Delaware | 33-0022692 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) |
951 Calle Amanecer | ||
San Clemente, California | 92673 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Name of each exchange on which registered | |
Common stock, par value $0.10 per share | The NASDAQ Stock Market LLC (Global Select Market) |
Large accelerated filer x | Accelerated filer o | |
Non-accelerated filer o | Small reporting company o | |
(Do not check if a smaller reporting company) | Emerging growth company o |
Page | ||
Item 4 | ||
◦ | Clave needlefree products, including the MicroClave, MicroClave Clear, and NanoClave brand of connectors, accessories, extension and administration sets used for the administration of IV fluids and medications. |
◦ | Neutron Catheter Patency Connector, used to help maintain patency of central venous catheters; |
◦ | SwabCap Disinfecting Cap, used to protect and disinfect any needlefree connector including, including competitive brands of connectors; |
◦ | Tego Hemodialysis Connector; |
◦ | NovaCath® and SuperCath® Peripheral IV Catheters. |
◦ | ChemoLock CSTD, is a Pharmacy preferred CSTD used for the preparation and administration of hazardous drugs. ChemoLock limits the escape of hazardous drug or vapor concentrations, blocks the transfer of environmental contaminants into the system, and eliminates the risk of needlestick injury; |
◦ | ChemoClave CSTD, is an ISO standard and universally compatible CSTD used for the preparation and administration of hazardous drugs. ChemoClave utilizes standard ISO luer locking connections, making it compatible with all brands of needlefree connectors and pump delivery systems. ChemoClave also limits the escape of hazardous drug or vapor concentrations, blocks the transfer of environmental contaminants into the system, and eliminates the risk of needlestick injury; |
◦ | Diana hazardous drug compounding system, used for the preparation of hazardous drugs. Diana is an automated sterile compounding system that incorporates ChemoClave and ChemoLock consumables for the accurate, safe, and efficient preparation of hazardous drugs. It is a user-controlled automated system that provides repeatable accuracy of drug mixes, minimizes clinician exposure to hazardous drugs while helping to maintain the sterility of the drugs being mixed. |
◦ | Sterile Solutions - IV solutions, normal saline, Ringers etc., used to replenish fluids and electrolytes by IV infusion. |
◦ | Irrigation Solutions - Used externally on open wounds to hydrate the wound, remove deep debris, assist with visual examination, to prevent infection and improve healing. |
◦ | Nutritionals - Solutions that feed vitamins, minerals and other natural therapeutic substances directly into the blood stream. We are committed to helping our customers deliver more comprehensive patient-care therapies, delivering an extensive source of nutrients for patients who cannot consume a normal diet. |
◦ | Plum 360™: The Plum 360™ infusion pump is an ICU Medical MedNet™ ready large volume infusion pump with an extensive drug library and wireless capability; |
◦ | LifeCare PCA™: The LifeCare PCA™ infusion pump is an ICU Medical MedNet™ ready patient-controlled analgesia pump ("PCA"); |
◦ | SapphirePlus™: The SapphirePlus™ infusion pump is an ICU Medical MedNet™ ready large volume infusion pump with an extensive drug library and wireless capability. The SapphirePlus is designed and manufactured by Q Core Medical Ltd ("Q Core"); |
◦ | Sapphire™: The Sapphire™ infusion pump is a compact infusion system used in ambulatory and hospital settings. The Sapphire™ infusion pump comes in multi-therapy and epidural-only configurations. The Sapphire is designed and manufactured by Q Core. |
◦ | Hemodynamic Monitoring Systems; |
• | Cogent® 2-in-1 Hemodynamic Monitoring System |
• | LiDCO LX1TM Noninvasive Hemodynamic Monitoring System |
• | CardioFlo® Hemodynamic Monitoring Sensor |
• | TriOx® PICC Minimally Invasive Venous Oximetry Sensor |
◦ | SafeSet® Closed Blood Sampling and Conservation System; |
◦ | Transpac® Consumable Blood Pressure Transducers; |
◦ | Q2 Plus™ CCO/SvO2 (continuous cardiac output/oximetry). |
◦ | La Aurora de Heredia, Costa Rica, which manufactures most of our infusion pumps and dedicated disposables and well as infusion consumables products; |
◦ | Ensenada, Mexico, which manufactures infusion consumables products; |
◦ | Salt Lake City, Utah, which produces primarily our Clave family of products and sends those products to Costa Rica or Mexico; |
◦ | Austin, Texas which produces our IV Solutions products. |
◦ | the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs, such as the Medicare and Medicaid programs. A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act; |
◦ | federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other federal third-party payors that are false or fraudulent; |
◦ | the federal Civil Monetary Penalties Law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier; |
◦ | federal criminal laws that prohibit executing a scheme to defraud any federal healthcare benefit program or making false statements relating to healthcare matters; |
◦ | the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, which governs the conduct of certain electronic healthcare transactions and protects the security and privacy of protected health information; |
◦ | the federal Physician Payment Sunshine Act, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the Centers for Medicare & Medicaid Services (“CMS”) information related to payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals and ownership and investment interests held by the physicians described above and their immediate family members, and payments or other “transfers of value” to such physician owners; and |
◦ | analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical and device companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require device manufacturers to track and report information related to payments and other “transfers of value” to physicians and other healthcare providers or pricing, marketing expenditures and information; and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. |
◦ | challenges in preserving important strategic customer and other third-party relationships of both businesses; |
◦ | the diversion of management’s attention to integration matters; |
◦ | challenges in maintaining employee morale and retaining or attracting key employees; |
◦ | potential incompatibility of corporate cultures; |
◦ | costs, delays and other difficulties (i) consolidating corporate and administrative infrastructures and information systems, (ii) implementing common systems and procedures including, in particular, our internal controls over financial reporting, and (iii) implementing the transitional services, manufacturing and other arrangements with Pfizer entered into at the closing of the HIS transaction; and |
◦ | coordinating and integrating a geographically dispersed organization, including operations in jurisdictions we did not operate in prior to the HIS transaction. |
◦ | untitled letters or warning letters; |
◦ | fines, injunctions, consent decrees and civil penalties; |
◦ | recalls, termination of distribution, administrative detention, or seizure of our products; |
◦ | customer notifications or repair, replacement or refunds; |
◦ | operating restrictions or partial suspension or total shutdown of production; |
◦ | delays in or refusal to grant our requests for future 510(k) clearances, PMA approvals or foreign regulatory approvals of new products, new intended uses, or modifications to existing products; |
◦ | withdrawals or suspensions of current 510(k) clearances or PMAs or foreign regulatory approvals, resulting in prohibitions on sales of our products; |
◦ | FDA refusal to issue certificates to foreign governments needed to export products for sale in other countries; and |
◦ | criminal prosecution. |
◦ | untitled letters or warning letters; |
◦ | fines, injunctions, consent decrees and civil penalties; |
◦ | customer notifications or repair, replacement, refunds, recall, detention or seizure of our products; |
◦ | operating restrictions or partial suspension or total shutdown of production; |
◦ | refusing or delaying our requests for clearance or approval of new products or modified products; |
◦ | withdrawing clearances or approvals that have already been granted; |
◦ | refusal to grant export approval for our products; or |
◦ | criminal prosecution. |
◦ | healthcare reform legislation; |
◦ | changes in medical reimbursement policies and programs; |
◦ | changes in non-U.S. government programs; |
◦ | multiple non-U.S. regulatory requirements that are subject to change and that could restrict our ability to manufacture and sell our products; |
◦ | possible failure to comply with anti-bribery laws such as the U.S. Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions; |
◦ | different local medical practices, product preferences and product requirements; |
◦ | possible failure to comply with trade protection and restriction measures and import or export licensing requirements; |
◦ | difficulty in establishing, staffing and managing non-U.S. operations; |
◦ | different labor regulations or work stoppages or strikes; |
◦ | changes in environmental, health and safety laws; |
◦ | potentially negative consequences from changes in or interpretations of tax laws, including changes regarding taxation of income earned outside the U.S.; |
◦ | political instability and actual or anticipated military or political conflicts; |
◦ | economic instability, including the European financial crisis or other economic instability in other parts of the world and the impact on interest rates, inflation and the credit worthiness of our customers; |
◦ | uncertainties regarding judicial systems and procedures; |
◦ | minimal or diminished protection of intellectual property in some countries; |
◦ | imposition of government controls; and |
◦ | regulatory changes that may place our products at a disadvantage. |
Location | Approximate Square Footage | Primary Use | Owned/Leased | |||
San Clemente, California, U.S. | 39,000 | Corporate Headquarters and R&D | Owned | |||
San Clemente, California, U.S. | 19,858 | Corporate Headquarters | Leased | |||
San Diego, California, U.S. | 44,779 | Corporate Offices | Leased | |||
Lake Forest, Illinois, U.S. | 137,498 | Corporate Offices | Leased | |||
Montreal, Canada | 48,065 | Corporate Offices | Leased | |||
Chennai, India | 36,879 | Corporate Offices | Leased | |||
Austin, Texas, U.S. | 594,602 | Manufacturing | Owned | |||
Ensenada, Baja California, Mexico | 308,000 sq ft building and approximately 94 acres of land | Manufacturing | Owned | |||
La Aurora, Costa Rica | 58,238 SM* | Manufacturing | Owned | |||
Salt Lake City, Utah, U.S. | 450,000 | Manufacturing | Owned | |||
San Cristobal, Dominican Republic** | 13,000 | Manufacturing | Owned | |||
Farmers Branch, Texas, U.S. | 66,060 | Distribution Warehouse | Owned | |||
King of Prussia, Pennsylvania, U.S. | 105,571 | Distribution Warehouse | Owned | |||
Round Rock, Texas, U.S. | 71,960 | Distribution Warehouse | Owned | |||
Santa Fe Springs, California, U.S. | 76,794 | Distribution Warehouse | Owned | |||
Botony, NSW Australia | 330SM* | Device service center | Leased | |||
San Jose, California, U.S. | 78,119 | Device service center | Leased | |||
Sligo, Ireland | 26,000 | Device service center | Leased | |||
________________________ *SM - Square Meters | ||||||
** We are in the process of selling our Dominican Republic manufacturing facility |
2017 | High | Low | ||||||
First quarter | $ | 159.95 | $ | 127.00 | ||||
Second quarter | $ | 175.73 | $ | 144.25 | ||||
Third quarter | $ | 188.85 | $ | 164.00 | ||||
Fourth quarter | $ | 225.38 | $ | 180.45 |
2016 | High | Low | ||||||
First quarter | $ | 110.89 | $ | 85.56 | ||||
Second quarter | $ | 113.24 | $ | 98.10 | ||||
Third quarter | $ | 128.93 | $ | 108.51 | ||||
Fourth quarter | $ | 154.80 | $ | 124.85 |
Period | Shares purchased | Average price paid per share | Shares purchased as part of a publicly announced program | Approximate dollar value that may yet be purchased under the program(1) | ||||||||||
