||||||
In order to calculate the respective carrying values, the Company initially recorded goodwill based on the purchase price allocation performed at the time of acquisition. Corporate assets and liabilities that directly relate to a reporting unit’s operations are ascribed directly to that reporting unit. Corporate assets and liabilities that are not directly related to a specific reporting unit, but from which the reporting unit benefits, are allocated based on the respective contribution measure of each reporting unit. Effective July 1, 2013, the Company re-aligned its reporting units and consequently reallocated the carrying value of goodwill from its previous reporting units to its new reporting units based on the relative fair value of each new reporting unit to total enterprise value at July 1, 2013. | |||||||||||||
As a result of the Company’s change in reporting structure, the Company allocated goodwill to each reporting unit, and subsequently evaluated each reporting unit for possible impairment of goodwill, as there were indicators of impairment when completing a qualitative analysis. The result of this analysis was a full impairment of the goodwill allocated to the Extremity Fixation and Spine Fixation reportable units, totaling $19.2 million. | |||||||||||||
The Company’s annual goodwill impairment analysis, which was performed qualitatively during the fourth quarter of 2013, did not result in any additional impairment charge. | |||||||||||||
(k) | Derivative instruments | ||||||||||||
The Company manages its exposure to fluctuating cash flows resulting from changes in interest rates and foreign exchange within the consolidated financial statements according to its hedging policy. Under the policy, the Company may engage in non-leveraged transactions involving various financial derivative instruments to manage exposed positions. The policy requires the Company to formally document the relationship between the hedging instrument and hedged item, as well as its risk-management objective and strategy for undertaking the hedge transaction. For instruments designated as a cash flow hedge, the Company formally assesses (both at the hedge’s inception and on an ongoing basis) whether the derivative that is used in the hedging transaction has been effective in offsetting changes in the cash flows of the hedged item and whether such derivative may be expected to remain effective in future periods. If it is determined that a derivative is not (or has ceased to be) effective as a hedge, the Company will discontinue the related hedge accounting prospectively. Such a determination would be made when (1) the derivative is no longer effective in offsetting changes in the cash flows of the hedged item; (2) the derivative expires or is sold, terminated or exercised; or (3) management determines that designating the derivative as a hedging instrument is no longer appropriate. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings. | |||||||||||||
The Company records all derivatives as either assets or liabilities on the balance sheet at their respective fair values. For a cash flow hedge, the effective portion of the derivative’s change in fair value (i.e. gains or losses) is initially reported as a component of other comprehensive income, net of related taxes, and subsequently reclassified into net earnings when the hedged exposure is no longer effective. | |||||||||||||
The Company utilizes a cross currency swap to manage its foreign currency exposure related to a portion of the Company’s intercompany receivable of a U.S. dollar functional currency subsidiary that is denominated in Euro. The cross currency swap has been accounted for as a cash flow hedge in accordance with ASC Topic 815, Derivatives and Hedging. | |||||||||||||
(l) | Accumulated other comprehensive income | ||||||||||||
Accumulated other comprehensive income is comprised of foreign currency translation adjustments and the effective portion of the gain (loss) on the Company’s cross-currency swap, which is designated and accounted for as a cash flow hedge (see Note 10) and the unrealized gain (loss) on warrants. The components of and changes in accumulated other comprehensive income are as follows: | |||||||||||||
(U.S. Dollars in thousands) | Foreign Currency | Change in | Accumulated Other | ||||||||||
Translation | Fair Value | Comprehensive | |||||||||||
Adjustments | Income | ||||||||||||
Balance at December 31, 2011 (Restated) | $ | 4,228 | $ | (132 | ) | $ | 4,096 | ||||||
Unrealized gain on cross-currency swaps, net of taxes of $153 | — | 263 | 263 | ||||||||||
Foreign currency translation adjustment (1) | 1,131 | — | 1,131 | ||||||||||
Balance at December 31, 2012 (Restated) | 5,359 | 131 | 5,490 | ||||||||||
Unrealized loss on cross-currency swaps, net of tax benefit of $164 | — | (278 | ) | (278 | ) | ||||||||
Unrealized gain (loss) on warrants | — | (1 | ) | (1 | ) | ||||||||
Foreign currency translation adjustment (1) | (1,708 | ) | — | (1,708 | ) | ||||||||
Balance at December 31, 2013 (Restated) | $ | 3,651 | $ | (148 | ) | $ | 3,503 | ||||||
-1 | As the cash generally remains permanently invested in the non U.S. dollar denominated foreign subsidiaries, no deferred taxes are recognized on the related foreign currency translation adjustment. | ||||||||||||
(m) | Revenue recognition and accounts receivable | ||||||||||||
Commercial revenue is related to the sale of the Company’s implant products, generally representing hospital customers. Revenues are recognized when these products have been utilized and a confirming purchase order has been received from the hospital. | |||||||||||||
Revenue is derived from third-party payors, including commercial insurance carriers, health maintenance organizations, preferred provider organizations and governmental payors such as Medicare, in connection with the sale of our stimulation products. Revenue is recognized when the stimulation product is placed on or implanted in and accepted by the patient. Amounts paid by these third-party payors are generally based on fixed or allowable reimbursement rates. These revenues are recorded at the expected or pre-authorized reimbursement rates, net of any contractual allowances or adjustments. Certain billings are subject to review by the third-party payors and may be subject to adjustment. | |||||||||||||
For distributor revenue, which is related primarily to implant products, the Company recognizes revenue either on a sell-in or sell-through basis depending on the specific circumstances of the distributor. In some cases the Company recognizes distributor revenue as title and risk of loss passes at either shipment from the Company’s facilities or receipt at the distributor’s facility, assuming all other revenue recognition criteria has been achieved (the “sell-in method”). Based on the results of the Independent Review, the Company determined in some cases the revenue recognition criteria for distributor sales were not satisfied at the time of shipment or receipt; specifically, the existence of extra-contractual terms or arrangements caused the Company not to meet the fixed or determinable criteria for revenue recognition in some cases, and in others collectability had not been established. In situations where we are unable to satisfy the requirements to recognize revenue on the sell-in method, we recognize revenue relating to distributor arrangements once the product is delivered to the end customer (the “sell-through method”). Because the Company does not have reliable information about when its distributors sell the product through to end customers, the Company uses cash collection from distributors as a basis for revenue recognition under the sell-through method. Although in many cases the Company is legally entitled to the accounts receivable at the time of shipment, the Company has not recognized accounts receivables or any corresponding deferred revenues associated with distributor transactions for which revenue is recognized on the sell-through method. Effective April 1, 2013, all distributor revenue is recognized on the sell-through basis. | |||||||||||||
For distributors on the sell-in method prior to April 1, 2013, cost of sales is recognized upon shipment. For sell-through distributors, whose revenue is recognized upon cash receipt, the Company considers whether to match the related cost of sales expense with revenue or to recognize expense upon shipment. In making this assessment, the Company considers the financial viability of its distributors based on their creditworthiness to determine if collectability of amounts sufficient to realize the costs of the products shipped is reasonably assured at the time of shipment to these distributors. In instances where the distributor is determined to be financially viable, the Company defers the costs of sales until the revenue is recognized. | |||||||||||||
Biologics revenue is primarily related to a collaborative arrangement with MTF. In 2008, the Company entered into a collaborative arrangement with MTF to develop and commercialize Trinity Evolution®, a stem cell-based bone growth biologic matrix. With the development process completed in 2009, the Company and MTF operated under the terms of a separate commercialization agreement. Under the terms of the 10-year agreement, MTF sourced the tissue, processed it to create the bone growth matrix, packaged and delivered it to the customer in accordance with orders received from the Company. The Company has exclusive global marketing rights for Trinity Evolution® as well as non-exclusive marketing rights for other products, and receives marketing fees from MTF based on total sales. These marketing fees are recorded on a net basis within net sales and were $48.1 million, $46.5 million and $36.8 million in 2013, 2012 and 2011, respectively. On January 10, 2012, the Company announced that it had reached an agreement with MTF to both co-develop and commercialize a new technology for use in bone grafting applications and to expand MTF’s Trinity Evolution® processing capacity. The amendment amends the term of the existing agreement until the later of (i) 15 years after the date that certain development milestones were achieved under the existing agreement (which occurred during 2010) or (ii) the date that certain licensing arrangements between the Company and NuVasive, Inc. expire. MTF is considered the primary obligor in these arrangements and therefore the Company recognizes these marketing service fees on a net basis upon shipment of the product to the customer. | |||||||||||||
Revenues exclude any value added or other local taxes, intercompany sales and trade discounts. Shipping and handling costs are included in cost of sales. | |||||||||||||
The process for estimating the ultimate collection of accounts receivable involves significant assumptions and judgments. Historical collection and payor reimbursement experience is an integral part of the estimation process related to reserves for doubtful accounts and the establishment of contractual allowances. Accounts receivable are analyzed on a quarterly basis to assess the adequacy of both reserves for doubtful accounts and contractual allowances. Revisions in allowances for doubtful accounts estimates are recorded as an adjustment to bad debt expense within sales and marketing expenses, and contractual allowances are recorded as an adjustment to revenue. These estimates are periodically tested against actual collection experience. | |||||||||||||
(n) | Sale of accounts receivable | ||||||||||||
The Company will generally sell receivables from certain Italian hospitals each year. The estimated related fee for 2013 and 2012 was $0.8 million and $0.6 million, respectively, which is recorded as interest expense. Trade accounts receivables sold without recourse are removed from the balance sheet at the time of sale. | |||||||||||||
(o) | Share-based compensation | ||||||||||||
The fair value of service-based stock options are determined using the Black-Scholes valuation model. Such value is recognized as expense over the service period net of estimated forfeitures. | |||||||||||||
The fair value of market-based stock options are determined at the date of the grant using the Monte Carlo valuation methodology. Such value is recognized as expense over the requisite service period adjusted for estimated forfeitures for each separately vesting tranche of the award. The Monte Carlo methodology that we use to estimate the fair value of market-based options incorporates into the valuation the possibility that the market condition may not be satisfied. | |||||||||||||
The expected term of options granted is estimated based on a number of factors, including the vesting and expiration terms of the award, historical employee exercise behavior for both options that are currently outstanding and options that have been exercised or are expired, the historical volatility of the Company’s common stock and an employee’s average length of service. The risk-free interest rate is determined based upon a constant U.S. Treasury security rate with a contractual life that approximates the expected term of the option award. Management estimates expected volatility based on the historical volatility of the Company’s stock. The compensation expense recognized for all equity-based awards is net of estimated forfeitures. Forfeitures are estimated based on an analysis of actual option forfeitures. | |||||||||||||
(p) | Advertising costs | ||||||||||||
The Company expenses all advertising costs as incurred. Advertising expense included in sales and marketing expense for the years ended December 31, 2013, 2012 and 2011 was $0.2 million, $0.3 million and $0.5 million, respectively. | |||||||||||||
(q) | Research and development costs | ||||||||||||
Expenditures related to the collaborative arrangement with MTF are expensed based on the terms of the related agreement. Milestone payments made to MTF in 2013 and 2012 totaled $2.5 million and $3.0 million, respectively. There were no milestone payments made to MTF in 2011. Expenditures for other research and development are expensed as incurred. | |||||||||||||
(r) | Income taxes | ||||||||||||
The Company is subject to income taxes in both the U.S. and foreign jurisdictions, and uses estimates in determining the provision for income taxes. The Company accounts for income taxes using the asset and liability method for accounting and reporting for income taxes. Under this method, deferred tax assets and liabilities are recognized based on temporary differences between the financial reporting and income tax basis of assets and liabilities using statutory rates. This process requires that the Company project the current tax liability and estimate the deferred tax assets and liabilities, including net operating loss and tax credit carry forwards. In assessing the need for a valuation allowance, the Company has considered the recent operating results, future taxable income projections and all prudent and feasible tax planning strategies. | |||||||||||||
The Company accounts for uncertain tax positions in accordance with ASC 740, Income Taxes, which contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company reevaluates income tax positions periodically to consider factors such as changes in facts or circumstances, changes in or interpretations of tax law, effectively settled issues under audit, and new audit activity. Such a change in recognition or measurement would result in recognition of a tax benefit or an additional charge to the tax provision. | |||||||||||||
The Company includes imputed interest and any applicable penalties related to tax issues as part of income tax expense in our consolidated financial statements. | |||||||||||||
(s) | Net income (loss) per common share | ||||||||||||
Net income (loss) per common share—basic is computed using the weighted average number of common shares outstanding during each of the respective years. Net income (loss) per common share—diluted is computed using the weighted average number of common and common equivalent shares outstanding during each of the respective years using the “treasury stock” method, if dilutive. Common equivalent shares represent the dilutive effect of the assumed exercise of outstanding share options (see Note 20). The only differences between basic and diluted shares result from the assumed exercise of certain outstanding share options. | |||||||||||||
(t) | Financial instruments and concentration of credit risk | ||||||||||||
Financial instruments that could subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. Generally, the cash is held at large financial institutions and our cash equivalents consist of highly liquid money market funds. The Company performs ongoing credit evaluations of the customers, generally does not require collateral and maintain a reserve for potential credit losses. The Company believes that a concentration of credit risk related to the accounts receivable is limited because the customers are geographically dispersed and the end users are diversified across several industries. | |||||||||||||
Net sales to our customers and distributors based in Europe were approximately $52 million in 2013 which results in a substantial portion of our trade accounts receivable balance as of December 31, 2013. It is at least reasonably possible that changes in global economic conditions and/or local operating and economic conditions in the regions these distributors operate, or other factors, could affect the future realization of these accounts receivable balances. | |||||||||||||
(u) | Recently issued accounting standards | ||||||||||||
In July 2013, the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update (“ASU”) No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, A Similar Tax Loss, or a Tax Credit Carryforward Exists. The authoritative guidance concludes that, under certain circumstances, unrecognized tax benefits should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. We adopted this guidance early, as permitted, for the fiscal year ended December 31, 2013. The adoption of this guidance did not have a material effect on our consolidated financial statements. | |||||||||||||
In February 2013, the FASB issued ASU No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The standard requires presentation (either in a single note or parenthetically on the face of the financial statements) of the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and the income statement line items affected by the reclassification. If a component is not required to be reclassified to net income in its entirety, a cross reference to the related footnote for additional information is required. The amendments are effective prospectively for reporting periods beginning after December 15, 2013. The adoption of this guidance did not have a material effect on our consolidated financial statements. | |||||||||||||
On June 16, 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income. This ASU eliminates the current option to present other comprehensive income and its components in the statement of changes in shareholders’ equity and increases the prominence of other comprehensive income in the statements by providing an alternative to present the components of net income and comprehensive income as either one continuous or two separate but consecutive financial statements. Companies are also required to present reclassification adjustments for items that are reclassified from other comprehensive income to net income within these statements. This standard is to be applied retrospectively and is effective for fiscal years beginning after December 15, 2011 with early adoption permitted. The Company adopted this ASU as of March 31, 2012 and it did not have a material impact on the Company’s consolidated financial statements. |
Original_and_Further_Restateme
Original and Further Restatement of the Consolidated Financial Statements | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||||||
Text Block [Abstract] | |||||||||||||||||||||||||||||||||||||
Original and Further Restatement of the Consolidated Financial Statements | 2 | Original and Further Restatement of the Consolidated Financial Statements | |||||||||||||||||||||||||||||||||||
These consolidated financial statements reflect two restatements, which we refer to herein respectively as the “Original Restatement” and the “Further Restatement.” The Original Restatement, which was contained in the financial statements filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed on March 31, 2014 (the “Original Form 10-K”), reflected the restatement of the Company’s previously filed consolidated financial statements for the fiscal years ended December 31, 2012 and 2011, as well as the fiscal quarter ended March 31, 2013. The Original Restatement is further described below under the subheading “– Original Restatement.” | |||||||||||||||||||||||||||||||||||||
In connection with the Company’s preparation of its consolidated interim quarterly financial statements for the fiscal quarter ended June 30, 2014, the Company determined that certain entries with respect to the previously filed financial statements contained in the Original Form 10-K were not properly accounted for under U.S. GAAP. As further described below, these additional errors affect the fiscal years ended December 31, 2013, 2012 and 2011 and quarterly reporting periods contained within the fiscal years ended December 31, 2013 and 2012, as well as the fiscal quarter ended March 31, 2014. Due to these errors, the Company determined in August 2014 to restate its consolidated financial statements for the fiscal years ended December 31, 2013, 2012 and 2011 (including the interim quarterly periods contained within the fiscal years ended December 31, 2013 and 2012) and the fiscal quarter ended March 31, 2014, and that the previously filed financial statements for these periods should no longer be relied upon. The Amendment No. 1 to Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (this “Amended Form 10-K”), to which these consolidated financial statements form a part, corrects these additional errors. We refer to these additional corrections as the “Further Restatement.” The Further Restatement is further described below under the subheading “Further Restatement,” which follows the description of the Original Restatement contained directly below. | |||||||||||||||||||||||||||||||||||||
Original Restatement | |||||||||||||||||||||||||||||||||||||
Background of Original Restatement | |||||||||||||||||||||||||||||||||||||
In July 2013, the Audit Committee (the “Audit Committee”) of the Company’s Board of Directors (the “Board”) commenced an independent review with the assistance of outside professionals into whether the Company had properly recognized revenue under U.S. GAAP in connection with certain revenue that had been recorded in 2012 and 2011 (the “Independent Review”). In conjunction with the Independent Review, the Company concluded that errors existed in the Company’s previously issued financial statements for the fiscal years ended December 31, 2012 and 2011, the interim quarterly period ended March 31, 2013, and certain other prior periods. | |||||||||||||||||||||||||||||||||||||
In reaching these conclusions, the Company considered information obtained in the Independent Review, including emails, data and interviews with current and former employees that indicated (i) the existence of extra-contractual terms or arrangements at the onset of the sale and concessions agreed to subsequent to the initial sale, such as extended payment terms and return and exchange rights for sales to distributors with respect to certain transactions, (ii) that at the time of some sales collection was not reasonably assured, and (iii) that certain amounts previously characterized as commissions were paid to related parties of the applicable customer. | |||||||||||||||||||||||||||||||||||||
The Company assessed the information derived from the Independent Review in making determinations with respect to accounting adjustments reflected in the restated consolidated financial statements contained in the Amendments and in its Annual Report on Form 10-K for the fiscal year ended December 31, 2013, and such determinations are consistent with the findings of the Independent Review. In addition to the matters that were the subject of the Independent Review, certain other adjustments identified by management, including revisions to inventory reserves and royalties, were made to the consolidated financial statements in connection with the restatement. | |||||||||||||||||||||||||||||||||||||
The correction of these errors had the following impact: decreased net sales by $14.7 million and $28.2 million for the years ended December 31, 2012 and 2011, respectively; and decreased net income from continuing operations by $8.9 million and $14.5 million for the years ended December 31, 2012 and 2011, respectively. The following include descriptions of the significant adjustments to the Company’s financial position and results of operations from the previously reported consolidated financial statements. | |||||||||||||||||||||||||||||||||||||
Distributor Revenue Recognition | |||||||||||||||||||||||||||||||||||||
The Company has determined that it previously recognized revenue with respect to certain distributor relationships before all revenue recognition criteria were met. Specifically, the Company has determined that a fixed or determinable sales price did not exist, and/or collection was not reasonably assured, with respect to certain transactions where revenue had previously been recognized at the time of shipment. Specifically, the Company’s review revealed arrangements, or extra-contractual terms, with certain of the Company’s distributors regarding extended payment terms, return or exchange rights, and contingent payment obligations for sales to such distributors with respect to certain transactions. There were also concessions being made subsequent to the shipment of inventory to the distributors and the related revenue recognition. Based on the results of this review, it was determined that these arrangements were not appropriately evaluated under the appropriate revenue recognition criteria applicable under U.S. GAAP. Distributor sales represented approximately 11–13% of the Company’s net sales (prior to the restatement) of approximately $462 million and $470 million for the years ended December 31, 2012 and 2011, respectively. | |||||||||||||||||||||||||||||||||||||
The Company previously recognized distributor revenue as title and risk of loss passed at either shipment from the Company’s facilities or receipt at the distributor’s facility, assuming all other revenue recognition criteria had been achieved (the “sell-in method”). Based on review of all facts and circumstances related to the arrangements described above, the Company determined that in many instances the revenue recognition criteria under the sell-in method were not satisfied at the time of shipment or receipt; specifically, the existence of extra-contractual terms or arrangements caused the Company not to meet the fixed or determinable criteria for revenue recognition in some cases, and in others collectability had not been established. In situations where the Company is unable to reasonably estimate the effects of these extra-contractual terms, it is precluded from recognizing revenue relating to distributor arrangements until the product is delivered to the end customer. This method is commonly referred to as the “sell-through” revenue recognition method because the vendor does not recognize revenue until the transaction consideration is fixed or determinable, which coincides with the selling of the product through the distribution channel to the end customer. Because the Company does not have reliable information about when its distributors sell the product through to end customers, the Company will use cash collection from distributors as a basis for revenue recognition under the sell-through method. Although in many cases the Company is legally entitled to the accounts receivable at the time of shipment, since the revenue recognition criteria has not been met, the Company has not recognized accounts receivables or any corresponding deferred revenues associated with these transactions. | |||||||||||||||||||||||||||||||||||||
As part of the review, the Company also considered the accounting treatment for the related cost of sales when distributor revenue is recognized on a sell-through basis. Previously, cost of sales were recognized upon shipment; however, the Company believes the matching of the recognition of costs of sales with revenue is preferred and therefore considered if such costs should be deferred until revenue is recognized on a sell-through basis. In making this assessment, the Company considered the financial viability of its distributors based on their creditworthiness to determine if collectability of amounts sufficient to realize the costs of the products shipped was reasonably assured at the time of shipment to these distributors. In instances where the distributor was determined to be financially viable, the Company determined that costs of sales should be deferred until the revenue is recognized. For those distributors where the Company has concluded that collectability was not reasonably assured, the Company has expensed the related cost of sales upon shipment. | |||||||||||||||||||||||||||||||||||||
Based on the results of the Independent Review, the Company determined that all distributor transactions should be transitioned to the sell-through method of accounting as of the dates described below: | |||||||||||||||||||||||||||||||||||||
• | For distributor transactions within the Company’s Orthopedics division, the Company has determined that sell-through accounting should be applied within the Brazil subsidiary for all prior periods given the frequency with which the Company conducted business under extra-contractual and undocumented terms, as well as the Company’s inability to fully access underlying transactional and other information that would be necessary to evaluate transactions under a sell-in basis. For distributor transactions within the division outside the Brazil subsidiary, there were also sales to four distributors that did not meet the fixed or determinable or collectability revenue recognition criteria and therefore, such sales were adjusted to sell-through accounting in the restatement. | ||||||||||||||||||||||||||||||||||||
• | For distributor transactions within the Company’s U.S. Spine division, the Company has determined that sell-through accounting should be applied beginning January 1, 2011. Following its consideration of the information provided from the Independent Review, the Company believes that January 1, 2011 is the date extra-contractual terms became pervasive in the Company’s U.S. business, and it is unaware of circumstances existing prior to that date that would require it to broadly apply sell-through accounting to all distributor transactions within the U.S. Spine division. Additionally, there were sales in 2012 and 2011 for which revenue was previously recognized that did not meet the fixed or determinable criteria and the product associated with such sales was subsequently returned in 2013 (i) under the terms of negotiated agreements whereby the Company terminated its relationships with two distributors and (ii) by an additional distributor who returned certain product sold pursuant to a contingent sales arrangement. Such sales represented approximately $3.3 million and $4.1 million for the years ended December 31, 2012 and 2011, respectively. Due to the return of the product, no revenue will be recognized for these transactions. | ||||||||||||||||||||||||||||||||||||
• | The Company has determined that stimulation products sold to distributors within the Company’s U.S. Spine division during 2012 did not meet the fixed or determinable (and in some cases, collectability) revenue recognition criterion at the time of shipment. Therefore, the Company has determined that sell-through accounting should be applied for these sales. Management also determined that many of these distributors (or affiliates thereof) received commission payments as part of the sales transactions, which the Company previously recorded as sales and marketing expense. The Company has recorded adjustments in the restatement to net these commission expenses against revenue, as they represented product discounts. | ||||||||||||||||||||||||||||||||||||
• | The Company has determined that it will prospectively apply sell-through accounting for all remaining distributor arrangements (which entails arrangements within the Company’s Orthopedics division outside the Brazil subsidiary) beginning April 1, 2013, the earliest date for which financial statements had not previously been issued by the Company at the time of the determination. Although the Independent Review did not provide information to indicate extra-contractual terms or that historical revenue recognition was inappropriate in these remaining instances, the Company believes the information from the Independent Review indicating that the Company has a history of extra-contractual arrangements for distributor transactions, as described above, provides additional information which should be considered in reassessing the application of sell-through accounting on a prospective basis, particularly given that the Company believes that there is a higher risk associated with distributor arrangements generally. | ||||||||||||||||||||||||||||||||||||
The effect of adjustments made to the Company’s previously filed consolidated statements of operations as a result of these matters are shown in the tables below. These adjustments also had the following effects on the Company’s previously filed consolidated balance sheets: | |||||||||||||||||||||||||||||||||||||
• | Accounts receivable decreased as of December 31, 2012 by $41.3 million related to the de-recognition of receivables for which revenue has been deferred and will now be recognized on a sell-through basis, based on cash collections. | ||||||||||||||||||||||||||||||||||||
• | Inventory increased as of December 31, 2012 by $11.0 million to recognize the costs of inventory shipments to distributors determined to be financially viable as discussed previously. | ||||||||||||||||||||||||||||||||||||
Inventory Reserves | |||||||||||||||||||||||||||||||||||||
The Company also identified material errors in inventory reserves. One error related to the Company recording an increase of $1.2 million to the Company’s excess and obsolete reserve in the second quarter of 2012 related to a product within the Spine business that was subsequently reversed by the Company in the fourth quarter of 2012. During the Company’s review, it was determined that removing the reserve in the fourth quarter of 2012 was not correct; therefore the reserve has been reinstated. | |||||||||||||||||||||||||||||||||||||
The Company has also determined that certain inconsistencies existed with respect to how the Company previously computed and recorded inventory reserves. As a result, the Company has reviewed the methodologies used to compute and record inventory reserves and determined that errors in the application of U.S. GAAP existed in prior periods, which required adjustment in these financial statements. Based on this review, the Company has determined that it previously made reductions to previously recorded reserves based on changes in forecasted demand, which it believes was contrary to guidance set forth in ASC Topic 330, Inventory (specifically ASC 330-10-35-14), which states that a write-down of inventory to the lower-of-cost-or-market value at the close of a fiscal year creates a new cost basis that subsequently should not be marked up based on changes in underlying circumstances. The restated consolidated financial statements contain several adjustments to reflect recomputed inventory reserves in each of the relevant periods. | |||||||||||||||||||||||||||||||||||||
These adjustments resulted in a decrease to inventory (due to an increase in reserves) as of December 31, 2012, by $14.8 million. | |||||||||||||||||||||||||||||||||||||
Royalties | |||||||||||||||||||||||||||||||||||||
The Company also reviewed the accounting for royalties and determined there were royalties classified as sales and marketing expense; however, such royalties were based on sales of products and were paid to doctors who consulted on development of those products. Given these amounts are attributable to the cost of producing the Company’s products, the Company determined they are correctly classified as cost of goods sold. | |||||||||||||||||||||||||||||||||||||
Other Adjustments | |||||||||||||||||||||||||||||||||||||
In addition to the adjustments recorded to address the Company’s errors in accounting for distributor revenue recognition, inventory reserves, and royalties, the Company has identified other errors that are generally not material, individually or in the aggregate, but have been recorded in connection with the restatement. | |||||||||||||||||||||||||||||||||||||
Included in Other Adjustments are adjustments to reclassify interest expense from continuing operations to discontinued operations of $3.9 million for the year ended December 31, 2011. The reclassification was necessary as the Company used a portion of the proceeds from the sale of Breg, Inc. to repay in full the remaining $87.5 million balance on the Term Loan Facility and pay down $57.5 million of amounts outstanding under the Revolving Credit Facility. | |||||||||||||||||||||||||||||||||||||
Further Restatement | |||||||||||||||||||||||||||||||||||||
Background of Further Restatement | |||||||||||||||||||||||||||||||||||||
During the second quarter of 2014, the Company’s management noted that the Company’s bad debt expense for its BioStim strategic business unit (“SBU”) during the first quarter of 2014 was higher than internally budgeted. As a result, the Company’s internal finance department reviewed bad debt expense entries in prior periods. In connection with this review, the Company also further considered its accounting methodology with respect to certain prior revenue adjustments related to uncollectible patient co-pay and self-pay amounts. As further described below, after performing this review, the Company determined that errors existed relating to the accounting for uncollectible patient co-pay and self-pay amounts, and that certain bad debt reserves originally recorded in fiscal years 2011 and 2012 were reversed in incorrect periods in the Original Restatement in connection with the change to sell-through accounting for certain distributors. After analyzing these errors, the Company determined to further restate its financial statements as described herein. In addition to these matters, certain other adjustments identified by management, including revisions to inventory reserves, intercompany profit adjustments and accounts receivable reserves, were made to the consolidated financial statements in connection with the Further Restatement, as discussed below. | |||||||||||||||||||||||||||||||||||||
Co-Pay and Self-Pay Revenue Adjustments | |||||||||||||||||||||||||||||||||||||
A majority of revenue from the Company’s BioStim SBU is derived from third parties, which is subject to change due to contractual adjustments related to commercial insurance carriers, and may include certain patient co-pay amounts. In addition, certain patient purchasers are without insurance, with revenue derived from “self-pay” arrangements. In previously issued financial statements, the Company recorded these co-pay and self-pay amounts as revenue with estimated uncollectible portions being recognized as bad debt expense. Upon further analysis, it was determined that because collectability of co-pay and self-pay amounts was not reasonably assured, the conditions for revenue recognition had not been met and revenue for those amounts should not have been recognized until collected. | |||||||||||||||||||||||||||||||||||||
Adjustments to correct the foregoing reduce equally both the Company’s historical net sales and its sales and marketing expense by approximately $2.2 million, $9.0 million and $6.0 million for the fiscal years ended December 31, 2013, 2012 and 2011, respectively. These adjustments have no effect on net income from continuing operations, net income or total assets in any period. | |||||||||||||||||||||||||||||||||||||
Bad Debt Timing Adjustments | |||||||||||||||||||||||||||||||||||||
In connection with the foregoing, the Company determined to review bad debt expense trends more broadly across all of its business units. As a result of this process, the Company determined that certain bad debt reserves originally recorded in fiscal years 2011 and 2012 were reversed in incorrect periods in the Original Restatement in connection with the change to sell-through accounting for certain distributors. Because the Original Restatement transferred these transactions to sell-through accounting (as opposed to sell-in accounting, which had been used when the original bad debt reserves were recorded), the bad debt reserve was reversed as part of the Original Restatement, as the receivable that was being reserved for was no longer recognized. | |||||||||||||||||||||||||||||||||||||
Adjustments to correct this error result in an increase of sales and marketing expense of $1.5 million and $1.1 million for the fiscal years ended December 31, 2013 and 2012 and a decrease of sales and marketing expense of $2.1 million for the fiscal year ended December 31, 2011. These adjustments resulted in no impact to the accounts receivable balance as of December 31, 2013 and an increase in accounts receivable by $1.5 million as of December 31, 2012. | |||||||||||||||||||||||||||||||||||||
Accounts Receivable Reserve Adjustments | |||||||||||||||||||||||||||||||||||||
As part of analyzing collections experience on accounts receivable, the Company identified that it had incorrectly considered certain deferred revenue amounts included in gross accounts receivable when calculating estimated reserves. Specifically, the computation of the contractual allowances and bad debt allowances, which serves to adjust accounts receivable to the estimated collectible amount, incorrectly assumed that some percentage of the deferred amounts would be collected, rather than fully deferring these amounts. | |||||||||||||||||||||||||||||||||||||
Adjustments to correct this error resulted in a net decrease in operating income of $0.7 million and $0.2 million for the fiscal years ended December 31, 2013 and 2011, respectively, and a net increase in operating income of $2.1 million for the fiscal year ended December 31, 2012. | |||||||||||||||||||||||||||||||||||||
This adjustment resulted in a decrease in accounts receivable, net (due to an increase in reserves) as of December 31, 2013 and 2012, by $4.2 million and $3.5 million, respectively. | |||||||||||||||||||||||||||||||||||||
Intercompany Profit Adjustments | |||||||||||||||||||||||||||||||||||||
The Company has two manufacturing facilities which support the inventory needs of other subsidiaries through intercompany sales transactions. These intercompany sales include a profit margin for the selling subsidiary (“intercompany profit”) that is eliminated by the Company as part of its consolidated financial reporting process. The elimination of intercompany profit requires determining the affected net inventory amounts and their related intercompany profit margin to eliminate all intercompany profit, resulting in all inventories being carried at historical cost in the Company’s consolidated financial statements. | |||||||||||||||||||||||||||||||||||||
As described further above under “Original Restatement – Inventory Reserves,” as part of the Original Restatement the Company made certain corrections to prior period excess and obsolete inventory reserves. The effect of these corrections was not properly considered when determining the adjustments needed to eliminate intercompany profits from inventories in the Original Restatement. | |||||||||||||||||||||||||||||||||||||
Adjustments to correct this error resulted in an increase to cost of sales of $1.1 million, $0.2 million and $0.3 million for the fiscal years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||||||||||||||
This adjustment resulted in a decrease in inventory as of December 31, 2013 and 2012, by $2.6 million and $1.5 million, respectively. | |||||||||||||||||||||||||||||||||||||
Inventory | |||||||||||||||||||||||||||||||||||||
Inventory Existence | |||||||||||||||||||||||||||||||||||||
As part of the remediation activities that followed the Original Restatement, the Company expanded its procedures in the second quarter of 2014 to validate the existence of field inventory held by independent sales representatives and noted that, in many cases, this inventory had higher rates of missing inventory (“shrinkage”) than previously estimated. To determine whether these higher error rates were pervasive across its field inventory, the Company counted approximately 90% of its field inventory during the third and fourth fiscal quarters of 2014. These counts resulted in the identification of errors relating to previous estimates of shrinkage. | |||||||||||||||||||||||||||||||||||||
Adjustments in the Further Restatement to correct these errors, net of the related effect on previously recorded excess and obsolete inventory reserves, resulted in an increase to cost of sales of $0.4 million, $0.3 million and $0.2 million for the fiscal years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||||||||||||||
These adjustments resulted in a decrease in inventory as of December 31, 2013 and 2012, by $1.0 million and $0.6 million, respectively. | |||||||||||||||||||||||||||||||||||||
Inventory Reserves | |||||||||||||||||||||||||||||||||||||
In connection with its remediation efforts associated with the material weakness noted in the Original Restatement related to inventory reserves the Company concluded that it was not appropriately calculating inventory reserves, including its consideration of demand assumptions for “kits”, which contain a variety of “piece part” components to be used during surgery that have various demand considerations, as well as inventory held by third parties under inventory purchase obligations. | |||||||||||||||||||||||||||||||||||||
Adjustments to correct these errors resulted in an increase to cost of sales of $3.2 million, 1.5 million and $0.1 million for the fiscal years ended December 31, 2013, 2012 and 2011, respectively. These adjustments resulted in a decrease to inventory (due to an increase in reserves) as of December 31, 2013 and 2012, by $14.4 million and $11.8 million, respectively. | |||||||||||||||||||||||||||||||||||||
Other Adjustments | |||||||||||||||||||||||||||||||||||||
In addition to the adjustments described above, the Company is correcting certain other items. Principally, these items consist of a decrease to income tax expense of $0.5 million and $1.1 million for the fiscal years ended December 31, 2013 and 2012, respectively, these adjustments are separate from the tax effect of the errors described above. | |||||||||||||||||||||||||||||||||||||
The effect of the Further Restatement adjustments made to the Company’s previously filed consolidated statements of operations as a result of these matters are shown in the tables below. These adjustments also resulted in a decrease of total assets of $11.2 million as of December 31, 2013, resulting primarily from a decrease of $17.9 million to inventory and $4.8 million to trade accounts receivable, partially offset by an increase of $6.0 million in deferred income taxes. For further discussion of the effect of these entries on retained earnings, see the “Cumulative Adjustments to Shareholders’ Equity at January 1, 2011” table below. | |||||||||||||||||||||||||||||||||||||
The tables below show the effects of the Original Restatement for each of the fiscal years ended December 31, 2012 and 2011, as well as the effects of the Further Restatement for each of the fiscal years ended December 31, 2013, 2012 and 2011. In each case, the tax effect of the adjustments is estimated based on the Company’s estimated tax rate. | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||||||||||||||||||
Further Restatement Adjustments by Category | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | Originally | Co-Pay and | Bad Debt | Accounts | Intercompany | Inventory | Other | Total Further | Restated | ||||||||||||||||||||||||||||
Reported | Self-Pay | Timing | Receivable | Profit | Restatement | ||||||||||||||||||||||||||||||||
Revenue | Reserve | Adjustments | |||||||||||||||||||||||||||||||||||
Net sales | $ | 400,534 | $ | (2,242 | ) | $ | — | $ | (582 | ) | $ | — | $ | — | $ | (99 | ) | $ | (2,923 | ) | $ | 397,611 | |||||||||||||||
Cost of sales | 102,300 | — | — | — | 1,090 | 3,688 | (166 | ) | 4,612 | 106,912 | |||||||||||||||||||||||||||
Gross profit | 298,234 | (2,242 | ) | — | (582 | ) | (1,090 | ) | (3,688 | ) | 67 | (7,535 | ) | 290,699 | |||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 176,581 | (2,242 | ) | 1,455 | 122 | — | — | (448 | ) | (1,113 | ) | 175,468 | |||||||||||||||||||||||||
General and administrative | 65,147 | — | — | — | — | — | (317 | ) | (317 | ) | 64,830 | ||||||||||||||||||||||||||
Research and development | 26,768 | — | — | — | — | — | — | — | 26,768 | ||||||||||||||||||||||||||||
Amortization of intangible assets | 2,687 | — | — | — | — | — | — | — | 2,687 | ||||||||||||||||||||||||||||
Costs related to the accounting review and restatement | 12,945 | — | — | — | — | — | — | — | 12,945 | ||||||||||||||||||||||||||||
Impairment of Goodwill | 19,193 | — | — | — | — | — | — | — | 19,193 | ||||||||||||||||||||||||||||
303,321 | (2,242 | ) | 1,455 | 122 | — | — | (765 | ) | (1,430 | ) | 301,891 | ||||||||||||||||||||||||||
Operating (loss) income | (5,087 | ) | — | (1,455 | ) | (704 | ) | (1,090 | ) | (3,688 | ) | 832 | (6,105 | ) | (11,192 | ) | |||||||||||||||||||||
Other income and (expense) | 295 | — | — | — | — | — | 294 | 294 | 589 | ||||||||||||||||||||||||||||
Loss before income taxes | (4,792 | ) | — | (1,455 | ) | (704 | ) | (1,090 | ) | (3,688 | ) | 1,126 | (5,811 | ) | (10,603 | ) | |||||||||||||||||||||
Income tax expense | (10,116 | ) | — | 509 | 246 | 381 | 1,290 | 88 | 2,514 | (7,602 | ) | ||||||||||||||||||||||||||
Net loss from continuing operations | $ | (14,908 | ) | $ | — | $ | (946 | ) | $ | (458 | ) | $ | (709 | ) | $ | (2,398 | ) | $ | 1,214 | $ | (3,297 | ) | $ | (18,205 | ) | ||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Original Restatement Adjustments by Category | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | As Reported | Distributor | Inventory | Royalties | Other | Total Original | As Originally | ||||||||||||||||||||||||||||||
in the 2012 | Revenue | Reserves | Restatement | Restated in | |||||||||||||||||||||||||||||||||
Form 10-K | Adjustments | 2012 | |||||||||||||||||||||||||||||||||||
Prior to | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Original | |||||||||||||||||||||||||||||||||||||
Restatement | |||||||||||||||||||||||||||||||||||||
Net sales | $ | 462,320 | $ | (14,777 | ) | $ | — | $ | — | $ | 38 | $ | (14,739 | ) | $ | 447,581 | |||||||||||||||||||||
Cost of sales | 86,492 | (2,032 | ) | 5,647 | 8,190 | (44 | ) | 11,761 | 98,253 | ||||||||||||||||||||||||||||
Gross profit | 375,828 | (12,745 | ) | (5,647 | ) | (8,190 | ) | 82 | (26,500 | ) | 349,328 | ||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 200,343 | (6,629 | ) | — | (8,190 | ) | 1,607 | (13,212 | ) | 187,131 | |||||||||||||||||||||||||||
General and administrative | 53,827 | (2 | ) | — | — | (434 | ) | (436 | ) | 53,391 | |||||||||||||||||||||||||||
Research and development | 28,577 | — | — | — | — | — | 28,577 | ||||||||||||||||||||||||||||||
Amortization of intangible assets | 2,098 | — | — | — | 200 | 200 | 2,298 | ||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | 1,973 | — | — | — | (678 | ) | (678 | ) | 1,295 | ||||||||||||||||||||||||||||
286,818 | (6,631 | ) | — | (8,190 | ) | 695 | (14,126 | ) | 272,692 | ||||||||||||||||||||||||||||
Operating income | 89,010 | (6,114 | ) | (5,647 | ) | — | (613 | ) | (12,374 | ) | 76,636 | ||||||||||||||||||||||||||
Other income and (expense) | (6,282 | ) | — | — | — | (166 | ) | (166 | ) | (6,448 | ) | ||||||||||||||||||||||||||
Income before income taxes | 82,728 | (6,114 | ) | (5,647 | ) | — | (779 | ) | (12,540 | ) | 70,188 | ||||||||||||||||||||||||||
Income tax expense | (28,792 | ) | 1,782 | 1,645 | — | 227 | 3,654 | (25,138 | ) | ||||||||||||||||||||||||||||
Net income from continuing operations | $ | 53,936 | $ | (4,332 | ) | $ | (4,002 | ) | $ | — | $ | (552 | ) | $ | (8,886 | ) | $ | 45,050 | |||||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Further Restatement Adjustments by Category | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | As Originally | Co-Pay and | Bad Debt | Accounts | Intercompany | Inventory | Other | Total Further | Restated | ||||||||||||||||||||||||||||
Restated in | Self-Pay | Timing | Receivable | Profit | Restatement | ||||||||||||||||||||||||||||||||
2012 | Revenue | Reserve | Adjustments | ||||||||||||||||||||||||||||||||||
Form 10-K/A | |||||||||||||||||||||||||||||||||||||
Net sales | $ | 447,581 | $ | (9,049 | ) | $ | — | $ | 1,653 | $ | — | $ | — | $ | 4 | $ | (7,392 | ) | $ | 440,189 | |||||||||||||||||
Cost of sales | 98,253 | — | — | — | 207 | 1,774 | 492 | 2,473 | 100,726 | ||||||||||||||||||||||||||||
Gross profit | 349,328 | (9,049 | ) | — | 1,653 | (207 | ) | (1,774 | ) | (488 | ) | $ | (9,865 | ) | 339,463 | ||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 187,131 | (9,049 | ) | 1,097 | (408 | ) | — | — | — | $ | (8,360 | ) | 178,771 | ||||||||||||||||||||||||
General and administrative | 53,391 | — | — | — | — | — | 259 | 259 | 53,650 | ||||||||||||||||||||||||||||
Research and development | 28,577 | — | — | — | — | — | — | — | 28,577 | ||||||||||||||||||||||||||||
Amortization of intangible assets | 2,298 | — | — | — | — | — | — | — | 2,298 | ||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | 1,295 | — | — | — | — | — | — | — | 1,295 | ||||||||||||||||||||||||||||
272,692 | (9,049 | ) | 1,097 | (408 | ) | — | — | 259 | (8,101 | ) | 264,591 | ||||||||||||||||||||||||||
Operating income | 76,636 | — | (1,097 | ) | 2,061 | (207 | ) | (1,774 | ) | (747 | ) | (1,764 | ) | 74,872 | |||||||||||||||||||||||
Other income and (expense) | (6,448 | ) | — | — | — | — | — | 641 | 641 | $ | (5,807 | ) | |||||||||||||||||||||||||
Income before income taxes | 70,188 | — | (1,097 | ) | 2,061 | (207 | ) | (1,774 | ) | (106 | ) | (1,123 | ) | 69,065 | |||||||||||||||||||||||
Income tax expense | (25,138 | ) | — | 384 | (721 | ) | 72 | 621 | 838 | 1,194 | $ | (23,944 | ) | ||||||||||||||||||||||||
Net income from continuing operations | $ | 45,050 | $ | — | $ | (713 | ) | $ | 1,340 | $ | (135 | ) | $ | (1,153 | ) | $ | 732 | $ | 71 | $ | 45,121 | ||||||||||||||||
Year Ended December 31, 2011 | |||||||||||||||||||||||||||||||||||||
Original Restatement Adjustments by Category | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | As Reported | Distributor | Inventory | Royalties | Other | Total Original | As Originally | ||||||||||||||||||||||||||||||
in the 2012 | Revenue | Reserves | Restatement | Restated in | |||||||||||||||||||||||||||||||||
Form 10-K | Adjustments | 2012 | |||||||||||||||||||||||||||||||||||
Prior to | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Original | |||||||||||||||||||||||||||||||||||||
Restatement | |||||||||||||||||||||||||||||||||||||
Net sales | $ | 470,121 | $ | (29,135 | ) | $ | — | $ | — | $ | 985 | $ | (28,150 | ) | $ | 441,971 | |||||||||||||||||||||
Cost of sales | 92,619 | (8,289 | ) | 3,377 | 7,713 | 107 | 2,908 | 95,527 | |||||||||||||||||||||||||||||
Gross profit | 377,502 | (20,846 | ) | (3,377 | ) | (7,713 | ) | 878 | (31,058 | ) | 346,444 | ||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 200,145 | (1,216 | ) | — | (7,713 | ) | 2,295 | (6,634 | ) | 193,511 | |||||||||||||||||||||||||||
General and administrative | 64,374 | — | — | — | 107 | 107 | 64,481 | ||||||||||||||||||||||||||||||
Research and development | 22,861 | — | — | — | — | — | 22,861 | ||||||||||||||||||||||||||||||
Amortization of intangible assets | 2,350 | — | — | — | 200 | 200 | 2,550 | ||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | 56,463 | — | — | — | 678 | 678 | 57,141 | ||||||||||||||||||||||||||||||
346,193 | (1,216 | ) | — | (7,713 | ) | 3,280 | (5,649 | ) | 340,544 | ||||||||||||||||||||||||||||
Operating income | 31,309 | (19,630 | ) | (3,377 | ) | — | (2,402 | ) | (25,409 | ) | 5,900 | ||||||||||||||||||||||||||
Other income and (expense) | (11,868 | ) | — | — | — | 3,915 | 3,915 | (7,953 | ) | ||||||||||||||||||||||||||||
Income (loss) before income taxes | 19,441 | (19,630 | ) | (3,377 | ) | — | 1,513 | (21,494 | ) | (2,053 | ) | ||||||||||||||||||||||||||
Income tax expense | (21,181 | ) | 6,408 | 1,102 | — | (494 | ) | 7,016 | (14,165 | ) | |||||||||||||||||||||||||||
Net loss from continuing operations | $ | (1,740 | ) | $ | (13,222 | ) | $ | (2,275 | ) | $ | — | $ | 1,019 | $ | (14,478 | ) | $ | (16,218 | ) | ||||||||||||||||||
Year Ended December 31, 2011 | |||||||||||||||||||||||||||||||||||||
Further Restatement Adjustments by Category | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | As Originally | Co-Pay and | Bad Debt | Accounts | Intercompany | Inventory | Other | Total Further | Restated | ||||||||||||||||||||||||||||
Restated in | Self-Pay | Timing | Receivable | Profit | Restatement | ||||||||||||||||||||||||||||||||
2012 | Revenue | Reserve | Adjustments | ||||||||||||||||||||||||||||||||||
Form 10-K/A | |||||||||||||||||||||||||||||||||||||
Net sales | $ | 441,971 | $ | (5,960 | ) | $ | — | $ | (439 | ) | $ | — | $ | — | $ | (53 | ) | $ | (6,452 | ) | $ | 435,519 | |||||||||||||||
Cost of sales | 95,527 | — | — | — | 253 | 321 | 314 | 888 | 96,415 | ||||||||||||||||||||||||||||
Gross profit | 346,444 | (5,960 | ) | — | (439 | ) | (253 | ) | (321 | ) | (367 | ) | (7,340 | ) | 339,104 | ||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 193,511 | (5,960 | ) | (2,143 | ) | (252 | ) | — | — | — | (8,355 | ) | 185,156 | ||||||||||||||||||||||||
General and administrative | 64,481 | — | — | — | — | — | 304 | 304 | 64,785 | ||||||||||||||||||||||||||||
Research and development | 22,861 | — | — | — | — | — | — | — | 22,861 | ||||||||||||||||||||||||||||
Amortization of intangible assets | 2,550 | — | — | — | — | — | — | — | 2,550 | ||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | 57,141 | — | — | — | — | — | — | — | 57,141 | ||||||||||||||||||||||||||||
340,544 | (5,960 | ) | (2,143 | ) | (252 | ) | — | — | 304 | (8,051 | ) | 332,493 | |||||||||||||||||||||||||
Operating income | 5,900 | — | 2,143 | (187 | ) | (253 | ) | (321 | ) | (671 | ) | 711 | 6,611 | ||||||||||||||||||||||||
Other income and (expense) | (7,953 | ) | — | — | — | — | — | (21 | ) | (21 | ) | (7,974 | ) | ||||||||||||||||||||||||
Loss before income taxes | (2,053 | ) | — | 2,143 | (187 | ) | (253 | ) | (321 | ) | (692 | ) | 690 | (1,363 | ) | ||||||||||||||||||||||
Income tax expense | (14,165 | ) | — | (752 | ) | 66 | 89 | 113 | 206 | (278 | ) | (14,443 | ) | ||||||||||||||||||||||||
Net loss from continuing operations | $ | (16,218 | ) | $ | — | $ | 1,391 | $ | (121 | ) | $ | (164 | ) | $ | (208 | ) | $ | (486 | ) | $ | 412 | $ | (15,806 | ) | |||||||||||||
The effects of the Further Restatement on the Company’s consolidated balance sheet as of December 31, 2013 are as follows: | |||||||||||||||||||||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands except share and per share data) | Originally | Further | Restated | ||||||||||||||||||||||||||||||||||
Reported in | Restatement | ||||||||||||||||||||||||||||||||||||
2013 | Adjustments | ||||||||||||||||||||||||||||||||||||
Form 10-K | |||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 30,486 | $ | (1,562 | ) | $ | 28,924 | ||||||||||||||||||||||||||||||
Restricted cash | 23,761 | — | 23,761 | ||||||||||||||||||||||||||||||||||
Trade accounts receivable, less allowances of $9,111 | 75,567 | (4,756 | ) | 70,811 | |||||||||||||||||||||||||||||||||
Inventories | 90,577 | (17,899 | ) | 72,678 | |||||||||||||||||||||||||||||||||
Deferred income taxes | 33,947 | 6,052 | 39,999 | ||||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | 25,906 | 3,027 | 28,933 | ||||||||||||||||||||||||||||||||||
Total current assets | 280,244 | (15,138 | ) | 265,106 | |||||||||||||||||||||||||||||||||
Property, plant and equipment, net | 54,606 | (234 | ) | 54,372 | |||||||||||||||||||||||||||||||||
Patents and other intangible assets, net | 9,046 | — | 9,046 | ||||||||||||||||||||||||||||||||||
Goodwill | 53,565 | — | 53,565 | ||||||||||||||||||||||||||||||||||
Deferred income taxes | 18,336 | 4,058 | 22,394 | ||||||||||||||||||||||||||||||||||
Other long-term assets | 7,385 | 107 | 7,492 | ||||||||||||||||||||||||||||||||||
Total assets | $ | 423,182 | $ | (11,207 | ) | $ | 411,975 | ||||||||||||||||||||||||||||||
Liabilities and shareholders’ equity | |||||||||||||||||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||||||||||||||||
Trade accounts payable | $ | 20,674 | $ | — | $ | 20,674 | |||||||||||||||||||||||||||||||
Other current liabilities | 46,146 | 3,530 | 49,676 | ||||||||||||||||||||||||||||||||||
Total current liabilities | 66,820 | 3,530 | 70,350 | ||||||||||||||||||||||||||||||||||
Long-term debt | 20,000 | — | 20,000 | ||||||||||||||||||||||||||||||||||
Deferred income taxes | 13,132 | (106 | ) | 13,026 | |||||||||||||||||||||||||||||||||
Other long-term liabilities | 12,736 | — | 12,736 | ||||||||||||||||||||||||||||||||||
Total liabilities | 112,688 | 3,424 | 116,112 | ||||||||||||||||||||||||||||||||||
Contingencies (Note 17) | |||||||||||||||||||||||||||||||||||||
Shareholders’ equity | |||||||||||||||||||||||||||||||||||||
Common shares $0.10 par value; 50,000,000 shares authorized; 18,102,335 issued and outstanding | 1,810 | — | 1,810 | ||||||||||||||||||||||||||||||||||
Additional paid-in capital | 216,653 | — | 216,653 | ||||||||||||||||||||||||||||||||||
Retained earnings | 89,332 | (15,435 | ) | 73,897 | |||||||||||||||||||||||||||||||||
Accumulated other comprehensive income | 2,699 | 804 | 3,503 | ||||||||||||||||||||||||||||||||||
Total shareholders’ equity | 310,494 | (14,631 | ) | 295,863 | |||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 423,182 | $ | (11,207 | ) | $ | 411,975 | ||||||||||||||||||||||||||||||
The effects of the Original Restatement and the Further Restatement on the Company’s consolidated balance sheet as of December 31, 2012 are as follows: | |||||||||||||||||||||||||||||||||||||
As of December 31, 2012 | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands except share and per share data) | As Reported in | Original | As Originally | Further | Restated | ||||||||||||||||||||||||||||||||
the 2012 Form | Restatement | Restated in the | Restatement | ||||||||||||||||||||||||||||||||||
10-K Prior to | Adjustments | 2012 | Adjustments | ||||||||||||||||||||||||||||||||||
Original | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Restatement | |||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 31,055 | $ | — | $ | 31,055 | $ | (288 | ) | $ | 30,767 | ||||||||||||||||||||||||||
Restricted cash | 21,314 | — | 21,314 | — | 21,314 | ||||||||||||||||||||||||||||||||
Trade accounts receivable, less allowances of $6,673 | 150,316 | (43,004 | ) | 107,312 | (3,510 | ) | 103,802 | ||||||||||||||||||||||||||||||
Inventories | 88,744 | (5,371 | ) | 83,373 | (13,560 | ) | 69,813 | ||||||||||||||||||||||||||||||
Deferred income taxes | 16,959 | 16,491 | 33,450 | 5,037 | 38,487 | ||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | 32,056 | 2,023 | 34,079 | 2,370 | 36,449 | ||||||||||||||||||||||||||||||||
Total current assets | 340,444 | (29,861 | ) | 310,583 | (9,951 | ) | 300,632 | ||||||||||||||||||||||||||||||
Property, plant and equipment, net | 51,362 | 2,473 | 53,835 | (1,042 | ) | 52,793 | |||||||||||||||||||||||||||||||
Patents and other intangible assets, net | 6,880 | 410 | 7,290 | — | 7,290 | ||||||||||||||||||||||||||||||||
Goodwill | 74,388 | — | 74,388 | — | 74,388 | ||||||||||||||||||||||||||||||||
Deferred income taxes | 19,904 | (1,023 | ) | 18,881 | 2,642 | 21,523 | |||||||||||||||||||||||||||||||
Other long-term assets | 11,303 | (3,383 | ) | 7,920 | — | 7,920 | |||||||||||||||||||||||||||||||
Total assets | $ | 504,281 | $ | (31,384 | ) | $ | 472,897 | $ | (8,351 | ) | $ | 464,546 | |||||||||||||||||||||||||
Liabilities and shareholders’ equity | |||||||||||||||||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||||||||||||||||
Bank borrowings | $ | 16 | $ | — | $ | 16 | $ | — | $ | 16 | |||||||||||||||||||||||||||
Trade accounts payable | 21,812 | 763 | 22,575 | — | 22,575 | ||||||||||||||||||||||||||||||||
Other current liabilities | 46,969 | (7,375 | ) | 39,594 | 3,148 | 42,742 | |||||||||||||||||||||||||||||||
Total current liabilities | 68,797 | (6,612 | ) | 62,185 | 3,148 | 65,333 | |||||||||||||||||||||||||||||||
Long-term debt | 20,000 | — | 20,000 | — | 20,000 | ||||||||||||||||||||||||||||||||
Deferred income taxes | 11,456 | — | 11,456 | (106 | ) | 11,350 | |||||||||||||||||||||||||||||||
Other long-term liabilities | 4,930 | 6,494 | 11,424 | — | 11,424 | ||||||||||||||||||||||||||||||||
Total liabilities | 105,183 | (118 | ) | 105,065 | 3,042 | 108,107 | |||||||||||||||||||||||||||||||
Contingencies (Note 17) | |||||||||||||||||||||||||||||||||||||
Shareholders’ equity | |||||||||||||||||||||||||||||||||||||
Common shares $0.10 par value; 50,000,000 shares authorized; 19,339,329 issued and outstanding | 1,934 | — | 1,934 | — | 1,934 | ||||||||||||||||||||||||||||||||
Additional paid-in capital | 246,111 | 195 | 246,306 | — | 246,306 | ||||||||||||||||||||||||||||||||
Retained earnings | 148,549 | (33,702 | ) | 114,847 | (12,138 | ) | 102,709 | ||||||||||||||||||||||||||||||
Accumulated other comprehensive income | 2,504 | 2,241 | 4,745 | 745 | 5,490 | ||||||||||||||||||||||||||||||||
Total shareholders’ equity | 399,098 | (31,266 | ) | 367,832 | (11,393 | ) | 356,439 | ||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 504,281 | $ | (31,384 | ) | $ | 472,897 | $ | (8,351 | ) | $ | 464,546 | |||||||||||||||||||||||||
The effects of the Further Restatement on the Company’s consolidated statement of operations and comprehensive income for the year ended December 31, 2013 are as follows: | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands, except share and per share data) | Originally | Further | Restated | ||||||||||||||||||||||||||||||||||
Reported in 2013 | Restatement | ||||||||||||||||||||||||||||||||||||
Form 10-K | Adjustments | ||||||||||||||||||||||||||||||||||||
Product sales | $ | 352,796 | $ | (3,244 | ) | $ | 349,552 | ||||||||||||||||||||||||||||||
Marketing service fees | 47,738 | 321 | 48,059 | ||||||||||||||||||||||||||||||||||
Net sales | 400,534 | (2,923 | ) | 397,611 | |||||||||||||||||||||||||||||||||
Cost of sales | 102,300 | 4,612 | 106,912 | ||||||||||||||||||||||||||||||||||
Gross profit | 298,234 | (7,535 | ) | 290,699 | |||||||||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 176,581 | (1,113 | ) | 175,468 | |||||||||||||||||||||||||||||||||
General and administrative | 65,147 | (317 | ) | 64,830 | |||||||||||||||||||||||||||||||||
Research and development | 26,768 | — | 26,768 | ||||||||||||||||||||||||||||||||||
Amortization of intangible assets | 2,687 | — | 2,687 | ||||||||||||||||||||||||||||||||||
Costs related to the accounting review and restatement | 12,945 | — | 12,945 | ||||||||||||||||||||||||||||||||||
Impairment of Goodwill | 19,193 | — | 19,193 | ||||||||||||||||||||||||||||||||||
303,321 | (1,430 | ) | 301,891 | ||||||||||||||||||||||||||||||||||
Operating loss | (5,087 | ) | (6,105 | ) | (11,192 | ) | |||||||||||||||||||||||||||||||
Other income and (expense) | |||||||||||||||||||||||||||||||||||||
Interest expense, net | (1,925 | ) | 98 | (1,827 | ) | ||||||||||||||||||||||||||||||||
Other expense | 2,220 | 196 | 2,416 | ||||||||||||||||||||||||||||||||||
295 | 294 | 589 | |||||||||||||||||||||||||||||||||||
Loss before income taxes | (4,792 | ) | (5,811 | ) | (10,603 | ) | |||||||||||||||||||||||||||||||
Income tax expense | (10,116 | ) | 2,514 | (7,602 | ) | ||||||||||||||||||||||||||||||||
Net loss from continuing operations | (14,908 | ) | (3,297 | ) | (18,205 | ) | |||||||||||||||||||||||||||||||
Discontinued operations (Note 16) | |||||||||||||||||||||||||||||||||||||
Loss from discontinued operations | (15,510 | ) | — | (15,510 | ) | ||||||||||||||||||||||||||||||||
Income tax benefit (expense) | 4,903 | — | 4,903 | ||||||||||||||||||||||||||||||||||
Net loss from discontinued operations | (10,607 | ) | — | (10,607 | ) | ||||||||||||||||||||||||||||||||
Net loss | $ | (25,515 | ) | $ | (3,297 | ) | $ | (28,812 | ) | ||||||||||||||||||||||||||||
Net loss per common share—basic: | |||||||||||||||||||||||||||||||||||||
Net loss from continuing operations | $ | (0.80 | ) | $ | (0.17 | ) | $ | (0.97 | ) | ||||||||||||||||||||||||||||
Net loss from discontinued operations | (0.57 | ) | — | (0.57 | ) | ||||||||||||||||||||||||||||||||
Net loss per common share—basic | $ | (1.37 | ) | $ | (0.17 | ) | $ | (1.54 | ) | ||||||||||||||||||||||||||||
Net loss per common share—diluted: | |||||||||||||||||||||||||||||||||||||
Net loss from continuing operations | $ | (0.80 | ) | $ | (0.17 | ) | $ | (0.97 | ) | ||||||||||||||||||||||||||||
