Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Apr. 23, 2015 | Jun. 28, 2014 |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
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 | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 18,766,158 | ||
Entity Public Float | $671.90 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $36,815 | $28,924 |
Restricted cash | 34,424 | 23,761 |
Trade accounts receivable, less allowances of $7,285 and $9,111 at December 31, 2014 and 2013, respectively | 61,358 | 70,811 |
Inventories | 59,846 | 72,678 |
Deferred income taxes | 37,413 | 39,999 |
Prepaid expenses and other current assets | 26,552 | 28,933 |
Total current assets | 256,408 | 265,106 |
Property, plant and equipment, net | 48,549 | 54,372 |
Patents and other intangible assets, net | 7,152 | 9,046 |
Goodwill | 53,565 | 53,565 |
Deferred income taxes | 18,541 | 22,394 |
Other long-term assets | 8,970 | 7,492 |
Total assets | 393,185 | 411,975 |
Current liabilities: | ||
Trade accounts payable | 13,223 | 20,674 |
Other current liabilities | 53,220 | 49,676 |
Total current liabilities | 66,443 | 70,350 |
Long-term debt | 20,000 | |
Deferred income taxes | 229 | 13,026 |
Other long-term liabilities | 26,886 | 12,736 |
Total liabilities | 93,558 | 116,112 |
Contingencies (Note 17) | ||
Shareholders’ equity | ||
Common shares $0.10 par value; 50,000,000 shares authorized; 18,611,495 and 18,102,335 issued and outstanding as of December 31, 2014 and 2013, respectively | 1,861 | 1,810 |
Additional paid-in capital | 232,788 | 216,653 |
Retained earnings | 65,360 | 73,897 |
Accumulated other comprehensive (loss) income | -382 | 3,503 |
Total shareholders’ equity | 299,627 | 295,863 |
Total liabilities and shareholders’ equity | $393,185 | $411,975 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement Of Financial Position [Abstract] | ||
Trade accounts receivable, allowances | $7,285 | $9,111 |
Common shares, par value | $0.10 | $0.10 |
Common shares, authorized | 50,000,000 | 50,000,000 |
Common shares, issued | 18,611,495 | 18,102,335 |
Common shares, outstanding | 18,611,495 | 18,102,335 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||
Product sales | $351,525 | $349,552 | $393,647 |
Marketing service fees | 50,752 | 48,059 | 46,542 |
Net sales | 402,277 | 397,611 | 440,189 |
Cost of sales | 98,912 | 106,912 | 100,726 |
Gross profit | 303,365 | 290,699 | 339,463 |
Operating expenses | |||
Sales and marketing | 166,547 | 175,468 | 178,771 |
General and administrative | 76,790 | 64,830 | 53,650 |
Research and development | 24,994 | 26,768 | 28,577 |
Amortization of intangible assets | 2,284 | 2,687 | 2,298 |
Costs related to the accounting review and restatement | 15,614 | 12,945 | |
Impairment of Goodwill | 19,193 | ||
Charges related to U.S. Government resolutions (Note 17) | 1,295 | ||
Total operating expenses | 286,229 | 301,891 | 264,591 |
Operating income (loss) | 17,136 | -11,192 | 74,872 |
Other income and (expense) | |||
Interest expense, net | -1,785 | -1,827 | -4,161 |
Other (expense) income | -2,895 | 2,416 | -1,646 |
Total other income (expense) | -4,680 | 589 | -5,807 |
Income (loss) before income taxes | 12,456 | -10,603 | 69,065 |
Income tax expense | -16,200 | -7,602 | -23,944 |
Net (loss) income from continuing operations | -3,744 | -18,205 | 45,121 |
Discontinued operations (Note 16) | |||
Gain on sale of Breg, Inc., net of tax | 1,345 | ||
Loss from discontinued operations | -7,157 | -15,510 | -3,494 |
Income tax benefit (expense) | 2,364 | 4,903 | -120 |
Net loss from discontinued operations | -4,793 | -10,607 | -2,269 |
Net (loss) income | -8,537 | -28,812 | 42,852 |
Net income (loss) per common share—basic: | |||
Net (loss) income from continuing operations | ($0.20) | ($0.97) | $2.38 |
Net loss from discontinued operations | ($0.26) | ($0.57) | ($0.12) |
Net (loss) income per common share—basic | ($0.46) | ($1.54) | $2.26 |
Net income (loss) per common share—diluted: | |||
Net (loss) income from continuing operations | ($0.20) | ($0.97) | $2.33 |
Net loss from discontinued operations | ($0.26) | ($0.57) | ($0.12) |
Net (loss) income per common share—diluted | ($0.46) | ($1.54) | $2.21 |
Weighted average number of common shares: | |||
Basic | 18,459,054 | 18,697,228 | 18,977,263 |
Diluted | 18,459,054 | 18,697,228 | 19,390,413 |
Other comprehensive income (loss), before tax: | |||
Translation adjustment | -4,133 | -1,708 | 1,131 |
Unrealized gain (loss) on derivative instrument | 307 | -443 | 416 |
Other comprehensive (loss) income, before tax | -3,826 | -2,151 | 1,547 |
Income tax related to components of other comprehensive income | -59 | 164 | -153 |
Other comprehensive (loss) income, net of tax | -3,885 | -1,987 | 1,394 |
Comprehensive (loss) income | ($12,422) | ($30,799) | $44,246 |
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 (Loss) Income |
In Thousands, except Share data | |||||
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 net of tax expense/benefit | 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 | ||||
Net income (loss) | -28,812 | -28,812 | |||
Unrealized gain (loss) on derivative instrument net of tax expense/benefit | -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 | |||
Net income (loss) | -8,537 | -8,537 | |||
Unrealized gain (loss) on derivative instrument net of tax expense/benefit | 248 | 248 | |||
Translation adjustment | -4,133 | -4,133 | |||
Share-based compensation expense | 5,724 | 5,724 | |||
Common shares issued | 10,462 | 51 | 10,411 | ||
Common shares issued, Shares | 509,160 | ||||
Balance, Amount at Dec. 31, 2014 | $299,627 | $1,861 | $232,788 | $65,360 | ($382) |
Balance, Shares at Dec. 31, 2014 | 18,611,495 | 18,611,495 |
Consolidated_Statements_of_Cha1
Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement Of Stockholders Equity [Abstract] | |||
Unrealized gain (loss) on derivative instrument, tax expense (benefit) | $59 | ($164) | $153 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net (loss) income | ($8,537) | ($28,812) | $42,852 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||
Depreciation and amortization | 22,878 | 22,822 | 20,732 |
Amortization of debt costs | 726 | 720 | 1,737 |
Amortization of exclusivity agreements | 1,929 | 1,546 | 1,289 |
Provision for doubtful accounts | 938 | 4,590 | 2,212 |
Deferred income taxes | -7,053 | 2,829 | 3,771 |
Share-based compensation | 5,724 | 6,267 | 6,303 |
Impairment of goodwill and certain assets | 966 | 19,193 | |
Gain on sale of Breg, Inc., net of tax | -1,345 | ||
Excess income tax benefit on employee stock-based awards | -206 | -82 | -1,020 |
Other | 821 | 4,536 | 4,798 |
Changes in operating assets and liabilities, net of effect of dispositions: | |||
Trade accounts receivable | 6,138 | 28,562 | -11,128 |
Inventories | 8,109 | -3,213 | -384 |
Escrow receivable | 41,537 | ||
Prepaid expenses and other current assets | 5,100 | 8,764 | -14,575 |
Trade accounts payable | -6,451 | -2,280 | 4,575 |
Charges related to U.S. Government resolutions | -83,178 | ||
Other current liabilities | 5,456 | 6,969 | -5,239 |
Other long-term assets | -734 | -5,329 | -3,391 |
Other long-term liabilities | 15,154 | -40 | 616 |
Net cash provided by operating activities | 50,958 | 67,042 | 10,162 |
Cash flows from investing activities: | |||
Capital expenditures for property, plant and equipment | -18,069 | -24,787 | -27,994 |
Capital expenditures for intangible assets | -456 | -4,891 | -780 |
Purchase of other investments | -1,457 | -1,374 | -714 |
Proceeds from sale of other investments | 32 | 878 | |
Net proceeds from sale of Breg, Inc. | 153,773 | ||
Net cash (used in) provided by investing activities | -19,950 | -31,052 | 125,163 |
Cash flows from financing activities: | |||
Net proceeds from issuance of common shares | 10,462 | 3,450 | 25,586 |
Repayments of long-term debt | -20,000 | -16 | -188,695 |
Repayment of bank borrowings, net | -1,297 | ||
Changes in restricted cash | -10,662 | -2,375 | 25,799 |
Purchase of common stock | -39,494 | ||
Excess income tax benefit on employee stock-based awards | 206 | 82 | 1,020 |
Net cash used in financing activities | -19,994 | -38,353 | -137,587 |
Effect of exchange rate changes on cash | -3,123 | 520 | 286 |
Net increase (decrease) in cash and cash equivalents | 7,891 | -1,843 | -1,976 |
Cash and cash equivalents at the beginning of the year | 28,924 | 30,767 | 32,743 |
Cash and cash equivalents at the end of the year | 36,815 | 28,924 | 30,767 |
Cash paid during the year for: | |||
Interest | 1,315 | 2,046 | 4,569 |
Income taxes | $2,222 | $8,773 | $18,268 |
Summary_of_significant_account
Summary of significant accounting policies | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
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) | 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. | |||||||||||||
(c) | 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 $2.4 million loss, $0.5 million loss and $0.4 million loss for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||
(d) | 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. | |||||||||||||
(e) | 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 7 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. | |||||||||||||
(f) | 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 2014, 2013 and 2012, 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. | |||||||||||||
(g) | 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. 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 independent sales representatives. Consignment inventory represents immediately saleable finished products located at third party customers, such as distributors and hospitals. | |||||||||||||
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 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. | |||||||||||||
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. | |||||||||||||
(h) | 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, 2014 was $62.0 million and ($46.2 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 earnings. 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, 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 finite lives, such as patents and other technology agreements, are tested for impairment whenever events or changes 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 asset for recoverability. For purposes of the recoverability test, the Company groups its long-lived or intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the 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 long-lived and intangible assets as the present value of estimated future cash flows. In determining the estimated future cash flows associated with the 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. | |||||||||||||
(i) | 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 records 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 structure 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 on July 1, 2013, 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 2014, did not result in any additional impairment charge for either the BioStim or Biologics reporting units, the reporting units with remaining goodwill. This qualitative analysis, which is referred to as step zero, considered all relevant factors specific to the reporting units, including macroeconomic conditions, industry and market considerations, overall financial performance and relevant entity-specific events. | |||||||||||||
(j) | 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 in the period the hedged transaction affects earnings. | |||||||||||||
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. | |||||||||||||
(k) | Accumulated other comprehensive income (loss) | ||||||||||||
Accumulated other comprehensive income (loss) 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 9) and the unrealized gain (loss) on warrants. The components of and changes in accumulated other comprehensive income (loss) are as follows: | |||||||||||||
(U.S. Dollars in thousands) | Foreign Currency | Change in | Accumulated Other | ||||||||||
Translation | Fair Value | Comprehensive (Loss) Income | |||||||||||
Adjustments | |||||||||||||
Balance at December 31, 2012 (Restated) | 5,359 | 131 | 5,490 | ||||||||||
Unrealized loss on derivative instruments, net of tax | — | (279 | ) | (279 | ) | ||||||||
benefit of $164 | |||||||||||||
Foreign currency translation adjustment (1) | (1,708 | ) | — | (1,708 | ) | ||||||||
Balance at December 31, 2013 (Restated) | $ | 3,651 | $ | (148 | ) | $ | 3,503 | ||||||
Unrealized gain on cross-currency swaps, net of tax | — | 248 | 248 | ||||||||||
expense of $59 | |||||||||||||
Foreign currency translation adjustment (1) | (4,133 | ) | — | (4,133 | ) | ||||||||
Balance at December 31, 2014 | $ | (482 | ) | $ | 100 | $ | (382 | ) | |||||
-1 | As the cash generally remains indefinitely reinvested in the non U.S. dollar denominated foreign subsidiaries, no deferred taxes are recognized on the related foreign currency translation adjustment. | ||||||||||||
(l) | Revenue recognition and accounts receivable | ||||||||||||
Commercial revenue is related to the sale of our 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 also 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 preauthorized 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 all distributor revenue, which is primarily related to implant products, we recognize revenue on the sell-through basis, effective April 1, 2013. Prior to this date, we recognized revenue either on a sell-in or sell-through basis, depending on the specific circumstances of the distributor. In some cases we recognized distributor revenue as title and risk of loss passes at either shipment from our facilities or receipt at the distributor’s facility, assuming all other revenue recognition criteria had been achieved (the “sell-in method”). 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 us 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 we do not have reliable information about when our distributors sell the product through to end customers, we use cash collection from distributors as a basis for revenue recognition under the sell-through method. Although in many cases we are legally entitled to the accounts receivable at the time of shipment, we have not recognized accounts receivables or any corresponding deferred revenues associated with distributor transactions for which revenue is recognized on the sell-through method. | |||||||||||||
For distributors on the sell-in method prior to April 1, 2013, cost of sales were recognized upon shipment. For sell-through distributors, whose revenue is recognized upon cash receipt, we consider whether to match the related cost of sales expense with revenue or to recognize expense upon shipment. In making this assessment, we consider the financial viability of our 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, we defer 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. MTF is considered the primary obligor in these arrangements and therefore the Company recognizes these marketing service fees on a net basis within net sales upon shipment of the product to the customer. These marketing fees were $50.4 million, $47.7 million and $46.5 million in 2014, 2013 and 2012, 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. | |||||||||||||
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. Revisions to contractual allowances are recorded as an adjustment to net sales. Our estimates are periodically tested against actual collection experience. | |||||||||||||
(m) | Sale of accounts receivable | ||||||||||||
The Company will generally sell receivables from certain Italian hospitals each year. The estimated related fee for 2014, 2013 and 2012 was $0.4 million, $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. | |||||||||||||
(n) | Share-based compensation | ||||||||||||
The fair value of service-based stock options is 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 is 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. | |||||||||||||
On June 30, 2014, the Company granted performance based restricted share awards to executive employees, which vesting is based on achieving earnings targets in two consecutive rolling four quarter periods. The fair value of performance-based restricted stock awards are recognized, net of estimated forfeitures, over the derived requisite vesting period beginning in the period in which they are deemed probable to vest. | |||||||||||||
(o) | Shipping and handling costs | ||||||||||||
Shipping and handling costs for products shipped to customers are included in cost of sales, and were $2.3 million, $2.8 million and $2.9 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||
(p) | Advertising costs | ||||||||||||
The Company expenses all advertising costs as incurred. Advertising expenses are included in sales and marketing expense, and were insignificant for the years ended December 31, 2014, 2013 and 2012. | |||||||||||||
(q) | Research and development costs | ||||||||||||
Expenditures related to the collaborative arrangement with MTF are expensed based on the terms of the related agreement. Payments made to MTF in 2014, 2013 and 2012 totaled $0.3 million, $2.5 million and $3.0 million, respectively. 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 considers its recent operating results, availability of taxable income in carryback years, future reversals of taxable temporary differences, future taxable income projections (exclusive of reversing temporary differences) and all prudent and feasible tax planning strategies. | |||||||||||||
The Company accounts for uncertain tax positions in accordance with ASC Topic 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 its 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 18). 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 based in Europe were approximately $59 million in 2014, which results in a substantial portion of our trade accounts receivable balance as of December 31, 2014. 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 May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 supersedes the revenue recognition requirements in Revenue Recognition (Topic 605), and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for the Company in the fiscal year beginning on January 1, 2017, including interim periods within that reporting period and is to be applied retrospectively, with early application not permitted. On April 1, 2015, the FASB proposed deferring the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. The FASB also proposed permitting early adoption of the standard, but not before the original effective date of December 15, 2016. The Company is currently evaluating the effect that adopting this new accounting guidance will have on consolidated results of operations, cash flows and financial position. | |||||||||||||