10/01/2017 - 10/31/2017 | — | $ | — | — | $ | 7,169,000 | ||||||||
11/01/2017 - 11/30/2017 | — | $ | — | — | 7,169,000 | |||||||||
12/01/2017 - 12/31/2017 | — | $ | — | — | 7,169,000 | |||||||||
Fourth quarter 2017 total | — | $ | — | — | $ | 7,169,000 |
(1) | Our common stock purchase plan, which authorized the repurchase of up to $40.0 million of our common stock, was authorized by our Board of Directors and publicly announced on July 19, 2010. This plan has no expiration date. We are not obligated to make any purchases under our stock purchase program. Subject to applicable state and federal corporate and securities laws, purchases under a stock purchase program may be made at such times and in such amounts as we deem appropriate. Purchases made under our stock purchase program can be discontinued at any time we feel additional purchases are not warranted. |
12/31/2012 | 12/31/2013 | 12/31/2014 | 12/31/2015 | 12/31/2016 | 12/31/2017 | |||||||||||||||||||
ICU Medical, Inc. | $ | 100.00 | $ | 104.56 | $ | 134.42 | $ | 185.10 | $ | 241.83 | $ | 354.51 | ||||||||||||
NASDAQ U.S. Index | $ | 100.00 | $ | 133.48 | $ | 150.12 | $ | 150.84 | $ | 170.46 | $ | 206.91 | ||||||||||||
NASDAQ Medical Supplies Index | $ | 100.00 | $ | 122.44 | $ | 147.13 | $ | 162.69 | $ | 173.78 | $ | 243.25 |
Year ended December 31, | ||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
INCOME DATA: | ||||||||||||||||||||
REVENUE | ||||||||||||||||||||
Net sales | $ | 1,292,166 | $ | 379,339 | $ | 341,254 | $ | 308,770 | $ | 313,056 | ||||||||||
Other | 447 | 33 | 414 | 490 | 660 | |||||||||||||||
TOTAL REVENUE | 1,292,613 | 379,372 | 341,668 | 309,260 | 313,716 | |||||||||||||||
COST OF GOODS SOLD | 866,518 | 177,974 | 160,871 | 157,859 | 158,984 | |||||||||||||||
GROSS PROFIT | 426,095 | 201,398 | 180,797 | 151,401 | 154,732 | |||||||||||||||
Selling, general and administrative expenses | 303,953 | 89,426 | 83,216 | 88,939 | 89,006 | |||||||||||||||
Research and development expenses | 51,253 | 12,955 | 15,714 | 18,332 | 12,407 | |||||||||||||||
Restructuring and strategic transaction | 77,967 | 15,348 | 8,451 | 5,093 | 1,370 | |||||||||||||||
Change in fair value of contingent earn-out | 8,000 | — | — | — | — | |||||||||||||||
Gain on sale of assets | — | — | (1,086 | ) | — | — | ||||||||||||||
Legal settlements | — | — | 1,798 | — | — | |||||||||||||||
Impairment of assets held for sale | — | 728 | 4,139 | — | — | |||||||||||||||
TOTAL OPERATING EXPENSES | 441,173 | 118,457 | 112,232 | 112,364 | 102,783 | |||||||||||||||
(LOSS) INCOME FROM OPERATIONS | (15,078 | ) | 82,941 | 68,565 | 39,037 | 51,949 | ||||||||||||||
BARGAIN PURCHASE GAIN | 70,890 | 1,456 | — | — | — | |||||||||||||||
INTEREST EXPENSE | (2,047 | ) | (118 | ) | (39 | ) | — | — | ||||||||||||
OTHER (EXPENSE) INCOME, net | (2,482 | ) | 885 | 1,173 | 755 | 765 | ||||||||||||||
INCOME BEFORE INCOME TAXES | 51,283 | 85,164 | 69,699 | 39,792 | 52,714 | |||||||||||||||
BENEFIT (PROVISION) FOR INCOME TAXES | 17,361 | (22,080 | ) | (24,714 | ) | (13,457 | ) | (12,296 | ) | |||||||||||
NET INCOME | $ | 68,644 | $ | 63,084 | $ | 44,985 | $ | 26,335 | $ | 40,418 | ||||||||||
NET INCOME PER SHARE | ||||||||||||||||||||
Basic | $ | 3.50 | $ | 3.90 | $ | 2.84 | $ | 1.72 | $ | 2.75 | ||||||||||
Diluted | $ | 3.29 | $ | 3.66 | $ | 2.73 | $ | 1.68 | $ | 2.65 | ||||||||||
WEIGHTED AVERAGE NUMBER OF SHARES | ||||||||||||||||||||
Basic | 19,614 | 16,168 | 15,848 | 15,282 | 14,688 | |||||||||||||||
Diluted | 20,858 | 17,254 | 16,496 | 15,647 | 15,274 | |||||||||||||||
Cash dividends per share | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
CASH FLOW DATA: | ||||||||||||||||||||
Total cash flows from operations | $ | 154,423 | $ | 89,941 | $ | 64,195 | $ | 66,340 | $ | 72,692 |
As of December 31, | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
BALANCE SHEET DATA: | ||||||||||||||||||||
Cash, cash equivalents and short-term investment securities | $ | 300,133 | $ | 445,082 | $ | 377,397 | $ | 346,764 | $ | 296,891 | ||||||||||
Working capital | $ | 654,370 | $ | 528,560 | $ | 462,389 | $ | 403,801 | $ | 367,410 | ||||||||||
Total assets | $ | 1,496,951 | $ | 704,688 | $ | 626,825 | $ | 541,102 | $ | 499,643 | ||||||||||
Stockholders’ equity | $ | 1,198,254 | $ | 660,155 | $ | 579,871 | $ | 508,252 | $ | 464,725 |
◦ | Clave® needlefree products, including the MicroClave, MicroClave Clear, and NanoClave brand of connectors, accessories, extension and administration sets used for the administration of IV fluids and medications. |
◦ | Neutron® Catheter Patency Connector, used to help maintain patency of central venous catheters. |
◦ | SwabCap® Disinfecting Cap, used to protect and disinfect any needlefree connector including, including competitive brands of connectors. |
◦ | Tego® Hemodialysis Connector |
◦ | NovaCath® and SuperCath® Peripheral IV Catheters |
◦ | ChemoLock® Closed System Transfer Device (CSTD), is a pharmacy preferred CSTD used for the preparation and administration of hazardous drugs. |
◦ | ChemoClave® CSTD, is an ISO standard and universally compatible CSTD used for the preparation and administration of hazardous drugs. |
◦ | Diana™ hazardous drug compounding system, used for the preparation of hazardous drugs. |
• | Sterile Solutions - IV solutions, normal saline, Ringers etc., used to replenish fluids and electrolytes by IV infusion. |
• | Irrigation Solutions - Used externally on open wounds to hydrate the wound, remove deep debris, assist with visual examination, to prevent infection and improve healing. |
• | Nutritionals - Solutions that feed vitamins, minerals and other natural therapeutic substances directly into the blood stream. We are committed to helping our customers deliver more comprehensive patient-care therapies, delivering an extensive source of nutrients for patients who cannot consume a normal diet. |
◦ | Plum 360™: The Plum 360™ infusion pump is an ICU Medical MedNet™ ready large volume infusion pump with an extensive drug library and wireless capability. |
◦ | LifeCare PCA™: The LifeCare PCA™ infusion pump is an ICU Medical MedNet™ ready patient-controlled analgesia pump. |
◦ | SapphirePlus™: The SapphirePlus™ infusion pump is an ICU Medical MedNet™ ready large volume infusion pump with an extensive drug library and wireless capability. The SapphirePlus is designed and manufactured by Q Core. |
◦ | Sapphire™: The Sapphire™ infusion pump is a compact infusion system used in ambulatory and hospital settings. The Sapphire™ infusion pump comes in multi-therapy and epidural-only configurations. The Sapphire is designed and manufactured by Q Core. |
• | Hemodynamic Monitoring Systems. |
◦ | Cogent® 2-in-1 Hemodynamic Monitoring System |
◦ | LiDCO LX1TM Noninvasive Hemodynamic Monitoring System |
◦ | CardioFlo® Hemodynamic Monitoring Sensor |
◦ | TriOx® PICC Minimally Invasive Venous Oximetry Sensor |
• | SafeSet® Closed Blood Sampling and Conservation System. |
• | Transpac® Consumable Blood Pressure Transducers. |
• | Q2 Plus™ CCO/SvO2 (continuous cardiac output/oximetry). |
Year Ended December 31, | ||||||||||||||||||||
2017 | 2016 | 2015 | ||||||||||||||||||
$ | % of Revenue | $ | % of Revenue | $ | % of Revenue | |||||||||||||||
Domestic | $ | 980.0 | 76 | % | $ | 266.0 | 70 | % | $ | 241.9 | 71 | % | ||||||||
International | 312.6 | 24 | % | 113.4 | 30 | % | 99.8 | 29 | % | |||||||||||
Total Revenue | $ | 1,292.6 | 100 | % | $ | 379.4 | 100 | % | $ | 341.7 | 100 | % |
Product line | 2017 | 2016 | 2015 | ||||||
Infusion Consumables | 28 | % | 86 | % | 84 | % | |||
IV Solutions | 40 | % | — | % | — | % | |||
Infusion Systems | 23 | % | — | % | — | % | |||
Critical Care | 4 | % | 14 | % | 16 | % | |||
Other | 5 | % | — | % | — | % | |||
100 | % | 100 | % | 100 | % |
Percentage of Revenues | |||||||||
2017 | 2016 | 2015 | |||||||
Revenue | |||||||||
Net sales | 100 | % | 100 | % | 100 | % | |||
Other | — | % | — | % | — | % | |||
Total revenues | 100 | % | 100 | % | 100 | % | |||
Gross margin | 33 | % | 53 | % | 53 | % | |||
Selling, general and administrative expenses | 24 | % | 24 | % | 24 | % | |||
Research and development expenses | 4 | % | 3 | % | 5 | % | |||
Restructuring and transaction expense | 6 | % | 4 | % | 2 | % | |||
Change in fair value of contingent earn-out | 1 | % | — | % | — | % | |||
Gain on sale of building | — | % | — | % | — | % | |||
Legal settlements | — | % | — | % | 1 | % | |||
Impairment of assets held for sale | — | % | — | % | 1 | % | |||
Total operating expenses | 35 | % | 31 | % | 33 | % | |||
(Loss) Income from operations | (2 | )% | 22 | % | 20 | % | |||
Bargain Purchase Gain | 5 | % | — | % | — | % | |||
Interest expense | — | % | — | % | — | % | |||
Other (expense) income, net | — | % | — | % | — | % | |||
Income before income taxes | 3 | % | 22 | % | 20 | % | |||
(Benefit) Provision For Income taxes | (1 | )% | 6 | % | 7 | % | |||
Net income | 4 | % | 16 | % | 13 | % |
Year Ended December 31, | $ change | % change | $ change | % change | |||||||||||||||||||||
2017 | 2016 | 2015 | 2017 over 2016 | 2016 over 2015 | |||||||||||||||||||||
Infusion Consumables | $ | 365.6 | $ | 324.9 | $ | 286.2 | $ | 40.7 | 12.5 | % | $ | 38.7 | 13.5 | % |
Year Ended December 31, | $ change | % change | $ change | % change | |||||||||||||||||||
2017 | 2016 | 2015 | 2017 over 2016 | 2016 over 2015 | |||||||||||||||||||
IV Solutions | $ | 522.0 | $ | — | $ | — | $ | 522.0 | * | $ | — | * |
Year Ended December 31, | $ change | % change | $ change | % change | |||||||||||||||||||
2017 | 2016 | 2015 | 2017 over 2016 | 2016 over 2015 | |||||||||||||||||||
Infusion Systems | $ | 290.2 | $ | — | $ | — | $ | 290.2 | * | $ | — | * |
Year Ended December 31, | $ change | % change | $ change | % change | |||||||||||||||||||||
2017 | 2016 | 2015 | 2017 over 2016 | 2016 over 2015 | |||||||||||||||||||||
Critical Care | $ | 50.0 | $ | 53.6 | $ | 54.3 | $ | (3.6 | ) | (6.7 | )% | $ | (0.7 | ) | (1.3 | )% |
Year Ended December 31, | $ change | % change | $ change | % change | |||||||||||||||||||
2017 | 2016 | 2015 | 2017 over 2016 | 2016 over 2015 | |||||||||||||||||||
Revenue from Deferred Close Entities | $ | 64.4 | $ | — | $ | — | $ | 64.4 | * | $ | — | * |
Year Ended December 31, | $ change | % change | $ change | % change | |||||||||||||||||||||
2017 | 2016 | 2015 | 2017 over 2016 | 2016 over 2015 | |||||||||||||||||||||
SG&A | $ | 304.0 | $ | 89.4 | $ | 83.2 | $ | 214.6 | 240.0 | % | $ | 6.2 | 7.5 | % |
Year Ended December 31, | $ change | % change | $ change | % change | |||||||||||||||||||||
2017 | 2016 | 2015 | 2017 over 2016 | 2016 over 2015 | |||||||||||||||||||||
R&D | $ | 51.3 | $ | 13.0 | $ | 15.7 | $ | 38.3 | 294.6 | % | $ | (2.7 | ) | (17.2 | )% |
For the Years Ended December 31, | Variance | ||||||||||||||||||||
2017 | 2016 | 2015 | 2017 | 2016 | |||||||||||||||||
Investing Cash Flows: | |||||||||||||||||||||
Purchases of property, plant and equipment | $ | (74,479 | ) | $ | (23,361 | ) | $ | (12,984 | ) | $ | (51,118 | ) | $ | (10,377 | ) | (1) | |||||
Proceeds from sale of assets | 2 | — | 3,592 | 2 | (3,592 | ) | (2) | ||||||||||||||
Proceeds from the disposal of assets held-for-sale, net | — | 3,268 | — | (3,268 | ) | 3,268 | (3) | ||||||||||||||
Intangible asset additions | (5,203 | ) | (1,192 | ) | (951 | ) | (4,011 | ) | (241 | ) | |||||||||||
Business acquisitions, net of cash acquired | (162,448 | ) | (2,584 | ) | (56,786 | ) | (159,864 | ) | 54,202 | (4) | |||||||||||
Proceeds from sale of assets acquired in a business combination | — | — | 28,970 | — | (28,970 | ) | (5) | ||||||||||||||
Purchases of investment securities | (24,743 | ) | (118,384 | ) | (56,137 | ) | 93,641 | (62,247 | ) | (6) | |||||||||||
Proceeds from sale of investment securities | — | 158,534 | 83,054 | (158,534 | ) | 75,480 | (7) | ||||||||||||||
Net cash (used in) provided by investing activities | $ | (266,871 | ) | $ | 16,281 | $ | (11,242 | ) | $ | (283,152 | ) | $ | 27,523 |
For the Years Ended December 31, | Variance | ||||||||||||||||||||
2017 | 2016 | 2015 | 2017 | 2016 | |||||||||||||||||