Net loss from discontinued operations | (0.57 | ) | — | (0.57 | ) | ||||||||||||||||||||||||||||||||
Net loss per common share—diluted | $ | (1.37 | ) | $ | (0.17 | ) | $ | (1.54 | ) | ||||||||||||||||||||||||||||
Weighted average number of common shares: | |||||||||||||||||||||||||||||||||||||
Basic | 18,697,228 | — | 18,697,228 | ||||||||||||||||||||||||||||||||||
Diluted | 18,697,228 | — | 18,697,228 | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, before tax: | |||||||||||||||||||||||||||||||||||||
Translation adjustment | $ | (1,768 | ) | $ | 60 | $ | (1,708 | ) | |||||||||||||||||||||||||||||
Unrealized gain on derivative instrument | (442 | ) | (1 | ) | (443 | ) | |||||||||||||||||||||||||||||||
Other comprehensive loss, before tax | (2,210 | ) | 59 | (2,151 | ) | ||||||||||||||||||||||||||||||||
Income tax expense related to components of other comprehensive income | 164 | — | 164 | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | (2,046 | ) | 59 | (1,987 | ) | ||||||||||||||||||||||||||||||||
Comprehensive loss | $ | (27,561 | ) | $ | (3,238 | ) | $ | (30,799 | ) | ||||||||||||||||||||||||||||
The effects of the Original Restatement and the Further Restatement on the Company’s consolidated statement of operations and comprehensive income for the year ended December 31, 2012 are as follows: | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands, except share and per share data) | As Reported in the | Original | As Originally | Further | Restated | ||||||||||||||||||||||||||||||||
2012 Form 10-K | Restatement | Restated in the | Restatement | ||||||||||||||||||||||||||||||||||
Prior to Original | Adjustments | 2012 | Adjustments | ||||||||||||||||||||||||||||||||||
Restatement | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Product sales | $ | 415,850 | $ | (14,811 | ) | $ | 401,039 | $ | (7,392 | ) | $ | 393,647 | |||||||||||||||||||||||||
Marketing service fees | 46,470 | 72 | 46,542 | — | 46,542 | ||||||||||||||||||||||||||||||||
Net sales | 462,320 | (14,739 | ) | 447,581 | (7,392 | ) | 440,189 | ||||||||||||||||||||||||||||||
Cost of sales | 86,492 | 11,761 | 98,253 | 2,473 | 100,726 | ||||||||||||||||||||||||||||||||
Gross profit | 375,828 | (26,500 | ) | 349,328 | (9,865 | ) | 339,463 | ||||||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 200,343 | (13,212 | ) | 187,131 | (8,360 | ) | 178,771 | ||||||||||||||||||||||||||||||
General and administrative | 53,827 | (436 | ) | 53,391 | 259 | 53,650 | |||||||||||||||||||||||||||||||
Research and development | 28,577 | — | 28,577 | — | 28,577 | ||||||||||||||||||||||||||||||||
Amortization of intangible assets | 2,098 | 200 | 2,298 | — | 2,298 | ||||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions (Note 17) | 1,973 | (678 | ) | 1,295 | — | 1,295 | |||||||||||||||||||||||||||||||
286,818 | (14,126 | ) | 272,692 | (8,101 | ) | 264,591 | |||||||||||||||||||||||||||||||
Operating income | 89,010 | (12,374 | ) | 76,636 | (1,764 | ) | 74,872 | ||||||||||||||||||||||||||||||
Other income and (expense) | |||||||||||||||||||||||||||||||||||||
Interest expense, net | (4,577 | ) | (166 | ) | (4,743 | ) | 582 | (4,161 | ) | ||||||||||||||||||||||||||||
Other expense | (1,705 | ) | — | (1,705 | ) | 59 | (1,646 | ) | |||||||||||||||||||||||||||||
(6,282 | ) | (166 | ) | (6,448 | ) | 641 | (5,807 | ) | |||||||||||||||||||||||||||||
Income before income taxes | 82,728 | (12,540 | ) | 70,188 | (1,123 | ) | 69,065 | ||||||||||||||||||||||||||||||
Income tax expense | (28,792 | ) | 3,654 | (25,138 | ) | 1,194 | (23,944 | ) | |||||||||||||||||||||||||||||
Net income from continuing operations | 53,936 | (8,886 | ) | 45,050 | 71 | 45,121 | |||||||||||||||||||||||||||||||
Discontinued operations (Note 16) | |||||||||||||||||||||||||||||||||||||
Gain on sale of Breg, Inc., | 1,345 | — | 1,345 | — | 1,345 | ||||||||||||||||||||||||||||||||
Loss from discontinued operations | (4,012 | ) | 1,018 | (2,994 | ) | (500 | ) | (3,494 | ) | ||||||||||||||||||||||||||||
Income tax benefit (expense) | 26 | (589 | ) | (563 | ) | 443 | (120 | ) | |||||||||||||||||||||||||||||
Net loss from discontinued operations | (2,641 | ) | 429 | (2,212 | ) | (57 | ) | (2,269 | ) | ||||||||||||||||||||||||||||
Net income | $ | 51,295 | $ | (8,457 | ) | $ | 42,838 | $ | 14 | $ | 42,852 | ||||||||||||||||||||||||||
Net income (loss) per common share—basic: | |||||||||||||||||||||||||||||||||||||
Net income from continuing operations | $ | 2.84 | $ | (0.47 | ) | $ | 2.37 | $ | 0.01 | $ | 2.38 | ||||||||||||||||||||||||||
Net loss from discontinued operations | (0.14 | ) | 0.02 | (0.12 | ) | — | (0.12 | ) | |||||||||||||||||||||||||||||
Net income per common share—basic | $ | 2.7 | $ | (0.45 | ) | $ | 2.25 | $ | 0.01 | $ | 2.26 | ||||||||||||||||||||||||||
Net income (loss) per common share—diluted: | |||||||||||||||||||||||||||||||||||||
Net income from continuing operations | $ | 2.78 | $ | (0.46 | ) | $ | 2.32 | $ | 0.01 | $ | 2.33 | ||||||||||||||||||||||||||
Net loss from discontinued operations | (0.14 | ) | 0.03 | (0.11 | ) | (0.01 | ) | (0.12 | ) | ||||||||||||||||||||||||||||
Net income per common share—diluted: | $ | 2.64 | $ | (0.43 | ) | $ | 2.21 | $ | 0 | $ | 2.21 | ||||||||||||||||||||||||||
Weighted average number of common shares: | |||||||||||||||||||||||||||||||||||||
Basic | 18,977,263 | — | 18,977,263 | — | 18,977,263 | ||||||||||||||||||||||||||||||||
Diluted | 19,390,413 | — | 19,390,413 | — | 19,390,413 | ||||||||||||||||||||||||||||||||
Other comprehensive income, before tax: | |||||||||||||||||||||||||||||||||||||
Translation adjustment | $ | 480 | $ | 288 | $ | 768 | $ | 363 | $ | 1,131 | |||||||||||||||||||||||||||
Unrealized gain on derivative instrument | 416 | — | 416 | — | 416 | ||||||||||||||||||||||||||||||||
Other comprehensive income, before tax | 896 | 288 | 1,184 | 363 | 1,547 | ||||||||||||||||||||||||||||||||
Income tax expense related to components of other comprehensive income | (153 | ) | — | (153 | ) | — | (153 | ) | |||||||||||||||||||||||||||||
Other comprehensive income, net of tax | 743 | 288 | 1,031 | 363 | 1,394 | ||||||||||||||||||||||||||||||||
Comprehensive income | $ | 52,038 | $ | (8,169 | ) | $ | 43,869 | $ | 377 | $ | 44,246 | ||||||||||||||||||||||||||
The effects of the Original Restatement and the Further Restatement on the Company’s consolidated statement of operations and comprehensive loss for the year ended December 31, 2011 are as follows: | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2011 | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands, except share and per share data) | As Reported in the | Original | As Originally | Further | Restated | ||||||||||||||||||||||||||||||||
2012 Form 10-K | Restatement | Restated in the | Restatement | ||||||||||||||||||||||||||||||||||
Prior to Original | Adjustments | 2012 | Adjustments | ||||||||||||||||||||||||||||||||||
Restatement | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Product sales | $ | 432,975 | $ | (27,828 | ) | $ | 405,147 | (6,452 | ) | $ | 398,695 | ||||||||||||||||||||||||||
Marketing service fees | 37,146 | (322 | ) | 36,824 | — | 36,824 | |||||||||||||||||||||||||||||||
Net sales | 470,121 | (28,150 | ) | 441,971 | (6,452 | ) | 435,519 | ||||||||||||||||||||||||||||||
Cost of sales | 92,619 | 2,908 | 95,527 | 888 | 96,415 | ||||||||||||||||||||||||||||||||
Gross profit | 377,502 | (31,058 | ) | 346,444 | (7,340 | ) | 339,104 | ||||||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 200,145 | (6,634 | ) | 193,511 | (8,355 | ) | 185,156 | ||||||||||||||||||||||||||||||
General and administrative | 64,374 | 107 | 64,481 | 304 | 64,785 | ||||||||||||||||||||||||||||||||
Research and development | 22,861 | — | 22,861 | — | 22,861 | ||||||||||||||||||||||||||||||||
Amortization of intangible assets | 2,350 | 200 | 2,550 | — | 2,550 | ||||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions (Note 17) | 56,463 | 678 | 57,141 | — | 57,141 | ||||||||||||||||||||||||||||||||
346,193 | (5,649 | ) | 340,544 | (8,051 | ) | 332,493 | |||||||||||||||||||||||||||||||
Operating income | 31,309 | (25,409 | ) | 5,900 | 711 | 6,611 | |||||||||||||||||||||||||||||||
Other income and (expense) | |||||||||||||||||||||||||||||||||||||
Interest expense, net | (9,456 | ) | 3,915 | (5,541 | ) | 100 | (5,441 | ) | |||||||||||||||||||||||||||||
Other expense | (2,412 | ) | — | (2,412 | ) | (121 | ) | (2,533 | ) | ||||||||||||||||||||||||||||
(11,868 | ) | 3,915 | (7,953 | ) | (21 | ) | (7,974 | ) | |||||||||||||||||||||||||||||
Income (loss) before income taxes | 19,441 | (21,494 | ) | (2,053 | ) | 690 | (1,363 | ) | |||||||||||||||||||||||||||||
Income tax expense | (21,181 | ) | 7,016 | (14,165 | ) | (278 | ) | (14,443 | ) | ||||||||||||||||||||||||||||
Net loss from continuing operations | (1,740 | ) | (14,478 | ) | (16,218 | ) | 412 | (15,806 | ) | ||||||||||||||||||||||||||||
Discontinued operations (Note 16) | |||||||||||||||||||||||||||||||||||||
Income (loss) from discontinued operations | 1,263 | (3,968 | ) | (2,705 | ) | — | (2,705 | ) | |||||||||||||||||||||||||||||
Income tax (expense) benefit | (596 | ) | 1,409 | 813 | — | 813 | |||||||||||||||||||||||||||||||
Net income (loss) from discontinued operations | 667 | (2,559 | ) | (1,892 | ) | — | (1,892 | ) | |||||||||||||||||||||||||||||
Net loss | $ | (1,073 | ) | $ | (17,037 | ) | $ | (18,110 | ) | 412 | $ | (17,698 | ) | ||||||||||||||||||||||||
Net (loss) income per common share—basic: | |||||||||||||||||||||||||||||||||||||
Net loss from continuing operations | $ | (0.10 | ) | $ | (0.79 | ) | $ | (0.89 | ) | $ | 0.02 | $ | (0.87 | ) | |||||||||||||||||||||||
Net income (loss) from discontinued operations | 0.04 | (0.14 | ) | (0.10 | ) | — | (0.10 | ) | |||||||||||||||||||||||||||||
Net loss per common share—basic | $ | (0.06 | ) | $ | (0.93 | ) | $ | (0.99 | ) | $ | 0.02 | $ | (0.97 | ) | |||||||||||||||||||||||
Net (loss) income per common share—diluted: | |||||||||||||||||||||||||||||||||||||
Net loss from continuing operations | $ | (0.10 | ) | $ | (0.79 | ) | $ | (0.89 | ) | $ | 0.02 | $ | (0.87 | ) | |||||||||||||||||||||||
Net income (loss) from discontinued operations | 0.04 | (0.14 | ) | (0.10 | ) | — | (0.10 | ) | |||||||||||||||||||||||||||||
Net loss per common share—diluted: | $ | (0.06 | ) | $ | (0.93 | ) | $ | (0.99 | ) | $ | 0.02 | $ | (0.97 | ) | |||||||||||||||||||||||
Weighted average number of common shares: | |||||||||||||||||||||||||||||||||||||
Basic | 18,219,343 | — | 18,219,343 | — | 18,219,343 | ||||||||||||||||||||||||||||||||
Diluted | 18,219,343 | — | 18,219,343 | — | 18,219,343 | ||||||||||||||||||||||||||||||||
Other comprehensive loss, before tax: | |||||||||||||||||||||||||||||||||||||
Translation adjustment | $ | (3,192 | ) | $ | 913 | $ | (2,279 | ) | $ | 382 | $ | (1,897 | ) | ||||||||||||||||||||||||
Unrealized loss on derivative instrument | (693 | ) | — | (693 | ) | — | (693 | ) | |||||||||||||||||||||||||||||
Other comprehensive loss, before tax | (3,885 | ) | 913 | (2,972 | ) | 382 | (2,590 | ) | |||||||||||||||||||||||||||||
Income tax benefit related to components of other comprehensive income | 256 | — | 256 | — | 256 | ||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | (3,629 | ) | 913 | (2,716 | ) | 382 | (2,334 | ) | |||||||||||||||||||||||||||||
Comprehensive loss | $ | (4,702 | ) | $ | (16,124 | ) | $ | (20,826 | ) | 794 | $ | (20,032 | ) | ||||||||||||||||||||||||
The effects of Further Restatement on the Company’s consolidated statement of cash flows for the year ended December 31, 2013 are as follows: | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | Year Ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||
Originally | Further | Restated | |||||||||||||||||||||||||||||||||||
Reported in | Restatement | ||||||||||||||||||||||||||||||||||||
2013 | Adjustments | ||||||||||||||||||||||||||||||||||||
Form 10-K | |||||||||||||||||||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||||||||||||||||||
Net loss | $ | (25,515 | ) | $ | (3,297 | ) | $ | (28,812 | ) | ||||||||||||||||||||||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 22,659 | 163 | 22,822 | ||||||||||||||||||||||||||||||||||
Amortization of debt costs | 720 | — | 720 | ||||||||||||||||||||||||||||||||||
Amortization of exclusivity agreements | 1,546 | — | 1,546 | ||||||||||||||||||||||||||||||||||
Provision for doubtful accounts | 6,003 | (1,413 | ) | 4,590 | |||||||||||||||||||||||||||||||||
Deferred income taxes | (1,986 | ) | 4,815 | 2,829 | |||||||||||||||||||||||||||||||||
Share-based compensation | 6,267 | — | 6,267 | ||||||||||||||||||||||||||||||||||
Impairment of goodwill | 19,193 | — | 19,193 | ||||||||||||||||||||||||||||||||||
Gain on sale of Breg, Inc., net of tax | — | — | — | ||||||||||||||||||||||||||||||||||
Excess income tax benefit on employee stock-based awards | (82 | ) | — | (82 | ) | ||||||||||||||||||||||||||||||||
Income tax benefit (expense) on employee stock-based awards | 795 | (795 | ) | — | |||||||||||||||||||||||||||||||||
Other | 4,442 | 94 | 4,536 | ||||||||||||||||||||||||||||||||||
Changes in operating assets and liabilities, net of effect of dispositions: | |||||||||||||||||||||||||||||||||||||
Trade accounts receivable | 25,747 | 2,815 | 28,562 | ||||||||||||||||||||||||||||||||||
Inventories | (6,626 | ) | 3,413 | (3,213 | ) | ||||||||||||||||||||||||||||||||
Escrow receivable | — | — | — | ||||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | 6,791 | 1,973 | 8,764 | ||||||||||||||||||||||||||||||||||
Trade accounts payable | (2,280 | ) | — | (2,280 | ) | ||||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | — | — | — | ||||||||||||||||||||||||||||||||||
Other current liabilities | 8,018 | (1,049 | ) | 6,969 | |||||||||||||||||||||||||||||||||
Other long-term assets | 2,750 | (8,079 | ) | (5,329 | ) | ||||||||||||||||||||||||||||||||
Other long-term liabilities | (1,561 | ) | 1,521 | (40 | ) | ||||||||||||||||||||||||||||||||
Net cash provided by operating activities | 66,881 | 161 | 67,042 | ||||||||||||||||||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||||||||||||||||
Capital expenditures for property, plant and equipment | (24,787 | ) | — | (24,787 | ) | ||||||||||||||||||||||||||||||||
Capital expenditures for intangible assets | (4,891 | ) | — | (4,891 | ) | ||||||||||||||||||||||||||||||||
Purchase of other investments | — | (1,374 | ) | (1,374 | ) | ||||||||||||||||||||||||||||||||
Net proceeds from sale of Breg, Inc. | — | — | — | ||||||||||||||||||||||||||||||||||
Net cash (used in) provided by investing activities | (29,678 | ) | (1,374 | ) | (31,052 | ) | |||||||||||||||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of common shares | 3,450 | — | 3,450 | ||||||||||||||||||||||||||||||||||
Payment of refinancing fees and debt issuance costs | — | — | — | ||||||||||||||||||||||||||||||||||
Repayments of long-term debt | (16 | ) | — | (16 | ) | ||||||||||||||||||||||||||||||||
Repayment of bank borrowings, net | — | — | — | ||||||||||||||||||||||||||||||||||
Changes in restricted cash | (2,375 | ) | — | (2,375 | ) | ||||||||||||||||||||||||||||||||
Purchase of common stock | (39,494 | ) | — | (39,494 | ) | ||||||||||||||||||||||||||||||||
Cash payment for purchase of minority interest in subsidiary | — | — | — | ||||||||||||||||||||||||||||||||||
Excess income tax benefit on employee stock-based awards | 82 | — | 82 | ||||||||||||||||||||||||||||||||||
Net cash used in financing activities | (38,353 | ) | — | (38,353 | ) | ||||||||||||||||||||||||||||||||
Effect of exchange rate changes on cash | 581 | (61 | ) | 520 | |||||||||||||||||||||||||||||||||
Net (decrease) increase in cash and cash equivalents | (569 | ) | (1,274 | ) | (1,843 | ) | |||||||||||||||||||||||||||||||
Cash and cash equivalents at the beginning of the year | 31,055 | (288 | ) | 30,767 | |||||||||||||||||||||||||||||||||
Cash and cash equivalents at the end of the year | $ | 30,486 | $ | (1,562 | ) | $ | 28,924 | ||||||||||||||||||||||||||||||
Supplemental disclosure of cash flow information: | |||||||||||||||||||||||||||||||||||||
Cash paid during the year for: | |||||||||||||||||||||||||||||||||||||
Interest | $ | 2,046 | $ | — | $ | 2,046 | |||||||||||||||||||||||||||||||
Income taxes | $ | 8,773 | $ | — | $ | 8,773 | |||||||||||||||||||||||||||||||
The effects of the Original Restatement and the Further Restatement on the Company’s consolidated statement of cash flows for the year ended December 31, 2012 are as follows: | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | Year Ended December 31, 2012 | ||||||||||||||||||||||||||||||||||||
As Reported in | Original | As Originally | Further | Restated | |||||||||||||||||||||||||||||||||
the 2012 Form | Restatement | Restated in | Restatement | ||||||||||||||||||||||||||||||||||
10-K Prior to | Adjustments | the 2012 | Adjustments | ||||||||||||||||||||||||||||||||||
Original | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Restatement | |||||||||||||||||||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||||||||||||||||||
Net income | $ | 51,295 | $ | (8,457 | ) | $ | 42,838 | $ | 14 | $ | 42,852 | ||||||||||||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 20,261 | 319 | 20,580 | 152 | 20,732 | ||||||||||||||||||||||||||||||||
Amortization of debt costs | 1,737 | — | 1,737 | — | 1,737 | ||||||||||||||||||||||||||||||||
Amortization of exclusivity agreements | 1,289 | — | 1,289 | — | 1,289 | ||||||||||||||||||||||||||||||||
Provision for doubtful accounts | 13,302 | (2,730 | ) | 10,572 | (8,360 | ) | 2,212 | ||||||||||||||||||||||||||||||
Deferred income taxes | 871 | (2,123 | ) | (1,252 | ) | 5,023 | 3,771 | ||||||||||||||||||||||||||||||
Share-based compensation | 6,303 | — | 6,303 | — | 6,303 | ||||||||||||||||||||||||||||||||
Impairment of goodwill | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Gain on sale of Breg, Inc, net of tax | (1,345 | ) | — | (1,345 | ) | — | (1,345 | ) | |||||||||||||||||||||||||||||
Excess income tax benefit on employee stock-based awards | — | (1,020 | ) | (1,020 | ) | — | (1,020 | ) | |||||||||||||||||||||||||||||
Income tax benefit on employee-stock-based awards | — | 2,910 | 2,910 | (2,910 | ) | — | |||||||||||||||||||||||||||||||
Other | 2,125 | 2,011 | 4,136 | 662 | 4,798 | ||||||||||||||||||||||||||||||||
Changes in operating assets and liabilities, net of effect of dispositions: | |||||||||||||||||||||||||||||||||||||
Trade accounts receivable | (31,600 | ) | 13,162 | (18,438 | ) | 7,310 | (11,128 | ) | |||||||||||||||||||||||||||||
Inventories | (6,341 | ) | 3,846 | (2,495 | ) | 2,111 | (384 | ) | |||||||||||||||||||||||||||||
Escrow receivable | 41,537 | — | 41,537 | — | 41,537 | ||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | (6,191 | ) | (9,386 | ) | (15,577 | ) | 1,002 | (14,575 | ) | ||||||||||||||||||||||||||||
Trade accounts payable | 5,554 | (979 | ) | 4,575 | — | 4,575 | |||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | (82,500 | ) | (678 | ) | (83,178 | ) | — | (83,178 | ) | ||||||||||||||||||||||||||||
Other current liabilities | (2,842 | ) | (2,887 | ) | (5,729 | ) | 490 | (5,239 | ) | ||||||||||||||||||||||||||||
Other long-term assets | (2,114 | ) | 4,241 | 2,127 | (5,518 | ) | (3,391 | ) | |||||||||||||||||||||||||||||
Other long-term liabilities | (135 | ) | 751 | 616 | — | 616 | |||||||||||||||||||||||||||||||
Net cash provided by operating activities | 11,206 | (1,020 | ) | 10,186 | (24 | ) | 10,162 | ||||||||||||||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||||||||||||||||
Capital expenditures for property, plant and equipment | (27,994 | ) | — | (27,994 | ) | — | (27,994 | ) | |||||||||||||||||||||||||||||
Capital expenditures for intangible assets | (780 | ) | — | (780 | ) | — | (780 | ) | |||||||||||||||||||||||||||||
Purchase of other investments | — | — | — | (714 | ) | (714 | ) | ||||||||||||||||||||||||||||||
Proceeds from sale of other investments | — | — | — | 878 | 878 | ||||||||||||||||||||||||||||||||
Net proceeds from sale of Breg Inc. | 153,773 | — | 153,773 | — | 153,773 | ||||||||||||||||||||||||||||||||
Net cash provided by (used in) investing activities | 124,999 | — | 124,999 | 164 | 125,163 | ||||||||||||||||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of common shares | 25,586 | — | 25,586 | — | 25,586 | ||||||||||||||||||||||||||||||||
Payment of refinancing fees and debt issuance costs | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Repayments of long-term debt | (188,695 | ) | — | (188,695 | ) | — | (188,695 | ) | |||||||||||||||||||||||||||||
Proceeds of bank borrowings, net | (1,297 | ) | — | (1,297 | ) | — | (1,297 | ) | |||||||||||||||||||||||||||||
Changes in restricted cash | 25,799 | — | 25,799 | — | 25,799 | ||||||||||||||||||||||||||||||||
Cash payment for purchase of minority interest in subsidiary | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Excess income tax benefit on employee stock-based awards | — | 1,020 | 1,020 | — | 1,020 | ||||||||||||||||||||||||||||||||
Net cash used in financing activities | (138,607 | ) | 1,020 | (137,587 | ) | — | (137,587 | ) | |||||||||||||||||||||||||||||
Effect of exchange rates changes on cash | 250 | — | 250 | 36 | 286 | ||||||||||||||||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | (2,152 | ) | — | (2,152 | ) | 176 | (1,976 | ) | |||||||||||||||||||||||||||||
Cash and cash equivalents at the beginning of the year | 33,207 | — | 33,207 | (464 | ) | 32,743 | |||||||||||||||||||||||||||||||
Cash and cash equivalents at the end of the year | $ | 31,055 | $ | — | $ | 31,055 | $ | (288 | ) | $ | 30,767 | ||||||||||||||||||||||||||
Supplemental disclosure of cash flow information: | |||||||||||||||||||||||||||||||||||||
Cash paid during the year for: | |||||||||||||||||||||||||||||||||||||
Interest | $ | 4,569 | $ | — | $ | 4,569 | $ | — | $ | 4,569 | |||||||||||||||||||||||||||
Income taxes | $ | 18,268 | $ | — | $ | 18,268 | $ | — | $ | 18,268 | |||||||||||||||||||||||||||
The effects of the Original Restatement and the Further Restatement on the Company’s consolidated statement of cash flows for the year ended December 31, 2011 are as follows: | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | Year Ended December 31, 2011 | ||||||||||||||||||||||||||||||||||||
As Reported in | Original | As Originally | Further | Restated | |||||||||||||||||||||||||||||||||
the 2012 Form | Restatement | Restated in | Restatement | ||||||||||||||||||||||||||||||||||
10-K Prior to | Adjustments | the 2012 | Adjustments | ||||||||||||||||||||||||||||||||||
Original | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Restatement | |||||||||||||||||||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||||||||||||||||||
Net loss | $ | (1,073 | ) | $ | (17,037 | ) | $ | (18,110 | ) | $ | 412 | $ | (17,698 | ) | |||||||||||||||||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 22,776 | 241 | 23,017 | 165 | 23,182 | ||||||||||||||||||||||||||||||||
Amortization of debt costs | 1,239 | — | 1,239 | — | 1,239 | ||||||||||||||||||||||||||||||||
Amortization of exclusivity agreements | 374 | — | 374 | — | 374 | ||||||||||||||||||||||||||||||||
Provision for doubtful accounts | 11,532 | 1,404 | 12,936 | (8,356 | ) | 4,580 | |||||||||||||||||||||||||||||||
Deferred income taxes | 936 | (988 | ) | (52 | ) | (13,889 | ) | (13,941 | ) | ||||||||||||||||||||||||||||
Share-based compensation | 6,648 | — | 6,648 | — | 6,648 | ||||||||||||||||||||||||||||||||
Impairment of goodwill | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Gain on sale of Breg, Inc, net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Excess income tax benefit on employee stock-based awards | (1,737 | ) | — | (1,737 | ) | — | (1,737 | ) | |||||||||||||||||||||||||||||
Income tax benefit on employee-stock-based awards | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Other | 4,906 | (415 | ) | 4,491 | (2,193 | ) | 2,298 | ) | |||||||||||||||||||||||||||||
Changes in operating assets and liabilities, net of effect of dispositions: | |||||||||||||||||||||||||||||||||||||
Trade accounts receivable | (25,818 | ) | 26,111 | 293 | 6,352 | 6,645 | |||||||||||||||||||||||||||||||
Inventories | (8,349 | ) | (4,275 | ) | (12,624 | ) | (81 | ) | (12,705 | ) | |||||||||||||||||||||||||||
Escrow receivable | (32,562 | ) | — | (32,562 | ) | — | (32,562 | ) | |||||||||||||||||||||||||||||
Prepaid expenses and other current assets | (4,057 | ) | 6,886 | 2,829 | (447 | ) | 2,382 | ||||||||||||||||||||||||||||||
Trade accounts payable | 576 | 1,746 | 2,322 | — | 2,322 | ||||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | 88,463 | 638 | 89,101 | — | 89,101 | ||||||||||||||||||||||||||||||||
Other current liabilities | 3,384 | (1,965 | ) | 1,419 | 2,097 | 3,516 | |||||||||||||||||||||||||||||||
Other long-term assets | (1,588 | ) | (16,093 | ) | (17,681 | ) | 15,364 | (2,317 | ) | ||||||||||||||||||||||||||||
Other long-term liabilities | (869 | ) | 3,747 | 2,878 | 525 | 3,403 | |||||||||||||||||||||||||||||||
Net cash provided by operating activities | 64,781 | — | 64,781 | (51 | ) | 64,730 | |||||||||||||||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||||||||||||||||
Capital expenditures for property, plant and equipment | (24,965 | ) | — | (24,965 | ) | — | (24,965 | ) | |||||||||||||||||||||||||||||
Capital expenditures for intangible assets | (793 | ) | — | (793 | ) | — | (793 | ) | |||||||||||||||||||||||||||||
Payment made in connection with acquisition | (5,250 | ) | — | (5,250 | ) | — | (5,250 | ) | |||||||||||||||||||||||||||||
Purchase of other investments | — | — | — | (468 | ) | (468 | ) | ||||||||||||||||||||||||||||||
Net cash provided by (used in) investing activities | (31,008 | ) | — | (31,008 | ) | (468 | ) | (31,476 | ) | ||||||||||||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of common shares | 20,113 | — | 20,113 | — | 20,113 | ||||||||||||||||||||||||||||||||
Payment of refinancing fees and debt issuance costs | (758 | ) | — | (758 | ) | — | (758 | ) | |||||||||||||||||||||||||||||
Repayments of long-term debt | (7,500 | ) | — | (7,500 | ) | — | (7,500 | ) | |||||||||||||||||||||||||||||
Proceeds of bank borrowings, net | (2,561 | ) | — | (2,561 | ) | — | (2,561 | ) | |||||||||||||||||||||||||||||
Changes in restricted cash | (24,178 | ) | — | (24,178 | ) | — | (24,178 | ) | |||||||||||||||||||||||||||||
Cash payment for purchase of minority interest in subsidiary | (517 | ) | — | (517 | ) | — | (517 | ) | |||||||||||||||||||||||||||||
Excess income tax benefit on employee stock-based awards | 1,737 | — | 1,737 | — | 1,737 | ||||||||||||||||||||||||||||||||
Net cash used in financing activities | (13,664 | ) | — | (13,664 | ) | — | (13,664 | ) | |||||||||||||||||||||||||||||
Effect of exchange rates changes on cash | (463 | ) | — | (463 | ) | 55 | (408 | ) | |||||||||||||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 19,646 | — | 19,646 | (464 | ) | 19,182 | |||||||||||||||||||||||||||||||
Cash and cash equivalents at the beginning of the year | 13,561 | — | 13,561 | — | 13,561 | ||||||||||||||||||||||||||||||||
Cash and cash equivalents at the end of the year | $ | 33,207 | $ | — | $ | 33,207 | $ | (464 | ) | $ | 32,743 | ||||||||||||||||||||||||||
Supplemental disclosure of cash flow information: | |||||||||||||||||||||||||||||||||||||
Cash paid during the year for: | |||||||||||||||||||||||||||||||||||||
Interest | $ | 17,088 | $ | — | $ | 17,088 | $ | — | $ | 17,088 | |||||||||||||||||||||||||||
Income taxes | $ | 26,227 | $ | — | $ | 26,227 | $ | — | $ | 26,227 | |||||||||||||||||||||||||||
2 | Original and Further Restatement of the Consolidated Financial Statements | ||||||||||||||||||||||||||||||||||||
These consolidated financial statements reflect two restatements, which we refer to herein respectively as the “Original Restatement” and the “Further Restatement.” The Original Restatement, which was contained in the financial statements filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed on March 31, 2014 (the “Original Form 10-K”), reflected the restatement of the Company’s previously filed consolidated financial statements for the fiscal years ended December 31, 2012 and 2011, as well as the fiscal quarter ended March 31, 2013. The Original Restatement is further described below under the subheading “– Original Restatement.” | |||||||||||||||||||||||||||||||||||||
In connection with the Company’s preparation of its consolidated interim quarterly financial statements for the fiscal quarter ended June 30, 2014, the Company determined that certain entries with respect to the previously filed financial statements contained in the Original Form 10-K were not properly accounted for under U.S. GAAP. As further described below, these additional errors affect the fiscal years ended December 31, 2013, 2012 and 2011 and quarterly reporting periods contained within the fiscal years ended December 31, 2013 and 2012, as well as the fiscal quarter ended March 31, 2014. Due to these errors, the Company determined in August 2014 to restate its consolidated financial statements for the fiscal years ended December 31, 2013, 2012 and 2011 (including the interim quarterly periods contained within the fiscal years ended December 31, 2013 and 2012) and the fiscal quarter ended March 31, 2014, and that the previously filed financial statements for these periods should no longer be relied upon. The Amendment No. 1 to Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (this “Amended Form 10-K”), to which these consolidated financial statements form a part, corrects these additional errors. We refer to these additional corrections as the “Further Restatement.” The Further Restatement is further described below under the subheading “Further Restatement,” which follows the description of the Original Restatement contained directly below. | |||||||||||||||||||||||||||||||||||||
Original Restatement | |||||||||||||||||||||||||||||||||||||
Background of Original Restatement | |||||||||||||||||||||||||||||||||||||
In July 2013, the Audit Committee (the “Audit Committee”) of the Company’s Board of Directors (the “Board”) commenced an independent review with the assistance of outside professionals into whether the Company had properly recognized revenue under U.S. GAAP in connection with certain revenue that had been recorded in 2012 and 2011 (the “Independent Review”). In conjunction with the Independent Review, the Company concluded that errors existed in the Company’s previously issued financial statements for the fiscal years ended December 31, 2012 and 2011, the interim quarterly period ended March 31, 2013, and certain other prior periods. | |||||||||||||||||||||||||||||||||||||
In reaching these conclusions, the Company considered information obtained in the Independent Review, including emails, data and interviews with current and former employees that indicated (i) the existence of extra-contractual terms or arrangements at the onset of the sale and concessions agreed to subsequent to the initial sale, such as extended payment terms and return and exchange rights for sales to distributors with respect to certain transactions, (ii) that at the time of some sales collection was not reasonably assured, and (iii) that certain amounts previously characterized as commissions were paid to related parties of the applicable customer. | |||||||||||||||||||||||||||||||||||||
The Company assessed the information derived from the Independent Review in making determinations with respect to accounting adjustments reflected in the restated consolidated financial statements contained in the Amendments and in its Annual Report on Form 10-K for the fiscal year ended December 31, 2013, and such determinations are consistent with the findings of the Independent Review. In addition to the matters that were the subject of the Independent Review, certain other adjustments identified by management, including revisions to inventory reserves and royalties, were made to the consolidated financial statements in connection with the restatement. | |||||||||||||||||||||||||||||||||||||
The correction of these errors had the following impact: decreased net sales by $14.7 million and $28.2 million for the years ended December 31, 2012 and 2011, respectively; and decreased net income from continuing operations by $8.9 million and $14.5 million for the years ended December 31, 2012 and 2011, respectively. The following include descriptions of the significant adjustments to the Company’s financial position and results of operations from the previously reported consolidated financial statements. | |||||||||||||||||||||||||||||||||||||
Distributor Revenue Recognition | |||||||||||||||||||||||||||||||||||||
The Company has determined that it previously recognized revenue with respect to certain distributor relationships before all revenue recognition criteria were met. Specifically, the Company has determined that a fixed or determinable sales price did not exist, and/or collection was not reasonably assured, with respect to certain transactions where revenue had previously been recognized at the time of shipment. Specifically, the Company’s review revealed arrangements, or extra-contractual terms, with certain of the Company’s distributors regarding extended payment terms, return or exchange rights, and contingent payment obligations for sales to such distributors with respect to certain transactions. There were also concessions being made subsequent to the shipment of inventory to the distributors and the related revenue recognition. Based on the results of this review, it was determined that these arrangements were not appropriately evaluated under the appropriate revenue recognition criteria applicable under U.S. GAAP. Distributor sales represented approximately 11–13% of the Company’s net sales (prior to the restatement) of approximately $462 million and $470 million for the years ended December 31, 2012 and 2011, respectively. | |||||||||||||||||||||||||||||||||||||
The Company previously recognized distributor revenue as title and risk of loss passed at either shipment from the Company’s facilities or receipt at the distributor’s facility, assuming all other revenue recognition criteria had been achieved (the “sell-in method”). Based on review of all facts and circumstances related to the arrangements described above, the Company determined that in many instances the revenue recognition criteria under the sell-in method were not satisfied at the time of shipment or receipt; specifically, the existence of extra-contractual terms or arrangements caused the Company not to meet the fixed or determinable criteria for revenue recognition in some cases, and in others collectability had not been established. In situations where the Company is unable to reasonably estimate the effects of these extra-contractual terms, it is precluded from recognizing revenue relating to distributor arrangements until the product is delivered to the end customer. This method is commonly referred to as the “sell-through” revenue recognition method because the vendor does not recognize revenue until the transaction consideration is fixed or determinable, which coincides with the selling of the product through the distribution channel to the end customer. Because the Company does not have reliable information about when its distributors sell the product through to end customers, the Company will use cash collection from distributors as a basis for revenue recognition under the sell-through method. Although in many cases the Company is legally entitled to the accounts receivable at the time of shipment, since the revenue recognition criteria has not been met, the Company has not recognized accounts receivables or any corresponding deferred revenues associated with these transactions. | |||||||||||||||||||||||||||||||||||||
As part of the review, the Company also considered the accounting treatment for the related cost of sales when distributor revenue is recognized on a sell-through basis. Previously, cost of sales were recognized upon shipment; however, the Company believes the matching of the recognition of costs of sales with revenue is preferred and therefore considered if such costs should be deferred until revenue is recognized on a sell-through basis. In making this assessment, the Company considered the financial viability of its distributors based on their creditworthiness to determine if collectability of amounts sufficient to realize the costs of the products shipped was reasonably assured at the time of shipment to these distributors. In instances where the distributor was determined to be financially viable, the Company determined that costs of sales should be deferred until the revenue is recognized. For those distributors where the Company has concluded that collectability was not reasonably assured, the Company has expensed the related cost of sales upon shipment. | |||||||||||||||||||||||||||||||||||||
Based on the results of the Independent Review, the Company determined that all distributor transactions should be transitioned to the sell-through method of accounting as of the dates described below: | |||||||||||||||||||||||||||||||||||||
• | For distributor transactions within the Company’s Orthopedics division, the Company has determined that sell-through accounting should be applied within the Brazil subsidiary for all prior periods given the frequency with which the Company conducted business under extra-contractual and undocumented terms, as well as the Company’s inability to fully access underlying transactional and other information that would be necessary to evaluate transactions under a sell-in basis. For distributor transactions within the division outside the Brazil subsidiary, there were also sales to four distributors that did not meet the fixed or determinable or collectability revenue recognition criteria and therefore, such sales were adjusted to sell-through accounting in the restatement. | ||||||||||||||||||||||||||||||||||||
• | For distributor transactions within the Company’s U.S. Spine division, the Company has determined that sell-through accounting should be applied beginning January 1, 2011. Following its consideration of the information provided from the Independent Review, the Company believes that January 1, 2011 is the date extra-contractual terms became pervasive in the Company’s U.S. business, and it is unaware of circumstances existing prior to that date that would require it to broadly apply sell-through accounting to all distributor transactions within the U.S. Spine division. Additionally, there were sales in 2012 and 2011 for which revenue was previously recognized that did not meet the fixed or determinable criteria and the product associated with such sales was subsequently returned in 2013 (i) under the terms of negotiated agreements whereby the Company terminated its relationships with two distributors and (ii) by an additional distributor who returned certain product sold pursuant to a contingent sales arrangement. Such sales represented approximately $3.3 million and $4.1 million for the years ended December 31, 2012 and 2011, respectively. Due to the return of the product, no revenue will be recognized for these transactions. | ||||||||||||||||||||||||||||||||||||
• | The Company has determined that stimulation products sold to distributors within the Company’s U.S. Spine division during 2012 did not meet the fixed or determinable (and in some cases, collectability) revenue recognition criterion at the time of shipment. Therefore, the Company has determined that sell-through accounting should be applied for these sales. Management also determined that many of these distributors (or affiliates thereof) received commission payments as part of the sales transactions, which the Company previously recorded as sales and marketing expense. The Company has recorded adjustments in the restatement to net these commission expenses against revenue, as they represented product discounts. | ||||||||||||||||||||||||||||||||||||
• | The Company has determined that it will prospectively apply sell-through accounting for all remaining distributor arrangements (which entails arrangements within the Company’s Orthopedics division outside the Brazil subsidiary) beginning April 1, 2013, the earliest date for which financial statements had not previously been issued by the Company at the time of the determination. Although the Independent Review did not provide information to indicate extra-contractual terms or that historical revenue recognition was inappropriate in these remaining instances, the Company believes the information from the Independent Review indicating that the Company has a history of extra-contractual arrangements for distributor transactions, as described above, provides additional information which should be considered in reassessing the application of sell-through accounting on a prospective basis, particularly given that the Company believes that there is a higher risk associated with distributor arrangements generally. | ||||||||||||||||||||||||||||||||||||
The effect of adjustments made to the Company’s previously filed consolidated statements of operations as a result of these matters are shown in the tables below. These adjustments also had the following effects on the Company’s previously filed consolidated balance sheets: | |||||||||||||||||||||||||||||||||||||
• | Accounts receivable decreased as of December 31, 2012 by $41.3 million related to the de-recognition of receivables for which revenue has been deferred and will now be recognized on a sell-through basis, based on cash collections. | ||||||||||||||||||||||||||||||||||||
• | Inventory increased as of December 31, 2012 by $11.0 million to recognize the costs of inventory shipments to distributors determined to be financially viable as discussed previously. | ||||||||||||||||||||||||||||||||||||
Inventory Reserves | |||||||||||||||||||||||||||||||||||||
The Company also identified material errors in inventory reserves. One error related to the Company recording an increase of $1.2 million to the Company’s excess and obsolete reserve in the second quarter of 2012 related to a product within the Spine business that was subsequently reversed by the Company in the fourth quarter of 2012. During the Company’s review, it was determined that removing the reserve in the fourth quarter of 2012 was not correct; therefore the reserve has been reinstated. | |||||||||||||||||||||||||||||||||||||
The Company has also determined that certain inconsistencies existed with respect to how the Company previously computed and recorded inventory reserves. As a result, the Company has reviewed the methodologies used to compute and record inventory reserves and determined that errors in the application of U.S. GAAP existed in prior periods, which required adjustment in these financial statements. Based on this review, the Company has determined that it previously made reductions to previously recorded reserves based on changes in forecasted demand, which it believes was contrary to guidance set forth in ASC Topic 330, Inventory (specifically ASC 330-10-35-14), which states that a write-down of inventory to the lower-of-cost-or-market value at the close of a fiscal year creates a new cost basis that subsequently should not be marked up based on changes in underlying circumstances. The restated consolidated financial statements contain several adjustments to reflect recomputed inventory reserves in each of the relevant periods. | |||||||||||||||||||||||||||||||||||||
These adjustments resulted in a decrease to inventory (due to an increase in reserves) as of December 31, 2012, by $14.8 million. | |||||||||||||||||||||||||||||||||||||
Royalties | |||||||||||||||||||||||||||||||||||||
The Company also reviewed the accounting for royalties and determined there were royalties classified as sales and marketing expense; however, such royalties were based on sales of products and were paid to doctors who consulted on development of those products. Given these amounts are attributable to the cost of producing the Company’s products, the Company determined they are correctly classified as cost of goods sold. | |||||||||||||||||||||||||||||||||||||
Other Adjustments | |||||||||||||||||||||||||||||||||||||
In addition to the adjustments recorded to address the Company’s errors in accounting for distributor revenue recognition, inventory reserves, and royalties, the Company has identified other errors that are generally not material, individually or in the aggregate, but have been recorded in connection with the restatement. | |||||||||||||||||||||||||||||||||||||
Included in Other Adjustments are adjustments to reclassify interest expense from continuing operations to discontinued operations of $3.9 million for the year ended December 31, 2011. The reclassification was necessary as the Company used a portion of the proceeds from the sale of Breg, Inc. to repay in full the remaining $87.5 million balance on the Term Loan Facility and pay down $57.5 million of amounts outstanding under the Revolving Credit Facility. | |||||||||||||||||||||||||||||||||||||
Further Restatement | |||||||||||||||||||||||||||||||||||||
Background of Further Restatement | |||||||||||||||||||||||||||||||||||||
During the second quarter of 2014, the Company’s management noted that the Company’s bad debt expense for its BioStim strategic business unit (“SBU”) during the first quarter of 2014 was higher than internally budgeted. As a result, the Company’s internal finance department reviewed bad debt expense entries in prior periods. In connection with this review, the Company also further considered its accounting methodology with respect to certain prior revenue adjustments related to uncollectible patient co-pay and self-pay amounts. As further described below, after performing this review, the Company determined that errors existed relating to the accounting for uncollectible patient co-pay and self-pay amounts, and that certain bad debt reserves originally recorded in fiscal years 2011 and 2012 were reversed in incorrect periods in the Original Restatement in connection with the change to sell-through accounting for certain distributors. After analyzing these errors, the Company determined to further restate its financial statements as described herein. In addition to these matters, certain other adjustments identified by management, including revisions to inventory reserves, intercompany profit adjustments and accounts receivable reserves, were made to the consolidated financial statements in connection with the Further Restatement, as discussed below. | |||||||||||||||||||||||||||||||||||||
Co-Pay and Self-Pay Revenue Adjustments | |||||||||||||||||||||||||||||||||||||
A majority of revenue from the Company’s BioStim SBU is derived from third parties, which is subject to change due to contractual adjustments related to commercial insurance carriers, and may include certain patient co-pay amounts. In addition, certain patient purchasers are without insurance, with revenue derived from “self-pay” arrangements. In previously issued financial statements, the Company recorded these co-pay and self-pay amounts as revenue with estimated uncollectible portions being recognized as bad debt expense. Upon further analysis, it was determined that because collectability of co-pay and self-pay amounts was not reasonably assured, the conditions for revenue recognition had not been met and revenue for those amounts should not have been recognized until collected. | |||||||||||||||||||||||||||||||||||||
Adjustments to correct the foregoing reduce equally both the Company’s historical net sales and its sales and marketing expense by approximately $2.2 million, $9.0 million and $6.0 million for the fiscal years ended December 31, 2013, 2012 and 2011, respectively. These adjustments have no effect on net income from continuing operations, net income or total assets in any period. | |||||||||||||||||||||||||||||||||||||
Bad Debt Timing Adjustments | |||||||||||||||||||||||||||||||||||||
In connection with the foregoing, the Company determined to review bad debt expense trends more broadly across all of its business units. As a result of this process, the Company determined that certain bad debt reserves originally recorded in fiscal years 2011 and 2012 were reversed in incorrect periods in the Original Restatement in connection with the change to sell-through accounting for certain distributors. Because the Original Restatement transferred these transactions to sell-through accounting (as opposed to sell-in accounting, which had been used when the original bad debt reserves were recorded), the bad debt reserve was reversed as part of the Original Restatement, as the receivable that was being reserved for was no longer recognized. | |||||||||||||||||||||||||||||||||||||
Adjustments to correct this error result in an increase of sales and marketing expense of $1.5 million and $1.1 million for the fiscal years ended December 31, 2013 and 2012 and a decrease of sales and marketing expense of $2.1 million for the fiscal year ended December 31, 2011. These adjustments resulted in no impact to the accounts receivable balance as of December 31, 2013 and an increase in accounts receivable by $1.5 million as of December 31, 2012. | |||||||||||||||||||||||||||||||||||||
Accounts Receivable Reserve Adjustments | |||||||||||||||||||||||||||||||||||||
As part of analyzing collections experience on accounts receivable, the Company identified that it had incorrectly considered certain deferred revenue amounts included in gross accounts receivable when calculating estimated reserves. Specifically, the computation of the contractual allowances and bad debt allowances, which serves to adjust accounts receivable to the estimated collectible amount, incorrectly assumed that some percentage of the deferred amounts would be collected, rather than fully deferring these amounts. | |||||||||||||||||||||||||||||||||||||
Adjustments to correct this error resulted in a net decrease in operating income of $0.7 million and $0.2 million for the fiscal years ended December 31, 2013 and 2011, respectively, and a net increase in operating income of $2.1 million for the fiscal year ended December 31, 2012. | |||||||||||||||||||||||||||||||||||||
This adjustment resulted in a decrease in accounts receivable, net (due to an increase in reserves) as of December 31, 2013 and 2012, by $4.2 million and $3.5 million, respectively. | |||||||||||||||||||||||||||||||||||||
Intercompany Profit Adjustments | |||||||||||||||||||||||||||||||||||||
The Company has two manufacturing facilities which support the inventory needs of other subsidiaries through intercompany sales transactions. These intercompany sales include a profit margin for the selling subsidiary (“intercompany profit”) that is eliminated by the Company as part of its consolidated financial reporting process. The elimination of intercompany profit requires determining the affected net inventory amounts and their related intercompany profit margin to eliminate all intercompany profit, resulting in all inventories being carried at historical cost in the Company’s consolidated financial statements. | |||||||||||||||||||||||||||||||||||||
As described further above under “Original Restatement – Inventory Reserves,” as part of the Original Restatement the Company made certain corrections to prior period excess and obsolete inventory reserves. The effect of these corrections was not properly considered when determining the adjustments needed to eliminate intercompany profits from inventories in the Original Restatement. | |||||||||||||||||||||||||||||||||||||
Adjustments to correct this error resulted in an increase to cost of sales of $1.1 million, $0.2 million and $0.3 million for the fiscal years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||||||||||||||
This adjustment resulted in a decrease in inventory as of December 31, 2013 and 2012, by $2.6 million and $1.5 million, respectively. | |||||||||||||||||||||||||||||||||||||
Inventory | |||||||||||||||||||||||||||||||||||||
Inventory Existence | |||||||||||||||||||||||||||||||||||||
As part of the remediation activities that followed the Original Restatement, the Company expanded its procedures in the second quarter of 2014 to validate the existence of field inventory held by independent sales representatives and noted that, in many cases, this inventory had higher rates of missing inventory (“shrinkage”) than previously estimated. To determine whether these higher error rates were pervasive across its field inventory, the Company counted approximately 90% of its field inventory during the third and fourth fiscal quarters of 2014. These counts resulted in the identification of errors relating to previous estimates of shrinkage. | |||||||||||||||||||||||||||||||||||||
Adjustments in the Further Restatement to correct these errors, net of the related effect on previously recorded excess and obsolete inventory reserves, resulted in an increase to cost of sales of $0.4 million, $0.3 million and $0.2 million for the fiscal years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||||||||||||||||||||
These adjustments resulted in a decrease in inventory as of December 31, 2013 and 2012, by $1.0 million and $0.6 million, respectively. | |||||||||||||||||||||||||||||||||||||
Inventory Reserves | |||||||||||||||||||||||||||||||||||||
In connection with its remediation efforts associated with the material weakness noted in the Original Restatement related to inventory reserves the Company concluded that it was not appropriately calculating inventory reserves, including its consideration of demand assumptions for “kits”, which contain a variety of “piece part” components to be used during surgery that have various demand considerations, as well as inventory held by third parties under inventory purchase obligations. | |||||||||||||||||||||||||||||||||||||
Adjustments to correct these errors resulted in an increase to cost of sales of $3.2 million, 1.5 million and $0.1 million for the fiscal years ended December 31, 2013, 2012 and 2011, respectively. These adjustments resulted in a decrease to inventory (due to an increase in reserves) as of December 31, 2013 and 2012, by $14.4 million and $11.8 million, respectively. | |||||||||||||||||||||||||||||||||||||
Other Adjustments | |||||||||||||||||||||||||||||||||||||
In addition to the adjustments described above, the Company is correcting certain other items. Principally, these items consist of a decrease to income tax expense of $0.5 million and $1.1 million for the fiscal years ended December 31, 2013 and 2012, respectively, these adjustments are separate from the tax effect of the errors described above. | |||||||||||||||||||||||||||||||||||||
The effect of the Further Restatement adjustments made to the Company’s previously filed consolidated statements of operations as a result of these matters are shown in the tables below. These adjustments also resulted in a decrease of total assets of $11.2 million as of December 31, 2013, resulting primarily from a decrease of $17.9 million to inventory and $4.8 million to trade accounts receivable, partially offset by an increase of $6.0 million in deferred income taxes. For further discussion of the effect of these entries on retained earnings, see the “Cumulative Adjustments to Shareholders’ Equity at January 1, 2011” table below. | |||||||||||||||||||||||||||||||||||||
The tables below show the effects of the Original Restatement for each of the fiscal years ended December 31, 2012 and 2011, as well as the effects of the Further Restatement for each of the fiscal years ended December 31, 2013, 2012 and 2011. In each case, the tax effect of the adjustments is estimated based on the Company’s estimated tax rate. | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||||||||||||||||||
Further Restatement Adjustments by Category | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | Originally | Co-Pay and | Bad Debt | Accounts | Intercompany | Inventory | Other | Total Further | Restated | ||||||||||||||||||||||||||||
Reported | Self-Pay | Timing | Receivable | Profit | Restatement | ||||||||||||||||||||||||||||||||
Revenue | Reserve | Adjustments | |||||||||||||||||||||||||||||||||||
Net sales | $ | 400,534 | $ | (2,242 | ) | $ | — | $ | (582 | ) | $ | — | $ | — | $ | (99 | ) | $ | (2,923 | ) | $ | 397,611 | |||||||||||||||
Cost of sales | 102,300 | — | — | — | 1,090 | 3,688 | (166 | ) | 4,612 | 106,912 | |||||||||||||||||||||||||||
Gross profit | 298,234 | (2,242 | ) | — | (582 | ) | (1,090 | ) | (3,688 | ) | 67 | (7,535 | ) | 290,699 | |||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 176,581 | (2,242 | ) | 1,455 | 122 | — | — | (448 | ) | (1,113 | ) | 175,468 | |||||||||||||||||||||||||
General and administrative | 65,147 | — | — | — | — | — | (317 | ) | (317 | ) | 64,830 | ||||||||||||||||||||||||||
Research and development | 26,768 | — | — | — | — | — | — | — | 26,768 | ||||||||||||||||||||||||||||
Amortization of intangible assets | 2,687 | — | — | — | — | — | — | — | 2,687 | ||||||||||||||||||||||||||||
Costs related to the accounting review and restatement | 12,945 | — | — | — | — | — | — | — | 12,945 | ||||||||||||||||||||||||||||
Impairment of Goodwill | 19,193 | — | — | — | — | — | — | — | 19,193 | ||||||||||||||||||||||||||||
303,321 | (2,242 | ) | 1,455 | 122 | — | — | (765 | ) | (1,430 | ) | 301,891 | ||||||||||||||||||||||||||
Operating (loss) income | (5,087 | ) | — | (1,455 | ) | (704 | ) | (1,090 | ) | (3,688 | ) | 832 | (6,105 | ) | (11,192 | ) | |||||||||||||||||||||
Other income and (expense) | 295 | — | — | — | — | — | 294 | 294 | 589 | ||||||||||||||||||||||||||||
Loss before income taxes | (4,792 | ) | — | (1,455 | ) | (704 | ) | (1,090 | ) | (3,688 | ) | 1,126 | (5,811 | ) | (10,603 | ) | |||||||||||||||||||||
Income tax expense | (10,116 | ) | — | 509 | 246 | 381 | 1,290 | 88 | 2,514 | (7,602 | ) | ||||||||||||||||||||||||||
Net loss from continuing operations | $ | (14,908 | ) | $ | — | $ | (946 | ) | $ | (458 | ) | $ | (709 | ) | $ | (2,398 | ) | $ | 1,214 | $ | (3,297 | ) | $ | (18,205 | ) | ||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Original Restatement Adjustments by Category | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | As Reported | Distributor | Inventory | Royalties | Other | Total Original | As Originally | ||||||||||||||||||||||||||||||
in the 2012 | Revenue | Reserves | Restatement | Restated in | |||||||||||||||||||||||||||||||||
Form 10-K | Adjustments | 2012 | |||||||||||||||||||||||||||||||||||
Prior to | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Original | |||||||||||||||||||||||||||||||||||||
Restatement | |||||||||||||||||||||||||||||||||||||
Net sales | $ | 462,320 | $ | (14,777 | ) | $ | — | $ | — | $ | 38 | $ | (14,739 | ) | $ | 447,581 | |||||||||||||||||||||
Cost of sales | 86,492 | (2,032 | ) | 5,647 | 8,190 | (44 | ) | 11,761 | 98,253 | ||||||||||||||||||||||||||||
Gross profit | 375,828 | (12,745 | ) | (5,647 | ) | (8,190 | ) | 82 | (26,500 | ) | 349,328 | ||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 200,343 | (6,629 | ) | — | (8,190 | ) | 1,607 | (13,212 | ) | 187,131 | |||||||||||||||||||||||||||
General and administrative | 53,827 | (2 | ) | — | — | (434 | ) | (436 | ) | 53,391 | |||||||||||||||||||||||||||
Research and development | 28,577 | — | — | — | — | — | 28,577 | ||||||||||||||||||||||||||||||
Amortization of intangible assets | 2,098 | — | — | — | 200 | 200 | 2,298 | ||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | 1,973 | — | — | — | (678 | ) | (678 | ) | 1,295 | ||||||||||||||||||||||||||||
286,818 | (6,631 | ) | — | (8,190 | ) | 695 | (14,126 | ) | 272,692 | ||||||||||||||||||||||||||||
Operating income | 89,010 | (6,114 | ) | (5,647 | ) | — | (613 | ) | (12,374 | ) | 76,636 | ||||||||||||||||||||||||||
Other income and (expense) | (6,282 | ) | — | — | — | (166 | ) | (166 | ) | (6,448 | ) | ||||||||||||||||||||||||||
Income before income taxes | 82,728 | (6,114 | ) | (5,647 | ) | — | (779 | ) | (12,540 | ) | 70,188 | ||||||||||||||||||||||||||
Income tax expense | (28,792 | ) | 1,782 | 1,645 | — | 227 | 3,654 | (25,138 | ) | ||||||||||||||||||||||||||||
Net income from continuing operations | $ | 53,936 | $ | (4,332 | ) | $ | (4,002 | ) | $ | — | $ | (552 | ) | $ | (8,886 | ) | $ | 45,050 | |||||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Further Restatement Adjustments by Category | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | As Originally | Co-Pay and | Bad Debt | Accounts | Intercompany | Inventory | Other | Total Further | Restated | ||||||||||||||||||||||||||||
Restated in | Self-Pay | Timing | Receivable | Profit | Restatement | ||||||||||||||||||||||||||||||||
2012 | Revenue | Reserve | Adjustments | ||||||||||||||||||||||||||||||||||
Form 10-K/A | |||||||||||||||||||||||||||||||||||||
Net sales | $ | 447,581 | $ | (9,049 | ) | $ | — | $ | 1,653 | $ | — | $ | — | $ | 4 | $ | (7,392 | ) | $ | 440,189 | |||||||||||||||||
Cost of sales | 98,253 | — | — | — | 207 | 1,774 | 492 | 2,473 | 100,726 | ||||||||||||||||||||||||||||
Gross profit | 349,328 | (9,049 | ) | — | 1,653 | (207 | ) | (1,774 | ) | (488 | ) | $ | (9,865 | ) | 339,463 | ||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 187,131 | (9,049 | ) | 1,097 | (408 | ) | — | — | — | $ | (8,360 | ) | 178,771 | ||||||||||||||||||||||||
General and administrative | 53,391 | — | — | — | — | — | 259 | 259 | 53,650 | ||||||||||||||||||||||||||||
Research and development | 28,577 | — | — | — | — | — | — | — | 28,577 | ||||||||||||||||||||||||||||
Amortization of intangible assets | 2,298 | — | — | — | — | — | — | — | 2,298 | ||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | 1,295 | — | — | — | — | — | — | — | 1,295 | ||||||||||||||||||||||||||||
272,692 | (9,049 | ) | 1,097 | (408 | ) | — | — | 259 | (8,101 | ) | 264,591 | ||||||||||||||||||||||||||
Operating income | 76,636 | — | (1,097 | ) | 2,061 | (207 | ) | (1,774 | ) | (747 | ) | (1,764 | ) | 74,872 | |||||||||||||||||||||||
Other income and (expense) | (6,448 | ) | — | — | — | — | — | 641 | 641 | $ | (5,807 | ) | |||||||||||||||||||||||||
Income before income taxes | 70,188 | — | (1,097 | ) | 2,061 | (207 | ) | (1,774 | ) | (106 | ) | (1,123 | ) | 69,065 | |||||||||||||||||||||||
Income tax expense | (25,138 | ) | — | 384 | (721 | ) | 72 | 621 | 838 | 1,194 | $ | (23,944 | ) | ||||||||||||||||||||||||
Net income from continuing operations | $ | 45,050 | $ | — | $ | (713 | ) | $ | 1,340 | $ | (135 | ) | $ | (1,153 | ) | $ | 732 | $ | 71 | $ | 45,121 | ||||||||||||||||
Year Ended December 31, 2011 | |||||||||||||||||||||||||||||||||||||
Original Restatement Adjustments by Category | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | As Reported | Distributor | Inventory | Royalties | Other | Total Original | As Originally | ||||||||||||||||||||||||||||||
in the 2012 | Revenue | Reserves | Restatement | Restated in | |||||||||||||||||||||||||||||||||
Form 10-K | Adjustments | 2012 | |||||||||||||||||||||||||||||||||||
Prior to | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Original | |||||||||||||||||||||||||||||||||||||
Restatement | |||||||||||||||||||||||||||||||||||||
Net sales | $ | 470,121 | $ | (29,135 | ) | $ | — | $ | — | $ | 985 | $ | (28,150 | ) | $ | 441,971 | |||||||||||||||||||||
Cost of sales | 92,619 | (8,289 | ) | 3,377 | 7,713 | 107 | 2,908 | 95,527 | |||||||||||||||||||||||||||||
Gross profit | 377,502 | (20,846 | ) | (3,377 | ) | (7,713 | ) | 878 | (31,058 | ) | 346,444 | ||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 200,145 | (1,216 | ) | — | (7,713 | ) | 2,295 | (6,634 | ) | 193,511 | |||||||||||||||||||||||||||
General and administrative | 64,374 | — | — | — | 107 | 107 | 64,481 | ||||||||||||||||||||||||||||||
Research and development | 22,861 | — | — | — | — | — | 22,861 | ||||||||||||||||||||||||||||||
Amortization of intangible assets | 2,350 | — | — | — | 200 | 200 | 2,550 | ||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | 56,463 | — | — | — | 678 | 678 | 57,141 | ||||||||||||||||||||||||||||||
346,193 | (1,216 | ) | — | (7,713 | ) | 3,280 | (5,649 | ) | 340,544 | ||||||||||||||||||||||||||||
Operating income | 31,309 | (19,630 | ) | (3,377 | ) | — | (2,402 | ) | (25,409 | ) | 5,900 | ||||||||||||||||||||||||||
Other income and (expense) | (11,868 | ) | — | — | — | 3,915 | 3,915 | (7,953 | ) | ||||||||||||||||||||||||||||
Income (loss) before income taxes | 19,441 | (19,630 | ) | (3,377 | ) | — | 1,513 | (21,494 | ) | (2,053 | ) | ||||||||||||||||||||||||||
Income tax expense | (21,181 | ) | 6,408 | 1,102 | — | (494 | ) | 7,016 | (14,165 | ) | |||||||||||||||||||||||||||
Net loss from continuing operations | $ | (1,740 | ) | $ | (13,222 | ) | $ | (2,275 | ) | $ | — | $ | 1,019 | $ | (14,478 | ) | $ | (16,218 | ) | ||||||||||||||||||
Year Ended December 31, 2011 | |||||||||||||||||||||||||||||||||||||
Further Restatement Adjustments by Category | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | As Originally | Co-Pay and | Bad Debt | Accounts | Intercompany | Inventory | Other | Total Further | Restated | ||||||||||||||||||||||||||||
Restated in | Self-Pay | Timing | Receivable | Profit | Restatement | ||||||||||||||||||||||||||||||||
2012 | Revenue | Reserve | Adjustments | ||||||||||||||||||||||||||||||||||
Form 10-K/A | |||||||||||||||||||||||||||||||||||||
Net sales | $ | 441,971 | $ | (5,960 | ) | $ | — | $ | (439 | ) | $ | — | $ | — | $ | (53 | ) | $ | (6,452 | ) | $ | 435,519 | |||||||||||||||
Cost of sales | 95,527 | — | — | — | 253 | 321 | 314 | 888 | 96,415 | ||||||||||||||||||||||||||||
Gross profit | 346,444 | (5,960 | ) | — | (439 | ) | (253 | ) | (321 | ) | (367 | ) | (7,340 | ) | 339,104 | ||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 193,511 | (5,960 | ) | (2,143 | ) | (252 | ) | — | — | — | (8,355 | ) | 185,156 | ||||||||||||||||||||||||
General and administrative | 64,481 | — | — | — | — | — | 304 | 304 | 64,785 | ||||||||||||||||||||||||||||
Research and development | 22,861 | — | — | — | — | — | — | — | 22,861 | ||||||||||||||||||||||||||||
Amortization of intangible assets | 2,550 | — | — | — | — | — | — | — | 2,550 | ||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | 57,141 | — | — | — | — | — | — | — | 57,141 | ||||||||||||||||||||||||||||
340,544 | (5,960 | ) | (2,143 | ) | (252 | ) | — | — | 304 | (8,051 | ) | 332,493 | |||||||||||||||||||||||||
Operating income | 5,900 | — | 2,143 | (187 | ) | (253 | ) | (321 | ) | (671 | ) | 711 | 6,611 | ||||||||||||||||||||||||
Other income and (expense) | (7,953 | ) | — | — | — | — | — | (21 | ) | (21 | ) | (7,974 | ) | ||||||||||||||||||||||||
Loss before income taxes | (2,053 | ) | — | 2,143 | (187 | ) | (253 | ) | (321 | ) | (692 | ) | 690 | (1,363 | ) | ||||||||||||||||||||||
Income tax expense | (14,165 | ) | — | (752 | ) | 66 | 89 | 113 | 206 | (278 | ) | (14,443 | ) | ||||||||||||||||||||||||
Net loss from continuing operations | $ | (16,218 | ) | $ | — | $ | 1,391 | $ | (121 | ) | $ | (164 | ) | $ | (208 | ) | $ | (486 | ) | $ | 412 | $ | (15,806 | ) | |||||||||||||
The effects of the Further Restatement on the Company’s consolidated balance sheet as of December 31, 2013 are as follows: | |||||||||||||||||||||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands except share and per share data) | Originally | Further | Restated | ||||||||||||||||||||||||||||||||||
Reported in | Restatement | ||||||||||||||||||||||||||||||||||||
2013 | Adjustments | ||||||||||||||||||||||||||||||||||||
Form 10-K | |||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 30,486 | $ | (1,562 | ) | $ | 28,924 | ||||||||||||||||||||||||||||||
Restricted cash | 23,761 | — | 23,761 | ||||||||||||||||||||||||||||||||||
Trade accounts receivable, less allowances of $9,111 | 75,567 | (4,756 | ) | 70,811 | |||||||||||||||||||||||||||||||||
Inventories | 90,577 | (17,899 | ) | 72,678 | |||||||||||||||||||||||||||||||||
Deferred income taxes | 33,947 | 6,052 | 39,999 | ||||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | 25,906 | 3,027 | 28,933 | ||||||||||||||||||||||||||||||||||
Total current assets | 280,244 | (15,138 | ) | 265,106 | |||||||||||||||||||||||||||||||||
Property, plant and equipment, net | 54,606 | (234 | ) | 54,372 | |||||||||||||||||||||||||||||||||
Patents and other intangible assets, net | 9,046 | — | 9,046 | ||||||||||||||||||||||||||||||||||
Goodwill | 53,565 | — | 53,565 | ||||||||||||||||||||||||||||||||||
Deferred income taxes | 18,336 | 4,058 | 22,394 | ||||||||||||||||||||||||||||||||||
Other long-term assets | 7,385 | 107 | 7,492 | ||||||||||||||||||||||||||||||||||
Total assets | $ | 423,182 | $ | (11,207 | ) | $ | 411,975 | ||||||||||||||||||||||||||||||
Liabilities and shareholders’ equity | |||||||||||||||||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||||||||||||||||
Trade accounts payable | $ | 20,674 | $ | — | $ | 20,674 | |||||||||||||||||||||||||||||||
Other current liabilities | 46,146 | 3,530 | 49,676 | ||||||||||||||||||||||||||||||||||
Total current liabilities | 66,820 | 3,530 | 70,350 | ||||||||||||||||||||||||||||||||||
Long-term debt | 20,000 | — | 20,000 | ||||||||||||||||||||||||||||||||||
Deferred income taxes | 13,132 | (106 | ) | 13,026 | |||||||||||||||||||||||||||||||||
Other long-term liabilities | 12,736 | — | 12,736 | ||||||||||||||||||||||||||||||||||
Total liabilities | 112,688 | 3,424 | 116,112 | ||||||||||||||||||||||||||||||||||
Contingencies (Note 17) | |||||||||||||||||||||||||||||||||||||
Shareholders’ equity | |||||||||||||||||||||||||||||||||||||
Common shares $0.10 par value; 50,000,000 shares authorized; 18,102,335 issued and outstanding | 1,810 | — | 1,810 | ||||||||||||||||||||||||||||||||||
Additional paid-in capital | 216,653 | — | 216,653 | ||||||||||||||||||||||||||||||||||
Retained earnings | 89,332 | (15,435 | ) | 73,897 | |||||||||||||||||||||||||||||||||