In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Components of an Entity. The ASU amends the definition of a discontinued operation and also provides new disclosure requirements for disposals meeting the definition, and for those that do not meet the definition, of a discontinued operation. Under the new guidance, a discontinued operation may include a component or a group of components of an entity, or a business or nonprofit activity that has been disposed of or is classified as held for sale, and represents a strategic shift that has or will have a major effect on an entity's operations and financial results. The ASU also expands the scope to include the disposals of equity method investments and acquired businesses held for sale. The guidance will be effective prospectively for interim and annual periods beginning on or after December 15, 2014, with early adoption permitted. The adoption of the guidance by the Company is not expected to have a material impact on its consolidated financial statements. | |||||||||||||
Inventories
Inventories | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Inventories | 2 | Inventories | |||||||
December 31, | |||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | |||||||
Raw materials | $ | 3,879 | $ | 6,515 | |||||
Work-in-process | 4,830 | 6,606 | |||||||
Finished products | 24,953 | 28,291 | |||||||
Field inventory | 18,003 | 21,312 | |||||||
Consignment inventory | 2,656 | 2,388 | |||||||
Deferred cost of sales | 5,525 | 7,566 | |||||||
$ | 59,846 | $ | 72,678 | ||||||
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, 2014 | |||||||||
Property Plant And Equipment [Abstract] | |||||||||
Property, plant and equipment | 3 | Property, plant and equipment | |||||||
December 31, | |||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | |||||||
Cost | |||||||||
Buildings | $ | 3,683 | $ | 4,075 | |||||
Plant, equipment and instrumentation | 140,110 | 133,427 | |||||||
Furniture and fixtures | 5,779 | 5,872 | |||||||
149,572 | 143,374 | ||||||||
Accumulated depreciation | (101,023 | ) | (89,002 | ) | |||||
$ | 48,549 | $ | 54,372 | ||||||
Included within plant, equipment and instrumentation is capitalized computer software of $9.0 million and $6.6 million net of accumulated amortization as of December 31, 2014 and 2013, respectively. Amortization of computer software for the years ended December 31, 2014, 2013 and 2012 was $3.0 million, $2.7 million and $2.0 million, respectively. | |||||||||
Total depreciation expense, for the years ended December 31, 2014, 2013 and 2012 was $20.6 million, $20.0 million and $15.8 million, respectively. |
Patents_and_other_intangible_a
Patents and other intangible assets | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||
Patents and other intangible assets | 4 | Patents and other intangible assets | |||||||
December 31, | |||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | |||||||
Cost | |||||||||
Patents | $ | 35,420 | $ | 34,820 | |||||
Trademarks—finite lived | 596 | 620 | |||||||
License and other | 7,248 | 7,748 | |||||||
43,264 | 43,188 | ||||||||
Accumulated amortization | |||||||||
Patents | (33,319 | ) | (31,739 | ) | |||||
Trademarks—finite lived | (469 | ) | (454 | ) | |||||
License and other | (2,324 | ) | (1,949 | ) | |||||
(36,112 | ) | (34,142 | ) | ||||||
Patents and other intangible assets, net | $ | 7,152 | $ | 9,046 | |||||
Amortization expense for intangible assets was $2.3 million, $2.7 million and $2.3 million for the periods ending December 31, 2014, 2013 and 2012, respectively, and is estimated to be approximately $2.2 million, $1.5 million, $1.1 million, $0.5 million, $0.5 million and $1.3 million for the periods ending December 31, 2015, 2016, 2017, 2018, 2019 and 2020 and thereafter, respectively. |
Goodwill
Goodwill | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||
Goodwill | 5 | 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 reporting structure. (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, 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 and 2014 | $ | — | $ | — | $ | 42,678 | $ | 10,887 | $ | — | $ | — | $ | 53,565 | |||||||||||||||
Other_current_liabilities
Other current liabilities | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables And Accruals [Abstract] | |||||||||
Other current liabilities | 6 | Other current liabilities | |||||||
December 31, | |||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | |||||||
Accrued expenses | $ | 23,298 | $ | 18,903 | |||||
Salaries, bonuses, commissions and related taxes payable | 16,879 | 16,598 | |||||||
Accrued legal expenses | 9,548 | 10,292 | |||||||
Other payables | 3,495 | 3,883 | |||||||
$ | 53,220 | $ | 49,676 | ||||||
Longterm_debt
Long-term debt | 12 Months Ended | |
Dec. 31, 2014 | ||
Debt Disclosure [Abstract] | ||
Long-term debt | 7 | 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 U.S. 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 14) 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, which was paid in its entirety along with applicable interest at December 31, 2014. 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, 2014 and 2013 was 2.7%. | ||
The Company has no annual contractual maturities of long-term debt as of December 31, 2014. 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. | ||
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. The Company was in compliance with the affirmative and negative covenants at December 31, 2014 and there were no events of default. | ||
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. U.S. 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, 2014 and 2013 is $181.8 million and $168.5 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, 2014 and 2013 was $34.4 million and $23.8 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, 2014 and 2013, debt issuance costs, net of accumulated amortization, related to the Credit Agreement were $0.4 million and $1.1 million, respectively. | ||
The Company had an unused available line of credit of €5.8 million ($7.0 million) and €5.8 million ($8.0 million) at December 31, 2014 and 2013, 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. |
Shareholders_equity
Shareholder's equity | 12 Months Ended | |
Dec. 31, 2014 | ||
Stockholders Equity Note [Abstract] | ||
Stockholders' equity | 8 | Stockholders’ equity |
The Company has not paid dividends to holders of its common stock in the past. The Company currently intends to retain all of its consolidated earnings to finance credit agreement obligations and to finance the continued growth of its business. Certain subsidiaries of the Company have restrictions on their ability to pay dividends in certain circumstances pursuant to the Credit Agreement. The Company does not have present intentions to pay dividends in the foreseeable future. | ||
In the event that the Company decides to pay a dividend to holders of its common stock in the future with dividends received from its subsidiaries, the Company may, based on prevailing rates of taxation, be required to pay additional withholding and income tax on such amounts received from its subsidiaries. |
Derivative_instruments
Derivative instruments | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |||||||||||||
Derivative instruments | 9 | 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, 2014 | |||||||||||||
Cross-currency swap | $ | 2,504 | Other long-term assets | ||||||||||
Warrants | $ | 321 | Other long-term assets | ||||||||||
As of December 31, 2013 | |||||||||||||
Cross-currency swap | $ | (1,036 | ) | Other long-term liabilities | |||||||||
Warrants | $ | 107 | Other long-term assets | ||||||||||
For the year ended | |||||||||||||
December 31, | |||||||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Cross-currency swap gain (loss) recorded in other | $ | 251 | $ | (278 | ) | $ | 263 | ||||||
comprehensive income (loss), net of taxes | |||||||||||||
Warrants unrealized gain (loss) recorded in other | $ | (3 | ) | $ | (1 | ) | $ | — | |||||
comprehensive income (loss), net of taxes | |||||||||||||
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 $35 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, of which $0.3 million was recognized in other comprehensive income (loss). | |||||||||||||
Warrants | |||||||||||||
As of December 31, 2014, the Company purchased notes receivable from Bone Biologics, Inc. (“Bone Biologics”) totaling $750 thousand, all of which were issued with detachable warrants to purchase common stock of Bone Biologics. As of December 31, 2014 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, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Fair value measurements | 10 | 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, | |||||||||||||||||
2014 | |||||||||||||||||
Assets | |||||||||||||||||
Collective trust funds | $ | 1,696 | $ | — | $ | 1,696 | $ | — | |||||||||
Treasury securities | 586 | 586 | — | — | |||||||||||||
Certificates of deposit | 1,510 | 1,510 | — | — | |||||||||||||
Derivative securities | 2,825 | — | 2,825 | — | |||||||||||||
Total | $ | 6,617 | $ | 2,096 | $ | 4,521 | $ | — | |||||||||
Liabilities | |||||||||||||||||
Deferred compensation plan | $ | (1,886 | ) | $ | — | $ | (1,886 | ) | $ | — | |||||||
Total | $ | (1,886 | ) | $ | — | $ | (1,886 | ) | $ | — | |||||||
(U.S. Dollars in thousands) | Balance | Level 1 | Level 2 | Level 3 | |||||||||||||
December 31, | |||||||||||||||||
2013 | |||||||||||||||||
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 | ) | $ | — | |||||||
Commitments
Commitments | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments And Contingencies Disclosure [Abstract] | |||||
Commitments | 11 | 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, 2014, 2013 and 2012 was approximately $3.4 million, $3.4 million and $4.1 million, respectively. | |||||
Future minimum lease payments under operating leases, net of amounts to be received under sub-leases, as of December 31, 2014 are as follows: | |||||
(U.S. Dollars in thousands) | |||||
2015 | $ | 3,885 | |||
2016 | 3,558 | ||||
2017 | 2,866 | ||||
2018 | 2,671 | ||||
2019 | 2,444 | ||||
Thereafter | 2,741 | ||||
Total | $ | 18,165 | |||
Inventory purchase commitments | |||||
The Company has inventory purchase commitments with third-party manufactures for $2.5 million, $3.0 million and $1.4 million as of December 31, 2014, 2013, and 2012, respectively. |
Business_segment_information
Business segment information | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||
Business segment information | 12 | 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 of 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 cervical and lumbar spine as well as a therapeutic treatment for non-spine fractures that have not healed (non-unions). These devices utilize Orthofix’s patented pulsed electromagnetic field (“PEMF”) technology, which is supported by strong basic mechanism of action data in the scientific literature and 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. This SBU uses both distributors and independent sales representatives to sell its devices to hospitals, doctors and other healthcare providers, primarily in the U.S. | |||||||||||||||||||||||||
Biologics | |||||||||||||||||||||||||
The Biologics SBU provides a portfolio of regenerative products and tissue forms 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, independent sales representatives and affiliates to supply to hospitals, doctors, and other healthcare providers, primarily in the U.S. Our partnership with the Musculoskeletal Transplant Foundation (“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 and solutions 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 procedures. Extremity Fixation distributes its products through a network of distributors, independent sales representatives and affiliates. This SBU uses both independent distributors and direct sales representatives to sell orthopedic 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 independent 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. | |||||||||||||||||||||||||
Net Sales by SBU: | |||||||||||||||||||||||||
The table below presents net sales for continuing operations by SBU reporting segment. Net sales include product sales and marketing service fees. | |||||||||||||||||||||||||
Net Sales by SBU | |||||||||||||||||||||||||
Year ended December 31, | |||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Net Sales | Percent of | Net Sales | Percent of | Net Sales | Percent of | ||||||||||||||||||||
Total Net | Total Net | Total Net | |||||||||||||||||||||||
Sales | Sales | Sales | |||||||||||||||||||||||
BioStim | $ | 154,676 | 38 | % | $ | 145,085 | 36 | % | $ | 174,562 | 40 | % | |||||||||||||
Biologics | 55,881 | 14 | % | 53,746 | 14 | % | 53,731 | 12 | % | ||||||||||||||||
Extremity Fixation | 109,678 | 27 | % | 103,359 | 26 | % | 112,011 | 25 | % | ||||||||||||||||
Spine Fixation | 82,042 | 21 | % | 95,421 | 24 | % | 99,885 | 23 | % | ||||||||||||||||
Total Net Sales | $ | 402,277 | 100 | % | $ | 397,611 | 100 | % | $ | 440,189 | 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) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Net Margin | |||||||||||||||||||||||||
BioStim | $ | 66,096 | $ | 63,847 | $ | 88,788 | |||||||||||||||||||
Biologics | 26,629 | 24,794 | 23,589 | ||||||||||||||||||||||
Extremity Fixation | 31,586 | 23,704 | 34,554 | ||||||||||||||||||||||
Spine Fixation | 14,243 | 4,329 | 15,256 | ||||||||||||||||||||||
Corporate | (1,736 | ) | (1,443 | ) | (1,495 | ) | |||||||||||||||||||
Total net margin | $ | 136,818 | $ | 115,231 | $ | 160,692 | |||||||||||||||||||
General & administrative | 76,790 | 64,830 | 53,650 | ||||||||||||||||||||||
Research and development | 24,994 | 26,768 | 28,577 | ||||||||||||||||||||||
Amortization of intangible assets | 2,284 | 2,687 | 2,298 | ||||||||||||||||||||||
Costs related to the accounting review and restatement | 15,614 | 12,945 | — | ||||||||||||||||||||||
Impairment of goodwill | — | 19,193 | — | ||||||||||||||||||||||
Charges related to U.S. Government resolutions | — | — | 1,295 | ||||||||||||||||||||||
Operating income (loss) | $ | 17,136 | $ | (11,192 | ) | $ | 74,872 | ||||||||||||||||||
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) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
BioStim | $ | 1,623 | $ | 1,979 | $ | 1,659 | |||||||||||||||||||
Biologics | 1,161 | 648 | 567 | ||||||||||||||||||||||
Extremity Fixation | 8,442 | 7,265 | 5,201 | ||||||||||||||||||||||
Spine Fixation | 11,711 | 12,834 | 10,800 | ||||||||||||||||||||||
Corporate | (59 | ) | 96 | 70 | |||||||||||||||||||||
Total | $ | 22,878 | $ | 22,822 | $ | 18,297 | |||||||||||||||||||
Geographical information | |||||||||||||||||||||||||
The following data includes net sales by geographic destination: | |||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
U.S. | $ | 294,682 | $ | 293,032 | $ | 327,228 | |||||||||||||||||||
Italy | 19,573 | 16,755 | 18,742 | ||||||||||||||||||||||
U.K. | 11,402 | 10,002 | 8,431 | ||||||||||||||||||||||
Brazil | 19,633 | 26,786 | 31,166 | ||||||||||||||||||||||
Others | 56,987 | 51,036 | 54,622 | ||||||||||||||||||||||
Total net sales | $ | 402,277 | $ | 397,611 | $ | 440,189 | |||||||||||||||||||
The following data includes property, plant and equipment by geographic area: | |||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | |||||||||||||||||||||||
U.S. | $ | 37,029 | $ | 39,287 | |||||||||||||||||||||
Italy | 6,865 | 8,150 | |||||||||||||||||||||||
U.K. | 1,368 | 1,871 | |||||||||||||||||||||||
Brazil | 1,308 | 3,210 | |||||||||||||||||||||||
Others | 1,979 | 1,854 | |||||||||||||||||||||||
Total | $ | 48,549 | $ | 54,372 | |||||||||||||||||||||
Income_taxes
Income taxes | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||
Income taxes | 13 | Income taxes | |||||||||||||||||||||||
Income from continuing operations before provision for income taxes consisted of: | |||||||||||||||||||||||||
Year Ended | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
U.S. | $ | 17,532 | $ | (3,546 | ) | $ | 56,210 | ||||||||||||||||||
Non-U.S. | (5,076 | ) | (7,057 | ) | 12,855 | ||||||||||||||||||||
Total income (loss) before taxes | $ | 12,456 | $ | (10,603 | ) | $ | 69,065 | ||||||||||||||||||
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, | |||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
U.S. | |||||||||||||||||||||||||
Current | $ | 5,067 | $ | 2,465 | $ | 16,982 | |||||||||||||||||||
Deferred | 2,825 | 4,013 | 2,675 | ||||||||||||||||||||||
Total U.S | 7,892 | 6,478 | 19,657 | ||||||||||||||||||||||
Non-U.S. | |||||||||||||||||||||||||
Current | 18,186 | 2,308 | 3,191 | ||||||||||||||||||||||
Deferred | (9,878 | ) | (1,184 | ) | 1,096 | ||||||||||||||||||||
8,308 | 1,124 | 4,287 | |||||||||||||||||||||||
Total tax expense | $ | 16,200 | $ | 7,602 | $ | 23,944 | |||||||||||||||||||
Deferred income taxes are provided primarily for net operating loss carryforwards and for temporary differences resulting from items that are recognized in different years for financial statement and income tax reporting purposes. The deferred tax assets and liabilities are as follows: | |||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | |||||||||||||||||||||||
Intangible assets and goodwill | $ | 4,067 | $ | 4,798 | |||||||||||||||||||||
Inventories and related reserves | 19,525 | 20,769 | |||||||||||||||||||||||
Deferred revenue and cost of goods sold | 10,826 | 11,577 | |||||||||||||||||||||||
Other accruals and reserves | 5,371 | 4,778 | |||||||||||||||||||||||
Accrued compensation | 5,004 | 3,942 | |||||||||||||||||||||||
Allowance for doubtful accounts | 2,094 | 2,040 | |||||||||||||||||||||||
Accrued interest | 17,555 | 18,063 | |||||||||||||||||||||||
Net operating loss carryforwards | 34,514 | 34,979 | |||||||||||||||||||||||
Other, net | 1,202 | 893 | |||||||||||||||||||||||
100,158 | 101,839 | ||||||||||||||||||||||||
Valuation allowance | (37,438 | ) | (31,772 | ) | |||||||||||||||||||||