Financing Cash Flows: | |||||||||||||||||||||
Repayment of long-term obligations | $ | (75,000 | ) | $ | — | $ | — | $ | (75,000 | ) | $ | — | (1) | ||||||||
Proceeds from exercise of stock options | 32,003 | 17,346 | 15,042 | 14,657 | 2,304 | (2) | |||||||||||||||
Proceeds from employee stock purchase plan | 2,705 | 2,361 | 2,162 | 344 | 199 | ||||||||||||||||
Purchase of treasury stock | (4,057 | ) | (17,235 | ) | (1,523 | ) | 13,178 | (15,712 | ) | (3) | |||||||||||
Net cash (used in) provided by financing activities | $ | (44,349 | ) | $ | 2,472 | $ | 15,681 | $ | (46,821 | ) | $ | (13,209 | ) |
(in thousands) | ||||||||||||||||||||||||||||
Contractual Obligations | Total | 2018 | 2019 | 2020 | 2021 | 2022 | Thereafter | |||||||||||||||||||||
Commitment fee on Credit Facility | $ | 1,109 | $ | 229 | $ | 228 | $ | 229 | $ | 228 | $ | 195 | $ | — | ||||||||||||||
Operating leases | 31,506 | 8,775 | 5,907 | 4,059 | 3,214 | 3,105 | 6,446 | |||||||||||||||||||||
Warehouse service agreements | 3,687 | 2,384 | 1,303 | — | — | — | — | |||||||||||||||||||||
Purchase obligations(1) | 92,456 | 4,477 | 14,005 | 34,756 | 39,218 | — | — | |||||||||||||||||||||
$ | 128,758 | $ | 15,865 | $ | 21,443 | $ | 39,044 | $ | 42,660 | $ | 3,300 | $ | 6,446 |
• | Inventories - we used the comparative sales method, which estimates the selling price of finished goods and work-in-progress inventory, reduced by estimated costs expected to be incurred in selling the inventory and a profit on those costs. The fair value of inventory is recognized in our statements of operations as the inventory is sold. Based on internal forecasts and estimates of inventory turnover, acquisition date inventory is sold and recognized in cost of goods sold over an estimated period of six months after the acquisition date. |
• | Property, Plant and Equipment - the fair value estimate of acquired property, plant and equipment is determined based upon the nature of the asset using either the cost approach, the sales comparison approach or the income capitalization approach. The cost approach measures the value of an asset by estimating the cost to acquire or reproduce comparable assets. The sales comparison approach measures the value of an asset through an analysis of comparable property sales. The income approach values the asset based on its earnings potential. The fair value of land was estimated using a sales comparison approach. Land and building improvements were valued using the cost approach. Personal property assets, such as, leasehold improvements, tooling, laboratory equipment, furniture and fixtures, and equipment, computer hardware, computer software, dies and molds were all valued using the cost approach. Transportation equipment and major manufacturing and equipment were valued using the sales comparison method. Construction-in-progress assets were valued based on the cost approach less adjustments for the nature of the assets. The fair value of property, plant and equipment will be recognized in our statements of operations over the expected useful life of the individual depreciable assets. |
• | Identifiable Intangible Assets - The fair value of the significant acquired identifiable intangible assets generally is determined using varying methods under the income approach. This method starts with a forecast of all of the expected future net cash flows associated with the asset and then adjusts the forecast to present value by applying an appropriate discount rate that reflects the risk factors associated with the cash flow streams. |
• | Earnout Liability - The fair value of the earnout was valued using a Monte Carlo simulation (see Note 9 to the consolidated financial statements in Part II, Item 8 of this Form 10-K for details). |
◦ | future growth; future operating results and various elements of operating results, including future expenditures and effects with respect to sales and marketing and product development and acquisition efforts; future sales and unit volumes of products; expected increases and decreases in sales; deferred revenue; accruals for restructuring charges, future license, royalty and revenue share income; production costs; gross margins; litigation expense; future SG&A and R&D expenses; manufacturing expenses; future costs of expanding our business; income; losses; cash flow; amortization; source of funds for capital purchases and operations; future tax rates; alternative sources of capital or financing; changes in working capital items such as receivables and inventory; selling prices; and income taxes; |
◦ | factors affecting operating results, such as shipments to specific customers; reduced dependence on current proprietary products; loss of a strategic relationship; change in demand; domestic and international sales; expansion in international markets, selling prices; future increases or decreases in sales of certain products and in certain markets and distribution channels; maintaining strategic relationships and securing long-term and multi-product contracts with large healthcare providers and major buying organizations; increases in systems capabilities; introduction, development and sales of new products, acquisition and integration of businesses and product lines, including the HIS business, SwabCap (EXC) and Tangent; benefits of our products over competing systems; qualification of our new products for the expedited Section 510(k) clearance procedure; possibility of lengthier clearance process for new products; planned increases in marketing; warranty claims; rebates; product returns; bad debt expense; amortization expense; inventory requirements; lives of property, plant and equipment; manufacturing efficiencies and cost savings; unit manufacturing costs; establishment or expansion of production facilities inside or outside of the U.S.; planned new orders for semi-automated or fully automated assembly machines for new products; adequacy of production capacity; results of R&D; our plans to repurchase shares of our common stock; asset impairment losses; relocation of manufacturing facilities and personnel; effect of expansion of manufacturing facilities on production efficiencies and resolution of production inefficiencies; the effect of costs to customers and delivery times; business seasonality and fluctuations in quarterly results; customer ordering patterns and the effects of new accounting pronouncements; and |
◦ | new or extended contracts with manufacturers and buying organizations; dependence on a small number of customers; loss of larger distributors and the ability to locate other distributors; the impact of our acquisition of the HIS business; growth of our Clave products in future years; design features of Clave products; the outcome of our strategic initiatives; regulatory approvals and compliance; outcome of litigation; patent protection and intellectual property landscape; patent infringement claims and the impact of newly issued patents on other medical devices; competitive and market factors, including continuing development of competing products by other manufacturers; improved production processes and higher volume production; innovation requirements; consolidation of the healthcare provider market and downward pressure on selling prices; distribution or financial capabilities of competitors; healthcare reform legislation; use of treasury stock; working capital requirements; liquidity and realizable value of our investment securities; future investment alternatives; foreign currency denominated financial instruments; foreign exchange risk; commodity price risk; our expectations regarding liquidity and capital resources over the next twelve months; capital expenditures; plans to convert existing space; acquisitions of other businesses or product lines, indemnification liabilities and contractual liabilities. |
◦ | general economic and business conditions, both in the U.S. and internationally; |
◦ | unexpected changes in our arrangements with our large customers; |
◦ | outcome of litigation; |
◦ | fluctuations in foreign exchange rates and other risks of doing business internationally; |
◦ | increases in labor costs or competition for skilled workers; |
◦ | increases in costs or availability of the raw materials need to manufacture our products; |
◦ | the effect of price and safety considerations on the healthcare industry; |
◦ | competitive factors, such as product innovation, new technologies, marketing and distribution strength and price erosion; |
◦ | the successful development and marketing of new products; |
◦ | unanticipated market shifts and trends; |
◦ | the impact of legislation affecting government reimbursement of healthcare costs; |
◦ | changes by our major customers and independent distributors in their strategies that might affect their efforts to market our products; |
◦ | the effects of additional governmental regulations; |
◦ | unanticipated production problems; and |
◦ | the availability of patent protection and the cost of enforcing and of defending patent claims. |
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE | |
Page No. | |
Consolidated Statements of Operations for the Years Ended December 31, 2017, 2016 and 2015 | |
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2017, 2016 and 2015 | |
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2017, 2016 and 2015 | |
Consolidated Statements of Cash Flows for the Years Ended December 31, 2017, 2016 and 2015 | |
/s/ Deloitte & Touche LLP | |
Costa Mesa, California | |
March 16, 2018 | |
We have served as the Company's auditor since 2008 |
December 31, | |||||||
2017 | 2016 | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 290,072 | $ | 445,082 | |||
Short-term investment securities | 10,061 | — | |||||
TOTAL CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENT SECURITIES | 300,133 | 445,082 | |||||
Accounts receivable, net of allowance for doubtful accounts of $3,311 and $1,073 at December 31, 2017 and 2016, respectively | 112,696 | 56,161 | |||||
Inventories | 288,657 | 49,264 | |||||
Prepaid income taxes | 10,594 | 11,235 | |||||
Prepaid expenses and other current assets | 41,286 | 7,355 | |||||
Related-party receivable | 98,807 | — | |||||
Assets held-for-sale | 12,489 | — | |||||
TOTAL CURRENT ASSETS | 864,662 | 569,097 | |||||
PROPERTY, PLANT AND EQUIPMENT, net | 398,684 | 85,696 | |||||
LONG-TERM INVESTMENT SECURITIES | 14,579 | — | |||||
GOODWILL | 12,357 | 5,577 | |||||
INTANGIBLE ASSETS, net | 143,753 | 22,383 | |||||
DEFERRED INCOME TAXES | 24,775 | 21,935 | |||||
OTHER ASSETS | 38,141 | — | |||||
TOTAL ASSETS | $ | 1,496,951 | $ | 704,688 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable | $ | 78,228 | $ | 14,641 | |||
Accrued liabilities | 132,064 | 25,896 | |||||
TOTAL CURRENT LIABILITIES | 210,292 | 40,537 | |||||
CONTINGENT EARN-OUT LIABILITY | 27,000 | — | |||||
OTHER LONG-TERM LIABILITIES | 55,326 | 1,107 | |||||
DEFERRED INCOME TAXES | 1,487 | 1,370 | |||||
INCOME TAX LIABILITY | 4,592 | 1,519 | |||||
COMMITMENTS AND CONTINGENCIES | — | — | |||||
STOCKHOLDERS’ EQUITY: | |||||||
Convertible preferred stock, $1.00 par value Authorized—500 shares; Issued and outstanding— none | — | — | |||||
Common stock, $0.10 par value — Authorized—80,000 shares; Issued and outstanding, 20,210 shares at December 31, 2017 and 16,338 shares at December 31, 2016 | 2,021 | 1,633 | |||||
Additional paid-in capital | 625,568 | 162,828 | |||||
Treasury stock, at cost | — | (14 | ) | ||||
Retained earnings | 585,624 | 516,980 | |||||
Accumulated other comprehensive loss | (14,959 | ) | (21,272 | ) | |||
TOTAL STOCKHOLDERS' EQUITY | 1,198,254 | 660,155 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,496,951 | $ | 704,688 |
Year ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
REVENUES: | |||||||||||
Net sales | $ | 1,292,166 | $ | 379,339 | $ | 341,254 | |||||
Other | 447 | 33 | 414 | ||||||||
TOTAL REVENUE | 1,292,613 | 379,372 | 341,668 | ||||||||
COST OF GOODS SOLD | 866,518 | 177,974 | 160,871 | ||||||||
GROSS PROFIT | 426,095 | 201,398 | 180,797 | ||||||||
OPERATING EXPENSES: | |||||||||||
Selling, general and administrative | 303,953 | 89,426 | 83,216 | ||||||||