Accumulated other comprehensive income | 2,699 | 804 | 3,503 | ||||||||||||||||||||||||||||||||||
Total shareholders’ equity | 310,494 | (14,631 | ) | 295,863 | |||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 423,182 | $ | (11,207 | ) | $ | 411,975 | ||||||||||||||||||||||||||||||
The effects of the Original Restatement and the Further Restatement on the Company’s consolidated balance sheet as of December 31, 2012 are as follows: | |||||||||||||||||||||||||||||||||||||
As of December 31, 2012 | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands except share and per share data) | As Reported in | Original | As Originally | Further | Restated | ||||||||||||||||||||||||||||||||
the 2012 Form | Restatement | Restated in the | Restatement | ||||||||||||||||||||||||||||||||||
10-K Prior to | Adjustments | 2012 | Adjustments | ||||||||||||||||||||||||||||||||||
Original | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Restatement | |||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 31,055 | $ | — | $ | 31,055 | $ | (288 | ) | $ | 30,767 | ||||||||||||||||||||||||||
Restricted cash | 21,314 | — | 21,314 | — | 21,314 | ||||||||||||||||||||||||||||||||
Trade accounts receivable, less allowances of $6,673 | 150,316 | (43,004 | ) | 107,312 | (3,510 | ) | 103,802 | ||||||||||||||||||||||||||||||
Inventories | 88,744 | (5,371 | ) | 83,373 | (13,560 | ) | 69,813 | ||||||||||||||||||||||||||||||
Deferred income taxes | 16,959 | 16,491 | 33,450 | 5,037 | 38,487 | ||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | 32,056 | 2,023 | 34,079 | 2,370 | 36,449 | ||||||||||||||||||||||||||||||||
Total current assets | 340,444 | (29,861 | ) | 310,583 | (9,951 | ) | 300,632 | ||||||||||||||||||||||||||||||
Property, plant and equipment, net | 51,362 | 2,473 | 53,835 | (1,042 | ) | 52,793 | |||||||||||||||||||||||||||||||
Patents and other intangible assets, net | 6,880 | 410 | 7,290 | — | 7,290 | ||||||||||||||||||||||||||||||||
Goodwill | 74,388 | — | 74,388 | — | 74,388 | ||||||||||||||||||||||||||||||||
Deferred income taxes | 19,904 | (1,023 | ) | 18,881 | 2,642 | 21,523 | |||||||||||||||||||||||||||||||
Other long-term assets | 11,303 | (3,383 | ) | 7,920 | — | 7,920 | |||||||||||||||||||||||||||||||
Total assets | $ | 504,281 | $ | (31,384 | ) | $ | 472,897 | $ | (8,351 | ) | $ | 464,546 | |||||||||||||||||||||||||
Liabilities and shareholders’ equity | |||||||||||||||||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||||||||||||||||
Bank borrowings | $ | 16 | $ | — | $ | 16 | $ | — | $ | 16 | |||||||||||||||||||||||||||
Trade accounts payable | 21,812 | 763 | 22,575 | — | 22,575 | ||||||||||||||||||||||||||||||||
Other current liabilities | 46,969 | (7,375 | ) | 39,594 | 3,148 | 42,742 | |||||||||||||||||||||||||||||||
Total current liabilities | 68,797 | (6,612 | ) | 62,185 | 3,148 | 65,333 | |||||||||||||||||||||||||||||||
Long-term debt | 20,000 | — | 20,000 | — | 20,000 | ||||||||||||||||||||||||||||||||
Deferred income taxes | 11,456 | — | 11,456 | (106 | ) | 11,350 | |||||||||||||||||||||||||||||||
Other long-term liabilities | 4,930 | 6,494 | 11,424 | — | 11,424 | ||||||||||||||||||||||||||||||||
Total liabilities | 105,183 | (118 | ) | 105,065 | 3,042 | 108,107 | |||||||||||||||||||||||||||||||
Contingencies (Note 17) | |||||||||||||||||||||||||||||||||||||
Shareholders’ equity | |||||||||||||||||||||||||||||||||||||
Common shares $0.10 par value; 50,000,000 shares authorized; 19,339,329 issued and outstanding | 1,934 | — | 1,934 | — | 1,934 | ||||||||||||||||||||||||||||||||
Additional paid-in capital | 246,111 | 195 | 246,306 | — | 246,306 | ||||||||||||||||||||||||||||||||
Retained earnings | 148,549 | (33,702 | ) | 114,847 | (12,138 | ) | 102,709 | ||||||||||||||||||||||||||||||
Accumulated other comprehensive income | 2,504 | 2,241 | 4,745 | 745 | 5,490 | ||||||||||||||||||||||||||||||||
Total shareholders’ equity | 399,098 | (31,266 | ) | 367,832 | (11,393 | ) | 356,439 | ||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 504,281 | $ | (31,384 | ) | $ | 472,897 | $ | (8,351 | ) | $ | 464,546 | |||||||||||||||||||||||||
The effects of the Further Restatement on the Company’s consolidated statement of operations and comprehensive income for the year ended December 31, 2013 are as follows: | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands, except share and per share data) | Originally | Further | Restated | ||||||||||||||||||||||||||||||||||
Reported in 2013 | Restatement | ||||||||||||||||||||||||||||||||||||
Form 10-K | Adjustments | ||||||||||||||||||||||||||||||||||||
Product sales | $ | 352,796 | $ | (3,244 | ) | $ | 349,552 | ||||||||||||||||||||||||||||||
Marketing service fees | 47,738 | 321 | 48,059 | ||||||||||||||||||||||||||||||||||
Net sales | 400,534 | (2,923 | ) | 397,611 | |||||||||||||||||||||||||||||||||
Cost of sales | 102,300 | 4,612 | 106,912 | ||||||||||||||||||||||||||||||||||
Gross profit | 298,234 | (7,535 | ) | 290,699 | |||||||||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 176,581 | (1,113 | ) | 175,468 | |||||||||||||||||||||||||||||||||
General and administrative | 65,147 | (317 | ) | 64,830 | |||||||||||||||||||||||||||||||||
Research and development | 26,768 | — | 26,768 | ||||||||||||||||||||||||||||||||||
Amortization of intangible assets | 2,687 | — | 2,687 | ||||||||||||||||||||||||||||||||||
Costs related to the accounting review and restatement | 12,945 | — | 12,945 | ||||||||||||||||||||||||||||||||||
Impairment of Goodwill | 19,193 | — | 19,193 | ||||||||||||||||||||||||||||||||||
303,321 | (1,430 | ) | 301,891 | ||||||||||||||||||||||||||||||||||
Operating loss | (5,087 | ) | (6,105 | ) | (11,192 | ) | |||||||||||||||||||||||||||||||
Other income and (expense) | |||||||||||||||||||||||||||||||||||||
Interest expense, net | (1,925 | ) | 98 | (1,827 | ) | ||||||||||||||||||||||||||||||||
Other expense | 2,220 | 196 | 2,416 | ||||||||||||||||||||||||||||||||||
295 | 294 | 589 | |||||||||||||||||||||||||||||||||||
Loss before income taxes | (4,792 | ) | (5,811 | ) | (10,603 | ) | |||||||||||||||||||||||||||||||
Income tax expense | (10,116 | ) | 2,514 | (7,602 | ) | ||||||||||||||||||||||||||||||||
Net loss from continuing operations | (14,908 | ) | (3,297 | ) | (18,205 | ) | |||||||||||||||||||||||||||||||
Discontinued operations (Note 16) | |||||||||||||||||||||||||||||||||||||
Loss from discontinued operations | (15,510 | ) | — | (15,510 | ) | ||||||||||||||||||||||||||||||||
Income tax benefit (expense) | 4,903 | — | 4,903 | ||||||||||||||||||||||||||||||||||
Net loss from discontinued operations | (10,607 | ) | — | (10,607 | ) | ||||||||||||||||||||||||||||||||
Net loss | $ | (25,515 | ) | $ | (3,297 | ) | $ | (28,812 | ) | ||||||||||||||||||||||||||||
Net loss per common share—basic: | |||||||||||||||||||||||||||||||||||||
Net loss from continuing operations | $ | (0.80 | ) | $ | (0.17 | ) | $ | (0.97 | ) | ||||||||||||||||||||||||||||
Net loss from discontinued operations | (0.57 | ) | — | (0.57 | ) | ||||||||||||||||||||||||||||||||
Net loss per common share—basic | $ | (1.37 | ) | $ | (0.17 | ) | $ | (1.54 | ) | ||||||||||||||||||||||||||||
Net loss per common share—diluted: | |||||||||||||||||||||||||||||||||||||
Net loss from continuing operations | $ | (0.80 | ) | $ | (0.17 | ) | $ | (0.97 | ) | ||||||||||||||||||||||||||||
Net loss from discontinued operations | (0.57 | ) | — | (0.57 | ) | ||||||||||||||||||||||||||||||||
Net loss per common share—diluted | $ | (1.37 | ) | $ | (0.17 | ) | $ | (1.54 | ) | ||||||||||||||||||||||||||||
Weighted average number of common shares: | |||||||||||||||||||||||||||||||||||||
Basic | 18,697,228 | — | 18,697,228 | ||||||||||||||||||||||||||||||||||
Diluted | 18,697,228 | — | 18,697,228 | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, before tax: | |||||||||||||||||||||||||||||||||||||
Translation adjustment | $ | (1,768 | ) | $ | 60 | $ | (1,708 | ) | |||||||||||||||||||||||||||||
Unrealized gain on derivative instrument | (442 | ) | (1 | ) | (443 | ) | |||||||||||||||||||||||||||||||
Other comprehensive loss, before tax | (2,210 | ) | 59 | (2,151 | ) | ||||||||||||||||||||||||||||||||
Income tax expense related to components of other comprehensive income | 164 | — | 164 | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | (2,046 | ) | 59 | (1,987 | ) | ||||||||||||||||||||||||||||||||
Comprehensive loss | $ | (27,561 | ) | $ | (3,238 | ) | $ | (30,799 | ) | ||||||||||||||||||||||||||||
The effects of the Original Restatement and the Further Restatement on the Company’s consolidated statement of operations and comprehensive income for the year ended December 31, 2012 are as follows: | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands, except share and per share data) | As Reported in the | Original | As Originally | Further | Restated | ||||||||||||||||||||||||||||||||
2012 Form 10-K | Restatement | Restated in the | Restatement | ||||||||||||||||||||||||||||||||||
Prior to Original | Adjustments | 2012 | Adjustments | ||||||||||||||||||||||||||||||||||
Restatement | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Product sales | $ | 415,850 | $ | (14,811 | ) | $ | 401,039 | $ | (7,392 | ) | $ | 393,647 | |||||||||||||||||||||||||
Marketing service fees | 46,470 | 72 | 46,542 | — | 46,542 | ||||||||||||||||||||||||||||||||
Net sales | 462,320 | (14,739 | ) | 447,581 | (7,392 | ) | 440,189 | ||||||||||||||||||||||||||||||
Cost of sales | 86,492 | 11,761 | 98,253 | 2,473 | 100,726 | ||||||||||||||||||||||||||||||||
Gross profit | 375,828 | (26,500 | ) | 349,328 | (9,865 | ) | 339,463 | ||||||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 200,343 | (13,212 | ) | 187,131 | (8,360 | ) | 178,771 | ||||||||||||||||||||||||||||||
General and administrative | 53,827 | (436 | ) | 53,391 | 259 | 53,650 | |||||||||||||||||||||||||||||||
Research and development | 28,577 | — | 28,577 | — | 28,577 | ||||||||||||||||||||||||||||||||
Amortization of intangible assets | 2,098 | 200 | 2,298 | — | 2,298 | ||||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions (Note 17) | 1,973 | (678 | ) | 1,295 | — | 1,295 | |||||||||||||||||||||||||||||||
286,818 | (14,126 | ) | 272,692 | (8,101 | ) | 264,591 | |||||||||||||||||||||||||||||||
Operating income | 89,010 | (12,374 | ) | 76,636 | (1,764 | ) | 74,872 | ||||||||||||||||||||||||||||||
Other income and (expense) | |||||||||||||||||||||||||||||||||||||
Interest expense, net | (4,577 | ) | (166 | ) | (4,743 | ) | 582 | (4,161 | ) | ||||||||||||||||||||||||||||
Other expense | (1,705 | ) | — | (1,705 | ) | 59 | (1,646 | ) | |||||||||||||||||||||||||||||
(6,282 | ) | (166 | ) | (6,448 | ) | 641 | (5,807 | ) | |||||||||||||||||||||||||||||
Income before income taxes | 82,728 | (12,540 | ) | 70,188 | (1,123 | ) | 69,065 | ||||||||||||||||||||||||||||||
Income tax expense | (28,792 | ) | 3,654 | (25,138 | ) | 1,194 | (23,944 | ) | |||||||||||||||||||||||||||||
Net income from continuing operations | 53,936 | (8,886 | ) | 45,050 | 71 | 45,121 | |||||||||||||||||||||||||||||||
Discontinued operations (Note 16) | |||||||||||||||||||||||||||||||||||||
Gain on sale of Breg, Inc., | 1,345 | — | 1,345 | — | 1,345 | ||||||||||||||||||||||||||||||||
Loss from discontinued operations | (4,012 | ) | 1,018 | (2,994 | ) | (500 | ) | (3,494 | ) | ||||||||||||||||||||||||||||
Income tax benefit (expense) | 26 | (589 | ) | (563 | ) | 443 | (120 | ) | |||||||||||||||||||||||||||||
Net loss from discontinued operations | (2,641 | ) | 429 | (2,212 | ) | (57 | ) | (2,269 | ) | ||||||||||||||||||||||||||||
Net income | $ | 51,295 | $ | (8,457 | ) | $ | 42,838 | $ | 14 | $ | 42,852 | ||||||||||||||||||||||||||
Net income (loss) per common share—basic: | |||||||||||||||||||||||||||||||||||||
Net income from continuing operations | $ | 2.84 | $ | (0.47 | ) | $ | 2.37 | $ | 0.01 | $ | 2.38 | ||||||||||||||||||||||||||
Net loss from discontinued operations | (0.14 | ) | 0.02 | (0.12 | ) | — | (0.12 | ) | |||||||||||||||||||||||||||||
Net income per common share—basic | $ | 2.7 | $ | (0.45 | ) | $ | 2.25 | $ | 0.02 | $ | 2.26 | ||||||||||||||||||||||||||
Net income (loss) per common share—diluted: | |||||||||||||||||||||||||||||||||||||
Net income from continuing operations | $ | 2.78 | $ | (0.46 | ) | $ | 2.32 | $ | 0.01 | $ | 2.33 | ||||||||||||||||||||||||||
Net loss from discontinued operations | (0.14 | ) | 0.03 | (0.11 | ) | (0.01 | ) | (0.12 | ) | ||||||||||||||||||||||||||||
Net income per common share—diluted: | $ | 2.64 | $ | (0.43 | ) | $ | 2.21 | $ | 0 | $ | 2.21 | ||||||||||||||||||||||||||
Weighted average number of common shares: | |||||||||||||||||||||||||||||||||||||
Basic | 18,977,263 | — | 18,977,263 | — | 18,977,263 | ||||||||||||||||||||||||||||||||
Diluted | 19,390,413 | — | 19,390,413 | — | 19,390,413 | ||||||||||||||||||||||||||||||||
Other comprehensive income, before tax: | |||||||||||||||||||||||||||||||||||||
Translation adjustment | $ | 480 | $ | 288 | $ | 768 | $ | 363 | $ | 1,131 | |||||||||||||||||||||||||||
Unrealized gain on derivative instrument | 416 | — | 416 | — | 416 | ||||||||||||||||||||||||||||||||
Other comprehensive income, before tax | 896 | 288 | 1,184 | 363 | 1,547 | ||||||||||||||||||||||||||||||||
Income tax expense related to components of other comprehensive income | (153 | ) | — | (153 | ) | — | (153 | ) | |||||||||||||||||||||||||||||
Other comprehensive income, net of tax | 743 | 288 | 1,031 | 363 | 1,394 | ||||||||||||||||||||||||||||||||
Comprehensive income | $ | 52,038 | $ | (8,169 | ) | $ | 43,869 | $ | 377 | $ | 44,246 | ||||||||||||||||||||||||||
The effects of the Original Restatement and the Further Restatement on the Company’s consolidated statement of operations and comprehensive loss for the year ended December 31, 2011 are as follows: | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2011 | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands, except share and per share data) | As Reported in the | Original | As Originally | Further | Restated | ||||||||||||||||||||||||||||||||
2012 Form 10-K | Restatement | Restated in the | Restatement | ||||||||||||||||||||||||||||||||||
Prior to Original | Adjustments | 2012 | Adjustments | ||||||||||||||||||||||||||||||||||
Restatement | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Product sales | $ | 432,975 | $ | (27,828 | ) | $ | 405,147 | (6,452 | ) | $ | 398,695 | ||||||||||||||||||||||||||
Marketing service fees | 37,146 | (322 | ) | 36,824 | — | 36,824 | |||||||||||||||||||||||||||||||
Net sales | 470,121 | (28,150 | ) | 441,971 | (6,452 | ) | 435,519 | ||||||||||||||||||||||||||||||
Cost of sales | 92,619 | 2,908 | 95,527 | 888 | 96,415 | ||||||||||||||||||||||||||||||||
Gross profit | 377,502 | (31,058 | ) | 346,444 | (7,340 | ) | 339,104 | ||||||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 200,145 | (6,634 | ) | 193,511 | (8,355 | ) | 185,156 | ||||||||||||||||||||||||||||||
General and administrative | 64,374 | 107 | 64,481 | 304 | 64,785 | ||||||||||||||||||||||||||||||||
Research and development | 22,861 | — | 22,861 | — | 22,861 | ||||||||||||||||||||||||||||||||
Amortization of intangible assets | 2,350 | 200 | 2,550 | — | 2,550 | ||||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions (Note 17) | 56,463 | 678 | 57,141 | — | 57,141 | ||||||||||||||||||||||||||||||||
346,193 | (5,649 | ) | 340,544 | (8,051 | ) | 332,493 | |||||||||||||||||||||||||||||||
Operating income | 31,309 | (25,409 | ) | 5,900 | 711 | 6,611 | |||||||||||||||||||||||||||||||
Other income and (expense) | |||||||||||||||||||||||||||||||||||||
Interest expense, net | (9,456 | ) | 3,915 | (5,541 | ) | 100 | (5,441 | ) | |||||||||||||||||||||||||||||
Other expense | (2,412 | ) | — | (2,412 | ) | (121 | ) | (2,533 | ) | ||||||||||||||||||||||||||||
(11,868 | ) | 3,915 | (7,953 | ) | (21 | ) | (7,974 | ) | |||||||||||||||||||||||||||||
Income (loss) before income taxes | 19,441 | (21,494 | ) | (2,053 | ) | 690 | (1,363 | ) | |||||||||||||||||||||||||||||
Income tax expense | (21,181 | ) | 7,016 | (14,165 | ) | (278 | ) | (14,443 | ) | ||||||||||||||||||||||||||||
Net loss from continuing operations | (1,740 | ) | (14,478 | ) | (16,218 | ) | 412 | (15,806 | ) | ||||||||||||||||||||||||||||
Discontinued operations (Note 16) | |||||||||||||||||||||||||||||||||||||
Income (loss) from discontinued operations | 1,263 | (3,968 | ) | (2,705 | ) | — | (2,705 | ) | |||||||||||||||||||||||||||||
Income tax (expense) benefit | (596 | ) | 1,409 | 813 | — | 813 | |||||||||||||||||||||||||||||||
Net income (loss) from discontinued operations | 667 | (2,559 | ) | (1,892 | ) | — | (1,892 | ) | |||||||||||||||||||||||||||||
Net loss | $ | (1,073 | ) | $ | (17,037 | ) | $ | (18,110 | ) | 412 | $ | (17,698 | ) | ||||||||||||||||||||||||
Net (loss) income per common share—basic: | |||||||||||||||||||||||||||||||||||||
Net loss from continuing operations | $ | (0.10 | ) | $ | (0.79 | ) | $ | (0.89 | ) | $ | 0.02 | $ | (0.87 | ) | |||||||||||||||||||||||
Net income (loss) from discontinued operations | 0.04 | (0.14 | ) | (0.10 | ) | — | (0.10 | ) | |||||||||||||||||||||||||||||
Net loss per common share—basic | $ | (0.06 | ) | $ | (0.93 | ) | $ | (0.99 | ) | $ | 0.02 | $ | (0.97 | ) | |||||||||||||||||||||||
Net (loss) income per common share—diluted: | |||||||||||||||||||||||||||||||||||||
Net loss from continuing operations | $ | (0.10 | ) | $ | (0.79 | ) | $ | (0.89 | ) | $ | 0.02 | $ | (0.87 | ) | |||||||||||||||||||||||
Net income (loss) from discontinued operations | 0.04 | (0.14 | ) | (0.10 | ) | — | (0.10 | ) | |||||||||||||||||||||||||||||
Net loss per common share—diluted: | $ | (0.06 | ) | $ | (0.93 | ) | $ | (0.99 | ) | $ | 0.02 | $ | (0.97 | ) | |||||||||||||||||||||||
Weighted average number of common shares: | |||||||||||||||||||||||||||||||||||||
Basic | 18,219,343 | — | 18,219,343 | — | 18,219,343 | ||||||||||||||||||||||||||||||||
Diluted | 18,219,343 | — | 18,219,343 | — | 18,219,343 | ||||||||||||||||||||||||||||||||
Other comprehensive loss, before tax: | |||||||||||||||||||||||||||||||||||||
Translation adjustment | $ | (3,192 | ) | $ | 913 | $ | (2,279 | ) | $ | 382 | $ | (1,897 | ) | ||||||||||||||||||||||||
Unrealized loss on derivative instrument | (693 | ) | — | (693 | ) | — | (693 | ) | |||||||||||||||||||||||||||||
Other comprehensive loss, before tax | (3,885 | ) | 913 | (2,972 | ) | 382 | (2,590 | ) | |||||||||||||||||||||||||||||
Income tax benefit related to components of other comprehensive income | 256 | — | 256 | — | 256 | ||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | (3,629 | ) | 913 | (2,716 | ) | 382 | (2,334 | ) | |||||||||||||||||||||||||||||
Comprehensive loss | $ | (4,702 | ) | $ | (16,124 | ) | $ | (20,826 | ) | 794 | $ | (20,032 | ) | ||||||||||||||||||||||||
The effects of Further Restatement on the Company’s consolidated statement of cash flows for the year ended December 31, 2013 are as follows: | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | Year Ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||
Originally | Further | Restated | |||||||||||||||||||||||||||||||||||
Reported in | Restatement | ||||||||||||||||||||||||||||||||||||
2013 | Adjustments | ||||||||||||||||||||||||||||||||||||
Form 10-K | |||||||||||||||||||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||||||||||||||||||
Net loss | $ | (25,515 | ) | $ | (3,297 | ) | $ | (28,812 | ) | ||||||||||||||||||||||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 22,659 | 163 | 22,822 | ||||||||||||||||||||||||||||||||||
Amortization of debt costs | 720 | — | 720 | ||||||||||||||||||||||||||||||||||
Amortization of exclusivity agreements | 1,546 | — | 1,546 | ||||||||||||||||||||||||||||||||||
Provision for doubtful accounts | 6,003 | (1,413 | ) | 4,590 | |||||||||||||||||||||||||||||||||
Deferred income taxes | (1,986 | ) | 4,815 | 2,829 | |||||||||||||||||||||||||||||||||
Share-based compensation | 6,267 | — | 6,267 | ||||||||||||||||||||||||||||||||||
Impairment of goodwill | 19,193 | — | 19,193 | ||||||||||||||||||||||||||||||||||
Gain on sale of Breg, Inc., net of tax | — | — | — | ||||||||||||||||||||||||||||||||||
Excess income tax benefit on employee stock-based awards | (82 | ) | — | (82 | ) | ||||||||||||||||||||||||||||||||
Income tax benefit (expense) on employee stock-based awards | 795 | (795 | ) | — | |||||||||||||||||||||||||||||||||
Other | 4,442 | 94 | 4,536 | ||||||||||||||||||||||||||||||||||
Changes in operating assets and liabilities, net of effect of dispositions: | |||||||||||||||||||||||||||||||||||||
Trade accounts receivable | 25,747 | 2,815 | 28,562 | ||||||||||||||||||||||||||||||||||
Inventories | (6,626 | ) | 3,413 | (3,213 | ) | ||||||||||||||||||||||||||||||||
Escrow receivable | — | — | — | ||||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | 6,791 | 1,973 | 8,764 | ||||||||||||||||||||||||||||||||||
Trade accounts payable | (2,280 | ) | — | (2,280 | ) | ||||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | — | — | — | ||||||||||||||||||||||||||||||||||
Other current liabilities | 8,018 | (1,049 | ) | 6,969 | |||||||||||||||||||||||||||||||||
Other long-term assets | 2,750 | (8,079 | ) | (5,329 | ) | ||||||||||||||||||||||||||||||||
Other long-term liabilities | (1,561 | ) | 1,521 | (40 | ) | ||||||||||||||||||||||||||||||||
Net cash provided by operating activities | 66,881 | 161 | 67,042 | ||||||||||||||||||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||||||||||||||||
Capital expenditures for property, plant and equipment | (24,787 | ) | — | (24,787 | ) | ||||||||||||||||||||||||||||||||
Capital expenditures for intangible assets | (4,891 | ) | — | (4,891 | ) | ||||||||||||||||||||||||||||||||
Purchase of other investments | — | (1,374 | ) | (1,374 | ) | ||||||||||||||||||||||||||||||||
Net proceeds from sale of Breg, Inc. | — | — | — | ||||||||||||||||||||||||||||||||||
Net cash (used in) provided by investing activities | (29,678 | ) | (1,374 | ) | (31,052 | ) | |||||||||||||||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of common shares | 3,450 | — | 3,450 | ||||||||||||||||||||||||||||||||||
Payment of refinancing fees and debt issuance costs | — | — | — | ||||||||||||||||||||||||||||||||||
Repayments of long-term debt | (16 | ) | — | (16 | ) | ||||||||||||||||||||||||||||||||
Repayment of bank borrowings, net | — | — | — | ||||||||||||||||||||||||||||||||||
Changes in restricted cash | (2,375 | ) | — | (2,375 | ) | ||||||||||||||||||||||||||||||||
Purchase of common stock | (39,494 | ) | — | (39,494 | ) | ||||||||||||||||||||||||||||||||
Cash payment for purchase of minority interest in subsidiary | — | — | — | ||||||||||||||||||||||||||||||||||
Excess income tax benefit on employee stock-based awards | 82 | — | 82 | ||||||||||||||||||||||||||||||||||
Net cash used in financing activities | (38,353 | ) | — | (38,353 | ) | ||||||||||||||||||||||||||||||||
Effect of exchange rate changes on cash | 581 | (61 | ) | 520 | |||||||||||||||||||||||||||||||||
Net (decrease) increase in cash and cash equivalents | (569 | ) | (1,274 | ) | (1,843 | ) | |||||||||||||||||||||||||||||||
Cash and cash equivalents at the beginning of the year | 31,055 | (288 | ) | 30,767 | |||||||||||||||||||||||||||||||||
Cash and cash equivalents at the end of the year | $ | 30,486 | $ | (1,562 | ) | $ | 28,924 | ||||||||||||||||||||||||||||||
Supplemental disclosure of cash flow information: | |||||||||||||||||||||||||||||||||||||
Cash paid during the year for: | |||||||||||||||||||||||||||||||||||||
Interest | $ | 2,046 | $ | — | $ | 2,046 | |||||||||||||||||||||||||||||||
Income taxes | $ | 8,773 | $ | — | $ | 8,773 | |||||||||||||||||||||||||||||||
The effects of the Original Restatement and the Further Restatement on the Company’s consolidated statement of cash flows for the year ended December 31, 2012 are as follows: | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | Year Ended December 31, 2012 | ||||||||||||||||||||||||||||||||||||
As Reported in | Original | As Originally | Further | Restated | |||||||||||||||||||||||||||||||||
the 2012 Form | Restatement | Restated in | Restatement | ||||||||||||||||||||||||||||||||||
10-K Prior to | Adjustments | the 2012 | Adjustments | ||||||||||||||||||||||||||||||||||
Original | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Restatement | |||||||||||||||||||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||||||||||||||||||
Net income | $ | 51,295 | $ | (8,457 | ) | $ | 42,838 | $ | 14 | $ | 42,852 | ||||||||||||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 20,261 | 319 | 20,580 | 152 | 20,732 | ||||||||||||||||||||||||||||||||
Amortization of debt costs | 1,737 | — | 1,737 | — | 1,737 | ||||||||||||||||||||||||||||||||
Amortization of exclusivity agreements | 1,289 | — | 1,289 | — | 1,289 | ||||||||||||||||||||||||||||||||
Provision for doubtful accounts | 13,302 | (2,730 | ) | 10,572 | (8,360 | ) | 2,212 | ||||||||||||||||||||||||||||||
Deferred income taxes | 871 | (2,123 | ) | (1,252 | ) | 5,023 | 3,771 | ||||||||||||||||||||||||||||||
Share-based compensation | 6,303 | — | 6,303 | — | 6,303 | ||||||||||||||||||||||||||||||||
Impairment of goodwill | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Gain on sale of Breg, Inc, net of tax | (1,345 | ) | — | (1,345 | ) | — | (1,345 | ) | |||||||||||||||||||||||||||||
Excess income tax benefit on employee stock-based awards | — | (1,020 | ) | (1,020 | ) | — | (1,020 | ) | |||||||||||||||||||||||||||||
Income tax benefit on employee-stock-based awards | — | 2,910 | 2,910 | (2,910 | ) | — | |||||||||||||||||||||||||||||||
Other | 2,125 | 2,011 | 4,136 | 662 | 4,798 | ||||||||||||||||||||||||||||||||
Changes in operating assets and liabilities, net of effect of dispositions: | |||||||||||||||||||||||||||||||||||||
Trade accounts receivable | (31,600 | ) | 13,162 | (18,438 | ) | 7,310 | (11,128 | ) | |||||||||||||||||||||||||||||
Inventories | (6,341 | ) | 3,846 | (2,495 | ) | 2,111 | (384 | ) | |||||||||||||||||||||||||||||
Escrow receivable | 41,537 | — | 41,537 | — | 41,537 | ||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | (6,191 | ) | (9,386 | ) | (15,577 | ) | 1,002 | (14,575 | ) | ||||||||||||||||||||||||||||
Trade accounts payable | 5,554 | (979 | ) | 4,575 | — | 4,575 | |||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | (82,500 | ) | (678 | ) | (83,178 | ) | — | (83,178 | ) | ||||||||||||||||||||||||||||
Other current liabilities | (2,842 | ) | (2,887 | ) | (5,729 | ) | 490 | (5,239 | ) | ||||||||||||||||||||||||||||
Other long-term assets | (2,114 | ) | 4,241 | 2,127 | (5,518 | ) | (3,391 | ) | |||||||||||||||||||||||||||||
Other long-term liabilities | (135 | ) | 751 | 616 | — | 616 | |||||||||||||||||||||||||||||||
Net cash provided by operating activities | 11,206 | (1,020 | ) | 10,186 | (24 | ) | 10,162 | ||||||||||||||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||||||||||||||||
Capital expenditures for property, plant and equipment | (27,994 | ) | — | (27,994 | ) | — | (27,994 | ) | |||||||||||||||||||||||||||||
Capital expenditures for intangible assets | (780 | ) | — | (780 | ) | — | (780 | ) | |||||||||||||||||||||||||||||
Purchase of other investments | — | — | — | (714 | ) | (714 | ) | ||||||||||||||||||||||||||||||
Proceeds from sale of other investments | — | — | — | 878 | 878 | ||||||||||||||||||||||||||||||||
Net proceeds from sale of Breg Inc. | 153,773 | — | 153,773 | — | 153,773 | ||||||||||||||||||||||||||||||||
Net cash provided by (used in) investing activities | 124,999 | — | 124,999 | 164 | 125,163 | ||||||||||||||||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of common shares | 25,586 | — | 25,586 | — | 25,586 | ||||||||||||||||||||||||||||||||
Payment of refinancing fees and debt issuance costs | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Repayments of long-term debt | (188,695 | ) | — | (188,695 | ) | — | (188,695 | ) | |||||||||||||||||||||||||||||
Proceeds of bank borrowings, net | (1,297 | ) | — | (1,297 | ) | — | (1,297 | ) | |||||||||||||||||||||||||||||
Changes in restricted cash | 25,799 | — | 25,799 | — | 25,799 | ||||||||||||||||||||||||||||||||
Cash payment for purchase of minority interest in subsidiary | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Excess income tax benefit on employee stock-based awards | — | 1,020 | 1,020 | — | 1,020 | ||||||||||||||||||||||||||||||||
Net cash used in financing activities | (138,607 | ) | 1,020 | (137,587 | ) | — | (137,587 | ) | |||||||||||||||||||||||||||||
Effect of exchange rates changes on cash | 250 | — | 250 | 36 | 286 | ||||||||||||||||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | (2,152 | ) | — | (2,152 | ) | 176 | (1,976 | ) | |||||||||||||||||||||||||||||
Cash and cash equivalents at the beginning of the year | 33,207 | — | 33,207 | (464 | ) | 32,743 | |||||||||||||||||||||||||||||||
Cash and cash equivalents at the end of the year | $ | 31,055 | $ | — | $ | 31,055 | $ | (288 | ) | $ | 30,767 | ||||||||||||||||||||||||||
Supplemental disclosure of cash flow information: | |||||||||||||||||||||||||||||||||||||
Cash paid during the year for: | |||||||||||||||||||||||||||||||||||||
Interest | $ | 4,569 | $ | — | $ | 4,569 | $ | — | $ | 4,569 | |||||||||||||||||||||||||||
Income taxes | $ | 18,268 | $ | — | $ | 18,268 | $ | — | $ | 18,268 | |||||||||||||||||||||||||||
The effects of the Original Restatement and the Further Restatement on the Company’s consolidated statement of cash flows for the year ended December 31, 2011 are as follows: | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | Year Ended December 31, 2011 | ||||||||||||||||||||||||||||||||||||
As Reported in | Original | As Originally | Further | Restated | |||||||||||||||||||||||||||||||||
the 2012 Form | Restatement | Restated in | Restatement | ||||||||||||||||||||||||||||||||||
10-K Prior to | Adjustments | the 2012 | Adjustments | ||||||||||||||||||||||||||||||||||
Original | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Restatement | |||||||||||||||||||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||||||||||||||||||
Net loss | $ | (1,073 | ) | $ | (17,037 | ) | $ | (18,110 | ) | $ | 412 | $ | (17,698 | ) | |||||||||||||||||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 22,776 | 241 | 23,017 | 165 | 23,182 | ||||||||||||||||||||||||||||||||
Amortization of debt costs | 1,239 | — | 1,239 | — | 1,239 | ||||||||||||||||||||||||||||||||
Amortization of exclusivity agreements | 374 | — | 374 | — | 374 | ||||||||||||||||||||||||||||||||
Provision for doubtful accounts | 11,532 | 1,404 | 12,936 | (8,356 | ) | 4,580 | |||||||||||||||||||||||||||||||
Deferred income taxes | 936 | (988 | ) | (52 | ) | (13,889 | ) | (13,941 | ) | ||||||||||||||||||||||||||||
Share-based compensation | 6,648 | — | 6,648 | — | 6,648 | ||||||||||||||||||||||||||||||||
Impairment of goodwill | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Gain on sale of Breg, Inc, net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Excess income tax benefit on employee stock-based awards | (1,737 | ) | — | (1,737 | ) | — | (1,737 | ) | |||||||||||||||||||||||||||||
Income tax benefit on employee-stock-based awards | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Other | 4,906 | (415 | ) | 4,491 | (4,833 | ) | (342 | ) | |||||||||||||||||||||||||||||
Changes in operating assets and liabilities, net of effect of dispositions: | |||||||||||||||||||||||||||||||||||||
Trade accounts receivable | (25,818 | ) | 26,111 | 293 | 6,352 | 6,645 | |||||||||||||||||||||||||||||||
Inventories | (8,349 | ) | (4,275 | ) | (12,624 | ) | (81 | ) | (12,705 | ) | |||||||||||||||||||||||||||
Escrow receivable | (32,562 | ) | — | (32,562 | ) | — | (32,562 | ) | |||||||||||||||||||||||||||||
Prepaid expenses and other current assets | (4,057 | ) | 6,886 | 2,829 | (447 | ) | 2,382 | ||||||||||||||||||||||||||||||
Trade accounts payable | 576 | 1,746 | 2,322 | — | 2,322 | ||||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | 88,463 | 638 | 89,101 | — | 89,101 | ||||||||||||||||||||||||||||||||
Other current liabilities | 3,384 | (1,965 | ) | 1,419 | 2,097 | 3,516 | |||||||||||||||||||||||||||||||
Other long-term assets | (1,588 | ) | (16,093 | ) | (17,681 | ) | 15,364 | (2,317 | ) | ||||||||||||||||||||||||||||
Other long-term liabilities | (869 | ) | 3,747 | 2,878 | 525 | 3,403 | |||||||||||||||||||||||||||||||
Net cash provided by operating activities | 64,781 | — | 64,781 | (51 | ) | 64,730 | |||||||||||||||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||||||||||||||||
Capital expenditures for property, plant and equipment | (24,965 | ) | — | (24,965 | ) | — | (24,965 | ) | |||||||||||||||||||||||||||||
Capital expenditures for intangible assets | (793 | ) | — | (793 | ) | — | (793 | ) | |||||||||||||||||||||||||||||
Payment made in connection with acquisition | (5,250 | ) | — | (5,250 | ) | — | (5,250 | ) | |||||||||||||||||||||||||||||
Purchase of other investments | — | — | — | (468 | ) | (468 | ) | ||||||||||||||||||||||||||||||
Net cash provided by (used in) investing activities | (31,008 | ) | — | (31,008 | ) | (468 | ) | (31,476 | ) | ||||||||||||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of common shares | 20,113 | — | 20,113 | — | 20,113 | ||||||||||||||||||||||||||||||||
Payment of refinancing fees and debt issuance costs | (758 | ) | — | (758 | ) | — | (758 | ) | |||||||||||||||||||||||||||||
Repayments of long-term debt | (7,500 | ) | — | (7,500 | ) | — | (7,500 | ) | |||||||||||||||||||||||||||||
Proceeds of bank borrowings, net | (2,561 | ) | — | (2,561 | ) | — | (2,561 | ) | |||||||||||||||||||||||||||||
Changes in restricted cash | (24,178 | ) | — | (24,178 | ) | — | (24,178 | ) | |||||||||||||||||||||||||||||
Cash payment for purchase of minority interest in subsidiary | (517 | ) | — | (517 | ) | — | (517 | ) | |||||||||||||||||||||||||||||
Excess income tax benefit on employee stock-based awards | 1,737 | — | 1,737 | — | 1,737 | ||||||||||||||||||||||||||||||||
Net cash used in financing activities | (13,664 | ) | — | (13,664 | ) | — | (13,664 | ) | |||||||||||||||||||||||||||||
Effect of exchange rates changes on cash | (463 | ) | — | (463 | ) | 55 | (408 | ) | |||||||||||||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 19,646 | — | 19,646 | (464 | ) | 19,182 | |||||||||||||||||||||||||||||||
Cash and cash equivalents at the beginning of the year | 13,561 | — | 13,561 | — | 13,561 | ||||||||||||||||||||||||||||||||
Cash and cash equivalents at the end of the year | $ | 33,207 | $ | — | $ | 33,207 | $ | (464 | ) | $ | 32,743 | ||||||||||||||||||||||||||
Supplemental disclosure of cash flow information: | |||||||||||||||||||||||||||||||||||||
Cash paid during the year for: | |||||||||||||||||||||||||||||||||||||
Interest | $ | 17,088 | $ | — | $ | 17,088 | $ | — | $ | 17,088 | |||||||||||||||||||||||||||
Income taxes | $ | 26,227 | $ | — | $ | 26,227 | $ | — | $ | 26,227 | |||||||||||||||||||||||||||
The results of the Further Restatement adjustments to the Company’s previously filed consolidated shareholders’ equity as of January 1, 2011, by category as discussed above under the subheadings “Bad Debt Timing Adjustments”, “Accounts Receivable Reserves”, “Intercompany Profit Adjustments”, “Piece Parts Inventory”, “Inventory Reserves” and “Other Adjustments” are summarized in the table below. | |||||||||||||||||||||||||||||||||||||
Cumulative Adjustments to Shareholders’ Equity at | |||||||||||||||||||||||||||||||||||||
January 1, 2011 | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | |||||||||||||||||||||||||||||||||||||
Further Restatement Adjustments by Category | Further Restatement | Further | Total Cumulative | ||||||||||||||||||||||||||||||||||
Increase (decrease) to Retained earnings | Adjustments for | Restatement | Adjustments | ||||||||||||||||||||||||||||||||||
Years ended | Adjustments to | through | |||||||||||||||||||||||||||||||||||
December 31, 2009 | Year ended | December 31, 2010 | |||||||||||||||||||||||||||||||||||
and Prior | December 31, 2010 | ||||||||||||||||||||||||||||||||||||
Bad debt timing adjustments | $ | — | $ | 409 | $ | 409 | |||||||||||||||||||||||||||||||
Accounts receivable reserves | (4,383 | ) | (1,037 | ) | (5,420 | ) | |||||||||||||||||||||||||||||||
Intercompany profit adjustments | (812 | ) | (203 | ) | (1,015 | ) | |||||||||||||||||||||||||||||||
Inventory existence | (68 | ) | (16 | ) | (84 | ) | |||||||||||||||||||||||||||||||
Inventory reserves | (13,352 | ) | 2,581 | (10,771 | ) | ||||||||||||||||||||||||||||||||
Other adjustments | (1,426 | ) | (285 | ) | (1,711 | ) | |||||||||||||||||||||||||||||||
Income tax benefit (expense) | 7,416 | (1,388 | ) | 6,028 | |||||||||||||||||||||||||||||||||
Retained earnings decrease | $ | (12,625 | ) | $ | 61 | $ | (12,564 | ) | |||||||||||||||||||||||||||||
The results of the Further Restatement adjustments to the Company’s previously filed consolidated shareholders’ equity as of January 1, 2011, by category as discussed above under the subheadings “Bad Debt Timing Adjustments”, “Accounts Receivable Reserves”, “Intercompany Profit Adjustments”, “Piece Parts Inventory”, “Inventory Reserves” and “Other Adjustments” are summarized in the table below. | |||||||||||||||||||||||||||||||||||||
Cumulative Adjustments to Shareholders’ Equity at | |||||||||||||||||||||||||||||||||||||
January 1, 2011 | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | |||||||||||||||||||||||||||||||||||||
Further Restatement Adjustments by Category | Further Restatement | Further | Total Cumulative | ||||||||||||||||||||||||||||||||||
Increase (decrease) to Retained earnings | Adjustments for | Restatement | Adjustments | ||||||||||||||||||||||||||||||||||
Years ended | Adjustments to | through | |||||||||||||||||||||||||||||||||||
December 31, 2009 | Year ended | December 31, 2010 | |||||||||||||||||||||||||||||||||||
and Prior | December 31, 2010 | ||||||||||||||||||||||||||||||||||||
Bad debt timing adjustments | $ | — | $ | 409 | $ | 409 | |||||||||||||||||||||||||||||||
Accounts receivable reserves | (4,383 | ) | (1,037 | ) | (5,420 | ) | |||||||||||||||||||||||||||||||
Intercompany profit adjustments | (812 | ) | (203 | ) | (1,015 | ) | |||||||||||||||||||||||||||||||
Inventory existence | (68 | ) | (16 | ) | (84 | ) | |||||||||||||||||||||||||||||||
Inventory reserves | (13,352 | ) | 2,581 | (10,771 | ) | ||||||||||||||||||||||||||||||||
Other adjustments | (1,426 | ) | (285 | ) | (1,711 | ) | |||||||||||||||||||||||||||||||
Income tax benefit (expense) | 7,416 | (1,388 | ) | 6,028 | |||||||||||||||||||||||||||||||||
Retained earnings decrease | $ | (12,625 | ) | $ | 61 | $ | (12,564 | ) | |||||||||||||||||||||||||||||
Inventories
Inventories | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Inventories | 3 | Inventories | |||||||
December 31, | |||||||||
(U.S. Dollars in thousands) | 2013 | 2012 | |||||||
(Restated) | (Restated) | ||||||||
Raw materials | $ | 6,515 | $ | 7,623 | |||||
Work-in-process | 6,606 | 7,886 | |||||||
Finished products | 28,291 | 22,236 | |||||||
Field inventory | 21,312 | 17,061 | |||||||
Consignment inventory | 2,388 | 4,235 | |||||||
Deferred cost of sales | 7,566 | 10,772 | |||||||
$ | 72,678 | $ | 69,813 | ||||||
The Company’s inventories are primarily stated at standard cost, which approximates actual cost determined on a first-in, first-out basis. The Company adjusts the value of its inventory to the extent management determines that the cost cannot be recovered due to obsolescence or other factors. In order to make these determinations, management uses estimates of future demand and sales prices for each product to determine the appropriate inventory reserves and to make corresponding adjustments to the carrying value of these inventories to reflect the lower of cost or market value. In the event of a sudden significant decrease in demand for the Company’s products, or a higher incidence of inventory obsolescence, the Company could be required to increase its inventory reserves, which would increase cost of sales and decrease gross profit. | |||||||||
Field inventory represents immediately saleable finished products that are in the possession of the Company’s direct sales representatives. Consignment inventory represents immediately saleable finished products located at third party customers, such as distributors and hospitals. Work-in-process, finished products, field inventory and consignment inventory include material, labor and production overhead costs. Deferred cost of sales result from transactions where the Company has shipped product or performed services for which all revenue recognition criteria have not yet been met. Once all revenue recognition criteria have been met, revenue previously recorded as deferred and associated cost of sales are recognized. |
Property_plant_and_equipment
Property, plant and equipment | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property, plant and equipment | 4 | Property, plant and equipment | |||||||
December 31, | |||||||||
(U.S. Dollars in thousands) | 2013 | 2012 | |||||||
(Restated) | (Restated) | ||||||||
Cost | |||||||||
Buildings | $ | 4,075 | $ | 3,911 | |||||
Plant, equipment and instrumentation | 133,427 | 121,370 | |||||||
Furniture and fixtures | 5,872 | 5,567 | |||||||
143,374 | 130,848 | ||||||||
Accumulated depreciation | (89,002 | ) | (78,055 | ) | |||||
$ | 54,372 | $ | 52,793 | ||||||
Depreciation expense for the years ended December 31, 2013, 2012 and 2011 was $20.0 million, $15.8 million and $14.3 million, respectively. | |||||||||
Patents_and_other_intangible_a
Patents and other intangible assets | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||
Patents and other intangible assets | 5 | Patents and other intangible assets | |||||||
December 31, | |||||||||
(U.S. Dollars in thousands) | 2013 | 2012 | |||||||
(Restated) | |||||||||
Cost | |||||||||
Patents and licenses | $ | 42,568 | $ | 38,905 | |||||
Trademarks—definite lived | 620 | 657 | |||||||
43,188 | 39,562 | ||||||||
Accumulated amortization | |||||||||
Patents and licenses | (33,688 | ) | (31,845 | ) | |||||
Trademarks—definite lived | (454 | ) | (427 | ) | |||||
(34,142 | ) | (32,272 | ) | ||||||
Patents and other intangible assets, net | $ | 9,046 | $ | 7,290 | |||||
Amortization expense for intangible assets is estimated to be approximately $2.1 million, $1.8 million, $1.7 million, $1.4 million, $0.5 million and $1.5 million for the periods ending December 31, 2014, 2015, 2016, 2017, 2018 and 2019 and thereafter, respectively. | |||||||||
Goodwill
Goodwill | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||
Goodwill | 6 | Goodwill | |||||||||||||||||||||||||||
The following table presents the changes in the net carrying value of goodwill by reportable segment as well as the reallocation as of July 1, 2013 in conjunction with our change in reportable segments. (See Note 1 “Summary of significant accounting policies”): | |||||||||||||||||||||||||||||
(U.S. Dollars in thousands) | Spine | Orthopedics | BioStim | Biologics | Extremity | Spine Fixation | Total | ||||||||||||||||||||||
Fixation | |||||||||||||||||||||||||||||
At December 31, 2011 | $ | 41,419 | $ | 31,675 | $ | — | $ | — | $ | — | $ | — | $ | 73,094 | |||||||||||||||
Foreign currency | 145 | 1,149 | — | — | — | — | 1,294 | ||||||||||||||||||||||
At December 31, 2012 | 41,564 | 32,824 | — | — | — | — | 74,388 | ||||||||||||||||||||||
Foreign currency | (163 | ) | (1,467 | ) | — | — | — | — | (1,630 | ) | |||||||||||||||||||
At June 30, 2013 | 41,401 | 31,357 | — | — | — | — | 72,758 | ||||||||||||||||||||||
Reallocation at July 1, 2013 | (41,401 | ) | (31,357 | ) | 42,678 | 10,887 | 9,825 | 9,368 | — | ||||||||||||||||||||
Impairment | — | — | — | — | (9,825 | ) | (9,368 | ) | (19,193 | ) | |||||||||||||||||||
At December 31, 2013 | $ | — | $ | — | $ | 42,678 | $ | 10,887 | $ | — | $ | — | $ | 53,565 | |||||||||||||||
Goodwill Impairment | |||||||||||||||||||||||||||||
The Company tests goodwill at least annually for impairment. The Company tests more frequently if indicators are present or changes in circumstances suggest that impairment may exist. These indicators include, among others, declines in sales, earnings or cash flows, or the development of a material adverse change in the business climate. The Company assesses goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a reporting unit. | |||||||||||||||||||||||||||||
In order to calculate the respective carrying values, the Company initially recorded goodwill based on the purchase price allocation performed at the time of acquisition. Corporate assets and liabilities that directly relate to a reporting unit’s operations are ascribed directly to that reporting unit. Corporate assets and liabilities that are not directly related to a specific reporting unit, but from which the reporting unit benefits, are allocated based on the respective contribution measure of each reporting unit. Effective July 1, 2013, the Company re-aligned its segments, and consequently reallocated the carrying value of goodwill to its new reporting units, determined to be the Company’s segments (i.e., BioStim, Biologics, Spine Fixation, and Extremity Fixation), based on the relative fair value of each new reporting unit to total enterprise value at July 1, 2013. | |||||||||||||||||||||||||||||
In the first quarter of 2012, ASU 2011-08, “Testing of Goodwill for Impairment” became effective. ASU 2011-08 allows entities testing goodwill for impairment the option of performing a qualitative assessment before calculating the fair value of a reporting unit (i.e. the first step of the goodwill impairment test). If entities determine, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not greater than the carrying amount, a quantitative calculation would not be needed. | |||||||||||||||||||||||||||||
As a result of the Company’s change in reporting structure, the Company re-allocated goodwill to each reporting unit. We estimated the fair value of each reporting unit using a weighting of fair values derived from an income approach, a cost approach, and a market approach (all Level 3 fair value measurements). Under the income approach, we calculated the fair value of each reporting unit based on the present value of its estimated future cash flows. Cash flow projections are based on our estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate used was based on the weighted average cost of capital adjusted for the risks associated with the reporting unit and the projected cash flows. The cost approach involves methods of determining a Company’s value by analyzing the market value of a Company’s assets. The market approach estimates fair value based on market multiples of revenue and earnings of comparable publicly traded companies that have similar operating and investment characteristics as our reporting units. | |||||||||||||||||||||||||||||
Upon estimating the fair value of the reporting units, we determined it was less than its carrying value for two of our reporting units, Extremity Fixation and Spine Fixation. As a result, we performed step two of the impairment analysis and allocated the fair value of these reporting units to the estimated fair values of each of the assets and liabilities of the reporting units (including identifiable intangible assets) with the excess fair value being the implied goodwill. Estimating the fair value of certain assets and liabilities requires significant judgment about future cash flows. The implied fair value of the reporting unit’s goodwill was less than its carrying value, which we recorded as a full impairment loss of goodwill for our Spine Fixation and Extremity Fixation reporting units, totaling $19.2 million, during the third quarter of 2013. The Company’s annual goodwill impairment analysis, which was performed qualitatively during the fourth quarter of 2013, did not result in any additional impairment charge. |
Bank_borrowings
Bank borrowings | 12 Months Ended | |
Dec. 31, 2013 | ||
Debt Disclosure [Abstract] | ||
Bank borrowings | 7 | Bank borrowings |
Borrowings under the line of credit consist of borrowings in Euros used to fund international operations. The borrowings under such facility were zero and $0.1 million at December 31, 2013 and 2012, respectively. The weighted average interest rate on borrowings under lines of credit as of December 31, 2013 and 2012 was 3.70%. | ||
The Company had an unused available line of credit of €5.8 million ($8.0 million) and €5.8 million ($7.6 million) at December 31, 2013 and 2012, respectively, in its Italian line of credit. This line of credit provides the Company the option to borrow amounts in Italy at rates which are determined at the time of borrowing. This line of credit is unsecured. |
Other_current_liabilities
Other current liabilities | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Payables and Accruals [Abstract] | |||||||||
Other current liabilities | 8 | Other current liabilities | |||||||
December 31, | |||||||||
(U.S. Dollars in thousands) | 2013 | 2012 | |||||||
(Restated) | (Restated) | ||||||||
Accrued expenses | $ | 18,903 | $ | 11,710 | |||||
Salaries, bonuses, commissions and related taxes payable | 16,598 | 17,915 | |||||||
Accrued legal expenses | 10,292 | 8,496 | |||||||
Other payables | 3,883 | 4,621 | |||||||
$ | 49,676 | $ | 42,742 |
Longterm_debt
Long-term debt | 12 Months Ended | |
Dec. 31, 2013 | ||
Debt Disclosure [Abstract] | ||
Long-term debt | 9 | Long-term debt |
On August 30, 2010, the Company’s wholly owned U.S. holding company, Orthofix Holdings, Inc. (“Orthofix Holdings”) entered into a Credit Agreement (the “Credit Agreement”) with certain domestic direct and indirect subsidiaries of the Company (the “Guarantors”), JPMorgan Chase Bank, N.A., as Administrative Agent, RBS Citizens, N.A., as Syndication Agent, and certain lender parties thereto. | ||
The Credit Agreement provides for a five year, $200 million secured revolving credit facility (the “Revolving Credit Facility”), and a five year, $100 million secured term loan facility (the “Term Loan Facility”, and together with the Revolving Credit Facility, the “Credit Facilities”). On January 15, 2015, at the Company’s request, the lenders agreed to reduce the available capacity under the Revolving Credit Facility to $100 million. | ||
In May 2012, the Company used a portion of the proceeds from the sale of Breg, Inc. (“Breg”) (see Note 16) to repay in full the remaining $87.5 million balance on the Term Loan Facility and pay down $57.5 million of amounts outstanding under the Revolving Credit Facility. This use of proceeds was required by the lenders’ consent dated April 23, 2012 to the Credit Agreement. As a result of the sale of Breg, Breg ceased to be a subsidiary of the Company and, therefore, Breg was released as a credit party under the Credit Agreement. Additionally, the Company paid $20 million in June and $20 million in September 2012 to reduce amounts outstanding under the Revolving Credit Facility. As a result, at December 31, 2012, the Term Loan Facility had been repaid in full and there was $20 million outstanding under the Revolving Credit Facility both at December 31, 2013 and 2012. Borrowings under the Credit Facilities bear interest at a floating rate, which is, at Orthofix Holdings’ option, either the London Inter-Bank Offered Rate (“LIBOR”) plus an applicable margin or a base rate (as defined in the Credit Agreement) plus an applicable margin (in each case subject to adjustment based on financial ratios). Such applicable margin will be up to 3.25% for LIBOR borrowings and up to 2.25% for base rate borrowings depending upon a measurement of the consolidated leverage ratio with respect to the immediately preceding four fiscal quarters. As of December 31, 2013 and 2012, the entire Revolving Credit Facility was at the LIBOR rate plus a margin of 2.50%. The effective interest rate on the Credit Facilities as of December 31, 2013 and 2012 was 2.7%. | ||
Outstanding principal on the Revolving Credit Facility is due on August 30, 2015. | ||
Borrowings under the Revolving Credit Facility, which may be made in the future, may be used for working capital, capital expenditures and other general corporate purposes of Orthofix Holdings and its subsidiaries. The Guarantors have guaranteed repayment of Orthofix Holdings’ obligations under the Credit Agreement. The obligations of Orthofix Holdings and each of the Guarantors with respect to the Credit Facilities are secured by a pledge of substantially all of the assets of Orthofix Holdings and each of the Guarantors. | ||
The Credit Agreement, as amended, requires Orthofix Holdings and the Company to comply with coverage ratios on a consolidated basis and contains affirmative and negative covenants, including limitations on additional debt, liens, investments and acquisitions. The Credit Agreement, as amended, also includes events of default customary for facilities of this type. Upon the occurrence of an event of default, all outstanding loans may be accelerated and/or the lenders’ commitments terminated. The Company was in compliance with the affirmative and negative covenants at December 31, 2012 and there were no events of default. | ||
On August 14, 2013, the Company and certain required lender parties to the Credit Agreement entered into a Limited Waiver (the “Original Limited Waiver”). Under the Original Limited Waiver, the lenders under the Credit Agreement (the “Lenders”) collectively waived requirements under the Credit Agreement that the Company deliver quarterly financial statements with respect to the fiscal quarters ending on June 30, 2013 and September 30, 2013, and related financial covenant certificates, until the earlier of (i) March 31, 2014 or (ii) the date that is one day after such financial statements are publicly filed or released. In addition, the Original Limited Waiver provided that the restatement of the Company’s financial statements for any period ending on or before March 31, 2013 would not constitute a default or event of default provided that within one business day after the public release or filing of such restated financial statements, the Company delivered corrected financial statements and compliance certificates with respect to such restated periods and immediately paid any additional interest and other fees that would have been owed had applicable interest and fees originally been calculated based on the restated financial statements. The Company was in compliance with the affirmative and negative covenants at December 31, 2013 and there were no events of default. | ||
On August 14, 2014 the Lenders and the Company entered into a subsequent Limited Waiver which was extended on September 30, 2014, January 15, 2015 and February 26, 2015 (the “Subsequent Limited Waivers”). Under the Subsequent Limited Waivers, the Lenders collectively waived requirements under the Credit Agreement that the Company deliver quarterly financial statements with respect to the fiscal quarters ended June 30, 2014 and September 30, 2014, and related financial covenant certificates, until the earlier of (i) March 31, 2015 or (ii) the date that is one day after such financial statements are publicly filed or released. The Subsequent Limited Waivers also extend the date by which the Company is required to provide certain 2014 fiscal year financial statements until the earlier of (i) one business day following the date that the Company files its Annual Report on Form 10-K for the fiscal year ended December 31, 2014 or (ii) April 30, 2015. In addition, the Subsequent Limited Waivers provided that the Further Restatement would not constitute a default or event of default provided that within one business day after the public release or filing of such restated financial statements, the Company delivered corrected financial statements and compliance certificates with respect to such restated periods and immediately paid any additional interest and other fees that would have been owed had applicable interest and fees originally been calculated based on the restated financial statements. | ||
Certain subsidiaries of the Company have restrictions on their ability to pay dividends or make intercompany loan advances pursuant to the Company’s Credit Facilities. The net assets of Orthofix Holdings and its subsidiaries are restricted for distributions to the parent company. Domestic subsidiaries of the Company, as parties to the credit agreement, have access to these net assets for operational purposes. | ||
The amount of restricted net assets of Orthofix Holdings and its subsidiaries as of December 31, 2013 and 2012 is $168.5 million and $194.5 million, respectively. In addition, the Credit Agreement restricts the Company and subsidiaries that are not parties to the Credit Facilities from access to cash held by Orthofix Holdings, Inc. and its subsidiaries. All of the Company’s subsidiaries that are parties to the Credit Agreement have access to this cash for operational and debt repayment purposes. The amount of restricted cash of the Company as of December 31, 2013 and 2012 was $23.8 million and $21.3 million, respectively. | ||
In conjunction with obtaining the Credit Facilities and the Credit Agreement, as amended, the Company incurred debt issuance costs of $5 million which includes $0.8 million of costs related to the May 2011 amendment. These costs are being amortized using the effective interest method over the life of the Credit Facilities. In conjunction with the Term Loan Facility repayment in May 2012, the Company wrote off $0.8 million of the related debt issuance costs. As of December 31, 2013 and 2012, debt issuance costs, net of accumulated amortization, related to the Credit Agreement were $1.1 million and $1.8 million, respectively. |
Derivative_instruments
Derivative instruments | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||
Derivative instruments | 10 | Derivative instruments | |||||||||||
The tables below disclose the types of derivative instruments the Company owns, the classifications and fair values of these instruments within the balance sheet, and the amount of gain (loss) recognized in other comprehensive income (loss) (“OCI”) or net income (loss). | |||||||||||||
(U.S. Dollars, in thousands) | Fair value: favorable | Balance sheet location | |||||||||||
(unfavorable) | |||||||||||||
As of December 31, 2013 | |||||||||||||
Cross-currency swap | $ | (1,036 | ) | Other long-term liabilities | |||||||||
Warrants | $ | 107 | Other long-term assets | ||||||||||
As of December 31, 2012 | |||||||||||||
Cross-currency swap | $ | 305 | Other long-term assets | ||||||||||
Warrants | $ | — | Other long-term assets | ||||||||||
For the year ended | |||||||||||||
December 31, | |||||||||||||
(U.S. Dollars in thousands) | 2013 | 2012 | 2011 | ||||||||||
Cross-currency swap and warrants gain (loss) recorded in other comprehensive income (loss), net of taxes | $ | (279 | ) | $ | 263 | $ | (437 | ) | |||||
Cross-currency swap | |||||||||||||
On September 30, 2010, the Company entered into a cross-currency swap agreement (the “replacement swap agreement”) with JPMorgan Chase Bank and Royal Bank of Scotland PLC (the “counterparties”) to manage its cash flows related to foreign currency exposure for a portion of the Company’s intercompany receivable of a U.S. dollar functional currency subsidiary that is denominated in Euro. | |||||||||||||
Under the terms of the swap agreement, the Company pays Euros based on a €28.7 million notional value and a fixed rate of 5.00% and receives U.S. dollars based on a notional value of $39 million and a fixed rate of 4.635%. The expiration date is December 30, 2016, the date upon which the underlying intercompany debt, to which the swap agreement applies, matures. The swap agreement is designated as a cash flow hedge and therefore the Company recognized an unrealized gain (loss) on the change in fair value, net of tax, within other comprehensive income (loss). | |||||||||||||
Warrants | |||||||||||||
In 2013, the Company purchased notes receivable from Bone Biologics, Inc. (“Bone Biologics”) totaling $250 thousand, all of which were issued with detachable warrants to purchase common stock of Bone Biologics. As of December 31, 2013 the Company held warrants for 125 thousand shares of Bone Biologics, at an exercise price of $1.00 per share. | |||||||||||||
Under the terms of the note and warrant purchase agreements, the warrants to purchase common stock in Bone Biologics are both detachable from the note, exercisable over a seven year period, and transferable by the holder to other parties. |
Fair_value_measurements
Fair value measurements | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Fair value measurements | 11 | Fair value measurements | |||||||||||||||
Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Non-financial assets and liabilities of the Company measured at fair value include any long-lived assets or equity method investments that are impaired in a currently reported period. The authoritative guidance also describes three levels of inputs that may be used to measure fair value: | |||||||||||||||||
Level 1 — | quoted prices in active markets for identical assets and liabilities | ||||||||||||||||
Level 2 — | observable inputs other than quoted prices in active markets for identical assets and liabilities | ||||||||||||||||
Level 3 — | unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions | ||||||||||||||||
The Company’s financial instruments include cash equivalents, restricted cash, certificates of deposit, treasury securities, collective trust funds, trade accounts receivable, accounts payable, long-term secured debt, deferred compensation plan liabilities and derivative securities. The carrying value of restricted cash, accounts receivable and accounts payable approximate fair value due to the short-term maturities of these instruments. The Company’s credit facilities carry a floating rate of interest, and therefore, the carrying value is considered to approximate the fair value. | |||||||||||||||||
The Company’s collective trust funds, treasury securities, certificates of deposit, deferred compensation plan liabilities and derivative securities are the only financial instruments recorded at fair value on a recurring basis. The fair value of treasury securities and certificates of deposit are determined based on quoted prices in active markets for identical assets, therefore, the Company has categorized these instruments as Level 1 financial instruments. The cross-currency derivative instrument consists of an over-the-counter contract, which is not traded on a public exchange. The fair value of this derivative swap contract, the common stock warrants, the Company’s collective trust funds and the Company’s deferred compensation plan liabilities are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets, therefore, the Company has categorized these instruments as Level 2 financial instruments. Changes in the fair value of collective trust funds and deferred compensation plan liabilities are recorded in Other income (expense). The Company also considers counterparty credit risk and its own credit risk in its determination of estimated fair values. The Company has consistently applied these valuation techniques in all periods presented. | |||||||||||||||||
The fair value of the Company’s financial assets and liabilities on a recurring basis were as follows: | |||||||||||||||||
(U.S. Dollars in thousands) | Balance | Level 1 | Level 2 | Level 3 | |||||||||||||
December 31, | |||||||||||||||||
2013 | |||||||||||||||||
(Restated1) | |||||||||||||||||
Assets | |||||||||||||||||
Collective trust funds | $ | 1,667 | $ | $ | 1,667 | $ | — | ||||||||||
Treasury securities | 660 | 660 | — | ||||||||||||||
Certificates of deposit | 1,562 | 1,562 | — | — | |||||||||||||
Derivative securities | 107 | — | 107 | — | |||||||||||||
Total | $ | 3,996 | $ | 2,222 | $ | 1,774 | $ | — | |||||||||
Liabilities | |||||||||||||||||
Deferred compensation plan | $ | (2,506 | ) | $ | — | $ | (2,506 | ) | $ | — | |||||||
Derivative securities | (1,036 | ) | — | (1,036 | ) | — | |||||||||||
Total | $ | (3,542 | ) | $ | — | $ | (3,542 | ) | $ | — | |||||||
(U.S. Dollars in thousands) | Balance | Level 1 | Level 2 | Level 3 | |||||||||||||
December 31, | |||||||||||||||||
2012 | |||||||||||||||||
(Restated1) | |||||||||||||||||
Assets | |||||||||||||||||
Collective trust funds | $ | 1,513 | $ | $ | 1,513 | $ | — | ||||||||||
Treasury securities | 624 | 624 | — | ||||||||||||||
Certificates of deposit | 288 | 288 | — | — | |||||||||||||
Derivative securities | 305 | — | 305 | — | |||||||||||||
Total | $ | 2,730 | $ | 912 | $ | 1,818 | $ | — | |||||||||
Liabilities | |||||||||||||||||
Deferred compensation plan | $ | (2,320 | ) | $ | — | $ | (2,320 | ) | $ | — | |||||||
Total | $ | (2,320 | ) | $ | — | $ | (2,320 | ) | $ | — | |||||||
1) | The Company has changed the presentation to breakout and provide more description of assets and to include financial instruments not previously included in the table above. |
Commitments
Commitments | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Commitments | 12 | Commitments | |||
Leases | |||||
The Company has entered into operating leases for facilities and equipment. These leases are non-cancellable and typically do not contain renewal options. Certain leases contain rent escalation clauses for which the Company recognizes the expense on a straight-line basis. Rent expense under the Company’s operating leases for the years ended December 31, 2013, 2012 and 2011 was approximately $3.4 million, $4.1 million and $4.8 million, respectively. Future minimum lease payments under operating leases, net of amounts to be received under sub-leases, as of December 31, 2013 are as follows: | |||||
(U.S. Dollars in thousands) | |||||
2014 | $ | 4,342 | |||
2015 | 4,107 | ||||
2016 | 3,713 | ||||
2017 | 2,974 | ||||
2018 | 2,846 | ||||
Thereafter | 3,049 | ||||
Total | $ | 21,031 | |||
Inventory purchase commitments | |||||
The Company has inventory purchase commitments with third-party manufacturers for $3.0 million, $1.4 million and $1.8 million as of December 31, 2013, 2012 and 2011, respectively. |
Business_segment_information
Business segment information | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||
Business segment information | 13 | Business segment information | |||||||||||||||||||||||
On July 1, 2013, we began certain organizational and executive leadership changes to align with how our Chief Executive Officer, who is also our Chief Operating Decision Maker (the “CODM”) reviews performance and makes decisions in managing the Company. We manage our business by our four strategic business units (“SBUs”), which are comprised of BioStim, Biologics, Extremity Fixation, and Spine Fixation supported by Corporate activities. These SBUs represent the segments for which our CODM reviews financial information and makes resource allocation decisions among business units. The primary metric used by the CODM in managing the Company is net margin, which is defined as gross profit less sales and marketing expense. The Company neither discretely allocates assets, other than goodwill, to its operating segments nor evaluates the operating segments using discrete asset information. Accordingly, our segment information has been prepared based on our four SBUs reporting segments. These four segments are discussed below. | |||||||||||||||||||||||||
BioStim | |||||||||||||||||||||||||
The BioStim SBU manufactures, distributes, and provides support services for market leading devices that enhance bone fusion. These Class III medical devices are indicated as an adjunctive, noninvasive treatment to improve fusion success rates in the cervical and lumbar spine as well as a therapeutic treatment for non-spine fractures that have not healed (non-unions). The devices utilize Orthofix’s patented pulsed electromagnetic field (“PEMF”) technology which is supported by strong basic mechanism of action data in the scientific literature as well as strong level one randomized controlled clinical trials in the medical literature. Current research and clinical studies are also underway to identify potential new clinical indications. | |||||||||||||||||||||||||
Biologics | |||||||||||||||||||||||||
The Biologics SBU provides a portfolio of regenerative products that allow physicians to successfully treat a variety of spinal and orthopedic conditions. This SBU specializes in the marketing of the Company’s regeneration tissue forms. Biologics markets its tissues through a network of distributors, sales, representatives and affiliates to supply to hospitals, doctors, and other healthcare providers, primarily in the U.S. Our partnership with MTF allows us to exclusively market our Trinity Evolution® and Trinity ELITE® tissue forms for musculoskeletal defects to enhance bony fusion. | |||||||||||||||||||||||||
Extremity Fixation | |||||||||||||||||||||||||
The Extremity Fixation SBU offers products that allow physicians to successfully treat a variety of orthopedic conditions unrelated to the spine. This SBU specializes in the design, development, and marketing of the Company’s orthopedic products used in fracture repair, deformity correction and bone reconstruction. Extremity Fixation distributes its products through a network of distributors, sales representatives, and affiliates. This SBU uses both distributors and direct sales representatives to sell orthopedics products to hospitals, doctors, and other health providers, globally. | |||||||||||||||||||||||||
Spine Fixation | |||||||||||||||||||||||||
The Spine Fixation SBU specializes in the design, development and marketing of a broad portfolio of implant products used in surgical procedures of the spine. Spine Fixation distributes its products through a network of distributors and affiliates. This SBU uses distributors and direct sales representatives to sell spine products to hospitals, doctors and other healthcare providers, globally. | |||||||||||||||||||||||||
