Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | CYNO | |
Entity Registrant Name | CYNOSURE INC | |
Entity Central Index Key | 885,306 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 23,858,441 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 130,997 | $ 108,587 |
Short-term marketable securities | 41,100 | 35,412 |
Accounts receivable, net | 40,827 | 42,012 |
Inventories | 83,926 | 79,768 |
Prepaid expenses and other current assets | 29,741 | 21,356 |
Total current assets | 326,591 | 287,135 |
Property and equipment, net | 45,858 | 39,706 |
Long-term marketable securities | 42,167 | 38,761 |
Goodwill | 105,865 | 105,807 |
Intangibles, net | 37,859 | 44,317 |
Deferred tax asset | 14,664 | 17,882 |
Other assets | 1,057 | 1,002 |
Total assets | 574,061 | 534,610 |
Current liabilities: | ||
Accounts payable | 26,406 | 33,885 |
Accrued expenses | 49,778 | 45,616 |
Deferred revenue | 21,278 | 24,803 |
Capital lease obligation | 958 | 741 |
Total current liabilities | 98,420 | 105,045 |
Capital lease obligation, net of current portion | 16,974 | 17,372 |
Deferred revenue, net of current portion | 1,099 | 903 |
Other noncurrent liability | 6,354 | 6,888 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value Authorized - 5,000 shares Issued - none | ||
Class A and Class B common stock, $0.001 par value Authorized - 61,500 Class A shares and no Class B shares at September 30, 2016 Authorized - 61,500 Class A shares and 8,500 Class B shares at December 31, 2015 Issued - 25,223 Class A shares and no Class B shares at September 30, 2016 Issued - 24,327 Class A shares and no Class B shares at December 31, 2015 | 25 | 24 |
Additional paid-in capital | 420,225 | 387,161 |
Retained earnings | 69,131 | 55,781 |
Accumulated other comprehensive loss | (5,063) | (5,460) |
Treasury stock, 1,628 Class A shares, at cost | (33,104) | (33,104) |
Total stockholders' equity | 451,214 | 404,402 |
Total liabilities and stockholders' equity | $ 574,061 | $ 534,610 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common Stock Class A [Member] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 61,500,000 | 61,500,000 |
Common stock, shares issued | 25,223,000 | 24,327,000 |
Treasury stock, shares | 1,628,000 | 1,628,000 |
Common Stock Class B [Member] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 0 | 8,500,000 |
Common stock, shares issued | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Product revenues | $ 87,613 | $ 64,644 | $ 255,226 | $ 190,575 |
Parts, accessories, service and royalty revenues | 18,773 | 13,770 | 56,167 | 46,445 |
Total revenues | 106,386 | 78,414 | 311,393 | 237,020 |
Cost of revenues | 43,576 | 34,009 | 128,106 | 102,486 |
Gross profit | 62,810 | 44,405 | 183,287 | 134,534 |
Operating expenses: | ||||
Sales and marketing | 38,090 | 26,828 | 112,255 | 78,950 |
Research and development | 7,210 | 5,514 | 21,288 | 16,723 |
Amortization of intangible assets acquired | 684 | 736 | 2,057 | 2,208 |
General and administrative | 8,664 | 6,492 | 24,574 | 22,124 |
Total operating expenses | 54,648 | 39,570 | 160,174 | 120,005 |
Income from operations | 8,162 | 4,835 | 23,113 | 14,529 |
Interest expense, net | (377) | (428) | (1,181) | (1,260) |
Other income (expense), net | 245 | (216) | 628 | (1,395) |
Income before provision for income taxes | 8,030 | 4,191 | 22,560 | 11,874 |
Provision for income taxes | 3,867 | 962 | 9,210 | 3,295 |
Net income | $ 4,163 | $ 3,229 | $ 13,350 | $ 8,579 |
Basic net income per share | $ 0.18 | $ 0.14 | $ 0.58 | $ 0.39 |
Diluted net income per share | $ 0.17 | $ 0.14 | $ 0.57 | $ 0.38 |
Basic weighted average common shares outstanding | 23,536 | 22,580 | 23,195 | 22,167 |
Diluted weighted average common shares outstanding | 23,945 | 22,880 | 23,607 | 22,539 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 4,163 | $ 3,229 | $ 13,350 | $ 8,579 |
Other comprehensive (loss) income components: | ||||
Cumulative translation adjustment | 17 | (516) | 404 | (1,605) |
Unrealized (loss) gain on marketable securities | (71) | 37 | (7) | 43 |
Total other comprehensive (loss) income | (54) | (479) | 397 | (1,562) |
Comprehensive income | $ 4,109 | $ 2,750 | $ 13,747 | $ 7,017 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Operating activities: | ||
Net income | $ 13,350 | $ 8,579 |
Reconciliation of net income to net cash from operating activities: | ||
Depreciation and amortization | 15,536 | 14,343 |
Stock-based compensation expense | 7,008 | 5,683 |
Loss on disposal of fixed assets | 252 | 15 |
Noncash interest expense on capital lease obligations | 1,402 | 1,271 |
Noncash interest expense on license transfer agreement | 140 | 148 |
Deferred income taxes | 3,083 | 1,590 |
Net accretion of marketable securities | 1,910 | 1,609 |
Tax benefit from stock option exercises | (3,258) | (1,309) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,368 | (3,391) |
Inventories | (8,905) | (20,018) |
Net book value of demonstration inventory sold | 525 | 298 |
Prepaid expenses and other current assets | (5,040) | (3,889) |
Accounts payable | (7,495) | 1,339 |
Accrued expenses | 3,897 | (1,345) |
Deferred revenue | (3,394) | 5,380 |
Other noncurrent liabilities | (502) | (179) |
Net cash from operating activities | 19,877 | 10,124 |
Investing activities: | ||
Purchases of property and equipment | (10,553) | (8,101) |
Proceeds from the sales and maturities of marketable securities | 45,981 | 35,247 |
Purchases of marketable securities | (56,993) | (50,403) |
Increase in other noncurrent assets | (20) | (29) |
Net cash from investing activities | (21,585) | (23,286) |
Financing activities: | ||
Excess tax benefit on options exercised | 3,258 | 1,309 |
Proceeds from stock option exercises | 22,797 | 17,745 |
Payments on capital lease obligation | (1,753) | (179) |
Net cash from financing activities | 24,302 | 18,875 |
Effect of exchange rate changes on cash and cash equivalents | (184) | 561 |
Net increase in cash and cash equivalents | 22,410 | 6,274 |
Cash and cash equivalents, beginning of the period | 108,587 | 75,131 |
Cash and cash equivalents, end of the period | 130,997 | 81,405 |
Supplemental cash flow information | ||
Cash paid for interest | 14 | 13 |
Cash paid for income taxes | 7,149 | 2,915 |
Supplemental noncash investing and financing activities | ||
Transfer of demonstration equipment from inventory to fixed assets | 5,084 | 4,970 |
Assets acquired under capital lease | $ 161 | 273 |
Net effect of acquisition-related opening balance sheet adjustments | $ 143 |
Interim Consolidated Financial
Interim Consolidated Financial Statements | 9 Months Ended |