Research and development | 51,253 | 12,955 | 15,714 | ||||||||
Restructuring, strategic transaction and integration expense | 77,967 | 15,348 | 8,451 | ||||||||
Change in fair value of contingent earn-out | 8,000 | — | — | ||||||||
Gain on sale of building | — | — | (1,086 | ) | |||||||
Legal settlements, net | — | — | 1,798 | ||||||||
Impairment of assets held for sale | — | 728 | 4,139 | ||||||||
TOTAL OPERATING EXPENSES | 441,173 | 118,457 | 112,232 | ||||||||
(LOSS) INCOME FROM OPERATIONS | (15,078 | ) | 82,941 | 68,565 | |||||||
BARGAIN PURCHASE GAIN | 70,890 | 1,456 | — | ||||||||
INTEREST EXPENSE | (2,047 | ) | (118 | ) | (39 | ) | |||||
OTHER (EXPENSE) INCOME, NET | (2,482 | ) | 885 | 1,173 | |||||||
INCOME BEFORE INCOME TAXES | 51,283 | 85,164 | 69,699 | ||||||||
BENEFIT (PROVISION) FOR INCOME TAXES | 17,361 | (22,080 | ) | (24,714 | ) | ||||||
NET INCOME | $ | 68,644 | $ | 63,084 | $ | 44,985 | |||||
NET INCOME PER SHARE | |||||||||||
Basic | $ | 3.50 | $ | 3.90 | $ | 2.84 | |||||
Diluted | $ | 3.29 | $ | 3.66 | $ | 2.73 | |||||
WEIGHTED AVERAGE NUMBER OF SHARES | |||||||||||
Basic | 19,614 | 16,168 | 15,848 | ||||||||
Diluted | 20,858 | 17,254 | 16,496 |
Year ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Net income | $ | 68,644 | $ | 63,084 | $ | 44,985 | |||||
Other comprehensive (loss) income, net of tax: | |||||||||||
Cash flow hedge adjustments, net of tax of $224 for the year ended December 31, 2017 | (365 | ) | — | — | |||||||
Foreign currency translation adjustment, net of taxes of $56, $185 and ($2,680) for the years ended December 31, 2017, 2016 and 2015, respectively | 6,694 | (514 | ) | (11,204 | ) | ||||||
Other adjustments, net of tax of $0 for the year ended December 31, 2017 | (16 | ) | — | — | |||||||
Other comprehensive income (loss), net of tax | 6,313 | (514 | ) | (11,204 | ) | ||||||
Comprehensive income | $ | 74,957 | $ | 62,570 | $ | 33,781 |
Common Stock | Accumulated | ||||||||||||||||||||||||||
Additional | Other | ||||||||||||||||||||||||||
Shares | Amount | Paid-In Capital | Treasury Stock | Retained Earnings | Comprehensive Income (Loss) | Total | |||||||||||||||||||||
Balance, December 31, 2014 | 15,595 | $ | 1,559 | $ | 107,336 | $ | — | $ | 408,911 | $ | (9,554 | ) | $ | 508,252 | |||||||||||||
Issuance of restricted stock and exercise of stock options, including excess income tax benefits of $9,330 | 475 | 46 | 22,715 | 1,611 | — | — | 24,372 | ||||||||||||||||||||
Purchase of treasury stock, treasury stock acquired in lieu of cash payment on stock option exercises and income tax withholding obligations | (18 | ) | — | 88 | (1,611 | ) | (1,523 | ) | |||||||||||||||||||
Proceeds from employee stock purchase plan | 34 | 3 | 2,159 | — | — | — | 2,162 | ||||||||||||||||||||
Stock compensation | — | — | 12,827 | — | — | — | 12,827 | ||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | (11,204 | ) | (11,204 | ) | ||||||||||||||||||
Net income | — | — | — | — | 44,985 | — | 44,985 | ||||||||||||||||||||
Balance, December 31, 2015 | 16,086 | 1,608 | 145,125 | — | 453,896 | (20,758 | ) | 579,871 | |||||||||||||||||||
Issuance of restricted stock and exercise of stock options | 416 | 22 | 103 | 17,221 | — | — | 17,346 | ||||||||||||||||||||
Purchase of treasury stock, treasury stock acquired in lieu of cash payment on stock option exercises and income tax withholding obligations | (195 | ) | — | — | (17,235 | ) | (17,235 | ) | |||||||||||||||||||
Proceeds from employee stock purchase plan | 31 | 3 | 2,358 | — | — | — | 2,361 | ||||||||||||||||||||
Stock compensation | — | — | 15,242 | — | — | — | 15,242 | ||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | (514 | ) | (514 | ) | ||||||||||||||||||
Net income | — | — | — | — | 63,084 | — | 63,084 | ||||||||||||||||||||
Balance, December 31, 2016 | 16,338 | 1,633 | 162,828 | (14 | ) | 516,980 | (21,272 | ) | 660,155 | ||||||||||||||||||
Issuance of restricted stock and exercise of stock options | 676 | 66 | 27,866 | 4,071 | — | — | 32,003 | ||||||||||||||||||||
Purchase of treasury stock, treasury stock acquired in lieu of cash payment on stock option exercises and income tax withholding obligations | (27 | ) | — | — | (4,057 | ) | (4,057 | ) | |||||||||||||||||||
Issuance of common stock for acquisitions | 3,200 | 320 | 412,819 | — | — | — | 413,139 | ||||||||||||||||||||
Proceeds from employee stock purchase plan | 23 | 2 | 2,703 | — | — | — | 2,705 | ||||||||||||||||||||
Stock compensation | — | — | 19,352 | — | — | — | 19,352 | ||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | 6,313 | 6,313 | ||||||||||||||||||||
Net income | — | — | — | — | 68,644 | — | 68,644 | ||||||||||||||||||||
Balance, December 31, 2017 | 20,210 | $ | 2,021 | $ | 625,568 | $ | — | $ | 585,624 | $ | (14,959 | ) | $ | 1,198,254 |
Year ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | $ | 68,644 | $ | 63,084 | $ | 44,985 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 66,569 | 19,050 | 18,073 | ||||||||
Provision for doubtful accounts | 2,308 | — | 54 | ||||||||
Provision for warranty and returns | 845 | 559 | 52 | ||||||||
Stock compensation | 19,352 | 15,242 | 12,827 | ||||||||
Loss (gain) on disposal of property, plant and equipment | 3,778 | 59 | (1,106 | ) | |||||||
Bond premium amortization | 103 | 1,355 | 1,670 | ||||||||
Debt issuance cost amortization | 48 | — | — | ||||||||
Impairment of assets held-for-sale | — | 728 | 4,139 | ||||||||
Bargain purchase gain | (70,890 | ) | (1,456 | ) | — | ||||||
Change in fair value of contingent earn-out | 8,000 | — | — | ||||||||
Other | (220 | ) | 75 | — | |||||||
Changes in operating assets and liabilities, net of amounts acquired: | |||||||||||
Accounts receivable | (54,533 | ) | 744 | (20,515 | ) | ||||||
Inventories | 181,699 | (5,501 | ) | (8,337 | ) | ||||||
Prepaid expenses and other assets | (31,807 | ) | (3,028 | ) | (1,832 | ) | |||||
Related-party receivables | (95,309 | ) | — | — | |||||||
Accounts payable | 46,648 | (463 | ) | 3,118 | |||||||
Accrued liabilities | 33,813 | (1,221 | ) | 9,454 | |||||||
Income taxes, including excess tax benefits and deferred income taxes | (24,625 | ) | 714 | 1,613 | |||||||
Net cash provided by operating activities | 154,423 | 89,941 | 64,195 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Purchases of property, plant and equipment | (74,479 | ) | (23,361 | ) | (12,984 | ) | |||||
Proceeds from sale of assets | 2 | — | 3,592 | ||||||||
Proceeds from the disposal of assets held-for-sale, net | — | 3,268 | — | ||||||||
Intangible asset additions | (5,203 | ) | (1,192 | ) | (951 | ) | |||||
Business acquisitions, net of cash acquired | (162,448 | ) | (2,584 | ) | (56,786 | ) | |||||
Proceeds from sale of assets acquired in a business acquisition | — | — | 28,970 | ||||||||
Purchases of investment securities | (24,743 | ) | (118,384 | ) | (56,137 | ) | |||||
Proceeds from sale of investment securities | — | 158,534 | 83,054 | ||||||||
Net cash (used in) provided by investing activities | (266,871 | ) | 16,281 | (11,242 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Repayment of long-term obligations | (75,000 | ) | — | — | |||||||
Proceeds from exercise of stock options | 32,003 | 17,346 | 15,042 | ||||||||
Proceeds from employee stock purchase plan | 2,705 | 2,361 | 2,162 | ||||||||
Purchase of treasury stock | (4,057 | ) | (17,235 | ) | (1,523 | ) | |||||
Net cash (used in) provided by financing activities | (44,349 | ) | 2,472 | 15,681 | |||||||
Effect of exchange rate changes on cash | 1,787 | 224 | (8,282 | ) | |||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (155,010 | ) | 108,918 | 60,352 | |||||||
CASH AND CASH EQUIVALENTS, beginning of period | 445,082 | 336,164 | 275,812 | ||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | 290,072 | $ | 445,082 | $ | 336,164 |
Year ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||||||
Cash paid during the year for income taxes | $ | 5,109 | $ | 21,101 | $ | 22,998 | |||||
Cash paid during the year for interest | $ | 2,047 | $ | 118 | $ | 39 | |||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||||||||||
Accounts payable for property, plant and equipment | $ | 5,376 | $ | 1,566 | $ | 182 | |||||
Detail of assets acquired and liabilities assumed in acquisitions: | |||||||||||
Fair value of assets acquired | $ | 886,569 | $ | 3,306 | $ | 60,693 | |||||
Cash paid for acquisitions, net of cash acquired | (162,448 | ) | (2,584 | ) | (56,786 | ) | |||||
Non-cash seller note | (75,000 | ) | — | — | |||||||
Estimated working capital adjustment | 4,253 | — | — | ||||||||
Contingent consideration | (19,000 | ) | — | — | |||||||
Issuance of common stock for acquisitions | (413,139 | ) | — | — | |||||||
Bargain purchase gain | (70,890 | ) | (1,456 | ) | — | ||||||
Goodwill, acquired during period | 6,536 | — | — | ||||||||
Liabilities assumed/Adjustments to liabilities assumed | $ | (156,881 | ) | $ | 734 | $ | (3,907 | ) |
2017 | 2016 | ||||||
Raw material | $ | 82,397 | $ | 28,435 | |||
Work in process | 42,304 | 4,415 | |||||
Finished goods | 163,956 | 16,414 | |||||
Total | $ | 288,657 | $ | 49,264 |
2017 | 2016 | ||||||
Machinery and equipment | $ | 220,999 | $ | 96,536 | |||
Land, building and building improvements | 206,846 | 63,524 | |||||
Molds | 56,253 | 39,014 | |||||
Computer equipment and software | 44,408 | 26,458 | |||||
Furniture and fixtures | 7,361 | 3,243 | |||||
Instruments placed with customers* | 15,812 | — | |||||
Construction in progress | 57,144 | 15,180 | |||||
Total property, plant and equipment, cost | 608,823 | 243,955 | |||||
Accumulated depreciation | (210,139 | ) | (158,259 | ) | |||
Net property, plant and equipment | $ | 398,684 | $ | 85,696 |
Buildings | 15 - 30 years |
Building improvements | 15 years |
Machinery and equipment | 2 - 10 years |
Furniture, fixtures and molds | 2 - 5 years |
Computer equipment and software | 3 - 5 years |
Instruments placed with customers* | 3 - 7 years |
Total | ||||
Balance as of December 31, 2015 | $ | 6,463 | ||
Other(1) | (886 | ) | ||
Balance as of December 31, 2016 | 5,577 | |||
Goodwill acquired(2) | 6,536 | |||
Other (3) | 244 | |||
Balance as of December 31, 2017 | $ | 12,357 |
Weighted Average Amortization Life in Years | December 31, 2017 | |||||||||||||
Cost | Accumulated Amortization | Net | ||||||||||||
Patents | 10 | $ | 17,064 | $ | 10,970 | $ | 6,094 | |||||||
Customer contracts | 9 | 5,319 | 4,892 | 427 | ||||||||||
Non-contractual customer relationships | 9 | 55,080 | 6,562 | 48,518 | ||||||||||
Trademarks | 4 | 425 | 425 | — | ||||||||||
Trade name | 15 | 7,310 | 1,096 | 6,214 | ||||||||||
Developed technology | 11 | 81,846 | 7,571 | 74,275 | ||||||||||
Total amortized intangible assets | $ | 167,044 | $ | 31,516 | $ | 135,528 | ||||||||
IPR&D | $ | 8,225 | $ | 8,225 | ||||||||||
Total intangible assets | $ | 175,269 | $ | 31,516 | $ | 143,753 |
Weighted Average | December 31, 2016 | |||||||||||||
Amortization Life in Years | Cost | Accumulated Amortization | Net | |||||||||||
Patents | 10 | $ | 14,423 | $ | 9,326 | $ | 5,097 | |||||||
MCDA contract * | 10 | 8,571 | 8,571 | — | ||||||||||
Customer contracts | 9 | 5,319 | 4,512 | 807 | ||||||||||
Non-contractual customer relationships | 15 | 7,080 | 590 | 6,490 | ||||||||||
Trademarks | 4 | 425 | 425 | — | ||||||||||
Trade name | 15 | 7,310 | 609 | 6,701 | ||||||||||
Developed technology | 10 | 3,797 | 509 | 3,288 | ||||||||||
Total | $ | 46,925 | $ | 24,542 | $ | 22,383 |
2018 | $ | 15,996 | ||
2019 | 15,582 | |||
2020 | 15,444 | |||
2021 | 15,361 | |||
2022 | 15,242 | |||
Thereafter | 57,903 | |||
Total | $ | 135,528 |
December 31, 2017 | |||||||||||
Amortized Cost | Unrealized Holding Gains (Losses) | Fair Value | |||||||||
Short-term corporate bonds | $ | 10,061 | $ | — | $ | 10,061 | |||||
Long-term corporate bonds | 14,579 | — | 14,579 | ||||||||
Total investment securities | $ | 24,640 | $ | — | $ | 24,640 |
Year ended December 31, (in thousands, except per share data) | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Net income | $ | 68,644 | $ | 63,084 | $ | 44,985 | ||||||
Weighted average number of common shares outstanding (basic) | 19,614 | 16,168 | 15,848 | |||||||||