Deferred tax asset | $ | 62,720 | $ | 70,067 | |||||||||||||||||||||
Withholding taxes | (229 | ) | (13,026 | ) | |||||||||||||||||||||
Property, plant and equipment | (6,766 | ) | (7,674 | ) | |||||||||||||||||||||
Deferred tax liability | (6,995 | ) | (20,700 | ) | |||||||||||||||||||||
Net deferred tax assets | $ | 55,725 | $ | 49,367 | |||||||||||||||||||||
Reported as: | |||||||||||||||||||||||||
Current deferred tax assets | 37,413 | 39,999 | |||||||||||||||||||||||
Non-current deferred tax assets | 18,541 | 22,394 | |||||||||||||||||||||||
Current deferred tax liability | — | — | |||||||||||||||||||||||
Non-current deferred tax liability | (229 | ) | (13,026 | ) | |||||||||||||||||||||
Net deferred tax assets | $ | 55,725 | $ | 49,367 | |||||||||||||||||||||
The valuation allowance as of December 31, 2014 and 2013 was $37.4 million and $31.8 million, respectively. The net increase in the valuation allowance of $5.6 million during the year principally relates to certain current period foreign losses without benefit. The valuation allowance is attributable to net operating loss carryforwards and certain temporary differences in certain foreign jurisdictions, for which it is more likely than not some portion or all of the deferred tax asset will not be realized. | |||||||||||||||||||||||||
The Company has state net operating loss carryforwards of approximately $14.0 million that will begin to expire in 2015. The Company has net operating losses in foreign taxing jurisdictions of approximately $133.7 million, the majority of which relate to the Company’s Netherlands operations and begin to expire in 2015. The Company has provided a valuation allowance against a significant portion of these net operating loss carryforwards since it does not believe that it is more likely than not 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. | |||||||||||||||||||||||||
(U.S. Dollars in thousands, except percentages) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||
Statutory U.S. federal income tax rate | $ | 4,360 | 35 | % | $ | (3,711 | ) | 35 | % | $ | 24,179 | 35 | % | ||||||||||||
State taxes, net of federal benefit | 1,439 | 11.6 | 2,039 | (19.2 | ) | 2,536 | 3.7 | ||||||||||||||||||
Foreign rate differential, including withholding taxes | 2,738 | 21.9 | 1,162 | (11.0 | ) | (10 | ) | (0.0 | ) | ||||||||||||||||
Valuation allowance | 8,672 | 69.6 | 3,913 | (36.9 | ) | 6,189 | 9 | ||||||||||||||||||
Italian subsidiary intangible asset | (2,546 | ) | (20.4 | ) | (2,288 | ) | 21.6 | (2,214 | ) | (3.2 | ) | ||||||||||||||
Goodwill impairment | — | — | 6,452 | (60.9 | ) | — | — | ||||||||||||||||||
Domestic manufacturing deduction | (377 | ) | (3.0 | ) | (233 | ) | 2.2 | (1,567 | ) | (2.3 | ) | ||||||||||||||
Settlement of U.S. Government resolutions | — | — | — | — | (1,260 | ) | (1.8 | ) | |||||||||||||||||
Italian audit settlement | 1,048 | 8.4 | — | — | — | — | |||||||||||||||||||
Other, net | 866 | 7 | 268 | (2.5 | ) | (3,909 | ) | (5.7 | ) | ||||||||||||||||
Income tax expense/effective rate | $ | 16,200 | 130.1 | % | $ | 7,602 | (71.7 | )% | $ | 23,944 | 34.7 | % | |||||||||||||
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 $15.6 million and $0.7 million for the years ended December 31, 2014 and 2013, 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 accrued for payment of interest and penalties as of December 31, 2014 and 2013. | |||||||||||||||||||||||||
The entire amount of unrecognized tax benefits, including interest, would favorably impact the Company’s effective tax rate if recognized. As of December 31, 2014, 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, 2014 and December 31, 2013 follows: | |||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | |||||||||||||||||||||||
Balance as of January 1, | $ | 723 | $ | 1,189 | |||||||||||||||||||||
Additions for current year tax positions | 14,794 | 183 | |||||||||||||||||||||||
Increases (decreases) for prior year tax positions | 145 | (12 | ) | ||||||||||||||||||||||
Settlements of prior year tax positions | — | (560 | ) | ||||||||||||||||||||||
Expiration of statutes | (65 | ) | (77 | ) | |||||||||||||||||||||
Balance as of December 31, | $ | 15,597 | $ | 723 | |||||||||||||||||||||
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 current intention is to indefinitely reinvest the total amount of its unremitted foreign earnings (residing outside Curaçao) in the local jurisdiction to the extent they are generated and available. As an entity incorporated in Curaçao, “foreign subsidiaries” refers 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 $329.7 million at December 31, 2013 to $374.1 million at December 31, 2014. The $374.1 million includes $391.1 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. | |||||||||||||||||||||||||
Total cash and cash equivalents at December 31, 2014 were $71.2 million, of which $34.4 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 $36.8 million at December 31, 2014 held by non-U.S. subsidiaries is indefinitely reinvested for use in non-U.S. operations. |
Sale_of_Breg_and_Disposition_o
Sale of Breg and Disposition of Sports Medicine Business | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Discontinued Operations And Disposal Groups [Abstract] | |||||
Sale of Breg and Disposition of Sports Medicine Business | 14 | Sale of Breg and Disposition of Sports Medicine Business | |||
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 15.) 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 business. | |||||
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 liability ratably over the period of indemnification, which is three years. The Company’s obligations under this guarantee were approximately $0.3 million, $0.9 million and $1.6 million as of December 31, 2014, 2013 and 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 now discontinued Sports Medicine business contributed $44 million of net sales in the years ended December 31, 2012. The Sports Medicine business had $2.9 million of operating losses in the year ended December 31, 2012. 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 business as discontinued operations. Income (loss) associated with the Sports Medicine business, net of applicable income taxes is shown as income (loss) from discontinued operations for all periods presented. |
Contingencies
Contingencies | 12 Months Ended | |
Dec. 31, 2014 | ||
Commitments And Contingencies Disclosure [Abstract] | ||
Contingencies | 15 | 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 has been 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, the Audit Committee of our Board of Directors began conducting an independent review, with the assistance of outside professionals, of certain accounting matters. This review resulted in a restatement of our previously filed consolidated financial statements for the fiscal years ended December 31, 2012, 2011 and 2010 and the fiscal quarter ended March 31, 2013, as well as the restatement of certain financial information for the fiscal years ended December 31, 2009, 2008 and 2007. This restatement, which we completed and filed in March 2014, is referred to herein as the “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 filings containing the Original Restatement were not properly accounted for under U.S. GAAP. As a result, the Company determined in August 2014 to restate its previously filed consolidated financial statements for 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. This restatement, which we completed in March 2015, is referred 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 of 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, 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 our subsidiary, Blackstone Medical, Inc., 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, we 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 the following: | ||
— | 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 2014, 2013 and 2012 of $3.8 million, $6.7 million and $6.8 million, respectively. 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 sought documents from us and our subsidiaries for the period of January 1, 2000 through the date of the subpoena. We believe 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. We believe that document production in response to the subpoena was completed as of July 2012, and we currently do not expect any liability to result from this matter. | |
— | At the time of its divestiture by us, 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 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 or who would not have purchased the units had they known they could be injured. In September 2014, the Company entered into a master settlement agreement resolving all pending pre-close claims. Pursuant to the terms of the settlement agreement, the Company paid approximately $ 1.3 million, and additional amounts owed under the settlement were paid directly by the Company’s insurance providers. These amounts paid by the Company were recorded as an expense in discontinued operations during the fiscal quarter ended June 30, 2014. Remaining cold therapy claims include a putative consumer class of individuals who did not suffer physical harm following use of the devices, and an appeal of an adverse July 2012 California jury verdict and a post-close cold therapy claim pending in California state court. We have established an accrual of $5.7 million for the July 2012 verdict and post-close cold therapy liabilities, however, actual liability could be higher or lower than the amount accrued. The putative class action is at an early stage and the Company currently cannot reasonably estimate the possible loss, or range of loss. |
Pensions_and_deferred_compensa
Pensions and deferred compensation | 12 Months Ended | |
Dec. 31, 2014 | ||
Compensation And Retirement Disclosure [Abstract] | ||
Pensions and deferred compensation | 16 | 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, 2014, 2013 and 2012, expenses incurred relating to 401(k) Plans, including matching contributions, were approximately $1.7 million, $2.4 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 each of the years ended 2014, 2013 and 2012 were $0.8 million, $0.7 million and $0.7 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. Our relations with our Italian employees, who represent 17.6% of our total employees at December 31, 2014, are governed by the provisions of a National Collective Labor Agreement setting forth mandatory minimum standards for labor relations in the metal mechanic workers industry. We are not a party to any other collective bargaining agreement. | ||
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 both deferred compensation plans described above during 2014, 2013 and 2012 was approximately $0.1 million, $0.3 million and $0.4 million, respectively. Deferred compensation payments of $0.3 million, $0.1 million, and $0.8 million were made in 2014, 2013, and 2012, respectively. The balance in other long-term liabilities as of December 31, 2014 and 2013 was $1.9 and $2.5 million and represents the amount which would be payable if all the employees and agents had terminated employment at that date. | ||
Sharebased_compensation_plans
Share-based compensation plans | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||||||||||||||||||||
Share-based compensation plans | 17 | Share-based compensation plans | |||||||||||||||||||
At December 31, 2014, 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, 2014, there were 648,675 options outstanding under the 2012 LTIP Plan, of which 81,899 were exercisable; in addition, there were 460,976 shares of unvested restricted stock outstanding. | |||||||||||||||||||||
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, 2014, there were 879,161 options outstanding under the 2004 LTIP Plan, of which 854,662 were exercisable; in addition, there were no shares of unvested restricted stock outstanding. | |||||||||||||||||||||
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, 2014, 1,517,313 shares had been issued under the Stock Purchase Plan. | |||||||||||||||||||||
Share-Based Compensation: | |||||||||||||||||||||
As of December 31, 2014, 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 tables show the detail of share-based compensation by line item in the consolidated statements of operations as well as by grant type, for the years ended December 31, 2014, 2013 and 2012 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, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Cost of sales | $ | 137 | $ | 104 | $ | 592 | |||||||||||||||
Sales and marketing | 1,701 | 1,444 | 1,550 | ||||||||||||||||||
General and administrative | 3,578 | 4,483 | 4,023 | ||||||||||||||||||
Research and development | 308 | 236 | 138 | ||||||||||||||||||
Total | $ | 5,724 | $ | 6,267 | $ | 6,303 | |||||||||||||||
(U.S. Dollars in thousands, except assumptions) | Year Ended | Year Ended | Year Ended | ||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Stock options | $ | 1,391 | $ | 2,753 | $ | 3,429 | |||||||||||||||
Restricted stock awards | 3,400 | 1,964 | 1,387 | ||||||||||||||||||
Stock purchase plan | 933 | 1,550 | 1,487 | ||||||||||||||||||
Total | $ | 5,724 | $ | 6,267 | $ | 6,303 | |||||||||||||||
Assumptions: | Year Ended | Year Ended | Year Ended | ||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Expected term | 5.00 years | 5.00 years | 4.50 years | ||||||||||||||||||
Expected volatility | 31.7% – 34.5% | 32.1% – 50.8% | 50.9% – 51.8% | ||||||||||||||||||
Risk free interest rate | 1.52% – 1.70% | 0.58% – 1.52% | 0.76% – 0.84% | ||||||||||||||||||
Dividend rate | — | — | — | ||||||||||||||||||
Weighted average fair value of options granted | $ | 10.45 | $ | 10.83 | $ | 16.99 | |||||||||||||||
during the year | |||||||||||||||||||||
Stock Option Activity: | |||||||||||||||||||||
Summaries of the status of the Company’s stock option plans as of December 31, 2014 and 2013 and changes during the year ended December 31, 2014 are presented below: | |||||||||||||||||||||
Options | Weighted Average | Weighted | |||||||||||||||||||
Exercise Price | Average | ||||||||||||||||||||
Remaining | |||||||||||||||||||||
Contractual | |||||||||||||||||||||
Term | |||||||||||||||||||||
Outstanding at December 31, 2013 | 1,924,179 | $ | 33.12 | ||||||||||||||||||
Granted | 286,750 | $ | 33.2 | ||||||||||||||||||
Exercised | (366,958 | ) | $ | 26.05 | |||||||||||||||||
Forfeited | (316,135 | ) | $ | 32.78 | |||||||||||||||||
Outstanding at December 31, 2014 | 1,527,836 | $ | 34.91 | 4.48 | |||||||||||||||||
Vested and expected to vest at | 1,437,703 | $ | 35.23 | 4.22 | |||||||||||||||||
December 31, 2014 | |||||||||||||||||||||
Options exercisable at December 31, 2014 | 936,561 | $ | 36.64 | 2.72 | |||||||||||||||||
Outstanding and exercisable by price range as of December 31, 2014 | |||||||||||||||||||||
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 | 164,750 | 7 | $ | 21.11 | 47,565 | $ | 20.41 | ||||||||||||||
$22.75 – $27.97 | 141,333 | 5.97 | $ | 24.87 | 81,333 | $ | 24.64 | ||||||||||||||
$27.98 – $31.40 | 151,500 | 5.23 | $ | 29.27 | 119,000 | $ | 29.34 | ||||||||||||||
$31.83 – $36.25 | 238,425 | 8.24 | $ | 34.25 | 44,000 | $ | 31.83 | ||||||||||||||
$37.36 – $37.36 | 53,334 | 5.27 | $ | 37.36 | 41,334 | $ | 37.36 | ||||||||||||||
$38.11 – $38.11 | 142,075 | 1.22 | $ | 38.11 | 142,075 | $ | 38.11 | ||||||||||||||
$38.82 – $39.94 | 299,687 | 3.44 | $ | 39.32 | 137,021 | $ | 39.83 | ||||||||||||||
$40.27 – $41.37 | 157,500 | 1.82 | $ | 41.18 | 145,001 | $ | 41.16 | ||||||||||||||
$43.04 – $44.97 | 160,732 | 1.74 | $ | 44.61 | 160,732 | $ | 44.61 | ||||||||||||||
$45.84 – $50.99 | 18,500 | 1.92 | $ | 48.43 | 18,500 | $ | 48.43 | ||||||||||||||
$10.42 – $50.99 | 1,527,836 | 4.48 | $ | 34.91 | 936,561 | $ | 36.64 | ||||||||||||||
The weighted average remaining contractual life of exercisable options was 2.72 years at December 31, 2014. The total intrinsic value of options exercised was $2.1 million, $0.4 million and $7.2 million for the years ended December 31, 2014, 2013 and 2012, respectively. The aggregate intrinsic value of options outstanding and options exercisable as of December 31, 2014 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 $30.06 closing price of the Company’s stock on December 31, 2014. The aggregate intrinsic value of options outstanding was $2.4 million, $0.5 million and $11.2 million for the years ended December 31, 2014, 2013, and 2012, respectively. The aggregate intrinsic value of options exercisable was $1.0 million, $0.2 million and $9.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||
Restricted Stock: | |||||||||||||||||||||
During the year ended December 31, 2014, the Company granted to employees and non-employee directors 358,450 shares of restricted stock, 99,600 of which are performance based, which vest at various dates through December 2018. 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. 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. The aggregate fair value of restricted stock that vested during the years ended December 31, 2014, 2013 and 2012 was $2.5 million, $2.1 million and $1.2 million, respectively. Unamortized compensation expense related to restricted stock amounted to $11.4 million at December 31, 2014, of which $3.1 million related to performance based restricted stock that are contingent upon meeting certain performance based vesting criteria, and is expected to be recognized over a weighted average period of approximately 2.3 years. The aggregate intrinsic value of restricted stock outstanding was $31.9 million, $6.5 million and $6.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||
A summary of the status of our restricted stock as of December 31, 2014 and 2013 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, 2013 | 286,704 | $ | 28.01 | ||||||||||||||||||
Granted | 358,450 | $ | 33.56 | ||||||||||||||||||
Vested | (84,396 | ) | $ | 29.25 | |||||||||||||||||
Cancelled | (99,782 | ) | $ | (30.39 | ) | ||||||||||||||||
Non-vested as of December 31, 2014 | 460,976 | $ | 31.55 | ||||||||||||||||||
Earnings_per_share
Earnings per share | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Earnings per share | 18 | Earnings per share | |||||||||||
For each of the three years ended December 31, 2014, 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, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Weighted average common shares-basic | 18,459,054 | 18,697,228 | 18,977,263 | ||||||||||