Sep. 30, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Interim Consolidated Financial Statements | Note 1 — Interim Consolidated Financial Statements The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim information and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. It is recommended that these financial statements be read in conjunction with the consolidated financial statements and related notes that appear in the Annual Report on Form 10-K of Cynosure, Inc. (Cynosure) for the year ended December 31, 2015. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position, results of operations, and cash flows as of the dates and for the periods presented have been included. The results of operations for the nine months ended September 30, 2016 may not be indicative of the results that may be expected for the year ending December 31, 2016, or any other period. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Note 2 — Stock-Based Compensation Cynosure recorded stock-based compensation expense of $2.4 million and $1.9 million for the three months ended September 30, 2016 and 2015, respectively. Cynosure recorded stock-based compensation expense of $7.0 million and $5.7 million for the nine months ended September 30, 2016 and 2015, respectively. As of September 30, 2016 and 2015, respectively, Cynosure had $31,000 and $29,000 of stock-based compensation expense capitalized as a part of inventory. Total stock-based compensation expense was recorded to cost of revenues and operating expenses based upon the functional responsibilities of the individual holding the respective share-based payments, as follows: Three Months Nine Months 2016 2015 2016 2015 (in thousands) Cost of revenues $ 118 $ 96 $ 351 $ 244 Sales and marketing 663 541 1,944 1,511 Research and development 356 308 1,070 857 General and administrative 1,215 1,004 3,643 3,071 Total stock-based compensation expense $ 2,352 $ 1,949 $ 7,008 $ 5,683 Cash received from option exercises was $22.8 million and $17.7 million during the nine months ended September 30, 2016 and 2015, respectively. Cynosure has been increasingly using restricted stock units as an equity incentive award for employees. Cynosure granted 158,613 and 86,618 restricted stock units to employees during the nine months ended September 30, 2016 and 2015, respectively, at the fair market value of its common stock on the date of grant and which vest annually over a three-year period. Fair market value was determined using the closing price of Cynosure’s common stock on the date of grant. Cynosure is recognizing related compensation expense, net of estimated forfeitures, on a straight-line basis over the three-year period. Cynosure granted 25,425 and 16,685 restricted stock units to non-employee directors during the nine months ended September 30, 2016 and 2015, respectively, at a fair market value of its common stock on the date of grant and which vest quarterly over a one-year period. Fair market value was determined using the closing price of Cynosure’s common stock on the date of grant. Cynosure is recognizing related compensation expense, net of estimated forfeitures, on a straight-line basis over the one-year period. Cynosure implemented a performance-based equity compensation program in 2016. Cynosure granted 58,981 performance-based stock units during the nine months ended September 30, 2016 to employees at the fair market value of its common stock on the date of grant and which vest annually over a three-year period based on continued performance of services and the achievement of performance goals. If Cynosure’s consolidated cumulative revenue and EBITDA exceeds defined thresholds for the one, two and three-year periods beginning on January 1, 2016 and ending December 31, 2016, December 31, 2017 and December 31, 2018, respectively, the performance-based stock units will vest on the date which is the earlier of (i) the financial earnings release for the year following the year in which the performance period ended or (ii) a determination by the audit committee of the board of directors that the performance target has been achieved. Cynosure recognizes compensation expense for performance targets when the probability of achieving such targets is considered probable and is recognizing related compensation expense on a straight-line basis over the period from the date of grant through the expected vest dates. Cynosure reevaluates at each reporting period whether the performance targets are probable of achievement and, if at any point in time, Cynosure believes that achieving a performance goal is not probable, it will stop recognizing the related compensation expense and will adjust the previously recognized compensation expense prospectively. Cynosure did not grant any stock options during the nine months ended September 30, 2016. Cynosure granted options to purchase 452,499 shares of common stock during the nine months ended September 30, 2015. Cynosure uses the Black-Scholes model to determine the weighted average fair value of options. The weighted average fair value of the options granted during the nine months ended September 30, 2015 was $12.40, using the following assumptions: Nine Months Ended September 30, 2015 Risk-free interest rate 1.39% - 1.72% Expected dividend yield — Expected term 4.8 years Expected volatility 42% - 43% Estimated forfeiture rate 5% Option-pricing models require the input of various subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. Cynosure’s estimated expected stock price volatility is based on its own historical volatility. Cynosure’s expected term of options represents the weighted average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and Cynosure’s historical exercise patterns. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield of zero is based on the fact that Cynosure has never paid cash dividends and has no present intention to pay cash dividends. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 3 — Inventories Cynosure states all inventories at the lower of cost or market, determined on a first-in, first-out method. Inventory includes material, labor and overhead and consists of the following: September 30, December 31, (in thousands) Raw materials $ 19,559 $ 22,569 Work in process 2,360 3,317 Finished goods 62,007 53,882 $ 83,926 $ 79,768 |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 4 — Fair Value U.S. GAAP establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the exchange 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. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable markets data for substantially the full term of the assets or liabilities. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table represents Cynosure’s fair value hierarchy for its financial assets (cash equivalents and marketable securities) measured at fair value as of September 30, 2016 (in thousands): Level 1 Level 2 Level 3 Total Money market funds (1) $ 5,690 $ — $ — $ 5,690 Treasuries and government agencies (2) — 30,231 — 30,231 State and municipal bonds — 54,536 — 54,536 Total $ 5,690 $ 84,767 $ — $ 90,457 The following table represents Cynosure’s fair value hierarchy for its financial assets (cash equivalents and marketable securities) measured at fair value as of December 31, 2015 (in thousands): Level 1 Level 2 Level 3 Total Money market funds (1) $ 5,785 $ — $ — $ 5,785 State and municipal bonds — 59,786 — 59,786 Treasuries and government agencies — 14,387 — 14,387 Total $ 5,785 $ 74,173 $ — $ 79,958 (1) Included in cash and cash equivalents at September 30, 2016 and December 31, 2015, as applicable. (2) $1.5 million included in cash and cash equivalents at September 30, 2016. During the nine months ended September 30, 2016, there were no significant transfers in or out of Level 1 or Level 2. Cynosure did not have any Level 3 financial assets at September 30, 2016 or December 31, 2015. |
Short and Long-Term Marketable
Short and Long-Term Marketable Securities | 9 Months Ended |