Dilutive securities (1) | 1,244 | 1,086 | 648 | |||||||||
Weighted average common and common equivalent shares outstanding (diluted) | 20,858 | 17,254 | 16,496 | |||||||||
EPS - basic | $ | 3.50 | $ | 3.90 | $ | 2.84 | ||||||
EPS - diluted | $ | 3.29 | $ | 3.66 | $ | 2.73 |
• | Bundled arrangements - The timing of revenue recognition changed under ASC 606 for arrangements that include the sale of equipment, software and related software implementation services, for which revenue is recognized over time, as the related implementation services are delivered. This results in a delay in the recognition of related revenue over the implementation period, and an acceleration of software related revenue when compared to ASC 605. |
• | Software renewals - The timing of revenue recognition for software license renewals changed under ASC 606. As functional IP, the license is transferred to the customer at a point in time, at the start of each annual renewal period. As a result, under ASC 606, revenue related to our annual software license renewals is accelerated compared to ASC 605. |
Cash consideration for acquired assets | $ | 180,785 | ||
Fair value of Seller Note | 75,000 | |||
Fair value of contingent consideration payable to Pfizer (long-term) | 19,000 | |||
Issuance of ICU Medical, Inc. common shares: | ||||
Number of shares issued to Pfizer | 3,200 | |||
Price per share (ICU's trading closing share price on the Closing Date) | $ | 140.75 | ||
Market price of ICU shares issued to Pfizer | $ | 450,400 | ||
Less: Discount due to lack of marketability of 8.3% | (37,261 | ) | ||
Equity portion of purchase price | 413,139 | |||
Total Consideration | $ | 687,924 | ||
Purchase Price Allocation: | ||||
Cash and cash equivalents | $ | 31,082 | ||
Trade receivables | 362 | |||
Inventories | 417,622 | |||
Prepaid expenses and other assets | 13,911 | |||
Property, plant and equipment | 288,134 | |||
Intangible assets(1) | 131,000 | |||
Other assets | 29,270 | |||
Accounts payable | (12,381 | ) | ||
Accrued liabilities | (47,936 | ) | ||
Long-term liabilities(2) | (67,170 | ) | ||
Total identifiable net assets acquired | $ | 783,894 | ||
Deferred tax, net | (25,080 | ) | ||
Estimated Gain on Bargain Purchase | (70,890 | ) | ||
Estimated Purchase Consideration | $ | 687,924 |
(In millions) | Revenue | Earnings | ||||||
Actual from 2/3/2017 - 12/31/2017(3) | $ | 1,062 | * | |||||
2017 supplemental pro forma from 1/1/2017 - 12/31/2017(1)(2) | $ | 1,293 | $ | 180 | ||||
2016 supplemental pro forma from 1/1/2016 - 12/31/2016(1)(2) | $ | 1,418 | $ | 22 |
Fair Value of Consideration: | |||
Cash, net of cash acquired | $ | 56,786 | |
Allocation of the Purchase Price: | |||
Net assets sold to Excelsior Medical, LLC | $ | 28,970 | |
Prepaid expenses and other current assets | 254 | ||
Deferred tax asset/liabilities | 4,426 | ||
Property, plant and equipment | 3,982 | ||
Identifiable intangible assets(1) | 18,076 | ||
Goodwill | 4,985 | ||
Assumed liabilities | (3,907 | ) | |
Net Assets Acquired | $ | 56,786 |
Accrued Balance December 31, 2015 | Charges incurred | Payments | Currency Translation | Other Adjustments | Accrued Balance December 31, 2016 | Charges incurred | Payments | Other Adjustments | Accrued Balance December 31, 2017 | ||||||||||||||||||||||||||||||
Severance pay and benefits | $ | 2,505 | $ | 25 | $ | (2,683 | ) | $ | 77 | $ | 129 | $ | 53 | $ | 15,983 | $ | (15,104 | ) | $ | (17 | ) | $ | 915 | ||||||||||||||||
Government incentive repayment | 1,884 | — | (1,769 | ) | 57 | (172 | ) | — | — | — | — | — | |||||||||||||||||||||||||||
Employment agreement buyout | 1,845 | — | (368 | ) | — | — | 1,477 | — | (363 | ) | — | 1,114 | |||||||||||||||||||||||||||
Other corporate restructuring | 305 | 168 | (468 | ) | — | (5 | ) | — | — | — | — | — | |||||||||||||||||||||||||||
Retention and facility closure expenses | — | 581 | (581 | ) | — | — | — | 2,789 | (2,789 | ) | — | — | |||||||||||||||||||||||||||
$ | 6,539 | $ | 774 | $ | (5,869 | ) | $ | 134 | $ | (48 | ) | $ | 1,530 | $ | 18,772 | $ | (18,256 | ) | $ | (17 | ) | $ | 2,029 |
Year ended December 31, | ||||||||||||
(In thousands) | 2017 | 2016 | 2015 | |||||||||
Stock compensation expense | $ | 19,352 | $ | 15,242 | $ | 12,827 | ||||||
Tax benefit from stock-based compensation cost | $ | 7,247 | $ | 5,682 | $ | 4,922 | ||||||
Indirect tax benefit | $ | 1,374 | $ | — | $ | 1,997 |
Year ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Number of time-based options granted | 8,825 | 13,405 | 22,816 | |||||||||
Grant date fair value of options granted (in thousands) | $ | 375 | $ | 413 | $ | 590 | ||||||
Weighted average assumptions for stock option valuation: | ||||||||||||
Expected term (years) | 5.5 | 5.5 | 5.6 | |||||||||
Expected stock price volatility | 27.0 | % | 31.8 | % | 25.9 | % | ||||||
Risk-free interest rate | 1.1 | % | 0.7 | % | 1.7 | % | ||||||
Expected dividend yield | — | % | — | % | — | % | ||||||
Weighted average grant price per option | $ | 158.20 | $ | 101.32 | $ | 93.30 | ||||||
Weighted average grant date fair value per option | $ | 42.51 | $ | 30.78 | $ | 25.86 |
Year ended December 31, | |||||||||
2017 | 2016 | 2015 | |||||||
Number of performance options granted | 244,825 | ||||||||
Number of performance options earned | 244,825 | 349,812 | |||||||
Grant date fair value of options granted (in thousands) | $ | 6,087 | |||||||
Weighted average assumptions for stock option valuation: | |||||||||
Expected term (years) | 3.0 | ||||||||
Expected stock price volatility | 30.86 | % | |||||||
Risk-free interest rate | 2.3 | % | |||||||
Expected dividend yield | — | % | |||||||
Weighted average grant price per option | $ | 91.88 | |||||||
Weighted average grant date fair value per option | $ | 24.86 |
Shares | Weighted Average Exercise Price Per Share | Weighted Average Contractual Life (Years) | Aggregate Intrinsic Value (in thousands) | ||||||||||
Outstanding at December 31, 2016 | 2,018,290 | $ | 58.90 | ||||||||||
Granted | 8,825 | $ | 158.20 | ||||||||||
Exercised | (610,316 | ) | $ | 52.43 | |||||||||
Forfeited or expired | (72 | ) | $ | 58.79 | |||||||||
Outstanding at December 31, 2017 | 1,416,727 | $ | 62.30 | 5.8 | $ | 217,749 | |||||||
Exercisable at December 31, 2017 | 1,133,734 | $ | 60.13 | 5.6 | $ | 176,721 | |||||||
Vested and expected to vest, December 31, 2017 | 1,416,727 | $ | 62.30 | 5.8 | $ | 217,749 |
Year ended December 31, | ||||||||||||
(In thousands) | 2017 | 2016 | 2015 | |||||||||
Intrinsic value of options exercised | $ | 71,283 | $ | 25,065 | $ | 28,071 | ||||||
Cash received from exercise of stock options | $ | 32,003 | $ | 17,346 | $ | 15,042 | ||||||
Tax benefit from stock option exercises | $ | 20,004 | $ | 7,556 | $ | 9,330 |
Year ended December 31, | ||||||||||||
(In thousands except shares and per share amounts) | 2017 | 2016 | 2015 | |||||||||
PRSU | ||||||||||||
Shares granted | 20,686 | 36,370 | — | |||||||||
Shares earned | — | — | — | |||||||||
Grant date fair value per share | $ | 154.75 | $ | 86.47 | $ | — | ||||||
Grant date fair value | $ | 3,201 | $ | 3,145 | $ | — | ||||||
Intrinsic value vested | $ | — | $ | — | $ | 787 | ||||||
RSU | ||||||||||||
Shares granted | 107,678 | 60,377 | 67,745 | |||||||||
Grant date fair value per share | $ | 156.49 | $ | 87.47 | $ | 93.52 | ||||||
Grant date fair value | $ | 16,851 | $ | 5,281 | $ | 6,336 | ||||||
Intrinsic value vested | $ | 9,813 | $ | 4,680 | $ | 2,754 |
Number of Units | Grant Date Fair Value Per Share | Weighted Average Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||||
Non-vested at December 31, 2016 | 159,439 | $ | 84.68 | ||||||||||
Change in units due to performance expectations (a) | 72,740 | $ | 86.47 | ||||||||||
Granted | 128,364 | $ | 156.21 | ||||||||||
Vested | (66,278 | ) | $ | 80.61 | |||||||||
Forfeited | (8,762 | ) | $ | 148.76 | |||||||||
Non-vested and expected to vest at December 31, 2017 | 285,503 | $ | 116.28 | 1.0 | $ | 33,197 |
Year ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
ESPP shares purchased by employees | 23,426 | 31,227 | 34,299 | |||||||||
Intrinsic value of ESPP purchases (in thousands) | $ | 986 | $ | 955 | $ | 1,382 | ||||||
Weighted average assumptions for ESPP valuation: | ||||||||||||
Expected term (in years) | 0.5 | 0.5 | 0.5 | |||||||||
Expected stock price volatility | 28.1 | % | 32.5 | % | 27.0 | % | ||||||
Risk-free interest rate | 0.6 | % | 0.3 | % | 0.6 | % | ||||||
Expected dividend yield | — | % | — | % | — | % |
Derivatives | |||||
Consolidated Balance Sheet Location | December 31, 2017 | ||||
Derivatives designated as cash flow hedging instruments | |||||
Foreign exchange forward contract: | Accrued liabilities | $ | 187 | ||
Other long-term liabilities | 402 | ||||
Total derivatives designated as cash flow hedging instruments | $ | 589 |
Line Item in the Consolidated Statements of Operations | Year Ended December 31, 2017 | ||||
Derivatives designated as cash flow hedging instruments | |||||
Foreign exchange forward contracts | Cost of goods sold | $ | 885 |
Amount of Gain Recognized in Other Comprehensive Income on Derivatives | Amount of Gain Reclassified From Accumulated Other Comprehensive Income into Income | ||||||||||
Year Ended December 31, 2017 | Location of Gain Reclassified From Accumulated Other Comprehensive Income into Income | Year Ended December 31, 2017 | |||||||||
Derivatives designated as cash flow hedges: | |||||||||||
Foreign exchange forward contract | $ | 296 | Cost of goods sold | $ | 885 | ||||||
Total derivatives designated as cash flow hedging instruments | $ | 296 | $ | 885 |
• | 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 in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or |
• | Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities. |
Earn-out Liability | ||||
Contingent earn-out liability, December 31, 2016 | $ | — | ||
Acquisition date fair value estimate of earn-out | 19,000 | |||
Change in fair value of contingent earn-out (included in income from operations as a separate line item) | 8,000 | |||
Contingent earn-out liability, December 31, 2017 | $ | 27,000 |
Simulation Input | As of December 31, 2017 | At Acquisition February 3, 2017 | ||||
Adjusted EBITDA Volatility | 26.00 | % | 29.00 | % | ||
WACC | 8.75 | % | 10.00 | % | ||
20-year risk free rate | 2.58 | % | 2.82 | % | ||
Market price of risk | 5.99 | % | 6.93 | % | ||
Cost of debt | 4.08 | % | 4.16 | % |
Fair value measurements at December 31, 2017 | |||||||||||||||
Total carrying value | Quoted prices in active markets for identical assets (level 1) | Significant other observable inputs (level 2) | Significant unobservable inputs (level 3) | ||||||||||||
Assets: | |||||||||||||||
Available for sale securities: | |||||||||||||||
Short-term | $ | 10,061 | $ | — | $ | 10,061 | $ | — | |||||||
Long-term | 14,579 | — | 14,579 | — | |||||||||||
Total Assets | $ | 24,640 | $ | — | $ | 24,640 | $ | — | |||||||
Liabilities: | |||||||||||||||
Earn-out liability | $ | 27,000 | $ | — | $ | — | $ | 27,000 | |||||||
Foreign exchange forwards: | |||||||||||||||
Accrued liabilities | 187 | — | 187 | — | |||||||||||
Other long-term liabilities | 402 | — | 402 | — | |||||||||||
Total Liabilities | $ | 27,589 | $ | — | $ | 589 | $ | 27,000 |
Fair value measurements at December 31, 2017 using | |||||||||||||||
Total carrying value | Quoted prices in active markets for identical assets (level 1) | Significant other observable inputs (level 2) | Significant unobservable inputs (level 3) | ||||||||||||
Assets: | |||||||||||||||
Assets held-for-sale | $ | 12,489 | $ | — | $ | — | $ | 12,489 | |||||||
Total Assets | $ | 12,489 | $ | — | $ | — | $ | 12,489 |
2017 | 2016 | |||||||
Deposits | $ | 21,940 | $ | — | ||||
Other prepaid expenses and receivables | 4,208 | 2,948 | ||||||
Prepaid insurance and property taxes | 2,580 | 1,649 | ||||||
VAT/GST receivable | 8,097 | 1,018 | ||||||
Deferred tax charge | 1,326 | — | ||||||
Other | 3,135 | 1,740 | ||||||
$ | 41,286 | $ | 7,355 |
2017 | 2016 | |||||||
Third-party receivables due from Pfizer | $ | 36,425 | $ | — | ||||
HIS business acquisition related | 62,382 | — | ||||||
$ | 98,807 | $ | — |
December 31, | ||||||||