Effect of diluted securities: | |||||||||||||
Unexercised stock options net of treasury share | — | — | 413,150 | ||||||||||
repurchase | |||||||||||||
Weighted average common shares-diluted | 18,459,054 | 18,697,228 | 19,390,413 | ||||||||||
No adjustment has been made in 2014 or 2013 for any common stock equivalents because their effects would be anti-dilutive. For 2013 potentially dilutive shares totaled 101,672. | |||||||||||||
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 1,062,198, 1,186,259 and 789,650 outstanding options not included in the diluted earnings per share computation for the fiscal year ended December 31, 2014, 2013 and 2012, respectively, because the inclusion of these options was anti-dilutive. |
Quarterly_financial_data_unaud
Quarterly financial data (unaudited) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||
Quarterly financial data (unaudited) | 19. Quarterly financial data (unaudited) | ||||||||||||||||||||
Condensed Consolidated Statement of Operations | |||||||||||||||||||||
(U.S. Dollars, in thousands, except per share data) | |||||||||||||||||||||
(U.S. Dollars, in thousands, except share and per share data) | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Year | ||||||||||||||||
2014 | |||||||||||||||||||||
Net sales | $ | 100,014 | $ | 100,985 | $ | 100,994 | $ | 100,284 | $ | 402,277 | |||||||||||
Cost of sales | 26,773 | 25,414 | 25,268 | 21,457 | 98,912 | ||||||||||||||||
Gross profit | 73,241 | 75,571 | 75,726 | 78,827 | 303,365 | ||||||||||||||||
Operating expense | 73,270 | 68,867 | 69,218 | 74,874 | 286,229 | ||||||||||||||||
Operating (loss) income | (29 | ) | 6,704 | 6,508 | 3,953 | 17,136 | |||||||||||||||
Net (loss) income from continuing operations | (1,948 | ) | 3,266 | 28 | (5,090 | ) | (3,744 | ) | |||||||||||||
Net (loss) income | $ | (2,508 | ) | $ | (683 | ) | $ | 452 | $ | (5,798 | ) | $ | (8,537 | ) | |||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net (loss) income from continuing operations | $ | (0.11 | ) | $ | 0.18 | $ | 0 | $ | (0.27 | ) | $ | (0.20 | ) | ||||||||
Net (loss) income | $ | (0.14 | ) | $ | (0.04 | ) | $ | 0.02 | $ | (0.31 | ) | $ | (0.46 | ) | |||||||
Diluted: | |||||||||||||||||||||
Net (loss) income from continuing operations | $ | (0.11 | ) | $ | 0.18 | $ | 0 | $ | (0.27 | ) | $ | (0.20 | ) | ||||||||
Net (loss) income | $ | (0.14 | ) | $ | (0.04 | ) | $ | 0.02 | $ | (0.31 | ) | $ | (0.46 | ) | |||||||
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Year | |||||||||||||||||
2013 | |||||||||||||||||||||
Net sales | $ | 102,279 | $ | 97,640 | $ | 91,806 | $ | 105,886 | $ | 397,611 | |||||||||||
Cost of sales | 25,841 | 21,884 | 25,064 | 34,123 | 106,912 | ||||||||||||||||
Gross profit | 76,438 | 75,756 | 66,742 | 71,763 | 290,699 | ||||||||||||||||
Operating expense | 70,370 | 68,836 | 80,843 | 81,842 | 301,891 | ||||||||||||||||
Operating income | 6,068 | 6,920 | (14,101 | ) | (10,079 | ) | (11,192 | ) | |||||||||||||
Net income from continuing operations | 5,926 | 2,012 | (16,504 | ) | (9,639 | ) | (18,205 | ) | |||||||||||||
Net income | $ | 3,447 | $ | (3,011 | ) | $ | (18,836 | ) | $ | (10,412 | ) | $ | (28,812 | ) | |||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.31 | $ | 0.11 | $ | (0.91 | ) | $ | (0.53 | ) | $ | (0.97 | ) | ||||||||
Net income | $ | 0.18 | $ | (0.16 | ) | $ | (1.04 | ) | $ | (0.58 | ) | $ | (1.54 | ) | |||||||
Diluted: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.3 | $ | 0.1 | $ | (0.91 | ) | $ | (0.53 | ) | $ | (0.97 | ) | ||||||||
Net income | $ | 0.18 | $ | (0.16 | ) | $ | (1.04 | ) | $ | (0.58 | ) | $ | (1.54 | ) | |||||||
Condensed Consolidated Balance Sheets | |||||||||||||||||||||
(U.S. Dollars, in thousands, except share and per share data) | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |||||||||||||||||
2014 | |||||||||||||||||||||
Total assets | $ | 403,973 | $ | 433,997 | $ | 411,045 | $ | 393,185 | |||||||||||||
Total liabilities | 103,410 | 128,786 | 106,029 | 93,558 | |||||||||||||||||
Total shareholders’ equity | 300,563 | 305,211 | 305,016 | 299,627 | |||||||||||||||||
Total liabilities and shareholders’ equity | $ | 403,973 | $ | 433,997 | $ | 411,045 | $ | 393,185 | |||||||||||||
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | ||||||||||||||||||
2013 | |||||||||||||||||||||
Total assets | $ | 464,153 | $ | 446,321 | $ | 415,524 | $ | 411,975 | |||||||||||||
Total liabilities | 103,178 | 114,175 | 108,531 | 116,112 | |||||||||||||||||
Total shareholders’ equity | 360,975 | 332,146 | 306,993 | 295,863 | |||||||||||||||||
Total liabilities and shareholders’ equity | $ | 464,153 | $ | 446,321 | $ | 415,524 | $ | 411,975 | |||||||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended | |
Dec. 31, 2014 | ||
Subsequent Events [Abstract] | ||
Subsequent events | 20 | Subsequent events |
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 thousand 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 $15.0 million and interest will accrue at 8.0%. 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, 2014 | |||||||||||||
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, | |||||||||||
2014 | 2013 | ||||||||||||
Assets | |||||||||||||
Current assets: | |||||||||||||
Cash and cash equivalents | $ | 5,162 | $ | 1,426 | |||||||||
Prepaid expenses and other current assets | 270 | 670 | |||||||||||
Total current assets | 5,432 | 2,096 | |||||||||||
Investments in and amounts due from subsidiaries and affiliates | 306,105 | 308,173 | |||||||||||
Total assets | $ | 311,537 | $ | 310,269 | |||||||||
Liabilities and shareholder’s equity | |||||||||||||
Current liabilities | $ | 3,799 | $ | 6,295 | |||||||||
Long-term liabilities | 8,111 | 8,111 | |||||||||||
Shareholder’s equity: | |||||||||||||
Common stock | 1,861 | 1,810 | |||||||||||
Additional paid in capital | 232,788 | 216,653 | |||||||||||
Accumulated earnings | 65,360 | 73,897 | |||||||||||
Accumulated other comprehensive (loss) income | (382 | ) | 3,503 | ||||||||||
299,627 | 295,863 | ||||||||||||
Total liabilities and shareholder’s equity | $ | 311,537 | $ | 310,269 | |||||||||
See accompanying notes to condensed financial statements. | |||||||||||||
Condensed Statements of Operations (unaudited) | |||||||||||||
(U.S. Dollars in thousands) | Year Ended | Year Ended | Year Ended | ||||||||||
December 31, | December 31, | December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||||
(Expenses) income: | |||||||||||||
General and administrative | $ | (21,073 | ) | $ | (16,641 | ) | $ | (7,700 | ) | ||||
Equity in earnings of investments in subsidiaries and affiliates | 12,540 | (12,494 | ) | 50,331 | |||||||||
Other, net | (4 | ) | 323 | 24 | |||||||||
(Loss) income before income taxes | (8,537 | ) | (28,812 | ) | 42,655 | ||||||||
Income tax expense | — | — | 197 | ||||||||||
Net (loss) income | $ | (8,537 | ) | $ | (28,812 | ) | $ | 42,852 | |||||
See accompanying notes to condensed financial statements. | |||||||||||||
Condensed Statement of Cash Flows (unaudited) | |||||||||||||
(U.S. Dollars in thousands) | Year Ended | Year Ended | Year Ended | ||||||||||
December 31, | December 31, | December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||||
Net (loss) income | $ | (8,537 | ) | $ | (28,812 | ) | $ | 42,852 | |||||
Equity in (loss) earnings of investments in subsidiaries and affiliates | (12,540 | ) | 12,494 | (50,331 | ) | ||||||||
Cash (used in) provided by other operating activities | (5,167 | ) | 468 | (6,811 | ) | ||||||||
Net cash used in operating activities | (26,244 | ) | (15,850 | ) | (14,290 | ) | |||||||
Cash flows from investing activities: | |||||||||||||
Distributions and amounts received from subsidiaries | 20,723 | 53,389 | 12,564 | ||||||||||
Capital expenditures | — | — | — | ||||||||||
Net cash provided by investing activities | 20,723 | 53,389 | 12,564 | ||||||||||
Cash flows from financing activities: | |||||||||||||
Net proceeds from issuance of common stock | 10,462 | 3,450 | 25,586 | ||||||||||
Repurchase of treasury shares | — | (39,494 | ) | — | |||||||||
Contributions to subsidiaries and affiliates | (1,411 | ) | (7,543 | ) | (36,921 | ) | |||||||
Excess tax benefit on exercise of stock options | 206 | 82 | 1,020 | ||||||||||
Net cash provided by (used in) financing activities | 9,257 | (43,505 | ) | (10,315 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents | 3,736 | (5,966 | ) | (12,041 | ) | ||||||||
Cash and cash equivalents at the beginning of the year | 1,426 | 7,392 | 19,433 | ||||||||||
Cash and cash equivalents at the end of the year | $ | 5,162 | $ | 1,426 | $ | 7,392 | |||||||
See accompanying notes to condensed financial statements. | |||||||||||||
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, 2014 and 2013 was approximately $181.8 million and $168.5 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 5, Note 7 and Note 15 of the Company’s consolidated financial statements. | |||||||||||||
4 | Dividends from subsidiaries | ||||||||||||
Orthofix International N.V. did not receive cash dividends in 2014 or 2013. | |||||||||||||
Schedule_2Valuation_and_Qualif
Schedule 2-Valuation and Qualifying Accounts | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Valuation And Qualifying Accounts [Abstract] | |||||||||||||||||||||
Schedule 2-Valuation and Qualifying Accounts | Schedule 2—Valuation and Qualifying Accounts | ||||||||||||||||||||
For the years ended December 31, 2014, 2013 and 2012: | |||||||||||||||||||||
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 | |||||||||||||||||||||
2014 | |||||||||||||||||||||
Allowance for doubtful accounts receivable | $ | 9,111 | $ | 937 | — | $ | (2,763 | ) | $ | 7,285 | |||||||||||
Deferred tax valuation allowance | 31,772 | 5,666 | — | — | 37,438 | ||||||||||||||||
2013 | |||||||||||||||||||||
Allowance for doubtful accounts receivable | $ | 6,673 | $ | 4,590 | — | $ | (2,152 | ) | $ | 9,111 | |||||||||||
Deferred tax valuation allowance | 26,361 | 5,411 | — | — | 31,772 | ||||||||||||||||
2012 | |||||||||||||||||||||
Allowance for doubtful accounts receivable | $ | 6,184 | $ | 2,027 | $ | (13 | ) | $ | (1,525 | ) | $ | 6,673 | |||||||||
Deferred tax valuation allowance | 19,124 | 7,237 | — | — | 26,361 | ||||||||||||||||
Summary_of_significant_account1
Summary of significant accounting policies (Policies) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
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. | |||||||||||||
Use of estimates in preparation of financial statements | (b) | 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 | (c) | 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 $2.4 million loss, $0.5 million loss and $0.4 million loss for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||
Cash and cash equivalents | (d) | 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 | (e) | 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 7 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 | (f) | 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 2014, 2013 and 2012, 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 | (g) | 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. 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 independent sales representatives. Consignment inventory represents immediately saleable finished products located at third party customers, such as distributors and hospitals. | |||||||||||||
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 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. | |||||||||||||
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. | |||||||||||||
Long-lived assets, including intangibles | (h) | 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, 2014 was $62.0 million and ($46.2 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 earnings. 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, 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 finite lives, such as patents and other technology agreements, are tested for impairment whenever events or changes 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 asset for recoverability. For purposes of the recoverability test, the Company groups its long-lived or intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the 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 long-lived and intangible assets as the present value of estimated future cash flows. In determining the estimated future cash flows associated with the 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 | (i) | 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 records 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 structure 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 on July 1, 2013, 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 2014, did not result in any additional impairment charge for either the BioStim or Biologics reporting units, the reporting units with remaining goodwill. This qualitative analysis, which is referred to as step zero, considered all relevant factors specific to the reporting units, including macroeconomic conditions, industry and market considerations, overall financial performance and relevant entity-specific events. | |||||||||||||
Derivative instruments | (j) | 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 in the period the hedged transaction affects earnings. | |||||||||||||
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 (loss) | (k) | Accumulated other comprehensive income (loss) | |||||||||||
Accumulated other comprehensive income (loss) 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 9) and the unrealized gain (loss) on warrants. The components of and changes in accumulated other comprehensive income (loss) are as follows: | |||||||||||||
(U.S. Dollars in thousands) | Foreign Currency | Change in | Accumulated Other | ||||||||||
Translation | Fair Value | Comprehensive (Loss) Income | |||||||||||
Adjustments | |||||||||||||
Balance at December 31, 2012 (Restated) | 5,359 | 131 | 5,490 | ||||||||||
Unrealized loss on derivative instruments, net of tax | — | (279 | ) | (279 | ) | ||||||||
benefit of $164 | |||||||||||||
Foreign currency translation adjustment (1) | (1,708 | ) | — | (1,708 | ) | ||||||||
Balance at December 31, 2013 (Restated) | $ | 3,651 | $ | (148 | ) | $ | 3,503 | ||||||
Unrealized gain on cross-currency swaps, net of tax | — | 248 | 248 | ||||||||||
expense of $59 | |||||||||||||
Foreign currency translation adjustment (1) | (4,133 | ) | — | (4,133 | ) | ||||||||
Balance at December 31, 2014 | $ | (482 | ) | $ | 100 | $ | (382 | ) | |||||
-1 | As the cash generally remains indefinitely reinvested 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 | (l) | Revenue recognition and accounts receivable | |||||||||||
Commercial revenue is related to the sale of our 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 also 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 preauthorized 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 all distributor revenue, which is primarily related to implant products, we recognize revenue on the sell-through basis, effective April 1, 2013. Prior to this date, we recognized revenue either on a sell-in or sell-through basis, depending on the specific circumstances of the distributor. In some cases we recognized distributor revenue as title and risk of loss passes at either shipment from our facilities or receipt at the distributor’s facility, assuming all other revenue recognition criteria had been achieved (the “sell-in method”). 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 us 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 we do not have reliable information about when our distributors sell the product through to end customers, we use cash collection from distributors as a basis for revenue recognition under the sell-through method. Although in many cases we are legally entitled to the accounts receivable at the time of shipment, we have not recognized accounts receivables or any corresponding deferred revenues associated with distributor transactions for which revenue is recognized on the sell-through method. | |||||||||||||
For distributors on the sell-in method prior to April 1, 2013, cost of sales were recognized upon shipment. For sell-through distributors, whose revenue is recognized upon cash receipt, we consider whether to match the related cost of sales expense with revenue or to recognize expense upon shipment. In making this assessment, we consider the financial viability of our 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, we defer 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. MTF is considered the primary obligor in these arrangements and therefore the Company recognizes these marketing service fees on a net basis within net sales upon shipment of the product to the customer. These marketing fees were $50.4 million, $47.7 million and $46.5 million in 2014, 2013 and 2012, 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. | |||||||||||||
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. Revisions to contractual allowances are recorded as an adjustment to net sales. Our estimates are periodically tested against actual collection experience. | |||||||||||||
Sale of accounts receivable | (m) | Sale of accounts receivable | |||||||||||
The Company will generally sell receivables from certain Italian hospitals each year. The estimated related fee for 2014, 2013 and 2012 was $0.4 million, $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 | (n) | Share-based compensation | |||||||||||
The fair value of service-based stock options is 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 is 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. | |||||||||||||
On June 30, 2014, the Company granted performance based restricted share awards to executive employees, which vesting is based on achieving earnings targets in two consecutive rolling four quarter periods. The fair value of performance-based restricted stock awards are recognized, net of estimated forfeitures, over the derived requisite vesting period beginning in the period in which they are deemed probable to vest. | |||||||||||||
Shipping and handling costs | (o) | Shipping and handling costs | |||||||||||
Shipping and handling costs for products shipped to customers are included in cost of sales, and were $2.3 million, $2.8 million and $2.9 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||