Sep. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Short and Long-Term Marketable Securities | Note 5 — Short and Long-Term Marketable Securities Cynosure’s available-for-sale securities at September 30, 2016 consist of approximately $84.8 million of investments in debt securities consisting of state and municipal bonds, treasuries and government agencies. All investments in available-for-sale securities are recorded at fair market value, with any unrealized gains and losses reported as a separate component of accumulated other comprehensive loss. As of September 30, 2016, Cynosure’s marketable securities consist of the following (in thousands): Market Amortized Unrealized Unrealized Available-for-Sale Securities: Cash equivalents: Treasuries and government agencies $ 1,500 $ 1,500 $ — $ — Total cash equivalents $ 1,500 $ 1,500 $ — $ — Short-term marketable securities: State and municipal bonds $ 32,044 $ 32,072 $ — $ (28 ) Treasuries and government agencies 9,056 9,056 1 (1 ) Total short-term marketable securities $ 41,100 $ 41,128 $ 1 $ (29 ) Long-term marketable securities: State and municipal bonds $ 22,492 $ 22,546 $ — $ (54 ) Treasuries and government agencies 19,675 19,680 2 (7 ) Total long-term marketable securities $ 42,167 $ 42,226 $ 2 $ (61 ) Total available-for-sale securities $ 84,767 $ 84,854 $ 3 $ (90 ) Total marketable securities $ 83,267 As of December 31, 2015, Cynosure’s marketable securities consist of the following (in thousands): Market Amortized Unrealized Unrealized Available-for-Sale Securities: Short-term marketable securities: State and municipal bonds $ 33,914 $ 33,923 $ — $ (9 ) Treasuries and government agencies 1,498 1,500 — (2 ) Total short-term marketable securities $ 35,412 $ 35,423 $ — $ (11 ) Long-term marketable securities: State and municipal bonds $ 25,872 $ 25,916 $ 1 $ (45 ) Treasuries and government agencies 12,889 12,914 — (25 ) Total long-term marketable securities $ 38,761 $ 38,830 $ 1 $ (70 ) Total available-for-sale securities $ 74,173 $ 74,253 $ 1 $ (81 ) Total marketable securities $ 74,173 As of September 30, 2016, Cynosure’s available-for-sale debt securities mature as follows (in thousands): Total Maturities Less One to More State and municipal bonds $ 54,536 $ 32,044 $ 22,492 $ — Treasuries and government agencies 30,231 10,556 19,675 — Total available-for-sale debt securities $ 84,767 $ 42,600 $ 42,167 $ — |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 6 — Goodwill and Other Intangible Assets Changes to goodwill during the nine months ended September 30, 2016 were as follows (in thousands): Balance — December 31, 2015 $ 105,807 Translation adjustment 58 Balance — September 30, 2016 $ 105,865 Other intangible assets consisted of the following at September 30, 2016 and December 31, 2015 (in thousands): Developed Business Customer Trade Other Total September 30, 2016 Cost $ 28,541 $ 384 $ 16,459 $ 18,370 $ 1,353 $ 65,107 Translation adjustment — — (32 ) — — $ (32 ) Accumulated amortization (17,719 ) (242 ) (5,763 ) $ (3,179 ) $ (313 ) $ (27,216 ) Balance, September 30, 2016 $ 10,822 $ 142 $ 10,664 $ 15,191 $ 1,040 $ 37,859 December 31, 2015 Cost $ 29,240 $ 384 $ 19,718 $ 18,390 $ 1,353 $ 69,085 Translation adjustment — — (42 ) — — (42 ) Accumulated amortization (14,055 ) (232 ) (7,799 ) (2,518 ) (122 ) (24,726 ) Balance, December 31, 2015 $ 15,185 $ 152 $ 11,877 $ 15,872 $ 1,231 $ 44,317 Amortization expense related to developed technology and patents is classified as a component of cost of revenues. Amortization expense related to customer relationships and trade names is classified as a component of amortization of intangible assets acquired. Amortization expense related to business licenses and other is classified as a component of general and administrative expenses. Amortization expense for the three months ended September 30, 2016 and 2015 was $2.2 million and $2.3 million, respectively. Amortization expense for the nine months ended September 30, 2016 and 2015 was $6.5 million and $6.9 million, respectively. Cynosure has approximately $56,000 of indefinite-life intangible assets that are included in other intangible assets in the table above. As of September 30, 2016, amortization expense on existing intangible assets for the next five years and beyond is as follows (in thousands): Remainder of 2016 $ 2,152 2017 6,624 2018 5,108 2019 3,373 2020 2,923 2021 and thereafter 17,623 Total $ 37,803 |
Warranty Costs
Warranty Costs | 9 Months Ended |
Sep. 30, 2016 | |
Guarantees [Abstract] | |
Warranty Costs | Note 7 — Warranty Costs Cynosure typically provides a one-year system and labor warranty on end-user sales of systems. Distributor sales of systems generally include a one-year warranty on systems only. These one-year warranty obligations are limited, in their exclusive options, to repair or replace parts and materials which prove to be defective, and do not contain any service performance obligations. Estimated future costs for initial product warranties are provided for at the time of revenue recognition and recorded as cost of revenues within Cynosure’s consolidated statement of operations. The following table provides the detail of the change in Cynosure’s product warranty accrual during the nine months ended September 30, 2016, which is a component of accrued expenses in the consolidated balance sheets (in thousands): Balance — December 31, 2015 $ 8,841 Warranty provision related to new sales 13,878 Costs incurred (12,332 ) Balance — September 30, 2016 $ 10,387 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Note 8 — Segment Information In accordance with Accounting Standards Codification (ASC) 280, Segment Reporting Topic, The following table represents total revenue by geographic area: Three Months Ended Nine Months Ended 2016 2015 2016 2015 (in thousands) United States $ 67,434 $ 47,341 $ 204,239 $ 136,988 Europe 8,785 8,470 28,679 29,572 Asia / Pacific 22,613 16,217 59,568 51,175 Other 7,554 6,386 18,907 19,285 Total $ 106,386 $ 78,414 $ 311,393 $ 237,020 Total assets by geographic area are as follows: September 30, December 31, (in thousands) United States $ 533,402 $ 497,007 Europe 21,643 22,204 Asia / Pacific 25,530 21,139 Eliminations (6,514 ) (5,740 ) Total $ 574,061 $ 534,610 Long-lived assets (property and equipment only) by geographic area are as follows: September 30, December 31, (in thousands) United States $ 40,378 $ 35,185 Europe 1,812 1,641 Asia / Pacific 3,668 2,880 Total $ 45,858 $ 39,706 No individual country within Europe or Asia/Pacific represented greater than 10% of total revenue, total assets or long-lived assets for any period presented. |
Net Income Per Common Share
Net Income Per Common Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share | Note 9 — Net Income Per Common Share Basic net income per share is determined by dividing net income by the weighted average common shares outstanding during the period. Diluted net income per share is determined by dividing net income by the diluted weighted average shares outstanding during the period. Diluted weighted average shares reflect the dilutive effect, if any, of common stock options and restricted stock units based on the treasury stock method. A reconciliation of basic and diluted shares is as follows (in thousands, except per share data): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Net income $ 4,163 $ 3,229 $ 13,350 $ 8,579 Basic weighted average common shares outstanding 23,536 22,580 23,195 22,167 Weighted average common equivalent shares 409 300 412 372 Diluted weighted average common shares outstanding 23,945 22,880 23,607 22,539 Basic net income per share $ 0.18 $ 0.14 $ 0.58 $ 0.39 Diluted net income per share $ 0.17 $ 0.14 $ 0.57 $ 0.38 For the three and nine months ended September 30, 2016, approximately 3,000 and 93,000 shares of Cynosure’s Class A common stock issuable pursuant to stock options, respectively, were excluded from the calculation of diluted weighted average shares outstanding as their effect was antidilutive. For the three and nine months ended September 30, 2015, approximately 0.5 million and 1.1 million shares of Cynosure’s Class A common stock issuable pursuant to stock options, respectively, were excluded from the calculation of diluted weighted average shares outstanding as their effect was antidilutive. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Note 10 — Accumulated Other Comprehensive Loss Changes to accumulated other comprehensive loss during the nine months ended September 30, 2016 were as follows (in thousands): Unrealized Translation Accumulated Balance — December 31, 2015 $ (49 ) $ (5,411 ) $ (5,460 ) Current period other comprehensive gain (7 ) 404 397 Balance — September 30, 2016 $ (56 ) $ (5,007 ) $ (5,063 ) |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11 — Income Taxes During the three and nine months ended September 30, 2016, Cynosure recorded an income tax provision of $3.9 million and $9.2 million, respectively, representing an effective tax rate of 48% and 41%, respectively. The income tax provision for the three and nine months ended September 30, 2016 was primarily attributable to applying Cynosure’s estimated annual effective tax rate to its year-to-date consolidated income before provision for income taxes. For the nine months ended September 30, 2016, the tax provision includes a $0.5 million discrete tax provision related to the impact of tax law changes enacted during the period, certain foreign audit settlements, and a provision to return differences. Other factors resulting in differences between the U.S. federal statutory tax rate and the effective tax rate include the jurisdictional mix of worldwide earnings, non-deductible expenses, the domestic manufacturing deduction, and federal research credits. During the three and nine months ended September 30, 2015, Cynosure recorded an income tax provision of $1.0 million and $3.3 million, respectively, representing an effective tax rate of 23% and 28%, respectively. The income tax provision for the three and nine months ended September 30, 2015 was primarily attributable to applying Cynosure’s estimated annual effective tax rate to its year-to-date consolidated income before provision for income taxes. The estimated annual effective tax rate was favorably impacted by the jurisdictional mix of worldwide earnings and the domestic manufacturing deduction, and unfavorably impacted by non-deductible expenses. The difference between the U.S. federal statutory tax rate and the effective tax rate was primarily attributable to a discrete tax benefit of $0.5 million for the release of the valuation allowance previously maintained against the net deferred tax assets of Palomar Japan K.K. that was recorded in the second quarter of 2015, as well as a discrete tax benefit of $0.5 million that was principally due to an increase in 2014 federal and state research credits that was recorded in the third quarter of 2015. At September 30, 2016 and December 31, 2015, Cynosure had gross tax-effected unrecognized tax benefits of $0.8 million of which the entire amount, if recognized, would favorably impact the effective tax rate. Cynosure classifies interest and penalties related to income taxes as a component of its provision for income taxes. Cynosure does not expect any material changes in the amounts of unrecognized tax benefits over the next 12 months. Cynosure files income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions. Cynosure is no longer subject to U.S. federal income tax examinations by tax authorities for years before 2013. With few exceptions, Cynosure is no longer subject to U.S. state tax examinations for years before 2012. Additionally, certain non-U.S. jurisdictions are no longer subject to income tax examinations by tax authorities for years before 2011. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 12 — Commitments and Contingencies Lease Commitments Cynosure leases the land portion of its U.S. operating facility and certain foreign facilities under non-cancellable operating lease agreements expiring through May 2027. These leases are non-cancellable and typically contain renewal options. Certain leases contain rent escalation clauses for which Cynosure recognizes the expense on a straight-line basis. Rent expense for the three and nine months ended September 30, 2016 was approximately $0.6 million and $1.6 million, respectively. Rent expense for the three and nine months ended September 30, 2015 was approximately $0.5 million and $1.5 million, respectively. Cynosure leases the buildings portion of its U.S. operating facility and certain equipment and vehicles under capital lease agreements with payments due through May 2027. Commitments under Cynosure’s lease arrangements are as follows as of September 30, 2016 (in thousands): Operating Capital Remainder of 2016 $ 593 $ 716 2017 2,070 2,837 2018 1,760 2,732 2019 1,453 2,662 2020 594 2,643 Thereafter 2,248 18,348 Total minimum lease payments $ 8,718 $ 29,938 Less amount representing interest (12,006 ) Present value of obligations under capital leases $ 17,932 Current portion of capital lease obligations 958 Capital lease obligations, net of current portion $ 16,974 In April and June 2016, Cynosure executed amendments to its U.S. operating facility lease, and these amendments became effective in October 2016. These amendments, among other things, extend the lease period for an additional year, provide additional rental space and require additional base rent of $5.7 million over the remaining life of the lease. Contractual Obligations Cynosure’s significant outstanding contractual obligations relate to its capital leases from its facilities leases, including the buildings portion of its U.S. operating facility, and equipment financings. Cynosure’s leases are non-cancellable and typically contain renewal options. Certain leases contain rent escalation clauses for which Cynosure recognizes the expense on a straight-line basis. Cynosure has summarized in the table below its fixed contractual cash obligations as of September 30, 2016. Total Less Than One to Three to More than (in thousands) Capital lease obligations, including interest $ 29,938 $ 2,845 $ 5,437 $ 5,363 $ 16,293 Operating leases 8,718 2,144 3,368 1,209 1,997 Total contractual obligations $ 38,656 $ 4,989 $ 8,805 $ 6,572 $ 18,290 Contingencies Cynosure continually assesses litigation to determine if an unfavorable outcome would lead to a probable loss or reasonably possible loss, which could be estimated. In accordance with the Financial Accounting Standards Board’s (FASB) guidance on accounting for contingencies, Cynosure accrues for all direct costs associated with the estimated resolution of contingencies at the earliest date at which it is deemed probable that a liability has been incurred and the amount of such liability can be reasonably estimated. If the estimate of a probable loss is a range and no amount within the range is more likely, Cynosure accrues the minimum amount of the range. In cases where Cynosure believes that a reasonably possible loss exists, Cynosure discloses the facts and circumstances of the litigation, including an estimable range, if possible. On July 27, 2016, ARcare, Inc., individually and as putative representative of a purported nationwide class, filed a complaint against Cynosure in the U.S. District Court for the District of Massachusetts. The