2017 | 2016 | |||||||
Salaries and benefits | $ | 20,745 | $ | 5,702 | ||||
Incentive compensation | 40,682 | 7,912 | ||||||
Accrued professional fees | 13,319 | — | ||||||
Accrued product field action | 11,810 | — | ||||||
Consigned inventory | 5,210 | — | ||||||
Third-party inventory | 4,284 | — | ||||||
Legal accrual | 3,538 | 4,177 | ||||||
Accrued sales taxes | 6,291 | 1,472 | ||||||
Warranties and Returns | 3,360 | — | ||||||
Deferred revenue | 3,326 | 18 | ||||||
Accrued other taxes | 2,771 | — | ||||||
Outside commissions | 725 | 1,141 | ||||||
Accrued freight | 5,696 | — | ||||||
Restructuring accrual | 1,290 | 423 | ||||||
Acquisition-related accrual | — | 2,750 | ||||||
Other | 9,017 | 2,301 | ||||||
$ | 132,064 | $ | 25,896 |
December 31, | ||||||||
2017 | 2016 | |||||||
Contract liabilities(1) | $ | 40,148 | $ | — | ||||
Deferred revenue | 7,099 | — | ||||||
Benefits | 2,104 | 1,107 | ||||||
Other | 5,975 | — | ||||||
$ | 55,326 | $ | 1,107 |
Level | Consolidated Total Leverage Ratio | Commitment Fee | LIBOR + | Base Rate + |
I | Less than 1.00 to 1.00 | 0.15% | 1.25% | 0.25% |
II | Greater than or equal to 1.00 to 1.00 but less than 2.00 to 1.00 | 0.20% | 1.50% | 0.50% |
III | Greater than or equal to 2.00 to 1.00 but less than 2.50 to 1.00 | 0.25% | 1.75% | 0.75% |
IV | Greater than or equal to 2.50 to 1.00 | 0.30% | 2.00% | 1.00% |
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
United States | $ | 59,872 | $ | 80,714 | $ | 74,288 | ||||||
Foreign | (8,589 | ) | 4,450 | (4,589 | ) | |||||||
$ | 51,283 | $ | 85,164 | $ | 69,699 |
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Current: | ||||||||||||
Federal | $ | 2,774 | $ | 21,123 | $ | 18,601 | ||||||
State | 2,263 | 2,347 | 745 | |||||||||
Foreign | 3,170 | 1,118 | 1,426 | |||||||||
8,207 | 24,588 | 20,772 | ||||||||||
Deferred: | ||||||||||||
Federal | $ | (20,878 | ) | $ | (2,045 | ) | $ | 4,524 | ||||
State | (4,619 | ) | (767 | ) | (960 | ) | ||||||
Foreign | (71 | ) | 304 | 378 | ||||||||
(25,568 | ) | (2,508 | ) | 3,942 | ||||||||
$ | (17,361 | ) | $ | 22,080 | $ | 24,714 |
Year Ended December 31, | |||||||||||||||||||||
2017 | 2016 | 2015 | |||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||
Federal tax at the expected statutory rate | $ | 17,950 | 35.0 | % | $ | 29,807 | 35.0 | % | $ | 24,395 | 35.0 | % | |||||||||
State income tax, net of federal effect | (403 | ) | (0.8 | )% | 1,795 | 2.1 | % | 2,661 | 3.9 | % | |||||||||||
Tax credits | (2,783 | ) | (5.4 | )% | (1,014 | ) | (1.2 | )% | (5,861 | ) | (8.4 | )% | |||||||||
Foreign income tax differential | 3,481 | 6.8 | % | (135 | ) | (0.1 | )% | 3,412 | 4.9 | % | |||||||||||
Stock based compensation | (18,958 | ) | (37.0 | )% | (7,720 | ) | (9.1 | )% | — | — | % | ||||||||||
Impact of the Tax Act | 3,076 | 6.0 | % | — | — | % | — | — | % | ||||||||||||
IP installment sale | 3,367 | 6.6 | % | — | — | % | — | — | % | ||||||||||||
Bargain purchase gain | (24,811 | ) | (48.4 | )% | — | — | % | — | — | % | |||||||||||
Other | 1,720 | 3.4 | % | (653 | ) | (0.8 | )% | 107 | 0.1 | % | |||||||||||
$ | (17,361 | ) | (33.8 | )% | $ | 22,080 | 25.9 | % | $ | 24,714 | 35.5 | % |
December 31, | ||||||||
2017 | 2016 | |||||||
Deferred tax asset: | ||||||||
Foreign | $ | — | $ | 1,223 | ||||
Accruals/other | 8,368 | 857 | ||||||
Acquired future tax deductions | 10,580 | 6,473 | ||||||
Stock-based compensation | 8,633 | 11,089 | ||||||
Foreign currency translation adjustments | 3,425 | 5,175 | ||||||
Tax credits state | 8,471 | 6,764 | ||||||
Foreign tax credits | 2,749 | — | ||||||
Inventory reserves | 10,658 | 1,938 | ||||||
Allowance for doubtful accounts | 636 | 151 | ||||||
Valuation allowance | (7,385 | ) | — | |||||
$ | 46,135 | $ | 33,670 | |||||
Deferred tax liability: | ||||||||
State income taxes | $ | 1,640 | $ | 1,708 | ||||
Foreign | 202 | 1,370 | ||||||
Depreciation and amortization | 21,005 | 10,027 | ||||||
$ | 22,847 | $ | 13,105 | |||||
Deferred tax asset, net | $ | 23,288 | $ | 20,565 |
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Beginning balance | $ | 2,000 | $ | 1,772 | $ | 4,115 | ||||||
Increases to prior year tax positions | 77 | 77 | 25 | |||||||||
Increases due to acquisitions | 640 | — | — | |||||||||
Increases to current year tax positions | 3,992 | 345 | 345 | |||||||||
Decreases to prior year tax positions | (12 | ) | (46 | ) | (2,399 | ) | ||||||
Decrease related to settlements | — | — | (314 | ) | ||||||||
Decrease related to lapse of statute of limitations | (170 | ) | (148 | ) | — | |||||||
Ending balance | $ | 6,527 | $ | 2,000 | $ | 1,772 |
Year Ended December 31, | |||||||
Product line | 2017 | 2016 | 2015 | ||||
Infusion Consumables | 28 | % | 86 | % | 84 | % | |
IV Solutions | 40 | % | — | % | — | % | |
Infusion Systems | 23 | % | — | % | — | % | |
Critical Care | 4 | % | 14 | % | 16 | % | |
Other | 5 | % | — | % | — | % | |
100 | % | 100 | % | 100 | % |
As of December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Europe | $ | 100,423 | $ | 50,105 | $ | 45,062 | |||||
Canada | 69,753 | 16,266 | 12,494 | ||||||||
LATAM | 57,851 | 29,920 | 27,780 | ||||||||
APAC | 54,465 | 10,304 | 7,047 | ||||||||
Other | 30,184 | 11,083 | 10,622 | ||||||||
Total foreign | $ | 312,676 | $ | 117,678 | $ | 103,005 | |||||
United States | 979,937 | 261,694 | 238,663 | ||||||||
Worldwide total | $ | 1,292,613 | $ | 379,372 | $ | 341,668 |
As of December 31, | ||||||||
2017 | 2016 | |||||||
Costa Rica | $ | 80,956 | $ | — | ||||
Mexico | 61,008 | 57,971 | ||||||
Other LATAM | 19,432 | — | ||||||
Canada | 4,362 | — | ||||||
Italy | 6,860 | 4,320 | ||||||
Spain | 5,601 | — | ||||||
Other Europe | 2,625 | 966 | ||||||
APAC | 5,169 | 41 | ||||||
Total foreign | $ | 186,013 | $ | 63,298 | ||||
United States | 422,810 | 180,657 | ||||||
Worldwide total | $ | 608,823 | $ | 243,955 |
Foreign Currency Translation Adjustments | Unrealized Gains on Cash Flow Hedges | Other Adjustments | Total | |||||||||||||
Balance as of December 31, 2016 | $ | (21,272 | ) | $ | — | $ | — | $ | (21,272 | ) | ||||||
Other comprehensive income (loss) before reclassifications | 6,694 | 184 | (16 | ) | 6,862 | |||||||||||
Amounts reclassified from AOCI | — | (549 | ) | — | (549 | ) | ||||||||||
Other comprehensive income (loss) | 6,694 | (365 | ) | (16 | ) | 6,313 | ||||||||||
Balance as of December 31, 2017 | $ | (14,578 | ) | $ | (365 | ) | $ | (16 | ) | $ | (14,959 | ) |
2018 | $ | 8,775 | ||
2019 | 5,907 | |||
2020 | 4,059 | |||
2021 | 3,214 | |||
2022 | 3,105 | |||
Thereafter | 6,446 | |||
Total | $ | 31,506 |
Quarter Ended | ||||||||||||||||
Mar. 31 | Jun. 30 | Sept. 30 | Dec. 31 | |||||||||||||
(in thousands except per share data) | ||||||||||||||||
2017 | ||||||||||||||||
Total revenue | $ | 247,739 | $ | 331,514 | $ | 343,236 | $ | 370,124 | ||||||||
Gross profit | $ | 88,945 | $ | 88,062 | $ | 111,598 | $ | 137,490 | ||||||||
Net income (loss) | $ | 55,863 | $ | (37,060 | ) | $ | 136 | $ | 49,705 | |||||||
Net income (loss) per share: | ||||||||||||||||
Basic | $ | 3.03 | $ | (1.87 | ) | $ | 0.01 | $ | 2.47 | |||||||
Diluted | $ | 2.86 | $ | (1.87 | ) | $ | 0.01 | $ | 2.33 | |||||||
2016 | ||||||||||||||||
Total revenue | $ | 89,855 | $ | 96,721 | $ | 97,108 | $ | 95,688 | ||||||||
Gross profit | $ | 49,233 | $ | 50,132 | $ | 51,273 | $ | 50,760 | ||||||||
Net income | $ | 18,160 | $ | 16,606 | $ | 18,806 | $ | 9,512 | ||||||||
Net income per share: | ||||||||||||||||
Basic | $ | 1.13 | $ | 1.03 | $ | 1.16 | $ | 0.58 | ||||||||
Diluted | $ | 1.08 | $ | 0.98 | $ | 1.09 | $ | 0.54 |
Form 10-K Page No. | |||
The following documents are filed as part of this report: | |||
1. | Consolidated Financial Statements. See Index to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K. | ||
2. | Exhibits. The exhibits listed in the accompanying Exhibit Index are filed or incorporated by reference as part of this Form 10-K. | ||
3. | Financial Statement Schedules. The Financial Statement Schedules required to be filed as a part of this Report are: | ||
Exhibit Number | Exhibit Description | |
Stock Purchase Agreement dated as of October 5, 2015, by and among Registrant, Medline Industries, Inc., Roundtable Healthcare Partners, L.P., Roundtable Healthcare Investors, L.P. and certain other sellers party thereto. Filed as Exhibit 2.1 to Registrant's Current Report on Form 8-K filed October 6, 2015, and incorporated herein by reference. | ||
Asset Purchase Agreement made as of October 5, 2015, by and among Registrant, Excelsior Medical, LLC and Medline Industries, Inc. Filed as Exhibit 2.2 to Registrant's Current Report on Form 8-K filed October 6, 2015, and incorporated herein by reference. | ||
Amended and Restated Stock and Asset Purchase Agreement, dated as of January 5, 2017, by and between Pfizer Inc., a Delaware corporation, and ICU Medical, Inc., a Delaware corporation. Filed as Exhibit 2.1 to Registrant’s Current Report on Form 8-K filed January 5, 2017, and incorporated herein by reference. | ||
Registrant's Certificate of Incorporation, as amended and restated. Filed as an exhibit to Registrant's Current Report on Form 8-K filed on June 10, 2014, and incorporated herein by reference. | ||
Registrant's Bylaws, as amended and restated. Filed as an Exhibit to Registrant's Current Report on Form 8-K filed August 3, 2016, and incorporated herein by reference. | ||
Form of Indemnification Agreement with Directors and Executive Officers. Filed as an Exhibit to Registrant's Quarterly Report on Form 10-Q for the Quarter ended September 30, 2010, and incorporated herein by reference. | ||
10.2 | Manufacture and Supply Agreement dated September 13, 1993 between Registrant and B. Braun, Inc. relating to the Protected Needle product. Filed as an Exhibit to Registrant's Quarterly Report on Form 10-Q for the Quarter ended September 30, 1993, and incorporated herein by reference. | |
10.3 | Supply and Distribution Agreement dated April 3, 1995 between Registrant and Abbott Laboratories, Inc. relating to the Clave product. Filed as an Exhibit to Registrant's Quarterly Report on Form 10-Q for the Quarter ended March 31, 1995, and incorporated herein by reference. |
Amended and Restated Rights Agreement dated October 18, 2007 between Registrant and American Stock Transfer & Trust Company as Rights Agent. Filed as an Exhibit to Registrant's Registration Statement on Form 8-A/A dated October 18, 2007, and incorporated herein by reference. | ||
SafeLine Agreement effective October 1, 1997 by and between Registrant and B. Braun Medical, Inc. Filed as an Exhibit to Registrant's Current Report on Form 8-K filed June 18, 1998, and incorporated herein by reference. | ||
Amendment to April 3, 1995 Supply and Distribution Agreement, dated January 1, 1999, between Registrant and Abbott Laboratories. Filed as an Exhibit to Registrant's Current Report on Form 8-K filed February 23, 1999, and incorporated herein by reference. | ||
Co-Promotion and Distribution Agreement, dated February 27, 2001 between Registrant and Abbott Laboratories. Filed as an Exhibit to Registrant's Current Report on Form 8-K filed March 7, 2001, and incorporated herein by reference. | ||
Registrant's 2001 Directors' Stock Option Plan.* Filed as an Exhibit to Registrant's definitive Proxy Statement filed pursuant to Regulation 14A on April 3, 2002, and incorporated herein by reference. | ||
Registrant's 2002 Employee Stock Purchase Plan.* Filed as an Exhibit to Registrant's definitive Proxy Statement filed pursuant to Regulation 14A on April 3, 2002, and incorporated herein by reference. | ||
Registrant's 2003 Stock Option Plan.* Filed as an Exhibit to Registrant's definitive Proxy Statement filed pursuant to Regulation 14A on April 25, 2003, and incorporated herein by reference. | ||
Amendment to April 3, 1995 Supply and Distribution Agreement, dated as of January 14, 2004, between Registrant and Abbott Laboratories. Filed as an Exhibit to Registrant's Current Report on Form 8-K dated January 15, 2004, and incorporated herein by reference. | ||