Advertising costs | (p) | Advertising costs | |||||||||||
The Company expenses all advertising costs as incurred. Advertising expenses are included in sales and marketing expense, and were insignificant for the years ended December 31, 2014, 2013 and 2012. | |||||||||||||
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. Payments made to MTF in 2014, 2013 and 2012 totaled $0.3 million, $2.5 million and $3.0 million, respectively. 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 considers its recent operating results, availability of taxable income in carryback years, future reversals of taxable temporary differences, future taxable income projections (exclusive of reversing temporary differences) and all prudent and feasible tax planning strategies. | |||||||||||||
The Company accounts for uncertain tax positions in accordance with ASC Topic 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 its 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 18). 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 based in Europe were approximately $59 million in 2014, which results in a substantial portion of our trade accounts receivable balance as of December 31, 2014. 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 May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 supersedes the revenue recognition requirements in Revenue Recognition (Topic 605), and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for the Company in the fiscal year beginning on January 1, 2017, including interim periods within that reporting period and is to be applied retrospectively, with early application not permitted. On April 1, 2015, the FASB proposed deferring the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. The FASB also proposed permitting early adoption of the standard, but not before the original effective date of December 15, 2016. The Company is currently evaluating the effect that adopting this new accounting guidance will have on consolidated results of operations, cash flows and financial position. | |||||||||||||
In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Components of an Entity. The ASU amends the definition of a discontinued operation and also provides new disclosure requirements for disposals meeting the definition, and for those that do not meet the definition, of a discontinued operation. Under the new guidance, a discontinued operation may include a component or a group of components of an entity, or a business or nonprofit activity that has been disposed of or is classified as held for sale, and represents a strategic shift that has or will have a major effect on an entity's operations and financial results. The ASU also expands the scope to include the disposals of equity method investments and acquired businesses held for sale. The guidance will be effective prospectively for interim and annual periods beginning on or after December 15, 2014, with early adoption permitted. The adoption of the guidance by the Company is not expected to have a material impact on its consolidated financial statements. |
Summary_of_significant_account2
Summary of significant accounting policies (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
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 (Loss) | The components of and changes in accumulated other comprehensive income (loss) are as follows: | ||||||||||||
(U.S. Dollars in thousands) | Foreign Currency | Change in | Accumulated Other | ||||||||||
Translation | Fair Value | Comprehensive (Loss) Income | |||||||||||
Adjustments | |||||||||||||
Balance at December 31, 2012 (Restated) | 5,359 | 131 | 5,490 | ||||||||||
Unrealized loss on derivative instruments, net of tax | — | (279 | ) | (279 | ) | ||||||||
benefit of $164 | |||||||||||||
Foreign currency translation adjustment (1) | (1,708 | ) | — | (1,708 | ) | ||||||||
Balance at December 31, 2013 (Restated) | $ | 3,651 | $ | (148 | ) | $ | 3,503 | ||||||
Unrealized gain on cross-currency swaps, net of tax | — | 248 | 248 | ||||||||||
expense of $59 | |||||||||||||
Foreign currency translation adjustment (1) | (4,133 | ) | — | (4,133 | ) | ||||||||
Balance at December 31, 2014 | $ | (482 | ) | $ | 100 | $ | (382 | ) | |||||
-1 | As the cash generally remains indefinitely reinvested in the non U.S. dollar denominated foreign subsidiaries, no deferred taxes are recognized on the related foreign currency translation adjustment. |
Inventories_Tables
Inventories (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Schedule of Inventories | December 31, | ||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | |||||||
Raw materials | $ | 3,879 | $ | 6,515 | |||||
Work-in-process | 4,830 | 6,606 | |||||||
Finished products | 24,953 | 28,291 | |||||||
Field inventory | 18,003 | 21,312 | |||||||
Consignment inventory | 2,656 | 2,388 | |||||||
Deferred cost of sales | 5,525 | 7,566 | |||||||
$ | 59,846 | $ | 72,678 | ||||||
Property_plant_and_equipment_T
Property, plant and equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property Plant And Equipment [Abstract] | |||||||||
Schedule of Property Plant and Equipment | |||||||||
December 31, | |||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | |||||||
Cost | |||||||||
Buildings | $ | 3,683 | $ | 4,075 | |||||
Plant, equipment and instrumentation | 140,110 | 133,427 | |||||||
Furniture and fixtures | 5,779 | 5,872 | |||||||
149,572 | 143,374 | ||||||||
Accumulated depreciation | (101,023 | ) | (89,002 | ) | |||||
$ | 48,549 | $ | 54,372 | ||||||
Patents_and_other_intangible_a1
Patents and other intangible assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||
Schedule of Patents and Other Intangible Assets | |||||||||
December 31, | |||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | |||||||
Cost | |||||||||
Patents | $ | 35,420 | $ | 34,820 | |||||
Trademarks—finite lived | 596 | 620 | |||||||
License and other | 7,248 | 7,748 | |||||||
43,264 | 43,188 | ||||||||
Accumulated amortization | |||||||||
Patents | (33,319 | ) | (31,739 | ) | |||||
Trademarks—finite lived | (469 | ) | (454 | ) | |||||
License and other | (2,324 | ) | (1,949 | ) | |||||
(36,112 | ) | (34,142 | ) | ||||||
Patents and other intangible assets, net | $ | 7,152 | $ | 9,046 | |||||
Goodwill_Tables
Goodwill (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
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 reporting structure. (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, 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 and 2014 | $ | — | $ | — | $ | 42,678 | $ | 10,887 | $ | — | $ | — | $ | 53,565 | |||||||||||||||
Other_current_liabilities_Tabl
Other current liabilities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables And Accruals [Abstract] | |||||||||
Summary of Other Current Liabilities | |||||||||
December 31, | |||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | |||||||
Accrued expenses | $ | 23,298 | $ | 18,903 | |||||
Salaries, bonuses, commissions and related taxes payable | 16,879 | 16,598 | |||||||
Accrued legal expenses | 9,548 | 10,292 | |||||||
Other payables | 3,495 | 3,883 | |||||||
$ | 53,220 | $ | 49,676 | ||||||
Derivative_instruments_Tables
Derivative instruments (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
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, 2014 | |||||||||||||
Cross-currency swap | $ | 2,504 | Other long-term assets | ||||||||||
Warrants | $ | 321 | Other long-term assets | ||||||||||
As of December 31, 2013 | |||||||||||||
Cross-currency swap | $ | (1,036 | ) | Other long-term liabilities | |||||||||
Warrants | $ | 107 | Other long-term assets | ||||||||||
Schedule of Gain (Loss) Recognized on Derivative Instruments | |||||||||||||
For the year ended | |||||||||||||
December 31, | |||||||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||
Cross-currency swap gain (loss) recorded in other | $ | 251 | $ | (278 | ) | $ | 263 | ||||||
comprehensive income (loss), net of taxes | |||||||||||||
Warrants unrealized gain (loss) recorded in other | $ | (3 | ) | $ | (1 | ) | $ | — | |||||
comprehensive income (loss), net of taxes | |||||||||||||
Fair_value_measurements_Tables
Fair value measurements (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
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, | |||||||||||||||||
2014 | |||||||||||||||||
Assets | |||||||||||||||||
Collective trust funds | $ | 1,696 | $ | — | $ | 1,696 | $ | — | |||||||||
Treasury securities | 586 | 586 | — | — | |||||||||||||
Certificates of deposit | 1,510 | 1,510 | — | — | |||||||||||||
Derivative securities | 2,825 | — | 2,825 | — | |||||||||||||
Total | $ | 6,617 | $ | 2,096 | $ | 4,521 | $ | — | |||||||||
Liabilities | |||||||||||||||||
Deferred compensation plan | $ | (1,886 | ) | $ | — | $ | (1,886 | ) | $ | — | |||||||
Total | $ | (1,886 | ) | $ | — | $ | (1,886 | ) | $ | — | |||||||
(U.S. Dollars in thousands) | Balance | Level 1 | Level 2 | Level 3 | |||||||||||||
December 31, | |||||||||||||||||
2013 | |||||||||||||||||
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 | ) | $ | — | |||||||
Commitments_Tables
Commitments (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
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, 2014 are as follows: | ||||
(U.S. Dollars in thousands) | |||||
2015 | $ | 3,885 | |||
2016 | 3,558 | ||||
2017 | 2,866 | ||||
2018 | 2,671 | ||||
2019 | 2,444 | ||||
Thereafter | 2,741 | ||||
Total | $ | 18,165 | |||
Business_segment_information_T
Business segment information (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||
Schedule of Net Sales by SBU Reporting Segment | The table below presents net sales for continuing operations by SBU reporting segment. Net sales include product sales and marketing service fees. | ||||||||||||||||||||||||
Net Sales by SBU | |||||||||||||||||||||||||
Year ended December 31, | |||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Net Sales | Percent of | Net Sales | Percent of | Net Sales | Percent of | ||||||||||||||||||||
Total Net | Total Net | Total Net | |||||||||||||||||||||||
Sales | Sales | Sales | |||||||||||||||||||||||
BioStim | $ | 154,676 | 38 | % | $ | 145,085 | 36 | % | $ | 174,562 | 40 | % | |||||||||||||
Biologics | 55,881 | 14 | % | 53,746 | 14 | % | 53,731 | 12 | % | ||||||||||||||||
Extremity Fixation | 109,678 | 27 | % | 103,359 | 26 | % | 112,011 | 25 | % | ||||||||||||||||
Spine Fixation | 82,042 | 21 | % | 95,421 | 24 | % | 99,885 | 23 | % | ||||||||||||||||
Total Net Sales | $ | 402,277 | 100 | % | $ | 397,611 | 100 | % | $ | 440,189 | 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) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Net Margin | |||||||||||||||||||||||||
BioStim | $ | 66,096 | $ | 63,847 | $ | 88,788 | |||||||||||||||||||
Biologics | 26,629 | 24,794 | 23,589 | ||||||||||||||||||||||
Extremity Fixation | 31,586 | 23,704 | 34,554 | ||||||||||||||||||||||
Spine Fixation | 14,243 | 4,329 | 15,256 | ||||||||||||||||||||||
Corporate | (1,736 | ) | (1,443 | ) | (1,495 | ) | |||||||||||||||||||
Total net margin | $ | 136,818 | $ | 115,231 | $ | 160,692 | |||||||||||||||||||
General & administrative | 76,790 | 64,830 | 53,650 | ||||||||||||||||||||||
Research and development | 24,994 | 26,768 | 28,577 | ||||||||||||||||||||||
Amortization of intangible assets | 2,284 | 2,687 | 2,298 | ||||||||||||||||||||||
Costs related to the accounting review and restatement | 15,614 | 12,945 | — | ||||||||||||||||||||||
Impairment of goodwill | — | 19,193 | — | ||||||||||||||||||||||
Charges related to U.S. Government resolutions | — | — | 1,295 | ||||||||||||||||||||||
Operating income (loss) | $ | 17,136 | $ | (11,192 | ) | $ | 74,872 | ||||||||||||||||||
Schedule of Depreciation and Amortization by GBU Reporting Segment | 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) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
BioStim | $ | 1,623 | $ | 1,979 | $ | 1,659 | |||||||||||||||||||
Biologics | 1,161 | 648 | 567 | ||||||||||||||||||||||
Extremity Fixation | 8,442 | 7,265 | 5,201 | ||||||||||||||||||||||
Spine Fixation | 11,711 | 12,834 | 10,800 | ||||||||||||||||||||||
Corporate | (59 | ) | 96 | 70 | |||||||||||||||||||||
Total | $ | 22,878 | $ | 22,822 | $ | 18,297 | |||||||||||||||||||
Summary of Net Sales by Geographic Destination | The following data includes net sales by geographic destination: | ||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
U.S. | $ | 294,682 | $ | 293,032 | $ | 327,228 | |||||||||||||||||||
Italy | 19,573 | 16,755 | 18,742 | ||||||||||||||||||||||
U.K. | 11,402 | 10,002 | 8,431 | ||||||||||||||||||||||
Brazil | 19,633 | 26,786 | 31,166 | ||||||||||||||||||||||
Others | 56,987 | 51,036 | 54,622 | ||||||||||||||||||||||
Total net sales | $ | 402,277 | $ | 397,611 | $ | 440,189 | |||||||||||||||||||
Summary of Property, Plant and Equipment of Reporting Segments by Geographic Area | The following data includes property, plant and equipment by geographic area: | ||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | |||||||||||||||||||||||
U.S. | $ | 37,029 | $ | 39,287 | |||||||||||||||||||||
Italy | 6,865 | 8,150 | |||||||||||||||||||||||
U.K. | 1,368 | 1,871 | |||||||||||||||||||||||
Brazil | 1,308 | 3,210 | |||||||||||||||||||||||
Others | 1,979 | 1,854 | |||||||||||||||||||||||
Total | $ | 48,549 | $ | 54,372 | |||||||||||||||||||||
Income_taxes_Tables
Income taxes (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
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, | |||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
U.S. | $ | 17,532 | $ | (3,546 | ) | $ | 56,210 | ||||||||||||||||||
Non-U.S. | (5,076 | ) | (7,057 | ) | 12,855 | ||||||||||||||||||||
Total income (loss) before taxes | $ | 12,456 | $ | (10,603 | ) | $ | 69,065 | ||||||||||||||||||
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, | |||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
U.S. | |||||||||||||||||||||||||
Current | $ | 5,067 | $ | 2,465 | $ | 16,982 | |||||||||||||||||||
Deferred | 2,825 | 4,013 | 2,675 | ||||||||||||||||||||||
Total U.S | 7,892 | 6,478 | 19,657 | ||||||||||||||||||||||
Non-U.S. | |||||||||||||||||||||||||
Current | 18,186 | 2,308 | 3,191 | ||||||||||||||||||||||
Deferred | (9,878 | ) | (1,184 | ) | 1,096 | ||||||||||||||||||||
8,308 | 1,124 | 4,287 | |||||||||||||||||||||||
Total tax expense | $ | 16,200 | $ | 7,602 | $ | 23,944 | |||||||||||||||||||
Schedule of Tax Effects of Significant Temporary Differences Comprising Deferred Tax Assets and Liabilities | Deferred income taxes are provided primarily for net operating loss carryforwards and for temporary differences resulting from items that are recognized in different years for financial statement and income tax reporting purposes. The deferred tax assets and liabilities are as follows: | ||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | |||||||||||||||||||||||
Intangible assets and goodwill | $ | 4,067 | $ | 4,798 | |||||||||||||||||||||
Inventories and related reserves | 19,525 | 20,769 | |||||||||||||||||||||||
Deferred revenue and cost of goods sold | 10,826 | 11,577 | |||||||||||||||||||||||
Other accruals and reserves | 5,371 | 4,778 | |||||||||||||||||||||||
Accrued compensation | 5,004 | 3,942 | |||||||||||||||||||||||
Allowance for doubtful accounts | 2,094 | 2,040 | |||||||||||||||||||||||
Accrued interest | 17,555 | 18,063 | |||||||||||||||||||||||
Net operating loss carryforwards | 34,514 | 34,979 | |||||||||||||||||||||||
Other, net | 1,202 | 893 | |||||||||||||||||||||||
100,158 | 101,839 | ||||||||||||||||||||||||
Valuation allowance | (37,438 | ) | (31,772 | ) | |||||||||||||||||||||
Deferred tax asset | $ | 62,720 | $ | 70,067 | |||||||||||||||||||||
Withholding taxes | (229 | ) | (13,026 | ) | |||||||||||||||||||||
Property, plant and equipment | (6,766 | ) | (7,674 | ) | |||||||||||||||||||||
Deferred tax liability | (6,995 | ) | (20,700 | ) | |||||||||||||||||||||
Net deferred tax assets | $ | 55,725 | $ | 49,367 | |||||||||||||||||||||
Reported as: | |||||||||||||||||||||||||
Current deferred tax assets | 37,413 | 39,999 | |||||||||||||||||||||||
Non-current deferred tax assets | 18,541 | 22,394 | |||||||||||||||||||||||
Current deferred tax liability | — | — | |||||||||||||||||||||||
Non-current deferred tax liability | (229 | ) | (13,026 | ) | |||||||||||||||||||||
Net deferred tax assets | $ | 55,725 | $ | 49,367 | |||||||||||||||||||||
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. | ||||||||||||||||||||||||
(U.S. Dollars in thousands, except percentages) | 2014 | 2013 | 2012 | ||||||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||
Statutory U.S. federal income tax rate | $ | 4,360 | 35 | % | $ | (3,711 | ) | 35 | % | $ | 24,179 | 35 | % | ||||||||||||
State taxes, net of federal benefit | 1,439 | 11.6 | 2,039 | (19.2 | ) | 2,536 | 3.7 | ||||||||||||||||||
Foreign rate differential, including withholding taxes | 2,738 | 21.9 | 1,162 | (11.0 | ) | (10 | ) | (0.0 | ) | ||||||||||||||||
Valuation allowance | 8,672 | 69.6 | 3,913 | (36.9 | ) | 6,189 | 9 | ||||||||||||||||||
Italian subsidiary intangible asset | (2,546 | ) | (20.4 | ) | (2,288 | ) | 21.6 | (2,214 | ) | (3.2 | ) | ||||||||||||||
Goodwill impairment | — | — | 6,452 | (60.9 | ) | — | — | ||||||||||||||||||
Domestic manufacturing deduction | (377 | ) | (3.0 | ) | (233 | ) | 2.2 | (1,567 | ) | (2.3 | ) | ||||||||||||||
Settlement of U.S. Government resolutions | — | — | — | — | (1,260 | ) | (1.8 | ) | |||||||||||||||||
Italian audit settlement | 1,048 | 8.4 | — | — | — | — | |||||||||||||||||||
Other, net | 866 | 7 | 268 | (2.5 | ) | (3,909 | ) | (5.7 | ) | ||||||||||||||||
Income tax expense/effective rate | $ | 16,200 | 130.1 | % | $ | 7,602 | (71.7 | )% | $ | 23,944 | 34.7 | % | |||||||||||||
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, 2014 and December 31, 2013 follows: | ||||||||||||||||||||||||
(U.S. Dollars in thousands) | 2014 | 2013 | |||||||||||||||||||||||
Balance as of January 1, | $ | 723 | $ | 1,189 | |||||||||||||||||||||
Additions for current year tax positions | 14,794 | 183 | |||||||||||||||||||||||
Increases (decreases) for prior year tax positions | 145 | (12 | ) | ||||||||||||||||||||||
Settlements of prior year tax positions | — | (560 | ) | ||||||||||||||||||||||
Expiration of statutes | (65 | ) | (77 | ) | |||||||||||||||||||||
Balance as of December 31, | $ | 15,597 | $ | 723 | |||||||||||||||||||||
Sale_of_Breg_and_Disposition_o1