Corporate | |||||||||||||||||||||||||
Corporate activities are comprised of the operating expenses, including share-based compensation of Orthofix International N.V. and its holding company subsidiaries, along with activities not necessarily identifiable within the four SBUs. | |||||||||||||||||||||||||
External Net Sales by SBU: | |||||||||||||||||||||||||
The table below presents external net sales for continuing operations by SBU reporting segment. Net sales include product sales and marketing service fees. | |||||||||||||||||||||||||
External Net Sales by SBU | |||||||||||||||||||||||||
Year ended December 31, | |||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||
Net Sales | Percent of | Net Sales | Percent of | Net Sales | Percent of | ||||||||||||||||||||
Total Net | Total Net | Total Net | |||||||||||||||||||||||
Sales | Sales | Sales | |||||||||||||||||||||||
(Restated) | (Restated) | (Restated) | |||||||||||||||||||||||
BioStim | $ | 145,085 | 36 | % | $ | 174,562 | 40 | % | $ | 181,736 | 42 | % | |||||||||||||
Biologics | 53,746 | 14 | % | 53,731 | 12 | % | 42,911 | 10 | % | ||||||||||||||||
Extremity Fixation | 103,359 | 26 | % | 112,011 | 25 | % | 119,504 | 27 | % | ||||||||||||||||
Spine Fixation | 95,421 | 24 | % | 99,885 | 23 | % | 91,368 | 21 | % | ||||||||||||||||
Total Net Sales | $ | 397,611 | 100 | % | $ | 440,189 | 100 | % | $ | 435,519 | 100 | % | |||||||||||||
The table below presents net margin, defined as gross profit less sales and marketing expenses from continuing operations by SBU reporting segment: | |||||||||||||||||||||||||
Net Margin by SBU | Year Ended December 31, | ||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||
(Restated) | (Restated) | (Restated) | |||||||||||||||||||||||
Net Margin | |||||||||||||||||||||||||
BioStim | $ | 63,847 | $ | 88,788 | $ | 92,860 | |||||||||||||||||||
Biologics | 24,794 | 23,589 | 18,978 | ||||||||||||||||||||||
Extremity Fixation | 23,704 | 34,554 | 30,773 | ||||||||||||||||||||||
Spine Fixation | 4,329 | 15,256 | 13,037 | ||||||||||||||||||||||
Corporate | (1,443 | ) | (1,495 | ) | (1,700 | ) | |||||||||||||||||||
Total net margin | $ | 115,231 | $ | 160,692 | $ | 153,948 | |||||||||||||||||||
General & administrative | 64,830 | 53,650 | 64,785 | ||||||||||||||||||||||
Research and development | 26,768 | 28,577 | 22,861 | ||||||||||||||||||||||
Amortization of intangible assets | 2,687 | 2,298 | 2,550 | ||||||||||||||||||||||
Costs related to the accounting review and restatement | 12,945 | — | — | ||||||||||||||||||||||
Impairment of goodwill | 19,193 | — | — | ||||||||||||||||||||||
Charges related to U.S. Government resolutions | — | 1,295 | 57,141 | ||||||||||||||||||||||
Operating (loss) income | $ | (11,192 | ) | $ | 74,872 | $ | 6,611 | ||||||||||||||||||
The following table presents depreciation and amortization for continuing operations by SBU reporting segment: | |||||||||||||||||||||||||
Depreciation and amortization by SBU | |||||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||
(Restated) | (Restated) | (Restated) | |||||||||||||||||||||||
BioStim | $ | 1,979 | $ | 1,659 | $ | 2,122 | |||||||||||||||||||
Biologics | 648 | 567 | 436 | ||||||||||||||||||||||
Extremity Fixation | 7,265 | 5,201 | 5,156 | ||||||||||||||||||||||
Spine Fixation | 12,834 | 10,800 | 9,258 | ||||||||||||||||||||||
Corporate | 96 | 70 | 53 | ||||||||||||||||||||||
Total | $ | 22,822 | $ | 18,297 | $ | 17,025 | |||||||||||||||||||
Geographical information | |||||||||||||||||||||||||
The following geographic data includes net sales by geographic destination: | |||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||
(Restated) | (Restated) | (Restated) | |||||||||||||||||||||||
U.S. | $ | 293,032 | $ | 327,228 | $ | 322,186 | |||||||||||||||||||
Italy | 16,755 | 18,742 | 17,447 | ||||||||||||||||||||||
U.K. | 10,002 | 8,431 | 8,206 | ||||||||||||||||||||||
Brazil | 26,786 | 31,166 | 34,424 | ||||||||||||||||||||||
Others | 51,036 | 54,622 | 53,256 | ||||||||||||||||||||||
Total net sales | $ | 397,611 | $ | 440,189 | $ | 435,519 | |||||||||||||||||||
Analysis of property, plant and equipment by geographic area: | |||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2013 | 2012 | |||||||||||||||||||||||
(Restated) | (Restated) | ||||||||||||||||||||||||
U.S. | $ | 39,287 | $ | 38,504 | |||||||||||||||||||||
Italy | 8,150 | 7,625 | |||||||||||||||||||||||
U.K. | 1,871 | 1,402 | |||||||||||||||||||||||
Brazil | 3,210 | 3,421 | |||||||||||||||||||||||
Others | 1,854 | 1,841 | |||||||||||||||||||||||
Total | $ | 54,372 | $ | 52,793 | |||||||||||||||||||||
Income_taxes
Income taxes | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||
Income taxes | 14 | Income taxes | |||||||||||||||||||||||
Income from continuing operations before provision for income taxes consisted of: | |||||||||||||||||||||||||
Year Ended | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
(US$ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||
(Restated) | (Restated) | (Restated) | |||||||||||||||||||||||
U.S. | $ | (3,546 | ) | $ | 56,210 | $ | 4,730 | ||||||||||||||||||
Non-U.S. | (7,057 | ) | 12,855 | (6,093 | ) | ||||||||||||||||||||
Total income before taxes | $ | (10,603 | ) | $ | 69,065 | $ | (1,363 | ) | |||||||||||||||||
The provision for (benefit from) income taxes on continuing operations in the accompanying consolidated statements of operations consists of the following: | |||||||||||||||||||||||||
Year Ended | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
(US$ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||
(Restated) | (Restated) | (Restated) | |||||||||||||||||||||||
U.S. | |||||||||||||||||||||||||
Current | $ | 2,465 | $ | 16,982 | $ | 26,273 | |||||||||||||||||||
Deferred | 4,013 | 2,675 | (13,241 | ) | |||||||||||||||||||||
Total U.S | 6,478 | 19,657 | 13,032 | ||||||||||||||||||||||
Non-U.S. | |||||||||||||||||||||||||
Current | 2,308 | 3,191 | 2,111 | ||||||||||||||||||||||
Deferred | (1,184 | ) | 1,096 | (700 | ) | ||||||||||||||||||||
1,124 | 4,287 | 1,411 | |||||||||||||||||||||||
Total tax expense | $ | 7,602 | $ | 23,944 | $ | 14,443 | |||||||||||||||||||
The tax effects of the significant temporary differences, which comprise the deferred tax assets and liabilities, are as follows: | |||||||||||||||||||||||||
(US$ in thousands) | 2013 | 2012 | |||||||||||||||||||||||
(Restated) | (Restated) | ||||||||||||||||||||||||
Intangible assets and goodwill | $ | 4,798 | $ | 5,338 | |||||||||||||||||||||
Inventories and related reserves | 20,769 | 19,626 | |||||||||||||||||||||||
Deferred revenue and cost of goods sold | 11,577 | 12,336 | |||||||||||||||||||||||
Other accruals and reserves | 4,778 | 6,149 | |||||||||||||||||||||||
Accrued compensation | 3,942 | 3,791 | |||||||||||||||||||||||
Allowance for doubtful accounts | 2,040 | 1,542 | |||||||||||||||||||||||
Accrued interest | 18,063 | 17,995 | |||||||||||||||||||||||
Net operating loss carryforwards | 34,979 | 27,231 | |||||||||||||||||||||||
Other, net | 893 | 590 | |||||||||||||||||||||||
101,839 | 94,598 | ||||||||||||||||||||||||
Valuation allowance | (31,772 | ) | (26,361 | ) | |||||||||||||||||||||
Deferred tax asset | $ | 70,067 | $ | 68,237 | |||||||||||||||||||||
Withholding taxes | (13,026 | ) | (11,351 | ) | |||||||||||||||||||||
Property, plant and equipment | (7,674 | ) | (8,226 | ) | |||||||||||||||||||||
Deferred tax liability | (20,700 | ) | (19,577 | ) | |||||||||||||||||||||
Net deferred tax assets | $ | 49,367 | $ | 48,660 | |||||||||||||||||||||
Reported as: | |||||||||||||||||||||||||
Current deferred tax assets | 39,999 | 38,487 | |||||||||||||||||||||||
Non-current deferred tax assets | 22,394 | 21,523 | |||||||||||||||||||||||
Current deferred tax liability | — | — | |||||||||||||||||||||||
Non-current deferred tax liability | (13,026 | ) | (11,350 | ) | |||||||||||||||||||||
Net deferred tax assets | $ | 49,367 | $ | 48,660 | |||||||||||||||||||||
The valuation allowance as of December 31, 2013 and 2012 was $31.8 million and $26.4 million, respectively. The net increase in the valuation allowance of $5.4 million during the year principally relates to certain current period foreign losses not benefitted. The valuation allowance is attributable to net operating loss carryforwards and certain temporary differences in certain foreign jurisdictions, the benefit for which is dependent upon the generation of future taxable income in those foreign jurisdictions. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not the Company will realize the benefits of these temporary differences, net of the existing valuation allowances at December 31, 2013. | |||||||||||||||||||||||||
The Company has state net operating loss carryforwards of approximately $24.5 million that will begin to expire in 2014. The Company has net operating losses of foreign taxing jurisdictions of approximately $120.4 million with the majority of the losses related to the Company’s Netherlands operations expiring in various amounts in tax years beginning in 2014. The Company has provided a valuation allowance against a significant portion of these net operating loss carryforwards since it does not believe that this deferred tax asset can be realized prior to expiration. | |||||||||||||||||||||||||
The rate reconciliation for continuing operations presented below is based on the U.S. federal income tax rate, rather than the parent company’s country of domicile tax rate. Management believes, given the large proportion of taxable income earned in the United States, such disclosure is more meaningful. | |||||||||||||||||||||||||
(US$ in thousands, except percentages) | 2013 | 2012 | 2011 | ||||||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||
(Restated) | (Restated) | (Restated) | (Restated) | (Restated) | (Restated) | ||||||||||||||||||||
Statutory U.S. federal income tax rate | $ | (3,711 | ) | 35 | % | $ | 24,179 | 35 | % | $ | (477 | ) | 35 | % | |||||||||||
State taxes, net | 2,039 | (19.2 | )% | 2,536 | 3.7 | % | 1,809 | (132.7 | )% | ||||||||||||||||
Foreign rate differential | (510 | ) | 4.8 | % | (2,894 | ) | (4.2 | )% | 1,549 | (113.6 | )% | ||||||||||||||
Valuation allowance—foreign losses | 3,913 | (36.9 | )% | 6,189 | 9 | % | 4,924 | 361.3 | % | ||||||||||||||||
Italian subsidiary intangible | (2,288 | ) | 21.6 | % | (2,214 | ) | (3.2 | )% | (2,421 | ) | 177.6 | % | |||||||||||||
Goodwill impairment | 6,452 | (60.9 | )% | — | — | — | — | ||||||||||||||||||
Domestic manufacturing deduction | (233 | ) | 2.2 | % | (1,567 | ) | (2.3 | )% | (1,703 | ) | 125 | % | |||||||||||||
Withholding taxes | 1,676 | (15.8 | )% | 1,679 | 2.4 | % | 1,676 | (123.0 | )% | ||||||||||||||||
Settlement of U.S. Government resolutions | — | — | (1,260 | ) | (1.8 | )% | 9,520 | (698.5 | )% | ||||||||||||||||
Other items, net | 264 | (2.5 | )% | (2,704 | ) | (3.9 | )% | (434 | ) | 31.9 | % | ||||||||||||||
Income tax expense/effective rate | $ | 7,602 | (71.7 | )% | $ | 23,944 | 34.7 | % | $ | 14,443 | (1,059.6 | )% | |||||||||||||
The income tax expense and effective tax rate for the year ended 2013 reflect a disproportionate ratio to the $23.9 million of income tax expense and effective tax rate of 34.7% for the tax year ended 2012. The principal factors affecting the Company’s effective tax rate were the company’s mix of earnings amongst various tax jurisdictions, state taxes, and the impairment of $18.4 million in non-deductible goodwill. For the years ended 2012 and 2011, the Company did not record a tax benefit on certain expenses associated with the Company’s estimate of the charges related to U.S. Government resolutions. | |||||||||||||||||||||||||
On January 2, 2013 the American Taxpayer Relief Act of 2012 (“ACT”) was enacted. The ACT provides tax relief for business by reinstating certain tax benefits and credits retroactively to January 1, 2012. There are several provisions of the Act that impact the Company, most notably the extension of the Research and Development credit. Income tax accounting rules require tax law changes to be recognized in the period of the enactment; as such the Company recognized a tax benefit of $0.3 million in its provision for income taxes in the first quarter of 2013. | |||||||||||||||||||||||||
The Company’s unrecognized tax benefit was $0.7 million and $1.2 million for the years ended December 31, 2013 and 2012, respectively. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits within its global operations in income tax expense. The Company had approximately $0.5 million and $0.8 million accrued for payment of interest and penalties as of December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||
The entire amount of unrecognized tax benefits, including interest, would favorably impact the Company’s effective tax rate if recognized. As of December 31, 2013, the Company does not expect the amount of unrecognized tax benefits to change significantly over the next twelve months. | |||||||||||||||||||||||||
A reconciliation of the gross unrecognized tax benefits (excluding interest and penalties) for the years ended December 31, 2013 and December 31, 2012 follows: | |||||||||||||||||||||||||
(US$ in thousands) | 2013 | 2012 | |||||||||||||||||||||||
(Restated) | (Restated) | ||||||||||||||||||||||||
Balance as of January 1, | $ | 1,189 | $ | 610 | |||||||||||||||||||||
Additions for current year tax positions | 183 | 793 | |||||||||||||||||||||||
Decreases for prior year tax positions | (12 | ) | (106 | ) | |||||||||||||||||||||
Settlements of prior year tax positions | (560 | ) | — | ||||||||||||||||||||||
Expiration of statutes | (77 | ) | (108 | ) | |||||||||||||||||||||
Balance as of December 31, | $ | 723 | $ | 1,189 | |||||||||||||||||||||
The Company files a consolidated income tax return in the U.S. federal jurisdiction, the U.K., Italy and numerous consolidated and separate income tax returns in many state and other foreign jurisdictions. The statute of limitations with respect to federal tax authorities is closed for years prior to December 31, 2011. The statute of limitations for the various state tax filings is closed in most instances for the years prior to December 31, 2010. The statute of limitations with respect to the major foreign tax filing jurisdictions is closed for years prior to December 31, 2009. | |||||||||||||||||||||||||
The Company’s intention is to reinvest the total amount of its unremitted foreign earnings (residing outside Curaçao) in the local jurisdiction, to the extent they are generated and available, or to repatriate the earnings only when tax-effective. As an entity incorporated in Curaçao, “foreign subsidiaries” refer to both U.S. and non-U.S. subsidiaries. Furthermore, only income sourced in the U.S. is subject to U.S. income tax. Unremitted foreign earnings increased from $272.6 million at December 31, 2012 to $329.7 million at December 31, 2013. The $329.7 million includes $341.3 million in U.S subsidiaries. It is not practicable to determine the amounts of net additional income tax that may be payable if such earnings were repatriated. The Company does not anticipate any impact on income tax liabilities since earnings are indefinitely reinvested for both U.S and non-U.S. subsidiaries. | |||||||||||||||||||||||||
Total cash and cash equivalents at December 31, 2013 were $52.7 million; of which $23.8 million is restricted under the senior secured credit agreement for use in the U.S. and is therefore classified as restricted cash on the balance sheet. The Company’s U.S. business generates sufficient cash flow and has borrowing capacity in the United States to fund its U.S. operations. Cash and cash equivalents of $30.2 million at December 31, 2013 held by non-U.S. subsidiaries is indefinitely reinvested for use in non-U.S. operations. | |||||||||||||||||||||||||
Related_parties
Related parties | 12 Months Ended | |
Dec. 31, 2013 | ||
Related Party Transactions [Abstract] | ||
Related parties | 15 | Related parties |
In 2011, we sold $0.5 million in products to OrthoPro, Inc. and Superior Medical Equipment, who were independent distributors for Breg, Inc., and were owned by the son of a former board member. |
Sale_of_Breg_and_Disposition_o
Sale of Breg and Disposition of Sports Medicine SBU | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Discontinued Operations and Disposal Groups [Abstract] | |||||
Sale of Breg and Disposition of Sports Medicine SBU | 16 | Sale of Breg and Disposition of Sports Medicine SBU | |||
On April 23, 2012, the Company’s subsidiary Orthofix Holdings and Breg entered into a stock purchase agreement (the “SPA”) with Breg Acquisition Corp. (“Buyer”), a newly formed affiliate of Water Street Healthcare Partners II, L.P., pursuant to which Buyer agreed to acquire from Orthofix Holdings all the outstanding shares of Breg, subject to the terms and conditions contained therein (the “Transaction”). Under the terms of the SPA, upon closing of the sale, Orthofix Holdings and the Company agreed to indemnify Buyer with respect to certain specified matters, including the government investigation and product liability matters regarding a previously owned infusion pump product line, and pre-closing sales of cold therapy units and certain post-closing sales of cold therapy units. (See “Matters Related to the Company’s former Breg Subsidiary and Possible Indemnification Obligations under Note 17.) On May 24, 2012 (the “Closing Date”), Orthofix Holdings completed the sale of all of the outstanding shares of Breg for $157.5 million in cash. After adjustments for working capital and indebtedness in accordance with the terms of the SPA, Orthofix Holdings used $145 million of the net proceeds to prepay outstanding Company indebtedness, as required by a lender consent received in connection with the Company’s existing Credit Agreement. As a result of the closing of this Transaction, Breg ceased to be a subsidiary of the Company and, therefore, Breg was released as a credit party under the Credit Agreement. The Company also agreed to enter into certain transition arrangements at the closing, including a transition services agreement pursuant to which the Company agreed to continue to provide administrative operational support for a period of up to twelve months. As a result of the sale of Breg, the Company completed its exit from the Sports Medicine SBU, of which Breg was a significant component. | |||||
The portion of indemnification related to post closing claims related to post-closing sales of cold therapy has created a guarantee under ASC 460—Guarantees and the fair value of the liability has been recorded under the initial recognition criteria in the amount of $2 million at the Closing Date of the transaction. The Company amortizes the fair value of the noncontingent liability ratably over the period of indemnification which is three years. The Company’s obligations under this guarantee were approximately $0.9 million and $1.6 million as of December 31, 2013 and December 31, 2012, respectively. | |||||
Gain on Sale of Discontinued Operations | |||||
The following table presents the value of the asset disposition, proceeds received, net of various working capital adjustments and indebtedness and net gain on sale of Breg as shown in the condensed consolidated statement of operations for the year ended December 31, 2012. | |||||
(U.S. Dollars in thousands) | Total | ||||
Cash proceeds | $ | 157,500 | |||
Less: | |||||
Working Capital | (7,093 | ) | |||
Transaction related expenses | (4,276 | ) | |||
Fair value of indemnification | (2,000 | ) | |||
Tangible assets | (8,309 | ) | |||
Intangible assets | (28,164 | ) | |||
Goodwill | (106,200 | ) | |||
Gain on sale of Breg | 1,458 | ||||
Income tax expense | (113 | ) | |||
Gain on sale of Breg, net of taxes | $ | 1,345 | |||
The Sports Medicine SBU contributed $44 million and $108.9 million of net sales in the years ended December 31, 2012 and 2011, respectively. The Sports Medicine SBU had $2.9 million of operating losses and $1.2 million of operating income in the years ended December 31, 2012 and 2011, respectively. The financial information above includes the financial results of Breg operations up to the date of sale. | |||||
The Company’s consolidated financial statements and related footnote disclosures reflect the Sports Medicine SBU as discontinued operations. Income (loss) associated with the Sports Medicine SBU, net of applicable income taxes is shown as income (loss) from discontinued operations for all periods presented. |
Contingencies
Contingencies | 12 Months Ended | |
Dec. 31, 2013 | ||
Commitments and Contingencies Disclosure [Abstract] | ||
Contingencies | 17 | Contingencies |
The Company is party to outstanding legal proceedings, investigations and claims as described below. The Company believes that it is unlikely that the outcome of each of these matters, including the matters discussed below, will have a material adverse effect on it and its subsidiaries as a whole, notwithstanding that the unfavorable resolution of any matter may have a material effect on the Company’s net earnings (if any) in any particular quarter. However, the Company cannot predict with any certainty the final outcome of any legal proceedings, investigations (including any settlement discussions with the government seeking to resolve such investigations) or claims made against it as described in the paragraphs below, and there can be no assurance that the ultimate resolution of any such matter will not have a material adverse impact on the Company’s consolidated financial position, results of operations, or cash flows. | ||
The Company records accruals for certain outstanding legal proceedings, investigations or claims when it is probable that a liability will be incurred and the amount of the loss can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal proceedings, investigations and claims that could affect the amount of any accrual, as well as any developments that would make a loss contingency both probable and reasonably estimable. When a loss contingency is not both probable and reasonably estimable, the Company does not accrue the loss. However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then the Company discloses a reasonable estimate of the possible loss or range of loss, if such reasonable estimate can be made. If the Company cannot make a reasonable estimate of the possible loss, or range of loss, then that is disclosed. | ||
The assessments of whether a loss is probable or a reasonable possibility, and whether the loss or range of loss is reasonably estimable, often involve a series of complex judgments about future events. Among the factors that the Company considers in this assessment are the nature of existing legal proceedings, investigations and claims, the asserted or possible damages or loss contingency (if reasonably estimable), the progress of the matter, existing law and precedent, the opinions or views of legal counsel and other advisers, the involvement of the U.S. Government and its agencies in such proceedings, the Company’s experience in similar matters and the experience of other companies, the facts available to the Company at the time of assessment, and how the Company intends to respond, or has responded, to the proceeding, investigation or claim. The Company’s assessment of these factors may change over time as individual proceedings, investigations or claims progress. For matters where the Company is not currently able to reasonably estimate the range of reasonably possible loss, the factors that have contributed to this determination include the following: (i) the damages sought are indeterminate, or an investigation has not manifested itself in a filed civil or criminal complaint, (ii) the matters are in the early stages, (iii) the matters involve novel or unsettled legal theories or a large or uncertain number of actual or potential cases or parties, and/or (iv) discussions with the government or other parties in matters that may be expected ultimately to be resolved through negotiation and settlement have not reached the point where the Company believes a reasonable estimate of loss, or range of loss, can be made. In such instances, the Company believes that there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss, fine, penalty or business impact, if any. | ||
In addition, the Company does not accrue for estimated legal fees and other directly related costs as they are expensed as incurred. | ||
In addition to the matters described in the paragraphs below, in the normal course of its business, the Company is involved in various lawsuits from time to time and may be subject to certain other contingencies. To the extent losses related to these contingencies are both probable and reasonably estimable, the Company accrues appropriate amounts in the accompanying financial statements and provides disclosures as to the possible range of loss in excess of the amount accrued, if such range is reasonably estimable. The Company believes losses are individually and collectively immaterial as to a possible loss and range of loss. | ||
Matters Related to the Audit Committee’s Review and the Restatement of Certain of our Consolidated Financial Statements. | ||
Audit Committee Review | ||
In July 2013, our Audit Committee began conducting an independent review, with the assistance of outside professionals, of certain accounting matters. This review resulted in the decision to restate certain of our previously filed consolidated financial statements, as reflected in the Original Restatement. As a result of this review and the Original Restatement, the filing of our Quarterly Reports on Form 10-Q for the quarterly periods ended June 30, 2013 and September 30, 2013, and the Original Form 10-K, was not timely. We filed our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013 on March 24, 2014, and filed our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 on March 25, 2014. We filed the Original Form 10-K on March 31, 2014. As further described in the explanatory note to this Form 10-K/A, this report also reflects a further restatement of our consolidated financial statements, which we refer to herein as the “Further Restatement.” | ||
SEC Investigation | ||
In connection with the initiation of the Audit Committee’s independent review, we initiated contact with the staff of the Division of Enforcement of the SEC (the “SEC Enforcement Staff”) in July 2013 to advise them of these matters. The Audit Committee and the Company, through respective counsel, have been in direct communication with the SEC Enforcement Staff regarding these matters. The SEC is conducting a formal investigation of these matters, and both the Company and the Audit Committee are cooperating fully with the SEC. | ||
In connection with the above-referenced communications, the Company has received requests from the SEC for documents and other information concerning various accounting practices, internal controls and business practices, and other related matters. Such requests cover the years ended December 31, 2011 and 2012, and in some instances, prior periods. It is anticipated that we may receive additional requests from the SEC in the future, including with respect to the Further Restatement. | ||
We have previously provided notice concerning our communications with the SEC to the Office of Inspector General of the U.S. Department of Health and Human Services (“HHS-OIG”) pursuant to our corporate integrity agreement with HHS-OIG (which agreement is described below in this Item 3). | ||
We cannot predict if, when or how this matter will be resolved or what, if any, actions we may be required to take as part of any resolution of these matters. Any action by the SEC, HHS-OIG or other governmental agency could result in civil or criminal sanctions against us and/or certain of our current and former officers, directors and employees. At this stage in the matter, we cannot reasonably estimate the possible loss, or range of loss, in connection with it. | ||
Securities Class Action Complaint | ||
On August 14, 2013, a securities class action complaint against the Company, currently styled Tejinder Singh v. Orthofix International N.V., et al. (No.:1:13-cv-05696-JGK), was filed in the United States District Court for the Southern District of New York arising out of the then anticipated restatement of our prior financial statements and the matters described above. Since the date or original filing, the complaint has been amended. | ||
The lead plaintiff’s complaint, as amended, purports to bring claims on behalf of persons who purchased the Company’s common stock between March 2, 2010 and July 29, 2013. The complaint asserts that the Company and four of its former executive officers, Alan W. Milinazzo, Robert S. Vaters, Brian McCollum, and Emily V. Buxton (collectively, the “Individual Defendants”), violated Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Securities and Exchange Commission Rule 10b-5 (“Rule 10b-5”) by making false or misleading statements in or relating to the Company’s financial statements. The complaint further asserts that the Individual Defendants were liable as control persons under Section 20(a) of the Exchange Act for any violation by the Company of Section 10(b) of the Exchange Act or Rule 10b-5. As relief, the complaint requests compensatory damages on behalf of the proposed class and lead plaintiff’s attorneys’ fees and costs. On March 6, 2015, the court granted the defendants’ motion to dismiss as to Mr. Milinazzo and denied it with respect to the Company and the other Individual Defendants. This matter remains at an early stage and, as of the date of this Form 10-K/A, we cannot reasonably estimate the possible loss, or range of loss, in connection with it. | ||
Matters Related to Promeca | ||
On July 10, 2012, the Company entered into definitive agreements with the DOJ and the SEC agreeing to settle its self-initiated and self-reported internal investigation of our Mexican subsidiary, Promeca S.A. de C.V. (“Promeca”), regarding non-compliance by Promeca with the Foreign Corrupt Practices Act (the “FCPA”). Under the terms of these agreements, the Company voluntarily disgorged profits to the United States government in an amount of $5.2 million, inclusive of pre-judgment interest, and agreed to pay a fine of $2.2 million. The Company paid $2.2 million in July 2012 and $5.2 million in September 2012. As part of the settlement, the Company entered into a three-year deferred prosecution agreement (“DPA”) with the DOJ and a consent to final judgment (the “Consent”) with the SEC. | ||
The DOJ has agreed not to pursue any criminal charges against the Company in connection with this matter if the Company complied with the terms of the DPA. The DPA takes note of the Company’s self-reporting of this matter to DOJ and the SEC, and of remedial measures, including the implementation of an enhanced compliance program, previously undertaken by the Company. The DPA and the Consent collectively require, among other things, that with respect to anti-bribery compliance matters the Company shall continue to cooperate fully with the government in any future matters related to corrupt payments, false books and records or inadequate internal controls. In that regard, the Company has represented that it has implemented and will continue to implement a compliance and ethics program designed to prevent and detect violations of the FCPA and other applicable anti-corruption laws. The Company will periodically report to the government during the term of the DPA regarding such remediation and implementation of compliance measures. As part of the settlement, the Company also agreed pursuant to the Consent to certain reporting obligations to the SEC regarding the status of the Company’s remediation and implementation of compliance measures. In the event that the Company fails to comply with these obligations, it could be subject to criminal prosecution by the DOJ for the FCPA-related matters we self-reported. | ||
Review of Potential Improper Payments Involving Brazil Subsidiary | ||
In August 2013, the Company’s internal legal department was notified of certain allegations involving potential improper payments with respect to its Brazilian subsidiary, Orthofix do Brasil. The Company engaged outside counsel to assist in the review of these matters, focusing on compliance with applicable anti-bribery laws, including the FCPA. This review remains ongoing. The FCPA and related provisions of law provide for potential criminal and civil sanctions in connection with anti-bribery violations, including criminal fines, civil penalties, disgorgement of past profits and other kinds of remedies. The Company currently cannot reasonably estimate a possible loss, or range of loss, in connection with this review. | ||
Consistent with the provisions of the DPA and the Consent described above, the Company contacted the DOJ and the SEC in August 2013 to voluntarily self-report the Brazil-related allegations, and the Company and its counsel remain in contact with both agencies regarding the status of the review. In the event that the DOJ and the SEC find that the matters related to the Company’s Brazilian subsidiary could give rise to a review of the Company’s obligations under the terms of the DPA and/or the Consent, the Company currently cannot reasonably estimate a possible loss, or range of loss, in connection with that review, including any effects it may have with respect to the DPA and the Consent. | ||
Corporate Integrity Agreement with HHS-OIG | ||
As previously disclosed, on June 6, 2012, the Company entered into a definitive settlement agreement with the United States of America, acting through the DOJ and on behalf of HHS-OIG; the TRICARE Management Activity, through its General Counsel; the Office of Personnel Management, in its capacity as administrator of the Federal Employees Health Benefits Program; the United States Department of Veteran Affairs; and the qui tam relator, pursuant to which the Company agreed to pay $34.2 million (plus interest at a rate of 3% from May 5, 2011 through the day before payment was made) to settle criminal and civil matters related to the promotion and marketing of the Company’s regenerative stimulator devices (which the Company has also described in the past as its “bone growth stimulator devices”). In connection with such settlement agreement, Orthofix Inc., the Company’s wholly owned subsidiary, also pled guilty to one felony count of obstruction of a June 2008 federal audit (§18 U.S.C. 1516) and paid a criminal fine of $7.8 million and a mandatory special assessment of $400. Also as previously disclosed, on October 29, 2012, the Company, through Blackstone, entered into a definitive settlement agreement with the U.S. government and the qui tam relator, pursuant to which the Company paid $32 million to settle claims (covering a period prior to Blackstone’s acquisition by the Company) concerning the compensation of physician consultants and related matters. All of the $32 million we paid pursuant to such settlement was funded by proceeds the Company received from an escrow fund established in connection with its acquisition of Blackstone in 2006. | ||
On June 6, 2012, in connection with these settlements, the Company also entered into a five-year corporate integrity agreement with HHS-OIG (the “CIA”). The CIA acknowledges the existence of the Company’s current compliance program and requires that the Company continues to maintain during the term of the CIA a compliance program designed to promote compliance with federal healthcare and FDA requirements. The Company also is required to maintain several elements of its previously existing program during the term of the CIA, including maintaining a Chief Compliance Officer, a Compliance Committee, and a Code of Conduct. The CIA requires that we conduct certain additional compliance-related activities during the term of the CIA, including various training and monitoring procedures, and maintaining a disciplinary process for compliance obligations. | ||
Pursuant to the CIA, the Company is required to notify the HHS-OIG in writing, among other things, of: (i) any ongoing government investigation or legal proceeding involving an allegation that the Company has committed a crime or has engaged in fraudulent activities; (ii) any other matter that a reasonable person would consider a probable violation of applicable criminal, civil, or administrative laws related to compliance with federal healthcare programs or FDA requirements; and (iii) any change in location, sale, closing, purchase, or establishment of a new business unit or location related to items or services that may be reimbursed by federal healthcare programs. The Company is also subject to periodic reporting and certification requirements attesting that the provisions of the CIA are being implemented and followed, as well as certain document and record retention mandates. The CIA provides that in the event of an uncured material breach of the CIA, the Company could be excluded from participation in federal healthcare programs and/or subject to monetary penalties. | ||
Matters Related to the Company’s Former Breg Subsidiary and Possible Indemnification Obligations | ||
On May 24, 2012, the Company sold Breg to an affiliate of Water Street Healthcare Partners II, L.P. (“Water Street”) pursuant to a stock purchase agreement (the “Breg SPA”). Under the terms of the Breg SPA, upon closing of the sale, the Company and its subsidiary, Orthofix Holdings, Inc., agreed to indemnify Water Street and Breg with respect to certain specified matters, including (i) the government investigation and product liability matters regarding the previously owned infusion pump product line described below, and (ii) pre-closing sales of cold therapy units and certain post-closing sales of cold therapy units. The Company has established an accrual of $4.2 million for its indemnification obligations in connection with the July 2012 verdict described in the third paragraph below; however, actual liability in this case could be higher or lower than the amount accrued. The Company has not established any accrual in connection with its other indemnification obligations under the Breg SPA, and currently cannot reasonably estimate the possible loss, or range of loss, in connection with certain of such obligations (including with respect to the matters described in the three paragraphs below). | ||
Breg was engaged in the manufacturing and sale of local infusion pumps for pain management from 1999 to 2008. Since 2008, numerous product liability cases have been filed in the United States alleging that the local anesthetic, when dispensed by such infusion pumps inside a joint, causes a rare arthritic condition called “chondrolysis.” The Company incurred losses for settlements and judgments in connection with these matters during 2011, 2012 and 2013 for $1.8 million, $6.8 million and $6.7 million, respectively. The Company has also accrued $2.1 million for judgements and settlements in connection with these matters that were not covered by insurance. Since December 31, 2013, the Company has accrued an additional $3.8 million and paid $4.6 million in connection with these matters that were not covered by insurance. In addition, several cases remain outstanding for which the Company currently cannot reasonably estimate the possible loss, or range of loss. | ||
On or about August 2, 2010, Breg received a HIPAA subpoena issued by the DOJ. The subpoena seeks documents from the Company and its subsidiaries for the period of January 1, 2000 through the date of the subpoena. The Company believes that document production in response to the subpoena was completed as of July 2012. It believes that this subpoena relates to an investigation by the DOJ into whether Breg’s sale, marketing and labeling of local infusion pumps for pain management, prior to Breg’s divestiture of this product line in 2008, complied with FDA regulations and federal law. The Company is currently cooperating with the U.S. government in connection with this matter. | ||
At the time of its divestiture by the Company, Breg was currently and had been engaged in the manufacturing and sales of motorized cold therapy units used to reduce pain and swelling. Several domestic product liability cases have been filed in recent years, mostly in California state court, alleging that the use of cold therapy causes skin and/or nerve injury and seeking damages on behalf of individual plaintiffs who were allegedly injured by such units. The majority of these cases are at an early stage and no conclusion can be drawn at the present time regarding their potential outcome. However, the Company believes that meritorious defenses exist to these claims. In July 2012, a jury in one case related to a motorized cold therapy unit previously sold by Breg returned a verdict providing for approximately $2.1 million in compensatory damages to the plaintiff against Breg and $7 million in exemplary damages. The case remains subject to appeal. The Company believes that the damages are without merit; however, the ultimate outcome is uncertain. The Company previously established an accrual and related charge to discontinued operations of $4.2 million for both compensatory damages and exemplary damages for its indemnification obligations in connection with this July 2012 verdict; however, actual liability in this case could be higher or lower than the amount accrued. |
Pensions_and_deferred_compensa
Pensions and deferred compensation | 12 Months Ended | |
Dec. 31, 2013 | ||
Compensation and Retirement Disclosure [Abstract] | ||
Pensions and deferred compensation | 18 | Pensions and deferred compensation |
Orthofix Inc. sponsors a defined contribution plan (the “Orthofix Inc. 401(k) Plan”) covering substantially all full time US employees. The Orthofix Inc. 401(k) Plan allows for participants to contribute up to 15% of their pre-tax compensation, subject to certain limitations, with the Company matching 100% of the first 2% of the employee’s base compensation and 50% of the next 4% of the employee’s base compensation if contributed to the Orthofix Inc. 401(k) Plan. During the years ended December 31, 2013, 2012 and 2011, expenses incurred relating to 401(k) Plans, including matching contributions, were approximately $2.4 million, $2.5 million and $2.5 million, respectively. | ||
The Company operates defined contribution pension plans for its other International employees not described above meeting minimum service requirements. The Company’s expenses for such pension contributions during 2013, 2012 and 2011 were $0.7 million, $0.7 million and $0.8 million, respectively. | ||
Under Italian Law, Orthofix S.r.l. accrues, on behalf of its employees, deferred compensation, which is paid on termination of employment. Each year’s provision for deferred compensation is based on a percentage of the employee’s current annual remuneration plus an annual charge. Deferred compensation is also accrued for the leaving indemnity payable to agents in case of dismissal which is regulated by a national contract and is equal to approximately 3.5% of total commissions earned from the Company. | ||
The Orthofix Deferred Compensation Plan (the “Plan”), administered by the Board of Directors of the Company, effective January 1, 2007, and as amended and restated effective January 1, 2009, is a plan intended to allow a select group of key management and highly compensated employees of the Company to defer the receipt of compensation that would otherwise be payable to them. The terms of this plan are intended to comply in all respects with the provisions of Code Section 409A and Code Section 457A. As of January 1, 2011 the Company disallowed further contributions into the plan and any new plan participants. Distributions are made in accordance with the requirements of Code Section 409A. | ||
The Company’s expense for deferred compensation during 2013, 2012 and 2011 was approximately $0.3 million, $0.4 million and $0.1 million, respectively. Deferred compensation payments of $0.1 million and $0.8 million were made in 2013 and 2012, respectively, and no deferred compensation payments were made in 2011. The balance as of December 31, 2013 and 2012 was $2.5 and $2.3 million that represents the amount which would be payable if all the employees and agents had terminated employment at that date and is included in other long-term liabilities. |
Sharebased_compensation_plans
Share-based compensation plans | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||
Share-based compensation plans | 19 | Share-based compensation plans | |||||||||||||||||||
At December 31, 2013, the Company had stock option and award plans, and an employee stock purchase plan which are described below. | |||||||||||||||||||||
2012 Long Term Incentive Plan | |||||||||||||||||||||
The Board of Directors adopted the Orthofix International N.V. 2012 Long-Term Incentive Plan (the “2012 LTIP”) on April 13, 2012, subject to shareholder approval which was subsequently provided by shareholder ratification. The 2012 LTIP provides for the grant of options to purchase shares of the Company’s common stock, stock awards (including restricted stock, unrestricted stock, and stock units), stock appreciation rights, performance-based awards and other equity-based awards. All of the Company’s employees and the employees of the Company’s subsidiaries and affiliates are eligible, and may receive awards under the 2012 LTIP. In addition, the Company’s non-employee directors and consultants and advisors who perform services for the Company and the Company’s subsidiaries and affiliates may receive awards under the 2012 LTIP. Incentive share options, however, are only available to the Company’s employees. The Company reserves a total of 1,600,000 shares of common stock for issuance pursuant to the 2012 LTIP, subject to certain adjustments set forth in the 2012 LTIP. At December 31, 2013, there were 515,917 options outstanding under the 2012 LTIP Plan, of which 22,668 were exercisable; in addition, there were 279,039 shares of restricted stock outstanding, none of which were vested. | |||||||||||||||||||||
2004 Long Term Incentive Plan | |||||||||||||||||||||
The 2004 Long Term Incentive Plan (the “2004 LTIP Plan”) reserves 3.1 million shares for issuance (in addition to shares (i) available for future awards as of June 29, 2004 under prior plans or (ii) that become available for future issuance upon the expiration or forfeiture after June 29, 2004 of awards upon prior plans). Awards generally vest on years of service with all awards fully vesting within three years from the date of grant for employees and either three or five years from the date of grant for non-employee directors. Awards can be in the form of a stock option, restricted stock, restricted share unit, performance share unit, or other award form determined by the Board of Directors. Awards granted under the 2004 LTIP Plan expire no later than ten years after the date of the grant. The 2004 LTIP Plan provides an annual grant to non-employee directors of 5,000 shares and limits the future the number of shares that may be awarded under the plan as full value awards to 100,000 shares. At December 31, 2013, there were 1,243,262 options outstanding under the 2004 LTIP Plan, of which 1,179,601 were exercisable; in addition, there were 7,665 shares of restricted stock outstanding, none of which were vested. | |||||||||||||||||||||
Staff Share Option Plan | |||||||||||||||||||||
The Staff Share Stock Option Plan (the “Staff Share Plan”) is a fixed stock option plan which was adopted in April 1992. Under the Staff Share Plan, the Company granted options to its employees at the estimated fair market value of such options at the date of grant. Options generally vest based on years of service with all options to be fully vested within five years from date of grant. Options granted under the Staff Share Plan expire ten years after the date of grant. There are no options left to be granted under the Staff Plan. At December 31, 2013, there were 15,000 options outstanding and exercisable under the Staff Share Plan. | |||||||||||||||||||||
Stock Purchase Plan | |||||||||||||||||||||
The Orthofix International N.V. Amended and Restated Stock Purchase Plan (the “Stock Purchase Plan”) provides for the issuance of shares of the Company’s common stock to eligible employees and directors of the Company and its subsidiaries that elect to participate in the plan and acquire shares of common stock through payroll deductions (including executive officers). | |||||||||||||||||||||
During each purchase period, eligible employees may designate between 1% and 25% of their compensation to be deducted for the purchase of common stock under the plan (up to 25% for employees working in North America, South America and Asia, and up to 15% for employees working in Europe). For eligible directors, the designated percentage will be an amount equal to his or her annual or other director compensation paid in cash for the current plan year. The purchase price of the shares under the plan is equal to 85% of the fair market value on the first day of the plan year (which is a calendar year, running from January 1 to December 31) or, if lower, on the last day of the plan year. | |||||||||||||||||||||
Due to the compensatory nature of such plan, the Company has recorded the related share based compensation in the consolidated statement of operations. The aggregate number of shares reserved for issuance under the Employee Stock Purchase Plan is 1,850,000 shares. As of December 31, 2013, 1,437,519 shares had been issued under the Stock Purchase Plan. | |||||||||||||||||||||
Share-Based Compensation: | |||||||||||||||||||||
As of December 31, 2013, the unamortized compensation expense relating to options granted and expected to be recognized was $2.8 million. This amount is expected to be recognized through January 2018. The following table shows the detail of share-based compensation by line item in the consolidated statements of operations for the years ended December 31, 2013, 2012 and 2011 and the assumptions for each of these years in which grants were awarded: | |||||||||||||||||||||
(U.S. Dollars in thousands, except assumptions) | Year Ended | Year Ended | Year Ended | ||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||
Cost of sales | $ | 104 | $ | 592 | $ | 153 | |||||||||||||||
Sales and marketing | 1,444 | 1,550 | 2,031 | ||||||||||||||||||
General and administrative | 4,483 | 4,023 | 4,322 | ||||||||||||||||||
Research and development | 236 | 138 | 142 | ||||||||||||||||||
Total | $ | 6,267 | $ | 6,303 | $ | 6,648 | |||||||||||||||
Assumptions: | |||||||||||||||||||||
Expected term | 5.00 years | 4.50 years | 4.58 years | ||||||||||||||||||
Expected volatility | 32.1% – 50.8 | % | 50.9% – 51.8 | % | 49.6% – 49.9 | % | |||||||||||||||
Risk free interest rate | 0.58% – 1.52 | % | 0.76% – 0.84 | % | .90% – 2.26 | % | |||||||||||||||
Dividend rate | — | — | — | ||||||||||||||||||
Weighted average fair value of options granted during the year | $ | 10.83 | $ | 16.99 | $ | 14.21 | |||||||||||||||
Stock Option Activity: | |||||||||||||||||||||
Summaries of the status of the Company’s stock option plans as of December 31, 2013 and 2012 and changes during the year ended December 31, 2013 are presented below: | |||||||||||||||||||||
Options | Weighted Average | Weighted | |||||||||||||||||||
Exercise Price | Average | ||||||||||||||||||||
Remaining | |||||||||||||||||||||
Contractual | |||||||||||||||||||||
Term | |||||||||||||||||||||
Outstanding at December 31, 2012 | 1,945,955 | $ | 34.5 | ||||||||||||||||||
Granted | 466,250 | $ | 28.51 | ||||||||||||||||||
Exercised | (79,949 | ) | $ | 23.25 | |||||||||||||||||
Forfeited | (408,077 | ) | $ | 36.33 | |||||||||||||||||
Outstanding at December 31, 2013 | 1,924,179 | $ | 33.12 | 4.41 | |||||||||||||||||
Vested and expected to vest at December 31, 2013 | 1,839,383 | $ | 33.5 | 4.17 | |||||||||||||||||
Options exercisable at December 31, 2013 | 1,367,269 | $ | 34.35 | 2.89 | |||||||||||||||||
Outstanding and exercisable by price range as of December 31, 2013 | |||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||
Range of Exercise Prices | Number | Weighted | Weighted | Number | Weighted | ||||||||||||||||
Outstanding | Average | Average | Exercisable | Average | |||||||||||||||||
Remaining | Exercise | Exercise | |||||||||||||||||||
Contractual | Price | Price | |||||||||||||||||||
Life | |||||||||||||||||||||
$10.42 – $21.78 | 232,250 | 9.31 | $ | 20.79 | 16,000 | $ | 13.31 | ||||||||||||||
$22.75 – $25.05 | 326,166 | 4.1 | $ | 24.73 | 306,166 | $ | 24.84 | ||||||||||||||
$26.79 – $28.95 | 230,000 | 4.79 | $ | 28.45 | 170,000 | $ | 28.65 | ||||||||||||||
$29.23 – $37.36 | 225,168 | 5.1 | $ | 33.14 | 169,839 | $ | 32.41 | ||||||||||||||
$37.76 – $38.11 | 230,975 | 1.69 | $ | 37.99 | 230,975 | $ | 37.99 | ||||||||||||||
$38.40 – $40.27 | 351,354 | 3.17 | $ | 39.76 | 174,355 | $ | 39.77 | ||||||||||||||
$41.33 – $43.04 | 178,633 | 2.84 | $ | 41.66 | 150,301 | $ | 41.72 | ||||||||||||||
$44.87 – $45.84 | 140,133 | 3.05 | $ | 45.02 | 140,133 | $ | 45.02 | ||||||||||||||
$50.50 – $50.50 | 2,000 | 3.01 | $ | 50.5 | 2,000 | $ | 50.5 | ||||||||||||||
$50.99 – $50.99 | 7,500 | 3.04 | $ | 50.99 | 7,500 | $ | 50.99 | ||||||||||||||
$10.42 – $50.99 | 1,924,179 | 4.41 | $ | 33.12 | 1,367,269 | $ | 34.35 | ||||||||||||||
The weighted average remaining contractual life of exercisable options was 2.89 years at December 31, 2013. The total intrinsic value of options exercised was $0.4 million, $7.2 million and $4.2 million for the years ended December 31, 2013, 2012 and 2011, respectively. The aggregate intrinsic value of options outstanding and options exercisable as of December 31, 2013 is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s common stock for the shares that had exercise prices that were lower than the $22.82 closing price of the Company’s stock on December 31, 2013. The aggregate intrinsic value of options outstanding was $0.5 million, $11.2 million and $10.8 million for the years ended December 31, 2013, 2012, and 2011, respectively. The aggregate intrinsic value of options exercisable was $0.2 million, $9.8 million and $8.4 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||||
Restricted Stock: | |||||||||||||||||||||
During the year ended December 31, 2013, the Company granted to employees and non-employee directors 269,791 shares of restricted stock, which vest at various dates through October 2017. During the year ended December 31, 2012, the Company granted to employees and non-employee directors 149,500 shares of restricted stock, which vest at various dates through November 2015. The compensation expense, which represents the fair value of the stock measured at the market price at the date of grant, less estimated forfeitures, is recognized on a straight-line basis over the vesting period. Unamortized compensation expense related to restricted stock amounted to $6.7 million at December 31, 2013. | |||||||||||||||||||||
A summary of the status of our restricted stock as of December 31, 2013 and 2012 and changes during the year ended December 31, 2013 are presented below: | |||||||||||||||||||||
Shares | Weighted | ||||||||||||||||||||
Average Grant | |||||||||||||||||||||
Date Fair Value | |||||||||||||||||||||
Non-vested as of December 31, 2012 | 160,831 | $ | 38.34 | ||||||||||||||||||
Granted | 269,791 | $ | 27.09 | ||||||||||||||||||
Vested | (62,948 | ) | $ | 36.58 | |||||||||||||||||
Cancelled | (80,970 | ) | $ | 38.8 | |||||||||||||||||
Non-vested as of December 31, 2013 | 286,704 | $ | 28.01 | ||||||||||||||||||
Earnings_per_share
Earnings per share | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Earnings per share | 20 | Earnings per share | |||||||||||
For each of the three years ended December 31, 2013, there were no adjustments to net income (loss) for purposes of calculating basic and diluted net income (loss) available to common shareholders. The following is a reconciliation of the weighted average shares used in the basic and diluted net income (loss) per common share computations. | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Weighted average common shares-basic | 18,697,228 | 18,977,263 | 18,219,343 | ||||||||||
Effect of diluted securities: | |||||||||||||
Unexercised stock options net of treasury share repurchase | — | 413,150 | — | ||||||||||
Weighted average common shares-diluted | 18,697,228 | 19,390,413 | 18,219,343 | ||||||||||
No adjustment has been made in 2013 or 2011 for any common stock equivalents because their effects would be anti-dilutive. For 2013 and 2011, potentially dilutive shares totaled 101,672 and 344,168, respectively. | |||||||||||||
Options to purchase shares of common stock with exercise prices in excess of the average market price of common shares are not included in the computation of diluted earnings per share. There were 1,186,259 and 789,650 outstanding options not included in the diluted earnings per share computation for the fiscal year ended December 31, 2013 and 2012, respectively, because the inclusion of these options was anti-dilutive. |
Stock_Repurchase_Program
Stock Repurchase Program | 12 Months Ended | |
Dec. 31, 2013 | ||
Text Block [Abstract] | ||
Stock Repurchase Program | 21 | Stock Repurchase Program |
On May 8, 2013, the Company announced that the Board of Directors had authorized a share repurchase program in an amount up to $50 million. Repurchases began on May 10, 2013 consisting primarily of open market transactions at prevailing market prices in accordance with the guidelines specified under Rule 10b-18 of the Securities Exchange Act of 1934, as amended. Repurchases are being made from cash on hand, cash generated from operations and additional borrowings. The timing of the transactions and the aggregate number of shares of common stock that will be ultimately repurchased under the repurchase program will depend on a variety of factors, including market conditions and the prices at which the securities are repurchased. The Company may discontinue repurchases without prior notice at any time if the Company determines additional repurchases are not warranted. The Company made total repurchases in 2013 of $39.5 million. |
Quarterly_financial_data_unaud
Quarterly financial data (unaudited) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||
Quarterly financial data (unaudited) | 22 | Quarterly financial data (unaudited) | |||||||||||||||||||
We have restated all quarterly periods of 2012 and 2013, to reflect the effects of the Original Restatement and the Further Restatement described herein (see Note 2). The following tables summarize the impacts of the restatement on our previously reported condensed consolidated statements of operations and balance sheets included in our Quarterly Reports on Form 10-Q for each respective period. | |||||||||||||||||||||
Condensed Consolidated Statement of Operations | |||||||||||||||||||||
(U.S. Dollars, in thousands, except per share data) | |||||||||||||||||||||
Originally | Original | Originally | Further | Restated | |||||||||||||||||
Reported in | Restatement | Reported in | Restatement | ||||||||||||||||||
2013 | Adjustments | 2013 | Adjustments | ||||||||||||||||||
Form 10-Q | Form 10-Q/A | ||||||||||||||||||||
1st Quarter | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Net sales | $ | 100,254 | $ | 3,119 | $ | 103,373 | $ | (1,094 | ) | $ | 102,279 | ||||||||||
Cost of sales | 22,699 | 2,918 | 25,617 | 224 | 25,841 | ||||||||||||||||
Gross profit | 77,555 | 201 | 77,756 | (1,318 | ) | 76,438 | |||||||||||||||
Operating expense | 73,531 | (3,862 | ) | 69,669 | 701 | 70,370 | |||||||||||||||
Operating income | 4,024 | 4,063 | 8,087 | (2,019 | ) | 6,068 | |||||||||||||||
Net income from continuing operations | 4,908 | 2,702 | 7,610 | (1,684 | ) | 5,926 | |||||||||||||||
Net income | $ | 2,116 | $ | 2,384 | $ | 4,500 | $ | (1,053 | ) | $ | 3,447 | ||||||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.25 | $ | 0.14 | $ | 0.39 | $ | (0.08 | ) | $ | 0.31 | ||||||||||
Net income | $ | 0.11 | $ | 0.12 | $ | 0.23 | $ | (0.05 | ) | $ | 0.18 | ||||||||||
Diluted: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.25 | $ | 0.14 | $ | 0.39 | $ | (0.09 | ) | $ | 0.3 | ||||||||||
Net income | $ | 0.11 | $ | 0.12 | $ | 0.23 | $ | (0.05 | ) | $ | 0.18 | ||||||||||
Originally | Original | Originally | Further | Restated | |||||||||||||||||
Reported in | Restatement | Reported in | Restatement | ||||||||||||||||||
2013 | Adjustments | 2013 | Adjustments | ||||||||||||||||||
Form 10-K | Form 10-K | ||||||||||||||||||||
2nd Quarter | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Net sales | $ | 98,280 | $ | — | $ | 98,280 | $ | (640 | ) | $ | 97,640 | ||||||||||
Cost of sales | 20,246 | — | 20,246 | 1,638 | 21,884 | ||||||||||||||||
Gross profit | 78,034 | — | 78,034 | (2,278 | ) | 75,756 | |||||||||||||||
Operating expense | 69,230 | — | 69,230 | (394 | ) | 68,836 | |||||||||||||||
Operating income | 8,804 | — | 8,804 | (1,884 | ) | 6,920 | |||||||||||||||
Net income from continuing operations | 4,130 | — | 4,130 | (2,118 | ) | 2,012 | |||||||||||||||
Net loss | $ | (2,317 | ) | $ | — | $ | (2,317 | ) | $ | (694 | ) | $ | (3,011 | ) | |||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.22 | $ | — | $ | 0.22 | $ | (0.11 | ) | $ | 0.11 | ||||||||||
Net loss | $ | (0.12 | ) | $ | — | $ | (0.12 | ) | $ | (0.04 | ) | $ | (0.16 | ) | |||||||
Diluted: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.21 | $ | — | $ | 0.21 | $ | (0.11 | ) | $ | 0.1 | ||||||||||
Net loss | $ | (0.12 | ) | $ | — | $ | (0.12 | ) | $ | (0.04 | ) | $ | (0.16 | ) | |||||||
Condensed Consolidated Statement of Operations | |||||||||||||||||||||
(U.S. Dollars, in thousands, except per share data) | |||||||||||||||||||||
Originally | Original | Originally | Further | Restated | |||||||||||||||||
Reported in | Restatement | Reported in | Restatement | ||||||||||||||||||
2013 | Adjustments | 2013 | Adjustments | ||||||||||||||||||
Form 10-K | Form 10-K | ||||||||||||||||||||
3rd Quarter | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Net sales | $ | 92,738 | $ | — | $ | 92,738 | $ | (932 | ) | $ | 91,806 | ||||||||||
Cost of sales | 23,920 | — | 23,920 | 1,144 | 25,064 | ||||||||||||||||
Gross profit | 68,818 | — | 68,818 | (2,076 | ) | 66,742 | |||||||||||||||
Operating expense | 84,418 | — | 84,418 | (3,575 | ) | 80,843 | |||||||||||||||
Operating loss | (15,600 | ) | — | (15,600 | ) | 1,499 | (14,101 | ) | |||||||||||||
Net loss from continuing operations | (18,084 | ) | — | (18,084 | ) | 1,580 | (16,504 | ) | |||||||||||||
Net loss | $ | (19,822 | ) | $ | — | $ | (19,822 | ) | $ | 986 | $ | (18,836 | ) | ||||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net loss from continuing operations | $ | (1.00 | ) | $ | — | $ | (1.00 | ) | $ | 0.09 | $ | (0.91 | ) | ||||||||
Net loss | $ | (1.10 | ) | $ | — | $ | (1.10 | ) | $ | 0.06 | $ | (1.04 | ) | ||||||||
Diluted: | |||||||||||||||||||||
Net loss from continuing operations | $ | (1.00 | ) | $ | — | $ | (1.00 | ) | $ | 0.09 | $ | (0.91 | ) | ||||||||
Net loss | $ | (1.10 | ) | $ | — | $ | (1.10 | ) | $ | 0.06 | $ | (1.04 | ) | ||||||||
4th Quarter | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Net sales | $ | 106,143 | $ | — | $ | 106,143 | $ | (257 | ) | $ | 105,886 | ||||||||||
Cost of sales | 32,517 | — | 32,517 | 1,606 | 34,123 | ||||||||||||||||
Gross profit | 73,626 | — | 73,626 | (1,863 | ) | 71,763 | |||||||||||||||
Operating expense | 80,004 | — | 80,004 | 1,838 | 81,842 | ||||||||||||||||
Operating loss | (6,378 | ) | — | (6,378 | ) | (3,701 | ) | (10,079 | ) | ||||||||||||
Net loss from continuing operations | (8,564 | ) | — | (8,564 | ) | (1,075 | ) | (9,639 | ) | ||||||||||||
Net loss | $ | (7,876 | ) | $ | — | $ | (7,876 | ) | $ | (2,536 | ) | $ | (10,412 | ) | |||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net loss from continuing operations | $ | (0.47 | ) | $ | — | $ | (0.47 | ) | $ | (0.06 | ) | $ | (0.53 | ) | |||||||
Net loss | $ | (0.43 | ) | $ | — | $ | (0.43 | ) | $ | (0.15 | ) | $ | (0.58 | ) | |||||||
Diluted: | |||||||||||||||||||||
Net loss from continuing operations | $ | (0.47 | ) | $ | — | $ | (0.47 | ) | $ | (0.06 | ) | $ | (0.53 | ) | |||||||
Net loss | $ | (0.43 | ) | $ | — | $ | (0.43 | ) | $ | (0.15 | ) | $ | (0.58 | ) | |||||||
Condensed Consolidated Statement of Operations | |||||||||||||||||||||
(U.S. Dollars, in thousands, except per share data) | |||||||||||||||||||||
As Reported | Original | As Originally | Further | Restated | |||||||||||||||||
in the 2012 | Restatement | Restated in | Restatement | ||||||||||||||||||
Form 10-K | Adjustments | the 2012 | Adjustments | ||||||||||||||||||
Prior to | Form 10-K/A | ||||||||||||||||||||
Original | |||||||||||||||||||||
Restatement | |||||||||||||||||||||
1st Quarter | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Net sales | $ | 116,041 | $ | (7,105 | ) | $ | 108,936 | $ | (1,773 | ) | $ | 107,163 | |||||||||
Cost of sales | 21,939 | (561 | ) | 21,378 | 2,767 | 24,145 | |||||||||||||||
Gross profit | 94,102 | (6,544 | ) | 87,558 | (4,540 | ) | 83,018 | ||||||||||||||
Operating expense | 71,671 | (2,033 | ) | 69,638 | (1,409 | ) | 68,229 | ||||||||||||||
Operating income | 22,431 | (4,511 | ) | 17,920 | (3,131 | ) | 14,789 | ||||||||||||||
Net income from continuing operations | 12,215 | (3,618 | ) | 8,597 | (1,727 | ) | 6,870 | ||||||||||||||
Net income | $ | 12,016 | $ | (2,609 | ) | $ | 9,407 | $ | (2,058 | ) | $ | 7,349 | |||||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.65 | $ | (0.19 | ) | $ | 0.46 | $ | (0.09 | ) | $ | 0.37 | |||||||||
Net income | $ | 0.64 | $ | (0.14 | ) | $ | 0.5 | $ | (0.11 | ) | $ | 0.39 | |||||||||
Diluted: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.64 | $ | (0.19 | ) | $ | 0.45 | $ | (0.09 | ) | $ | 0.36 | |||||||||
Net income | $ | 0.63 | $ | (0.14 | ) | $ | 0.49 | $ | (0.11 | ) | $ | 0.38 | |||||||||
2nd Quarter | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Net sales | $ | 119,492 | $ | (6,069 | ) | $ | 113,423 | $ | (1,822 | ) | $ | 111,601 | |||||||||
Cost of sales | 23,676 | 3,871 | 27,547 | (2,604 | ) | 24,943 | |||||||||||||||
Gross profit | 95,816 | (9,940 | ) | 85,876 | 782 | 86,658 | |||||||||||||||
Operating expense | 75,251 | (3,673 | ) | 71,578 | (1,542 | ) | 70,036 | ||||||||||||||
Operating income | 20,565 | (6,267 | ) | 14,298 | 2,324 | 16,622 | |||||||||||||||
Net income from continuing operations | 13,967 | (4,097 | ) | 9,870 | 1,551 | 11,421 | |||||||||||||||
Net income | $ | 11,205 | $ | (3,951 | ) | $ | 7,254 | $ | 1,548 | $ | 8,802 | ||||||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.74 | $ | (0.22 | ) | $ | 0.52 | $ | 0.09 | $ | 0.61 | ||||||||||
Net income | $ | 0.59 | $ | (0.21 | ) | $ | 0.38 | $ | 0.09 | $ | 0.47 | ||||||||||
Diluted: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.73 | $ | (0.22 | ) | $ | 0.51 | $ | 0.08 | $ | 0.59 | ||||||||||
Net income | $ | 0.58 | $ | (0.21 | ) | $ | 0.37 | $ | 0.09 | $ | 0.46 | ||||||||||
Condensed Consolidated Statement of Operations | |||||||||||||||||||||
(U.S. Dollars, in thousands, except per share data) | |||||||||||||||||||||
As Reported | Original | As Originally | Further | Restated | |||||||||||||||||
in the 2012 | Restatement | Restated in | Restatement | ||||||||||||||||||
Form 10-K | Adjustments | the 2012 | Adjustments | ||||||||||||||||||
Prior to | Form 10-K/A | ||||||||||||||||||||
Original | |||||||||||||||||||||
Restatement | |||||||||||||||||||||
3rd Quarter | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Net sales | $ | 114,752 | $ | (6,895 | ) | $ | 107,857 | $ | (2,039 | ) | $ | 105,818 | |||||||||
Cost of sales | 22,373 | 2,011 | 24,384 | 503 | 24,887 | ||||||||||||||||
Gross profit | 92,379 | (8,906 | ) | 83,473 | (2,542 | ) | 80,931 | ||||||||||||||
Operating expense | 70,846 | (6,178 | ) | 64,668 | (680 | ) | 63,988 | ||||||||||||||
Operating income | 21,533 | (2,728 | ) | 18,805 | (1,862 | ) | 16,943 | ||||||||||||||
Net income from continuing operations | 13,118 | (2,544 | ) | 10,574 | (1,262 | ) | 9,312 | ||||||||||||||
Net income | $ | 7,560 | $ | (2,544 | ) | $ | 5,016 | $ | (1,269 | ) | $ | 3,747 | |||||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.69 | $ | (0.14 | ) | $ | 0.55 | $ | (0.06 | ) | $ | 0.49 | |||||||||
Net income | $ | 0.4 | $ | (0.14 | ) | $ | 0.26 | $ | (0.06 | ) | $ | 0.2 | |||||||||
Diluted: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.67 | $ | (0.13 | ) | $ | 0.54 | $ | (0.06 | ) | $ | 0.48 | |||||||||
Net income | $ | 0.39 | $ | (0.14 | ) | $ | 0.25 | $ | (0.06 | ) | $ | 0.19 | |||||||||
4th Quarter | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Net sales | $ | 112,035 | $ | 5,330 | $ | 117,365 | $ | (1,758 | ) | $ | 115,607 | ||||||||||
Cost of sales | 18,504 | 6,440 | 24,944 | 1,807 | 26,751 | ||||||||||||||||
Gross profit | 93,531 | (1,110 | ) | 92,421 | (3,565 | ) | 88,856 | ||||||||||||||
Operating expense | 69,050 | (2,242 | ) | 66,808 | (4,470 | ) | 62,338 | ||||||||||||||
Operating income | 24,481 | 1,132 | 25,613 | 905 | 26,518 | ||||||||||||||||
Net income from continuing operations | 14,636 | 1,373 | 16,009 | 1,509 | 17,518 | ||||||||||||||||
Net income | $ | 20,514 | $ | 647 | $ | 21,161 | $ | 1,793 | $ | 22,954 | |||||||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.76 | $ | 0.07 | $ | 0.83 | $ | 0.08 | $ | 0.91 | |||||||||||
Net income | $ | 1.06 | $ | 0.04 | $ | 1.1 | $ | 0.09 | $ | 1.19 | |||||||||||
Diluted: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.74 | $ | 0.07 | $ | 0.81 | $ | 0.08 | $ | 0.89 | |||||||||||
Net income | $ | 1.04 | $ | 0.03 | $ | 1.07 | $ | 0.1 | $ | 1.17 | |||||||||||
Condensed Consolidated Balance Sheets | |||||||||||||||||||||