Amendment to February 27, 2001 Co-Promotion and Distribution Agreement, dated as of January 14, 2004, between Registrant and Abbott Laboratories. Filed as an Exhibit to Registrant's Current Report on Form 8-K dated January 15, 2004, and incorporated herein by reference. | ||
Settlement and Release Agreement dated as of January 2, 2007 between ICU Medical, Inc. and Fulwider Patton Lee & Utecht, LLP. Filed as an Exhibit to Registrant's Annual Report on Form 10-K for the year ended December 31, 2006, and incorporated herein by reference. | ||
Executive officer compensation* | ||
Non-employee director compensation* | ||
2008 Performance-Based Incentive Plan, as amended.* Filed as Annex A to Registrant's proxy statement filed April 3, 2013, and incorporated herein by reference. | ||
Amendment No. 1 to 2001 Directors' Stock Option Plan.* Filed as an Exhibit to Registrant's Quarterly Report on Form 10-Q for the Quarter ended September 30, 2009, and incorporated herein by reference. | ||
Amendment No. 2 to 2001 Directors' Stock Option Plan.* Filed as an Exhibit to Registrant's Quarterly Report on Form 10-Q for the Quarter ended September 30, 2009, and incorporated herein by reference. | ||
Amendment No. 3 to 2001 Directors' Stock Option Plan.* Filed as an Exhibit to Registrant's Quarterly Report on Form 10-Q for the Quarter ended September 30, 2009, and incorporated herein by reference. | ||
ICU Medical, Inc. Amended 2011 Stock Incentive Plan.* Filed as an Exhibit to Registrant's Quarterly Report on Form 10-Q for the Quarter ended June 30, 2012, and incorporated herein by reference. | ||
2014 Inducement Stock Incentive Plan.* Filed as an Exhibit to Registrant's Current Report on Form 8-K filed February 26, 2014 and incorporated herein by reference. | ||
Executive Employment Agreement, dated as of February 7, 2014, by and between ICU Medical, Inc. and Vivek Jain.* Filed as an Exhibit to Registrant's Current Report on Form 8-K filed February 12, 2014, and incorporated herein by reference. | ||
Amendment to Executive Employment Agreement, dated as of February 12, 2014, by and between ICU Medical, Inc. and Vivek Jain.* Filed as an Exhibit to Registrant's Current Report on Form 8-K filed February 12, 2014, and incorporated herein by reference. | ||
Buy-Out Agreement between Registrant and George A. Lopez, M.D. effective September 30, 2015.* Filed as an Exhibit to Registrant's Current Report on Form 8-K filed October 1, 2015, and incorporated herein by reference. | ||
Form of Shareholder Agreement, by and between a subsidiary of Pfizer Inc. and ICU Medical Inc dated February 3, 2017. Filed as an Exhibit to Registrant’s Current Report on Form 8-K filed October 13, 2016, and incorporated herein by reference. | ||
ICU Medical, Inc. Executive Severance Plan.* Filed as an Exhibit to Registrant’s Current Report on Form 8-K filed January 6, 2017, and incorporated herein by reference. | ||
Senior Note issued by ICU Medical, Inc. in favor of Pfizer Inc., dated as of February 3, 2017. Filed as an Exhibit to Registrant’s Current Report on Form 8-K filed February 9, 2017, and incorporated herein by reference. | ||
Revolving Credit Agreement, dated as of November 8, 2017, among ICU Medical, Inc., as borrower, certain lenders party thereto and Wells Fargo Bank, N.A., as administrative agent and swingline lender. Filed as an Exhibit to Registrant's Quarterly Report on Form 10-Q for the Quarter ended September 30, 2017, and incorporated herein by reference. | ||
Transitional Services Agreement, between ICU Medical, Inc. and Pfizer Inc., dated as of February 3, 2017. Filed as an Exhibit to Registrant’s Current Report on Form 8-K filed February 9, 2017, and incorporated herein by reference. | ||
Amended and Restated Executive Employment Agreement, dated as of May 8, 2017, by and between ICU Medical, Inc. and Vivek Jain.* Filed as Exhibit 10.1 to Registrant's Current Report on Form 8-K filed on May 8, 2017, and incorporated herein by reference. | ||
Code of Business Conduct and Ethics for Directors and Officers. Filed as an Exhibit to Registrant's Current Report on Form 8-K filed February 5, 2009, and incorporated herein by reference. | ||
Subsidiaries of Registrant. | ||
Consent of Deloitte & Touche LLP | ||
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
Exhibit 101.INS | XBRL Instance Document | |
Exhibit 101.SCH | XBRL Taxonomy Extension Schema Document | |
Exhibit 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
Exhibit 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
Exhibit 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
Exhibit 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
Additions | ||||||||||||||||||||
(Amounts in thousands) Description | Balance at Beginning of Period | Charged to Costs and Expenses | Charged to Other Accounts | Write-off/ Disposals | Balance at End of Period | |||||||||||||||
For the year ended December 31, 2015: | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 1,127 | $ | 54 | $ | 55 | $ | (135 | ) | $ | 1,101 | |||||||||
Warranty and return reserve - accounts receivable | $ | 481 | $ | 102 | $ | — | $ | — | $ | 583 | ||||||||||
Deferred tax asset valuation allowance | $ | — | $ | 2,354 | $ | — | $ | — | $ | 2,354 | ||||||||||
For the year ended December 31, 2016: | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 1,101 | $ | — | $ | (24 | ) | $ | (4 | ) | $ | 1,073 | ||||||||
Warranty and return reserve - accounts receivable | $ | 583 | $ | 539 | $ | — | $ | — | $ | 1,122 | ||||||||||
Deferred tax asset valuation allowance | $ | 2,354 | $ | — | $ | — | $ | (2,354 | ) | $ | — | |||||||||
For the year ended December 31, 2017: | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 1,073 | $ | 2,308 | $ | 90 | $ | (160 | ) | $ | 3,311 | |||||||||
Warranty and return reserve - accounts receivable | $ | 1,122 | $ | 604 | $ | — | $ | — | $ | 1,726 | ||||||||||
Deferred tax asset valuation allowance | $ | — | $ | 7,385 | $ | — | $ | — | $ | 7,385 |
ICU MEDICAL, INC. | ||
By: | /s/ Vivek Jain | |
Vivek Jain | ||
Chairman of the Board and Chief Executive Officer | ||
Dated: | March 16, 2018 |
Signature | Title | Date | ||
/s/ Vivek Jain | Chairman of the Board and | March 16, 2018 | ||
Vivek Jain | Chief Executive Officer | |||
(Principal Executive Officer) | ||||
/s/ Scott E. Lamb | Chief Financial Officer | March 16, 2018 | ||
Scott E. Lamb | (Principal Financial Officer) | |||
/s/ Kevin J. McGrody | Controller | March 16, 2018 | ||
Kevin J. McGrody | (Principal Accounting Officer) | |||
/s/ George A. Lopez, M.D. | Director | March 16, 2018 | ||
George A. Lopez, M.D. | ||||
/s/ Joseph R. Saucedo | Director | March 16, 2018 | ||
Joseph R. Saucedo | ||||
/s/ Robert S. Swinney, M.D. | Director | March 16, 2018 | ||
Robert S. Swinney, M.D. | ||||
/s/ David C. Greenberg | Director | March 16, 2018 | ||
David C. Greenberg | ||||
/s/ Elisha W. Finney | Director | March 16, 2018 | ||
Elisha W. Finney | ||||
/s/ Douglas E. Giordano | Director | March 16, 2018 | ||
Douglas E. Giordano | ||||
/s/ David F. Hoffmeister | Director | March 16, 2018 | ||
David F. Hoffmeister | ||||
/s/ Donald M. Abbey | Director | March 16, 2018 | ||
Donald M. Abbey |
Name | Title | ||||||
Vivek Jain | Chairman of the Board and Chief Executive Officer | $ | 650,000 | ||||
Scott E. Lamb | Chief Financial Officer | $ | 395,150 | ||||
Steven C. Riggs | Vice President of Operations | $ | 360,582 | ||||
Alison D. Burcar | Vice President and General Manager of Infusion Systems | $ | 315,000 | ||||
Tom McCall | Vice President and General Manager of Critical Care | $ | 293,550 |
Name | State or Country of Incorporation | |
ICU Medical Sales, Inc. | Delaware | |
ICU Medical de Mexico, S. de R. L. de C.V. | Mexico | |
ICU Medical Europe S.r.l. | Italy | |
ICU World, Inc. | Delaware | |
ICU Medical Germany GmbH | Germany | |
ICU Medical Slovakia S.r.o. | Slovak Republic | |
ICU Medical, LLC | California | |
Medical Connections C.V. | Netherlands | |
ICU Medical B.V. | Netherlands | |
ICU Medical Aust Pty Limited | Australia | |
ICU Medical SA Pty Ltd | South Africa | |
EXC Holding Corp. | Delaware | |
Tangent Medical Technologies, Inc. | Delaware | |
Excelsior Medical Corporation | Delaware | |
ICU Medical France S.A.S. | France | |
ICU Medical Canada Inc. | Canada | |
ICU Medical HIS LLC | Delaware | |
ICU Medical Latam LLC | Delaware | |
ICU UK Medical Limited | United Kingdom | |
ICU Medical Ireland Limited | Ireland | |
Hospira Argentina S.R.L. | Argentina | |
ICU Medical Costa Rica, Ltd | Bahamas | |
ICU Medical Bahamas, Ltd | Bahamas | |
ICU Medical Chile Limitada | Chile | |
Hospira Limitada | Colombia | |
Hospira, S. de R.L. de C.V. | Mexico | |
Hospira Peru S.R.L. | Peru | |
ICU Medical Fleet Services, LLC | Delaware | |
BMDi Tuta Healthcare Pty Ltd | Australia | |
Medical Australia Limited | Australia | |
Medivet Pty Ltd | Australia | |
ICU Medical Hong Kong Limited | Hong Kong | |
ICU Medical India LLP | India | |
ICU Medical Philippines, Inc. | Philippines | |
ICU Medical Unlimited Company | Ireland | |
Hospira Italia S.r.l. | Italy | |
ICU Medical Productos Farmacéuticos y Hospitalarios, S.L. | Spain | |
ICU Medical Spain, S.L. | Spain | |
BMDI Tuta Healthcare UK Ltd | United Kingdom | |
ICU Medical Aust MLA Pty Limited | Australia |
/s/ Deloitte & Touche LLP | |
Costa Mesa, California | |
March 16, 2018 |
1. | I have reviewed this annual report on Form 10-K of ICU Medical, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | March 16, 2018 | /s/ Vivek Jain |
Chief Executive Officer |
1. | I have reviewed this annual report on Form 10-K of ICU Medical, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | March 16, 2018 | /s/ Scott E. Lamb |
Chief Financial Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
March 16, 2018 | /s/ Vivek Jain |
Vivek Jain |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
March 16, 2018 | /s/ Scott E. Lamb |
Scott E. Lamb |
DEI Document - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Jan. 31, 2018 |
Jun. 30, 2017 |
|
Entity Information [Line Items] | |||
Entity Registrant Name | ICU MEDICAL INC/DE | ||
Entity Central Index Key | 0000883984 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 20,239,458 | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-Known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 3,127,790,010 |
Consolidated Statements of Income - USD ($) shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
REVENUES: | |||
Net sales | $ 1,292,166,000 | $ 379,339,000 | $ 341,254,000 |
Other | 447,000 | 33,000 | 414,000 |
TOTAL REVENUE | 1,292,613,000 | 379,372,000 | 341,668,000 |
COST OF GOODS SOLD | 866,518,000 | 177,974,000 | 160,871,000 |
Gross profit | 426,095,000 | 201,398,000 | 180,797,000 |
OPERATING EXPENSES: | |||
Selling, general and administrative | 303,953,000 | 89,426,000 | 83,216,000 |
Research and development | 51,253,000 | 12,955,000 | 15,714,000 |
Restructuring, strategic transaction and integration expenses | 77,967,000 | 15,348,000 | 8,451,000 |
Change in fair value of contingent earn-out | 8,000,000 | 0 | 0 |
Gain on sale of building | 0 | 0 | (1,086,000) |
Legal settlements, net | 0 | 0 | 1,798,000 |
Impairment of assets held for sale | 0 | 728,000 | 4,139,000 |
Total operating expenses | 441,173,000 | 118,457,000 | 112,232,000 |
(Loss) Income from operations | (15,078,000) | 82,941,000 | 68,565,000 |
Bargain Purchase Gain | 70,890,000 | 1,456,000 | 0 |
Interest Expense | (2,047,000) | (118,000) | (39,000) |
OTHER (EXPENSE) INCOME,NET | (2,482,000) | 885,000 | 1,173,000 |
Income before income taxes | 51,283,000 | 85,164,000 | 69,699,000 |
BENEFIT (PROVISION) FOR INCOME TAXES | 17,361,000 | (22,080,000) | (24,714,000) |
Net Income | $ 68,644,000 | $ 63,084,000 | $ 44,985,000 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Basic | $ 3.50 | $ 3.90 | $ 2.84 |
Diluted | $ 3.29 | $ 3.66 | $ 2.73 |
WEIGHTED AVERAGE NUMBER OF SHARES | |||
Basic (in shares) | 19,614 | 16,168 | 15,848 |
Diluted (in shares) | 20,858 | 17,254 | 16,496 |
Statement of Comprehensive Income - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Net income | $ 68,644,000 | $ 63,084,000 | $ 44,985,000 |
Cash flow hedge adjustments, net of taxes of $224 for the year ended December 31, 2017 | (365,000) | 0 | 0 |