Sale of Breg and Disposition of Sports Medicine Business (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
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, 2014 | |||||||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||||||||||||||||||||
Schedule of Share-Based Compensation by Line Item in Consolidated Statements of Operations | The following tables show the detail of share-based compensation by line item in the consolidated statements of operations as well as by grant type, for the years ended December 31, 2014, 2013 and 2012 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, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Cost of sales | $ | 137 | $ | 104 | $ | 592 | |||||||||||||||
Sales and marketing | 1,701 | 1,444 | 1,550 | ||||||||||||||||||
General and administrative | 3,578 | 4,483 | 4,023 | ||||||||||||||||||
Research and development | 308 | 236 | 138 | ||||||||||||||||||
Total | $ | 5,724 | $ | 6,267 | $ | 6,303 | |||||||||||||||
Schedule of Share-based Payment Award, Valuation Assumptions | |||||||||||||||||||||
Assumptions: | Year Ended | Year Ended | Year Ended | ||||||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Expected term | 5.00 years | 5.00 years | 4.50 years | ||||||||||||||||||
Expected volatility | 31.7% – 34.5% | 32.1% – 50.8% | 50.9% – 51.8% | ||||||||||||||||||
Risk free interest rate | 1.52% – 1.70% | 0.58% – 1.52% | 0.76% – 0.84% | ||||||||||||||||||
Dividend rate | — | — | — | ||||||||||||||||||
Weighted average fair value of options granted | $ | 10.45 | $ | 10.83 | $ | 16.99 | |||||||||||||||
during the year | |||||||||||||||||||||
Schedule of Stock Option Activity | Summaries of the status of the Company’s stock option plans as of December 31, 2014 and 2013 and changes during the year ended December 31, 2014 are presented below: | ||||||||||||||||||||
Options | Weighted Average | Weighted | |||||||||||||||||||
Exercise Price | Average | ||||||||||||||||||||
Remaining | |||||||||||||||||||||
Contractual | |||||||||||||||||||||
Term | |||||||||||||||||||||
Outstanding at December 31, 2013 | 1,924,179 | $ | 33.12 | ||||||||||||||||||
Granted | 286,750 | $ | 33.2 | ||||||||||||||||||
Exercised | (366,958 | ) | $ | 26.05 | |||||||||||||||||
Forfeited | (316,135 | ) | $ | 32.78 | |||||||||||||||||
Outstanding at December 31, 2014 | 1,527,836 | $ | 34.91 | 4.48 | |||||||||||||||||
Vested and expected to vest at | 1,437,703 | $ | 35.23 | 4.22 | |||||||||||||||||
December 31, 2014 | |||||||||||||||||||||
Options exercisable at December 31, 2014 | 936,561 | $ | 36.64 | 2.72 | |||||||||||||||||
Schedule of Stock Options Outstanding and Exercisable by Price Range | Outstanding and exercisable by price range as of December 31, 2014 | ||||||||||||||||||||
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 | 164,750 | 7 | $ | 21.11 | 47,565 | $ | 20.41 | ||||||||||||||
$22.75 – $27.97 | 141,333 | 5.97 | $ | 24.87 | 81,333 | $ | 24.64 | ||||||||||||||
$27.98 – $31.40 | 151,500 | 5.23 | $ | 29.27 | 119,000 | $ | 29.34 | ||||||||||||||
$31.83 – $36.25 | 238,425 | 8.24 | $ | 34.25 | 44,000 | $ | 31.83 | ||||||||||||||
$37.36 – $37.36 | 53,334 | 5.27 | $ | 37.36 | 41,334 | $ | 37.36 | ||||||||||||||
$38.11 – $38.11 | 142,075 | 1.22 | $ | 38.11 | 142,075 | $ | 38.11 | ||||||||||||||
$38.82 – $39.94 | 299,687 | 3.44 | $ | 39.32 | 137,021 | $ | 39.83 | ||||||||||||||
$40.27 – $41.37 | 157,500 | 1.82 | $ | 41.18 | 145,001 | $ | 41.16 | ||||||||||||||
$43.04 – $44.97 | 160,732 | 1.74 | $ | 44.61 | 160,732 | $ | 44.61 | ||||||||||||||
$45.84 – $50.99 | 18,500 | 1.92 | $ | 48.43 | 18,500 | $ | 48.43 | ||||||||||||||
$10.42 – $50.99 | 1,527,836 | 4.48 | $ | 34.91 | 936,561 | $ | 36.64 | ||||||||||||||
Schedule of Changes in Restricted Stock | A summary of the status of our restricted stock as of December 31, 2014 and 2013 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, 2013 | 286,704 | $ | 28.01 | ||||||||||||||||||
Granted | 358,450 | $ | 33.56 | ||||||||||||||||||
Vested | (84,396 | ) | $ | 29.25 | |||||||||||||||||
Cancelled | (99,782 | ) | $ | (30.39 | ) | ||||||||||||||||
Non-vested as of December 31, 2014 | 460,976 | $ | 31.55 | ||||||||||||||||||
Earnings_per_share_Tables
Earnings per share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
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, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Weighted average common shares-basic | 18,459,054 | 18,697,228 | 18,977,263 | ||||||||||
Effect of diluted securities: | |||||||||||||
Unexercised stock options net of treasury share | — | — | 413,150 | ||||||||||
repurchase | |||||||||||||
Weighted average common shares-diluted | 18,459,054 | 18,697,228 | 19,390,413 | ||||||||||
Quarterly_financial_data_unaud1
Quarterly financial data (unaudited) (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||
Condensed Consolidated Statement of Operations | Condensed Consolidated Statement of Operations | ||||||||||||||||||||
(U.S. Dollars, in thousands, except per share data) | |||||||||||||||||||||
(U.S. Dollars, in thousands, except share and per share data) | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Year | ||||||||||||||||
2014 | |||||||||||||||||||||
Net sales | $ | 100,014 | $ | 100,985 | $ | 100,994 | $ | 100,284 | $ | 402,277 | |||||||||||
Cost of sales | 26,773 | 25,414 | 25,268 | 21,457 | 98,912 | ||||||||||||||||
Gross profit | 73,241 | 75,571 | 75,726 | 78,827 | 303,365 | ||||||||||||||||
Operating expense | 73,270 | 68,867 | 69,218 | 74,874 | 286,229 | ||||||||||||||||
Operating (loss) income | (29 | ) | 6,704 | 6,508 | 3,953 | 17,136 | |||||||||||||||
Net (loss) income from continuing operations | (1,948 | ) | 3,266 | 28 | (5,090 | ) | (3,744 | ) | |||||||||||||
Net (loss) income | $ | (2,508 | ) | $ | (683 | ) | $ | 452 | $ | (5,798 | ) | $ | (8,537 | ) | |||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net (loss) income from continuing operations | $ | (0.11 | ) | $ | 0.18 | $ | 0 | $ | (0.27 | ) | $ | (0.20 | ) | ||||||||
Net (loss) income | $ | (0.14 | ) | $ | (0.04 | ) | $ | 0.02 | $ | (0.31 | ) | $ | (0.46 | ) | |||||||
Diluted: | |||||||||||||||||||||
Net (loss) income from continuing operations | $ | (0.11 | ) | $ | 0.18 | $ | 0 | $ | (0.27 | ) | $ | (0.20 | ) | ||||||||
Net (loss) income | $ | (0.14 | ) | $ | (0.04 | ) | $ | 0.02 | $ | (0.31 | ) | $ | (0.46 | ) | |||||||
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Year | |||||||||||||||||
2013 | |||||||||||||||||||||
Net sales | $ | 102,279 | $ | 97,640 | $ | 91,806 | $ | 105,886 | $ | 397,611 | |||||||||||
Cost of sales | 25,841 | 21,884 | 25,064 | 34,123 | 106,912 | ||||||||||||||||
Gross profit | 76,438 | 75,756 | 66,742 | 71,763 | 290,699 | ||||||||||||||||
Operating expense | 70,370 | 68,836 | 80,843 | 81,842 | 301,891 | ||||||||||||||||
Operating income | 6,068 | 6,920 | (14,101 | ) | (10,079 | ) | (11,192 | ) | |||||||||||||
Net income from continuing operations | 5,926 | 2,012 | (16,504 | ) | (9,639 | ) | (18,205 | ) | |||||||||||||
Net income | $ | 3,447 | $ | (3,011 | ) | $ | (18,836 | ) | $ | (10,412 | ) | $ | (28,812 | ) | |||||||
Net income (loss) per common share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.31 | $ | 0.11 | $ | (0.91 | ) | $ | (0.53 | ) | $ | (0.97 | ) | ||||||||
Net income | $ | 0.18 | $ | (0.16 | ) | $ | (1.04 | ) | $ | (0.58 | ) | $ | (1.54 | ) | |||||||
Diluted: | |||||||||||||||||||||
Net income from continuing operations | $ | 0.3 | $ | 0.1 | $ | (0.91 | ) | $ | (0.53 | ) | $ | (0.97 | ) | ||||||||
Net income | $ | 0.18 | $ | (0.16 | ) | $ | (1.04 | ) | $ | (0.58 | ) | $ | (1.54 | ) | |||||||
Condensed Consolidated Balance Sheets | Condensed Consolidated Balance Sheets | ||||||||||||||||||||
(U.S. Dollars, in thousands, except share and per share data) | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |||||||||||||||||
2014 | |||||||||||||||||||||
Total assets | $ | 403,973 | $ | 433,997 | $ | 411,045 | $ | 393,185 | |||||||||||||
Total liabilities | 103,410 | 128,786 | 106,029 | 93,558 | |||||||||||||||||
Total shareholders’ equity | 300,563 | 305,211 | 305,016 | 299,627 | |||||||||||||||||
Total liabilities and shareholders’ equity | $ | 403,973 | $ | 433,997 | $ | 411,045 | $ | 393,185 | |||||||||||||
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | ||||||||||||||||||
2013 | |||||||||||||||||||||
Total assets | $ | 464,153 | $ | 446,321 | $ | 415,524 | $ | 411,975 | |||||||||||||
Total liabilities | 103,178 | 114,175 | 108,531 | 116,112 | |||||||||||||||||
Total shareholders’ equity | 360,975 | 332,146 | 306,993 | 295,863 | |||||||||||||||||
Total liabilities and shareholders’ equity | $ | 464,153 | $ | 446,321 | $ | 415,524 | $ | 411,975 | |||||||||||||
Recovered_Sheet1
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2009 | |
Segment | |||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Transactional foreign currency gains and (losses), including those generated from intercompany operations | ($2,400,000) | ($500,000) | ($400,000) | ||||||||||
Property plant and equipment, gross | 149,572,000 | 143,374,000 | 143,374,000 | 149,572,000 | 143,374,000 | ||||||||
Number of reporting units | 4 | ||||||||||||
Number of reporting units | 2 | ||||||||||||
Impairment of goodwill | 19,193,000 | 19,193,000 | |||||||||||
Estimated related fee | 400,000 | 800,000 | 600,000 | ||||||||||
Shipping and handling costs | 2,300,000 | 2,800,000 | 2,900,000 | ||||||||||
Net sales | 100,284,000 | 100,994,000 | 100,985,000 | 100,014,000 | 105,886,000 | 91,806,000 | 97,640,000 | 102,279,000 | 402,277,000 | 397,611,000 | 440,189,000 | ||
Customers and Distributors Based in Europe [Member] | |||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Net sales | 59,000,000 | ||||||||||||
Musculoskeletal Transplant Foundation ("MTF") [Member] | |||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Expenditures for other research and development | 300,000 | 2,500,000 | 3,000,000 | ||||||||||
Collaborative Arrangement [Member] | Musculoskeletal Transplant Foundation ("MTF") [Member] | |||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Period of agreement with MTF | 10 years | ||||||||||||
Extended Period of existing agreement with MTF | 15 years | ||||||||||||
Marketing fee | 50,400,000 | 47,700,000 | 46,500,000 | ||||||||||
Spine Fixation and our Extremity Fixation reportable units [Member] | |||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Impairment of goodwill | 19,200,000 | ||||||||||||
Developed Technology [Member] | |||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Weighted average amortization period ( in years) | 11 years | ||||||||||||
Instrumentation [Member] | |||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Property plant and equipment, gross | 62,000,000 | 62,000,000 | |||||||||||
Property plant and equipment, accumulated depreciation | $46,200,000 | $46,200,000 |
Recovered_Sheet2
Summary of Significant Accounting Policies - Schedule of Useful Lives (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
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 - Schedule of Components of Changes in Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | $3,503 | ||
Unrealized gain (loss) on derivative instrument net of tax expense/benefit | 248 | -279 | 263 |
Foreign currency translation adjustment | -4,133 | -1,708 | 1,131 |
Ending Balance | -382 | 3,503 | |
Foreign Currency Translation Adjustments [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | 3,651 | 5,359 | |
Foreign currency translation adjustment | -4,133 | -1,708 | |
Ending Balance | -482 | 3,651 | |
Change in Fair Value [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | -148 | 131 | |
Unrealized gain (loss) on derivative instrument net of tax expense/benefit | 248 | -279 | |
Ending Balance | 100 | -148 | |
Accumulated Other Comprehensive (Loss) Income [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | 3,503 | 5,490 | |
Unrealized gain (loss) on derivative instrument net of tax expense/benefit | 248 | -279 | 263 |
Foreign currency translation adjustment | -4,133 | -1,708 | 1,131 |
Ending Balance | ($382) | $3,503 | $5,490 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Schedule of Components of Changes in Accumulated Other Comprehensive Income (Loss) (Parenthetical) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Unrealized gain (loss) on derivative instrument, tax expense (benefit) | $59 | ($164) | $153 |
Change in Fair Value [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Unrealized gain (loss) on derivative instrument, tax expense (benefit) | 59 | -164 | |
Accumulated Other Comprehensive (Loss) Income [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Unrealized gain (loss) on derivative instrument, tax expense (benefit) | $59 | ($164) |
Inventories_Schedule_of_Invent
Inventories - Schedule of Inventories (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Raw materials | $3,879 | $6,515 |
Work-in-process | 4,830 | 6,606 |
Finished products | 24,953 | 28,291 |
Field inventory | 18,003 | 21,312 |
Consignment inventory | 2,656 | 2,388 |
Deferred cost of sales | 5,525 | 7,566 |
Total Inventory | $59,846 | $72,678 |
Property_Plant_and_Equipment_S
Property, Plant and Equipment - Schedule of Property,Plant and Equipment (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property Plant And Equipment [Line Items] | ||
Cost | $149,572 | $143,374 |
Accumulated depreciation | -101,023 | -89,002 |
Total | 48,549 | 54,372 |
Buildings [Member] | ||
Property Plant And Equipment [Line Items] | ||
Cost | 3,683 | 4,075 |
Plant equipment and instrumentation [Member] | ||
Property Plant And Equipment [Line Items] | ||
Cost | 140,110 | 133,427 |
Furniture and fixtures [Member] | ||
Property Plant And Equipment [Line Items] | ||
Cost | $5,779 | $5,872 |
Property_Plant_and_Equipment_A
Property, Plant and Equipment - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property Plant And Equipment Useful Life And Values [Abstract] | |||
Capitalized Computer Software, Net | $9 | $6.60 | |
Amortization of computer software | 3 | 2.7 | 2 |
Depreciation expense | $20.60 | $20 | $15.80 |
Recovered_Sheet4
Patents and Other Intangible Assets - Schedule of Patents and Other Intangibles Assets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | $43,264 | $43,188 |
Accumulated amortization | -36,112 | -34,142 |
Patents and other intangible assets, net | 7,152 | 9,046 |
Patents [Member] | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | 35,420 | 34,820 |
Accumulated amortization | -33,319 | -31,739 |
Trademarks—finite lived [Member] | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | 596 | 620 |
Accumulated amortization | -469 | -454 |
Licenses and other [Member] | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | 7,248 | 7,748 |
Accumulated amortization | ($2,324) | ($1,949) |
Recovered_Sheet5
Patents and Other Intangible Assets - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Amortization of intangible assets | $2,284,000 | $2,687,000 | $2,298,000 |
2015 | 2,200,000 | ||
2016 | 1,500,000 | ||
2017 | 1,100,000 | ||
2018 | 500,000 | ||
2019 | 500,000 | ||
2020 and thereafter | $1,300,000 |
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, 2014 |
Goodwill [Line Items] | ||||
Beginning balance | $72,758 | $74,388 | $74,388 | $53,565 |
Foreign currency | -1,630 | |||
Impairment | -19,193 | -19,193 | ||
Ending balance | 53,565 | 72,758 | 53,565 | 53,565 |
Spine [Member] | ||||
Goodwill [Line Items] | ||||
Beginning balance | 41,401 | 41,564 | 41,564 | |
Foreign currency | -163 | |||
Reallocation | -41,401 | |||
Ending balance | 41,401 | |||
Orthopedics [Member] | ||||
Goodwill [Line Items] | ||||
Beginning balance | 31,357 | 32,824 | 32,824 | |
Foreign currency | -1,467 | |||
Reallocation | -31,357 | |||
Ending balance | 31,357 | |||
BioStim [Member] | ||||
Goodwill [Line Items] | ||||
Beginning balance | 42,678 | |||
Reallocation | 42,678 | |||
Ending balance | 42,678 | 42,678 | 42,678 | |
Biologics [Member] | ||||
Goodwill [Line Items] | ||||
Beginning balance | 10,887 | |||
Reallocation | 10,887 | |||
Ending balance | 10,887 | 10,887 | 10,887 | |
Extremity Fixation [Member] | ||||
Goodwill [Line Items] | ||||
Reallocation | 9,825 | |||
Impairment | -9,825 | |||
Spine Fixation [Member] | ||||
Goodwill [Line Items] | ||||
Reallocation | 9,368 | |||
Impairment | ($9,368) |
Other_Current_Liabilities_Summ
Other Current Liabilities - Summary of Other Current Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Payables And Accruals [Abstract] | ||
Accrued expenses | $23,298 | $18,903 |
Salaries, bonuses, commissions and related taxes payable | 16,879 | 16,598 |
Accrued legal expenses | 9,548 | 10,292 |
Other payables | 3,495 | 3,883 |
Total | $53,220 | $49,676 |
LongTerm_Debt_Additional_Infor
Long-Term Debt - Additional Information (Detail) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 15, 2015 | Sep. 30, 2012 | Jun. 30, 2012 | 31-May-12 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 30, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 30, 2010 | 31-May-12 | 31-May-11 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
USD ($) | USD ($) | USD ($) | EUR (€) | EUR (€) | Subsequent Event [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] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Term Loan Facility [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 ($) | USD ($) | USD ($) | LIBOR [Member] | LIBOR [Member] | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Maximum [Member] | Maximum [Member] | Maximum [Member] | LIBOR [Member] | LIBOR [Member] | |||||||
Base rate [Member] | LIBOR [Member] | Base rate [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Debt instrument term (in years) | 5 years | 5 years | |||||||||||||||||||||||
Maximum borrowing capacity | $7,000,000 | $8,000,000 | € 5,800,000 | € 5,800,000 | $200,000,000 | ||||||||||||||||||||
Maximum borrowing capacity | 100,000,000 | ||||||||||||||||||||||||
Available capacity under the revolving credit facility | 100,000,000 | ||||||||||||||||||||||||
Repayment of debt obligation | 20,000,000 | 16,000 | 188,695,000 | 87,500,000 | |||||||||||||||||||||
Repayment of debt obligation | 20,000,000 | 20,000,000 | 57,500,000 | ||||||||||||||||||||||
Amount outstanding | 0 | 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% | |||||||||||||||||||||||
Contractual maturities of long-term debt | 0 | ||||||||||||||||||||||||
Revolving credit facility due date | 30-Aug-15 | ||||||||||||||||||||||||
Amount of restricted net assets | 181,800,000 | 168,500,000 | |||||||||||||||||||||||