(U.S. Dollars, in thousands, except share and per share data) | Originally | Original | Originally | Further | Restated | ||||||||||||||||
Reported in | Restatement | Restated in | Restatement | ||||||||||||||||||
2013 | Adjustments | 2013 | Adjustments | ||||||||||||||||||
Form 10-Q | Form 10-Q/A | ||||||||||||||||||||
1st Quarter | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Total assets | $ | 503,380 | $ | (27,622 | ) | $ | 475,758 | $ | (11,605 | ) | $ | 464,153 | |||||||||
Total liabilities | 101,212 | 1,154 | 102,366 | 812 | 103,178 | ||||||||||||||||
Total shareholders’ equity | 402,168 | (28,776 | ) | 373,392 | (12,417 | ) | 360,975 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 503,380 | $ | (27,622 | ) | $ | 475,758 | $ | (11,605 | ) | $ | 464,153 | |||||||||
Originally | Original | Originally | Further | Restated | |||||||||||||||||
Reported in | Restatement | Reported in | Restatement | ||||||||||||||||||
2013 | Adjustments | 2013 | Adjustments | ||||||||||||||||||
Form 10-K | Form 10-K | ||||||||||||||||||||
2nd Quarter | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Total assets | $ | 459,450 | $ | — | $ | 459,450 | $ | (13,129 | ) | $ | 446,321 | ||||||||||
Total liabilities | 114,223 | — | 114,223 | (48 | ) | 114,175 | |||||||||||||||
Total shareholders’ equity | 345,227 | — | 345,227 | (13,081 | ) | 332,146 | |||||||||||||||
Total liabilities and shareholders’ equity | $ | 459,450 | $ | — | $ | 459,450 | $ | (13,129 | ) | $ | 446,321 | ||||||||||
3rd Quarter | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Total assets | $ | 430,058 | $ | — | $ | 430,058 | $ | (14,534 | ) | $ | 415,524 | ||||||||||
Total liabilities | 111,001 | — | 111,001 | (2,470 | ) | 108,531 | |||||||||||||||
Total shareholders’ equity | 319,057 | — | 319,057 | (12,064 | ) | 306,993 | |||||||||||||||
Total liabilities and shareholders’ equity | $ | 430,058 | $ | — | $ | 430,058 | $ | (14,534 | ) | $ | 415,524 | ||||||||||
4th Quarter | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Total assets | $ | 423,182 | $ | — | $ | 423,182 | $ | (11,207 | ) | $ | 411,975 | ||||||||||
Total liabilities | 112,688 | — | 112,688 | 3,424 | 116,112 | ||||||||||||||||
Total shareholders’ equity | 310,494 | — | 310,494 | (14,631 | ) | 295,863 | |||||||||||||||
Total liabilities and shareholders’ equity | $ | 423,182 | $ | — | $ | 423,182 | $ | (11,207 | ) | $ | 411,975 | ||||||||||
Condensed Consolidated Balance Sheets | |||||||||||||||||||||
(U.S. Dollars, in thousands, except share and per share data) | As Reported | Original | As Originally | Further | Restated | ||||||||||||||||
in the 2012 | Restatement | Restated in | Restatement | ||||||||||||||||||
Form 10-K | Adjustments | the 2012 | Adjustments | ||||||||||||||||||
Prior to | Form 10-K/A | ||||||||||||||||||||
Original | |||||||||||||||||||||
Restatement | |||||||||||||||||||||
1st Quarter | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Total assets | $ | 707,586 | $ | (13,480 | ) | $ | 694,106 | $ | (13,510 | ) | $ | 680,596 | |||||||||
Total liabilities | 369,178 | 12,556 | 381,734 | 317 | 382,051 | ||||||||||||||||
Total shareholders’ equity | 338,408 | (26,036 | ) | 312,372 | (13,827 | ) | 298,545 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 707,586 | $ | (13,480 | ) | $ | 694,106 | $ | (13,510 | ) | $ | 680,596 | |||||||||
2nd Quarter | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Total assets | $ | 553,320 | $ | (22,925 | ) | $ | 530,395 | $ | (9,547 | ) | $ | 520,848 | |||||||||
Total liabilities | 199,104 | 6,092 | 205,196 | 2,731 | 207,927 | ||||||||||||||||
Total shareholders’ equity | 354,216 | (29,017 | ) | 325,199 | (12,278 | ) | 312,921 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 553,320 | $ | (22,925 | ) | $ | 530,395 | $ | (9,547 | ) | $ | 520,848 | |||||||||
3rd Quarter | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Total assets | $ | 565,073 | $ | (25,507 | ) | $ | 539,566 | $ | (11,392 | ) | $ | 528,174 | |||||||||
Total liabilities | 187,463 | 6,136 | 193,599 | 2,156 | 195,755 | ||||||||||||||||
Total shareholders’ equity | 377,610 | (31,643 | ) | 345,967 | (13,548 | ) | 332,419 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 565,073 | $ | (25,507 | ) | $ | 539,566 | $ | (11,392 | ) | $ | 528,174 | |||||||||
4th Quarter | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Total assets | $ | 504,281 | $ | (31,384 | ) | $ | 472,897 | $ | (8,351 | ) | $ | 464,546 | |||||||||
Total liabilities | 105,183 | (118 | ) | 105,065 | 3,042 | 108,107 | |||||||||||||||
Total shareholders’ equity | 399,098 | (31,266 | ) | 367,832 | (11,393 | ) | 356,439 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 504,281 | $ | (31,384 | ) | $ | 472,897 | $ | (8,351 | ) | $ | 464,546 | |||||||||
Note: The sum of the quarterly earnings per share may not equal the full year amount, as the computations of the weighted average number of common shares outstanding for each quarter and full year are performed independently. | |||||||||||||||||||||
There were no material impacts to the consolidated statements of cash flows for the restated interim quarterly periods contained within the fiscal years ended December 31, 2013 and 2012 that are not representative of the changes presented in the consolidated statements of cash flows for the years ended December 31, 2013 and 2012. See Note 2 “Original and Further Restatement of the Consolidated Financial Statements.” | |||||||||||||||||||||
Subsequent_events
Subsequent events | 12 Months Ended | |
Dec. 31, 2013 | ||
Subsequent Events [Abstract] | ||
Subsequent events | 23 | Subsequent events |
On August 14, 2014 the Lenders and the Company entered into a subsequent Limited Waiver which was extended on September 30, 2014, January 15, 2015 and February 26, 2015 (the “Subsequent Limited Waivers”). Under the Subsequent Limited Waivers, the Lenders collectively waived requirements under the Credit Agreement that the Company deliver quarterly financial statements with respect to the fiscal quarters ended June 30, 2014 and September 30, 2014, and related financial covenant certificates, until the earlier of (i) March 31, 2015 or (ii) the date that is one day after such financial statements are publicly filed or released. The Subsequent Limited Waivers also extend the date by which the Company is required to provide certain 2014 fiscal year financial statements until the earlier of (i) one business day following the date that the Company files its Annual Report on Form 10-K for the fiscal year ended December 31, 2014 or (ii) April 30, 2015. In addition, the Subsequent Limited Waivers provided that the Further Restatement would not constitute a default or event of default provided that within one business day after the public release or filing of such restated financial statements, the Company delivered corrected financial statements and compliance certificates with respect to such restated periods and immediately paid any additional interest and other fees that would have been owed had applicable interest and fees originally been calculated based on the restated financial statements. | ||
In January 2015, the Company completed the sale of its Tempus™ Cervical Plate product line, which was part of the Company’s Spine Fixation SBU. The sale included the transfer of net assets of $2.1 million, consisting of intellectual property and the associated inventory, in exchange for consideration of $4.8 million in cash. | ||
On March 4, 2015, the Company entered into an Option Agreement (the “Option Agreement”) with eNeura, Inc. (“eNeura”), a privately held medical technology company that is developing devices for the treatment of migraines. The Option Agreement provides the Company with an exclusive option to acquire eNeura (the “Option”) during the 18-month period following the grant of the Option. In consideration for the Option, (i) the Company paid a non-refundable $250,000 fee to eNeura, and (ii) eNeura issued a Convertible Promissory Note (the “eNeura Note”) to the Company. The principal amount of the eNeura Note is $15,000,000 and interest will accrue at 8%. The eNeura Note will mature on the earlier of (i) March 4, 2019, or (ii) consummation of the acquisition (as described below), unless converted or prepaid at an earlier date. The Company will be entitled to designate one representative for appointment to the board of directors of eNeura during the 18-month option period. Pursuant to an Agreement and Plan of Merger between the Company, eNeura and certain other parties, if the Company exercises the Option to acquire eNeura, the Company will pay to former eNeura shareholders $65 million (subject to certain positive or negative adjustments based on the assets and liabilities of eNeura). In addition, during the 4-year period following the closing of such acquisition, the Company may be required to pay additional cash consideration to eNeura shareholders upon the satisfaction of certain milestones. |
Schedule_1Condensed_Financial_
Schedule 1-Condensed Financial Information of Registrant Orthofix International N.V. | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||
Schedule 1-Condensed Financial Information of Registrant Orthofix International N.V. | Schedule 1—Condensed Financial Information of Registrant Orthofix International N.V. | ||||||||||||
Condensed Balance Sheets (unaudited) | |||||||||||||
(U.S. Dollars in thousands) | December 31, | December 31, | |||||||||||
2013 | 2012 | ||||||||||||
(Restated) | (Restated) | ||||||||||||
Assets | |||||||||||||
Current assets: | |||||||||||||
Cash and cash equivalents | $ | 1,426 | $ | 7,392 | |||||||||
Prepaid expenses and other current assets | 670 | 534 | |||||||||||
Total current assets | 2,096 | 7,926 | |||||||||||
Other long term assets | — | 15 | |||||||||||
Investments in and amounts due from subsidiaries and affiliates | 308,173 | 357,811 | |||||||||||
Total assets | $ | 310,269 | $ | 365,752 | |||||||||
Liabilities and shareholder’s equity | |||||||||||||
Current liabilities | $ | 6,295 | $ | 1,202 | |||||||||
Long-term liabilities | 8,111 | 8,111 | |||||||||||
Shareholder’s equity: | |||||||||||||
Common stock | 1,810 | 1,934 | |||||||||||
Additional paid in capital | 216,653 | 246,306 | |||||||||||
Accumulated earnings | 73,897 | 102,709 | |||||||||||
Accumulated other comprehensive income | 3,503 | 5,490 | |||||||||||
295,863 | 356,439 | ||||||||||||
Total liabilities and shareholder’s equity | $ | 310,269 | $ | 365,752 | |||||||||
See accompanying notes to condensed financial statements. | |||||||||||||
Orthofix International N.V. | |||||||||||||
Schedule 1—Condensed Financial Information of Registrant Orthofix International N.V. | |||||||||||||
Condensed Statements of Operations (unaudited) | |||||||||||||
(U.S. Dollars in thousands) | Year Ended | Year Ended | Year Ended | ||||||||||
December 31, | December 31, | December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||||
(Restated) | (Restated) | (Restated) | |||||||||||
(Expenses) income: | |||||||||||||
General and administrative | $ | (16,641 | ) | $ | (7,700 | ) | $ | (11,134 | ) | ||||
Equity in earnings of investments in subsidiaries and affiliates | (12,494 | ) | 50,331 | (5,884 | ) | ||||||||
Other, net | 323 | 24 | 7 | ||||||||||
(Loss) income before income taxes | (28,812 | ) | 42,655 | (17,011 | ) | ||||||||
Income tax benefit (expense) | — | 197 | (687 | ) | |||||||||
Net (loss) income | $ | (28,812 | ) | $ | 42,852 | $ | (17,698 | ) | |||||
See accompanying notes to condensed financial statements. | |||||||||||||
Orthofix International N.V. | |||||||||||||
Schedule 1—Condensed Financial Information of Registrant Orthofix International N.V. | |||||||||||||
Condensed Statement of Cash Flows (unaudited) | |||||||||||||
(U.S. Dollars in thousands) | Year Ended | Year Ended | Year Ended | ||||||||||
December 31, | December 31, | December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||||
(Restated) | (Restated) | (Restated) | |||||||||||
Net (loss) income | $ | (28,812 | ) | $ | 42,852 | $ | (17,698 | ) | |||||
Equity in earnings of (loss) investments in subsidiaries and affiliates | 12,494 | (50,331 | ) | 5,884 | |||||||||
Cash (used in) provided by other operating activities | 468 | (6,811 | ) | 3,429 | |||||||||
Net cash used in operating activities | (15,850 | ) | (14,290 | ) | (8,385 | ) | |||||||
Cash flows from investing activities: | |||||||||||||
Distributions and amounts received from subsidiaries | 53,389 | 12,564 | 5,875 | ||||||||||
Capital expenditures | — | — | — | ||||||||||
Net cash provided by investing activities | 53,389 | 12,564 | 5,875 | ||||||||||
Cash flows from financing activities: | |||||||||||||
Net proceeds from issuance of common stock | 3,450 | 25,586 | 20,113 | ||||||||||
Repurchase of treasury shares | (39,494 | ) | — | — | |||||||||
Contributions to subsidiaries and affiliates | (7,543 | ) | (36,921 | ) | (2,789 | ) | |||||||
Tax benefit on exercise of stock options | 82 | 1,020 | 1,737 | ||||||||||
Net cash (used in) provided by financing activities | (43,505 | ) | (10,315 | ) | 19,061 | ||||||||
Net (decrease) increase in cash and cash equivalents | (5,966 | ) | (12,041 | ) | 16,551 | ||||||||
Cash and cash equivalents at the beginning of the year | 7,392 | 19,433 | 2,882 | ||||||||||
Cash and cash equivalents at the end of the year | $ | 1,426 | $ | 7,392 | $ | 19,433 | |||||||
See accompanying notes to condensed financial statements. | |||||||||||||
Orthofix International N.V. | |||||||||||||
Schedule 1—Condensed Financial Information of Registrant Orthofix International N.V. | |||||||||||||
Notes to Condensed Financial Statements (unaudited) | |||||||||||||
1 | Background and basis of presentation | ||||||||||||
These condensed parent company financial statements have been prepared in accordance with Rule 12-04, Schedule 1 of Regulation S-X, as the restricted net assets of Orthofix Holdings, Inc. and its subsidiaries exceed 25% of the consolidated net assets of Orthofix International N.V. and its subsidiaries (the “Company”). This information should be read in conjunction with the Company’s consolidated financial statements included elsewhere in this filing. | |||||||||||||
2 | Restricted net assets of subsidiaries | ||||||||||||
Certain of the Company’s subsidiaries have restrictions on their ability to pay dividends or make intercompany loans and advances pursuant to their financing arrangements. The amount of restricted net assets the Company’s subsidiaries held at December 31, 2013 and 2012 was approximately $168.5 million and $194.5 million, respectively. Such restrictions are on net assets of Orthofix Holdings, Inc. and its subsidiaries. | |||||||||||||
3 | Commitments, contingencies and long-term obligations | ||||||||||||
For a discussion of the Company’s commitments, contingencies and long term obligations under its senior secured credit facility, see Note 9, Note 12 and Note 17 of the Company’s consolidated financial statements. | |||||||||||||
4 | Dividends from subsidiaries | ||||||||||||
Orthofix International N.V. did not receive cash dividends in 2013 or 2012. |
Schedule_2Valuation_and_Qualif
Schedule 2-Valuation and Qualifying Accounts | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||
Schedule 2-Valuation and Qualifying Accounts | Schedule 2—Valuation and Qualifying Accounts | ||||||||||||||||||||
For the years ended December 31, 2013, 2012 and 2011: | |||||||||||||||||||||
Additions | |||||||||||||||||||||
(U.S. Dollars in thousands) | Balance at | Charged to | Charged | Deductions/ | Balance at | ||||||||||||||||
Provisions from assets to which they apply: | beginning | cost and | (credited) | Other | end of year | ||||||||||||||||
of year | expenses | to other | |||||||||||||||||||
accounts | |||||||||||||||||||||
2013 (Restated) | |||||||||||||||||||||
Allowance for doubtful accounts receivable | $ | 6,673 | $ | 4,590 | — | $ | (2,152 | ) | $ | 9,111 | |||||||||||
Deferred tax valuation allowance | 26,361 | 5,411 | — | — | 31,772 | ||||||||||||||||
2012 (Restated) | |||||||||||||||||||||
Allowance for doubtful accounts receivable | $ | 6,184 | $ | 2,027 | $ | (13 | ) | $ | (1,525 | ) | $ | 6,673 | |||||||||
Deferred tax valuation allowance | 19,124 | 7,237 | — | — | 26,361 | ||||||||||||||||
2011 (Restated) | |||||||||||||||||||||
Allowance for doubtful accounts receivable | $ | 6,784 | (1) | $ | 4,523 | $ | — | $ | (5,123 | ) | $ | 6,184 | |||||||||
Deferred tax valuation allowance | 21,023 | (1,899 | ) | — | — | 19,124 | |||||||||||||||
-1 | Balance at beginning of year includes a $242 thousand increase in allowance for doubtful accounts for an error correction recorded in the Further Restatement. |
Summary_of_significant_account1
Summary of significant accounting policies (Policies) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Basis of consolidation | (a) | Basis of consolidation | |||||||||||
The consolidated financial statements include the financial statements of the Company and its wholly owned and majority-owned subsidiaries and entities over which the Company has control. All intercompany accounts and transactions are eliminated in consolidation. | |||||||||||||
Reclassifications | (b) Reclassifications | ||||||||||||
The Company has reclassified certain line items to conform to the current year presentation. The reclassifications have no effect on previously reported net earnings or shareholders’ equity. | |||||||||||||
Use of estimates in preparation of financial statements | (c) | Use of estimates in preparation of financial statements | |||||||||||
The preparation of financial statements in conformity with United States generally accepted accounting principles (“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 at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate these estimates, including those related to contractual allowances, doubtful accounts, inventories, potential intangible assets and goodwill impairment, income taxes, and share-based compensation. We base our estimates on historical experience, future expectations and on other relevant assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. | |||||||||||||
Foreign currency translation | (d) | Foreign currency translation | |||||||||||
The financial statements for operations outside the United States are generally maintained in their local currency. All foreign currency denominated balance sheet accounts, except shareholders’ equity, are translated to U.S. dollars at year end exchange rates and revenue and expense items are translated at weighted average rates of exchange prevailing during the year. Gains and (losses) resulting from the translation of foreign currency are recorded in the accumulated other comprehensive income component of shareholders’ equity. Transactional foreign currency gains and (losses), including those generated from intercompany operations, are included in other expense, net and were $0.5 million loss, $0.4 million loss and $1.7 million loss for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||
Cash and cash equivalents | (e) Cash and cash equivalents | ||||||||||||
The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. | |||||||||||||
Restricted cash | (f) Restricted cash | ||||||||||||
Restricted cash consists of cash held at certain subsidiaries, the distribution or transfer of which to Orthofix International N.V. (the “Parent”) or other subsidiaries that are not parties to the credit facility described in Note 9 is restricted. The senior secured credit facility restricts the Parent and subsidiaries that are not parties to the facility from access to cash held by Orthofix Holdings, Inc. and its subsidiaries. All credit party subsidiaries have access to this cash for operational and debt repayment purposes. | |||||||||||||
Market risk | (g) Market risk | ||||||||||||
In the ordinary course of business, the Company is exposed to the impact of changes in interest rates and foreign currency fluctuations. The Company’s objective is to limit the impact of such movements on earnings and cash flows. In order to achieve this objective, the Company seeks to balance its non-U.S. dollar denominated income and expenditures. During 2013, 2012 and 2011, the Company made use of a foreign currency swap agreement to manage cash flow exposure generated from foreign currency fluctuations. | |||||||||||||
The Company generally does not require collateral on trade receivables. | |||||||||||||
Inventories | (h) Inventories | ||||||||||||
Inventories are valued at the lower of cost or estimated net realizable value, after provision for excess, obsolete or impaired items which is reviewed and updated on a periodic basis by management. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at our manufacturing facility in Italy, cost is determined on a weighted-average basis, which approximates the first-in, first-out (“FIFO”) method, due to the high turn-over rate of inventory at this location. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at our manufacturing facility in Texas, standard costs, which approximates actual cost on the FIFO method, is used to value inventory. Standard costs are reviewed annually by management, or more often in the event circumstances indicate a change in cost has occurred. The valuation of work-in-process, finished products, field inventory and consignment inventory includes the cost of materials, labor and other production costs. Field inventory represents immediately saleable finished products inventory that is in the possession of the Company’s direct sales representatives. Consignment inventory represents immediately saleable finished products located at third party customers, such as distributors and hospitals. | |||||||||||||
Long-lived assets, including intangibles | (i) | Long-lived assets, including intangibles | |||||||||||
Property, plant and equipment is stated at cost less accumulated depreciation. Costs include all expenditures necessary to place the asset in service, including freight and sales and use taxes. Plant equipment also includes instrumentation held by customers and is generally used to facilitate the implantation of the Company’s products, the associated cost and accumulated depreciation as of December 31, 2013 was $56.7 million and ($35.4 million), respectively. Depreciation is computed on a straight-line basis over the useful lives of the assets. Depreciation of leasehold improvements is computed over the shorter of the lease term or the useful life of the asset. The useful lives are as follows: | |||||||||||||
Years | |||||||||||||
Buildings | 25 to 33 | ||||||||||||
Plant equipment and instrumentation | 2 to 10 | ||||||||||||
Furniture and fixtures | 4 to 8 | ||||||||||||
Expenditures for maintenance and repairs and minor renewals and improvements, which do not extend the lives of the respective assets, are expensed as incurred. All other expenditures for renewals and improvements are capitalized. The assets and related accumulated depreciation are adjusted for property retirements and disposals, with the resulting gain or loss included in operations. Fully depreciated assets remain in the accounts until retired from service. | |||||||||||||
Patents and other intangible assets are recorded at cost, or when acquired as a part of a business combination at estimated fair value. These assets primarily include patents and other technology agreements (“developed technologies”) and trademarks. Identifiable intangible assets which are considered definite lived are amortized over their useful lives using a method of amortization that reflects the pattern in which the economic benefit of the intangible assets is consumed. The Company’s weighted average amortization period for developed technologies is 11 years. | |||||||||||||
Intangible and long-lived assets with definite lives, such as developed technologies, are tested for impairment if any adverse conditions exist or change in circumstances have occurred that would indicate impairment or a change in the remaining useful life. If an impairment indicator exists, the Company tests the intangible asset for recoverability. For purposes of the recoverability test, the Company groups its intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset (asset group), the Company will write the carrying value down to the fair value in the period identified. | |||||||||||||
The Company generally calculates fair value of indefinite-lived intangible assets as the present value of estimated future cash flows. In determining the estimated future cash flows associated with intangible assets, the Company uses estimates and assumptions about future revenue contributions, cost structures and remaining useful lives of the asset (asset group). The use of alternative assumptions, including estimated cash flows, discount rates, and alternative estimated remaining useful lives could result in different calculations of impairment. | |||||||||||||
Goodwill | (j) | Goodwill | |||||||||||
The Company tests goodwill at least annually for impairment. The Company tests more frequently if indicators are present or changes in circumstances suggest that impairment may exist. These indicators include, among others, declines in sales, earnings or cash flows, or the development of a material adverse change in the business climate. The Company assesses goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a reporting unit. The Company has identified four reporting units, which are consistent with the Company’s reporting segments: BioStim, Biologics, Extremity Fixation, and Spine Fixation. | |||||||||||||
In order to calculate the respective carrying values, the Company initially recorded goodwill based on the purchase price allocation performed at the time of acquisition. Corporate assets and liabilities that directly relate to a reporting unit’s operations are ascribed directly to that reporting unit. Corporate assets and liabilities that are not directly related to a specific reporting unit, but from which the reporting unit benefits, are allocated based on the respective contribution measure of each reporting unit. Effective July 1, 2013, the Company re-aligned its reporting units and consequently reallocated the carrying value of goodwill from its previous reporting units to its new reporting units based on the relative fair value of each new reporting unit to total enterprise value at July 1, 2013. | |||||||||||||
As a result of the Company’s change in reporting structure, the Company allocated goodwill to each reporting unit, and subsequently evaluated each reporting unit for possible impairment of goodwill, as there were indicators of impairment when completing a qualitative analysis. The result of this analysis was a full impairment of the goodwill allocated to the Extremity Fixation and Spine Fixation reportable units, totaling $19.2 million. | |||||||||||||
The Company’s annual goodwill impairment analysis, which was performed qualitatively during the fourth quarter of 2013, did not result in any additional impairment charge. | |||||||||||||
Derivative instruments | (k) Derivative instruments | ||||||||||||
The Company manages its exposure to fluctuating cash flows resulting from changes in interest rates and foreign exchange within the consolidated financial statements according to its hedging policy. Under the policy, the Company may engage in non-leveraged transactions involving various financial derivative instruments to manage exposed positions. The policy requires the Company to formally document the relationship between the hedging instrument and hedged item, as well as its risk-management objective and strategy for undertaking the hedge transaction. For instruments designated as a cash flow hedge, the Company formally assesses (both at the hedge’s inception and on an ongoing basis) whether the derivative that is used in the hedging transaction has been effective in offsetting changes in the cash flows of the hedged item and whether such derivative may be expected to remain effective in future periods. If it is determined that a derivative is not (or has ceased to be) effective as a hedge, the Company will discontinue the related hedge accounting prospectively. Such a determination would be made when (1) the derivative is no longer effective in offsetting changes in the cash flows of the hedged item; (2) the derivative expires or is sold, terminated or exercised; or (3) management determines that designating the derivative as a hedging instrument is no longer appropriate. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings. | |||||||||||||
The Company records all derivatives as either assets or liabilities on the balance sheet at their respective fair values. For a cash flow hedge, the effective portion of the derivative’s change in fair value (i.e. gains or losses) is initially reported as a component of other comprehensive income, net of related taxes, and subsequently reclassified into net earnings when the hedged exposure is no longer effective. | |||||||||||||
The Company utilizes a cross currency swap to manage its foreign currency exposure related to a portion of the Company’s intercompany receivable of a U.S. dollar functional currency subsidiary that is denominated in Euro. The cross currency swap has been accounted for as a cash flow hedge in accordance with ASC Topic 815, Derivatives and Hedging. | |||||||||||||
Accumulated other comprehensive income | (l) | Accumulated other comprehensive income | |||||||||||
Accumulated other comprehensive income is comprised of foreign currency translation adjustments and the effective portion of the gain (loss) on the Company’s cross-currency swap, which is designated and accounted for as a cash flow hedge (see Note 10) and the unrealized gain (loss) on warrants. The components of and changes in accumulated other comprehensive income are as follows: | |||||||||||||
(U.S. Dollars in thousands) | Foreign Currency | Change in | Accumulated Other | ||||||||||
Translation | Fair Value | Comprehensive | |||||||||||
Adjustments | Income | ||||||||||||
Balance at December 31, 2011 (Restated) | $ | 4,228 | $ | (132 | ) | $ | 4,096 | ||||||
Unrealized gain on cross-currency swaps, net of taxes of $153 | — | 263 | 263 | ||||||||||
Foreign currency translation adjustment (1) | 1,131 | — | 1,131 | ||||||||||
Balance at December 31, 2012 (Restated) | 5,359 | 131 | 5,490 | ||||||||||
Unrealized loss on cross-currency swaps, net of tax benefit of $164 | — | (278 | ) | (278 | ) | ||||||||
Unrealized gain (loss) on warrants | — | (1 | ) | (1 | ) | ||||||||
Foreign currency translation adjustment (1) | (1,708 | ) | — | (1,708 | ) | ||||||||
Balance at December 31, 2013 (Restated) | $ | 3,651 | $ | (148 | ) | $ | 3,503 | ||||||
-1 | As the cash generally remains permanently invested in the non U.S. dollar denominated foreign subsidiaries, no deferred taxes are recognized on the related foreign currency translation adjustment. | ||||||||||||
Revenue recognition and accounts receivable | (m) | Revenue recognition and accounts receivable | |||||||||||
Commercial revenue is related to the sale of the Company’s implant products, generally representing hospital customers. Revenues are recognized when these products have been utilized and a confirming purchase order has been received from the hospital. | |||||||||||||
Revenue is derived from third-party payors, including commercial insurance carriers, health maintenance organizations, preferred provider organizations and governmental payors such as Medicare, in connection with the sale of our stimulation products. Revenue is recognized when the stimulation product is placed on or implanted in and accepted by the patient. Amounts paid by these third-party payors are generally based on fixed or allowable reimbursement rates. These revenues are recorded at the expected or pre-authorized reimbursement rates, net of any contractual allowances or adjustments. Certain billings are subject to review by the third-party payors and may be subject to adjustment. | |||||||||||||
For distributor revenue, which is related primarily to implant products, the Company recognizes revenue either on a sell-in or sell-through basis depending on the specific circumstances of the distributor. In some cases the Company recognizes distributor revenue as title and risk of loss passes at either shipment from the Company’s facilities or receipt at the distributor’s facility, assuming all other revenue recognition criteria has been achieved (the “sell-in method”). Based on the results of the Independent Review, the Company determined in some cases the revenue recognition criteria for distributor sales were not satisfied at the time of shipment or receipt; specifically, the existence of extra-contractual terms or arrangements caused the Company not to meet the fixed or determinable criteria for revenue recognition in some cases, and in others collectability had not been established. In situations where we are unable to satisfy the requirements to recognize revenue on the sell-in method, we recognize revenue relating to distributor arrangements once the product is delivered to the end customer (the “sell-through method”). Because the Company does not have reliable information about when its distributors sell the product through to end customers, the Company uses cash collection from distributors as a basis for revenue recognition under the sell-through method. Although in many cases the Company is legally entitled to the accounts receivable at the time of shipment, the Company has not recognized accounts receivables or any corresponding deferred revenues associated with distributor transactions for which revenue is recognized on the sell-through method. Effective April 1, 2013, all distributor revenue is recognized on the sell-through basis. | |||||||||||||
For distributors on the sell-in method prior to April 1, 2013, cost of sales is recognized upon shipment. For sell-through distributors, whose revenue is recognized upon cash receipt, the Company considers whether to match the related cost of sales expense with revenue or to recognize expense upon shipment. In making this assessment, the Company considers the financial viability of its distributors based on their creditworthiness to determine if collectability of amounts sufficient to realize the costs of the products shipped is reasonably assured at the time of shipment to these distributors. In instances where the distributor is determined to be financially viable, the Company defers the costs of sales until the revenue is recognized. | |||||||||||||
Biologics revenue is primarily related to a collaborative arrangement with MTF. In 2008, the Company entered into a collaborative arrangement with MTF to develop and commercialize Trinity Evolution®, a stem cell-based bone growth biologic matrix. With the development process completed in 2009, the Company and MTF operated under the terms of a separate commercialization agreement. Under the terms of the 10-year agreement, MTF sourced the tissue, processed it to create the bone growth matrix, packaged and delivered it to the customer in accordance with orders received from the Company. The Company has exclusive global marketing rights for Trinity Evolution® as well as non-exclusive marketing rights for other products, and receives marketing fees from MTF based on total sales. These marketing fees are recorded on a net basis within net sales and were $48.1 million, $46.5 million and $36.8 million in 2013, 2012 and 2011, respectively. On January 10, 2012, the Company announced that it had reached an agreement with MTF to both co-develop and commercialize a new technology for use in bone grafting applications and to expand MTF’s Trinity Evolution® processing capacity. The amendment amends the term of the existing agreement until the later of (i) 15 years after the date that certain development milestones were achieved under the existing agreement (which occurred during 2010) or (ii) the date that certain licensing arrangements between the Company and NuVasive, Inc. expire. MTF is considered the primary obligor in these arrangements and therefore the Company recognizes these marketing service fees on a net basis upon shipment of the product to the customer. | |||||||||||||
Revenues exclude any value added or other local taxes, intercompany sales and trade discounts. Shipping and handling costs are included in cost of sales. | |||||||||||||
The process for estimating the ultimate collection of accounts receivable involves significant assumptions and judgments. Historical collection and payor reimbursement experience is an integral part of the estimation process related to reserves for doubtful accounts and the establishment of contractual allowances. Accounts receivable are analyzed on a quarterly basis to assess the adequacy of both reserves for doubtful accounts and contractual allowances. Revisions in allowances for doubtful accounts estimates are recorded as an adjustment to bad debt expense within sales and marketing expenses, and contractual allowances are recorded as an adjustment to revenue. These estimates are periodically tested against actual collection experience. | |||||||||||||
Sale of accounts receivable | (n) Sale of accounts receivable | ||||||||||||
The Company will generally sell receivables from certain Italian hospitals each year. The estimated related fee for 2013 and 2012 was $0.8 million and $0.6 million, respectively, which is recorded as interest expense. Trade accounts receivables sold without recourse are removed from the balance sheet at the time of sale. | |||||||||||||
Share-based compensation | (o) Share-based compensation | ||||||||||||
The fair value of service-based stock options are determined using the Black-Scholes valuation model. Such value is recognized as expense over the service period net of estimated forfeitures. | |||||||||||||
The fair value of market-based stock options are determined at the date of the grant using the Monte Carlo valuation methodology. Such value is recognized as expense over the requisite service period adjusted for estimated forfeitures for each separately vesting tranche of the award. The Monte Carlo methodology that we use to estimate the fair value of market-based options incorporates into the valuation the possibility that the market condition may not be satisfied. | |||||||||||||
The expected term of options granted is estimated based on a number of factors, including the vesting and expiration terms of the award, historical employee exercise behavior for both options that are currently outstanding and options that have been exercised or are expired, the historical volatility of the Company’s common stock and an employee’s average length of service. The risk-free interest rate is determined based upon a constant U.S. Treasury security rate with a contractual life that approximates the expected term of the option award. Management estimates expected volatility based on the historical volatility of the Company’s stock. The compensation expense recognized for all equity-based awards is net of estimated forfeitures. Forfeitures are estimated based on an analysis of actual option forfeitures. | |||||||||||||
Advertising costs | (p) Advertising costs | ||||||||||||
The Company expenses all advertising costs as incurred. Advertising expense included in sales and marketing expense for the years ended December 31, 2013, 2012 and 2011 was $0.2 million, $0.3 million and $0.5 million, respectively. | |||||||||||||
Research and development costs | (q) Research and development costs | ||||||||||||
Expenditures related to the collaborative arrangement with MTF are expensed based on the terms of the related agreement. Milestone payments made to MTF in 2013 and 2012 totaled $2.5 million and $3.0 million, respectively. There were no milestone payments made to MTF in 2011. Expenditures for other research and development are expensed as incurred. | |||||||||||||
Income taxes | (r) Income taxes | ||||||||||||
The Company is subject to income taxes in both the U.S. and foreign jurisdictions, and uses estimates in determining the provision for income taxes. The Company accounts for income taxes using the asset and liability method for accounting and reporting for income taxes. Under this method, deferred tax assets and liabilities are recognized based on temporary differences between the financial reporting and income tax basis of assets and liabilities using statutory rates. This process requires that the Company project the current tax liability and estimate the deferred tax assets and liabilities, including net operating loss and tax credit carry forwards. In assessing the need for a valuation allowance, the Company has considered the recent operating results, future taxable income projections and all prudent and feasible tax planning strategies. | |||||||||||||
The Company accounts for uncertain tax positions in accordance with ASC 740, Income Taxes, which contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company reevaluates income tax positions periodically to consider factors such as changes in facts or circumstances, changes in or interpretations of tax law, effectively settled issues under audit, and new audit activity. Such a change in recognition or measurement would result in recognition of a tax benefit or an additional charge to the tax provision. | |||||||||||||
The Company includes imputed interest and any applicable penalties related to tax issues as part of income tax expense in our consolidated financial statements. | |||||||||||||
Net income (loss) per common share | (s) Net income (loss) per common share | ||||||||||||
Net income (loss) per common share—basic is computed using the weighted average number of common shares outstanding during each of the respective years. Net income (loss) per common share—diluted is computed using the weighted average number of common and common equivalent shares outstanding during each of the respective years using the “treasury stock” method, if dilutive. Common equivalent shares represent the dilutive effect of the assumed exercise of outstanding share options (see Note 20). The only differences between basic and diluted shares result from the assumed exercise of certain outstanding share options. | |||||||||||||
Financial instruments and concentration of credit risk | (t) Financial instruments and concentration of credit risk | ||||||||||||
Financial instruments that could subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. Generally, the cash is held at large financial institutions and our cash equivalents consist of highly liquid money market funds. The Company performs ongoing credit evaluations of the customers, generally does not require collateral and maintain a reserve for potential credit losses. The Company believes that a concentration of credit risk related to the accounts receivable is limited because the customers are geographically dispersed and the end users are diversified across several industries. | |||||||||||||
Net sales to our customers and distributors based in Europe were approximately $52 million in 2013 which results in a substantial portion of our trade accounts receivable balance as of December 31, 2013. It is at least reasonably possible that changes in global economic conditions and/or local operating and economic conditions in the regions these distributors operate, or other factors, could affect the future realization of these accounts receivable balances. | |||||||||||||
Recently issued accounting standards | (u) Recently issued accounting standards | ||||||||||||
In July 2013, the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update (“ASU”) No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, A Similar Tax Loss, or a Tax Credit Carryforward Exists. The authoritative guidance concludes that, under certain circumstances, unrecognized tax benefits should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. We adopted this guidance early, as permitted, for the fiscal year ended December 31, 2013. The adoption of this guidance did not have a material effect on our consolidated financial statements. | |||||||||||||
In February 2013, the FASB issued ASU No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The standard requires presentation (either in a single note or parenthetically on the face of the financial statements) of the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and the income statement line items affected by the reclassification. If a component is not required to be reclassified to net income in its entirety, a cross reference to the related footnote for additional information is required. The amendments are effective prospectively for reporting periods beginning after December 15, 2013. The adoption of this guidance did not have a material effect on our consolidated financial statements. | |||||||||||||
On June 16, 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income. This ASU eliminates the current option to present other comprehensive income and its components in the statement of changes in shareholders’ equity and increases the prominence of other comprehensive income in the statements by providing an alternative to present the components of net income and comprehensive income as either one continuous or two separate but consecutive financial statements. Companies are also required to present reclassification adjustments for items that are reclassified from other comprehensive income to net income within these statements. This standard is to be applied retrospectively and is effective for fiscal years beginning after December 15, 2011 with early adoption permitted. The Company adopted this ASU as of March 31, 2012 and it did not have a material impact on the Company’s consolidated financial statements. |
Summary_of_significant_account2
Summary of significant accounting policies (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Schedule of Useful Lives | The useful lives are as follows: | ||||||||||||
Years | |||||||||||||
Buildings | 25 to 33 | ||||||||||||
Plant equipment and instrumentation | 2 to 10 | ||||||||||||
Furniture and fixtures | 4 to 8 | ||||||||||||
Components of Changes in Accumulated Other Comprehensive Income | The components of and changes in accumulated other comprehensive income are as follows: | ||||||||||||
(U.S. Dollars in thousands) | Foreign Currency | Change in | Accumulated Other | ||||||||||
Translation | Fair Value | Comprehensive | |||||||||||
Adjustments | Income | ||||||||||||
Balance at December 31, 2011 (Restated) | $ | 4,228 | $ | (132 | ) | $ | 4,096 | ||||||
Unrealized gain on cross-currency swaps, net of taxes of $153 | — | 263 | 263 | ||||||||||
Foreign currency translation adjustment (1) | 1,131 | — | 1,131 | ||||||||||
Balance at December 31, 2012 (Restated) | 5,359 | 131 | 5,490 | ||||||||||
Unrealized loss on cross-currency swaps, net of tax benefit of $164 | — | (278 | ) | (278 | ) | ||||||||
Unrealized gain (loss) on warrants | — | (1 | ) | (1 | ) | ||||||||
Foreign currency translation adjustment (1) | (1,708 | ) | — | (1,708 | ) | ||||||||
Balance at December 31, 2013 (Restated) | $ | 3,651 | $ | (148 | ) | $ | 3,503 | ||||||
-1 | As the cash generally remains permanently invested in the non U.S. dollar denominated foreign subsidiaries, no deferred taxes are recognized on the related foreign currency translation adjustment. |
Original_and_Further_Restateme1
Original and Further Restatement of the Consolidated Financial Statements (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||||||
Text Block [Abstract] | |||||||||||||||||||||||||||||||||||||
Effects of Original Restatement and Further Restatement to Previously Filed Consolidated Income Statements | The tables below show the effects of the Original Restatement for each of the fiscal years ended December 31, 2012 and 2011, as well as the effects of the Further Restatement for each of the fiscal years ended December 31, 2013, 2012 and 2011. In each case, the tax effect of the adjustments is estimated based on the Company’s estimated tax rate. | ||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||||||||||||||||||
Further Restatement Adjustments by Category | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | Originally | Co-Pay and | Bad Debt | Accounts | Intercompany | Inventory | Other | Total Further | Restated | ||||||||||||||||||||||||||||
Reported | Self-Pay | Timing | Receivable | Profit | Restatement | ||||||||||||||||||||||||||||||||
Revenue | Reserve | Adjustments | |||||||||||||||||||||||||||||||||||
Net sales | $ | 400,534 | $ | (2,242 | ) | $ | — | $ | (582 | ) | $ | — | $ | — | $ | (99 | ) | $ | (2,923 | ) | $ | 397,611 | |||||||||||||||
Cost of sales | 102,300 | — | — | — | 1,090 | 3,688 | (166 | ) | 4,612 | 106,912 | |||||||||||||||||||||||||||
Gross profit | 298,234 | (2,242 | ) | — | (582 | ) | (1,090 | ) | (3,688 | ) | 67 | (7,535 | ) | 290,699 | |||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 176,581 | (2,242 | ) | 1,455 | 122 | — | — | (448 | ) | (1,113 | ) | 175,468 | |||||||||||||||||||||||||
General and administrative | 65,147 | — | — | — | — | — | (317 | ) | (317 | ) | 64,830 | ||||||||||||||||||||||||||
Research and development | 26,768 | — | — | — | — | — | — | — | 26,768 | ||||||||||||||||||||||||||||
Amortization of intangible assets | 2,687 | — | — | — | — | — | — | — | 2,687 | ||||||||||||||||||||||||||||
Costs related to the accounting review and restatement | 12,945 | — | — | — | — | — | — | — | 12,945 | ||||||||||||||||||||||||||||
Impairment of Goodwill | 19,193 | — | — | — | — | — | — | — | 19,193 | ||||||||||||||||||||||||||||
303,321 | (2,242 | ) | 1,455 | 122 | — | — | (765 | ) | (1,430 | ) | 301,891 | ||||||||||||||||||||||||||
Operating (loss) income | (5,087 | ) | — | (1,455 | ) | (704 | ) | (1,090 | ) | (3,688 | ) | 832 | (6,105 | ) | (11,192 | ) | |||||||||||||||||||||
Other income and (expense) | 295 | — | — | — | — | — | 294 | 294 | 589 | ||||||||||||||||||||||||||||
Loss before income taxes | (4,792 | ) | — | (1,455 | ) | (704 | ) | (1,090 | ) | (3,688 | ) | 1,126 | (5,811 | ) | (10,603 | ) | |||||||||||||||||||||
Income tax expense | (10,116 | ) | — | 509 | 246 | 381 | 1,290 | 88 | 2,514 | (7,602 | ) | ||||||||||||||||||||||||||
Net loss from continuing operations | $ | (14,908 | ) | $ | — | $ | (946 | ) | $ | (458 | ) | $ | (709 | ) | $ | (2,398 | ) | $ | 1,214 | $ | (3,297 | ) | $ | (18,205 | ) | ||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Original Restatement Adjustments by Category | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | As Reported | Distributor | Inventory | Royalties | Other | Total Original | As Originally | ||||||||||||||||||||||||||||||
in the 2012 | Revenue | Reserves | Restatement | Restated in | |||||||||||||||||||||||||||||||||
Form 10-K | Adjustments | 2012 | |||||||||||||||||||||||||||||||||||
Prior to | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Original | |||||||||||||||||||||||||||||||||||||
Restatement | |||||||||||||||||||||||||||||||||||||
Net sales | $ | 462,320 | $ | (14,777 | ) | $ | — | $ | — | $ | 38 | $ | (14,739 | ) | $ | 447,581 | |||||||||||||||||||||
Cost of sales | 86,492 | (2,032 | ) | 5,647 | 8,190 | (44 | ) | 11,761 | 98,253 | ||||||||||||||||||||||||||||
Gross profit | 375,828 | (12,745 | ) | (5,647 | ) | (8,190 | ) | 82 | (26,500 | ) | 349,328 | ||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 200,343 | (6,629 | ) | — | (8,190 | ) | 1,607 | (13,212 | ) | 187,131 | |||||||||||||||||||||||||||
General and administrative | 53,827 | (2 | ) | — | — | (434 | ) | (436 | ) | 53,391 | |||||||||||||||||||||||||||
Research and development | 28,577 | — | — | — | — | — | 28,577 | ||||||||||||||||||||||||||||||
Amortization of intangible assets | 2,098 | — | — | — | 200 | 200 | 2,298 | ||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | 1,973 | — | — | — | (678 | ) | (678 | ) | 1,295 | ||||||||||||||||||||||||||||
286,818 | (6,631 | ) | — | (8,190 | ) | 695 | (14,126 | ) | 272,692 | ||||||||||||||||||||||||||||
Operating income | 89,010 | (6,114 | ) | (5,647 | ) | — | (613 | ) | (12,374 | ) | 76,636 | ||||||||||||||||||||||||||
Other income and (expense) | (6,282 | ) | — | — | — | (166 | ) | (166 | ) | (6,448 | ) | ||||||||||||||||||||||||||
Income before income taxes | 82,728 | (6,114 | ) | (5,647 | ) | — | (779 | ) | (12,540 | ) | 70,188 | ||||||||||||||||||||||||||
Income tax expense | (28,792 | ) | 1,782 | 1,645 | — | 227 | 3,654 | (25,138 | ) | ||||||||||||||||||||||||||||
Net income from continuing operations | $ | 53,936 | $ | (4,332 | ) | $ | (4,002 | ) | $ | — | $ | (552 | ) | $ | (8,886 | ) | $ | 45,050 | |||||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||||||||||||||||||
Further Restatement Adjustments by Category | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | As Originally | Co-Pay and | Bad Debt | Accounts | Intercompany | Inventory | Other | Total Further | Restated | ||||||||||||||||||||||||||||
Restated in | Self-Pay | Timing | Receivable | Profit | Restatement | ||||||||||||||||||||||||||||||||
2012 | Revenue | Reserve | Adjustments | ||||||||||||||||||||||||||||||||||
Form 10-K/A | |||||||||||||||||||||||||||||||||||||
Net sales | $ | 447,581 | $ | (9,049 | ) | $ | — | $ | 1,653 | $ | — | $ | — | $ | 4 | $ | (7,392 | ) | $ | 440,189 | |||||||||||||||||
Cost of sales | 98,253 | — | — | — | 207 | 1,774 | 492 | 2,473 | 100,726 | ||||||||||||||||||||||||||||
Gross profit | 349,328 | (9,049 | ) | — | 1,653 | (207 | ) | (1,774 | ) | (488 | ) | $ | (9,865 | ) | 339,463 | ||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 187,131 | (9,049 | ) | 1,097 | (408 | ) | — | — | — | $ | (8,360 | ) | 178,771 | ||||||||||||||||||||||||
General and administrative | 53,391 | — | — | — | — | — | 259 | 259 | 53,650 | ||||||||||||||||||||||||||||
Research and development | 28,577 | — | — | — | — | — | — | — | 28,577 | ||||||||||||||||||||||||||||
Amortization of intangible assets | 2,298 | — | — | — | — | — | — | — | 2,298 | ||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | 1,295 | — | — | — | — | — | — | — | 1,295 | ||||||||||||||||||||||||||||
272,692 | (9,049 | ) | 1,097 | (408 | ) | — | — | 259 | (8,101 | ) | 264,591 | ||||||||||||||||||||||||||
Operating income | 76,636 | — | (1,097 | ) | 2,061 | (207 | ) | (1,774 | ) | (747 | ) | (1,764 | ) | 74,872 | |||||||||||||||||||||||
Other income and (expense) | (6,448 | ) | — | — | — | — | — | 641 | 641 | $ | (5,807 | ) | |||||||||||||||||||||||||
Income before income taxes | 70,188 | — | (1,097 | ) | 2,061 | (207 | ) | (1,774 | ) | (106 | ) | (1,123 | ) | 69,065 | |||||||||||||||||||||||
Income tax expense | (25,138 | ) | — | 384 | (721 | ) | 72 | 621 | 838 | 1,194 | $ | (23,944 | ) | ||||||||||||||||||||||||
Net income from continuing operations | $ | 45,050 | $ | — | $ | (713 | ) | $ | 1,340 | $ | (135 | ) | $ | (1,153 | ) | $ | 732 | $ | 71 | $ | 45,121 | ||||||||||||||||
Year Ended December 31, 2011 | |||||||||||||||||||||||||||||||||||||
Original Restatement Adjustments by Category | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | As Reported | Distributor | Inventory | Royalties | Other | Total Original | As Originally | ||||||||||||||||||||||||||||||
in the 2012 | Revenue | Reserves | Restatement | Restated in | |||||||||||||||||||||||||||||||||
Form 10-K | Adjustments | 2012 | |||||||||||||||||||||||||||||||||||
Prior to | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Original | |||||||||||||||||||||||||||||||||||||
Restatement | |||||||||||||||||||||||||||||||||||||
Net sales | $ | 470,121 | $ | (29,135 | ) | $ | — | $ | — | $ | 985 | $ | (28,150 | ) | $ | 441,971 | |||||||||||||||||||||
Cost of sales | 92,619 | (8,289 | ) | 3,377 | 7,713 | 107 | 2,908 | 95,527 | |||||||||||||||||||||||||||||
Gross profit | 377,502 | (20,846 | ) | (3,377 | ) | (7,713 | ) | 878 | (31,058 | ) | 346,444 | ||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 200,145 | (1,216 | ) | — | (7,713 | ) | 2,295 | (6,634 | ) | 193,511 | |||||||||||||||||||||||||||
General and administrative | 64,374 | — | — | — | 107 | 107 | 64,481 | ||||||||||||||||||||||||||||||
Research and development | 22,861 | — | — | — | — | — | 22,861 | ||||||||||||||||||||||||||||||
Amortization of intangible assets | 2,350 | — | — | — | 200 | 200 | 2,550 | ||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | 56,463 | — | — | — | 678 | 678 | 57,141 | ||||||||||||||||||||||||||||||
346,193 | (1,216 | ) | — | (7,713 | ) | 3,280 | (5,649 | ) | 340,544 | ||||||||||||||||||||||||||||
Operating income | 31,309 | (19,630 | ) | (3,377 | ) | — | (2,402 | ) | (25,409 | ) | 5,900 | ||||||||||||||||||||||||||
Other income and (expense) | (11,868 | ) | — | — | — | 3,915 | 3,915 | (7,953 | ) | ||||||||||||||||||||||||||||
Income (loss) before income taxes | 19,441 | (19,630 | ) | (3,377 | ) | — | 1,513 | (21,494 | ) | (2,053 | ) | ||||||||||||||||||||||||||
Income tax expense | (21,181 | ) | 6,408 | 1,102 | — | (494 | ) | 7,016 | (14,165 | ) | |||||||||||||||||||||||||||
Net loss from continuing operations | $ | (1,740 | ) | $ | (13,222 | ) | $ | (2,275 | ) | $ | — | $ | 1,019 | $ | (14,478 | ) | $ | (16,218 | ) | ||||||||||||||||||
Year Ended December 31, 2011 | |||||||||||||||||||||||||||||||||||||
Further Restatement Adjustments by Category | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | As Originally | Co-Pay and | Bad Debt | Accounts | Intercompany | Inventory | Other | Total Further | Restated | ||||||||||||||||||||||||||||
Restated in | Self-Pay | Timing | Receivable | Profit | Restatement | ||||||||||||||||||||||||||||||||
2012 | Revenue | Reserve | Adjustments | ||||||||||||||||||||||||||||||||||
Form 10-K/A | |||||||||||||||||||||||||||||||||||||
Net sales | $ | 441,971 | $ | (5,960 | ) | $ | — | $ | (439 | ) | $ | — | $ | — | $ | (53 | ) | $ | (6,452 | ) | $ | 435,519 | |||||||||||||||
Cost of sales | 95,527 | — | — | — | 253 | 321 | 314 | 888 | 96,415 | ||||||||||||||||||||||||||||
Gross profit | 346,444 | (5,960 | ) | — | (439 | ) | (253 | ) | (321 | ) | (367 | ) | (7,340 | ) | 339,104 | ||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 193,511 | (5,960 | ) | (2,143 | ) | (252 | ) | — | — | — | (8,355 | ) | 185,156 | ||||||||||||||||||||||||
General and administrative | 64,481 | — | — | — | — | — | 304 | 304 | 64,785 | ||||||||||||||||||||||||||||
Research and development | 22,861 | — | — | — | — | — | — | — | 22,861 | ||||||||||||||||||||||||||||
Amortization of intangible assets | 2,550 | — | — | — | — | — | — | — | 2,550 | ||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | 57,141 | — | — | — | — | — | — | — | 57,141 | ||||||||||||||||||||||||||||
340,544 | (5,960 | ) | (2,143 | ) | (252 | ) | — | — | 304 | (8,051 | ) | 332,493 | |||||||||||||||||||||||||
Operating income | 5,900 | — | 2,143 | (187 | ) | (253 | ) | (321 | ) | (671 | ) | 711 | 6,611 | ||||||||||||||||||||||||
Other income and (expense) | (7,953 | ) | — | — | — | — | — | (21 | ) | (21 | ) | (7,974 | ) | ||||||||||||||||||||||||
Loss before income taxes | (2,053 | ) | — | 2,143 | (187 | ) | (253 | ) | (321 | ) | (692 | ) | 690 | (1,363 | ) | ||||||||||||||||||||||
Income tax expense | (14,165 | ) | — | (752 | ) | 66 | 89 | 113 | 206 | (278 | ) | (14,443 | ) | ||||||||||||||||||||||||
Net loss from continuing operations | $ | (16,218 | ) | $ | — | $ | 1,391 | $ | (121 | ) | $ | (164 | ) | $ | (208 | ) | $ | (486 | ) | $ | 412 | $ | (15,806 | ) | |||||||||||||
Effects of Original Restatement and Further Restatement on Consolidated Balance Sheet | The effects of the Further Restatement on the Company’s consolidated balance sheet as of December 31, 2013 are as follows: | ||||||||||||||||||||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands except share and per share data) | Originally | Further | Restated | ||||||||||||||||||||||||||||||||||
Reported in | Restatement | ||||||||||||||||||||||||||||||||||||
2013 | Adjustments | ||||||||||||||||||||||||||||||||||||
Form 10-K | |||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 30,486 | $ | (1,562 | ) | $ | 28,924 | ||||||||||||||||||||||||||||||
Restricted cash | 23,761 | — | 23,761 | ||||||||||||||||||||||||||||||||||
Trade accounts receivable, less allowances of $9,111 | 75,567 | (4,756 | ) | 70,811 | |||||||||||||||||||||||||||||||||
Inventories | 90,577 | (17,899 | ) | 72,678 | |||||||||||||||||||||||||||||||||
Deferred income taxes | 33,947 | 6,052 | 39,999 | ||||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | 25,906 | 3,027 | 28,933 | ||||||||||||||||||||||||||||||||||
Total current assets | 280,244 | (15,138 | ) | 265,106 | |||||||||||||||||||||||||||||||||
Property, plant and equipment, net | 54,606 | (234 | ) | 54,372 | |||||||||||||||||||||||||||||||||
Patents and other intangible assets, net | 9,046 | — | 9,046 | ||||||||||||||||||||||||||||||||||
Goodwill | 53,565 | — | 53,565 | ||||||||||||||||||||||||||||||||||
Deferred income taxes | 18,336 | 4,058 | 22,394 | ||||||||||||||||||||||||||||||||||
Other long-term assets | 7,385 | 107 | 7,492 | ||||||||||||||||||||||||||||||||||
Total assets | $ | 423,182 | $ | (11,207 | ) | $ | 411,975 | ||||||||||||||||||||||||||||||
Liabilities and shareholders’ equity | |||||||||||||||||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||||||||||||||||
Trade accounts payable | $ | 20,674 | $ | — | $ | 20,674 | |||||||||||||||||||||||||||||||
Other current liabilities | 46,146 | 3,530 | 49,676 | ||||||||||||||||||||||||||||||||||
Total current liabilities | 66,820 | 3,530 | 70,350 | ||||||||||||||||||||||||||||||||||
Long-term debt | 20,000 | — | 20,000 | ||||||||||||||||||||||||||||||||||
Deferred income taxes | 13,132 | (106 | ) | 13,026 | |||||||||||||||||||||||||||||||||
Other long-term liabilities | 12,736 | — | 12,736 | ||||||||||||||||||||||||||||||||||
Total liabilities | 112,688 | 3,424 | 116,112 | ||||||||||||||||||||||||||||||||||
Contingencies (Note 17) | |||||||||||||||||||||||||||||||||||||
Shareholders’ equity | |||||||||||||||||||||||||||||||||||||
Common shares $0.10 par value; 50,000,000 shares authorized; 18,102,335 issued and outstanding | 1,810 | — | 1,810 | ||||||||||||||||||||||||||||||||||
Additional paid-in capital | 216,653 | — | 216,653 | ||||||||||||||||||||||||||||||||||
Retained earnings | 89,332 | (15,435 | ) | 73,897 | |||||||||||||||||||||||||||||||||
Accumulated other comprehensive income | 2,699 | 804 | 3,503 | ||||||||||||||||||||||||||||||||||
Total shareholders’ equity | 310,494 | (14,631 | ) | 295,863 | |||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 423,182 | $ | (11,207 | ) | $ | 411,975 | ||||||||||||||||||||||||||||||
The effects of the Original Restatement and the Further Restatement on the Company’s consolidated balance sheet as of December 31, 2012 are as follows: | |||||||||||||||||||||||||||||||||||||
As of December 31, 2012 | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands except share and per share data) | As Reported in | Original | As Originally | Further | Restated | ||||||||||||||||||||||||||||||||
the 2012 Form | Restatement | Restated in the | Restatement | ||||||||||||||||||||||||||||||||||
10-K Prior to | Adjustments | 2012 | Adjustments | ||||||||||||||||||||||||||||||||||
Original | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Restatement | |||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 31,055 | $ | — | $ | 31,055 | $ | (288 | ) | $ | 30,767 | ||||||||||||||||||||||||||
Restricted cash | 21,314 | — | 21,314 | — | 21,314 | ||||||||||||||||||||||||||||||||
Trade accounts receivable, less allowances of $6,673 | 150,316 | (43,004 | ) | 107,312 | (3,510 | ) | 103,802 | ||||||||||||||||||||||||||||||
Inventories | 88,744 | (5,371 | ) | 83,373 | (13,560 | ) | 69,813 | ||||||||||||||||||||||||||||||
Deferred income taxes | 16,959 | 16,491 | 33,450 | 5,037 | 38,487 | ||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | 32,056 | 2,023 | 34,079 | 2,370 | 36,449 | ||||||||||||||||||||||||||||||||
Total current assets | 340,444 | (29,861 | ) | 310,583 | (9,951 | ) | 300,632 | ||||||||||||||||||||||||||||||
Property, plant and equipment, net | 51,362 | 2,473 | 53,835 | (1,042 | ) | 52,793 | |||||||||||||||||||||||||||||||
Patents and other intangible assets, net | 6,880 | 410 | 7,290 | — | 7,290 | ||||||||||||||||||||||||||||||||
Goodwill | 74,388 | — | 74,388 | — | 74,388 | ||||||||||||||||||||||||||||||||
Deferred income taxes | 19,904 | (1,023 | ) | 18,881 | 2,642 | 21,523 | |||||||||||||||||||||||||||||||
Other long-term assets | 11,303 | (3,383 | ) | 7,920 | — | 7,920 | |||||||||||||||||||||||||||||||
Total assets | $ | 504,281 | $ | (31,384 | ) | $ | 472,897 | $ | (8,351 | ) | $ | 464,546 | |||||||||||||||||||||||||
Liabilities and shareholders’ equity | |||||||||||||||||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||||||||||||||||
Bank borrowings | $ | 16 | $ | — | $ | 16 | $ | — | $ | 16 | |||||||||||||||||||||||||||
Trade accounts payable | 21,812 | 763 | 22,575 | — | 22,575 | ||||||||||||||||||||||||||||||||
Other current liabilities | 46,969 | (7,375 | ) | 39,594 | 3,148 | 42,742 | |||||||||||||||||||||||||||||||
Total current liabilities | 68,797 | (6,612 | ) | 62,185 | 3,148 | 65,333 | |||||||||||||||||||||||||||||||
Long-term debt | 20,000 | — | 20,000 | — | 20,000 | ||||||||||||||||||||||||||||||||
Deferred income taxes | 11,456 | — | 11,456 | (106 | ) | 11,350 | |||||||||||||||||||||||||||||||
Other long-term liabilities | 4,930 | 6,494 | 11,424 | — | 11,424 | ||||||||||||||||||||||||||||||||
Total liabilities | 105,183 | (118 | ) | 105,065 | 3,042 | 108,107 | |||||||||||||||||||||||||||||||
Contingencies (Note 17) | |||||||||||||||||||||||||||||||||||||
Shareholders’ equity | |||||||||||||||||||||||||||||||||||||
Common shares $0.10 par value; 50,000,000 shares authorized; 19,339,329 issued and outstanding | 1,934 | — | 1,934 | — | 1,934 | ||||||||||||||||||||||||||||||||
Additional paid-in capital | 246,111 | 195 | 246,306 | — | 246,306 | ||||||||||||||||||||||||||||||||
Retained earnings | 148,549 | (33,702 | ) | 114,847 | (12,138 | ) | 102,709 | ||||||||||||||||||||||||||||||
Accumulated other comprehensive income | 2,504 | 2,241 | 4,745 | 745 | 5,490 | ||||||||||||||||||||||||||||||||
Total shareholders’ equity | 399,098 | (31,266 | ) | 367,832 | (11,393 | ) | 356,439 | ||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 504,281 | $ | (31,384 | ) | $ | 472,897 | $ | (8,351 | ) | $ | 464,546 | |||||||||||||||||||||||||
Effects of Original Restatement and Further Restatement of Consolidated Statement of Operations and Comprehensive Income (Loss) | The effects of the Further Restatement on the Company’s consolidated statement of operations and comprehensive income for the year ended December 31, 2013 are as follows: | ||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands, except share and per share data) | Originally | Further | Restated | ||||||||||||||||||||||||||||||||||
Reported in 2013 | Restatement | ||||||||||||||||||||||||||||||||||||
Form 10-K | Adjustments | ||||||||||||||||||||||||||||||||||||
Product sales | $ | 352,796 | $ | (3,244 | ) | $ | 349,552 | ||||||||||||||||||||||||||||||
Marketing service fees | 47,738 | 321 | 48,059 | ||||||||||||||||||||||||||||||||||
Net sales | 400,534 | (2,923 | ) | 397,611 | |||||||||||||||||||||||||||||||||
Cost of sales | 102,300 | 4,612 | 106,912 | ||||||||||||||||||||||||||||||||||
Gross profit | 298,234 | (7,535 | ) | 290,699 | |||||||||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 176,581 | (1,113 | ) | 175,468 | |||||||||||||||||||||||||||||||||
General and administrative | 65,147 | (317 | ) | 64,830 | |||||||||||||||||||||||||||||||||
Research and development | 26,768 | — | 26,768 | ||||||||||||||||||||||||||||||||||
Amortization of intangible assets | 2,687 | — | 2,687 | ||||||||||||||||||||||||||||||||||
Costs related to the accounting review and restatement | 12,945 | — | 12,945 | ||||||||||||||||||||||||||||||||||
Impairment of Goodwill | 19,193 | — | 19,193 | ||||||||||||||||||||||||||||||||||
303,321 | (1,430 | ) | 301,891 | ||||||||||||||||||||||||||||||||||
Operating loss | (5,087 | ) | (6,105 | ) | (11,192 | ) | |||||||||||||||||||||||||||||||
Other income and (expense) | |||||||||||||||||||||||||||||||||||||
Interest expense, net | (1,925 | ) | 98 | (1,827 | ) | ||||||||||||||||||||||||||||||||
Other expense | 2,220 | 196 | 2,416 | ||||||||||||||||||||||||||||||||||
295 | 294 | 589 | |||||||||||||||||||||||||||||||||||
Loss before income taxes | (4,792 | ) | (5,811 | ) | (10,603 | ) | |||||||||||||||||||||||||||||||
Income tax expense | (10,116 | ) | 2,514 | (7,602 | ) | ||||||||||||||||||||||||||||||||
Net loss from continuing operations | (14,908 | ) | (3,297 | ) | (18,205 | ) | |||||||||||||||||||||||||||||||
Discontinued operations (Note 16) | |||||||||||||||||||||||||||||||||||||
Loss from discontinued operations | (15,510 | ) | — | (15,510 | ) | ||||||||||||||||||||||||||||||||
Income tax benefit (expense) | 4,903 | — | 4,903 | ||||||||||||||||||||||||||||||||||
Net loss from discontinued operations | (10,607 | ) | — | (10,607 | ) | ||||||||||||||||||||||||||||||||
Net loss | $ | (25,515 | ) | $ | (3,297 | ) | $ | (28,812 | ) | ||||||||||||||||||||||||||||
Net loss per common share—basic: | |||||||||||||||||||||||||||||||||||||
Net loss from continuing operations | $ | (0.80 | ) | $ | (0.17 | ) | $ | (0.97 | ) | ||||||||||||||||||||||||||||
Net loss from discontinued operations | (0.57 | ) | — | (0.57 | ) | ||||||||||||||||||||||||||||||||
Net loss per common share—basic | $ | (1.37 | ) | $ | (0.17 | ) | $ | (1.54 | ) | ||||||||||||||||||||||||||||
Net loss per common share—diluted: | |||||||||||||||||||||||||||||||||||||
Net loss from continuing operations | $ | (0.80 | ) | $ | (0.17 | ) | $ | (0.97 | ) | ||||||||||||||||||||||||||||
Net loss from discontinued operations | (0.57 | ) | — | (0.57 | ) | ||||||||||||||||||||||||||||||||
Net loss per common share—diluted | $ | (1.37 | ) | $ | (0.17 | ) | $ | (1.54 | ) | ||||||||||||||||||||||||||||