plaintiff alleges that Cynosure violated the federal Telephone Consumer Protection Act (TCPA) by sending fax advertisements that did not comply with statutory and Federal Communications Commission (FCC) requirements that senders provide recipients with certain information about how to opt out from receiving faxed advertisements in the future, and by sending unsolicited fax advertisements. The complaint seeks damages, declaratory and injunctive relief, and attorneys’ fees on behalf of a purported class of all recipients of purported fax advertisements that the plaintiff alleges did not receive an adequate opt-out notice. The TCPA provides for statutory damages of $500 per violation and gives courts the discretion to increase that amount up to $1,500 for knowing and willful violations. On September 30, 2016, Cynosure answered the complaint and denied liability. On September 7, 2016, the plaintiff sent a demand letter seeking a class settlement for statutory damages under Massachusetts General Laws, Chapter 93A § 9, and on October 7, 2016, Cynosure responded denying any liability under Chapter 93A, but offering the plaintiff statutory damages under Chapter 93A on an individual basis. To date, the plaintiff has not moved to amend the complaint to assert a claim under Chapter 93A. Cynosure and the plaintiff have agreed to explore a possible class settlement of the litigation in a mediation to be held in late 2016, and on October 12, 2016, the court stayed the case until January 11, 2017 to allow the parties to mediate without litigation. Based on preliminary estimates, Cynosure believes the aggregate number of faxes sent in the four years prior to the lawsuit to be approximately 835,000. Cynosure has not recorded a liability in respect of this matter, and at this time it cannot estimate the possible loss or range of losses that it may incur in respect of this matter. Cynosure is unable to make such an estimate because, among other reasons, the proceedings are at an early stage and other reported TCPA lawsuits have resulted in a broad range of outcomes, with each case being dependent on its own facts and circumstances. In addition, Cynosure believes that the outcome of litigation currently pending before the U.S. Court of Appeals for the D.C. Circuit (Bais Yaakov of Spring Valley, et al. v. FCC) may have a significant impact on the outcome of this matter. In that case, the outcome of which Cynosure cannot predict, other companies are challenging the validity of an FCC regulation that requires certain opt out information to be included in fax promotions sent to recipients who had given permission to receive them. Cynosure has also applied to the FCC for a retroactive waiver from that requirement, which if approved, would exempt Cynosure from that requirement through April 30, 2015. The FCC’s ability to issue such waivers is also before the U.S. Court of Appeals for the D.C. Circuit in the Bais Yaakov matter, and in any event there can be no assurance that Cynosure’s application will be granted. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note 13 — Recent Accounting Pronouncements In May 2014, the FASB issued guidance codified in ASC 606, Revenue Recognition — Revenue from Contracts with Customers Revenue Recognition In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements — Going Concern In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory In November 2015, the FASB issued ASU 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Leases (Topic 840) |
Recent Accounting Pronounceme20
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued guidance codified in ASC 606, Revenue Recognition — Revenue from Contracts with Customers Revenue Recognition In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements — Going Concern In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory In November 2015, the FASB issued ASU 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Leases (Topic 840) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock-Based Compensation Expenses | Total stock-based compensation expense was recorded to cost of revenues and operating expenses based upon the functional responsibilities of the individual holding the respective share-based payments, as follows: Three Months Nine Months 2016 2015 2016 2015 (in thousands) Cost of revenues $ 118 $ 96 $ 351 $ 244 Sales and marketing 663 541 1,944 1,511 Research and development 356 308 1,070 857 General and administrative 1,215 1,004 3,643 3,071 Total stock-based compensation expense $ 2,352 $ 1,949 $ 7,008 $ 5,683 |
Summary of Share-Based Compensation Arrangement Fair Value Assumptions | The weighted average fair value of the options granted during the nine months ended September 30, 2015 was $12.40, using the following assumptions: Nine Months Ended September 30, 2015 Risk-free interest rate 1.39% - 1.72% Expected dividend yield — Expected term 4.8 years Expected volatility 42% - 43% Estimated forfeiture rate 5% |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Cynosure states all inventories at the lower of cost or market, determined on a first-in, first-out method. Inventory includes material, labor and overhead and consists of the following: September 30, December 31, (in thousands) Raw materials $ 19,559 $ 22,569 Work in process 2,360 3,317 Finished goods 62,007 53,882 $ 83,926 $ 79,768 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Measurement of Fair Value Hierarchy for Financial Assets | The following table represents Cynosure’s fair value hierarchy for its financial assets (cash equivalents and marketable securities) measured at fair value as of September 30, 2016 (in thousands): Level 1 Level 2 Level 3 Total Money market funds (1) $ 5,690 $ — $ — $ 5,690 Treasuries and government agencies (2) — 30,231 — 30,231 State and municipal bonds — 54,536 — 54,536 Total $ 5,690 $ 84,767 $ — $ 90,457 The following table represents Cynosure’s fair value hierarchy for its financial assets (cash equivalents and marketable securities) measured at fair value as of December 31, 2015 (in thousands): Level 1 Level 2 Level 3 Total Money market funds (1) $ 5,785 $ — $ — $ 5,785 State and municipal bonds — 59,786 — 59,786 Treasuries and government agencies — 14,387 — 14,387 Total $ 5,785 $ 74,173 $ — $ 79,958 (1) Included in cash and cash equivalents at September 30, 2016 and December 31, 2015, as applicable. (2) $1.5 million included in cash and cash equivalents at September 30, 2016. |
Short and Long-Term Marketabl24
Short and Long-Term Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Marketable Securities | As of September 30, 2016, Cynosure’s marketable securities consist of the following (in thousands): Market Amortized Unrealized Unrealized Available-for-Sale Securities: Cash equivalents: Treasuries and government agencies $ 1,500 $ 1,500 $ — $ — Total cash equivalents $ 1,500 $ 1,500 $ — $ — Short-term marketable securities: State and municipal bonds $ 32,044 $ 32,072 $ — $ (28 ) Treasuries and government agencies 9,056 9,056 1 (1 ) Total short-term marketable securities $ 41,100 $ 41,128 $ 1 $ (29 ) Long-term marketable securities: State and municipal bonds $ 22,492 $ 22,546 $ — $ (54 ) Treasuries and government agencies 19,675 19,680 2 (7 ) Total long-term marketable securities $ 42,167 $ 42,226 $ 2 $ (61 ) Total available-for-sale securities $ 84,767 $ 84,854 $ 3 $ (90 ) Total marketable securities $ 83,267 As of December 31, 2015, Cynosure’s marketable securities consist of the following (in thousands): Market Amortized Unrealized Unrealized Available-for-Sale Securities: Short-term marketable securities: State and municipal bonds $ 33,914 $ 33,923 $ — $ (9 ) Treasuries and government agencies 1,498 1,500 — (2 ) Total short-term marketable securities $ 35,412 $ 35,423 $ — $ (11 ) Long-term marketable securities: State and municipal bonds $ 25,872 $ 25,916 $ 1 $ (45 ) Treasuries and government agencies 12,889 12,914 — (25 ) Total long-term marketable securities $ 38,761 $ 38,830 $ 1 $ (70 ) Total available-for-sale securities $ 74,173 $ 74,253 $ 1 $ (81 ) Total marketable securities $ 74,173 |