Restricted cash | 34,424,000 | 23,761,000 | |||||||||||||||||||||||
Debt issuance costs incurred | 800,000 | 5,000,000 | |||||||||||||||||||||||
Write-off of debt issue costs | 800,000 | ||||||||||||||||||||||||
Deferred debt issuance costs, net | $400,000 | $1,100,000 |
Derivative_Instruments_Schedul
Derivative Instruments - Schedule of Fair Values of Derivative Instruments (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Cross-currency swap [Member] | Other long-term assets [Member] | ||
Derivatives Fair Value [Line Items] | ||
Fair value: favorable (unfavorable) | $2,504 | |
Cross-currency swap [Member] | Other long-term liabilities [Member] | ||
Derivatives Fair Value [Line Items] | ||
Fair value: favorable (unfavorable) | -1,036 | |
Warrants [Member] | Other long-term assets [Member] | ||
Derivatives Fair Value [Line Items] | ||
Fair value: favorable (unfavorable) | $321 | $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, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Derivative Instruments [Line Items] | |||
Cross-currency swap gain (loss) recorded in other comprehensive income (loss), net of taxes | $248 | ($279) | $263 |
Cross-currency swap [Member] | |||
Derivative Instruments [Line Items] | |||
Cross-currency swap gain (loss) recorded in other comprehensive income (loss), net of taxes | 251 | -278 | 263 |
Warrants [Member] | |||
Derivative Instruments [Line Items] | |||
Warrants unrealized gain (loss) recorded in other comprehensive income (loss), net of taxes | ($3) | ($1) |
Derivative_Instruments_Additio
Derivative Instruments - Additional Information (Detail) | 12 Months Ended | ||||||
Share data in Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Sep. 30, 2010 | Sep. 30, 2010 |
USD ($) | USD ($) | USD ($) | Bone Biologics Inc [Member] | Swap Agreement [Member] | Cross-currency swap [Member] | Cross-currency swap [Member] | |
USD ($) | USD ($) | 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 | $35,000,000 | |||||
Fixed rate (as a percent) | 5.00% | 4.64% | |||||
Swap agreement expiration date | 30-Dec-16 | ||||||
Unrealized (loss) gain on derivative instrument | -307,000 | 443,000 | -416,000 | 300,000 | |||
Purchase of notes receivable | $750,000 | ||||||
Warrants held for share purchases | 125 | ||||||
Exercise price of warrant | $1 | ||||||
Warrants exercisable period | 7 years |
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, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | $6,617 | $3,996 |
Deferred compensation plan, Liabilities | -1,886 | -2,506 |
Liabilities fair value, Total | -1,886 | -3,542 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | 2,096 | 2,222 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | 4,521 | 1,774 |
Deferred compensation plan, Liabilities | -1,886 | -2,506 |
Liabilities fair value, Total | -1,886 | -3,542 |
Collective Trust Funds [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | 1,696 | 1,667 |
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 | 1,696 | 1,667 |
Treasury Securities [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | 586 | 660 |
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 | 586 | 660 |
Certificates of Deposit [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | 1,510 | 1,562 |
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 | 1,510 | 1,562 |
Derivative Securities [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | 2,825 | 107 |
Derivative securities, Liabilities | -1,036 | |
Derivative Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | 2,825 | 107 |
Derivative securities, Liabilities | ($1,036) |
Commitments_Additional_Informa
Commitments - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Commitments And Contingencies Disclosure [Abstract] | |||
Rent expenses | $3.40 | $3.40 | $4.10 |
Inventory purchase commitments with third-party | $2.50 | $3 | $1.40 |
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, 2014 |
In Thousands, unless otherwise specified | |
Commitments And Contingencies Disclosure [Abstract] | |
2015 | $3,885 |
2016 | 3,558 |
2017 | 2,866 |
2018 | 2,671 |
2019 | 2,444 |
Thereafter | 2,741 |
Total | $18,165 |
Business_Segment_Information_A
Business Segment Information - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Segment | |
Segment Reporting [Abstract] | |
Number of strategic business units | 4 |
Business_Segment_Information_S
Business Segment Information - Schedule of Net Sales by SBU Reporting Segment (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Sales Information [Line Items] | |||||||||||
Net sales | $100,284 | $100,994 | $100,985 | $100,014 | $105,886 | $91,806 | $97,640 | $102,279 | $402,277 | $397,611 | $440,189 |
Percent of Total Net Sales | 100.00% | 100.00% | 100.00% | ||||||||
BioStim [Member] | |||||||||||
Sales Information [Line Items] | |||||||||||
Net sales | 154,676 | 145,085 | 174,562 | ||||||||
Percent of Total Net Sales | 38.00% | 36.00% | 40.00% | ||||||||
Biologics [Member] | |||||||||||
Sales Information [Line Items] | |||||||||||
Net sales | 55,881 | 53,746 | 53,731 | ||||||||
Percent of Total Net Sales | 14.00% | 14.00% | 12.00% | ||||||||
Extremity Fixation [Member] | |||||||||||
Sales Information [Line Items] | |||||||||||
Net sales | 109,678 | 103,359 | 112,011 | ||||||||
Percent of Total Net Sales | 27.00% | 26.00% | 25.00% | ||||||||
Spine Fixation [Member] | |||||||||||
Sales Information [Line Items] | |||||||||||
Net sales | $82,042 | $95,421 | $99,885 | ||||||||
Percent of Total Net Sales | 21.00% | 24.00% | 23.00% |
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, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | ||||||||||||
Total net margin | $136,818 | $115,231 | $160,692 | |||||||||
General & administrative | 76,790 | 64,830 | 53,650 | |||||||||
Research and development | 24,994 | 26,768 | 28,577 | |||||||||
Amortization of intangible assets | 2,284 | 2,687 | 2,298 | |||||||||
Costs related to the accounting review and restatement | 15,614 | 12,945 | ||||||||||
Impairment of goodwill | 19,193 | 19,193 | ||||||||||
Charges related to U.S. Government resolutions | -1,295 | |||||||||||
Operating income (loss) | 3,953 | 6,508 | 6,704 | -29 | -10,079 | -14,101 | 6,920 | 6,068 | 17,136 | -11,192 | 74,872 | |
Extremity Fixation [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Impairment of goodwill | 9,825 | |||||||||||
Spine Fixation [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Impairment of goodwill | 9,368 | |||||||||||
Operating Segments [Member] | BioStim [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total net margin | 66,096 | 63,847 | 88,788 | |||||||||
Operating Segments [Member] | Biologics [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total net margin | 26,629 | 24,794 | 23,589 | |||||||||
Operating Segments [Member] | Extremity Fixation [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total net margin | 31,586 | 23,704 | 34,554 | |||||||||
Operating Segments [Member] | Spine Fixation [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total net margin | 14,243 | 4,329 | 15,256 | |||||||||
Corporate, Non-Segment [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total net margin | -1,736 | -1,443 | -1,495 | |||||||||
Material Reconciling Items [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
General & administrative | 76,790 | 64,830 | 53,650 | |||||||||
Research and development | 24,994 | 26,768 | 28,577 | |||||||||
Amortization of intangible assets | 2,284 | 2,687 | 2,298 | |||||||||
Costs related to the accounting review and restatement | 15,614 | 12,945 | ||||||||||
Impairment of goodwill | 19,193 | |||||||||||
Charges related to U.S. Government resolutions | 1,295 | |||||||||||
Operating income (loss) | $17,136 | ($11,192) | $74,872 |
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, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Sales Information [Line Items] | |||
Depreciation and amortization | $22,878 | $22,822 | $18,297 |
BioStim [Member] | |||
Sales Information [Line Items] | |||
Depreciation and amortization | 1,623 | 1,979 | 1,659 |
Biologics [Member] | |||
Sales Information [Line Items] | |||
Depreciation and amortization | 1,161 | 648 | 567 |
Extremity Fixation [Member] | |||
Sales Information [Line Items] | |||
Depreciation and amortization | 8,442 | 7,265 | 5,201 |
Spine Fixation [Member] | |||
Sales Information [Line Items] | |||
Depreciation and amortization | 11,711 | 12,834 | 10,800 |
Operating Segments [Member] | Corporate, Non-Segment [Member] | |||
Sales Information [Line Items] | |||
Depreciation and amortization | ($59) | $96 | $70 |
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, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | $100,284 | $100,994 | $100,985 | $100,014 | $105,886 | $91,806 | $97,640 | $102,279 | $402,277 | $397,611 | $440,189 |
Domestic Tax Authority [Member] | U.S. [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 294,682 | 293,032 | 327,228 | ||||||||
Foreign Tax Authority [Member] | Italy [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 19,573 | 16,755 | 18,742 | ||||||||
Foreign Tax Authority [Member] | U.K. [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 11,402 | 10,002 | 8,431 | ||||||||
Foreign Tax Authority [Member] | Brazil [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 19,633 | 26,786 | 31,166 | ||||||||
Foreign Tax Authority [Member] | Others [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | $56,987 | $51,036 | $54,622 |
Business_Segment_Information_S4
Business Segment Information - Summary of Property, Plant and Equipment of Reporting Segments by Geographic Area (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property plant and equipment net | $48,549 | $54,372 |
U.S. [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property plant and equipment net | 37,029 | 39,287 |
Italy [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property plant and equipment net | 6,865 | 8,150 |
U.K. [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property plant and equipment net | 1,368 | 1,871 |
Brazil [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property plant and equipment net | 1,308 | 3,210 |
Others [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property plant and equipment net | $1,979 | $1,854 |
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, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
U.S. | $17,532 | ($3,546) | $56,210 |
Non-U.S. | -5,076 | -7,057 | 12,855 |
Income (loss) before income taxes | $12,456 | ($10,603) | $69,065 |
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, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
U.S. | |||
Current | $5,067 | $2,465 | $16,982 |
Deferred | 2,825 | 4,013 | 2,675 |
Total U.S | 7,892 | 6,478 | 19,657 |
Non-U.S. | |||
Current | 18,186 | 2,308 | 3,191 |
Deferred | -9,878 | -1,184 | 1,096 |
Total Non U.S | 8,308 | 1,124 | 4,287 |
Income tax expense/effective rate | $16,200 | $7,602 | $23,944 |
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, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Income Tax Disclosure [Abstract] | ||
Intangible assets and goodwill | $4,067 | $4,798 |
Inventories and related reserves | 19,525 | 20,769 |
Deferred revenue and cost of goods sold | 10,826 | 11,577 |
Other accruals and reserves | 5,371 | 4,778 |
Accrued compensation | 5,004 | 3,942 |
Allowance for doubtful accounts | 2,094 | 2,040 |
Accrued interest | 17,555 | 18,063 |
Net operating loss carryforwards | 34,514 | 34,979 |
Other, net | 1,202 | 893 |
Total | 100,158 | 101,839 |
Valuation allowance | -37,438 | -31,772 |
Deferred tax asset | 62,720 | 70,067 |
Withholding taxes | -229 | -13,026 |
Property, plant and equipment | -6,766 | -7,674 |
Deferred tax liability | -6,995 | -20,700 |
Net deferred tax assets | 55,725 | 49,367 |
Reported as: | ||
Current deferred tax assets | 37,413 | 39,999 |
Non-current deferred tax assets | 18,541 | 22,394 |
Non-current deferred tax liability | -229 | -13,026 |
Net deferred tax assets | $55,725 | $49,367 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Components Of Income Tax Expense Benefit [Line Items] | ||||
Valuation allowance | $37,438,000 | $31,772,000 | ||
Net increase in valuation allowance | 5,600,000 | |||
Operating loss carry forwards, state, net of tax | 14,000,000 | |||
Operating loss carry forwards, foreign, net of tax | 133,700,000 | |||
Recognized tax benefit | 300,000 | |||
Gross unrecognized tax benefit | 15,600,000 | 700,000 | ||
Accrued interest and penalties related to unrecognized tax benefits | 500,000 | 500,000 | ||
Unremitted foreign earnings | 374,100,000 | 329,700,000 | ||
Total cash and cash equivalents | 71,200,000 | |||
Cash and cash equivalents | 36,815,000 | 28,924,000 | 30,767,000 | 32,743,000 |
Senior Secured Credit Agreement [Member] | ||||
Components Of Income Tax Expense Benefit [Line Items] | ||||
Restricted cash and cash equivalents | 34,400,000 | |||
Non-U.S. Subsidiaries [Member] | ||||
Components Of Income Tax Expense Benefit [Line Items] | ||||
Cash and cash equivalents | 36,800,000 | |||
U.S. Subsidiary [Member] | ||||
Components Of Income Tax Expense Benefit [Line Items] | ||||
Unremitted foreign earnings | $391,100,000 |
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, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Statutory U.S. federal income tax rate | $4,360 | ($3,711) | $24,179 |
State taxes, net of federal benefit | 1,439 | 2,039 | 2,536 |
Foreign rate differential, including withholding taxes | 2,738 | 1,162 | -10 |
Valuation allowance | 8,672 | 3,913 | 6,189 |
Italian subsidiary intangible asset | -2,546 | -2,288 | -2,214 |
Goodwill impairment | 6,452 | ||
Domestic manufacturing deduction | -377 | -233 | -1,567 |
Settlement of U.S. Government resolutions | -1,260 | ||
Italian audit settlement | 1,048 | ||
Other, net | 866 | 268 | -3,909 |
Income tax expense/effective rate | $16,200 | $7,602 | $23,944 |
Statutory U.S. federal income tax rate | 35.00% | 35.00% | 35.00% |
State taxes, net of federal benefit | 11.60% | -19.20% | 3.70% |
Foreign rate differential, including withholding taxes | 21.90% | -11.00% | 0.00% |
Valuation allowance | 69.60% | -36.90% | 9.00% |
Italian subsidiary intangible asset | -20.40% | 21.60% | -3.20% |
Goodwill impairment | -60.90% | ||
Domestic manufacturing deduction | -3.00% | 2.20% | -2.30% |
Settlement of U.S. Government resolutions | -1.80% | ||
Italian audit settlement | 8.40% | ||
Other, net | 7.00% | -2.50% | -5.70% |
Income tax expense/effective rate | 130.10% | -71.70% | 34.70% |
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, 2014 | Dec. 31, 2013 |
Income Tax Disclosure [Abstract] | ||
Beginning Balance | $723 | $1,189 |
Additions for current year tax positions | 14,794 | 183 |
Increases (decreases) for prior year tax positions | 145 | -12 |
Settlements of prior year tax positions | -560 | |
Expiration of statutes | -65 | -77 |
Ending Balance | $15,597 | $723 |
Sale_of_Breg_and_Disposition_o2
Sale of Breg and Disposition of Sports Medicine Business - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | ||
24-May-12 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Breg [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Obligations under guarantee | $2,000,000 | |||
Sports Medicine [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net sales | 44,000,000 | |||
Operating loss | 2,900,000 | |||
Orthofix Inc [Member] | 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 | 157,500,000 | |||
Prepayment of outstanding company indebtedness | 145,000,000 | |||
Fair value of liability | 2,000,000 | |||
Period of indemnification (in years) | 3 years | |||
Obligations under guarantee | $300,000 | $900,000 | $1,600,000 |
Sale_of_Breg_and_Disposition_o3
Sale of Breg and Disposition of Sports Medicine Business - Schedule of Information Related to Sale of Breg (Detail) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2012 |
Less: | |
Gain on sale of Breg, net of taxes | $1,345 |
Breg [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
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 |
Contingencies_Additional_Infor
Contingencies - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | 1 Months Ended | |||||
Oct. 29, 2012 | Jun. 06, 2012 | Dec. 31, 2014 | Sep. 30, 2012 | Jul. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 10, 2012 | |
Commitment And Contingencies [Line Items] | ||||||||
Amount of fine paid | $7,800,000 | |||||||
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 | 1,300,000 | ||||||
Amount used from escrow fund through acquisition of Blackstone for legal settlement | 32,000,000 | |||||||
Judgments and settlement costs | 3,800,000 | 6,700,000 | 6,800,000 | |||||
Discontinued operations for compensatory damages and exemplary damages | 5,700,000 | |||||||
Litigation Related To Promeca | ||||||||
Commitment And Contingencies [Line Items] | ||||||||
Loss contingency accrued amount | 5,200,000 | |||||||
Accrued amount of fine | 2,200,000 | |||||||
Loss contingency paid | 5,200,000 | |||||||
Amount of fine paid | $2,200,000 | |||||||
Deferred prosecution agreement term | 3 years |
Recovered_Sheet6
Pensions and Deferred Compensation - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
National Collective Labor Agreement [Member] | Labor Force Concentration Risk [Member] | Italy [Member] | |||
Defined Benefit Plans And Other Postretirement Benefit Plans [Line Items] | |||
Number of employees, percentage | 17.60% | ||
Defined Contribution pension plans for other International employees [Member] | |||
Defined Benefit Plans And Other Postretirement Benefit Plans [Line Items] | |||
Expenses incurred for contribution plans | $0.80 | $0.70 | $0.70 |
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 | 0.1 | 0.3 | 0.4 |
Deferred compensation payments | 0.3 | 0.1 | 0.8 |
Amount of deferred compensation payable | 1.9 | 2.5 | |
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 | $1.70 | $2.40 | $2.50 |
Recovered_Sheet7
Share-based Compensation plans - Additional Information (Detail) (USD $) | 12 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 29, 2004 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Options outstanding | 1,527,836 | 1,924,179 | ||
Options exercisable | 936,561 | |||
Restricted stock outstanding | 460,976 | 286,704 | ||
Purchase price of shares equivalent to fair market value | 85.00% | |||
Shares issued under stock purchase plan | 1,517,313 | |||
Unamortized compensation expense | $2.80 | |||