Weighted average number of common shares: | |||||||||||||||||||||||||||||||||||||
Basic | 18,697,228 | — | 18,697,228 | ||||||||||||||||||||||||||||||||||
Diluted | 18,697,228 | — | 18,697,228 | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, before tax: | |||||||||||||||||||||||||||||||||||||
Translation adjustment | $ | (1,768 | ) | $ | 60 | $ | (1,708 | ) | |||||||||||||||||||||||||||||
Unrealized gain on derivative instrument | (442 | ) | (1 | ) | (443 | ) | |||||||||||||||||||||||||||||||
Other comprehensive loss, before tax | (2,210 | ) | 59 | (2,151 | ) | ||||||||||||||||||||||||||||||||
Income tax expense related to components of other comprehensive income | 164 | — | 164 | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | (2,046 | ) | 59 | (1,987 | ) | ||||||||||||||||||||||||||||||||
Comprehensive loss | $ | (27,561 | ) | $ | (3,238 | ) | $ | (30,799 | ) | ||||||||||||||||||||||||||||
The effects of the Original Restatement and the Further Restatement on the Company’s consolidated statement of operations and comprehensive income for the year ended December 31, 2012 are as follows: | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands, except share and per share data) | As Reported in the | Original | As Originally | Further | Restated | ||||||||||||||||||||||||||||||||
2012 Form 10-K | Restatement | Restated in the | Restatement | ||||||||||||||||||||||||||||||||||
Prior to Original | Adjustments | 2012 | Adjustments | ||||||||||||||||||||||||||||||||||
Restatement | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Product sales | $ | 415,850 | $ | (14,811 | ) | $ | 401,039 | $ | (7,392 | ) | $ | 393,647 | |||||||||||||||||||||||||
Marketing service fees | 46,470 | 72 | 46,542 | — | 46,542 | ||||||||||||||||||||||||||||||||
Net sales | 462,320 | (14,739 | ) | 447,581 | (7,392 | ) | 440,189 | ||||||||||||||||||||||||||||||
Cost of sales | 86,492 | 11,761 | 98,253 | 2,473 | 100,726 | ||||||||||||||||||||||||||||||||
Gross profit | 375,828 | (26,500 | ) | 349,328 | (9,865 | ) | 339,463 | ||||||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 200,343 | (13,212 | ) | 187,131 | (8,360 | ) | 178,771 | ||||||||||||||||||||||||||||||
General and administrative | 53,827 | (436 | ) | 53,391 | 259 | 53,650 | |||||||||||||||||||||||||||||||
Research and development | 28,577 | — | 28,577 | — | 28,577 | ||||||||||||||||||||||||||||||||
Amortization of intangible assets | 2,098 | 200 | 2,298 | — | 2,298 | ||||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions (Note 17) | 1,973 | (678 | ) | 1,295 | — | 1,295 | |||||||||||||||||||||||||||||||
286,818 | (14,126 | ) | 272,692 | (8,101 | ) | 264,591 | |||||||||||||||||||||||||||||||
Operating income | 89,010 | (12,374 | ) | 76,636 | (1,764 | ) | 74,872 | ||||||||||||||||||||||||||||||
Other income and (expense) | |||||||||||||||||||||||||||||||||||||
Interest expense, net | (4,577 | ) | (166 | ) | (4,743 | ) | 582 | (4,161 | ) | ||||||||||||||||||||||||||||
Other expense | (1,705 | ) | — | (1,705 | ) | 59 | (1,646 | ) | |||||||||||||||||||||||||||||
(6,282 | ) | (166 | ) | (6,448 | ) | 641 | (5,807 | ) | |||||||||||||||||||||||||||||
Income before income taxes | 82,728 | (12,540 | ) | 70,188 | (1,123 | ) | 69,065 | ||||||||||||||||||||||||||||||
Income tax expense | (28,792 | ) | 3,654 | (25,138 | ) | 1,194 | (23,944 | ) | |||||||||||||||||||||||||||||
Net income from continuing operations | 53,936 | (8,886 | ) | 45,050 | 71 | 45,121 | |||||||||||||||||||||||||||||||
Discontinued operations (Note 16) | |||||||||||||||||||||||||||||||||||||
Gain on sale of Breg, Inc., | 1,345 | — | 1,345 | — | 1,345 | ||||||||||||||||||||||||||||||||
Loss from discontinued operations | (4,012 | ) | 1,018 | (2,994 | ) | (500 | ) | (3,494 | ) | ||||||||||||||||||||||||||||
Income tax benefit (expense) | 26 | (589 | ) | (563 | ) | 443 | (120 | ) | |||||||||||||||||||||||||||||
Net loss from discontinued operations | (2,641 | ) | 429 | (2,212 | ) | (57 | ) | (2,269 | ) | ||||||||||||||||||||||||||||
Net income | $ | 51,295 | $ | (8,457 | ) | $ | 42,838 | $ | 14 | $ | 42,852 | ||||||||||||||||||||||||||
Net income (loss) per common share—basic: | |||||||||||||||||||||||||||||||||||||
Net income from continuing operations | $ | 2.84 | $ | (0.47 | ) | $ | 2.37 | $ | 0.01 | $ | 2.38 | ||||||||||||||||||||||||||
Net loss from discontinued operations | (0.14 | ) | 0.02 | (0.12 | ) | — | (0.12 | ) | |||||||||||||||||||||||||||||
Net income per common share—basic | $ | 2.7 | $ | (0.45 | ) | $ | 2.25 | $ | 0.01 | $ | 2.26 | ||||||||||||||||||||||||||
Net income (loss) per common share—diluted: | |||||||||||||||||||||||||||||||||||||
Net income from continuing operations | $ | 2.78 | $ | (0.46 | ) | $ | 2.32 | $ | 0.01 | $ | 2.33 | ||||||||||||||||||||||||||
Net loss from discontinued operations | (0.14 | ) | 0.03 | (0.11 | ) | (0.01 | ) | (0.12 | ) | ||||||||||||||||||||||||||||
Net income per common share—diluted: | $ | 2.64 | $ | (0.43 | ) | $ | 2.21 | $ | 0 | $ | 2.21 | ||||||||||||||||||||||||||
Weighted average number of common shares: | |||||||||||||||||||||||||||||||||||||
Basic | 18,977,263 | — | 18,977,263 | — | 18,977,263 | ||||||||||||||||||||||||||||||||
Diluted | 19,390,413 | — | 19,390,413 | — | 19,390,413 | ||||||||||||||||||||||||||||||||
Other comprehensive income, before tax: | |||||||||||||||||||||||||||||||||||||
Translation adjustment | $ | 480 | $ | 288 | $ | 768 | $ | 363 | $ | 1,131 | |||||||||||||||||||||||||||
Unrealized gain on derivative instrument | 416 | — | 416 | — | 416 | ||||||||||||||||||||||||||||||||
Other comprehensive income, before tax | 896 | 288 | 1,184 | 363 | 1,547 | ||||||||||||||||||||||||||||||||
Income tax expense related to components of other comprehensive income | (153 | ) | — | (153 | ) | — | (153 | ) | |||||||||||||||||||||||||||||
Other comprehensive income, net of tax | 743 | 288 | 1,031 | 363 | 1,394 | ||||||||||||||||||||||||||||||||
Comprehensive income | $ | 52,038 | $ | (8,169 | ) | $ | 43,869 | $ | 377 | $ | 44,246 | ||||||||||||||||||||||||||
The effects of the Original Restatement and the Further Restatement on the Company’s consolidated statement of operations and comprehensive loss for the year ended December 31, 2011 are as follows: | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2011 | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands, except share and per share data) | As Reported in the | Original | As Originally | Further | Restated | ||||||||||||||||||||||||||||||||
2012 Form 10-K | Restatement | Restated in the | Restatement | ||||||||||||||||||||||||||||||||||
Prior to Original | Adjustments | 2012 | Adjustments | ||||||||||||||||||||||||||||||||||
Restatement | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Product sales | $ | 432,975 | $ | (27,828 | ) | $ | 405,147 | (6,452 | ) | $ | 398,695 | ||||||||||||||||||||||||||
Marketing service fees | 37,146 | (322 | ) | 36,824 | — | 36,824 | |||||||||||||||||||||||||||||||
Net sales | 470,121 | (28,150 | ) | 441,971 | (6,452 | ) | 435,519 | ||||||||||||||||||||||||||||||
Cost of sales | 92,619 | 2,908 | 95,527 | 888 | 96,415 | ||||||||||||||||||||||||||||||||
Gross profit | 377,502 | (31,058 | ) | 346,444 | (7,340 | ) | 339,104 | ||||||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 200,145 | (6,634 | ) | 193,511 | (8,355 | ) | 185,156 | ||||||||||||||||||||||||||||||
General and administrative | 64,374 | 107 | 64,481 | 304 | 64,785 | ||||||||||||||||||||||||||||||||
Research and development | 22,861 | — | 22,861 | — | 22,861 | ||||||||||||||||||||||||||||||||
Amortization of intangible assets | 2,350 | 200 | 2,550 | — | 2,550 | ||||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions (Note 17) | 56,463 | 678 | 57,141 | — | 57,141 | ||||||||||||||||||||||||||||||||
346,193 | (5,649 | ) | 340,544 | (8,051 | ) | 332,493 | |||||||||||||||||||||||||||||||
Operating income | 31,309 | (25,409 | ) | 5,900 | 711 | 6,611 | |||||||||||||||||||||||||||||||
Other income and (expense) | |||||||||||||||||||||||||||||||||||||
Interest expense, net | (9,456 | ) | 3,915 | (5,541 | ) | 100 | (5,441 | ) | |||||||||||||||||||||||||||||
Other expense | (2,412 | ) | — | (2,412 | ) | (121 | ) | (2,533 | ) | ||||||||||||||||||||||||||||
(11,868 | ) | 3,915 | (7,953 | ) | (21 | ) | (7,974 | ) | |||||||||||||||||||||||||||||
Income (loss) before income taxes | 19,441 | (21,494 | ) | (2,053 | ) | 690 | (1,363 | ) | |||||||||||||||||||||||||||||
Income tax expense | (21,181 | ) | 7,016 | (14,165 | ) | (278 | ) | (14,443 | ) | ||||||||||||||||||||||||||||
Net loss from continuing operations | (1,740 | ) | (14,478 | ) | (16,218 | ) | 412 | (15,806 | ) | ||||||||||||||||||||||||||||
Discontinued operations (Note 16) | |||||||||||||||||||||||||||||||||||||
Income (loss) from discontinued operations | 1,263 | (3,968 | ) | (2,705 | ) | — | (2,705 | ) | |||||||||||||||||||||||||||||
Income tax (expense) benefit | (596 | ) | 1,409 | 813 | — | 813 | |||||||||||||||||||||||||||||||
Net income (loss) from discontinued operations | 667 | (2,559 | ) | (1,892 | ) | — | (1,892 | ) | |||||||||||||||||||||||||||||
Net loss | $ | (1,073 | ) | $ | (17,037 | ) | $ | (18,110 | ) | 412 | $ | (17,698 | ) | ||||||||||||||||||||||||
Net (loss) income per common share—basic: | |||||||||||||||||||||||||||||||||||||
Net loss from continuing operations | $ | (0.10 | ) | $ | (0.79 | ) | $ | (0.89 | ) | $ | 0.02 | $ | (0.87 | ) | |||||||||||||||||||||||
Net income (loss) from discontinued operations | 0.04 | (0.14 | ) | (0.10 | ) | — | (0.10 | ) | |||||||||||||||||||||||||||||
Net loss per common share—basic | $ | (0.06 | ) | $ | (0.93 | ) | $ | (0.99 | ) | $ | 0.02 | $ | (0.97 | ) | |||||||||||||||||||||||
Net (loss) income per common share—diluted: | |||||||||||||||||||||||||||||||||||||
Net loss from continuing operations | $ | (0.10 | ) | $ | (0.79 | ) | $ | (0.89 | ) | $ | 0.02 | $ | (0.87 | ) | |||||||||||||||||||||||
Net income (loss) from discontinued operations | 0.04 | (0.14 | ) | (0.10 | ) | — | (0.10 | ) | |||||||||||||||||||||||||||||
Net loss per common share—diluted: | $ | (0.06 | ) | $ | (0.93 | ) | $ | (0.99 | ) | $ | 0.02 | $ | (0.97 | ) | |||||||||||||||||||||||
Weighted average number of common shares: | |||||||||||||||||||||||||||||||||||||
Basic | 18,219,343 | — | 18,219,343 | — | 18,219,343 | ||||||||||||||||||||||||||||||||
Diluted | 18,219,343 | — | 18,219,343 | — | 18,219,343 | ||||||||||||||||||||||||||||||||
Other comprehensive loss, before tax: | |||||||||||||||||||||||||||||||||||||
Translation adjustment | $ | (3,192 | ) | $ | 913 | $ | (2,279 | ) | $ | 382 | $ | (1,897 | ) | ||||||||||||||||||||||||
Unrealized loss on derivative instrument | (693 | ) | — | (693 | ) | — | (693 | ) | |||||||||||||||||||||||||||||
Other comprehensive loss, before tax | (3,885 | ) | 913 | (2,972 | ) | 382 | (2,590 | ) | |||||||||||||||||||||||||||||
Income tax benefit related to components of other comprehensive income | 256 | — | 256 | — | 256 | ||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | (3,629 | ) | 913 | (2,716 | ) | 382 | (2,334 | ) | |||||||||||||||||||||||||||||
Comprehensive loss | $ | (4,702 | ) | $ | (16,124 | ) | $ | (20,826 | ) | 794 | $ | (20,032 | ) | ||||||||||||||||||||||||
Effects of Original Restatement and Further Restatement on Consolidated Cash Flow | The effects of Further Restatement on the Company’s consolidated statement of cash flows for the year ended December 31, 2013 are as follows: | ||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | Year Ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||
Originally | Further | Restated | |||||||||||||||||||||||||||||||||||
Reported in | Restatement | ||||||||||||||||||||||||||||||||||||
2013 | Adjustments | ||||||||||||||||||||||||||||||||||||
Form 10-K | |||||||||||||||||||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||||||||||||||||||
Net loss | $ | (25,515 | ) | $ | (3,297 | ) | $ | (28,812 | ) | ||||||||||||||||||||||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 22,659 | 163 | 22,822 | ||||||||||||||||||||||||||||||||||
Amortization of debt costs | 720 | — | 720 | ||||||||||||||||||||||||||||||||||
Amortization of exclusivity agreements | 1,546 | — | 1,546 | ||||||||||||||||||||||||||||||||||
Provision for doubtful accounts | 6,003 | (1,413 | ) | 4,590 | |||||||||||||||||||||||||||||||||
Deferred income taxes | (1,986 | ) | 4,815 | 2,829 | |||||||||||||||||||||||||||||||||
Share-based compensation | 6,267 | — | 6,267 | ||||||||||||||||||||||||||||||||||
Impairment of goodwill | 19,193 | — | 19,193 | ||||||||||||||||||||||||||||||||||
Gain on sale of Breg, Inc., net of tax | — | — | — | ||||||||||||||||||||||||||||||||||
Excess income tax benefit on employee stock-based awards | (82 | ) | — | (82 | ) | ||||||||||||||||||||||||||||||||
Income tax benefit (expense) on employee stock-based awards | 795 | (795 | ) | — | |||||||||||||||||||||||||||||||||
Other | 4,442 | 94 | 4,536 | ||||||||||||||||||||||||||||||||||
Changes in operating assets and liabilities, net of effect of dispositions: | |||||||||||||||||||||||||||||||||||||
Trade accounts receivable | 25,747 | 2,815 | 28,562 | ||||||||||||||||||||||||||||||||||
Inventories | (6,626 | ) | 3,413 | (3,213 | ) | ||||||||||||||||||||||||||||||||
Escrow receivable | — | — | — | ||||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | 6,791 | 1,973 | 8,764 | ||||||||||||||||||||||||||||||||||
Trade accounts payable | (2,280 | ) | — | (2,280 | ) | ||||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | — | — | — | ||||||||||||||||||||||||||||||||||
Other current liabilities | 8,018 | (1,049 | ) | 6,969 | |||||||||||||||||||||||||||||||||
Other long-term assets | 2,750 | (8,079 | ) | (5,329 | ) | ||||||||||||||||||||||||||||||||
Other long-term liabilities | (1,561 | ) | 1,521 | (40 | ) | ||||||||||||||||||||||||||||||||
Net cash provided by operating activities | 66,881 | 161 | 67,042 | ||||||||||||||||||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||||||||||||||||
Capital expenditures for property, plant and equipment | (24,787 | ) | — | (24,787 | ) | ||||||||||||||||||||||||||||||||
Capital expenditures for intangible assets | (4,891 | ) | — | (4,891 | ) | ||||||||||||||||||||||||||||||||
Purchase of other investments | — | (1,374 | ) | (1,374 | ) | ||||||||||||||||||||||||||||||||
Net proceeds from sale of Breg, Inc. | — | — | — | ||||||||||||||||||||||||||||||||||
Net cash (used in) provided by investing activities | (29,678 | ) | (1,374 | ) | (31,052 | ) | |||||||||||||||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of common shares | 3,450 | — | 3,450 | ||||||||||||||||||||||||||||||||||
Payment of refinancing fees and debt issuance costs | — | — | — | ||||||||||||||||||||||||||||||||||
Repayments of long-term debt | (16 | ) | — | (16 | ) | ||||||||||||||||||||||||||||||||
Repayment of bank borrowings, net | — | — | — | ||||||||||||||||||||||||||||||||||
Changes in restricted cash | (2,375 | ) | — | (2,375 | ) | ||||||||||||||||||||||||||||||||
Purchase of common stock | (39,494 | ) | — | (39,494 | ) | ||||||||||||||||||||||||||||||||
Cash payment for purchase of minority interest in subsidiary | — | — | — | ||||||||||||||||||||||||||||||||||
Excess income tax benefit on employee stock-based awards | 82 | — | 82 | ||||||||||||||||||||||||||||||||||
Net cash used in financing activities | (38,353 | ) | — | (38,353 | ) | ||||||||||||||||||||||||||||||||
Effect of exchange rate changes on cash | 581 | (61 | ) | 520 | |||||||||||||||||||||||||||||||||
Net (decrease) increase in cash and cash equivalents | (569 | ) | (1,274 | ) | (1,843 | ) | |||||||||||||||||||||||||||||||
Cash and cash equivalents at the beginning of the year | 31,055 | (288 | ) | 30,767 | |||||||||||||||||||||||||||||||||
Cash and cash equivalents at the end of the year | $ | 30,486 | $ | (1,562 | ) | $ | 28,924 | ||||||||||||||||||||||||||||||
Supplemental disclosure of cash flow information: | |||||||||||||||||||||||||||||||||||||
Cash paid during the year for: | |||||||||||||||||||||||||||||||||||||
Interest | $ | 2,046 | $ | — | $ | 2,046 | |||||||||||||||||||||||||||||||
Income taxes | $ | 8,773 | $ | — | $ | 8,773 | |||||||||||||||||||||||||||||||
The effects of the Original Restatement and the Further Restatement on the Company’s consolidated statement of cash flows for the year ended December 31, 2012 are as follows: | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | Year Ended December 31, 2012 | ||||||||||||||||||||||||||||||||||||
As Reported in | Original | As Originally | Further | Restated | |||||||||||||||||||||||||||||||||
the 2012 Form | Restatement | Restated in | Restatement | ||||||||||||||||||||||||||||||||||
10-K Prior to | Adjustments | the 2012 | Adjustments | ||||||||||||||||||||||||||||||||||
Original | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Restatement | |||||||||||||||||||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||||||||||||||||||
Net income | $ | 51,295 | $ | (8,457 | ) | $ | 42,838 | $ | 14 | $ | 42,852 | ||||||||||||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 20,261 | 319 | 20,580 | 152 | 20,732 | ||||||||||||||||||||||||||||||||
Amortization of debt costs | 1,737 | — | 1,737 | — | 1,737 | ||||||||||||||||||||||||||||||||
Amortization of exclusivity agreements | 1,289 | — | 1,289 | — | 1,289 | ||||||||||||||||||||||||||||||||
Provision for doubtful accounts | 13,302 | (2,730 | ) | 10,572 | (8,360 | ) | 2,212 | ||||||||||||||||||||||||||||||
Deferred income taxes | 871 | (2,123 | ) | (1,252 | ) | 5,023 | 3,771 | ||||||||||||||||||||||||||||||
Share-based compensation | 6,303 | — | 6,303 | — | 6,303 | ||||||||||||||||||||||||||||||||
Impairment of goodwill | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Gain on sale of Breg, Inc, net of tax | (1,345 | ) | — | (1,345 | ) | — | (1,345 | ) | |||||||||||||||||||||||||||||
Excess income tax benefit on employee stock-based awards | — | (1,020 | ) | (1,020 | ) | — | (1,020 | ) | |||||||||||||||||||||||||||||
Income tax benefit on employee-stock-based awards | — | 2,910 | 2,910 | (2,910 | ) | — | |||||||||||||||||||||||||||||||
Other | 2,125 | 2,011 | 4,136 | 662 | 4,798 | ||||||||||||||||||||||||||||||||
Changes in operating assets and liabilities, net of effect of dispositions: | |||||||||||||||||||||||||||||||||||||
Trade accounts receivable | (31,600 | ) | 13,162 | (18,438 | ) | 7,310 | (11,128 | ) | |||||||||||||||||||||||||||||
Inventories | (6,341 | ) | 3,846 | (2,495 | ) | 2,111 | (384 | ) | |||||||||||||||||||||||||||||
Escrow receivable | 41,537 | — | 41,537 | — | 41,537 | ||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | (6,191 | ) | (9,386 | ) | (15,577 | ) | 1,002 | (14,575 | ) | ||||||||||||||||||||||||||||
Trade accounts payable | 5,554 | (979 | ) | 4,575 | — | 4,575 | |||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | (82,500 | ) | (678 | ) | (83,178 | ) | — | (83,178 | ) | ||||||||||||||||||||||||||||
Other current liabilities | (2,842 | ) | (2,887 | ) | (5,729 | ) | 490 | (5,239 | ) | ||||||||||||||||||||||||||||
Other long-term assets | (2,114 | ) | 4,241 | 2,127 | (5,518 | ) | (3,391 | ) | |||||||||||||||||||||||||||||
Other long-term liabilities | (135 | ) | 751 | 616 | — | 616 | |||||||||||||||||||||||||||||||
Net cash provided by operating activities | 11,206 | (1,020 | ) | 10,186 | (24 | ) | 10,162 | ||||||||||||||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||||||||||||||||
Capital expenditures for property, plant and equipment | (27,994 | ) | — | (27,994 | ) | — | (27,994 | ) | |||||||||||||||||||||||||||||
Capital expenditures for intangible assets | (780 | ) | — | (780 | ) | — | (780 | ) | |||||||||||||||||||||||||||||
Purchase of other investments | — | — | — | (714 | ) | (714 | ) | ||||||||||||||||||||||||||||||
Proceeds from sale of other investments | — | — | — | 878 | 878 | ||||||||||||||||||||||||||||||||
Net proceeds from sale of Breg Inc. | 153,773 | — | 153,773 | — | 153,773 | ||||||||||||||||||||||||||||||||
Net cash provided by (used in) investing activities | 124,999 | — | 124,999 | 164 | 125,163 | ||||||||||||||||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of common shares | 25,586 | — | 25,586 | — | 25,586 | ||||||||||||||||||||||||||||||||
Payment of refinancing fees and debt issuance costs | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Repayments of long-term debt | (188,695 | ) | — | (188,695 | ) | — | (188,695 | ) | |||||||||||||||||||||||||||||
Proceeds of bank borrowings, net | (1,297 | ) | — | (1,297 | ) | — | (1,297 | ) | |||||||||||||||||||||||||||||
Changes in restricted cash | 25,799 | — | 25,799 | — | 25,799 | ||||||||||||||||||||||||||||||||
Cash payment for purchase of minority interest in subsidiary | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Excess income tax benefit on employee stock-based awards | — | 1,020 | 1,020 | — | 1,020 | ||||||||||||||||||||||||||||||||
Net cash used in financing activities | (138,607 | ) | 1,020 | (137,587 | ) | — | (137,587 | ) | |||||||||||||||||||||||||||||
Effect of exchange rates changes on cash | 250 | — | 250 | 36 | 286 | ||||||||||||||||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | (2,152 | ) | — | (2,152 | ) | 176 | (1,976 | ) | |||||||||||||||||||||||||||||
Cash and cash equivalents at the beginning of the year | 33,207 | — | 33,207 | (464 | ) | 32,743 | |||||||||||||||||||||||||||||||
Cash and cash equivalents at the end of the year | $ | 31,055 | $ | — | $ | 31,055 | $ | (288 | ) | $ | 30,767 | ||||||||||||||||||||||||||
Supplemental disclosure of cash flow information: | |||||||||||||||||||||||||||||||||||||
Cash paid during the year for: | |||||||||||||||||||||||||||||||||||||
Interest | $ | 4,569 | $ | — | $ | 4,569 | $ | — | $ | 4,569 | |||||||||||||||||||||||||||
Income taxes | $ | 18,268 | $ | — | $ | 18,268 | $ | — | $ | 18,268 | |||||||||||||||||||||||||||
The effects of the Original Restatement and the Further Restatement on the Company’s consolidated statement of cash flows for the year ended December 31, 2011 are as follows: | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | Year Ended December 31, 2011 | ||||||||||||||||||||||||||||||||||||
As Reported in | Original | As Originally | Further | Restated | |||||||||||||||||||||||||||||||||
the 2012 Form | Restatement | Restated in | Restatement | ||||||||||||||||||||||||||||||||||
10-K Prior to | Adjustments | the 2012 | Adjustments | ||||||||||||||||||||||||||||||||||
Original | Form 10-K/A | ||||||||||||||||||||||||||||||||||||
Restatement | |||||||||||||||||||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||||||||||||||||||
Net loss | $ | (1,073 | ) | $ | (17,037 | ) | $ | (18,110 | ) | $ | 412 | $ | (17,698 | ) | |||||||||||||||||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 22,776 | 241 | 23,017 | 165 | 23,182 | ||||||||||||||||||||||||||||||||
Amortization of debt costs | 1,239 | — | 1,239 | — | 1,239 | ||||||||||||||||||||||||||||||||
Amortization of exclusivity agreements | 374 | — | 374 | — | 374 | ||||||||||||||||||||||||||||||||
Provision for doubtful accounts | 11,532 | 1,404 | 12,936 | (8,356 | ) | 4,580 | |||||||||||||||||||||||||||||||
Deferred income taxes | 936 | (988 | ) | (52 | ) | (13,889 | ) | (13,941 | ) | ||||||||||||||||||||||||||||
Share-based compensation | 6,648 | — | 6,648 | — | 6,648 | ||||||||||||||||||||||||||||||||
Impairment of goodwill | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Gain on sale of Breg, Inc, net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Excess income tax benefit on employee stock-based awards | (1,737 | ) | — | (1,737 | ) | — | (1,737 | ) | |||||||||||||||||||||||||||||
Income tax benefit on employee-stock-based awards | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Other | 4,906 | (415 | ) | 4,491 | (2,193 | ) | 2,298 | ||||||||||||||||||||||||||||||
Changes in operating assets and liabilities, net of effect of dispositions: | |||||||||||||||||||||||||||||||||||||
Trade accounts receivable | (25,818 | ) | 26,111 | 293 | 6,352 | 6,645 | |||||||||||||||||||||||||||||||
Inventories | (8,349 | ) | (4,275 | ) | (12,624 | ) | (81 | ) | (12,705 | ) | |||||||||||||||||||||||||||
Escrow receivable | (32,562 | ) | — | (32,562 | ) | — | (32,562 | ) | |||||||||||||||||||||||||||||
Prepaid expenses and other current assets | (4,057 | ) | 6,886 | 2,829 | (447 | ) | 2,382 | ||||||||||||||||||||||||||||||
Trade accounts payable | 576 | 1,746 | 2,322 | — | 2,322 | ||||||||||||||||||||||||||||||||
Charges related to U.S. Government resolutions | 88,463 | 638 | 89,101 | — | 89,101 | ||||||||||||||||||||||||||||||||
Other current liabilities | 3,384 | (1,965 | ) | 1,419 | 2,097 | 3,516 | |||||||||||||||||||||||||||||||
Other long-term assets | (1,588 | ) | (16,093 | ) | (17,681 | ) | 15,364 | (2,317 | ) | ||||||||||||||||||||||||||||
Other long-term liabilities | (869 | ) | 3,747 | 2,878 | 525 | 3,403 | |||||||||||||||||||||||||||||||
Net cash provided by operating activities | 64,781 | — | 64,781 | (51 | ) | 64,730 | |||||||||||||||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||||||||||||||||
Capital expenditures for property, plant and equipment | (24,965 | ) | — | (24,965 | ) | — | (24,965 | ) | |||||||||||||||||||||||||||||
Capital expenditures for intangible assets | (793 | ) | — | (793 | ) | — | (793 | ) | |||||||||||||||||||||||||||||
Payment made in connection with acquisition | (5,250 | ) | — | (5,250 | ) | — | (5,250 | ) | |||||||||||||||||||||||||||||
Purchase of other investments | — | — | — | (468 | ) | (468 | ) | ||||||||||||||||||||||||||||||
Net cash provided by (used in) investing activities | (31,008 | ) | — | (31,008 | ) | (468 | ) | (31,476 | ) | ||||||||||||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||||||||||||||||
Net proceeds from issuance of common shares | 20,113 | — | 20,113 | — | 20,113 | ||||||||||||||||||||||||||||||||
Payment of refinancing fees and debt issuance costs | (758 | ) | — | (758 | ) | — | (758 | ) | |||||||||||||||||||||||||||||
Repayments of long-term debt | (7,500 | ) | — | (7,500 | ) | — | (7,500 | ) | |||||||||||||||||||||||||||||
Proceeds of bank borrowings, net | (2,561 | ) | — | (2,561 | ) | — | (2,561 | ) | |||||||||||||||||||||||||||||
Changes in restricted cash | (24,178 | ) | — | (24,178 | ) | — | (24,178 | ) | |||||||||||||||||||||||||||||
Cash payment for purchase of minority interest in subsidiary | (517 | ) | — | (517 | ) | — | (517 | ) | |||||||||||||||||||||||||||||
Excess income tax benefit on employee stock-based awards | 1,737 | — | 1,737 | — | 1,737 | ||||||||||||||||||||||||||||||||
Net cash used in financing activities | (13,664 | ) | — | (13,664 | ) | — | (13,664 | ) | |||||||||||||||||||||||||||||
Effect of exchange rates changes on cash | (463 | ) | — | (463 | ) | 55 | (408 | ) | |||||||||||||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 19,646 | — | 19,646 | (464 | ) | 19,182 | |||||||||||||||||||||||||||||||
Cash and cash equivalents at the beginning of the year | 13,561 | — | 13,561 | — | 13,561 | ||||||||||||||||||||||||||||||||
Cash and cash equivalents at the end of the year | $ | 33,207 | $ | — | $ | 33,207 | $ | (464 | ) | $ | 32,743 | ||||||||||||||||||||||||||
Supplemental disclosure of cash flow information: | |||||||||||||||||||||||||||||||||||||
Cash paid during the year for: | |||||||||||||||||||||||||||||||||||||
Interest | $ | 17,088 | $ | — | $ | 17,088 | $ | — | $ | 17,088 | |||||||||||||||||||||||||||
Income taxes | $ | 26,227 | $ | — | $ | 26,227 | $ | — | $ | 26,227 | |||||||||||||||||||||||||||
Effects of Original Restatement and Further Restatement on Consolidated Shareholders' Equity | The results of the Further Restatement adjustments to the Company’s previously filed consolidated shareholders’ equity as of January 1, 2011, by category as discussed above under the subheadings “Bad Debt Timing Adjustments”, “Accounts Receivable Reserves”, “Intercompany Profit Adjustments”, “Piece Parts Inventory”, “Inventory Reserves” and “Other Adjustments” are summarized in the table below. | ||||||||||||||||||||||||||||||||||||
Cumulative Adjustments to Shareholders’ Equity at | |||||||||||||||||||||||||||||||||||||
January 1, 2011 | |||||||||||||||||||||||||||||||||||||
(U.S. Dollars, in thousands) | |||||||||||||||||||||||||||||||||||||
Further Restatement Adjustments by Category | Further Restatement | Further | Total Cumulative | ||||||||||||||||||||||||||||||||||
Increase (decrease) to Retained earnings | Adjustments for | Restatement | Adjustments | ||||||||||||||||||||||||||||||||||
Years ended | Adjustments to | through | |||||||||||||||||||||||||||||||||||
December 31, 2009 | Year ended | December 31, 2010 | |||||||||||||||||||||||||||||||||||
and Prior | December 31, 2010 | ||||||||||||||||||||||||||||||||||||
Bad debt timing adjustments | $ | — | $ | 409 | $ | 409 | |||||||||||||||||||||||||||||||
Accounts receivable reserves | (4,383 | ) | (1,037 | ) | (5,420 | ) | |||||||||||||||||||||||||||||||
Intercompany profit adjustments | (812 | ) | (203 | ) | (1,015 | ) | |||||||||||||||||||||||||||||||
Inventory existence | (68 | ) | (16 | ) | (84 | ) | |||||||||||||||||||||||||||||||
Inventory reserves | (13,352 | ) | 2,581 | (10,771 | ) | ||||||||||||||||||||||||||||||||
Other adjustments | (1,426 | ) | (285 | ) | (1,711 | ) | |||||||||||||||||||||||||||||||
Income tax benefit (expense) | 7,416 | (1,388 | ) | 6,028 | |||||||||||||||||||||||||||||||||
Retained earnings decrease | $ | (12,625 | ) | $ | 61 | $ | (12,564 | ) | |||||||||||||||||||||||||||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Schedule of Inventories | |||||||||
December 31, | |||||||||
(U.S. Dollars in thousands) | 2013 | 2012 | |||||||
(Restated) | (Restated) | ||||||||
Raw materials | $ | 6,515 | $ | 7,623 | |||||
Work-in-process | 6,606 | 7,886 | |||||||
Finished products | 28,291 | 22,236 | |||||||
Field inventory | 21,312 | 17,061 | |||||||
Consignment inventory | 2,388 | 4,235 | |||||||
Deferred cost of sales | 7,566 | 10,772 | |||||||
$ | 72,678 | $ | 69,813 | ||||||
Property_plant_and_equipment_T
Property, plant and equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Schedule of Property Plant and Equipment | |||||||||
December 31, | |||||||||
(U.S. Dollars in thousands) | 2013 | 2012 | |||||||
(Restated) | (Restated) | ||||||||
Cost | |||||||||
Buildings | $ | 4,075 | $ | 3,911 | |||||
Plant, equipment and instrumentation | 133,427 | 121,370 | |||||||
Furniture and fixtures | 5,872 | 5,567 | |||||||
143,374 | 130,848 | ||||||||
Accumulated depreciation | (89,002 | ) | (78,055 | ) | |||||
$ | 54,372 | $ | 52,793 | ||||||
Patents_and_other_intangible_a1
Patents and other intangible assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||
Schedule of Patents and Other Intangible Assets | |||||||||
December 31, | |||||||||
(U.S. Dollars in thousands) | 2013 | 2012 | |||||||
(Restated) | |||||||||
Cost | |||||||||
Patents and licenses | $ | 42,568 | $ | 38,905 | |||||
Trademarks—definite lived | 620 | 657 | |||||||
43,188 | 39,562 | ||||||||
Accumulated amortization | |||||||||
Patents and licenses | (33,688 | ) | (31,845 | ) | |||||
Trademarks—definite lived | (454 | ) | (427 | ) | |||||
(34,142 | ) | (32,272 | ) | ||||||
Patents and other intangible assets, net | $ | 9,046 | $ | 7,290 | |||||
Goodwill_Tables
Goodwill (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||
Schedule of Changes in Net Carrying Amount of Goodwill | The following table presents the changes in the net carrying value of goodwill by reportable segment as well as the reallocation as of July 1, 2013 in conjunction with our change in reportable segments. (See Note 1 “Summary of significant accounting policies”): | ||||||||||||||||||||||||||||
(U.S. Dollars in thousands) | Spine | Orthopedics | BioStim | Biologics | Extremity | Spine Fixation | Total | ||||||||||||||||||||||
Fixation | |||||||||||||||||||||||||||||
At December 31, 2011 | $ | 41,419 | $ | 31,675 | $ | — | $ | — | $ | — | $ | — | $ | 73,094 | |||||||||||||||
Foreign currency | 145 | 1,149 | — | — | — | — | 1,294 | ||||||||||||||||||||||
At December 31, 2012 | 41,564 | 32,824 | — | — | — | — | 74,388 | ||||||||||||||||||||||
Foreign currency | (163 | ) | (1,467 | ) | — | — | — | — | (1,630 | ) | |||||||||||||||||||
At June 30, 2013 | 41,401 | 31,357 | — | — | — | — | 72,758 | ||||||||||||||||||||||
Reallocation at July 1, 2013 | (41,401 | ) | (31,357 | ) | 42,678 | 10,887 | 9,825 | 9,368 | — | ||||||||||||||||||||
Impairment | — | — | — | — | (9,825 | ) | (9,368 | ) | (19,193 | ) | |||||||||||||||||||
At December 31, 2013 | $ | — | $ | — | $ | 42,678 | $ | 10,887 | $ | — | $ | — | $ | 53,565 | |||||||||||||||
Other_current_liabilities_Tabl
Other current liabilities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Payables and Accruals [Abstract] | |||||||||
Summary of Other Current Liabilities | (U.S. Dollars in thousands) | 2013 | 2012 | ||||||
(Restated) | (Restated) | ||||||||
Accrued expenses | $ | 18,903 | $ | 11,710 | |||||
Salaries, bonuses, commissions and related taxes payable | 16,598 | 17,915 | |||||||
Accrued legal expenses | 10,292 | 8,496 | |||||||
Other payables | 3,883 | 4,621 | |||||||
$ | 49,676 | $ | 42,742 |
Derivative_instruments_Tables
Derivative instruments (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||
Schedule of Fair Values of Derivative Instruments | The tables below disclose the types of derivative instruments the Company owns, the classifications and fair values of these instruments within the balance sheet, and the amount of gain (loss) recognized in other comprehensive income (loss) (“OCI”) or net income (loss). | ||||||||||||
(U.S. Dollars, in thousands) | Fair value: favorable | Balance sheet location | |||||||||||
(unfavorable) | |||||||||||||
As of December 31, 2013 | |||||||||||||
Cross-currency swap | $ | (1,036 | ) | Other long-term liabilities | |||||||||
Warrants | $ | 107 | Other long-term assets | ||||||||||
As of December 31, 2012 | |||||||||||||
Cross-currency swap | $ | 305 | Other long-term assets | ||||||||||
Warrants | $ | — | Other long-term assets | ||||||||||
Schedule of Gain (Loss) Recognized on Derivative Instruments | |||||||||||||
For the year ended | |||||||||||||
December 31, | |||||||||||||
(U.S. Dollars in thousands) | 2013 | 2012 | 2011 | ||||||||||
Cross-currency swap and warrants gain (loss) recorded in other comprehensive income (loss), net of taxes | $ | (279 | ) | $ | 263 | $ | (437 | ) |
Fair_value_measurements_Tables
Fair value measurements (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Schedule of Financial Assets and Liabilities Recorded at Fair Value on Recurring Basis | The fair value of the Company’s financial assets and liabilities on a recurring basis were as follows: | ||||||||||||||||
(U.S. Dollars in thousands) | Balance | Level 1 | Level 2 | Level 3 | |||||||||||||
December 31, | |||||||||||||||||
2013 | |||||||||||||||||
(Restated1) | |||||||||||||||||
Assets | |||||||||||||||||
Collective trust funds | $ | 1,667 | $ | $ | 1,667 | $ | — | ||||||||||
Treasury securities | 660 | 660 | — | ||||||||||||||
Certificates of deposit | 1,562 | 1,562 | — | — | |||||||||||||
Derivative securities | 107 | — | 107 | — | |||||||||||||
Total | $ | 3,996 | $ | 2,222 | $ | 1,774 | $ | — | |||||||||
Liabilities | |||||||||||||||||
Deferred compensation plan | $ | (2,506 | ) | $ | — | $ | (2,506 | ) | $ | — | |||||||
Derivative securities | (1,036 | ) | — | (1,036 | ) | — | |||||||||||
Total | $ | (3,542 | ) | $ | — | $ | (3,542 | ) | $ | — | |||||||
(U.S. Dollars in thousands) | Balance | Level 1 | Level 2 | Level 3 | |||||||||||||
December 31, | |||||||||||||||||
2012 | |||||||||||||||||
(Restated1) | |||||||||||||||||
Assets | |||||||||||||||||
Collective trust funds | $ | 1,513 | $ | $ | 1,513 | $ | — | ||||||||||
Treasury securities | 624 | 624 | — | ||||||||||||||
Certificates of deposit | 288 | 288 | — | — | |||||||||||||
Derivative securities | 305 | — | 305 | — | |||||||||||||
Total | $ | 2,730 | $ | 912 | $ | 1,818 | $ | — | |||||||||
Liabilities | |||||||||||||||||
Deferred compensation plan | $ | (2,320 | ) | $ | — | $ | (2,320 | ) | $ | — | |||||||
Total | $ | (2,320 | ) | $ | — | $ | (2,320 | ) | $ | — | |||||||
1) | The Company has changed the presentation to breakout and provide more description of assets and to include financial instruments not previously included in the table above. |
Commitments_Tables
Commitments (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Schedule of Future Minimum Lease Payments Under Operating Leases, Net of Amount to be Received Under Sub Leases | Future minimum lease payments under operating leases, net of amounts to be received under sub-leases, as of December 31, 2013 are as follows: | ||||
(U.S. Dollars in thousands) | |||||
2014 | $ | 4,342 | |||
2015 | 4,107 | ||||
2016 | 3,713 | ||||
2017 | 2,974 | ||||
2018 | 2,846 | ||||
Thereafter | 3,049 | ||||
Total | $ | 21,031 | |||
Business_segment_information_T
Business segment information (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||
Schedule of External Net Sales by SBU Reporting Segment | External Net Sales by SBU: | ||||||||||||||||||||||||
The table below presents external net sales for continuing operations by SBU reporting segment. Net sales include product sales and marketing service fees. | |||||||||||||||||||||||||
External Net Sales by SBU | |||||||||||||||||||||||||
Year ended December 31, | |||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||
Net Sales | Percent of | Net Sales | Percent of | Net Sales | Percent of | ||||||||||||||||||||
Total Net | Total Net | Total Net | |||||||||||||||||||||||
Sales | Sales | Sales | |||||||||||||||||||||||
(Restated) | (Restated) | (Restated) | |||||||||||||||||||||||
BioStim | $ | 145,085 | 36 | % | $ | 174,562 | 40 | % | $ | 181,736 | 42 | % | |||||||||||||
Biologics | 53,746 | 14 | % | 53,731 | 12 | % | 42,910 | 10 | % | ||||||||||||||||
Extremity Fixation | 103,359 | 26 | % | 112,011 | 25 | % | 119,504 | 27 | % | ||||||||||||||||
Spine Fixation | 95,421 | 24 | % | 99,885 | 23 | % | 91,368 | 21 | % | ||||||||||||||||
Total Net Sales | $ | 397,611 | 100 | % | $ | 440,189 | 100 | % | $ | 435,519 | 100 | % | |||||||||||||
Summary of Net Margin, Defined as Gross Profit Less Sales And Marketing Expenses from Continuing Operations by SBU Reporting Segment | The table below presents net margin, defined as gross profit less sales and marketing expenses from continuing operations by SBU reporting segment: | ||||||||||||||||||||||||
Net Margin by SBU | Year Ended December 31, | ||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||
(Restated) | (Restated) | (Restated) | |||||||||||||||||||||||
Net Margin | |||||||||||||||||||||||||
BioStim | $ | 63,847 | $ | 88,788 | $ | 92,860 | |||||||||||||||||||
Biologics | 24,794 | 23,589 | 18,978 | ||||||||||||||||||||||
Extremity Fixation | 23,704 | 34,554 | 30,773 | ||||||||||||||||||||||
Spine Fixation | 4,329 | 15,256 | 13,037 | ||||||||||||||||||||||
Corporate | (1,443 | ) | (1,495 | ) | (1,700 | ) | |||||||||||||||||||
Total net margin | $ | 115,231 | $ | 160,692 | $ | 153,948 | |||||||||||||||||||
General & administrative | 64,830 | 53,650 | 64,785 | ||||||||||||||||||||||
Research and development | 26,768 | 28,577 | 22,861 | ||||||||||||||||||||||
Amortization of intangible assets | 2,687 | 2,298 | 2,550 | ||||||||||||||||||||||
Costs related to the accounting review and restatement | 12,945 | — | — | ||||||||||||||||||||||
Impairment of goodwill | 19,193 | — | — | ||||||||||||||||||||||
Charges related to U.S. Government resolutions | — | 1,295 | 57,141 | ||||||||||||||||||||||
Operating (loss) income | $ | (11,192 | ) | $ | 74,872 | $ | 6,611 | ||||||||||||||||||
Schedule of Depreciation and Amortization by SBU Reporting Segment | The table below presents external net sales for continuing operations by SBU reporting segment. Net sales include product sales and marketing service fees. | ||||||||||||||||||||||||
External Net Sales by SBU | |||||||||||||||||||||||||
Year ended December 31, | |||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||
Net Sales | Percent of | Net Sales | Percent of | Net Sales | Percent of | ||||||||||||||||||||
Total Net | Total Net | Total Net | |||||||||||||||||||||||
Sales | Sales | Sales | |||||||||||||||||||||||
(Restated) | (Restated) | (Restated) | |||||||||||||||||||||||
BioStim | $ | 145,085 | 36 | % | $ | 174,562 | 40 | % | $ | 181,736 | 42 | % | |||||||||||||
Biologics | 53,746 | 14 | % | 53,731 | 12 | % | 42,911 | 10 | % | ||||||||||||||||
Extremity Fixation | 103,359 | 26 | % | 112,011 | 25 | % | 119,504 | 27 | % | ||||||||||||||||
Spine Fixation | 95,421 | 24 | % | 99,885 | 23 | % | 91,368 | 21 | % | ||||||||||||||||
Total Net Sales | $ | 397,611 | 100 | % | $ | 440,189 | 100 | % | $ | 435,519 | 100 | % | |||||||||||||
Summary of Net Sales by Geographic Destination | The following geographic data includes net sales by geographic destination: | ||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||
(Restated) | (Restated) | (Restated) | |||||||||||||||||||||||
U.S. | $ | 293,032 | $ | 327,228 | $ | 322,186 | |||||||||||||||||||
Italy | 16,755 | 18,742 | 17,447 | ||||||||||||||||||||||
U.K. | 10,002 | 8,431 | 8,206 | ||||||||||||||||||||||
Brazil | 26,786 | 31,166 | 34,424 | ||||||||||||||||||||||
Others | 51,036 | 54,622 | 53,256 | ||||||||||||||||||||||
Total net sales | $ | 397,611 | $ | 440,189 | $ | 435,519 | |||||||||||||||||||
Analysis of Property, Plant and Equipment of Reporting Segments by Geographic Area | Analysis of property, plant and equipment by geographic area: | ||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2013 | 2012 | |||||||||||||||||||||||
(Restated) | (Restated) | ||||||||||||||||||||||||
U.S. | $ | 39,287 | $ | 38,504 | |||||||||||||||||||||
Italy | 8,150 | 7,625 | |||||||||||||||||||||||
U.K. | 1,871 | 1,402 | |||||||||||||||||||||||
Brazil | 3,210 | 3,421 | |||||||||||||||||||||||
Others | 1,854 | 1,841 | |||||||||||||||||||||||
Total | $ | 54,372 | $ | 52,793 | |||||||||||||||||||||
Income_taxes_Tables
Income taxes (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||
Schedule of Income from Continuing Operations Before Provision for Income Taxes | Income from continuing operations before provision for income taxes consisted of: | ||||||||||||||||||||||||
Year Ended | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
(US$ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||
(Restated) | (Restated) | (Restated) | |||||||||||||||||||||||
U.S. | $ | (3,546 | ) | $ | 56,210 | $ | 4,730 | ||||||||||||||||||
Non-U.S. | (7,057 | ) | 12,855 | (6,093 | ) | ||||||||||||||||||||
Total income before taxes | $ | (10,603 | ) | $ | 69,065 | $ | (1,363 | ) | |||||||||||||||||
Schedule of Provision for (Benefit from) Income Taxes on Continuing Operations | The provision for (benefit from) income taxes on continuing operations in the accompanying consolidated statements of operations consists of the following: | ||||||||||||||||||||||||
Year Ended | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
(US$ in thousands) | 2013 | 2012 | 2011 | ||||||||||||||||||||||
(Restated) | (Restated) | (Restated) | |||||||||||||||||||||||
U.S. | |||||||||||||||||||||||||
Current | $ | 2,465 | $ | 16,982 | $ | 26,273 | |||||||||||||||||||
Deferred | 4,013 | 2,675 | (13,241 | ) | |||||||||||||||||||||
Total U.S | 6,478 | 19,657 | 13,032 | ||||||||||||||||||||||
Non-U.S. | |||||||||||||||||||||||||
Current | 2,308 | 3,191 | 2,111 | ||||||||||||||||||||||
Deferred | (1,184 | ) | 1,096 | (700 | ) | ||||||||||||||||||||
1,124 | 4,287 | 1,411 | |||||||||||||||||||||||
Total tax expense | $ | 7,602 | $ | 23,944 | $ | 14,443 | |||||||||||||||||||
Schedule of Tax Effects of Significant Temporary Differences Comprising Deferred Tax Assets and Liabilities | The tax effects of the significant temporary differences, which comprise the deferred tax assets and liabilities, are as follows: | ||||||||||||||||||||||||
(US$ in thousands) | 2013 | 2012 | |||||||||||||||||||||||
(Restated) | (Restated) | ||||||||||||||||||||||||
Intangible assets and goodwill | $ | 4,798 | $ | 5,338 | |||||||||||||||||||||
Inventories and related reserves | 20,769 | 19,626 | |||||||||||||||||||||||
Deferred revenue and cost of goods sold | 11,577 | 12,336 | |||||||||||||||||||||||
Other accruals and reserves | 4,778 | 6,149 | |||||||||||||||||||||||
Accrued compensation | 3,942 | 3,791 | |||||||||||||||||||||||
Allowance for doubtful accounts | 2,040 | 1,542 | |||||||||||||||||||||||
Accrued interest | 18,063 | 17,995 | |||||||||||||||||||||||
Net operating loss carryforwards | 34,979 | 27,231 | |||||||||||||||||||||||
Other, net | 893 | 590 | |||||||||||||||||||||||
101,839 | 94,598 | ||||||||||||||||||||||||
Valuation allowance | (31,772 | ) | (26,361 | ) | |||||||||||||||||||||
Deferred tax asset | $ | 70,067 | $ | 68,237 | |||||||||||||||||||||
Withholding taxes | (13,026 | ) | (11,351 | ) | |||||||||||||||||||||
Property, plant and equipment | (7,674 | ) | (8,226 | ) | |||||||||||||||||||||
Deferred tax liability | (20,700 | ) | (19,577 | ) | |||||||||||||||||||||
Net deferred tax assets | $ | 49,367 | $ | 48,660 | |||||||||||||||||||||
Reported as: | |||||||||||||||||||||||||
Current deferred tax assets | 39,999 | 38,487 | |||||||||||||||||||||||
Non-current deferred tax assets | 22,394 | 21,523 | |||||||||||||||||||||||
Current deferred tax liability | — | — | |||||||||||||||||||||||
Non-current deferred tax liability | (13,026 | ) | (11,350 | ) | |||||||||||||||||||||
Net deferred tax assets | $ | 49,367 | $ | 48,660 | |||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation for Continuing Operations | The rate reconciliation for continuing operations presented below is based on the U.S. federal income tax rate, rather than the parent company’s country of domicile tax rate. Management believes, given the large proportion of taxable income earned in the United States, such disclosure is more meaningful. | ||||||||||||||||||||||||
(US$ in thousands, except percentages) | 2013 | 2012 | 2011 | ||||||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||
(Restated) | (Restated) | (Restated) | (Restated) | (Restated) | (Restated) | ||||||||||||||||||||
Statutory U.S. federal income tax rate | $ | (3,711 | ) | 35 | % | $ | 24,179 | 35 | % | $ | (477 | ) | 35 | % | |||||||||||
State taxes, net | 2,039 | (19.2 | )% | 2,536 | 3.7 | % | 1,809 | (132.7 | )% | ||||||||||||||||
Foreign rate differential | (510 | ) | 4.8 | % | (2,894 | ) | (4.2 | )% | 1,549 | (113.6 | )% | ||||||||||||||
Valuation allowance—foreign losses | 3,913 | (36.9 | )% | 6,189 | 9 | % | 4,924 | 361.3 | % | ||||||||||||||||
Italian subsidiary intangible | (2,288 | ) | 21.6 | % | (2,214 | ) | (3.2 | )% | (2,421 | ) | 177.6 | % | |||||||||||||
Goodwill impairment | 6,452 | (60.9 | )% | — | — | — | — | ||||||||||||||||||
Domestic manufacturing deduction | (233 | ) | 2.2 | % | (1,567 | ) | (2.3 | )% | (1,703 | ) | 125 | % | |||||||||||||
Withholding taxes | 1,676 | (15.8 | )% | 1,679 | 2.4 | % | 1,676 | (123.0 | )% | ||||||||||||||||
Settlement of U.S. Government resolutions | — | — | (1,260 | ) | (1.8 | )% | 9,520 | (698.5 | )% | ||||||||||||||||
Other items, net | 264 | (2.5 | )% | (2,704 | ) | (3.9 | )% | (434 | ) | 31.9 | % | ||||||||||||||
Income tax expense/effective rate | $ | 7,602 | (71.7 | )% | $ | 23,944 | 34.7 | % | $ | 14,443 | (1,059.6 | )% | |||||||||||||
Schedule of Gross Unrecognized Tax Benefits (Excluding Interest and Penalties) | A reconciliation of the gross unrecognized tax benefits (excluding interest and penalties) for the years ended December 31, 2013 and December 31, 2012 follows: | ||||||||||||||||||||||||
(US$ in thousands) | 2013 | 2012 | |||||||||||||||||||||||
(Restated) | (Restated) | ||||||||||||||||||||||||
Balance as of January 1, | $ | 1,189 | $ | 610 | |||||||||||||||||||||
Additions for current year tax positions | 183 | 793 | |||||||||||||||||||||||
Decreases for prior year tax positions | (12 | ) | (106 | ) | |||||||||||||||||||||
Settlements of prior year tax positions | (560 | ) | — | ||||||||||||||||||||||
Expiration of statutes | (77 | ) | (108 | ) | |||||||||||||||||||||
Balance as of December 31, | $ | 723 | $ | 1,189 | |||||||||||||||||||||
Sale_of_Breg_and_Disposition_o1
Sale of Breg and Disposition of Sports Medicine SBU (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Discontinued Operations and Disposal Groups [Abstract] | |||||
Schedule of Information Related to Sale of Breg | The following table presents the value of the asset disposition, proceeds received, net of various working capital adjustments and indebtedness and net gain on sale of Breg as shown in the condensed consolidated statement of operations for the year ended December 31, 2012. | ||||
(U.S. Dollars in thousands) | Total | ||||
Cash proceeds | $ | 157,500 | |||
Less: | |||||
Working Capital | (7,093 | ) | |||
Transaction related expenses | (4,276 | ) | |||
Fair value of indemnification | (2,000 | ) | |||
Tangible assets | (8,309 | ) | |||
Intangible assets | (28,164 | ) | |||
Goodwill | (106,200 | ) | |||
Gain on sale of Breg | 1,458 | ||||
Income tax expense | (113 | ) | |||
Gain on sale of Breg, net of taxes | $ | 1,345 | |||
Sharebased_compensation_plans_
Share-based compensation plans (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||
Schedule of Share-Based Compensation by Line Item in Consolidated Statements of Operations | The following table shows the detail of share-based compensation by line item in the consolidated statements of operations for the years ended December 31, 2013, 2012 and 2011 and the assumptions for each of these years in which grants were awarded: | ||||||||||||||||||||
(U.S. Dollars in thousands, except assumptions) | Year Ended | Year Ended | Year Ended | ||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||
Cost of sales | $ | 104 | $ | 592 | $ | 153 | |||||||||||||||
Sales and marketing | 1,444 | 1,550 | 2,031 | ||||||||||||||||||
General and administrative | 4,483 | 4,023 | 4,322 | ||||||||||||||||||
Research and development | 236 | 138 | 142 | ||||||||||||||||||
Total | $ | 6,267 | $ | 6,303 | $ | 6,648 | |||||||||||||||
Schedule of Share-based Payment Award, Valuation Assumptions | Assumptions: | ||||||||||||||||||||
Expected term | 5.00 years | 4.50 years | 4.58 years | ||||||||||||||||||
Expected volatility | 32.1% – 50.8 | % | 50.9% – 51.8 | % | 49.6% – 49.9 | % | |||||||||||||||
Risk free interest rate | 0.58% – 1.52 | % | 0.76% – 0.84 | % | .90% – 2.26 | % | |||||||||||||||
Dividend rate | — | — | — | ||||||||||||||||||
Weighted average fair value of options granted during the year | $ | 10.83 | $ | 16.99 | $ | 14.21 | |||||||||||||||
Schedule of Stock Option Activity | Summaries of the status of the Company’s stock option plans as of December 31, 2013 and 2012 and changes during the year ended December 31, 2013 are presented below: | ||||||||||||||||||||
Options | Weighted Average | Weighted | |||||||||||||||||||
Exercise Price | Average | ||||||||||||||||||||
Remaining | |||||||||||||||||||||
Contractual | |||||||||||||||||||||
Term | |||||||||||||||||||||
Outstanding at December 31, 2012 | 1,945,955 | $ | 34.5 | ||||||||||||||||||
Granted | 466,250 | $ | 28.51 | ||||||||||||||||||
Exercised | (79,949 | ) | $ | 23.25 | |||||||||||||||||
Forfeited | (408,077 | ) | $ | 36.33 | |||||||||||||||||
Outstanding at December 31, 2013 | 1,924,179 | $ | 33.12 | 4.41 | |||||||||||||||||
Vested and expected to vest at December 31, 2013 | 1,839,383 | $ | 33.5 | 4.17 | |||||||||||||||||
Options exercisable at December 31, 2013 | 1,367,269 | $ | 34.35 | 2.89 | |||||||||||||||||
Schedule of Stock Options Outstanding and Exercisable by Price Range | Outstanding and exercisable by price range as of December 31, 2013 | ||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||
Range of Exercise Prices | Number | Weighted | Weighted | Number | Weighted | ||||||||||||||||
Outstanding | Average | Average | Exercisable | Average | |||||||||||||||||
Remaining | Exercise | Exercise | |||||||||||||||||||
Contractual | Price | Price | |||||||||||||||||||
Life | |||||||||||||||||||||
$10.42 – $21.78 | 232,250 | 9.31 | $ | 20.79 | 16,000 | $ | 13.31 | ||||||||||||||
$22.75 – $25.05 | 326,166 | 4.1 | $ | 24.73 | 306,166 | $ | 24.84 | ||||||||||||||
$26.79 – $28.95 | 230,000 | 4.79 | $ | 28.45 | 170,000 | $ | 28.65 | ||||||||||||||
$29.23 – $37.36 | 225,168 | 5.1 | $ | 33.14 | 169,839 | $ | 32.41 | ||||||||||||||
$37.76 – $38.11 | 230,975 | 1.69 | $ | 37.99 | 230,975 | $ | 37.99 | ||||||||||||||
$38.40 – $40.27 | 351,354 | 3.17 | $ | 39.76 | 174,355 | $ | 39.77 | ||||||||||||||
$41.33 – $43.04 | 178,633 | 2.84 | $ | 41.66 | 150,301 | $ | 41.72 | ||||||||||||||
$44.87 – $45.84 | 140,133 | 3.05 | $ | 45.02 | 140,133 | $ | 45.02 | ||||||||||||||
$50.50 – $50.50 | 2,000 | 3.01 | $ | 50.5 | 2,000 | $ | 50.5 | ||||||||||||||
$50.99 – $50.99 | 7,500 | 3.04 | $ | 50.99 | 7,500 | $ | 50.99 | ||||||||||||||
$10.42 – $50.99 | 1,924,179 | 4.41 | $ | 33.12 | 1,367,269 | $ | 34.35 | ||||||||||||||
Schedule of Changes in Restricted Stock | A summary of the status of our restricted stock as of December 31, 2013 and 2012 and changes during the year ended December 31, 2013 are presented below: | ||||||||||||||||||||
Shares | Weighted | ||||||||||||||||||||
Average Grant | |||||||||||||||||||||
Date Fair Value | |||||||||||||||||||||
Non-vested as of December 31, 2012 | 160,831 | $ | 38.34 | ||||||||||||||||||
Granted | 269,791 | $ | 27.09 | ||||||||||||||||||
Vested | (62,948 | ) | $ | 36.58 | |||||||||||||||||
Cancelled | (80,970 | ) | $ | 38.8 | |||||||||||||||||
Non-vested as of December 31, 2013 | 286,704 | $ | 28.01 | ||||||||||||||||||
Earnings_per_share_Tables
Earnings per share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Schedule of Reconciliation of Weighted Average Shares Used in Calculation of Basic and Diluted Earnings Per Share | The following is a reconciliation of the weighted average shares used in the basic and diluted net income (loss) per common share computations. | ||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Weighted average common shares-basic | 18,697,228 | 18,977,263 | 18,219,343 | ||||||||||
Effect of diluted securities: | |||||||||||||
Unexercised stock options net of treasury share repurchase | — | 413,150 | — | ||||||||||
Weighted average common shares-diluted | 18,697,228 | 19,390,413 | 18,219,343 | ||||||||||
Quarterly_financial_data_unaud1
Quarterly financial data (unaudited) (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||
Condensed Consolidated Statement of Operations | Condensed Consolidated Statement of Operations | ||||||||||||||||||||
(U.S. Dollars, in thousands, except per share data) | |||||||||||||||||||||
Originally | Original | Originally | Further | Restated | |||||||||||||||||
Reported in | Restatement | Reported in | Restatement | ||||||||||||||||||
2013 | Adjustments | 2013 | Adjustments | ||||||||||||||||||
Form 10-Q | Form 10-Q/A | ||||||||||||||||||||
1st Quarter | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Net sales | $ | 100,254 | $ | 3,119 | $ | 103,373 | $ | (1,094 | ) | $ | 102,279 | ||||||||||
Cost of sales | 22,699 | 2,918 | 25,617 | 224 | 25,841 | ||||||||||||||||
Gross profit | 77,555 | 201 | 77,756 | (1,318 | ) | 76,438 | |||||||||||||||
Operating expense | 73,531 | (3,862 | ) | 69,669 | 701 | 70,370 | |||||||||||||||
Operating income | 4,024 | 4,063 | 8,087 | (2,019 | ) | 6,068 | |||||||||||||||
Net income from continuing operations | 4,908 | 2,702 | 7,610 | (1,684 | ) | 5,926 | |||||||||||||||
Net income | $ | 2,116 | $ | 2,384 | $ | 4,500 | $ | (1,053 | ) | $ | 3,447 | ||||||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.25 | $ | 0.14 | $ | 0.39 | $ | (0.08 | ) | $ | 0.31 | ||||||||||
Net income | $ | 0.11 | $ | 0.12 | $ | 0.23 | $ | (0.05 | ) | $ | 0.18 | ||||||||||
Diluted: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.25 | $ | 0.14 | $ | 0.39 | $ | (0.09 | ) | $ | 0.3 | ||||||||||
Net income | $ | 0.11 | $ | 0.12 | $ | 0.23 | $ | (0.05 | ) | $ | 0.18 | ||||||||||
Originally | Original | Originally | Further | Restated | |||||||||||||||||
Reported in | Restatement | Reported in | Restatement | ||||||||||||||||||
2013 | Adjustments | 2013 | Adjustments | ||||||||||||||||||
Form 10-K | Form 10-K | ||||||||||||||||||||
2nd Quarter | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Net sales | $ | 98,280 | $ | — | $ | 98,280 | $ | (640 | ) | $ | 97,640 | ||||||||||
Cost of sales | 20,246 | — | 20,246 | 1,638 | 21,884 | ||||||||||||||||
Gross profit | 78,034 | — | 78,034 | (2,278 | ) | 75,756 | |||||||||||||||
Operating expense | 69,230 | — | 69,230 | (394 | ) | 68,836 | |||||||||||||||
Operating income | 8,804 | — | 8,804 | (1,884 | ) | 6,920 | |||||||||||||||
Net income from continuing operations | 4,130 | — | 4,130 | (2,118 | ) | 2,012 | |||||||||||||||
Net loss | $ | (2,317 | ) | $ | — | $ | (2,317 | ) | $ | (694 | ) | $ | (3,011 | ) | |||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.22 | $ | — | $ | 0.22 | $ | (0.11 | ) | $ | 0.11 | ||||||||||
Net loss | $ | (0.12 | ) | $ | — | $ | (0.12 | ) | $ | (0.04 | ) | $ | (0.16 | ) | |||||||
Diluted: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.21 | $ | — | $ | 0.21 | $ | (0.11 | ) | $ | 0.1 | ||||||||||
Net loss | $ | (0.12 | ) | $ | — | $ | (0.12 | ) | $ | (0.04 | ) | $ | (0.16 | ) | |||||||
Condensed Consolidated Statement of Operations | |||||||||||||||||||||
(U.S. Dollars, in thousands, except per share data) | |||||||||||||||||||||
Originally | Original | Originally | Further | Restated | |||||||||||||||||
Reported in | Restatement | Reported in | Restatement | ||||||||||||||||||
2013 | Adjustments | 2013 | Adjustments | ||||||||||||||||||
Form 10-K | Form 10-K | ||||||||||||||||||||
3rd Quarter | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Net sales | $ | 92,738 | $ | — | $ | 92,738 | $ | (932 | ) | $ | 91,806 | ||||||||||
Cost of sales | 23,920 | — | 23,920 | 1,144 | 25,064 | ||||||||||||||||
Gross profit | 68,818 | — | 68,818 | (2,076 | ) | 66,742 | |||||||||||||||
Operating expense | 84,418 | — | 84,418 | (3,575 | ) | 80,843 | |||||||||||||||
Operating loss | (15,600 | ) | — | (15,600 | ) | 1,499 | (14,101 | ) | |||||||||||||
Net loss from continuing operations | (18,084 | ) | — | (18,084 | ) | 1,580 | (16,504 | ) | |||||||||||||
Net loss | $ | (19,822 | ) | $ | — | $ | (19,822 | ) | $ | 986 | $ | (18,836 | ) | ||||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net loss from continuing operations | $ | (1.00 | ) | $ | — | $ | (1.00 | ) | $ | 0.09 | $ | (0.91 | ) | ||||||||
Net loss | $ | (1.10 | ) | $ | — | $ | (1.10 | ) | $ | 0.06 | $ | (1.04 | ) | ||||||||
Diluted: | |||||||||||||||||||||
Net loss from continuing operations | $ | (1.00 | ) | $ | — | $ | (1.00 | ) | $ | 0.09 | $ | (0.91 | ) | ||||||||
Net loss | $ | (1.10 | ) | $ | — | $ | (1.10 | ) | $ | 0.06 | $ | (1.04 | ) | ||||||||
4th Quarter | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Net sales | $ | 106,143 | $ | — | $ | 106,143 | $ | (257 | ) | $ | 105,886 | ||||||||||
Cost of sales | 32,517 | — | 32,517 | 1,606 | 34,123 | ||||||||||||||||
Gross profit | 73,626 | — | 73,626 | (1,863 | ) | 71,763 | |||||||||||||||
Operating expense | 80,004 | — | 80,004 | 1,838 | 81,842 | ||||||||||||||||
Operating loss | (6,378 | ) | — | (6,378 | ) | (3,701 | ) | (10,079 | ) | ||||||||||||
Net loss from continuing operations | (8,564 | ) | — | (8,564 | ) | (1,075 | ) | (9,639 | ) | ||||||||||||
Net loss | $ | (7,876 | ) | $ | — | $ | (7,876 | ) | $ | (2,536 | ) | $ | (10,412 | ) | |||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net loss from continuing operations | $ | (0.47 | ) | $ | — | $ | (0.47 | ) | $ | (0.06 | ) | $ | (0.53 | ) | |||||||
Net loss | $ | (0.43 | ) | $ | — | $ | (0.43 | ) | $ | (0.15 | ) | $ | (0.58 | ) | |||||||
Diluted: | |||||||||||||||||||||
Net loss from continuing operations | $ | (0.47 | ) | $ | — | $ | (0.47 | ) | $ | (0.06 | ) | $ | (0.53 | ) | |||||||
Net loss | $ | (0.43 | ) | $ | — | $ | (0.43 | ) | $ | (0.15 | ) | $ | (0.58 | ) | |||||||
Condensed Consolidated Statement of Operations | |||||||||||||||||||||
(U.S. Dollars, in thousands, except per share data) | |||||||||||||||||||||
As Reported | Original | As Originally | Further | Restated | |||||||||||||||||
in the 2012 | Restatement | Restated in | Restatement | ||||||||||||||||||
Form 10-K | Adjustments | the 2012 | Adjustments | ||||||||||||||||||
Prior to | Form 10-K/A | ||||||||||||||||||||
Original | |||||||||||||||||||||
Restatement | |||||||||||||||||||||
1st Quarter | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Net sales | $ | 116,041 | $ | (7,105 | ) | $ | 108,936 | $ | (1,773 | ) | $ | 107,163 | |||||||||
Cost of sales | 21,939 | (561 | ) | 21,378 | 2,767 | 24,145 | |||||||||||||||
Gross profit | 94,102 | (6,544 | ) | 87,558 | (4,540 | ) | 83,018 | ||||||||||||||
Operating expense | 71,671 | (2,033 | ) | 69,638 | (1,409 | ) | 68,229 | ||||||||||||||
Operating income | 22,431 | (4,511 | ) | 17,920 | (3,131 | ) | 14,789 | ||||||||||||||
Net income from continuing operations | 12,215 | (3,618 | ) | 8,597 | (1,727 | ) | 6,870 | ||||||||||||||
Net income | $ | 12,016 | $ | (2,609 | ) | $ | 9,407 | $ | (2,058 | ) | $ | 7,349 | |||||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.65 | $ | (0.19 | ) | $ | 0.46 | $ | (0.09 | ) | $ | 0.37 | |||||||||
Net income | $ | 0.64 | $ | (0.14 | ) | $ | 0.5 | $ | (0.11 | ) | $ | 0.39 | |||||||||
Diluted: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.64 | $ | (0.19 | ) | $ | 0.45 | $ | (0.09 | ) | $ | 0.36 | |||||||||
Net income | $ | 0.63 | $ | (0.14 | ) | $ | 0.49 | $ | (0.11 | ) | $ | 0.38 | |||||||||
2nd Quarter | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Net sales | $ | 119,492 | $ | (6,069 | ) | $ | 113,423 | $ | (1,822 | ) | $ | 111,601 | |||||||||
Cost of sales | 23,676 | 3,871 | 27,547 | (2,604 | ) | 24,943 | |||||||||||||||
Gross profit | 95,816 | (9,940 | ) | 85,876 | 782 | 86,658 | |||||||||||||||
Operating expense | 75,251 | (3,673 | ) | 71,578 | (1,542 | ) | 70,036 | ||||||||||||||
Operating income | 20,565 | (6,267 | ) | 14,298 | 2,324 | 16,622 | |||||||||||||||
Net income from continuing operations | 13,967 | (4,097 | ) | 9,870 | 1,551 | 11,421 | |||||||||||||||
Net income | $ | 11,205 | $ | (3,951 | ) | $ | 7,254 | $ | 1,548 | $ | 8,802 | ||||||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.74 | $ | (0.22 | ) | $ | 0.52 | $ | 0.09 | $ | 0.61 | ||||||||||
Net income | $ | 0.59 | $ | (0.21 | ) | $ | 0.38 | $ | 0.09 | $ | 0.47 | ||||||||||
Diluted: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.73 | $ | (0.22 | ) | $ | 0.51 | $ | 0.08 | $ | 0.59 | ||||||||||
Net income | $ | 0.58 | $ | (0.21 | ) | $ | 0.37 | $ | 0.09 | $ | 0.46 | ||||||||||
Condensed Consolidated Statement of Operations | |||||||||||||||||||||
(U.S. Dollars, in thousands, except per share data) | |||||||||||||||||||||
As Reported | Original | As Originally | Further | Restated | |||||||||||||||||
in the 2012 | Restatement | Restated in | Restatement | ||||||||||||||||||
Form 10-K | Adjustments | the 2012 | Adjustments | ||||||||||||||||||
Prior to | Form 10-K/A | ||||||||||||||||||||
Original | |||||||||||||||||||||
Restatement | |||||||||||||||||||||
3rd Quarter | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Net sales | $ | 114,752 | $ | (6,895 | ) | $ | 107,857 | $ | (2,039 | ) | $ | 105,818 | |||||||||
Cost of sales | 22,373 | 2,011 | 24,384 | 503 | 24,887 | ||||||||||||||||
Gross profit | 92,379 | (8,906 | ) | 83,473 | (2,542 | ) | 80,931 | ||||||||||||||
Operating expense | 70,846 | (6,178 | ) | 64,668 | (680 | ) | 63,988 | ||||||||||||||
Operating income | 21,533 | (2,728 | ) | 18,805 | (1,862 | ) | 16,943 | ||||||||||||||
Net income from continuing operations | 13,118 | (2,544 | ) | 10,574 | (1,262 | ) | 9,312 | ||||||||||||||
Net income | $ | 7,560 | $ | (2,544 | ) | $ | 5,016 | $ | (1,269 | ) | $ | 3,747 | |||||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.69 | $ | (0.14 | ) | $ | 0.55 | $ | (0.06 | ) | $ | 0.49 | |||||||||
Net income | $ | 0.4 | $ | (0.14 | ) | $ | 0.26 | $ | (0.06 | ) | $ | 0.2 | |||||||||
Diluted: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.67 | $ | (0.13 | ) | $ | 0.54 | $ | (0.06 | ) | $ | 0.48 | |||||||||
Net income | $ | 0.39 | $ | (0.14 | ) | $ | 0.25 | $ | (0.06 | ) | $ | 0.19 | |||||||||
4th Quarter | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Net sales | $ | 112,035 | $ | 5,330 | $ | 117,365 | $ | (1,758 | ) | $ | 115,607 | ||||||||||
Cost of sales | 18,504 | 6,440 | 24,944 | 1,807 | 26,751 | ||||||||||||||||
Gross profit | 93,531 | (1,110 | ) | 92,421 | (3,565 | ) | 88,856 | ||||||||||||||
Operating expense | 69,050 | (2,242 | ) | 66,808 | (4,470 | ) | 62,338 | ||||||||||||||
Operating income | 24,481 | 1,132 | 25,613 | 905 | 26,518 | ||||||||||||||||
Net income from continuing operations | 14,636 | 1,373 | 16,009 | 1,509 | 17,518 | ||||||||||||||||
Net income | $ | 20,514 | $ | 647 | $ | 21,161 | $ | 1,793 | $ | 22,954 | |||||||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.76 | $ | 0.07 | $ | 0.83 | $ | 0.08 | $ | 0.91 | |||||||||||
Net income | $ | 1.06 | $ | 0.04 | $ | 1.1 | $ | 0.09 | $ | 1.19 | |||||||||||
Diluted: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.74 | $ | 0.07 | $ | 0.81 | $ | 0.08 | $ | 0.89 | |||||||||||
Net income | $ | 1.04 | $ | 0.03 | $ | 1.07 | $ | 0.1 | $ | 1.17 | |||||||||||
Condensed Consolidated Balance Sheets | Condensed Consolidated Balance Sheets | ||||||||||||||||||||
(U.S. Dollars, in thousands, except share and per share data) | Originally | Original | Originally | Further | Restated | ||||||||||||||||
Reported in | Restatement | Restated in | Restatement | ||||||||||||||||||
2013 | Adjustments | 2013 | Adjustments | ||||||||||||||||||
Form 10-Q | Form 10-Q/A | ||||||||||||||||||||
1st Quarter | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Total assets | $ | 503,380 | $ | (27,622 | ) | $ | 475,758 | $ | (11,605 | ) | $ | 464,153 | |||||||||
Total liabilities | 101,212 | 1,154 | 102,366 | 812 | 103,178 | ||||||||||||||||
Total shareholders’ equity | 402,168 | (28,776 | ) | 373,392 | (12,417 | ) | 360,975 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 503,380 | $ | (27,622 | ) | $ | 475,758 | $ | (11,605 | ) | $ | 464,153 | |||||||||
Originally | Original | Originally | Further | Restated | |||||||||||||||||
Reported in | Restatement | Reported in | Restatement | ||||||||||||||||||
2013 | Adjustments | 2013 | Adjustments | ||||||||||||||||||
Form 10-K | Form 10-K | ||||||||||||||||||||
2nd Quarter | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Total assets | $ | 459,450 | $ | — | $ | 459,450 | $ | (13,129 | ) | $ | 446,321 | ||||||||||
Total liabilities | 114,223 | — | 114,223 | (48 | ) | 114,175 | |||||||||||||||
Total shareholders’ equity | 345,227 | — | 345,227 | (13,081 | ) | 332,146 | |||||||||||||||
Total liabilities and shareholders’ equity | $ | 459,450 | $ | — | $ | 459,450 | $ | (13,129 | ) | $ | 446,321 | ||||||||||
3rd Quarter | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Total assets | $ | 430,058 | $ | — | $ | 430,058 | $ | (14,534 | ) | $ | 415,524 | ||||||||||
Total liabilities | 111,001 | — | 111,001 | (2,470 | ) | 108,531 | |||||||||||||||
Total shareholders’ equity | 319,057 | — | 319,057 | (12,064 | ) | 306,993 | |||||||||||||||
Total liabilities and shareholders’ equity | $ | 430,058 | $ | — | $ | 430,058 | $ | (14,534 | ) | $ | 415,524 | ||||||||||
4th Quarter | |||||||||||||||||||||
2013 | |||||||||||||||||||||
Total assets | $ | 423,182 | $ | — | $ | 423,182 | $ | (11,207 | ) | $ | 411,975 | ||||||||||
Total liabilities | 112,688 | — | 112,688 | 3,424 | 116,112 | ||||||||||||||||
Total shareholders’ equity | 310,494 | — | 310,494 | (14,631 | ) | 295,863 | |||||||||||||||
Total liabilities and shareholders’ equity | $ | 423,182 | $ | — | $ | 423,182 | $ | (11,207 | ) | $ | 411,975 | ||||||||||
Condensed Consolidated Balance Sheets | |||||||||||||||||||||
(U.S. Dollars, in thousands, except share and per share data) | As Reported | Original | As Originally | Further | Restated | ||||||||||||||||
in the 2012 | Restatement | Restated in | Restatement | ||||||||||||||||||
Form 10-K | Adjustments | the 2012 | Adjustments | ||||||||||||||||||
Prior to | Form 10-K/A | ||||||||||||||||||||
Original | |||||||||||||||||||||
Restatement | |||||||||||||||||||||
1st Quarter | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Total assets | $ | 707,586 | $ | (13,480 | ) | $ | 694,106 | $ | (13,510 | ) | $ | 680,596 | |||||||||
Total liabilities | 369,178 | 12,556 | 381,734 | 317 | 382,051 | ||||||||||||||||
Total shareholders’ equity | 338,408 | (26,036 | ) | 312,372 | (13,827 | ) | 298,545 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 707,586 | $ | (13,480 | ) | $ | 694,106 | $ | (13,510 | ) | $ | 680,596 | |||||||||
2nd Quarter | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Total assets | $ | 553,320 | $ | (22,925 | ) | $ | 530,395 | $ | (9,547 | ) | $ | 520,848 | |||||||||
Total liabilities | 199,104 | 6,092 | 205,196 | 2,731 | 207,927 | ||||||||||||||||
Total shareholders’ equity | 354,216 | (29,017 | ) | 325,199 | (12,278 | ) | 312,921 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 553,320 | $ | (22,925 | ) | $ | 530,395 | $ | (9,547 | ) | $ | 520,848 | |||||||||
3rd Quarter | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Total assets | $ | 565,073 | $ | (25,507 | ) | $ | 539,566 | $ | (11,392 | ) | $ | 528,174 | |||||||||
Total liabilities | 187,463 | 6,136 | 193,599 | 2,156 | 195,755 | ||||||||||||||||
Total shareholders’ equity | 377,610 | (31,643 | ) | 345,967 | (13,548 | ) | 332,419 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 565,073 | $ | (25,507 | ) | $ | 539,566 | $ | (11,392 | ) | $ | 528,174 | |||||||||
4th Quarter | |||||||||||||||||||||
2012 | |||||||||||||||||||||
Total assets | $ | 504,281 | $ | (31,384 | ) | $ | 472,897 | $ | (8,351 | ) | $ | 464,546 | |||||||||
Total liabilities | 105,183 | (118 | ) | 105,065 | 3,042 | 108,107 | |||||||||||||||