Schedule of Available-for-Sale Debt Securities Mature | As of September 30, 2016, Cynosure’s available-for-sale debt securities mature as follows (in thousands): Total Maturities Less One to More State and municipal bonds $ 54,536 $ 32,044 $ 22,492 $ — Treasuries and government agencies 30,231 10,556 19,675 — Total available-for-sale debt securities $ 84,767 $ 42,600 $ 42,167 $ — |
Goodwill and Other Intangible25
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes to Goodwill | Changes to goodwill during the nine months ended September 30, 2016 were as follows (in thousands): Balance — December 31, 2015 $ 105,807 Translation adjustment 58 Balance — September 30, 2016 $ 105,865 |
Schedule of Components of Other Intangible Assets | Other intangible assets consisted of the following at September 30, 2016 and December 31, 2015 (in thousands): Developed Business Customer Trade Other Total September 30, 2016 Cost $ 28,541 $ 384 $ 16,459 $ 18,370 $ 1,353 $ 65,107 Translation adjustment — — (32 ) — — $ (32 ) Accumulated amortization (17,719 ) (242 ) (5,763 ) $ (3,179 ) $ (313 ) $ (27,216 ) Balance, September 30, 2016 $ 10,822 $ 142 $ 10,664 $ 15,191 $ 1,040 $ 37,859 December 31, 2015 Cost $ 29,240 $ 384 $ 19,718 $ 18,390 $ 1,353 $ 69,085 Translation adjustment — — (42 ) — — (42 ) Accumulated amortization (14,055 ) (232 ) (7,799 ) (2,518 ) (122 ) (24,726 ) Balance, December 31, 2015 $ 15,185 $ 152 $ 11,877 $ 15,872 $ 1,231 $ 44,317 |
Schedule of Amortization Expenses on Intangible Assets | As of September 30, 2016, amortization expense on existing intangible assets for the next five years and beyond is as follows (in thousands): Remainder of 2016 $ 2,152 2017 6,624 2018 5,108 2019 3,373 2020 2,923 2021 and thereafter 17,623 Total $ 37,803 |
Warranty Costs (Tables)
Warranty Costs (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Guarantees [Abstract] | |
Schedule of Change in Product Warranty Accrual | The following table provides the detail of the change in Cynosure’s product warranty accrual during the nine months ended September 30, 2016, which is a component of accrued expenses in the consolidated balance sheets (in thousands): Balance — December 31, 2015 $ 8,841 Warranty provision related to new sales 13,878 Costs incurred (12,332 ) Balance — September 30, 2016 $ 10,387 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Total Revenue by Geographic Area | The following table represents total revenue by geographic area: Three Months Ended Nine Months Ended 2016 2015 2016 2015 (in thousands) United States $ 67,434 $ 47,341 $ 204,239 $ 136,988 Europe 8,785 8,470 28,679 29,572 Asia / Pacific 22,613 16,217 59,568 51,175 Other 7,554 6,386 18,907 19,285 Total $ 106,386 $ 78,414 $ 311,393 $ 237,020 |
Schedule of Total Assets by Geographic Area | Total assets by geographic area are as follows: September 30, December 31, (in thousands) United States $ 533,402 $ 497,007 Europe 21,643 22,204 Asia / Pacific 25,530 21,139 Eliminations (6,514 ) (5,740 ) Total $ 574,061 $ 534,610 |
Schedule of Long-Lived Assets (Property and Equipment Only) by Geographic Area | Long-lived assets (property and equipment only) by geographic area are as follows: September 30, December 31, (in thousands) United States $ 40,378 $ 35,185 Europe 1,812 1,641 Asia / Pacific 3,668 2,880 Total $ 45,858 $ 39,706 |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Basic and Diluted Shares | A reconciliation of basic and diluted shares is as follows (in thousands, except per share data): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Net income $ 4,163 $ 3,229 $ 13,350 $ 8,579 Basic weighted average common shares outstanding 23,536 22,580 23,195 22,167 Weighted average common equivalent shares 409 300 412 372 Diluted weighted average common shares outstanding 23,945 22,880 23,607 22,539 Basic net income per share $ 0.18 $ 0.14 $ 0.58 $ 0.39 Diluted net income per share $ 0.17 $ 0.14 $ 0.57 $ 0.38 |
Accumulated Other Comprehensi29
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Changes to Accumulated Other Comprehensive Loss | Changes to accumulated other comprehensive loss during the nine months ended September 30, 2016 were as follows (in thousands): Unrealized Translation Accumulated Balance — December 31, 2015 $ (49 ) $ (5,411 ) $ (5,460 ) Current period other comprehensive gain (7 ) 404 397 Balance — September 30, 2016 $ (56 ) $ (5,007 ) $ (5,063 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating Facility, Certain Equipment and Vehicles Under Operating Lease and Capital Lease Agreements with Payments | Commitments under Cynosure’s lease arrangements are as follows as of September 30, 2016 (in thousands): Operating Capital Remainder of 2016 $ 593 $ 716 2017 2,070 2,837 2018 1,760 2,732 2019 1,453 2,662 2020 594 2,643 Thereafter 2,248 18,348 Total minimum lease payments $ 8,718 $ 29,938 Less amount representing interest (12,006 ) Present value of obligations under capital leases $ 17,932 Current portion of capital lease obligations 958 Capital lease obligations, net of current portion $ 16,974 |
Summary of Fixed Contractual Cash Obligations | Cynosure has summarized in the table below its fixed contractual cash obligations as of September 30, 2016. Total Less Than One to Three to More than (in thousands) Capital lease obligations, including interest $ 29,938 $ 2,845 $ 5,437 $ 5,363 $ 16,293 Operating leases 8,718 2,144 3,368 1,209 1,997 Total contractual obligations $ 38,656 $ 4,989 $ 8,805 $ 6,572 $ 18,290 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 2,352 | $ 1,949 | $ 7,008 | $ 5,683 |
Stock-based compensation expense capitalized to inventory | 31 | 29 | ||
Cash received from option exercises | $ 22,800 | $ 17,700 | ||
Stock options granted | 0 | 452,499 | ||
Weighted average fair value of the options granted | $ 12.40 | |||
Cash dividend yield | 0.00% | |||
Restricted Stock Units (RSUs) [Member] | Employee [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted stock units | 158,613 | 86,618 | ||
Vested period | 3 years | |||
Share based compensation period | 3 years | |||
Restricted Stock Units (RSUs) [Member] | Non Employee [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted stock units | 25,425 | 16,685 | ||
Vested period | 1 year | |||
Share based compensation period | 1 year | |||
Performance-based Stock Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted stock units | 58,981 | |||
Vested period | 3 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock-Based Compensation Expenses (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | $ 2,352 | $ 1,949 | $ 7,008 | $ 5,683 |
Cost of Revenues [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 118 | 96 | 351 | 244 |
Sales and Marketing [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 663 | 541 | 1,944 | 1,511 |
Research and Development [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 356 | 308 | 1,070 | 857 |