Weighted average remaining contractual life of exercisable options (in years) | 2 years 8 months 19 days | |||
Total intrinsic value of options exercised | 2.1 | 0.4 | 7.2 | |
Closing stock price | $30.06 | |||
Aggregate intrinsic value of options outstanding | 2.4 | 0.5 | 11.2 | |
Aggregate intrinsic value of options exercisable | 1 | 0.2 | 9.8 | |
Non-vested shares | 358,450 | |||
Restricted Stock [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Unamortized compensation expense | 11.4 | |||
Non-vested shares | 358,450 | 269,791 | ||
Non-vested shares, vested in period | 2.5 | 2.1 | 1.2 | |
Weighted-average period for unamortized compensation cost expected to be recognized | 2 years 3 months 18 days | |||
Aggregate intrinsic value of restricted stock outstanding | 31.9 | 6.5 | 6.3 | |
Performance Based [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Unamortized compensation expense | $3.10 | |||
Non-vested shares | 99,600 | |||
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 | 648,675 | |||
Options exercisable | 81,899 | |||
Restricted stock outstanding | 460,976 | |||
Full value award limit | 100,000 | |||
2004 LTIP Plan [Member] | Staff Share Option Plan [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Options outstanding | 879,161 | |||
Options exercisable | 854,662 | |||
Restricted stock outstanding | 0 | |||
Award Contractual term | 10 years | |||
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% |
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, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | $5,724 | $6,267 | $6,303 |
Stock options [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 1,391 | 2,753 | 3,429 |
Restricted Stock [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 3,400 | 1,964 | 1,387 |
Stock purchase plan [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 933 | 1,550 | 1,487 |
Cost of sales [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 137 | 104 | 592 |
Sales and marketing [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 1,701 | 1,444 | 1,550 |
General and administrative [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 3,578 | 4,483 | 4,023 |
Research and development [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | $308 | $236 | $138 |
Sharebased_Compensation_Plans_1
Share-based Compensation Plans - Schedule of Share-based Payment Award, Valuation Assumptions (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Expected term | 5 years | 5 years | 4 years 6 months |
Expected volatility | 31.70% | 32.10% | 50.90% |
Expected volatility | 34.50% | 50.80% | 51.80% |
Weighted average fair value of options granted during the year | $10.45 | $10.83 | $16.99 |
Minimum [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Risk free interest rate | 1.52% | 0.58% | 0.76% |
Maximum [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Risk free interest rate | 1.70% | 1.52% | 0.84% |
Sharebased_Compensation_Plans_2
Share-based Compensation Plans - Schedule of Stock Option Activity (Detail) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Outstanding at the beginning of the period (in shares) | 1,924,179 |
Granted | 286,750 |
Exercised | -366,958 |
Forfeited | -316,135 |
Outstanding at the end of the period (in shares) | 1,527,836 |
Vested and expected to vest | 1,437,703 |
Options exercisable (in shares) | 936,561 |
Outstanding at the beginning of the period (in dollars per share) | $33.12 |
Granted | $33.20 |
Exercised | $26.05 |
Forfeited | $32.78 |
Outstanding at the end of the period (in dollars per share) | $34.91 |
Vested and expected to vest | $35.23 |
Options exercisable | $36.64 |
Options outstanding, weighted average remaining contractual term | 4 years 5 months 23 days |
Options vested and expected, weighted average remaining contractual term | 4 years 2 months 19 days |
Options exercisable, weighted average remaining contractual term | 2 years 8 months 19 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, 2014 | |
$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) | 164,750 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 7 years |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $21.11 |
Number Exercisable (in shares) | 47,565 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $20.41 |
$22.75 – $27.97 [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) | $27.97 |
Number outstanding (in shares) | 141,333 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 5 years 11 months 19 days |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $24.87 |
Number Exercisable (in shares) | 81,333 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $24.64 |
$27.98 – $31.40 [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) | $27.98 |
Exercise price, high end of range (in dollars per share) | $31.40 |
Number outstanding (in shares) | 151,500 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 5 years 2 months 23 days |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $29.27 |
Number Exercisable (in shares) | 119,000 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $29.34 |
$31.83 – $36.25 [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) | $31.83 |
Exercise price, high end of range (in dollars per share) | $36.25 |
Number outstanding (in shares) | 238,425 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 8 years 2 months 27 days |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $34.25 |
Number Exercisable (in shares) | 44,000 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $31.83 |
$37.36 – $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) | $37.36 |
Exercise price, high end of range (in dollars per share) | $37.36 |
Number outstanding (in shares) | 53,334 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 5 years 3 months 7 days |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $37.36 |
Number Exercisable (in shares) | 41,334 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $37.36 |
$38.11 – $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) | $38.11 |
Exercise price, high end of range (in dollars per share) | $38.11 |
Number outstanding (in shares) | 142,075 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 1 year 2 months 19 days |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $38.11 |
Number Exercisable (in shares) | 142,075 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $38.11 |
$38.82 – $39.94 [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) | $38.82 |
Exercise price, high end of range (in dollars per share) | $39.94 |
Number outstanding (in shares) | 299,687 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 3 years 5 months 9 days |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $39.32 |
Number Exercisable (in shares) | 137,021 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $39.83 |
$40.27 – $41.37 [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) | $40.27 |
Exercise price, high end of range (in dollars per share) | $41.37 |
Number outstanding (in shares) | 157,500 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 1 year 9 months 26 days |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $41.18 |
Number Exercisable (in shares) | 145,001 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $41.16 |
$43.04 – $44.97 [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) | $43.04 |
Exercise price, high end of range (in dollars per share) | $44.97 |
Number outstanding (in shares) | 160,732 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 1 year 8 months 27 days |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $44.61 |
Number Exercisable (in shares) | 160,732 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $44.61 |
$45.84– $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) | $45.84 |
Exercise price, high end of range (in dollars per share) | $50.99 |
Number outstanding (in shares) | 18,500 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 1 year 11 months 1 day |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $48.43 |
Number Exercisable (in shares) | 18,500 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $48.43 |
$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) | 1,527,836 |
Weighted Average Remaining Contractual Life of options outstanding (in years) | 4 years 5 months 23 days |
Weighted Average Exercise Price of options outstanding (in dollars per share) | $34.91 |
Number Exercisable (in shares) | 936,561 |
Weighted Average Exercise Price of options exercisable (in dollars per share) | $36.64 |
Sharebased_Compensation_Plans_4
Share-based Compensation Plans - Schedule of Changes in Restricted Stock (Detail) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Non-vested at the beginning of the period (in shares) | 286,704 |
Granted (in shares) | 358,450 |
Vested (in shares) | -84,396 |
Cancelled (in shares) | -99,782 |
Non-vested at the end of the period (in shares) | 460,976 |
Non-vested at the beginning of period (in dollars per share) | $28.01 |
Granted (in dollars per share) | $33.56 |
Vested (in dollars per share) | $29.25 |
Cancelled (in dollars per share) | ($30.39) |
Non-vested at the end of period (in dollars per share) | $31.55 |
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, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Earnings Per Share [Abstract] | |||
Weighted average common shares-basic | 18,459,054 | 18,697,228 | 18,977,263 |
Effect of diluted securities: | |||
Unexercised stock options net of treasury share repurchase | 413,150 | ||
Weighted average common shares-diluted | 18,459,054 | 18,697,228 | 19,390,413 |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
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 | ||
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 | 1,062,198 | 1,186,259 | 789,650 |
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, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $100,284 | $100,994 | $100,985 | $100,014 | $105,886 | $91,806 | $97,640 | $102,279 | $402,277 | $397,611 | $440,189 |
Cost of sales | 21,457 | 25,268 | 25,414 | 26,773 | 34,123 | 25,064 | 21,884 | 25,841 | 98,912 | 106,912 | 100,726 |
Gross profit | 78,827 | 75,726 | 75,571 | 73,241 | 71,763 | 66,742 | 75,756 | 76,438 | 303,365 | 290,699 | 339,463 |
Operating expense | 74,874 | 69,218 | 68,867 | 73,270 | 81,842 | 80,843 | 68,836 | 70,370 | 286,229 | 301,891 | 264,591 |
Operating (loss) income | 3,953 | 6,508 | 6,704 | -29 | -10,079 | -14,101 | 6,920 | 6,068 | 17,136 | -11,192 | 74,872 |
Net (loss) income from continuing operations | -5,090 | 28 | 3,266 | -1,948 | -9,639 | -16,504 | 2,012 | 5,926 | -3,744 | -18,205 | 45,121 |
Net (loss) income | ($5,798) | $452 | ($683) | ($2,508) | ($10,412) | ($18,836) | ($3,011) | $3,447 | ($8,537) | ($28,812) | $42,852 |
Basic: | |||||||||||
Net (loss) income from continuing operations | ($0.27) | $0 | $0.18 | ($0.11) | ($0.53) | ($0.91) | $0.11 | $0.31 | ($0.20) | ($0.97) | $2.38 |
Net (loss) income | ($0.31) | $0.02 | ($0.04) | ($0.14) | ($0.58) | ($1.04) | ($0.16) | $0.18 | ($0.46) | ($1.54) | $2.26 |
Diluted: | |||||||||||
Net (loss) income from continuing operations | ($0.27) | $0 | $0.18 | ($0.11) | ($0.53) | ($0.91) | $0.10 | $0.30 | ($0.20) | ($0.97) | $2.33 |
Net (loss) income | ($0.31) | $0.02 | ($0.04) | ($0.14) | ($0.58) | ($1.04) | ($0.16) | $0.18 | ($0.46) | ($1.54) | $2.21 |
Quarterly_Financial_Data_Conde1
Quarterly Financial Data - Condensed Consolidated Balance Sheets (Detail) (USD $) | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||
Total assets | $393,185 | $411,045 | $433,997 | $403,973 | $411,975 | $415,524 | $446,321 | $464,153 | |
Total liabilities | 93,558 | 106,029 | 128,786 | 103,410 | 116,112 | 108,531 | 114,175 | 103,178 | |
Total shareholders’ equity | 299,627 | 305,016 | 305,211 | 300,563 | 295,863 | 306,993 | 332,146 | 360,975 | 356,439 |
Total liabilities and shareholders’ equity | $393,185 | $411,045 | $433,997 | $403,973 | $411,975 | $415,524 | $446,321 | $464,153 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (Tempus [Member], USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended |
Dec. 31, 2014 | Mar. 04, 2015 | Jan. 31, 2015 | |
Subsequent Event [Line Items] | |||
Maturity date of promissory note | 4-Mar-19 | ||
Maturity description of Promissory note | The eNeura Note will mature on the earlier of (i) March 4, 2019, or (ii) consummation of the acquisition | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Net sales consideration transferred | $2,100,000 | ||
Consideration in cash | 4,800,000 | ||
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, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $36,815 | $28,924 | $30,767 | $32,743 | ||||||
Prepaid expenses and other current assets | 26,552 | 28,933 | ||||||||
Total current assets | 256,408 | 265,106 | ||||||||
Total assets | 393,185 | 411,045 | 433,997 | 403,973 | 411,975 | 415,524 | 446,321 | 464,153 | ||
Liabilities and shareholders’ equity | ||||||||||
Current liabilities | 66,443 | 70,350 | ||||||||
Shareholders’ equity | ||||||||||
Common stock | 1,861 | 1,810 | ||||||||
Additional paid-in capital | 232,788 | 216,653 | ||||||||
Accumulated earnings | 65,360 | 73,897 | ||||||||
Accumulated other comprehensive (loss) income | -382 | 3,503 | ||||||||
Total shareholders’ equity | 299,627 | 305,016 | 305,211 | 300,563 | 295,863 | 306,993 | 332,146 | 360,975 | 356,439 | |
Total liabilities and shareholders’ equity | 393,185 | 411,045 | 433,997 | 403,973 | 411,975 | 415,524 | 446,321 | 464,153 | ||
Orthofix International N V [Member] | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 5,162 | 1,426 | 7,392 | 19,433 | ||||||
Prepaid expenses and other current assets | 270 | 670 | ||||||||
Total current assets | 5,432 | 2,096 | ||||||||
Investments in and amounts due from subsidiaries and affiliates | 306,105 | 308,173 | ||||||||
Total assets | 311,537 | 310,269 | ||||||||
Liabilities and shareholders’ equity | ||||||||||
Current liabilities | 3,799 | 6,295 | ||||||||
Long-term liabilities | 8,111 | 8,111 | ||||||||
Shareholders’ equity | ||||||||||
Common stock | 1,861 | 1,810 | ||||||||
Additional paid-in capital | 232,788 | 216,653 | ||||||||
Accumulated earnings | 65,360 | 73,897 | ||||||||
Accumulated other comprehensive (loss) income | -382 | 3,503 | ||||||||
Total shareholders’ equity | 299,627 | 295,863 | ||||||||
Total liabilities and shareholders’ equity | $311,537 | $310,269 |
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, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
(Expenses) income: | |||||||||||
General and administrative | ($76,790) | ($64,830) | ($53,650) | ||||||||
Income (loss) before income taxes | 12,456 | -10,603 | 69,065 | ||||||||
Income tax expense | -16,200 | -7,602 | -23,944 | ||||||||
Net (loss) income | -5,798 | 452 | -683 | -2,508 | -10,412 | -18,836 | -3,011 | 3,447 | -8,537 | -28,812 | 42,852 |
Orthofix International N V [Member] | |||||||||||
(Expenses) income: | |||||||||||
General and administrative | -21,073 | -16,641 | -7,700 | ||||||||
Equity in earnings of investments in subsidiaries and affiliates | 12,540 | -12,494 | 50,331 | ||||||||
Other, net | -4 | 323 | 24 | ||||||||
Income (loss) before income taxes | -8,537 | -28,812 | 42,655 | ||||||||
Income tax expense | 197 | ||||||||||
Net (loss) income | ($8,537) | ($28,812) | $42,852 |
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, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed Financial Statements Captions [Line Items] | |||
Net (loss) income | ($8,537) | ($28,812) | $42,852 |
Cash flows from investing activities: | |||
Capital expenditures for property, plant and equipment | -18,069 | -24,787 | -27,994 |
Cash flows from financing activities: | |||
Net proceeds from issuance of common stock | 10,462 | 3,450 | 25,586 |
Excess tax benefit on exercise of stock options | 206 | 82 | 1,020 |
Net increase (decrease) in cash and cash equivalents | 7,891 | -1,843 | -1,976 |
Cash and cash equivalents at the beginning of the year | 28,924 | 30,767 | 32,743 |
Cash and cash equivalents at the end of the year | 36,815 | 28,924 | 30,767 |
Orthofix International N V [Member] | |||
Condensed Financial Statements Captions [Line Items] | |||
Net (loss) income | -8,537 | -28,812 | 42,852 |
Equity in (loss) earnings of investments in subsidiaries and affiliates | -12,540 | 12,494 | -50,331 |
Cash (used in) provided by other operating activities | -5,167 | 468 | -6,811 |
Net cash used in operating activities | -26,244 | -15,850 | -14,290 |
Cash flows from investing activities: | |||
Distributions and amounts received from subsidiaries | 20,723 | 53,389 | 12,564 |
Net cash provided by investing activities | 20,723 | 53,389 | 12,564 |
Cash flows from financing activities: | |||
Net proceeds from issuance of common stock | 10,462 | 3,450 | 25,586 |
Repurchase of treasury shares | -39,494 | ||
Contributions to subsidiaries and affiliates | -1,411 | -7,543 | -36,921 |
Excess tax benefit on exercise of stock options | 206 | 82 | 1,020 |
Net cash provided by (used in) financing activities | 9,257 | -43,505 | -10,315 |
Net increase (decrease) in cash and cash equivalents | 3,736 | -5,966 | -12,041 |
Cash and cash equivalents at the beginning of the year | 1,426 | 7,392 | 19,433 |
Cash and cash equivalents at the end of the year | $5,162 | $1,426 | $7,392 |
Schedule_1_Condensed_Financial3
Schedule 1 - Condensed Financial Information of Registrant Orthofix International NV - Additional information (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Condensed Financial Statements Captions [Line Items] | ||
Restricted net assets of subsidiary of the reporting entity | $181,800,000 | $168,500,000 |
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 | $181,800,000 | $168,500,000 |
Schedule_2_Valuation_and_Quali
Schedule 2 - Valuation and Qualifying Accounts (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for Doubtful Accounts Receivable [Member] | |||
Valuation And Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of year | $9,111 | $6,673 | $6,184 |
Additions Charged to cost and expenses | 937 | 4,590 | 2,027 |
Additions Charged (credited) to other accounts | -13 | ||
Deductions/ Other | -2,763 | -2,152 | -1,525 |
Balance at end of year | 7,285 | 9,111 | 6,673 |
Deferred Tax Valuation Allowance [Member] | |||
Valuation And Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of year | 31,772 | 26,361 | 19,124 |
Additions Charged to cost and expenses | 5,666 | 5,411 | 7,237 |
Balance at end of year | $37,438 | $31,772 | $26,361 |