Total shareholders’ equity | 399,098 | (31,266 | ) | 367,832 | (11,393 | ) | 356,439 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 504,281 | $ | (31,384 | ) | $ | 472,897 | $ | (8,351 | ) | $ | 464,546 | |||||||||
Recovered_Sheet1
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2009 | |
Unit | |||||||||||||
Foreign Currency Translation [Line Items] | |||||||||||||
Transactional foreign currency gains and (losses), including those generated from intercompany operations | ($500,000) | ($400,000) | ($1,700,000) | ||||||||||
Property plant and equipment, gross | 143,374,000 | 130,848,000 | 143,374,000 | 143,374,000 | 130,848,000 | ||||||||
Property plant and equipment, accumulated depreciation | 35,400,000 | 35,400,000 | 35,400,000 | ||||||||||
Number of reporting units | 4 | ||||||||||||
Impairment of goodwill | 19,193,000 | 19,193,000 | |||||||||||
Estimated related fee | 800,000 | 600,000 | |||||||||||
Advertising expense | 200,000 | 300,000 | 500,000 | ||||||||||
Net sales | 105,886,000 | 91,806,000 | 97,640,000 | 102,279,000 | 115,607,000 | 105,818,000 | 111,601,000 | 107,163,000 | 397,611,000 | 440,189,000 | 435,519,000 | ||
Musculoskeletal Transplant Foundation ("MTF") [Member] | |||||||||||||
Foreign Currency Translation [Line Items] | |||||||||||||
Expenditures for other research and development | 2,500,000 | 3,000,000 | 0 | ||||||||||
Customers and Distributors Based in Europe [Member] | |||||||||||||
Foreign Currency Translation [Line Items] | |||||||||||||
Net sales | 52,000,000 | ||||||||||||
Collaborative Arrangement [Member] | Musculoskeletal Transplant Foundation ("MTF") [Member] | |||||||||||||
Foreign Currency Translation [Line Items] | |||||||||||||
Period of agreement with MTF | 10 years | ||||||||||||
Extended Period of existing agreement with MTF | 15 years | ||||||||||||
Marketing fee | 48,100,000 | 46,500,000 | 36,800,000 | ||||||||||
Spine Fixation and our Extremity Fixation reportable units [Member] | |||||||||||||
Foreign Currency Translation [Line Items] | |||||||||||||
Impairment of goodwill | $19,200,000 | $19,200,000 | |||||||||||
Developed Technology [Member] | |||||||||||||
Foreign Currency Translation [Line Items] | |||||||||||||
Weighted average amortization period ( in years) | 11 years |
Recovered_Sheet2
Summary of Significant Accounting Policies - Schedule of Useful Lives (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
Minimum [Member] | Buildings [Member] | |
Foreign Currency Translation [Line Items] | |
Useful life, in years | 25 years |
Minimum [Member] | Plant equipment and instrumentation [Member] | |
Foreign Currency Translation [Line Items] | |
Useful life, in years | 2 years |
Minimum [Member] | Furniture and fixtures [Member] | |
Foreign Currency Translation [Line Items] | |
Useful life, in years | 4 years |
Maximum [Member] | Buildings [Member] | |
Foreign Currency Translation [Line Items] | |
Useful life, in years | 33 years |
Maximum [Member] | Plant equipment and instrumentation [Member] | |
Foreign Currency Translation [Line Items] | |
Useful life, in years | 10 years |
Maximum [Member] | Furniture and fixtures [Member] | |
Foreign Currency Translation [Line Items] | |
Useful life, in years | 8 years |
Recovered_Sheet3
Summary of Significant Accounting Policies - Components of Changes in Accumulated Other Comprehensive Income (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | $5,490 | ||
Unrealized gain (loss) on cross-currency swaps, net of taxes (benefit) | -279 | 263 | -437 |
Foreign currency translation adjustment | -1,708 | 1,131 | -1,897 |
Ending Balance | 3,503 | 5,490 | |
Foreign Currency Translation Adjustments [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | 5,359 | 4,228 | |
Foreign currency translation adjustment | -1,708 | 1,131 | |
Ending Balance | 3,651 | 5,359 | |
Change in Fair Value [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | 131 | -132 | |
Unrealized gain (loss) on cross-currency swaps, net of taxes (benefit) | -278 | 263 | |
Unrealized gain (loss) on warrants | -1 | ||
Ending Balance | -148 | 131 | |
Accumulated Other Comprehensive Income [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | 5,490 | 4,096 | |
Unrealized gain (loss) on cross-currency swaps, net of taxes (benefit) | -279 | 263 | -437 |
Unrealized gain (loss) on warrants | -1 | ||
Foreign currency translation adjustment | -1,708 | 1,131 | -1,897 |
Ending Balance | $3,503 | $5,490 | $4,096 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Components of Changes in Accumulated Other Comprehensive Income (Parenthetical) (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Unrealized gain (loss) on cross-currency swaps, taxes (benefit) | ($164,000) | $153,000 | ($256,000) |
Deferred taxes recognized on related foreign currency translation adjustment | -1,184,000 | 1,096,000 | -700,000 |
Foreign Currency Translation Adjustments [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Deferred taxes recognized on related foreign currency translation adjustment | 0 | 0 | |
Change in Fair Value [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Unrealized gain (loss) on cross-currency swaps, taxes (benefit) | -164,000 | 153,000 | |
Accumulated Other Comprehensive Income [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Unrealized gain (loss) on cross-currency swaps, taxes (benefit) | ($164,000) | $153,000 |
Original_and_Further_Restateme2
Original and Further Restatement of the Consolidated Financial Statements - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | 6 Months Ended | 3 Months Ended | |||||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2012 | Jun. 30, 2012 | 31-May-12 | Jun. 30, 2012 | Mar. 31, 2014 | |
Facilities | ||||||||||||||||
Increase (Decrease) in net sales | ($14,700,000) | ($28,200,000) | ||||||||||||||
Increase (Decrease) in net income from continuing operations | -8,900,000 | -14,500,000 | ||||||||||||||
Net sales | 105,886,000 | 91,806,000 | 97,640,000 | 102,279,000 | 115,607,000 | 105,818,000 | 111,601,000 | 107,163,000 | 397,611,000 | 440,189,000 | 435,519,000 | |||||
Increase (Decrease) in accounts receivable | -28,562,000 | 11,128,000 | -6,645,000 | |||||||||||||
Increase (Decease) in inventory | 3,213,000 | 384,000 | 12,705,000 | |||||||||||||
Adjustment to reclassify interest expenses | 3,900,000 | |||||||||||||||
Repayment of debt obligation | 16,000 | 188,695,000 | 7,500,000 | |||||||||||||
Sales and marketing expense | 175,468,000 | 178,771,000 | 185,156,000 | |||||||||||||
Number of manufacturing facilities | 2 | |||||||||||||||
Increase (Decrease) in Income Taxes | -1,700,000 | -1,200,000 | 200,000 | |||||||||||||
Revolving Credit Facility [Member] | ||||||||||||||||
Repayment of debt obligation | 57,500,000 | 20,000,000 | 20,000,000 | 57,500,000 | ||||||||||||
Term Loan Facility [Member] | ||||||||||||||||
Repayment of debt obligation | 87,500,000 | 87,500,000 | ||||||||||||||
Inventory Reserve [Member] | ||||||||||||||||
Increase (Decease) in inventory | -14,800,000 | |||||||||||||||
Increase (Decrease) in inventory reserve | 1,200,000 | |||||||||||||||
Restatement Adjustments [Member] | ||||||||||||||||
Increase (Decrease) in accounts receivable | -4,800,000 | |||||||||||||||
Increase (Decease) in inventory | -17,900,000 | |||||||||||||||
Sales and marketing expense | 2,200,000 | 9,000,000 | 6,000,000 | |||||||||||||
Increase (Decrease) in assets | -11,200,000 | |||||||||||||||
Increase (Decrease) in income tax expense | -500,000 | -1,100,000 | ||||||||||||||
Increase (Decrease) in Deferred income tax | 6,000,000 | |||||||||||||||
Restatement Adjustments [Member] | Bad Debt Timing [Member] | ||||||||||||||||
Increase (Decrease) in accounts receivable | 1,500,000 | |||||||||||||||
Sales and marketing expense | 1,500,000 | 1,100,000 | 2,100,000 | |||||||||||||
Restatement Adjustments [Member] | Other Adjustments [Member] | ||||||||||||||||
Increase (Decease) in inventory | -2,600,000 | -1,500,000 | ||||||||||||||
Increase (Decrease) in cost of sales | 1,100,000 | 200,000 | 300,000 | |||||||||||||
Restatement Adjustments [Member] | Discontinued Operations [Member] | ||||||||||||||||
Interest expenses classified under discontinued operations | 500,000 | |||||||||||||||
Restatement Adjustments [Member] | Accounts Receivable Reserve [Member] | ||||||||||||||||
Increase (Decrease) in accounts receivable | -4,200,000 | -3,500,000 | ||||||||||||||
Increase (Decrease) in assets | -700,000 | -200,000 | 2,100,000 | |||||||||||||
Restatement Adjustments [Member] | Inventory Reserve [Member] | ||||||||||||||||
Increase (Decease) in inventory | -14,400,000 | -11,800,000 | ||||||||||||||
Increase (Decrease) in cost of sales | 3,200,000 | 1,500,000 | 100,000 | |||||||||||||
Restatement Adjustments [Member] | Inventory Existence [Member] | ||||||||||||||||
Increase (Decease) in inventory | -1,000,000 | -600,000 | ||||||||||||||
Increase (Decrease) in cost of sales | 400,000 | 300,000 | 200,000 | |||||||||||||
Subsequent Event [Member] | ||||||||||||||||
Increase (Decrease) in Income Taxes | -1,900,000 | |||||||||||||||
Distributor Revenue [Member] | ||||||||||||||||
Distributors that did not meet the fixed or determinable or collectability revenue recognition criteria | 4 | |||||||||||||||
Number of distributer terminated | 2 | |||||||||||||||
Sales return | 3,300,000 | 4,100,000 | ||||||||||||||
Increase (Decrease) in accounts receivable | -41,300,000 | |||||||||||||||
Increase (Decease) in inventory | 11,000,000 | |||||||||||||||
Distributor Revenue [Member] | Previously Reported [Member] | ||||||||||||||||
Net sales | $462,000,000 | $470,000,000 | ||||||||||||||
Distributor Revenue [Member] | Minimum [Member] | ||||||||||||||||
Percentage of net sales | 11.00% | |||||||||||||||
Distributor Revenue [Member] | Maximum [Member] | ||||||||||||||||
Percentage of net sales | 13.00% |
Original_and_Further_Restateme3
Original and Further Restatement of the Consolidated Financial Statements - Effects of Original Restatement and Further Restatement to Previously Filed Consolidated Income Statements (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Net sales | $105,886 | $91,806 | $97,640 | $102,279 | $115,607 | $105,818 | $111,601 | $107,163 | $397,611 | $440,189 | $435,519 | ||
Cost of sales | 34,123 | 25,064 | 21,884 | 25,841 | 26,751 | 24,887 | 24,943 | 24,145 | 106,912 | 100,726 | 96,415 | ||
Gross profit | 71,763 | 66,742 | 75,756 | 76,438 | 88,856 | 80,931 | 86,658 | 83,018 | 290,699 | 339,463 | 339,104 | ||
Operating expenses | |||||||||||||
Sales and marketing | 175,468 | 178,771 | 185,156 | ||||||||||
General and administrative | 64,830 | 53,650 | 64,785 | ||||||||||
Research and development | 26,768 | 28,577 | 22,861 | ||||||||||
Amortization of intangible assets | 2,687 | 2,298 | 2,550 | ||||||||||
Costs related to the accounting review and restatement | 12,945 | ||||||||||||
Charges related to U.S. Government resolutions | 1,295 | 57,141 | |||||||||||
Impairment of goodwill | 19,193 | 19,193 | |||||||||||
Total operation expenses | 81,842 | 80,843 | 68,836 | 70,370 | 62,338 | 63,988 | 70,036 | 68,229 | 301,891 | 264,591 | 332,493 | ||
Operating (loss) income | -10,079 | -14,101 | 6,920 | 6,068 | 26,518 | 16,943 | 16,622 | 14,789 | -11,192 | 74,872 | 6,611 | ||
Other income and (expense) | 589 | -5,807 | -7,974 | ||||||||||
(Loss) before income taxes | -10,603 | 69,065 | -1,363 | ||||||||||
Income tax expense | -7,602 | -23,944 | -14,443 | 6,028 | |||||||||
Net income (loss) from continuing operations | -9,639 | -16,504 | 2,012 | 5,926 | 17,518 | 9,312 | 11,421 | 6,870 | -18,205 | 45,121 | -15,806 | ||
As Originally Restated in the 2012 Form 10-K/A [Member] | |||||||||||||
Net sales | 117,365 | 107,857 | 113,423 | 447,581 | 441,971 | ||||||||
Cost of sales | 24,944 | 24,384 | 27,547 | 98,253 | 95,527 | ||||||||
Gross profit | 92,421 | 83,473 | 85,876 | 349,328 | 346,444 | ||||||||
Operating expenses | |||||||||||||
Sales and marketing | 187,131 | 193,511 | |||||||||||
General and administrative | 53,391 | 64,481 | |||||||||||
Research and development | 28,577 | 22,861 | |||||||||||
Amortization of intangible assets | 2,298 | 2,550 | |||||||||||
Charges related to U.S. Government resolutions | 1,295 | 57,141 | |||||||||||
Total operation expenses | 66,808 | 64,668 | 71,578 | 272,692 | 340,544 | ||||||||
Operating (loss) income | 25,613 | 18,805 | 14,298 | 76,636 | 5,900 | ||||||||
Other income and (expense) | -6,448 | -7,953 | |||||||||||
(Loss) before income taxes | -70,188 | -2,053 | |||||||||||
Income tax expense | -25,138 | -14,165 | |||||||||||
Net income (loss) from continuing operations | 16,009 | 10,574 | 9,870 | 45,050 | -16,218 | ||||||||
As Reported in the 2012 Form 10-K Prior to Original Restatement [Member] | |||||||||||||
Net sales | 112,035 | 114,752 | 119,492 | 116,041 | 462,320 | 470,121 | |||||||
Cost of sales | 18,504 | 22,373 | 23,676 | 21,939 | 86,492 | 92,619 | |||||||
Gross profit | 93,531 | 92,379 | 95,816 | 94,102 | 375,828 | 377,502 | |||||||
Operating expenses | |||||||||||||
Sales and marketing | 200,343 | 200,145 | |||||||||||
General and administrative | 53,827 | 64,374 | |||||||||||
Research and development | 28,577 | 22,861 | |||||||||||
Amortization of intangible assets | 2,098 | 2,350 | |||||||||||
Charges related to U.S. Government resolutions | 1,973 | 56,463 | |||||||||||
Total operation expenses | 69,050 | 70,846 | 75,251 | 71,671 | 286,818 | 346,193 | |||||||
Operating (loss) income | 24,481 | 21,533 | 20,565 | 22,431 | 89,010 | 31,309 | |||||||
Other income and (expense) | -6,282 | -11,868 | |||||||||||
(Loss) before income taxes | 82,728 | 19,441 | |||||||||||
Income tax expense | -28,792 | -21,181 | |||||||||||
Net income (loss) from continuing operations | 14,636 | 13,118 | 13,967 | 12,215 | 53,936 | -1,740 | |||||||
Further Restatement [Member] | |||||||||||||
Net sales | 397,611 | 438,532 | 435,519 | ||||||||||
Cost of sales | 106,912 | 100,726 | 96,415 | ||||||||||
Gross profit | 290,699 | 339,463 | 339,104 | ||||||||||
Operating expenses | |||||||||||||
Sales and marketing | 175,468 | 178,771 | 185,156 | ||||||||||
General and administrative | 64,830 | 53,650 | 64,785 | ||||||||||
Research and development | 26,768 | 28,577 | 22,861 | ||||||||||
Amortization of intangible assets | 2,687 | 2,298 | 2,550 | ||||||||||
Costs related to the accounting review and restatement | 12,945 | ||||||||||||
Charges related to U.S. Government resolutions | 1,295 | 57,141 | |||||||||||
Impairment of goodwill | 19,193 | ||||||||||||
Total operation expenses | 301,891 | 264,591 | 332,493 | ||||||||||
Operating (loss) income | -11,192 | 74,872 | 6,611 | ||||||||||
Other income and (expense) | 589 | -5,807 | -7,974 | ||||||||||
(Loss) before income taxes | -10,603 | 69,065 | -1,363 | ||||||||||
Income tax expense | -7,602 | -23,944 | 14,443 | ||||||||||
Net income (loss) from continuing operations | -18,205 | 45,121 | -15,806 | ||||||||||
Further Restatement [Member] | As Originally Restated in the 2012 Form 10-K/A [Member] | |||||||||||||
Net sales | 400,534 | 447,581 | 441,971 | ||||||||||
Cost of sales | 102,300 | 98,253 | 95,527 | ||||||||||
Gross profit | 298,234 | 349,328 | 346,444 | ||||||||||
Operating expenses | |||||||||||||
Sales and marketing | 176,581 | 187,131 | 193,511 | ||||||||||
General and administrative | 65,147 | 53,391 | 64,481 | ||||||||||
Research and development | 26,768 | 28,577 | 22,861 | ||||||||||
Amortization of intangible assets | 2,687 | 2,298 | 2,550 | ||||||||||
Costs related to the accounting review and restatement | 12,945 | ||||||||||||
Charges related to U.S. Government resolutions | 1,295 | 57,141 | |||||||||||
Impairment of goodwill | 19,193 | ||||||||||||
Total operation expenses | 303,321 | 272,692 | 340,544 | ||||||||||
Operating (loss) income | -5,087 | 76,636 | 5,900 | ||||||||||
Other income and (expense) | 295 | -6,448 | -7,953 | ||||||||||
(Loss) before income taxes | -4,792 | 70,188 | -2,053 | ||||||||||
Income tax expense | -10,116 | -25,138 | -14,165 | ||||||||||
Net income (loss) from continuing operations | -14,908 | 45,050 | -16,218 | ||||||||||
Further Restatement [Member] | Co-Pay and Self-Pay Revenue [Member] | |||||||||||||
Net sales | -2,242 | -9,049 | -5,960 | ||||||||||
Cost of sales | |||||||||||||
Gross profit | -2,242 | -9,049 | -5,960 | ||||||||||
Operating expenses | |||||||||||||
Sales and marketing | -2,242 | -9,049 | -5,960 | ||||||||||
General and administrative | |||||||||||||
Research and development | |||||||||||||
Amortization of intangible assets | |||||||||||||
Costs related to the accounting review and restatement | |||||||||||||
Charges related to U.S. Government resolutions | |||||||||||||
Impairment of goodwill | |||||||||||||
Total operation expenses | -2,242 | -9,049 | -5,960 | ||||||||||
Operating (loss) income | |||||||||||||
Other income and (expense) | |||||||||||||
(Loss) before income taxes | |||||||||||||
Income tax expense | |||||||||||||
Net income (loss) from continuing operations | |||||||||||||
Further Restatement [Member] | Bad Debt Timing [Member] | |||||||||||||
Net sales | |||||||||||||
Cost of sales | |||||||||||||
Gross profit | |||||||||||||
Operating expenses | |||||||||||||
Sales and marketing | 1,455 | 1,097 | -2,143 | ||||||||||
General and administrative | |||||||||||||
Research and development | |||||||||||||
Amortization of intangible assets | |||||||||||||
Costs related to the accounting review and restatement | |||||||||||||
Charges related to U.S. Government resolutions | |||||||||||||
Impairment of goodwill | |||||||||||||
Total operation expenses | 1,455 | 1,097 | -2,143 | ||||||||||
Operating (loss) income | -1,455 | -1,097 | 2,143 | ||||||||||
Other income and (expense) | |||||||||||||
(Loss) before income taxes | -1,455 | -1,097 | 2,143 | ||||||||||
Income tax expense | 509 | 384 | -752 | ||||||||||
Net income (loss) from continuing operations | -946 | -713 | 1,391 | ||||||||||
Further Restatement [Member] | Accounts Receivable Reserve [Member] | |||||||||||||
Net sales | -582 | 1,653 | -439 | ||||||||||
Cost of sales | |||||||||||||
Gross profit | -582 | 1,653 | -439 | ||||||||||
Operating expenses | |||||||||||||
Sales and marketing | 122 | -408 | -252 | ||||||||||
General and administrative | |||||||||||||
Research and development | |||||||||||||
Amortization of intangible assets | |||||||||||||
Costs related to the accounting review and restatement | |||||||||||||
Charges related to U.S. Government resolutions | |||||||||||||
Impairment of goodwill | |||||||||||||
Total operation expenses | 122 | -408 | -252 | ||||||||||
Operating (loss) income | -704 | 2,061 | -187 | ||||||||||
Other income and (expense) | |||||||||||||
(Loss) before income taxes | -704 | 2,061 | -187 | ||||||||||
Income tax expense | 246 | -721 | 66 | ||||||||||
Net income (loss) from continuing operations | -458 | 1,340 | -121 | ||||||||||
Further Restatement [Member] | Intercompany Profit [Member] | |||||||||||||
Net sales | |||||||||||||
Cost of sales | 1,090 | 207 | 253 | ||||||||||
Gross profit | -1,090 | -207 | -253 | ||||||||||
Operating expenses | |||||||||||||
Sales and marketing | |||||||||||||
General and administrative | |||||||||||||
Research and development | |||||||||||||
Amortization of intangible assets | |||||||||||||
Costs related to the accounting review and restatement | |||||||||||||
Charges related to U.S. Government resolutions | |||||||||||||
Impairment of goodwill | |||||||||||||
Total operation expenses | |||||||||||||
Operating (loss) income | -1,090 | -207 | -253 | ||||||||||
Other income and (expense) | |||||||||||||
(Loss) before income taxes | -1,090 | -207 | -253 | ||||||||||
Income tax expense | 381 | 72 | 89 | ||||||||||
Net income (loss) from continuing operations | -709 | -135 | -164 | ||||||||||
Further Restatement [Member] | Inventory [Member] | |||||||||||||
Net sales | |||||||||||||
Cost of sales | 3,688 | 1,774 | 321 | ||||||||||
Gross profit | -3,688 | -1,774 | -321 | ||||||||||
Operating expenses | |||||||||||||
Sales and marketing | |||||||||||||
General and administrative | |||||||||||||
Research and development | |||||||||||||
Amortization of intangible assets | |||||||||||||
Costs related to the accounting review and restatement | |||||||||||||
Charges related to U.S. Government resolutions | |||||||||||||
Impairment of goodwill | |||||||||||||
Total operation expenses | |||||||||||||
Operating (loss) income | -3,688 | -1,774 | -321 | ||||||||||
Other income and (expense) | |||||||||||||
(Loss) before income taxes | -3,688 | -1,774 | -321 | ||||||||||
Income tax expense | 1,290 | 621 | 113 | ||||||||||
Net income (loss) from continuing operations | -2,398 | -1,153 | -208 | ||||||||||
Further Restatement [Member] | Total Adjustments [Member] | |||||||||||||
Net sales | -2,923 | -9,049 | -6,452 | ||||||||||
Cost of sales | 4,612 | 2,473 | 888 | ||||||||||
Gross profit | -7,535 | -9,865 | -7,340 | ||||||||||
Operating expenses | |||||||||||||
Sales and marketing | -1,113 | -8,360 | -8,355 | ||||||||||
General and administrative | -317 | 259 | 304 | ||||||||||
Research and development | |||||||||||||
Amortization of intangible assets | |||||||||||||
Costs related to the accounting review and restatement | |||||||||||||
Charges related to U.S. Government resolutions | |||||||||||||
Impairment of goodwill | |||||||||||||
Total operation expenses | -1,430 | -8,101 | -8,051 | ||||||||||
Operating (loss) income | -6,105 | -1,764 | 711 | ||||||||||
Other income and (expense) | 294 | 641 | -21 | ||||||||||
(Loss) before income taxes | -5,811 | -1,123 | 690 | ||||||||||
Income tax expense | 2,514 | 1,194 | -278 | ||||||||||
Net income (loss) from continuing operations | -3,297 | 71 | 412 | ||||||||||
Further Restatement [Member] | Other Adjustments [Member] | |||||||||||||
Net sales | -99 | 4 | -53 | ||||||||||
Cost of sales | -166 | 492 | 314 | ||||||||||
Gross profit | 67 | -488 | -367 | ||||||||||
Operating expenses | |||||||||||||
Sales and marketing | -448 | ||||||||||||
General and administrative | -317 | 259 | 304 | ||||||||||
Research and development | |||||||||||||
Amortization of intangible assets | |||||||||||||
Costs related to the accounting review and restatement | |||||||||||||
Charges related to U.S. Government resolutions | |||||||||||||
Impairment of goodwill | |||||||||||||
Total operation expenses | -765 | 259 | 304 | ||||||||||
Operating (loss) income | 832 | -747 | -671 | ||||||||||
Other income and (expense) | 294 | 641 | -21 | ||||||||||
(Loss) before income taxes | -1,126 | -106 | -692 | ||||||||||
Income tax expense | 88 | 838 | 206 | ||||||||||
Net income (loss) from continuing operations | 1,214 | 732 | -486 | ||||||||||
Original Restatement [Member] | |||||||||||||
Net sales | 447,581 | 441,971 | |||||||||||
Cost of sales | 98,253 | 95,527 | |||||||||||
Gross profit | 349,328 | 346,444 | |||||||||||
Operating expenses | |||||||||||||
Sales and marketing | 187,131 | 193,511 | |||||||||||
General and administrative | 53,391 | 64,481 | |||||||||||
Research and development | 28,577 | 22,861 | |||||||||||
Amortization of intangible assets | 2,298 | 2,550 | |||||||||||
Charges related to U.S. Government resolutions | 1,295 | 57,141 | |||||||||||
Total operation expenses | 272,692 | 340,544 | |||||||||||
Operating (loss) income | 76,636 | 5,900 | |||||||||||
Other income and (expense) | -6,448 | -7,953 | |||||||||||
(Loss) before income taxes | 70,188 | -2,053 | |||||||||||
Income tax expense | -25,138 | -14,165 | |||||||||||
Net income (loss) from continuing operations | 45,050 | -16,218 | |||||||||||
Original Restatement [Member] | Distributor Revenue [Member] | |||||||||||||
Net sales | -14,777 | -29,135 | |||||||||||
Cost of sales | -2,032 | -8,289 | |||||||||||
Gross profit | -12,745 | -20,846 | |||||||||||
Operating expenses | |||||||||||||
Sales and marketing | -6,629 | -1,216 | |||||||||||
General and administrative | -2 | ||||||||||||
Research and development | |||||||||||||
Amortization of intangible assets | |||||||||||||
Charges related to U.S. Government resolutions | |||||||||||||
Total operation expenses | -6,631 | -1,216 | |||||||||||
Operating (loss) income | -6,114 | -19,630 | |||||||||||
Other income and (expense) | |||||||||||||
(Loss) before income taxes | -6,114 | -19,630 | |||||||||||
Income tax expense | 1,782 | 6,408 | |||||||||||
Net income (loss) from continuing operations | -4,332 | -13,222 | |||||||||||
Original Restatement [Member] | Inventory Reserves [Member] | |||||||||||||
Net sales | |||||||||||||
Cost of sales | 5,647 | 3,377 | |||||||||||
Gross profit | -5,647 | -3,377 | |||||||||||
Operating expenses | |||||||||||||
Sales and marketing | |||||||||||||
General and administrative | |||||||||||||
Research and development | |||||||||||||
Amortization of intangible assets | |||||||||||||
Charges related to U.S. Government resolutions | |||||||||||||
Total operation expenses | |||||||||||||
Operating (loss) income | -5,647 | -3,377 | |||||||||||
Other income and (expense) | |||||||||||||
(Loss) before income taxes | -5,647 | -3,377 | |||||||||||
Income tax expense | 1,645 | 1,102 | |||||||||||
Net income (loss) from continuing operations | -4,002 | -2,275 | |||||||||||
Original Restatement [Member] | Total Adjustments [Member] | |||||||||||||
Net sales | -14,739 | -28,150 | |||||||||||
Cost of sales | 11,761 | 2,908 | |||||||||||
Gross profit | -26,500 | -31,058 | |||||||||||
Operating expenses | |||||||||||||
Sales and marketing | -13,212 | -6,634 | |||||||||||
General and administrative | -436 | 107 | |||||||||||
Research and development | |||||||||||||
Amortization of intangible assets | 200 | ||||||||||||
Charges related to U.S. Government resolutions | -678 | 678 | |||||||||||
Total operation expenses | -14,126 | -5,649 | |||||||||||
Operating (loss) income | -12,374 | -25,409 | |||||||||||
Other income and (expense) | -166 | 3,915 | |||||||||||
(Loss) before income taxes | -12,540 | -21,494 | |||||||||||
Income tax expense | 3,654 | 7,016 | |||||||||||
Net income (loss) from continuing operations | -8,886 | -14,478 | |||||||||||
Original Restatement [Member] | As Reported in the 2012 Form 10-K Prior to Original Restatement [Member] | |||||||||||||
Net sales | 462,320 | 470,121 | |||||||||||
Cost of sales | 86,492 | 92,619 | |||||||||||
Gross profit | 375,828 | 377,502 | |||||||||||
Operating expenses | |||||||||||||
Sales and marketing | 200,343 | 200,145 | |||||||||||
General and administrative | 53,827 | 64,374 | |||||||||||
Research and development | 28,577 | 22,861 | |||||||||||
Amortization of intangible assets | 2,098 | 2,350 | |||||||||||
Charges related to U.S. Government resolutions | 1,973 | 56,463 | |||||||||||
Total operation expenses | 286,818 | 346,193 | |||||||||||
Operating (loss) income | 89,010 | 31,309 | |||||||||||
Other income and (expense) | -6,282 | -11,868 | |||||||||||
(Loss) before income taxes | 82,728 | 19,441 | |||||||||||
Income tax expense | -28,792 | -21,181 | |||||||||||
Net income (loss) from continuing operations | 53,936 | -1,740 | |||||||||||
Original Restatement [Member] | Other Adjustments [Member] | |||||||||||||
Net sales | 38 | 985 | |||||||||||
Cost of sales | -44 | 107 | |||||||||||
Gross profit | 82 | 878 | |||||||||||
Operating expenses | |||||||||||||
Sales and marketing | 1,607 | 2,295 | |||||||||||
General and administrative | -434 | 107 | |||||||||||
Research and development | |||||||||||||
Amortization of intangible assets | 200 | 200 | |||||||||||
Charges related to U.S. Government resolutions | -678 | 678 | |||||||||||
Total operation expenses | 695 | 3,280 | |||||||||||
Operating (loss) income | -613 | -2,402 | |||||||||||
Other income and (expense) | -166 | 3,915 | |||||||||||
(Loss) before income taxes | -779 | 1,513 | |||||||||||
Income tax expense | 227 | -494 | |||||||||||
Net income (loss) from continuing operations | -552 | 1,019 | |||||||||||
Original Restatement [Member] | Royalties [Member] | |||||||||||||
Net sales | |||||||||||||
Cost of sales | 8,190 | 7,713 | |||||||||||
Gross profit | -8,190 | -7,713 | |||||||||||
Operating expenses | |||||||||||||
Sales and marketing | -8,190 | -7,713 | |||||||||||
General and administrative | |||||||||||||
Research and development | |||||||||||||
Amortization of intangible assets | |||||||||||||
Charges related to U.S. Government resolutions | |||||||||||||
Total operation expenses | -8,190 | -7,713 | |||||||||||
Operating (loss) income | |||||||||||||
Other income and (expense) | |||||||||||||
(Loss) before income taxes | |||||||||||||
Income tax expense | |||||||||||||
Net income (loss) from continuing operations |
Original_and_Further_Restateme4
Original and Further Restatement of the Consolidated Financial Statements - Effects of Original Restatement and Further Restatement on Consolidated Balance Sheet (Detail) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, unless otherwise specified | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $28,924 | $30,767 | $32,743 | $13,561 | ||||||
Restricted cash | 23,761 | 21,314 | ||||||||
Trade accounts receivable, less allowances | 70,811 | 103,802 | ||||||||
Inventories | 72,678 | 69,813 | ||||||||
Deferred income taxes | 39,999 | 38,487 | ||||||||
Prepaid expenses and other current assets | 28,933 | 36,449 | ||||||||
Total current assets | 265,106 | 300,632 | ||||||||
Property, plant and equipment, net | 54,372 | 52,793 | ||||||||
Patents and other intangible assets, net | 9,046 | 7,290 | ||||||||
Goodwill | 53,565 | 72,758 | 74,388 | 73,094 | ||||||
Deferred income taxes | 22,394 | 21,523 | ||||||||
Other long-term assets | 7,492 | 7,920 | ||||||||
Total assets | 411,975 | 415,524 | 446,321 | 464,153 | 464,546 | 528,174 | 520,848 | 680,596 | ||
Current liabilities: | ||||||||||
Bank borrowings | 16 | |||||||||
Trade accounts payable | 20,674 | 22,575 | ||||||||
Other current liabilities | 49,676 | 42,742 | ||||||||
Total current liabilities | 70,350 | 65,333 | ||||||||
Long-term debt | 20,000 | 20,000 | ||||||||
Deferred income taxes | 13,026 | 11,350 | ||||||||
Other long-term liabilities | 12,736 | 11,424 | ||||||||
Total liabilities | 116,112 | 108,531 | 114,175 | 103,178 | 108,107 | 195,755 | 207,927 | 382,051 | ||
Contingencies (Note 17) | ||||||||||
Shareholders' equity | ||||||||||
Common shares $0.10 par value; 50,000,000 shares authorized; 18,102,335 and 19,339,329 issued and outstanding as of December 31, 2013 and 2012, respectively | 1,810 | 1,934 | ||||||||
Additional paid-in capital | 216,653 | 246,306 | ||||||||
Retained earnings | 73,897 | 102,709 | ||||||||
Accumulated other comprehensive income | 3,503 | 5,490 | ||||||||
Total shareholders' equity | 295,863 | 306,993 | 332,146 | 360,975 | 356,439 | 332,419 | 312,921 | 298,545 | 280,304 | |
Total liabilities and shareholders' equity | 411,975 | 415,524 | 446,321 | 464,153 | 464,546 | 528,174 | 520,848 | 680,596 | ||
Originally Reported [Member] | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 30,486 | 31,055 | ||||||||
Restricted cash | 23,761 | |||||||||
Trade accounts receivable, less allowances | 75,567 | |||||||||
Inventories | 90,577 | |||||||||
Deferred income taxes | 33,947 | |||||||||
Prepaid expenses and other current assets | 25,906 | |||||||||
Total current assets | 280,244 | |||||||||
Property, plant and equipment, net | 54,606 | |||||||||
Patents and other intangible assets, net | 9,046 | |||||||||
Goodwill | 53,565 | |||||||||
Deferred income taxes | 18,336 | |||||||||
Other long-term assets | 7,385 | |||||||||
Total assets | 423,182 | 430,058 | 459,450 | |||||||
Current liabilities: | ||||||||||
Trade accounts payable | 20,674 | |||||||||
Other current liabilities | 46,146 | |||||||||
Total current liabilities | 66,820 | |||||||||
Long-term debt | 20,000 | |||||||||
Deferred income taxes | 13,132 | |||||||||
Other long-term liabilities | 12,736 | |||||||||
Total liabilities | 112,688 | 111,001 | 114,223 | |||||||
Contingencies (Note 17) | ||||||||||
Shareholders' equity | ||||||||||
Common shares $0.10 par value; 50,000,000 shares authorized; 18,102,335 and 19,339,329 issued and outstanding as of December 31, 2013 and 2012, respectively | 1,810 | |||||||||
Additional paid-in capital | 216,653 | |||||||||
Retained earnings | 89,332 | |||||||||
Accumulated other comprehensive income | 2,699 | |||||||||
Total shareholders' equity | 310,494 | 319,057 | 345,227 | |||||||
Total liabilities and shareholders' equity | 423,182 | 430,058 | 459,450 | |||||||
Further Restatement Adjustments [Member] | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | -1,562 | -288 | -464 | |||||||
Restricted cash | ||||||||||
Trade accounts receivable, less allowances | -4,756 | -3,510 | ||||||||
Inventories | -17,899 | -13,560 | ||||||||
Deferred income taxes | 6,052 | 5,037 | ||||||||
Prepaid expenses and other current assets | 3,027 | -2,370 | ||||||||
Total current assets | -15,138 | -9,951 | ||||||||
Property, plant and equipment, net | -234 | -1,042 | ||||||||
Patents and other intangible assets, net | ||||||||||
Goodwill | ||||||||||
Deferred income taxes | 4,058 | 2,642 | ||||||||
Other long-term assets | 107 | |||||||||
Total assets | -11,207 | -14,534 | -13,129 | -11,605 | -8,351 | -11,392 | -9,547 | -13,510 | ||
Current liabilities: | ||||||||||
Bank borrowings | ||||||||||
Trade accounts payable | ||||||||||
Other current liabilities | 3,530 | 3,148 | ||||||||
Total current liabilities | 3,530 | 3,148 | ||||||||
Long-term debt | ||||||||||
Deferred income taxes | -106 | -106 | ||||||||
Other long-term liabilities | ||||||||||
Total liabilities | 3,424 | -2,470 | -48 | 812 | 3,042 | 2,156 | 2,731 | 317 | ||
Contingencies (Note 17) | ||||||||||
Shareholders' equity | ||||||||||
Common shares $0.10 par value; 50,000,000 shares authorized; 18,102,335 and 19,339,329 issued and outstanding as of December 31, 2013 and 2012, respectively | ||||||||||
Additional paid-in capital | ||||||||||
Retained earnings | -15,435 | -12,138 | ||||||||
Accumulated other comprehensive income | 804 | 745 | ||||||||
Total shareholders' equity | -14,631 | -12,064 | -13,081 | -12,417 | -11,393 | -13,548 | -12,278 | -13,827 | ||
Total liabilities and shareholders' equity | -11,207 | -14,534 | -13,129 | -11,605 | -8,351 | -11,392 | -9,547 | -13,510 | ||
As Reported in the 2012 Form 10-K Prior to Original Restatement [Member] | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 31,055 | 33,207 | 13,561 | |||||||
Restricted cash | 21,314 | |||||||||
Trade accounts receivable, less allowances | 150,316 | |||||||||
Inventories | 88,744 | |||||||||
Deferred income taxes | 16,959 | |||||||||
Prepaid expenses and other current assets | 32,056 | |||||||||
Total current assets | 340,444 | |||||||||
Property, plant and equipment, net | 51,362 | |||||||||
Patents and other intangible assets, net | 6,880 | |||||||||
Goodwill | 74,388 | |||||||||
Deferred income taxes | 19,904 | |||||||||
Other long-term assets | 11,303 | |||||||||
Total assets | 504,281 | 565,073 | 553,320 | 707,586 | ||||||
Current liabilities: | ||||||||||
Bank borrowings | 16 | |||||||||
Trade accounts payable | 21,812 | |||||||||
Other current liabilities | 46,969 | |||||||||
Total current liabilities | 68,797 | |||||||||
Long-term debt | 20,000 | |||||||||
Deferred income taxes | 11,456 | |||||||||
Other long-term liabilities | 4,930 | |||||||||
Total liabilities | 105,183 | 187,463 | 199,104 | 369,178 | ||||||
Contingencies (Note 17) | ||||||||||
Shareholders' equity | ||||||||||
Common shares $0.10 par value; 50,000,000 shares authorized; 18,102,335 and 19,339,329 issued and outstanding as of December 31, 2013 and 2012, respectively | 1,934 | |||||||||
Additional paid-in capital | 246,111 | |||||||||
Retained earnings | 148,549 | |||||||||
Accumulated other comprehensive income | 2,504 | |||||||||
Total shareholders' equity | 399,098 | 377,610 | 354,216 | 338,408 | ||||||
Total liabilities and shareholders' equity | 504,281 | 565,073 | 553,320 | 707,586 | ||||||
Original Restatement Adjustments [Member] | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | ||||||||||
Restricted cash | ||||||||||
Trade accounts receivable, less allowances | -43,004 | |||||||||
Inventories | -5,371 | |||||||||
Deferred income taxes | 16,491 | |||||||||
Prepaid expenses and other current assets | 2,023 | |||||||||
Total current assets | -29,861 | |||||||||
Property, plant and equipment, net | 2,473 | |||||||||
Patents and other intangible assets, net | 410 | |||||||||
Goodwill | ||||||||||
Deferred income taxes | -1,023 | |||||||||
Other long-term assets | -3,383 | |||||||||
Total assets | 0 | 0 | 0 | -27,622 | -31,384 | -25,507 | -22,925 | -13,480 | ||
Current liabilities: | ||||||||||
Bank borrowings | ||||||||||
Trade accounts payable | 763 | |||||||||
Other current liabilities | -7,375 | |||||||||
Total current liabilities | -6,612 | |||||||||
Long-term debt | ||||||||||
Deferred income taxes | ||||||||||
Other long-term liabilities | 6,494 | |||||||||
Total liabilities | 0 | 0 | 0 | 1,154 | -118 | 6,136 | 6,092 | 12,556 | ||
Contingencies (Note 17) | ||||||||||
Shareholders' equity | ||||||||||
Common shares $0.10 par value; 50,000,000 shares authorized; 18,102,335 and 19,339,329 issued and outstanding as of December 31, 2013 and 2012, respectively | ||||||||||
Additional paid-in capital | 195 | |||||||||
Retained earnings | -33,702 | |||||||||
Accumulated other comprehensive income | 2,241 | |||||||||
Total shareholders' equity | 0 | 0 | 0 | -28,776 | -31,266 | -31,643 | -29,017 | -26,036 | ||
Total liabilities and shareholders' equity | 0 | 0 | 0 | -27,622 | -31,384 | -25,507 | -22,925 | -13,480 | ||
As Originally Restated in the 2012 Form 10-K/A [Member] | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 31,055 | 33,207 | 13,561 | |||||||
Restricted cash | 21,314 | |||||||||
Trade accounts receivable, less allowances | 107,312 | |||||||||
Inventories | 83,373 | |||||||||
Deferred income taxes | 33,450 | |||||||||
Prepaid expenses and other current assets | 34,079 | |||||||||
Total current assets | 310,583 | |||||||||
Property, plant and equipment, net | 53,835 | |||||||||
Patents and other intangible assets, net | 7,290 | |||||||||
Goodwill | 74,388 | |||||||||
Deferred income taxes | 18,881 | |||||||||
Other long-term assets | 7,920 | |||||||||
Total assets | 472,897 | 539,566 | 530,395 | 694,106 | ||||||
Current liabilities: | ||||||||||
Bank borrowings | 16 | |||||||||
Trade accounts payable | 22,575 | |||||||||
Other current liabilities | 39,594 | |||||||||
Total current liabilities | 62,185 | |||||||||
Long-term debt | 20,000 | |||||||||
Deferred income taxes | 11,456 | |||||||||
Other long-term liabilities | 11,424 | |||||||||
Total liabilities | 105,065 | 193,599 | 205,196 | 381,734 | ||||||
Contingencies (Note 17) | ||||||||||
Shareholders' equity | ||||||||||
Common shares $0.10 par value; 50,000,000 shares authorized; 18,102,335 and 19,339,329 issued and outstanding as of December 31, 2013 and 2012, respectively | 1,934 | |||||||||
Additional paid-in capital | 246,306 | |||||||||
Retained earnings | 114,847 | |||||||||
Accumulated other comprehensive income | 4,745 | |||||||||
Total shareholders' equity | 367,832 | 345,967 | 325,199 | 312,372 | ||||||
Total liabilities and shareholders' equity | $472,897 | $539,566 | $530,395 | $694,106 |
Original_and_Further_Restateme5
Original and Further Restatement of the Consolidated Financial Statements - Effects of Original Restatement and Further Restatement on Consolidated Balance Sheet (Parenthetical) (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Trade accounts receivable, allowances | $9,111 | $6,673 |
Common shares, par value | $0.10 | $0.10 |
Common shares, authorized | 50,000,000 | 50,000,000 |
Common shares, issued | 18,102,335 | 19,339,329 |
Common shares, outstanding | 18,102,335 | 19,339,329 |
Originally Reported [Member] | ||
Trade accounts receivable, allowances | 9,111 | |
Common shares, par value | $0.10 | |
Common shares, authorized | 50,000,000 | |
Common shares, issued | 18,102,335 | |
Common shares, outstanding | 18,102,335 | |
Further Restatement Adjustments [Member] | ||
Trade accounts receivable, allowances | 9,111 | 6,673 |
As Reported in the 2012 Form 10-K Prior to Original Restatement [Member] | ||
Trade accounts receivable, allowances | 6,673 | |
Common shares, par value | $0.10 | |
Common shares, authorized | 50,000,000 | |
Common shares, issued | 19,339,329 | |
Common shares, outstanding | 19,339,329 | |
Original Restatement Adjustments [Member] | ||
Trade accounts receivable, allowances | 6,673 | |
As Originally Restated in the 2012 Form 10-K/A [Member] | ||
Trade accounts receivable, allowances | $6,673 |
Original_and_Further_Restateme6
Original and Further Restatement of the Consolidated Financial Statements - Effects of Original Restatement and Further Restatement of Consolidated Statement of Operations and Comprehensive Income (Loss) (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 |
Product sales | $349,552 | $393,647 | $398,695 | |||||||||||
Marketing service fees | 48,059 | 46,542 | 36,824 | |||||||||||
Net sales | 105,886 | 91,806 | 97,640 | 102,279 | 115,607 | 105,818 | 111,601 | 107,163 | 397,611 | 440,189 | 435,519 | |||
Cost of sales | 34,123 | 25,064 | 21,884 | 25,841 | 26,751 | 24,887 | 24,943 | 24,145 | 106,912 | 100,726 | 96,415 | |||
Gross profit | 71,763 | 66,742 | 75,756 | 76,438 | 88,856 | 80,931 | 86,658 | 83,018 | 290,699 | 339,463 | 339,104 | |||
Operating expenses | ||||||||||||||
Sales and marketing | 175,468 | 178,771 | 185,156 | |||||||||||
General and administrative | 64,830 | 53,650 | 64,785 | |||||||||||
Research and development | 26,768 | 28,577 | 22,861 | |||||||||||
Amortization of intangible assets | 2,687 | 2,298 | 2,550 | |||||||||||
Costs related to the accounting review and restatement | 12,945 | |||||||||||||
Charges related to U.S. Government resolutions (Note 17) | 1,295 | 57,141 | ||||||||||||
Impairment of goodwill | 19,193 | 19,193 | ||||||||||||
Total operating expenses | 81,842 | 80,843 | 68,836 | 70,370 | 62,338 | 63,988 | 70,036 | 68,229 | 301,891 | 264,591 | 332,493 | |||
Operating (loss) income | -10,079 | -14,101 | 6,920 | 6,068 | 26,518 | 16,943 | 16,622 | 14,789 | -11,192 | 74,872 | 6,611 | |||
Other income and (expense) | ||||||||||||||
Interest expense, net | -1,827 | -4,161 | -5,441 | |||||||||||
Other expense | 2,416 | -1,646 | -2,533 | |||||||||||
Total other income (expense) | 589 | -5,807 | -7,974 | |||||||||||
(Loss) income before income taxes | -10,603 | 69,065 | -1,363 | |||||||||||
Income tax expense | -7,602 | -23,944 | -14,443 | 6,028 | ||||||||||
Net income (loss) from continuing operations | -9,639 | -16,504 | 2,012 | 5,926 | 17,518 | 9,312 | 11,421 | 6,870 | -18,205 | 45,121 | -15,806 | |||
Discontinued operations (Note 16) | ||||||||||||||
Gain on sale of Breg, Inc. | 1,345 | |||||||||||||
Income (loss) from discontinued operations | -15,510 | -3,494 | -2,705 | |||||||||||
Income tax (expense) benefit | 4,903 | -120 | 813 | |||||||||||
Net income (loss) from discontinued operations | -10,607 | -2,269 | -1,892 | |||||||||||
Net income | -28,812 | 42,852 | -17,698 | |||||||||||
Net (loss) income per common share-basic: | ||||||||||||||
Net income from continuing operations | ($0.53) | ($0.91) | $0.11 | $0.31 | $0.91 | $0.49 | $0.61 | $0.37 | ($0.97) | $2.38 | ($0.87) | |||
Net income (loss) from discontinued operations | ($0.57) | ($0.12) | ($0.10) | |||||||||||
Net income per common share-basic | ($0.58) | ($1.04) | ($0.16) | $0.18 | $1.19 | $0.20 | $0.47 | $0.39 | ($1.54) | $2.26 | ($0.97) | |||
Net (loss) income per common share-diluted: | ||||||||||||||
Net income from continuing operations | ($0.53) | ($0.91) | $0.10 | $0.30 | $0.89 | $0.48 | $0.59 | $0.36 | ($0.97) | $2.33 | ($0.87) | |||
Net income (loss) from discontinued operations | ($0.57) | ($0.12) | ($0.10) | |||||||||||
Net income per common share-diluted: | ($0.58) | ($1.04) | ($0.16) | $0.18 | $1.17 | $0.19 | $0.46 | $0.38 | ($1.54) | $2.21 | ($0.97) | |||
Weighted average number of common shares: | ||||||||||||||
Basic | 18,697,228 | 18,977,263 | 18,219,343 | |||||||||||
Diluted | 18,697,228 | 19,390,413 | 18,219,343 | |||||||||||
Other comprehensive income, before tax: | ||||||||||||||
Translation adjustment | -1,708 | 1,131 | -1,897 | |||||||||||
Unrealized gain on derivative instrument | -443 | 416 | -693 | |||||||||||
Other comprehensive income, before tax | -2,151 | 1,547 | -2,590 | |||||||||||
Income tax expense related to components of other comprehensive income | 164 | -153 | 164 | 164 | -153 | 256 | ||||||||
Other comprehensive income, net of tax | -1,987 | 1,394 | -2,334 | |||||||||||
Comprehensive income | -30,799 | 44,246 | -20,032 | |||||||||||
As Reported in the 2012 Form 10-K Prior to Original Restatement [Member] | ||||||||||||||
Product sales | 415,850 | 432,975 | ||||||||||||
Marketing service fees | 46,470 | 37,146 | ||||||||||||
Net sales | 112,035 | 114,752 | 119,492 | 116,041 | 462,320 | 470,121 | ||||||||
Cost of sales | 18,504 | 22,373 | 23,676 | 21,939 | 86,492 | 92,619 | ||||||||
Gross profit | 93,531 | 92,379 | 95,816 | 94,102 | 375,828 | 377,502 | ||||||||
Operating expenses | ||||||||||||||
Sales and marketing | 200,343 | 200,145 | ||||||||||||
General and administrative | 53,827 | 64,374 | ||||||||||||
Research and development | 28,577 | 22,861 | ||||||||||||
Amortization of intangible assets | 2,098 | 2,350 | ||||||||||||
Charges related to U.S. Government resolutions (Note 17) | 1,973 | 56,463 | ||||||||||||
Total operating expenses | 69,050 | 70,846 | 75,251 | 71,671 | 286,818 | 346,193 | ||||||||
Operating (loss) income | 24,481 | 21,533 | 20,565 | 22,431 | 89,010 | 31,309 | ||||||||
Other income and (expense) | ||||||||||||||
Interest expense, net | -4,577 | -9,456 | ||||||||||||
Other expense | -1,705 | -2,412 | ||||||||||||
Total other income (expense) | -6,282 | -11,868 | ||||||||||||
(Loss) income before income taxes | 82,728 | 19,441 | ||||||||||||
Income tax expense | -28,792 | -21,181 | ||||||||||||
Net income (loss) from continuing operations | 14,636 | 13,118 | 13,967 | 12,215 | 53,936 | -1,740 | ||||||||
Discontinued operations (Note 16) | ||||||||||||||
Gain on sale of Breg, Inc. | 1,345 | |||||||||||||
Income (loss) from discontinued operations | -4,012 | 1,263 | ||||||||||||
Income tax (expense) benefit | 26 | -596 | ||||||||||||
Net income (loss) from discontinued operations | -2,641 | 667 | ||||||||||||
Net income | 51,295 | -1,073 | ||||||||||||
Net (loss) income per common share-basic: | ||||||||||||||
Net income from continuing operations | $0.76 | $0.69 | $0.74 | $0.65 | $2.84 | ($0.10) | ||||||||
Net income (loss) from discontinued operations | ($0.14) | $0.04 | ||||||||||||
Net income per common share-basic | $1.06 | $0.40 | $0.59 | $0.64 | $2.70 | ($0.06) | ||||||||
Net (loss) income per common share-diluted: | ||||||||||||||
Net income from continuing operations | $0.74 | $0.67 | $0.73 | $0.64 | $2.78 | ($0.10) | ||||||||
Net income (loss) from discontinued operations | ($0.14) | $0.04 | ||||||||||||
Net income per common share-diluted: | $1.04 | $0.39 | $0.58 | $0.63 | $2.64 | ($0.06) | ||||||||
Weighted average number of common shares: | ||||||||||||||
Basic | 18,977,263 | 18,219,343 | ||||||||||||
Diluted | 19,390,413 | 18,219,343 | ||||||||||||
Other comprehensive income, before tax: | ||||||||||||||
Translation adjustment | 480 | -3,192 | ||||||||||||
Unrealized gain on derivative instrument | 416 | -693 | ||||||||||||
Other comprehensive income, before tax | 896 | -3,885 | ||||||||||||
Income tax expense related to components of other comprehensive income | -153 | -153 | 256 | |||||||||||
Other comprehensive income, net of tax | 743 | -3,629 | ||||||||||||
Comprehensive income | 52,038 | -4,702 | ||||||||||||
Original Restatement Adjustments [Member] | ||||||||||||||
Product sales | -14,811 | -27,828 | ||||||||||||
Marketing service fees | 72 | -322 | ||||||||||||
Net sales | 3,119 | 5,330 | -6,895 | -6,069 | -7,105 | -14,739 | -28,150 | |||||||
Cost of sales | 2,918 | 6,440 | 2,011 | 3,871 | -561 | 11,761 | 2,908 | |||||||
Gross profit | 201 | -1,110 | -8,906 | -9,940 | -6,544 | -26,500 | -31,058 | |||||||
Operating expenses | ||||||||||||||
Sales and marketing | -13,212 | -6,634 | ||||||||||||
General and administrative | -436 | 107 | ||||||||||||
Research and development | ||||||||||||||
Amortization of intangible assets | 200 | 200 | ||||||||||||
Charges related to U.S. Government resolutions (Note 17) | -678 | 678 | ||||||||||||
Total operating expenses | -3,862 | -2,242 | -6,178 | -3,673 | -2,033 | -14,126 | -5,649 | |||||||
Operating (loss) income | 4,063 | 1,132 | -2,728 | -6,267 | -4,511 | -12,374 | -25,409 | |||||||
Other income and (expense) | ||||||||||||||
Interest expense, net | -166 | 3,915 | ||||||||||||
Other expense | ||||||||||||||
Total other income (expense) | -166 | 3,915 | ||||||||||||
(Loss) income before income taxes | -12,540 | -21,494 | ||||||||||||
Income tax expense | 3,654 | 7,016 | ||||||||||||
Net income (loss) from continuing operations | 2,702 | 1,373 | -2,544 | -4,097 | -3,618 | -8,886 | -14,478 | |||||||
Discontinued operations (Note 16) | ||||||||||||||
Gain on sale of Breg, Inc. | ||||||||||||||
Income (loss) from discontinued operations | 1,018 | -3,968 | ||||||||||||
Income tax (expense) benefit | -589 | 1,409 | ||||||||||||
Net income (loss) from discontinued operations | 429 | -2,559 | ||||||||||||
Net income | -8,457 | -17,037 | ||||||||||||
Net (loss) income per common share-basic: | ||||||||||||||
Net income from continuing operations | $0.14 | $0.07 | ($0.14) | ($0.22) | ($0.19) | ($0.47) | ($0.79) | |||||||
Net income (loss) from discontinued operations | $0.02 | ($0.14) | ||||||||||||
Net income per common share-basic | $0.12 | $0.04 | ($0.14) | ($0.21) | ($0.14) | ($0.45) | ($0.93) | |||||||
Net (loss) income per common share-diluted: | ||||||||||||||
Net income from continuing operations | $0.14 | $0.07 | ($0.13) | ($0.22) | ($0.19) | ($0.46) | ($0.79) | |||||||
Net income (loss) from discontinued operations | $0.03 | ($0.14) | ||||||||||||
Net income per common share-diluted: | $0.12 | $0.03 | ($0.14) | ($0.21) | ($0.14) | ($0.43) | ($0.93) | |||||||
Weighted average number of common shares: | ||||||||||||||
Basic | ||||||||||||||
Diluted | ||||||||||||||
Other comprehensive income, before tax: | ||||||||||||||
Translation adjustment | 288 | 913 | ||||||||||||
Unrealized gain on derivative instrument | ||||||||||||||
Other comprehensive income, before tax | 288 | 913 | ||||||||||||
Income tax expense related to components of other comprehensive income | ||||||||||||||
Other comprehensive income, net of tax | 288 | 913 | ||||||||||||
Comprehensive income | -8,169 | -16,124 | ||||||||||||
As Originally Restated in the 2012 Form 10-K/A [Member] | ||||||||||||||
Product sales | 401,039 | 405,147 | ||||||||||||
Marketing service fees | 46,542 | 36,824 | ||||||||||||
Net sales | 117,365 | 107,857 | 113,423 | 447,581 | 441,971 | |||||||||
Cost of sales | 24,944 | 24,384 | 27,547 | 98,253 | 95,527 | |||||||||
Gross profit | 92,421 | 83,473 | 85,876 | 349,328 | 346,444 | |||||||||
Operating expenses | ||||||||||||||
Sales and marketing | 187,131 | 193,511 | ||||||||||||
General and administrative | 53,391 | 64,481 | ||||||||||||
Research and development | 28,577 | 22,861 | ||||||||||||
Amortization of intangible assets | 2,298 | 2,550 | ||||||||||||
Charges related to U.S. Government resolutions (Note 17) | 1,295 | 57,141 | ||||||||||||
Total operating expenses | 66,808 | 64,668 | 71,578 | 272,692 | 340,544 | |||||||||
Operating (loss) income | 25,613 | 18,805 | 14,298 | 76,636 | 5,900 | |||||||||
Other income and (expense) | ||||||||||||||
Interest expense, net | -4,743 | -5,541 | ||||||||||||
Other expense | -1,705 | -2,412 | ||||||||||||
Total other income (expense) | -6,448 | -7,953 | ||||||||||||
(Loss) income before income taxes | -70,188 | -2,053 | ||||||||||||
Income tax expense | -25,138 | -14,165 | ||||||||||||
Net income (loss) from continuing operations | 16,009 | 10,574 | 9,870 | 45,050 | -16,218 | |||||||||
Discontinued operations (Note 16) | ||||||||||||||
Gain on sale of Breg, Inc. | 1,345 | |||||||||||||
Income (loss) from discontinued operations | -2,994 | -2,705 | ||||||||||||
Income tax (expense) benefit | -563 | 813 | ||||||||||||
Net income (loss) from discontinued operations | -2,212 | -1,892 | ||||||||||||
Net income | -42,838 | -18,110 | ||||||||||||
Net (loss) income per common share-basic: | ||||||||||||||
Net income from continuing operations | $0.83 | $0.55 | $0.52 | $2.37 | ($0.89) | |||||||||
Net income (loss) from discontinued operations | ($0.12) | ($0.10) | ||||||||||||
Net income per common share-basic | $1.10 | $0.26 | $0.38 | $2.25 | ($0.99) | |||||||||
Net (loss) income per common share-diluted: | ||||||||||||||
Net income from continuing operations | $0.81 | $0.54 | $0.51 | $2.32 | ($0.89) | |||||||||
Net income (loss) from discontinued operations | ($0.11) | ($0.10) | ||||||||||||
Net income per common share-diluted: | $1.07 | $0.25 | $0.37 | $2.21 | ($0.99) | |||||||||
Weighted average number of common shares: | ||||||||||||||
Basic | 18,977,263 | 18,219,343 | ||||||||||||
Diluted | 19,390,413 | 18,219,343 | ||||||||||||
Other comprehensive income, before tax: | ||||||||||||||
Translation adjustment | 768 | -2,279 | ||||||||||||
Unrealized gain on derivative instrument | 416 | -693 | ||||||||||||
Other comprehensive income, before tax | 1,184 | -2,972 | ||||||||||||
Income tax expense related to components of other comprehensive income | -153 | -153 | 256 | |||||||||||
Other comprehensive income, net of tax | 1,031 | -2,716 | ||||||||||||
Comprehensive income | 43,869 | -20,826 | ||||||||||||
Further Restatement Adjustments [Member] | ||||||||||||||
Product sales | -3,244 | -7,392 | -6,452 | |||||||||||
Marketing service fees | 321 | |||||||||||||
Net sales | -257 | -932 | -640 | -1,094 | -1,758 | -2,039 | -1,822 | -1,773 | -2,923 | -7,392 | -6,452 | |||
Cost of sales | 1,606 | 1,144 | 1,638 | 224 | 1,807 | 503 | -2,604 | 2,767 | 4,612 | 2,473 | 888 | |||
Gross profit | -1,863 | -2,076 | -2,278 | -1,318 | -3,565 | -2,542 | 782 | -4,540 | -7,535 | -9,865 | -7,340 | |||
Operating expenses | ||||||||||||||
Sales and marketing | -1,113 | -8,360 | -8,355 | |||||||||||
General and administrative | -317 | 259 | 304 | |||||||||||
Research and development | ||||||||||||||
Amortization of intangible assets | ||||||||||||||
Costs related to the accounting review and restatement | ||||||||||||||
Charges related to U.S. Government resolutions (Note 17) | ||||||||||||||
Impairment of goodwill | ||||||||||||||
Total operating expenses | 1,838 | -3,575 | -394 | 701 | -4,470 | -680 | -1,542 | -1,409 | -1,430 | -8,101 | -8,051 | |||
Operating (loss) income | -3,701 | 1,499 | -1,884 | -2,019 | 905 | -1,862 | 2,324 | -3,131 | -6,105 | -1,764 | 711 | |||
Other income and (expense) | ||||||||||||||
Interest expense, net | 98 | 582 | 100 | |||||||||||
Other expense | 196 | 59 | -121 | |||||||||||
Total other income (expense) | 294 | 641 | -21 | |||||||||||
(Loss) income before income taxes | -5,811 | -1,123 | 690 | |||||||||||
Income tax expense | 2,514 | 1,194 | -278 | -1,388 | 7,416 | |||||||||
Net income (loss) from continuing operations | -1,075 | 1,580 | -2,118 | -1,684 | 1,509 | -1,262 | 1,551 | -1,727 | -3,297 | 71 | 412 | |||
Discontinued operations (Note 16) | ||||||||||||||
Gain on sale of Breg, Inc. | ||||||||||||||
Income (loss) from discontinued operations | -500 | |||||||||||||
Income tax (expense) benefit | 443 | |||||||||||||
Net income (loss) from discontinued operations | -57 | |||||||||||||
Net income | -3,297 | 14 | 412 | |||||||||||
Net (loss) income per common share-basic: | ||||||||||||||
Net income from continuing operations | ($0.06) | $0.09 | ($0.11) | ($0.08) | $0.08 | ($0.06) | $0.09 | ($0.09) | ($0.17) | $0.01 | $0.02 | |||
Net income (loss) from discontinued operations | ||||||||||||||
Net income per common share-basic | ($0.15) | $0.06 | ($0.04) | ($0.05) | $0.09 | ($0.06) | $0.09 | ($0.11) | ($0.17) | $0.01 | $0.02 | |||
Net (loss) income per common share-diluted: | ||||||||||||||
Net income from continuing operations | ($0.06) | $0.09 | ($0.11) | ($0.09) | $0.08 | ($0.06) | $0.08 | ($0.09) | ($0.17) | $0.01 | $0.02 | |||
Net income (loss) from discontinued operations | ($0.01) | |||||||||||||
Net income per common share-diluted: | ($0.15) | $0.06 | ($0.04) | ($0.05) | $0.10 | ($0.06) | $0.09 | ($0.11) | ($0.17) | $0 | $0.02 | |||
Weighted average number of common shares: | ||||||||||||||
Basic | ||||||||||||||
Diluted | ||||||||||||||
Other comprehensive income, before tax: | ||||||||||||||
Translation adjustment | 60 | 363 | 382 | |||||||||||
Unrealized gain on derivative instrument | -1 | |||||||||||||
Other comprehensive income, before tax | 59 | 363 | 382 | |||||||||||
Income tax expense related to components of other comprehensive income | ||||||||||||||
Other comprehensive income, net of tax | 59 | 363 | 382 | |||||||||||
Comprehensive income | -3,238 | 377 | 794 | |||||||||||
Originally Reported in 2013 Form 10-K [Member] | ||||||||||||||
Product sales | 352,796 | |||||||||||||
Marketing service fees | 47,738 | |||||||||||||
Net sales | 106,143 | 92,738 | 98,280 | 400,534 | ||||||||||
Cost of sales | 32,517 | 23,920 | 20,246 | 102,300 | ||||||||||
Gross profit | 73,626 | 68,818 | 78,034 | 298,234 | ||||||||||
Operating expenses | ||||||||||||||
Sales and marketing | 176,581 | |||||||||||||
General and administrative | 65,147 | |||||||||||||
Research and development | 26,768 | |||||||||||||
Amortization of intangible assets | 2,687 | |||||||||||||
Costs related to the accounting review and restatement | 12,945 | |||||||||||||
Impairment of goodwill | 19,193 | |||||||||||||
Total operating expenses | 80,004 | 84,418 | 69,230 | 303,321 | ||||||||||
Operating (loss) income | -6,378 | -15,600 | 8,804 | -5,087 | ||||||||||
Other income and (expense) | ||||||||||||||
Interest expense, net | -1,925 | |||||||||||||
Other expense | 2,220 | |||||||||||||
Total other income (expense) | 295 | |||||||||||||
(Loss) income before income taxes | -4,792 | |||||||||||||
Income tax expense | -10,116 | |||||||||||||
Net income (loss) from continuing operations | -8,564 | -18,084 | 4,130 | -14,908 | ||||||||||
Discontinued operations (Note 16) | ||||||||||||||
Income (loss) from discontinued operations | -15,510 | |||||||||||||
Income tax (expense) benefit | 4,903 | |||||||||||||
Net income (loss) from discontinued operations | -10,607 | |||||||||||||
Net income | -25,515 | |||||||||||||
Net (loss) income per common share-basic: | ||||||||||||||
Net income from continuing operations | ($0.47) | ($1) | $0.22 | ($0.80) | ||||||||||
Net income (loss) from discontinued operations | ($0.57) | |||||||||||||
Net income per common share-basic | ($0.43) | ($1.10) | ($0.12) | ($1.37) | ||||||||||
Net (loss) income per common share-diluted: | ||||||||||||||
Net income from continuing operations | ($0.47) | ($1) | $0.21 | ($0.80) | ||||||||||
Net income (loss) from discontinued operations | ($0.57) | |||||||||||||
Net income per common share-diluted: | ($0.43) | ($1.10) | ($0.12) | ($1.37) | ||||||||||
Weighted average number of common shares: | ||||||||||||||
Basic | 18,697,228 | |||||||||||||
Diluted | 18,697,228 | |||||||||||||
Other comprehensive income, before tax: | ||||||||||||||
Translation adjustment | -1,768 | |||||||||||||
Unrealized gain on derivative instrument | -442 | |||||||||||||
Other comprehensive income, before tax | -2,210 | |||||||||||||
Income tax expense related to components of other comprehensive income | 164 | 164 | 164 | |||||||||||
Other comprehensive income, net of tax | -2,046 | |||||||||||||
Comprehensive income | ($27,561) |
Original_and_Further_Restateme7
Original and Further Restatement of the Consolidated Financial Statements - Effects of Original Restatement and Further Restatement on Consolidated Cash Flow (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | |||
Net income (loss) | ($28,812) | $42,852 | ($17,698) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 22,822 | 20,732 | 23,182 |
Amortization of debt costs | 720 | 1,737 | 1,239 |
Amortization of exclusivity agreements | 1,546 | 1,289 | 374 |
Provision for doubtful accounts | 4,590 | 2,212 | 4,580 |
Deferred income taxes | 2,829 | 3,771 | -13,941 |
Share-based compensation | 6,267 | 6,303 | 6,648 |
Impairment of goodwill | 19,193 | ||
Gain on sale of Breg, Inc, net of tax. | -1,345 | ||
Excess income tax benefit on employee stock-based awards | -82 | -1,020 | -1,737 |
Income tax benefit (expense) on employee stock-based awards | |||
Other | 4,536 | 4,798 | 2,298 |
Changes in operating assets and liabilities, net of effect of dispositions: | |||
Trade accounts receivable | 28,562 | -11,128 | 6,645 |
Inventories | -3,213 | -384 | -12,705 |
Escrow receivable | 41,537 | -32,562 | |
Prepaid expenses and other current assets | 8,764 | -14,575 | 2,382 |
Trade accounts payable | -2,280 | 4,575 | 2,322 |
Charges related to U.S. Government resolutions | -83,178 | 89,101 | |
Other current liabilities | 6,969 | -5,239 | 3,516 |
Other long-term assets | -5,329 | -3,391 | -2,317 |
Other long-term liabilities | -40 | 616 | 3,403 |
Net cash provided by operating activities | 67,042 | 10,162 | 64,730 |
Cash flows from investing activities: | |||
Capital expenditures for property, plant and equipment | -24,787 | -27,994 | -24,965 |
Capital expenditures for intangible assets | -4,891 | -780 | -793 |
Payment made in connection with acquisition | -5,250 | ||
Purchase of other investments | -1,374 | -714 | -468 |
Proceeds from sale of other investments | 878 | ||
Net proceeds from sale of Breg Inc. | 153,773 | ||
Net cash (used in) provided by investing activities | -31,052 | 125,163 | -31,476 |
Cash flows from financing activities: | |||
Net proceeds from issuance of common shares | 3,450 | 25,586 | 20,113 |
Payment of refinancing fees and debt issuance costs | -758 | ||
Repayments of long-term debt | -16 | -188,695 | -7,500 |
Proceeds from (repayment of) bank borrowings, net | -1,297 | -2,561 | |
Changes in restricted cash | -2,375 | 25,799 | -24,178 |
Purchase of common stock | -39,494 | ||
Cash payment for purchase of minority interest in subsidiary | -517 | ||
Excess income tax benefit on employee stock-based awards | 82 | 1,020 | 1,737 |
Net cash used in financing activities | -38,353 | -137,587 | -13,664 |
Effect of exchange rates changes on cash | 520 | 286 | -408 |
Net (decrease) increase in cash and cash equivalents | -1,843 | -1,976 | 19,182 |
Cash and cash equivalents at the beginning of the year | 30,767 | 32,743 | 13,561 |
Cash and cash equivalents at the end of the year | 28,924 | 30,767 | 32,743 |
Cash paid during the year for: | |||
Interest | 2,046 | 4,569 | 17,088 |
Income taxes | 8,773 | 18,268 | 26,227 |
Originally Reported [Member] | |||
Cash flows from operating activities: | |||
Net income (loss) | -25,515 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 22,659 | ||
Amortization of debt costs | 720 | ||
Amortization of exclusivity agreements | 1,546 | ||
Provision for doubtful accounts | 6,003 | ||
Deferred income taxes | -1,986 | ||
Share-based compensation | 6,267 | ||
Impairment of goodwill | 19,193 | ||
Gain on sale of Breg, Inc, net of tax. | |||
Excess income tax benefit on employee stock-based awards | -82 | ||
Income tax benefit (expense) on employee stock-based awards | 795 | ||
Other | 4,442 | ||
Changes in operating assets and liabilities, net of effect of dispositions: | |||
Trade accounts receivable | 25,747 | ||
Inventories | -6,626 | ||
Escrow receivable | |||
Prepaid expenses and other current assets | 6,791 | ||
Trade accounts payable | -2,280 | ||
Charges related to U.S. Government resolutions | |||
Other current liabilities | 8,018 | ||
Other long-term assets | 2,750 | ||
Other long-term liabilities | -1,561 | ||
Net cash provided by operating activities | 66,881 | ||
Cash flows from investing activities: | |||
Capital expenditures for property, plant and equipment | -24,787 | ||
Capital expenditures for intangible assets | -4,891 | ||
Purchase of other investments | |||
Net proceeds from sale of Breg Inc. | |||
Net cash (used in) provided by investing activities | -29,678 | ||
Cash flows from financing activities: | |||
Net proceeds from issuance of common shares | 3,450 | ||
Payment of refinancing fees and debt issuance costs | |||
Repayments of long-term debt | -16 | ||
Proceeds from (repayment of) bank borrowings, net | |||
Changes in restricted cash | -2,375 | ||
Purchase of common stock | -39,494 | ||
Cash payment for purchase of minority interest in subsidiary | |||
Excess income tax benefit on employee stock-based awards | 82 | ||
Net cash used in financing activities | -38,353 | ||
Effect of exchange rates changes on cash | 581 | ||
Net (decrease) increase in cash and cash equivalents | -569 | ||
Cash and cash equivalents at the beginning of the year | 31,055 | ||
Cash and cash equivalents at the end of the year | 30,486 | ||
Cash paid during the year for: | |||
Interest | 2,046 | ||
Income taxes | 8,773 | ||
Further Restatement Adjustments [Member] | |||
Cash flows from operating activities: | |||
Net income (loss) | -3,297 | 14 | 412 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 163 | 152 | 165 |
Amortization of debt costs | |||
Amortization of exclusivity agreements | |||
Provision for doubtful accounts | -1,413 | -8,360 | -8,356 |
Deferred income taxes | 4,815 | 5,023 | -13,889 |
Share-based compensation | |||
Impairment of goodwill | |||
Gain on sale of Breg, Inc, net of tax. | |||
Excess income tax benefit on employee stock-based awards | |||
Income tax benefit (expense) on employee stock-based awards | -795 | -2,910 | |
Other | 94 | 662 | -2,193 |
Changes in operating assets and liabilities, net of effect of dispositions: | |||
Trade accounts receivable | 2,815 | 7,310 | 6,352 |
Inventories | 3,413 | 2,111 | -81 |
Escrow receivable | |||
Prepaid expenses and other current assets | -1,973 | 1,002 | -447 |
Trade accounts payable | |||
Charges related to U.S. Government resolutions | |||
Other current liabilities | -1,049 | 490 | 2,097 |
Other long-term assets | -8,079 | -5,518 | 15,364 |
Other long-term liabilities | 1,521 | 525 | |
Net cash provided by operating activities | 161 | -24 | -51 |
Cash flows from investing activities: | |||
Capital expenditures for property, plant and equipment | |||
Capital expenditures for intangible assets | |||
Purchase of other investments | -1,374 | -714 | -468 |
Proceeds from sale of other investments | 878 | ||
Net proceeds from sale of Breg Inc. | |||
Net cash (used in) provided by investing activities | -1,374 | 164 | -468 |
Cash flows from financing activities: | |||
Net proceeds from issuance of common shares | |||
Payment of refinancing fees and debt issuance costs | |||
Repayments of long-term debt | |||
Proceeds from (repayment of) bank borrowings, net | |||
Changes in restricted cash | |||
Purchase of common stock | |||
Cash payment for purchase of minority interest in subsidiary | |||
Excess income tax benefit on employee stock-based awards | |||
Net cash used in financing activities | |||
Effect of exchange rates changes on cash | -61 | 36 | 55 |
Net (decrease) increase in cash and cash equivalents | -1,274 | 176 | -464 |
Cash and cash equivalents at the beginning of the year | -288 | -464 | |
Cash and cash equivalents at the end of the year | -1,562 | -288 | -464 |
Cash paid during the year for: | |||
Interest | |||
Income taxes | |||
As Reported in the 2012 Form 10-K Prior to Original Restatement [Member] | |||
Cash flows from operating activities: | |||
Net income (loss) | 51,295 | -1,073 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 20,261 | 22,776 | |
Amortization of debt costs | 1,737 | 1,239 | |
Amortization of exclusivity agreements | 1,289 | 374 | |
Provision for doubtful accounts | 13,302 | 11,532 | |
Deferred income taxes | 871 | 936 | |
Share-based compensation | 6,303 | 6,648 | |
Gain on sale of Breg, Inc, net of tax. | -1,345 | ||
Excess income tax benefit on employee stock-based awards | -1,737 | ||
Other | 2,125 | 4,906 | |
Changes in operating assets and liabilities, net of effect of dispositions: | |||
Trade accounts receivable | -31,600 | -25,818 | |
Inventories | -6,341 | -8,349 | |
Escrow receivable | 41,537 | -32,562 | |
Prepaid expenses and other current assets | -6,191 | -4,057 | |
Trade accounts payable | 5,554 | 576 | |
Charges related to U.S. Government resolutions | -82,500 | 88,463 | |
Other current liabilities | -2,842 | 3,384 | |
Other long-term assets | -2,114 | -1,588 | |
Other long-term liabilities | -135 | -869 | |
Net cash provided by operating activities | 11,206 | 64,781 | |
Cash flows from investing activities: | |||
Capital expenditures for property, plant and equipment | -27,994 | -24,965 | |
Capital expenditures for intangible assets | -780 | -793 | |
Payment made in connection with acquisition | -5,250 | ||
Net proceeds from sale of Breg Inc. | 153,773 | ||
Net cash (used in) provided by investing activities | 124,999 | -31,008 | |
Cash flows from financing activities: | |||
Net proceeds from issuance of common shares | 25,586 | 20,113 | |
Payment of refinancing fees and debt issuance costs | -758 | ||
Repayments of long-term debt | -188,695 | -7,500 | |
Proceeds from (repayment of) bank borrowings, net | -1,297 | -2,561 | |
Changes in restricted cash | 25,799 | -24,178 | |
Cash payment for purchase of minority interest in subsidiary | -517 | ||
Excess income tax benefit on employee stock-based awards | 1,737 | ||
Net cash used in financing activities | -138,607 | -13,664 | |
Effect of exchange rates changes on cash | 250 | -463 | |
Net (decrease) increase in cash and cash equivalents | -2,152 | 19,646 | |
Cash and cash equivalents at the beginning of the year | 33,207 | 13,561 | |
Cash and cash equivalents at the end of the year | 31,055 | 33,207 | |
Cash paid during the year for: | |||
Interest | 4,569 | 17,088 | |
Income taxes | 18,268 | 26,227 | |
Original Restatement Adjustments [Member] | |||