General and Administrative [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | $ 1,215 | $ 1,004 | $ 3,643 | $ 3,071 |
Stock-Based Compensation - Su33
Stock-Based Compensation - Summary of Share-Based Compensation Arrangement Fair Value Assumptions (Detail) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Risk-free interest rate, minimum | 1.39% |
Risk-free interest rate, maximum | 1.72% |
Expected dividend yield | 0.00% |
Expected term | 4 years 9 months 18 days |
Expected volatility, minimum | 42.00% |
Expected volatility, maximum | 43.00% |
Estimated forfeiture rate | 5.00% |
Inventories - Inventories (Deta
Inventories - Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 19,559 | $ 22,569 |
Work in process | 2,360 | 3,317 |
Finished goods | 62,007 | 53,882 |
Inventories, Total | $ 83,926 | $ 79,768 |
Fair Value - Measurement of Fai
Fair Value - Measurement of Fair Value Hierarchy for Financial Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial assets | $ 90,457 | $ 79,958 |
Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial assets | 5,690 | 5,785 |
State and Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial assets | 54,536 | 59,786 |
Treasuries and Government Agencies [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial assets | 30,231 | 14,387 |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial assets | 5,690 | 5,785 |
Level 1 [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial assets | 5,690 | 5,785 |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial assets | 84,767 | 74,173 |
Level 2 [Member] | State and Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial assets | 54,536 | 59,786 |
Level 2 [Member] | Treasuries and Government Agencies [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial assets | $ 30,231 | $ 14,387 |
Fair Value - Measurement of F36
Fair Value - Measurement of Fair Value Hierarchy for Financial Assets (Parenthetical) (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 90,457 | $ 79,958 |
Treasuries and Government Agencies [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 30,231 | $ 14,387 |
Treasuries and Government Agencies [Member] | Cash and Cash Equivalents [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 1,500 |
Short and Long-Term Marketabl37
Short and Long-Term Marketable Securities - Additional Information (Detail) $ in Thousands | Sep. 30, 2016USD ($) |
Investments, Debt and Equity Securities [Abstract] | |
Available for sale securities in debt | $ 84,767 |
Short and Long-Term Marketabl38
Short and Long-Term Marketable Securities - Schedule of Marketable Securities (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Market Value | $ 84,767 | $ 74,173 |
Amortized Cost | 84,854 | 74,253 |
Unrealized Gains | 3 | 1 |
Unrealized Losses | (90) | (81) |
Total marketable securities | 83,267 | 74,173 |
Cash Equivalents [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Market Value | 1,500 | |
Amortized Cost | 1,500 | |
Cash Equivalents [Member] | Treasuries and Government Agencies [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Market Value | 1,500 | |
Amortized Cost | 1,500 | |
Short-Term Marketable Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Market Value | 41,100 | 35,412 |
Amortized Cost | 41,128 | 35,423 |
Unrealized Gains | 1 | |
Unrealized Losses | (29) | (11) |
Short-Term Marketable Securities [Member] | State and Municipal Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Market Value | 32,044 | 33,914 |
Amortized Cost | 32,072 | 33,923 |
Unrealized Losses | (28) | (9) |
Short-Term Marketable Securities [Member] | Treasuries and Government Agencies [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Market Value | 9,056 | 1,498 |
Amortized Cost | 9,056 | 1,500 |
Unrealized Gains | 1 | |
Unrealized Losses | (1) | (2) |
Long-Term Marketable Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Market Value | 42,167 | 38,761 |
Amortized Cost | 42,226 | 38,830 |
Unrealized Gains | 2 | 1 |
Unrealized Losses | (61) | (70) |
Long-Term Marketable Securities [Member] | State and Municipal Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Market Value | 22,492 | 25,872 |
Amortized Cost | 22,546 | 25,916 |
Unrealized Gains | 1 | |
Unrealized Losses | (54) | (45) |
Long-Term Marketable Securities [Member] | Treasuries and Government Agencies [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Market Value | 19,675 | 12,889 |
Amortized Cost | 19,680 | 12,914 |
Unrealized Gains | 2 | |
Unrealized Losses | $ (7) | $ (25) |
Short and Long-Term Marketabl39
Short and Long-Term Marketable Securities - Schedule of Available-for-Sale Debt Securities Mature (Detail) $ in Thousands | Sep. 30, 2016USD ($) |
Schedule of Available-for-sale Securities [Line Items] | |
Total | $ 84,767 |
Less Than One Year | 42,600 |
One to Five Years | 42,167 |
More than Five Years | 0 |
State and Municipal Bonds [Member] | |
Schedule of Available-for-sale Securities [Line Items] | |
Total | 54,536 |
Less Than One Year | 32,044 |
One to Five Years | 22,492 |
More than Five Years | 0 |
Treasuries and Government Agencies [Member] | |
Schedule of Available-for-sale Securities [Line Items] | |
Total | 30,231 |
Less Than One Year | 10,556 |
One to Five Years | 19,675 |
More than Five Years | $ 0 |
Goodwill and Other Intangible40
Goodwill and Other Intangible Assets - Schedule of Changes to Goodwill (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Balance - December 31, 2015 | $ 105,807 |
Translation adjustment | 58 |
Balance - September 30, 2016 | $ 105,865 |
Goodwill and Other Intangible41
Goodwill and Other Intangible Assets - Schedule of Components of Other Intangible Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 65,107 | $ 69,085 |
Translation adjustment | (32) | (42) |
Accumulated amortization | (27,216) | (24,726) |
Other intangible assets, net | 37,859 | 44,317 |
Developed Technology & Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 28,541 | 29,240 |
Accumulated amortization | (17,719) | (14,055) |
Other intangible assets, net | 10,822 | 15,185 |
Business Licenses [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 384 | 384 |
Accumulated amortization | (242) | (232) |
Other intangible assets, net | 142 | 152 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 16,459 | 19,718 |
Translation adjustment | (32) | (42) |
Accumulated amortization | (5,763) | (7,799) |
Other intangible assets, net | 10,664 | 11,877 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 18,370 | 18,390 |
Accumulated amortization | (3,179) | (2,518) |
Other intangible assets, net | 15,191 | 15,872 |
Other [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 1,353 | 1,353 |
Accumulated amortization | (313) | (122) |
Other intangible assets, net | $ 1,040 | $ 1,231 |
Goodwill and Other Intangible42
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 2,200,000 | $ 2,300,000 | $ 6,500,000 | $ 6,900,000 |
Indefinite-life intangible assets | $ 56,000 | $ 56,000 |
Goodwill and Other Intangible43
Goodwill and Other Intangible Assets - Schedule of Amortization Expenses on Intangible Assets (Detail) $ in Thousands | Sep. 30, 2016USD ($) |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
Remainder of 2016 | $ 2,152 |
2,017 | 6,624 |
2,018 | 5,108 |
2,019 | 3,373 |
2,020 | 2,923 |
2021 and thereafter | 17,623 |
Total | $ 37,803 |
Warranty Costs - Additional Inf
Warranty Costs - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2016 | |
Guarantees [Abstract] | |
Standard product warranty period | 1 year |
Warranty Costs - Schedule of Ch