Cash flows from operating activities: | |||
Net income (loss) | -8,457 | -17,037 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 319 | 241 | |
Provision for doubtful accounts | -2,730 | 1,404 | |
Deferred income taxes | -2,123 | -988 | |
Gain on sale of Breg, Inc, net of tax. | |||
Income tax benefit (expense) on employee stock-based awards | 2,910 | ||
Other | 2,011 | -415 | |
Changes in operating assets and liabilities, net of effect of dispositions: | |||
Trade accounts receivable | 13,162 | 26,111 | |
Inventories | 3,846 | -4,275 | |
Prepaid expenses and other current assets | -9,386 | 6,886 | |
Trade accounts payable | -979 | 1,746 | |
Charges related to U.S. Government resolutions | -678 | -638 | |
Other current liabilities | -2,887 | -1,965 | |
Other long-term assets | 4,241 | -16,093 | |
Other long-term liabilities | 751 | 3,747 | |
Net cash provided by operating activities | -1,020 | ||
Cash flows from financing activities: | |||
Excess income tax benefit on employee stock-based awards | 1,020 | ||
Net cash used in financing activities | 1,020 | ||
Cash and cash equivalents at the beginning of the year | |||
Cash and cash equivalents at the end of the year | |||
As Originally Restated in the 2012 Form 10-K/A [Member] | |||
Cash flows from operating activities: | |||
Net income (loss) | 42,838 | -18,110 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 20,580 | 23,017 | |
Amortization of debt costs | 1,737 | 1,239 | |
Amortization of exclusivity agreements | 1,289 | 374 | |
Provision for doubtful accounts | 10,572 | 12,936 | |
Deferred income taxes | -1,252 | -52 | |
Share-based compensation | 6,303 | 6,648 | |
Gain on sale of Breg, Inc, net of tax. | -1,345 | ||
Excess income tax benefit on employee stock-based awards | -1,020 | -1,737 | |
Income tax benefit (expense) on employee stock-based awards | 2,910 | ||
Other | 4,136 | 4,491 | |
Changes in operating assets and liabilities, net of effect of dispositions: | |||
Trade accounts receivable | -18,438 | 293 | |
Inventories | -2,495 | -12,624 | |
Escrow receivable | 41,537 | -32,562 | |
Prepaid expenses and other current assets | -15,577 | 2,829 | |
Trade accounts payable | 4,575 | 2,322 | |
Charges related to U.S. Government resolutions | -83,178 | 89,101 | |
Other current liabilities | -5,729 | 1,419 | |
Other long-term assets | 2,127 | -17,681 | |
Other long-term liabilities | 616 | 2,878 | |
Net cash provided by operating activities | 10,186 | 64,781 | |
Cash flows from investing activities: | |||
Capital expenditures for property, plant and equipment | -27,994 | -24,965 | |
Capital expenditures for intangible assets | -780 | -793 | |
Payment made in connection with acquisition | -5,250 | ||
Net proceeds from sale of Breg Inc. | 153,773 | ||
Net cash (used in) provided by investing activities | 124,999 | -31,008 | |
Cash flows from financing activities: | |||
Net proceeds from issuance of common shares | 25,586 | 20,113 | |
Payment of refinancing fees and debt issuance costs | -758 | ||
Repayments of long-term debt | -188,695 | -7,500 | |
Proceeds from (repayment of) bank borrowings, net | -1,297 | -2,561 | |
Changes in restricted cash | 25,799 | -24,178 | |
Cash payment for purchase of minority interest in subsidiary | -517 | ||
Excess income tax benefit on employee stock-based awards | 1,020 | 1,737 | |
Net cash used in financing activities | -137,587 | -13,664 | |
Effect of exchange rates changes on cash | 250 | -463 | |
Net (decrease) increase in cash and cash equivalents | -2,152 | 19,646 | |
Cash and cash equivalents at the beginning of the year | 33,207 | 13,561 | |
Cash and cash equivalents at the end of the year | 31,055 | 33,207 | |
Cash paid during the year for: | |||
Interest | 4,569 | 17,088 | |
Income taxes | $18,268 | $26,227 |
Original_and_Further_Restateme8
Original and Further Restatement of the Consolidated Financial Statements - Effects of Original Restatement and Further Restatement on Consolidated Shareholders' Equity (Detail) (USD $) | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 |
Income tax benefit (expense) | ($7,602) | ($23,944) | ($14,443) | $6,028 | |
Retained earnings increase (decrease) | -12,564 | ||||
Bad Debt Timing [Member] | |||||
Retained earnings increase (decrease) | 409 | ||||
Accounts Receivable Reserve [Member] | |||||
Retained earnings increase (decrease) | -5,420 | ||||
Other Adjustments [Member] | |||||
Retained earnings increase (decrease) | -1,015 | ||||
Inventory Existence [Member] | |||||
Retained earnings increase (decrease) | -84 | ||||
Inventory Reserve [Member] | |||||
Retained earnings increase (decrease) | -10,771 | ||||
Other Adjustments [Member] | |||||
Retained earnings increase (decrease) | -1,711 | ||||
Further Restatement Adjustments [Member] | |||||
Income tax benefit (expense) | 2,514 | 1,194 | -278 | -1,388 | 7,416 |
Retained earnings increase (decrease) | 61 | -12,625 | |||
Further Restatement Adjustments [Member] | Bad Debt Timing [Member] | |||||
Retained earnings increase (decrease) | 409 | ||||
Further Restatement Adjustments [Member] | Accounts Receivable Reserve [Member] | |||||
Retained earnings increase (decrease) | -1,037 | -4,383 | |||
Further Restatement Adjustments [Member] | Other Adjustments [Member] | |||||
Retained earnings increase (decrease) | -203 | -812 | |||
Further Restatement Adjustments [Member] | Inventory Existence [Member] | |||||
Retained earnings increase (decrease) | -16 | -68 | |||
Further Restatement Adjustments [Member] | Inventory Reserve [Member] | |||||
Retained earnings increase (decrease) | 2,581 | -13,352 | |||
Further Restatement Adjustments [Member] | Other Adjustments [Member] | |||||
Retained earnings increase (decrease) | ($285) | ($1,426) |
Inventories_Schedule_of_Invent
Inventories - Schedule of Inventories (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Raw materials | $6,515 | $7,623 |
Work-in-process | 6,606 | 7,886 |
Finished products | 28,291 | 22,236 |
Field inventory | 21,312 | 17,061 |
Consignment inventory | 2,388 | 4,235 |
Deferred cost of sales | 7,566 | 10,772 |
Total Inventory | $72,678 | $69,813 |
Property_Plant_and_Equipment_S
Property, Plant and Equipment - Schedule of Property,Plant and Equipment (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ||
Cost | $143,374 | $130,848 |
Accumulated depreciation | -89,002 | -78,055 |
Total | 54,372 | 52,793 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 4,075 | 3,911 |
Plant equipment and instrumentation [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 133,427 | 121,370 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | $5,872 | $5,567 |
Property_Plant_and_Equipment_A
Property, Plant and Equipment - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property Plant and Equipment Useful Life And Values [Abstract] | |||
Depreciation expense | $20 | $15.80 | $14.30 |
Recovered_Sheet4
Patents and Other Intangible Assets - Schedule of Patents and Other Intangibles Assets (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | $43,188 | $39,562 |
Accumulated amortization | -34,142 | -32,272 |
Patents and other intangible assets, net | 9,046 | 7,290 |
Patents and licenses [Member] | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | 42,568 | 38,905 |
Accumulated amortization | -33,688 | -31,845 |
Trademarks-definite lived [Member] | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | 620 | 657 |
Accumulated amortization | ($454) | ($427) |
Recovered_Sheet5
Patents and Other Intangible Assets - Additional Information (Detail) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Future Amortization expense | |
2014 | $2.10 |
2015 | 1.8 |
2016 | 1.7 |
2017 | 1.4 |
2018 | 0.5 |
2019 and thereafter | $1.50 |
Goodwill_Schedule_of_Changes_i
Goodwill - Schedule of Changes in Net Carrying Amount of Goodwill (Detail) (USD $) | 6 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill [Line Items] | ||||
Beginning balance | $72,758 | $74,388 | $74,388 | $73,094 |
Reallocation | ||||
Foreign currency | -1,630 | 1,294 | ||
Impairment | -19,193 | -19,193 | ||
Ending balance | 53,565 | 72,758 | 53,565 | 74,388 |
Spine [Member] | ||||
Goodwill [Line Items] | ||||
Beginning balance | 41,401 | 41,564 | 41,564 | 41,419 |
Reallocation | -41,401 | |||
Foreign currency | -163 | 145 | ||
Impairment | ||||
Ending balance | 41,401 | 41,564 | ||
Orthopedics [Member] | ||||
Goodwill [Line Items] | ||||
Beginning balance | 31,357 | 32,824 | 32,824 | 31,675 |
Reallocation | -31,357 | |||
Foreign currency | -1,467 | 1,149 | ||
Impairment | ||||
Ending balance | 31,357 | 32,824 | ||
BioStim [Member] | ||||
Goodwill [Line Items] | ||||
Beginning balance | ||||
Reallocation | 42,678 | |||
Foreign currency | ||||
Impairment | ||||
Ending balance | 42,678 | 42,678 | ||
Biologics [Member] | ||||
Goodwill [Line Items] | ||||
Beginning balance | ||||
Reallocation | 10,887 | |||
Foreign currency | ||||
Impairment | ||||
Ending balance | 10,887 | 10,887 | ||
Extremity Fixation [Member] | ||||
Goodwill [Line Items] | ||||
Beginning balance | ||||
Reallocation | 9,825 | |||
Foreign currency | ||||
Impairment | -9,825 | |||
Ending balance | ||||
Spine Fixation [Member] | ||||
Goodwill [Line Items] | ||||
Beginning balance | ||||
Reallocation | 9,368 | |||
Foreign currency | ||||
Impairment | -9,368 | |||
Ending balance |
Goodwill_Additional_Informatio
Goodwill - Additional Information (Detail) (USD $) | 6 Months Ended | 12 Months Ended | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 |
Goodwill [Line Items] | ||||
Impairment of goodwill | $19,193 | $19,193 | ||
Spine Fixation and our Extremity Fixation reportable units [Member] | ||||
Goodwill [Line Items] | ||||
Impairment of goodwill | $19,200 | $19,200 |
Bank_Borrowings_Additional_Inf
Bank Borrowings - Additional Information (Detail) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 |
In Millions, unless otherwise specified | USD ($) | EUR (€) | USD ($) | EUR (€) |
Equity Method Investments And Cost Method Investments [Abstract] | ||||
Amount outstanding under lines of credit | $0 | $0.10 | ||
Weighted average interest rate on borrowings under lines of credit | 3.70% | 3.70% | 3.70% | 3.70% |
Maximum borrowing capacity | $8 | € 5.80 | $7.60 | € 5.80 |
Other_Current_Liabilities_Summ
Other Current Liabilities - Summary of Other Current Liabilities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Payables and Accruals [Abstract] | ||
Accrued expenses | $18,903 | $11,710 |
Salaries, bonuses, commissions and related taxes payable | 16,598 | 17,915 |
Accrued legal expenses | 10,292 | 8,496 |
Other payables | 3,883 | 4,621 |
Total | $49,676 | $42,742 |
LongTerm_Debt_Additional_Infor
Long-Term Debt - Additional Information (Detail) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | 31-May-12 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 30, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 15, 2015 | Aug. 30, 2010 | 31-May-12 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
USD ($) | USD ($) | USD ($) | EUR (€) | EUR (€) | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Subsequent Event [Member] | Term Loan Facility [Member] | Term Loan Facility [Member] | Term Loan Facility [Member] | Term Loan Facility [Member] | Term Loan Facility [Member] | New Credit Agreement [Member] | New Credit Agreement [Member] | Prior Credit Agreement [Member] | Prior Credit Agreement [Member] | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | LIBOR [Member] | LIBOR [Member] | Revolving Credit Facility [Member] | USD ($) | USD ($) | USD ($) | USD ($) | Base rate [Member] | LIBOR [Member] | Base rate [Member] | LIBOR [Member] | LIBOR [Member] | ||||||
USD ($) | Maximum [Member] | Maximum [Member] | Maximum [Member] | ||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt instrument term (in years) | 5 years | 5 years | |||||||||||||||||||||
Maximum borrowing capacity | $8,000,000 | $7,600,000 | € 5,800,000 | € 5,800,000 | $200,000,000 | ||||||||||||||||||
Maximum borrowing capacity | 100,000,000 | ||||||||||||||||||||||
Maximum additional borrowing capacity available | 100,000,000 | ||||||||||||||||||||||
Repayment of debt obligation | 16,000 | 188,695,000 | 7,500,000 | 87,500,000 | 87,500,000 | ||||||||||||||||||
Repayment of debt obligation | 20,000,000 | 20,000,000 | 57,500,000 | 57,500,000 | |||||||||||||||||||
Amount outstanding | 0 | 100,000 | 20,000,000 | 20,000,000 | |||||||||||||||||||
Margin on variable rate | 2.50% | 2.50% | 3.25% | 2.25% | |||||||||||||||||||
Variable rate basis | LIBOR | ||||||||||||||||||||||
Effective interest rate (as a Percent) | 2.70% | 2.70% | |||||||||||||||||||||
Revolving credit facility due date | 30-Aug-15 | ||||||||||||||||||||||
Amount of restricted net assets | 168,500,000 | 194,500,000 | |||||||||||||||||||||
Restricted cash | 23,761,000 | 21,314,000 | |||||||||||||||||||||
Debt issuance costs incurred | 5,000,000 | ||||||||||||||||||||||
Write-off of debt issue costs | 800,000 | ||||||||||||||||||||||
Deferred debt issuance costs, net | $1,100,000 | $1,800,000 |
Derivative_Instruments_Schedul
Derivative Instruments - Schedule of Fair Values of Derivative Instruments (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Other long-term liabilities [Member] | Cross-currency swap [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value: favorable (unfavorable) | ($1,036) | |
Other long-term assets [Member] | Cross-currency swap [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value: favorable (unfavorable) | 305 | |
Other long-term assets [Member] | Warrants [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value: favorable (unfavorable) | $107 |
Derivative_Instruments_Schedul1
Derivative Instruments - Schedule of Gain (Loss) Recognized on Derivative Instruments (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Derivative Instruments [Line Items] | |||
Cross-currency swap and warrants gain (loss) recorded in other comprehensive income (loss), net of taxes | ($279) | $263 | ($437) |
Cross-currency swap and warrants [Member] | |||
Derivative Instruments [Line Items] | |||
Cross-currency swap and warrants gain (loss) recorded in other comprehensive income (loss), net of taxes | ($279) | $263 | ($437) |
Derivative_Instruments_Additio
Derivative Instruments - Additional Information (Detail) | 12 Months Ended | |||
Share data in Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2010 | Sep. 30, 2010 |
Swap Agreement [Member] | Bone Biologics, Inc [Member] | Cross-currency swap [Member] | Cross-currency swap [Member] | |
USD ($) | Designated as Hedging Instrument [Member] | Designated as Hedging Instrument [Member] | ||
Pay Euros [Member] | Receive U.S. dollars [Member] | |||
EUR (€) | USD ($) | |||
Derivatives, Fair Value [Line Items] | ||||
Notional amount | € 28,700,000 | $39,000,000 | ||
Fixed rate (as a percent) | 5.00% | 4.64% | ||
Swap agreement expiration date | 30-Dec-16 | |||
Notes receivable net | $250,000 | |||
Number of shares for which warrants held | 125 | |||
Exercise price shares on which warrant exercised | $1 |
Fair_Value_Measurements_Schedu
Fair Value Measurements - Schedule of Financial Assets and Liabilities Recorded at Fair Value on Recurring Basis (Detail) (Fair Value, Measurements, Recurring [Member], USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative securities | $107 | $305 |
Assets fair value | 3,996 | 2,730 |
Deferred compensation plan, Liabilities | -2,506 | -2,320 |
Derivative securities, Liabilities | -1,036 | |
Liabilities fair value, Total | -3,542 | -2,320 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative securities | ||
Assets fair value | 2,222 | 912 |
Deferred compensation plan, Liabilities | ||
Liabilities fair value, Total | ||
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative securities | 107 | 305 |
Assets fair value | 1,774 | 1,818 |
Deferred compensation plan, Liabilities | -2,506 | -2,320 |
Derivative securities, Liabilities | -1,036 | |
Liabilities fair value, Total | -3,542 | -2,320 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative securities | ||
Assets fair value | ||
Deferred compensation plan, Liabilities | ||
Derivative securities, Liabilities | ||
Liabilities fair value, Total | ||
Collective trust funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets fair value | 1,667 | 1,513 |
Collective trust funds [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets fair value | ||
Collective trust funds [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets fair value | 1,667 | 1,513 |
Collective trust funds [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets fair value | ||
Treasury securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets fair value | 660 | 624 |
Treasury securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets fair value | 660 | 624 |
Treasury securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets fair value | ||
Treasury securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets fair value | ||
Certificates of deposit [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets fair value | 1,562 | 288 |
Certificates of deposit [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets fair value | 1,562 | 288 |
Certificates of deposit [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets fair value | ||
Certificates of deposit [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets fair value |
Commitments_Additional_Informa
Commitments - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expenses | $3.40 | $4.10 | $4.80 |
Inventory purchase commitment | $3 | $1.40 | $1.80 |
Commitments_Schedule_of_Future
Commitments - Schedule of Future Minimum Lease Payments Under Operating Leases, Net of Amount to be Received Under Sub Leases (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | |
2014 | $4,342 |
2015 | 4,107 |
2016 | 3,713 |
2017 | 2,974 |
2018 | 2,846 |
Thereafter | 3,049 |
Total | $21,031 |
Business_Segment_Information_A
Business Segment Information - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2013 | |
Segment | |
Segment Reporting [Abstract] | |
Number of strategic business units | 4 |
Business_Segment_Information_S
Business Segment Information - Schedule of External Net Sales by SBU Reporting Segment (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Sales Information [Line Items] | |||||||||||
Percent of Total Net Sales | 100.00% | 100.00% | 100.00% | ||||||||
Net sales | $105,886 | $91,806 | $97,640 | $102,279 | $115,607 | $105,818 | $111,601 | $107,163 | $397,611 | $440,189 | $435,519 |
BioStim [Member] | |||||||||||
Sales Information [Line Items] | |||||||||||
Percent of Total Net Sales | 36.00% | 40.00% | 42.00% | ||||||||
Net sales | 145,085 | 174,562 | 181,736 | ||||||||
Biologics [Member] | |||||||||||
Sales Information [Line Items] | |||||||||||
Percent of Total Net Sales | 14.00% | 12.00% | 10.00% | ||||||||
Net sales | 53,746 | 53,731 | 42,911 | ||||||||
Extremity Fixation [Member] | |||||||||||
Sales Information [Line Items] | |||||||||||
Percent of Total Net Sales | 26.00% | 25.00% | 27.00% | ||||||||
Net sales | 103,359 | 112,011 | 119,504 | ||||||||
Spine Fixation [Member] | |||||||||||
Sales Information [Line Items] | |||||||||||
Percent of Total Net Sales | 24.00% | 23.00% | 21.00% | ||||||||
Net sales | $95,421 | $99,885 | $91,368 |
Business_Segment_Information_S1
Business Segment Information - Summary of Net Margin, Defined as Gross Profit Less Sales and Marketing Expenses from Continuing Operations by SBU Reporting Segment (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Sales Information [Line Items] | ||||||||||||
Total net margin | $115,231 | $160,692 | $153,948 | |||||||||
General and administrative | 64,830 | 53,650 | 64,785 | |||||||||
Research and development | 26,768 | 28,577 | 22,861 | |||||||||
Amortization of intangible assets | 2,687 | 2,298 | 2,550 | |||||||||
Costs related to the accounting review and restatement | 12,945 | |||||||||||
Impairment of goodwill | 19,193 | 19,193 | ||||||||||
Charges related to U.S. Government resolutions | 1,295 | 57,141 | ||||||||||
Operating (loss) income | -10,079 | -14,101 | 6,920 | 6,068 | 26,518 | 16,943 | 16,622 | 14,789 | -11,192 | 74,872 | 6,611 | |
BioStim [Member] | ||||||||||||
Sales Information [Line Items] | ||||||||||||
Impairment of goodwill | ||||||||||||
Biologics [Member] | ||||||||||||
Sales Information [Line Items] | ||||||||||||
Impairment of goodwill | ||||||||||||
Extremity Fixation [Member] | ||||||||||||
Sales Information [Line Items] | ||||||||||||
Impairment of goodwill | 9,825 | |||||||||||
Spine Fixation [Member] | ||||||||||||
Sales Information [Line Items] | ||||||||||||
Impairment of goodwill | 9,368 | |||||||||||
Operating Segments [Member] | BioStim [Member] | ||||||||||||
Sales Information [Line Items] | ||||||||||||
Total net margin | 63,847 | 88,788 | 92,860 | |||||||||
Operating Segments [Member] | Biologics [Member] | ||||||||||||
Sales Information [Line Items] | ||||||||||||
Total net margin | 24,794 | 23,589 | 18,978 | |||||||||
Operating Segments [Member] | Extremity Fixation [Member] | ||||||||||||
Sales Information [Line Items] | ||||||||||||
Total net margin | 23,704 | 34,554 | 30,773 | |||||||||
Operating Segments [Member] | Spine Fixation [Member] | ||||||||||||
Sales Information [Line Items] | ||||||||||||
Total net margin | 4,329 | 15,256 | 13,037 | |||||||||
Corporate, Non-Segment [Member] | ||||||||||||
Sales Information [Line Items] | ||||||||||||
Total net margin | 1,443 | 1,495 | 1,700 | |||||||||
Material Reconciling Items [Member] | ||||||||||||
Sales Information [Line Items] | ||||||||||||
General and administrative | 64,830 | 53,650 | 64,785 | |||||||||
Research and development | 26,768 | 28,577 | 22,861 | |||||||||
Amortization of intangible assets | 2,687 | 2,298 | 2,550 | |||||||||
Costs related to the accounting review and restatement | 12,945 | |||||||||||
Impairment of goodwill | 19,193 | |||||||||||
Charges related to U.S. Government resolutions | 1,295 | 57,141 | ||||||||||
Operating (loss) income | ($11,192) | $74,872 | $6,611 |
Business_Segment_Information_S2
Business Segment Information - Schedule of Depreciation and Amortization by SBU Reporting Segment (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Sales Information [Line Items] | |||
Depreciation and amortization | $22,822 | $20,732 | $23,182 |
Continuing Operations [Member] | |||
Sales Information [Line Items] | |||
Depreciation and amortization | 22,822 | 18,297 | 17,025 |
Continuing Operations [Member] | BioStim [Member] | |||
Sales Information [Line Items] | |||
Depreciation and amortization | 1,979 | 1,659 | 2,122 |
Continuing Operations [Member] | Biologics [Member] | |||
Sales Information [Line Items] | |||
Depreciation and amortization | 648 | 567 | 436 |
Continuing Operations [Member] | Extremity Fixation [Member] | |||
Sales Information [Line Items] | |||
Depreciation and amortization | 7,265 | 5,201 | 5,156 |
Continuing Operations [Member] | Spine Fixation [Member] | |||
Sales Information [Line Items] | |||
Depreciation and amortization | 12,834 | 10,800 | 9,258 |
Operating Segments [Member] | Continuing Operations [Member] | Corporate [Member] | |||
Sales Information [Line Items] | |||
Depreciation and amortization | $96 | $70 | $53 |
Business_Segment_Information_S3
Business Segment Information - Summary of Net Sales by Geographic Destination (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | $105,886 | $91,806 | $97,640 | $102,279 | $115,607 | $105,818 | $111,601 | $107,163 | $397,611 | $440,189 | $435,519 |
Domestic Tax Authority [Member] | U.S. [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 293,032 | 327,228 | 322,186 | ||||||||
Foreign Tax Authority [Member] | Italy [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 16,755 | 18,742 | 17,447 | ||||||||
Foreign Tax Authority [Member] | U.K. [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 10,002 | 8,431 | 8,206 | ||||||||
Foreign Tax Authority [Member] | Brazil [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 26,786 | 31,166 | 34,424 | ||||||||
Foreign Tax Authority [Member] | Others [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | $51,036 | $54,622 | $53,256 |
Business_Segment_Information_A1
Business Segment Information - Analysis of Property, Plant and Equipment of Reporting Segments by Geographic Area (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | $54,372 | $52,793 |
U.S. [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 39,287 | 38,504 |
Italy [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 8,150 | 7,625 |
U.K. [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 1,871 | 1,402 |
Brazil [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 3,210 | 3,421 |
Others [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | $1,854 | $1,841 |
Income_Taxes_Schedule_of_Incom
Income Taxes - Schedule of Income from Continuing Operations Before Provision for Income Taxes (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Tax Disclosure [Abstract] | |||
U.S. | ($3,546) | $56,210 | $4,730 |
Non-U.S. | -7,057 | 12,855 | -6,093 |
(Loss) income before income taxes | ($10,603) | $69,065 | ($1,363) |
Income_Taxes_Schedule_of_Provi
Income Taxes - Schedule of Provision for (Benefit from) Income Taxes on Continuing Operations (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
U.S. | ||||
Current | $2,465 | $16,982 | $26,273 | |
Deferred | 4,013 | 2,675 | -13,241 | |
Total U.S | 6,478 | 19,657 | 13,032 | |
Non-U.S. | ||||
Current | 2,308 | 3,191 | 2,111 | |
Deferred | -1,184 | 1,096 | -700 | |
Total Non U.S | 1,124 | 4,287 | 1,411 | |
Income tax expense/effective rate | $7,602 | $23,944 | $14,443 | ($6,028) |
Income_Taxes_Schedule_of_Tax_E
Income Taxes - Schedule of Tax Effects of Significant Temporary Differences Comprising Deferred Tax Assets and Liabilities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Income Tax Disclosure [Abstract] | ||
Intangible assets and goodwill | $4,798 | $5,338 |
Inventories and related reserves | 20,769 | 19,626 |
Deferred revenue and cost of goods sold | 11,577 | 12,336 |
Other accruals and reserves | 4,778 | 6,149 |
Accrued compensation | 3,942 | 3,791 |
Allowance for doubtful accounts | 2,040 | 1,542 |
Accrued interest | 18,063 | 17,995 |
Net operating loss carryforwards | 34,979 | 27,231 |
Other, net | 893 | 590 |
Total | 101,839 | 94,598 |
Valuation allowance | -31,772 | -26,361 |
Deferred tax asset | 70,067 | 68,237 |
Withholding taxes | -13,026 | -11,351 |
Property, plant and equipment | -7,674 | -8,226 |
Deferred tax liability | -20,700 | -19,577 |
Net deferred tax assets | 49,367 | 48,660 |
Current deferred tax assets | 39,999 | 38,487 |
Non-current deferred tax assets | 22,394 | 21,523 |
Current deferred tax liability | ||
Non-current deferred tax liability | -13,026 | -11,350 |
Net deferred tax assets | $49,367 | $48,660 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Components Of Income Tax Expense Benefit [Line Items] | ||||||
Valuation allowance | $31,772,000 | $31,772,000 | $26,361,000 | |||
Net increase in valuation allowance | 5,400,000 | |||||
Operating loss carry forwards, state, net of tax | 24,500,000 | 24,500,000 | ||||
Operating loss carry forwards, foreign, net of tax | 120,400,000 | 120,400,000 | ||||
Impairment of goodwill | 19,193,000 | 19,193,000 | ||||
Income tax expense | 7,602,000 | 23,944,000 | 14,443,000 | -6,028,000 | ||
Income tax effective rate | -71.70% | 34.70% | -1059.60% | |||
Recognized tax benefit | 300,000 | |||||
Gross unrecognized tax benefit | 700,000 | 700,000 | 1,200,000 | |||
Accrued interest and penalties related to unrecognized tax benefits | 500,000 | 500,000 | 800,000 | |||
Unremitted foreign earnings | 329,700,000 | 329,700,000 | 272,600,000 | |||
Total cash and cash equivalents | 52,700,000 | 52,700,000 | ||||
Cash and cash equivalents | 28,924,000 | 28,924,000 | 30,767,000 | 32,743,000 | 13,561,000 | |
U.S. Subsidiary [Member] | ||||||
Components Of Income Tax Expense Benefit [Line Items] | ||||||
Unremitted foreign earnings | 341,300,000 | 341,300,000 | ||||
Senior Secured Credit Agreement [Member] | ||||||
Components Of Income Tax Expense Benefit [Line Items] | ||||||
Restricted cash and cash equivalents | 23,800,000 | 23,800,000 | ||||
Non-U.S. Subsidiaries [Member] | ||||||
Components Of Income Tax Expense Benefit [Line Items] | ||||||
Cash and cash equivalents | $30,200,000 | $30,200,000 |
Income_Taxes_Schedule_of_Effec
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation for Continuing Operations (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Income Tax Disclosure [Abstract] | ||||
Statutory U.S. federal income tax rate | 35.00% | 35.00% | 35.00% | |
State taxes, net | -19.20% | 3.70% | -132.70% | |
Foreign rate differential | 4.80% | -4.20% | -113.60% | |
Valuation allowance-foreign losses | -36.90% | 9.00% | 361.30% | |
Italian subsidiary intangible | 21.60% | -3.20% | 177.60% | |
Goodwill impairment | -60.90% | |||
Domestic manufacturing deduction | 2.20% | -2.30% | 125.00% | |
Withholding taxes | -15.80% | 2.40% | -123.00% | |
Settlement of U.S. Government resolutions | -1.80% | -698.50% | ||
Other items, net | -2.50% | -3.90% | 31.90% | |
Income tax expense/effective rate | -71.70% | 34.70% | -1059.60% | |
Statutory U.S. federal income tax rate | ($3,711) | $24,179 | ($477) | |
State taxes, net | 2,039 | 2,536 | 1,809 | |
Foreign rate differential | -510 | -2,894 | 1,549 | |
Valuation allowance-foreign losses | 3,913 | 6,189 | 4,924 | |
Italian subsidiary intangible | -2,288 | -2,214 | -2,421 | |
Goodwill impairment | 6,452 | |||
Domestic manufacturing deduction | -233 | -1,567 | -1,703 | |
Withholding taxes | 1,676 | 1,679 | 1,676 | |
Settlement of U.S. Government resolutions | -1,260 | 9,520 | ||
Other items, net | 264 | -2,704 | -434 | |
Income tax expense/effective rate | $7,602 | $23,944 | $14,443 | ($6,028) |
Income_Taxes_Schedule_of_Gross
Income Taxes - Schedule of Gross Unrecognized Tax Benefits (Excluding Interest and Penalties) (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | ||
Beginning Balance | $1,189 | $610 |
Additions for current year tax positions | 183 | 793 |
Decreases for prior year tax positions | -12 | -106 |
Settlements of prior year tax positions | -560 | |
Expiration of statutes | -77 | -108 |
Ending Balance | $723 | $1,189 |
Related_parties_Additional_inf
Related parties - Additional information (Detail) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2011 |
Related Party Transactions [Abstract] | |
Sales | $0.50 |
Sale_of_Breg_and_Disposition_o2
Sale of Breg and Disposition of Sports Medicine SBU - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | 24-May-12 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Breg [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from sale of outstanding shares of Breg | $157.50 | |||
Prepayment of outstanding company indebtedness | 145 | |||
Fair value of liability | 2 | |||
Period of indemnification (in years) | 3 years | |||
Obligations under guarantee | 0.9 | 1.6 | ||
Sports Medicine [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net sales | 44 | 108.9 | ||
Operating income (loss) | $2.90 | $1.20 |
Sale_of_Breg_and_Disposition_o3
Sale of Breg and Disposition of Sports Medicine SBU - Schedule of Information Related to Sale of Breg (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Less: | ||
Gain on sale of Breg, net of taxes | $1,345,000 | |
Breg [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Cash proceeds | 157,500,000 | |
Less: | ||
Working Capital | -7,093,000 | |
Transaction related expenses | -4,276,000 | |
Fair value of indemnification | -2,000,000 | |
Tangible assets | -8,309,000 | |
Intangible assets | -28,164,000 | |
Goodwill | -106,200,000 | |
Gain on sale of Breg | 1,458,000 | |
Income tax expense | -113,000 | |
Gain on sale of Breg, net of taxes | $1,345,000 |
Contingencies_Additional_Infor
Contingencies - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | 1 Months Ended | ||||
Oct. 29, 2012 | Jun. 06, 2012 | 24-May-12 | Dec. 31, 2013 | Jul. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Commitment And Contingencies [Line Items] | |||||||
Amount of fine | $7,800,000 | ||||||
Deferred prosecution agreement term | 3 years | ||||||
Amount approved to be paid under the agreement | 34,200,000 | ||||||
Interest rate on settlement amount approved to be paid under the agreement (as a percent) | 3.00% | ||||||
Settlement agreement description | The Company agreed to pay $34.2 million (plus interest at a rate of 3% from May 5, 2011 through the day before payment was made) | ||||||
Mandatory special assessment | 400 | ||||||
Amount paid to settlement of claims | 32,000,000 | ||||||
Amount used from escrow fund through acquisition of Blackstone for legal settlement | 32,000,000 | ||||||
Charges accrued in connection with litigation | 4,200,000 | ||||||
Judgments and settlement costs | 6,700,000 | 6,800,000 | 1,800,000 | ||||
Accrued judgments and settlements | 2,100,000 | ||||||
Litigation settlement paid | 4,600,000 | ||||||
Additional settlement costs | 3,800,000 | ||||||
Discontinued operations for compensatory damages and exemplary damages | 4,200,000 | ||||||
Litigation related to Promeca [Member] | |||||||
Commitment And Contingencies [Line Items] | |||||||
Imputed Interest settlement against the charge | 5,200,000 | ||||||
Amount of fine | 2,200,000 | ||||||
Litigation Related to Breg [Member] | |||||||
Commitment And Contingencies [Line Items] | |||||||
Compensatory damages to plaintiff | 2,100,000 | ||||||
Exemplary damages | $7,000,000 |
Recovered_Sheet6
Pensions and Deferred Compensation - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Orthofix Inc 401(k) Plan [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |||
Employee contribution limit per calendar year (as a percent of compensation) | 15.00% | ||
Employer match of employee contributions of first level of eligible compensation (as a percent) | 100.00% | ||
Percentage of eligible compensation, matched by employer, level one | 2.00% | ||
Employer match of employee contributions of second level of eligible compensation (as a percent) | 50.00% | ||
Percentage of eligible compensation matched by employer, level two | 4.00% | ||
401 (k) Plans [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |||
Expenses incurred for contribution plans | $2.40 | $2.50 | $2.50 |
Defined Contribution pension plans for other International employees [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |||
Expenses incurred for contribution plans | 0.7 | 0.7 | 0.8 |
Deferred Compensation Plan [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items] | |||
Annual deferred compensation provision for leaving indemnity, as a percentage of total commissions earned | 3.50% | ||
Expense for deferred compensation | 0.3 | 0.4 | 0.1 |
Deferred compensation payments | 0.1 | 0.8 | |
Amount of deferred compensation payable | $2.50 | $2.30 |
Recovered_Sheet7
Share-based Compensation plans - Additional Information (Detail) (USD $) | 12 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 29, 2004 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Options outstanding | 1,924,179 | 1,945,955 | ||
Options exercisable | 1,367,269 | |||
Restricted stock outstanding | 286,704 | 160,831 | ||
Purchase price of shares equivalent to fair market value | 85.00% | |||
Shares issued under stock purchase plan | 1,437,519 | |||
Unamortized compensation expense | $2.80 | |||
Weighted average remaining contractual life of exercisable options (in years) | 2 years 10 months 21 days | |||
Total intrinsic value of options exercised | 0.4 | 7.2 | 4.2 | |
Closing stock price | $22.82 | |||
Aggregate intrinsic value of options outstanding | 0.5 | 11.2 | 10.8 | |
Aggregate intrinsic value of options exercisable | 0.2 | 9.8 | 8.4 | |
Granted (in shares) | 269,791 | |||
2004 LTIP Plan [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Amount of shares reserved for issuance | 1,600,000 | 3,100,000 | ||
Options outstanding | 515,917 | |||
Options exercisable | 22,668 | |||
Restricted stock outstanding | 279,039 | |||
Full value award limit | 100,000 | |||
2004 LTIP Plan [Member] | Employees [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Award vesting period | 3 years | |||
2004 LTIP Plan [Member] | Non-Employees Director [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Number of shares approved for annual grant | 5,000 | |||
2004 LTIP Plan [Member] | Minimum [Member] | Non-Employees Director [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Award vesting period | 3 years | |||
2004 LTIP Plan [Member] | Maximum [Member] | Non-Employees Director [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Award vesting period | 5 years | |||
Stock Purchase Plan [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Amount of shares reserved for issuance | 1,850,000 | |||
Stock Purchase Plan [Member] | North America, South America and Asia [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Percentage of compensation eligible employees to be deducted for purchase of common stock | 25.00% | |||
Stock Purchase Plan [Member] | Minimum [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Percentage of compensation eligible employees to be deducted for purchase of common stock | 1.00% | |||
Stock Purchase Plan [Member] | Maximum [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Percentage of compensation eligible employees to be deducted for purchase of common stock | 25.00% | |||
Stock Purchase Plan [Member] | Maximum [Member] | Customers and Distributors Based in Europe [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Percentage of compensation eligible employees to be deducted for purchase of common stock | 15.00% | |||
Staff Share Option Plan [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Options outstanding | 15,000 | |||
Options exercisable | 15,000 | |||
Award vesting period | 5 years | |||
Award Contractual term | 10 years | |||
Staff Share Option Plan [Member] | 2004 LTIP Plan [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Options outstanding | 1,243,262 | |||
Options exercisable | 1,179,601 | |||
Restricted stock outstanding | 7,665 | |||
Award Contractual term | 10 years | |||
Restricted Stock [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Unamortized compensation expense | $6.70 | |||
Granted (in shares) | 269,791 | 149,500 |
Recovered_Sheet8
Share-based Compensation Plans - Schedule of Share-Based Compensation by Line Item in Consolidated Statements of Operations (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share-based compensation expense | $6,267 | $6,303 | $6,648 |
Cost of sales [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share-based compensation expense | 104 | 592 | 153 |
Sales and marketing [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share-based compensation expense | 1,444 | 1,550 | 2,031 |
General and administrative [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share-based compensation expense | 4,483 | 4,023 | 4,322 |
Research and development [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share-based compensation expense | $236 | $138 | $142 |
Sharebased_Compensation_Plans_1
Share-based Compensation Plans - Schedule of Share-based Payment Award, Valuation Assumptions (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Expected volatility | 32.10% | 50.90% | 49.60% |
Expected volatility | 50.80% | 51.80% | 49.90% |
Expected term | 5 years | 4 years 6 months | 4 years 6 months 29 days |
Dividend rate | |||
Weighted average fair value of options granted during the year | $10.83 | $16.99 | $14.21 |
Minimum [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Risk free interest rate | 0.58% | 0.76% | 0.90% |
Maximum [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Risk free interest rate | 1.52% | 0.84% | 2.26% |
Sharebased_Compensation_Plans_2
Share-based Compensation Plans - Schedule of Stock Option Activity (Detail) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Outstanding at the beginning of the period (in shares) | 1,945,955 |
Granted | 466,250 |
Exercised | -79,949 |
Forfeited | -408,077 |
Outstanding at the end of the period (in shares) | 1,924,179 |
Vested and expected to vest | 1,839,383 |
Options exercisable | 1,367,269 |
Outstanding at the beginning of the period (in dollars per share) | $34.50 |
Granted | $28.51 |
Exercised | $23.25 |
Forfeited | $36.33 |
Outstanding at the end of the period (in dollars per share) | $33.12 |
Vested and expected to vest | $33.50 |
Options exercisable | $34.35 |
Options outstanding, weighted average remaining contractual term | 4 years 4 months 28 days |
Options vested and expected, weighted average remaining contractual term | 4 years 2 months 1 day |
Options exercisable, weighted average remaining contractual term | 2 years 10 months 21 days |
Sharebased_Compensation_Plans_3
Share-based Compensation Plans - Schedule of Stock Options Outstanding and Exercisable by Price Range (Detail) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
$10.42 - $21.78 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, low end of range (in dollars per share) | $10.42 |
Exercise price, high end of range (in dollars per share) | $21.78 |
Number outstanding (in shares) | 232,250 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 9 years 3 months 22 days |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $20.79 |
Number Exercisable (in shares) | 16,000 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $13.31 |
$22.75 - $25.05 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, low end of range (in dollars per share) | $22.75 |
Exercise price, high end of range (in dollars per share) | $25.05 |
Number outstanding (in shares) | 326,166 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 4 years 1 month 6 days |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $24.73 |
Number Exercisable (in shares) | 306,166 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $24.84 |
$26.79 - $28.95 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, low end of range (in dollars per share) | $26.79 |
Exercise price, high end of range (in dollars per share) | $28.95 |
Number outstanding (in shares) | 230,000 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 4 years 9 months 15 days |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $28.45 |
Number Exercisable (in shares) | 170,000 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $28.65 |
$29.23 - $37.36 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, low end of range (in dollars per share) | $29.23 |
Exercise price, high end of range (in dollars per share) | $37.36 |
Number outstanding (in shares) | 225,168 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 5 years 1 month 6 days |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $33.14 |
Number Exercisable (in shares) | 169,839 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $32.41 |
$37.76 - $38.11 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, low end of range (in dollars per share) | $37.76 |
Exercise price, high end of range (in dollars per share) | $38.11 |
Number outstanding (in shares) | 230,975 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 1 year 8 months 9 days |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $37.99 |
Number Exercisable (in shares) | 230,975 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $37.99 |
$38.40 - $40.27 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, low end of range (in dollars per share) | $38.40 |
Exercise price, high end of range (in dollars per share) | $40.27 |
Number outstanding (in shares) | 351,354 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 3 years 2 months 1 day |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $39.76 |
Number Exercisable (in shares) | 174,355 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $39.77 |
$41.33 - $43.04 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, low end of range (in dollars per share) | $41.33 |
Exercise price, high end of range (in dollars per share) | $43.04 |
Number outstanding (in shares) | 178,633 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 2 years 10 months 2 days |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $41.66 |
Number Exercisable (in shares) | 150,301 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $41.72 |
$44.87 - $45.84 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, low end of range (in dollars per share) | $44.87 |
Exercise price, high end of range (in dollars per share) | $45.84 |
Number outstanding (in shares) | 140,133 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 3 years 18 days |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $45.02 |
Number Exercisable (in shares) | 140,133 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $45.02 |
$50.50 - $50.50 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, low end of range (in dollars per share) | $50.50 |
Exercise price, high end of range (in dollars per share) | $50.50 |
Number outstanding (in shares) | 2,000 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 3 years 4 days |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $50.50 |
Number Exercisable (in shares) | 2,000 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $50.50 |
$50.99 - $50.99 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, low end of range (in dollars per share) | $50.99 |
Exercise price, high end of range (in dollars per share) | $50.99 |
Number outstanding (in shares) | 7,500 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 3 years 15 days |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $50.99 |
Number Exercisable (in shares) | 7,500 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $50.99 |
$10.42 - $50.99 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, low end of range (in dollars per share) | $10.42 |
Exercise price, high end of range (in dollars per share) | $50.99 |
Number outstanding (in shares) | 1,924,179 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 4 years 4 months 28 days |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $33.12 |
Number Exercisable (in shares) | 1,367,269 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $34.35 |
Sharebased_Compensation_Plans_4
Share-based Compensation Plans - Schedule of Changes in Restricted Stock (Detail) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Non-vested at the beginning of the period (in shares) | 160,831 |
Granted (in shares) | 269,791 |
Vested (in shares) | -62,948 |
Cancelled (in shares) | -80,970 |
Non-vested at the end of the period (in shares) | 286,704 |
Non-vested at the beginning of period (in dollars per share) | $38.34 |
Granted (in dollars per share) | $27.09 |
Vested (in dollars per share) | $36.58 |
Cancelled (in dollars per share) | $38.80 |
Non-vested at the end of period (in dollars per share) | $28.01 |
Earnings_Per_Share_Schedule_of
Earnings Per Share - Schedule of Reconciliation of Weighted Average Shares Used in Calculation of Basic and Diluted Earnings Per Share (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Earnings Per Share [Abstract] | |||
Weighted average common shares-basic | 18,697,228 | 18,977,263 | 18,219,343 |
Effect of diluted securities: | |||
Unexercised stock options net of treasury share repurchase | 413,150 | ||
Weighted average common shares-diluted | 18,697,228 | 19,390,413 | 18,219,343 |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Options to Purchase Common Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Outstanding options not included in diluted earnings per share | 1,186,259 | 789,650 | |
Common Stock Equivalents [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Outstanding options not included in diluted earnings per share | 101,672 | 344,168 |
Stock_Repurchase_Program_Addit
Stock Repurchase Program - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended |
8-May-13 | Dec. 31, 2013 | |
Equity [Abstract] | ||
Share repurchase program, authorized amount | $50,000,000 | |
Stock repurchased amount | $39,500,000 |
Quarterly_Financial_Data_Conde
Quarterly Financial Data - Condensed Consolidated Statement of Operations (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Interim Reporting [Line Items] | |||||||||||
Net sales | $105,886 | $91,806 | $97,640 | $102,279 | $115,607 | $105,818 | $111,601 | $107,163 | $397,611 | $440,189 | $435,519 |
Cost of sales | 34,123 | 25,064 | 21,884 | 25,841 | 26,751 | 24,887 | 24,943 | 24,145 | 106,912 | 100,726 | 96,415 |
Gross profit | 71,763 | 66,742 | 75,756 | 76,438 | 88,856 | 80,931 | 86,658 | 83,018 | 290,699 | 339,463 | 339,104 |
Operating expense | 81,842 | 80,843 | 68,836 | 70,370 | 62,338 | 63,988 | 70,036 | 68,229 | 301,891 | 264,591 | 332,493 |
Operating (loss) income | -10,079 | -14,101 | 6,920 | 6,068 | 26,518 | 16,943 | 16,622 | 14,789 | -11,192 | 74,872 | 6,611 |
Net income (loss) from continuing operations | -9,639 | -16,504 | 2,012 | 5,926 | 17,518 | 9,312 | 11,421 | 6,870 | -18,205 | 45,121 | -15,806 |
Net (loss) income | -10,412 | -18,836 | -3,011 | 3,447 | 22,954 | 3,747 | 8,802 | 7,349 | -28,812 | 42,852 | -17,698 |
Basic: | |||||||||||
Net income (loss) from continuing operations | ($0.53) | ($0.91) | $0.11 | $0.31 | $0.91 | $0.49 | $0.61 | $0.37 | ($0.97) | $2.38 | ($0.87) |
Net income (loss) | ($0.58) | ($1.04) | ($0.16) | $0.18 | $1.19 | $0.20 | $0.47 | $0.39 | ($1.54) | $2.26 | ($0.97) |
Diluted: | |||||||||||
Net income (loss) from continuing operations | ($0.53) | ($0.91) | $0.10 | $0.30 | $0.89 | $0.48 | $0.59 | $0.36 | ($0.97) | $2.33 | ($0.87) |
Net income (loss) | ($0.58) | ($1.04) | ($0.16) | $0.18 | $1.17 | $0.19 | $0.46 | $0.38 | ($1.54) | $2.21 | ($0.97) |
Originally Reported in 2013 Form 10-Q [Member] | |||||||||||
Interim Reporting [Line Items] | |||||||||||
Net sales | 100,254 | ||||||||||
Cost of sales | 22,699 | ||||||||||
Gross profit | 77,555 | ||||||||||
Operating expense | 73,531 | ||||||||||
Operating (loss) income | 4,024 | ||||||||||
Net income (loss) from continuing operations | 4,908 | ||||||||||
Net (loss) income | 2,116 | ||||||||||
Basic: | |||||||||||
Net income (loss) from continuing operations | $0.25 | ||||||||||
Net income (loss) | $0.11 | ||||||||||
Diluted: | |||||||||||
Net income (loss) from continuing operations | $0.25 | ||||||||||
Net income (loss) | $0.11 | ||||||||||
Original Restatement Adjustments [Member] | |||||||||||
Interim Reporting [Line Items] | |||||||||||
Net sales | 3,119 | 5,330 | -6,895 | -6,069 | -7,105 | -14,739 | -28,150 | ||||
Cost of sales | 2,918 | 6,440 | 2,011 | 3,871 | -561 | 11,761 | 2,908 | ||||
Gross profit | 201 | -1,110 | -8,906 | -9,940 | -6,544 | -26,500 | -31,058 | ||||
Operating expense | -3,862 | -2,242 | -6,178 | -3,673 | -2,033 | -14,126 | -5,649 | ||||
Operating (loss) income | 4,063 | 1,132 | -2,728 | -6,267 | -4,511 | -12,374 | -25,409 | ||||
Net income (loss) from continuing operations | 2,702 | 1,373 | -2,544 | -4,097 | -3,618 | -8,886 | -14,478 | ||||
Net (loss) income | 2,384 | 647 | -2,544 | -3,951 | -2,609 | -8,457 | -17,037 | ||||
Basic: | |||||||||||
Net income (loss) from continuing operations | $0.14 | $0.07 | ($0.14) | ($0.22) | ($0.19) | ($0.47) | ($0.79) | ||||
Net income (loss) | $0.12 | $0.04 | ($0.14) | ($0.21) | ($0.14) | ($0.45) | ($0.93) | ||||
Diluted: | |||||||||||
Net income (loss) from continuing operations | $0.14 | $0.07 | ($0.13) | ($0.22) | ($0.19) | ($0.46) | ($0.79) | ||||
Net income (loss) | $0.12 | $0.03 | ($0.14) | ($0.21) | ($0.14) | ($0.43) | ($0.93) | ||||
Originally Reported in 2013 Form 10-Q/A [Member] | |||||||||||
Interim Reporting [Line Items] | |||||||||||
Net sales | 103,373 | ||||||||||
Cost of sales | 25,617 | ||||||||||
Gross profit | 77,756 | ||||||||||
Operating expense | 69,669 | ||||||||||
Operating (loss) income | 8,087 | ||||||||||
Net income (loss) from continuing operations | 7,610 | ||||||||||
Net (loss) income | 4,500 | ||||||||||
Basic: | |||||||||||
Net income (loss) from continuing operations | $0.39 | ||||||||||
Net income (loss) | $0.23 | ||||||||||
Diluted: | |||||||||||
Net income (loss) from continuing operations | $0.39 | ||||||||||
Net income (loss) | $0.23 | ||||||||||
Further Restatement Adjustments [Member] | |||||||||||
Interim Reporting [Line Items] | |||||||||||
Net sales | -257 | -932 | -640 | -1,094 | -1,758 | -2,039 | -1,822 | -1,773 | -2,923 | -7,392 | -6,452 |
Cost of sales | 1,606 | 1,144 | 1,638 | 224 | 1,807 | 503 | -2,604 | 2,767 | 4,612 | 2,473 | 888 |
Gross profit | -1,863 | -2,076 | -2,278 | -1,318 | -3,565 | -2,542 | 782 | -4,540 | -7,535 | -9,865 | -7,340 |
Operating expense | 1,838 | -3,575 | -394 | 701 | -4,470 | -680 | -1,542 | -1,409 | -1,430 | -8,101 | -8,051 |
Operating (loss) income | -3,701 | 1,499 | -1,884 | -2,019 | 905 | -1,862 | 2,324 | -3,131 | -6,105 | -1,764 | 711 |
Net income (loss) from continuing operations | -1,075 | 1,580 | -2,118 | -1,684 | 1,509 | -1,262 | 1,551 | -1,727 | -3,297 | 71 | 412 |
Net (loss) income | -2,536 | 986 | -694 | -1,053 | 1,793 | -1,269 | 1,548 | -2,058 | -3,297 | 14 | 412 |
Basic: | |||||||||||
Net income (loss) from continuing operations | ($0.06) | $0.09 | ($0.11) | ($0.08) | $0.08 | ($0.06) | $0.09 | ($0.09) | ($0.17) | $0.01 | $0.02 |
Net income (loss) | ($0.15) | $0.06 | ($0.04) | ($0.05) | $0.09 | ($0.06) | $0.09 | ($0.11) | ($0.17) | $0.01 | $0.02 |
Diluted: | |||||||||||
Net income (loss) from continuing operations | ($0.06) | $0.09 | ($0.11) | ($0.09) | $0.08 | ($0.06) | $0.08 | ($0.09) | ($0.17) | $0.01 | $0.02 |
Net income (loss) | ($0.15) | $0.06 | ($0.04) | ($0.05) | $0.10 | ($0.06) | $0.09 | ($0.11) | ($0.17) | $0 | $0.02 |
Originally Reported [Member] | |||||||||||
Interim Reporting [Line Items] | |||||||||||
Net sales | 106,143 | 92,738 | 98,280 | ||||||||
Cost of sales | 32,517 | 23,920 | 20,246 | ||||||||
Gross profit | 73,626 | 68,818 | 78,034 | ||||||||
Operating expense | 80,004 | 84,418 | 69,230 | ||||||||
Operating (loss) income | -6,378 | -15,600 | 8,804 | ||||||||
Net income (loss) from continuing operations | -8,564 | -18,084 | 4,130 | ||||||||
Net (loss) income | -7,876 | -19,822 | -2,317 | -25,515 | |||||||
Basic: | |||||||||||
Net income (loss) from continuing operations | ($0.47) | ($1) | $0.22 | ||||||||
Net income (loss) | ($0.43) | ($1.10) | ($0.12) | ||||||||
Diluted: | |||||||||||
Net income (loss) from continuing operations | ($0.47) | ($1) | $0.21 | ||||||||
Net income (loss) | ($0.43) | ($1.10) | ($0.12) | ||||||||
Originally Reported in 2013 Form 10-K [Member] | |||||||||||
Interim Reporting [Line Items] | |||||||||||
Net sales | 106,143 | 92,738 | 98,280 | 400,534 | |||||||
Cost of sales | 32,517 | 23,920 | 20,246 | 102,300 | |||||||
Gross profit | 73,626 | 68,818 | 78,034 | 298,234 | |||||||
Operating expense | 80,004 | 84,418 | 69,230 | 303,321 | |||||||
Operating (loss) income | -6,378 | -15,600 | 8,804 | -5,087 | |||||||
Net income (loss) from continuing operations | -8,564 | -18,084 | 4,130 | -14,908 | |||||||
Net (loss) income | -7,876 | -19,822 | -2,317 | ||||||||
Basic: | |||||||||||
Net income (loss) from continuing operations | ($0.47) | ($1) | $0.22 | ($0.80) | |||||||
Net income (loss) | ($0.43) | ($1.10) | ($0.12) | ($1.37) | |||||||
Diluted: | |||||||||||
Net income (loss) from continuing operations | ($0.47) | ($1) | $0.21 | ($0.80) | |||||||
Net income (loss) | ($0.43) | ($1.10) | ($0.12) | ($1.37) | |||||||
As Reported in the 2012 Form 10-K Prior to Original Restatement [Member] | |||||||||||
Interim Reporting [Line Items] | |||||||||||
Net sales | 112,035 | 114,752 | 119,492 | 116,041 | 462,320 | 470,121 | |||||
Cost of sales | 18,504 | 22,373 | 23,676 | 21,939 | 86,492 | 92,619 | |||||
Gross profit | 93,531 | 92,379 | 95,816 | 94,102 | 375,828 | 377,502 | |||||
Operating expense | 69,050 | 70,846 | 75,251 | 71,671 | 286,818 | 346,193 | |||||
Operating (loss) income | 24,481 | 21,533 | 20,565 | 22,431 | 89,010 | 31,309 | |||||
Net income (loss) from continuing operations | 14,636 | 13,118 | 13,967 | 12,215 | 53,936 | -1,740 | |||||
Net (loss) income | 20,514 | 7,560 | 11,205 | 12,016 | 51,295 | -1,073 | |||||
Basic: | |||||||||||
Net income (loss) from continuing operations | $0.76 | $0.69 | $0.74 | $0.65 | $2.84 | ($0.10) | |||||
Net income (loss) | $1.06 | $0.40 | $0.59 | $0.64 | $2.70 | ($0.06) | |||||
Diluted: | |||||||||||
Net income (loss) from continuing operations | $0.74 | $0.67 | $0.73 | $0.64 | $2.78 | ($0.10) | |||||
Net income (loss) | $1.04 | $0.39 | $0.58 | $0.63 | $2.64 | ($0.06) | |||||
Originally Restated [Member] | |||||||||||
Interim Reporting [Line Items] | |||||||||||
Net sales | 108,936 | ||||||||||
Cost of sales | 21,378 | ||||||||||
Gross profit | 87,558 | ||||||||||
Operating expense | 69,638 | ||||||||||
Operating (loss) income | 17,920 | ||||||||||
Net income (loss) from continuing operations | 8,597 | ||||||||||
Net (loss) income | 9,407 | ||||||||||
Basic: | |||||||||||
Net income (loss) from continuing operations | $0.46 | ||||||||||
Net income (loss) | $0.50 | ||||||||||
Diluted: | |||||||||||
Net income (loss) from continuing operations | $0.45 | ||||||||||
Net income (loss) | $0.49 | ||||||||||
As Originally Restated in the 2012 Form 10-K/A [Member] | |||||||||||
Interim Reporting [Line Items] | |||||||||||
Net sales | 117,365 | 107,857 | 113,423 | 447,581 | 441,971 | ||||||
Cost of sales | 24,944 | 24,384 | 27,547 | 98,253 | 95,527 | ||||||
Gross profit | 92,421 | 83,473 | 85,876 | 349,328 | 346,444 | ||||||
Operating expense | 66,808 | 64,668 | 71,578 | 272,692 | 340,544 | ||||||
Operating (loss) income | 25,613 | 18,805 | 14,298 | 76,636 | 5,900 | ||||||
Net income (loss) from continuing operations | 16,009 | 10,574 | 9,870 | 45,050 | -16,218 | ||||||
Net (loss) income | $21,161 | $5,016 | $7,254 | $42,838 | ($18,110) | ||||||
Basic: | |||||||||||
Net income (loss) from continuing operations | $0.83 | $0.55 | $0.52 | $2.37 | ($0.89) | ||||||
Net income (loss) | $1.10 | $0.26 | $0.38 | $2.25 | ($0.99) | ||||||
Diluted: | |||||||||||
Net income (loss) from continuing operations | $0.81 | $0.54 | $0.51 | $2.32 | ($0.89) | ||||||
Net income (loss) | $1.07 | $0.25 | $0.37 | $2.21 | ($0.99) |
Quarterly_Financial_Data_Conde1
Quarterly Financial Data - Condensed Consolidated Balance Sheets (Detail) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||||||||
Interim Reporting [Line Items] | |||||||||
Total assets | $411,975 | $415,524 | $446,321 | $464,153 | $464,546 | $528,174 | $520,848 | $680,596 | |
Total liabilities | 116,112 | 108,531 | 114,175 | 103,178 | 108,107 | 195,755 | 207,927 | 382,051 | |
Total shareholders' equity | 295,863 | 306,993 | 332,146 | 360,975 | 356,439 | 332,419 | 312,921 | 298,545 | 280,304 |
Total liabilities and shareholders' equity | 411,975 | 415,524 | 446,321 | 464,153 | 464,546 | 528,174 | 520,848 | 680,596 | |
Originally Reported in 2013 Form 10-Q [Member] | |||||||||
Interim Reporting [Line Items] | |||||||||
Total assets | 503,380 | ||||||||
Total liabilities | 101,212 | ||||||||
Total shareholders' equity | 402,168 | ||||||||
Total liabilities and shareholders' equity | 503,380 | ||||||||
Original Restatement Adjustments [Member] | |||||||||
Interim Reporting [Line Items] | |||||||||
Total assets | 0 | 0 | 0 | -27,622 | -31,384 | -25,507 | -22,925 | -13,480 | |
Total liabilities | 0 | 0 | 0 | 1,154 | -118 | 6,136 | 6,092 | 12,556 | |
Total shareholders' equity | 0 | 0 | 0 | -28,776 | -31,266 | -31,643 | -29,017 | -26,036 | |
Total liabilities and shareholders' equity | 0 | 0 | 0 | -27,622 | -31,384 | -25,507 | -22,925 | -13,480 | |
Originally Restated in 2013 Form 10-Q/A [Member] | |||||||||
Interim Reporting [Line Items] | |||||||||
Total assets | 475,758 | ||||||||
Total liabilities | 102,366 | ||||||||
Total shareholders' equity | 373,392 | ||||||||
Total liabilities and shareholders' equity | 475,758 | ||||||||
Further Restatement Adjustments [Member] | |||||||||
Interim Reporting [Line Items] | |||||||||
Total assets | -11,207 | -14,534 | -13,129 | -11,605 | -8,351 | -11,392 | -9,547 | -13,510 | |
Total liabilities | 3,424 | -2,470 | -48 | 812 | 3,042 | 2,156 | 2,731 | 317 | |
Total shareholders' equity | -14,631 | -12,064 | -13,081 | -12,417 | -11,393 | -13,548 | -12,278 | -13,827 | |
Total liabilities and shareholders' equity | -11,207 | -14,534 | -13,129 | -11,605 | -8,351 | -11,392 | -9,547 | -13,510 | |
Originally Reported [Member] | |||||||||
Interim Reporting [Line Items] | |||||||||
Total assets | 423,182 | 430,058 | 459,450 | ||||||
Total liabilities | 112,688 | 111,001 | 114,223 | ||||||
Total shareholders' equity | 310,494 | 319,057 | 345,227 | ||||||
Total liabilities and shareholders' equity | 423,182 | 430,058 | 459,450 | ||||||
As Originally Reported in the 2013 10-Q [Member] | |||||||||
Interim Reporting [Line Items] | |||||||||
Total assets | 459,450 | ||||||||
Total liabilities | 114,223 | ||||||||
Total shareholders' equity | 345,227 | ||||||||
Total liabilities and shareholders' equity | 459,450 | ||||||||
Originally Reported in 2013 Form 10-K [Member] | |||||||||
Interim Reporting [Line Items] | |||||||||
Total assets | 423,182 | 430,058 | |||||||
Total liabilities | 112,688 | 111,001 | |||||||
Total shareholders' equity | 310,494 | 319,057 | |||||||
Total liabilities and shareholders' equity | 423,182 | 430,058 | |||||||
As Reported in the 2012 Form 10-K Prior to Original Restatement [Member] | |||||||||
Interim Reporting [Line Items] | |||||||||
Total assets | 504,281 | 565,073 | 553,320 | 707,586 | |||||
Total liabilities | 105,183 | 187,463 | 199,104 | 369,178 | |||||
Total shareholders' equity | 399,098 | 377,610 | 354,216 | 338,408 | |||||
Total liabilities and shareholders' equity | 504,281 | 565,073 | 553,320 | 707,586 | |||||
As Originally Restated in the 2012 Form 10-K/A [Member] | |||||||||
Interim Reporting [Line Items] | |||||||||
Total assets | 472,897 | 539,566 | 530,395 | 694,106 | |||||
Total liabilities | 105,065 | 193,599 | 205,196 | 381,734 | |||||
Total shareholders' equity | 367,832 | 345,967 | 325,199 | 312,372 | |||||
Total liabilities and shareholders' equity | $472,897 | $539,566 | $530,395 | $694,106 |
Subsequent_events_Additional_I
Subsequent events - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended | 0 Months Ended |
Dec. 31, 2013 | Jan. 31, 2015 | Mar. 04, 2015 | |
eNeura Inc [Member] | |||
Subsequent Event [Line Items] | |||
Maturity description of promissory note | The eNeura Note will mature on the earlier of (i) March 4, 2019, or (ii) consummation of the acquisition (as described below), unless converted or prepaid at an earlier date. | ||
Scenario, Forecast [Member] | Tempus [Member] | |||
Subsequent Event [Line Items] | |||
Net sales consideration transferred | $2,100,000 | ||
Consideration in cash | 4,800,000 | ||
Scenario, Forecast [Member] | eNeura Inc [Member] | |||
Subsequent Event [Line Items] | |||
Non-refundable fees paid | 250,000 | ||
Principal amount of promissory note | 15,000,000 | ||
Accrued interest on promissory note | 8.00% | ||
Amount paid to former shareholders | $65,000,000 |
Schedule_1_Condensed_Financial
Schedule 1- Condensed Financial Information of Registrant Orthofix International N.V. - Condensed Balance Sheets (unaudited) (Detail) (USD $) | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, unless otherwise specified | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $28,924 | $30,767 | $32,743 | $13,561 | ||||||
Prepaid expenses and other current assets | 28,933 | 36,449 | ||||||||
Total current assets | 265,106 | 300,632 | ||||||||
Other long term assets | 7,492 | 7,920 | ||||||||
Total assets | 411,975 | 415,524 | 446,321 | 464,153 | 464,546 | 528,174 | 520,848 | 680,596 | ||
Liabilities and shareholder's equity | ||||||||||
Current liabilities | 70,350 | 65,333 | ||||||||
Shareholders' equity: | ||||||||||
Common stock | 1,810 | 1,934 | ||||||||
Additional paid in capital | 216,653 | 246,306 | ||||||||
Accumulated earnings | 73,897 | 102,709 | ||||||||
Accumulated other comprehensive income | 3,503 | 5,490 | ||||||||
Total shareholders' equity | 295,863 | 306,993 | 332,146 | 360,975 | 356,439 | 332,419 | 312,921 | 298,545 | 280,304 | |
Total liabilities and shareholders' equity | 411,975 | 415,524 | 446,321 | 464,153 | 464,546 | 528,174 | 520,848 | 680,596 | ||
Orthofix International N V [Member] | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 1,426 | 7,392 | 19,433 | 2,882 | ||||||
Prepaid expenses and other current assets | 670 | 534 | ||||||||
Total current assets | 2,096 | 7,926 | ||||||||
Other long term assets | 15 | |||||||||
Investments in and amounts due from subsidiaries and affiliates | 308,173 | 357,811 | ||||||||
Total assets | 310,269 | 365,752 | ||||||||
Liabilities and shareholder's equity | ||||||||||
Current liabilities | 6,295 | 1,202 | ||||||||
Long-term liabilities | 8,111 | 8,111 | ||||||||
Shareholders' equity: | ||||||||||
Common stock | 1,810 | 1,934 | ||||||||
Additional paid in capital | 216,653 | 246,306 | ||||||||
Accumulated earnings | 73,897 | 102,709 | ||||||||
Accumulated other comprehensive income | 3,503 | 5,490 | ||||||||
Total shareholders' equity | 295,863 | 356,439 | ||||||||
Total liabilities and shareholders' equity | $310,269 | $365,752 |
Schedule_1_Condensed_Financial1
Schedule 1 - Condensed Financial Information of Registrant Orthofix International NV - Condensed Statements of Operations (unaudited) (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
(Expenses) income: | ||||||||||||
General and administrative | ($64,830) | ($53,650) | ($64,785) | |||||||||
(Loss) income before income taxes | -10,603 | 69,065 | -1,363 | |||||||||
Income tax benefit (expense) | -7,602 | -23,944 | -14,443 | 6,028 | ||||||||
Net (loss) income | -10,412 | -18,836 | -3,011 | 3,447 | 22,954 | 3,747 | 8,802 | 7,349 | -28,812 | 42,852 | -17,698 | |
Orthofix International N V [Member] | ||||||||||||
(Expenses) income: | ||||||||||||
General and administrative | -16,641 | -7,700 | -11,134 | |||||||||
Equity in earnings of investments in subsidiaries and affiliates | -12,494 | 50,331 | -5,884 | |||||||||
Other, net | 323 | 24 | 7 | |||||||||
(Loss) income before income taxes | -28,812 | 42,655 | -17,011 | |||||||||
Income tax benefit (expense) | 197 | -687 | ||||||||||
Net (loss) income | ($28,812) | $42,852 | ($17,698) |
Schedule_1_Condensed_Financial2
Schedule 1 - Condensed Financial Information of Registrant Orthofix International NV - Condensed Statement of Cash Flows (unaudited) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Condensed Financial Statements, Captions [Line Items] | |||
Net (loss) income | ($28,812) | $42,852 | ($17,698) |
Cash flows from investing activities: | |||
Capital expenditures | -24,787 | -27,994 | -24,965 |
Cash flows from financing activities: | |||
Net proceeds from issuance of common stock | 3,450 | 25,586 | 20,113 |
Repurchase of treasury shares | -39,494 | ||
Contributions to subsidiaries and affiliates | -517 | ||
Tax benefit on exercise of stock options | 82 | 1,020 | 1,737 |
Net (decrease) increase in cash and cash equivalents | -1,843 | -1,976 | 19,182 |
Cash and cash equivalents at the beginning of the year | 30,767 | 32,743 | 13,561 |
Cash and cash equivalents at the end of the year | 28,924 | 30,767 | 32,743 |
Orthofix International N V [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net (loss) income | -28,812 | 42,852 | -17,698 |
Equity in earnings of (loss) investments in subsidiaries and affiliates | 12,494 | -50,331 | 5,884 |
Cash (used in) provided by other operating activities | 468 | -6,811 | 3,429 |
Net cash used in operating activities | -15,850 | -14,290 | -8,385 |
Cash flows from investing activities: | |||
Distributions and amounts received from subsidiaries | 53,389 | 12,564 | 5,875 |
Capital expenditures | |||
Net cash provided by investing activities | 53,389 | 12,564 | 5,875 |
Cash flows from financing activities: | |||
Net proceeds from issuance of common stock | 3,450 | 25,586 | 20,113 |
Repurchase of treasury shares | -39,494 | ||
Contributions to subsidiaries and affiliates | -7,543 | -36,921 | -2,789 |
Tax benefit on exercise of stock options | 82 | 1,020 | 1,737 |
Net cash (used in) provided by financing activities | -43,505 | -10,315 | 19,061 |
Net (decrease) increase in cash and cash equivalents | -5,966 | -12,041 | 16,551 |
Cash and cash equivalents at the beginning of the year | 7,392 | 19,433 | 2,882 |
Cash and cash equivalents at the end of the year | $1,426 | $7,392 | $19,433 |
Schedule_1_Condensed_Financial3
Schedule 1 - Condensed Financial Information of Registrant Orthofix International NV - Additional information (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Condensed Financial Statements, Captions [Line Items] | ||
Restricted net assets of subsidiary of the reporting entity | $168,500,000 | $194,500,000 |
Cash dividends received from consolidated subsidiaries | 0 | 0 |
Orthofix Inc [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Percent of restricted net assets of a Subsidiary to consolidated net assets of the company where condensed parent company financial statement are required | 25.00% | |
Restricted net assets of subsidiary of the reporting entity | $168,500,000 | $194,500,000 |
Schedule_2_Valuation_and_Quali
Schedule 2 - Valuation and Qualifying Accounts (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Allowance for doubtful accounts receivable [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of year | $6,673 | $6,184 | $6,784 |
Additions Charged to cost and expenses | 4,590 | 2,027 | 4,523 |
Additions Charged (credited) to other accounts | -13 | ||
Deductions/ Other | -2,152 | -1,525 | -5,123 |
Balance at end of year | 9,111 | 6,673 | 6,184 |
Deferred tax valuation allowance [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of year | 26,361 | 19,124 | 21,023 |
Additions Charged to cost and expenses | 5,411 | 7,237 | -1,899 |
Balance at end of year | $31,772 | $26,361 | $19,124 |
Schedule_2_Valuation_and_Quali1
Schedule 2 - Valuation and Qualifying Accounts (Parenthetical) (Detail) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Valuation and Qualifying Accounts [Abstract] | |
Decrease in allowance for doubtful accounts | $242 |