Warranty Costs - Schedule of Change in Product Warranty Accrual (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Guarantees [Abstract] | |
Balance at beginning of period | $ 8,841 |
Warranty provision related to new sales | 13,878 |
Costs incurred | (12,332) |
Balance at end of period | $ 10,387 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2016SegmentCountry | |
Segment Reporting [Abstract] | |
Number of operating segments | Segment | 1 |
Number of individual countries with greater than 10% of total revenue, total assets or total long lived assets | Country | 0 |
Percentage of total revenue | 10.00% |
Segment Information - Schedule
Segment Information - Schedule of Total Revenue by Geographic Area (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 106,386 | $ 78,414 | $ 311,393 | $ 237,020 |
United States [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 67,434 | 47,341 | 204,239 | 136,988 |
Europe [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 8,785 | 8,470 | 28,679 | 29,572 |
Asia Pacific [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 22,613 | 16,217 | 59,568 | 51,175 |
Other [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 7,554 | $ 6,386 | $ 18,907 | $ 19,285 |
Segment Information - Schedul48
Segment Information - Schedule of Total Assets by Geographic Area (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total assets | $ 574,061 | $ 534,610 |
Reportable Geographical Components [Member] | United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total assets | 533,402 | 497,007 |
Reportable Geographical Components [Member] | Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total assets | 21,643 | 22,204 |
Reportable Geographical Components [Member] | Asia Pacific [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total assets | 25,530 | 21,139 |
Eliminations [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total assets | $ (6,514) | $ (5,740) |
Segment Information - Schedul49
Segment Information - Schedule of Long-Lived Assets (Property and Equipment Only) by Geographic Area (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 45,858 | $ 39,706 |
United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 40,378 | 35,185 |
Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 1,812 | 1,641 |
Asia Pacific [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 3,668 | $ 2,880 |
Net Income Per Common Share - S
Net Income Per Common Share - Schedule of Reconciliation of Basic and Diluted Shares (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 4,163 | $ 3,229 | $ 13,350 | $ 8,579 |
Basic weighted average common shares outstanding | 23,536 | 22,580 | 23,195 | 22,167 |
Weighted average common equivalent shares | 409 | 300 | 412 | 372 |
Diluted weighted average common shares outstanding | 23,945 | 22,880 | 23,607 | 22,539 |
Basic net income per share | $ 0.18 | $ 0.14 | $ 0.58 | $ 0.39 |
Diluted net income per share | $ 0.17 | $ 0.14 | $ 0.57 | $ 0.38 |
Net Income Per Common Share - A
Net Income Per Common Share - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Stock options excluded from computation of earning per share | 3,000 | 500,000 | 93,000 | 1,100,000 |
Accumulated Other Comprehensi52
Accumulated Other Comprehensive Loss - Changes to Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | $ 404,402 | |||
Accumulated Other Comprehensive Loss, Current period other comprehensive gain | $ (54) | $ (479) | 397 | $ (1,562) |
Ending Balance | 451,214 | 451,214 | ||
Accumulated Other Comprehensive Loss [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | (5,460) | |||
Accumulated Other Comprehensive Loss, Current period other comprehensive gain | 397 | |||
Ending Balance | (5,063) | (5,063) | ||
Translation Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | (5,411) | |||
Accumulated Other Comprehensive Loss, Current period other comprehensive gain | 404 | |||
Ending Balance | (5,007) | (5,007) | ||
Unrealized Loss on Marketable Securities, Net of Taxes [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | (49) | |||
Accumulated Other Comprehensive Loss, Current period other comprehensive gain | (7) | |||
Ending Balance | $ (56) | $ (56) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Deferred Tax Assets And Liabilities Classification [Line Items] | ||||||
(Benefit) provision for income taxes | $ 3,867 | $ 962 | $ 9,210 | $ 3,295 | ||
Effective tax rate | 48.00% | 23.00% | 41.00% | 28.00% | ||
Discrete provision for income taxes | $ 500 | |||||
Discrete tax benefits related to federal and state research credits | $ 500 | |||||
Unrecognized tax benefits | $ 800 | $ 800 | $ 800 | |||
Palomar Medical Technologies, Inc. [Member] | ||||||
Deferred Tax Assets And Liabilities Classification [Line Items] | ||||||
Discrete tax benefits related to release of valuation allowance | $ 500 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2016USD ($) | Apr. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)Faxes | Sep. 30, 2015USD ($) | |
Loss Contingencies [Line Items] | ||||||
Operating lease rent expense | $ 600,000 | $ 500,000 | $ 1,600,000 | $ 1,500,000 | ||
Operating lease expiration period | 2027-05 | |||||
Additional base rent required under operating lease | $ 5,700,000 | $ 5,700,000 | ||||
Aggregate number of faxes sent in four years prior to the lawsuit | Faxes | 835,000 | |||||
Minimum [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Statutory damages per violation | $ 500 | |||||
Maximum [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Statutory damages per violation | $ 1,500 |
Commitments and Contingencies55
Commitments and Contingencies - Operating Facility, Certain Equipment and Vehicles Under Operating Lease and Capital Lease Agreements with Payments (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Commitments and Contingencies Disclosure [Abstract] | ||
Remainder of 2016 | $ 593 | |
2,017 | 2,070 | |
2,018 | 1,760 | |
2,019 | 1,453 | |
2,020 | 594 | |
Thereafter | 2,248 | |
Total minimum lease payments | 8,718 | |
Remainder of 2016 | 716 | |
2,017 | 2,837 | |
2,018 | 2,732 | |
2,019 | 2,662 | |
2,020 | 2,643 | |
Thereafter | 18,348 | |
Total minimum lease payments | 29,938 | |
Less amount representing interest | (12,006) | |
Present value of obligations under capital leases | 17,932 | |
Current portion of capital lease obligations | 958 | $ 741 |
Capital lease obligations, net of current portion | $ 16,974 | $ 17,372 |
Commitments and Contingencies56
Commitments and Contingencies - Summary of Fixed Contractual Cash Obligations (Detail) $ in Thousands | Sep. 30, 2016USD ($) |
Contractual Obligation [Line Items] | |
Capital lease obligations, including interest | $ 29,938 |
Operating leases | 8,718 |
Total contractual obligations | 38,656 |
Less Than One Year [Member] | |
Contractual Obligation [Line Items] | |
Capital lease obligations, including interest | 2,845 |
Operating leases | 2,144 |
Total contractual obligations | 4,989 |
One To Three Years [Member] | |
Contractual Obligation [Line Items] | |
Capital lease obligations, including interest | 5,437 |
Operating leases | 3,368 |
Total contractual obligations | 8,805 |
Three To Five Years [Member] | |
Contractual Obligation [Line Items] | |
Capital lease obligations, including interest | 5,363 |
Operating leases | 1,209 |
Total contractual obligations | 6,572 |
More Than Five Years [Member] | |
Contractual Obligation [Line Items] | |
Capital lease obligations, including interest | 16,293 |
Operating leases | 1,997 |
Total contractual obligations | $ 18,290 |