Foreign currency translation adjustment, net of taxes of $56, $185 and ($2,680) for the years ended December 31, 2017, 2016 and 2015, respectively | 6,694,000 | (514,000) | (11,204,000) |
Other adjustments, net of taxes of $0 for the year ended December 31, 2017 | (16,000) | 0 | 0 |
Other Comprehensive Income (Loss), Net of Tax | 6,313,000 | (514,000) | (11,204,000) |
Comprehensive income | 74,957,000 | 62,570,000 | 33,781,000 |
Other Comprehensive Income (Loss), Cash Flow Hedge Adjustments, Tax | (224) | 0 | 0 |
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax | 56,000 | 185,000 | (2,680,000) |
Other Comprehensive (Income) Loss, Other Adjustments, Tax | $ 0 | $ 0 | $ 0 |
General and Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | Basis of Presentation and Preparation ICU Medical, Inc. ("ICU"), a Delaware corporation, operates in one business segment engaged in the development, manufacturing and sale of innovative medical devices used in vascular therapy, and critical care applications. ICU's product portfolio includes intravenous smart pumps, sets, connectors, closed transfer devices for hazardous drugs, cardiac monitoring systems, along with pain management and safety software technology. We sell the majority of our products through our direct sales force and through independent distributors throughout the U. S. and internationally. Additionally, we sell our products on an original equipment manufacturer basis to other medical device manufacturers. The manufacturing for all product groups occurs in Salt Lake City, Utah, Austin, Texas, Mexico and Costa Rica. All subsidiaries are wholly owned and are included in the consolidated financial statements. All intercompany accounts and transactions have been eliminated. Results of operations of companies purchased are included from the dates of acquisition. In our opinion, the consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. These consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount 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. Actual results could differ from those estimates. Cash, Cash Equivalents Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less from the date of purchase as cash equivalents. Accounts Receivable Accounts receivable are stated at net realizable value. An allowance is provided for estimated collection losses based on an assessment of various factors. We consider prior payment trends, the age of the accounts receivable balances, financial status and other factors to estimate the cash which ultimately will be received. Such amounts cannot be known with certainty at the financial statement date. We regularly review individual past due balances for collectability. Inventories Inventories are stated at the lower of cost or net realizable value with cost determined using the first-in, first-out method. Inventory costs include material, labor and overhead related to the manufacturing of medical devices. Inventories consist of the following at December 31 (in thousands):
Property, Plant and Equipment Property, plant and equipment consist of the following at December 31 (in thousands):
______________________________ *Instruments placed with customers consist of drug-delivery and monitoring systems placed with customer under operating leases. All property, plant and equipment are stated at cost. We use the straight-line method for depreciating property, plant and equipment over their estimated useful lives. Estimated useful lives are:
We capitalize expenditures that materially increase the life of the related assets; maintenance and repairs are expensed as incurred. The costs and related accumulated depreciation applicable to property, plant and equipment sold or retired are removed from the accounts and any gain or loss is reflected in the statements of income at the time of disposal. Depreciation expense was $51.6 million, $16.3 million and $15.9 million in the years ended December 31, 2017, 2016 and 2015, respectively. Goodwill We test goodwill for impairment on an annual basis in the month of November. If the carrying amount of goodwill exceeds the implied estimated fair value, an impairment charge to current operations is recorded to reduce the carrying value to the implied estimated fair value. There were no accumulated impairment losses as of December 31, 2017 and 2016. The following table presents the changes in the carrying amount of our goodwill for 2017 and 2016 (in thousands):
______________________________ (1) In 2016, "other" relates to measurement period adjustments on the net assets of our 2015 acquisition of EXC Holding Corp. ("EXC"). (2) In 2017, our Fannin (UK) Limited ("Fannin") acquisition resulted in $1.0 million of goodwill and our Medical Australia Limited ("MLA") acquisition resulted in $5.5 million of goodwill. The goodwill related to MLA is preliminary and subject to adjustment. (3) In 2017, "other" relates to foreign currency translation. Intangible Assets Intangible assets, carried at cost less accumulated amortization and amortized on a straight-lined basis, were as follows (in thousands):
*MCDA contract: Manufacturing, Commercialization and Development Agreement with Hospira, Inc., dated May 1, 2005 (the "MCDA”). The MCDA was terminated in connection with the acquisition of the HIS business on February 3, 2017. Amortization expense in 2017, 2016 and 2015 was $15.0 million, $2.8 million and $2.2 million, respectively. As of December 31, 2017 estimated annual amortization for our intangible assets for each of the next five years is approximately (in thousands):
Long-Lived Assets We periodically evaluate the recoverability of long-lived assets whenever events and changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. When indicators of impairment are present, the carrying values of the assets are evaluated in relation to the operating performance and future undiscounted cash flows of the underlying business. The net book value of the underlying asset is adjusted to fair value if the sum of the expected discounted cash flows is less than book value. Fair values are based on estimates of market prices and assumptions concerning the amount and timing of estimated future cash flows and discount rates, reflecting varying degrees of perceived risk. Investment Securities Short-term investments, exclusive of cash equivalents, are marketable securities intended to be sold within one year and may include trading securities, available-for-sale securities, and held-to-maturity securities (if maturing within one year). Long-term investments are marketable securities intended to be sold after one year and may include trading securities, available-for-sale securities, and held-to-maturity securities. Our investment securities are considered available-for-sale and are “investment grade” and carried at fair value. Our investments currently consist of corporate bonds. Available-for-sale securities are recorded at fair value, and unrealized holding gains and losses are recorded, net of tax, as a component of accumulated other comprehensive income (loss). Unrealized losses on available-for-sale securities are charged against net earnings when a decline in fair value is determined to be other than temporary. Our management reviews several factors to determine whether a loss is other than temporary, such as the length and extent of the fair value decline, the financial condition and near term prospects of the issuer, and for equity investments, our intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. For debt securities, management also evaluates whether we have the intent to sell or will likely be required to sell before its anticipated recovery. Realized gains and losses are accounted for on the specific identification method. There have been no realized gains or losses on their disposal. The scheduled maturities of the equity securities are between 2018 and 2020. All short-term investment securities are all callable within one year. As of December 31, 2017, our investment securities consist of the following (in thousands):
Income Taxes Deferred taxes are determined based on the differences between the financial statements and the tax bases using rates as enacted in the laws. A valuation allowance is established if it is “more likely than not” that all or a portion of the deferred tax assets will not be realized. We recognize interest and penalties related to unrecognized tax benefits in the tax provision. We recognize liabilities for uncertain tax positions when it is more likely than not that a tax position will not be sustained upon examination and settlement with various taxing authorities. Liabilities for uncertain tax positions are measured based upon the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. We have not recorded any material interest or penalties during any of the years presented. Foreign Currency Generally, the functional currency of our international subsidiaries is the local currency. Generally, we translate the financial statements of these subsidiaries to U.S. dollars at the exchange rate in effect at the balance sheet date and revenues and expenses are translated at the average monthly exchange rates during the year. Certain of our international subsidiaries consolidate first with another subsidiary that utilizes a functional currency other than U.S. dollars. In those cases, we follow a step by step translation process utilizing the same sequence as the consolidation process. Translation adjustments are recorded as a component of accumulated other comprehensive income, a separate component of stockholders' equity on our consolidated balance sheets and the effect of exchange rate changes on cash and cash equivalents are reflected on our consolidated statements of cash flows. Gains and losses for transactions denominated in a currency other than the functional currency of the entity are included in our statements of operations in other (expense) income, net. Foreign currency transaction losses, net were $1.8 million in 2017, $0.3 million in 2016 and less than $0.2 million in 2015. Revenue Recognition Most of our product sales are free on board shipping point and ownership of the product transfers to the customer on shipment. We record sales and related costs when ownership of the product transfers to the customer, persuasive evidence of an arrangement exists, collectability is reasonably assured and the sales price is determinable. Our customers are distributors, medical product manufacturers and end-users. Our only post-sale obligations are warranty and certain rebates. We warrant products against defects and have a policy permitting the return of defective products. We reserve for warranty and returns based on historical experience. We accrue rebates based on agreements and on historical experience as a reduction in revenue at the time of sale. Other revenue consists of license, royalty and revenue sharing payments. Payments expected to be received are estimated and recorded in the period earned and adjusted to actual amounts when reports are received from payers; if there is insufficient data to make such estimates, payments are not recorded until reported by the payers. Arrangements with Multiple Deliverables In certain circumstances, we enter into arrangements in which we provide multiple deliverables to our customers. These bundled arrangements may include infusion pumps, Mednet software, implementation services, extended warranty and consumables. We first separate the deliverables into different units of accounting and then allocate the arrangement consideration to those separate units of accounting based on their relative selling price. When applying the relative selling price method, the selling price for each deliverable shall be determined using the following hierarchy: (i) vendor-specific objective evidence of selling price; (ii) third-part evidence of selling price; or (iii) best estimate of the selling price. We record revenue related to these multiple deliverables as products are delivered and services have been performed. Shipping Costs Costs to ship finished goods to our customers are included in cost of goods sold on the consolidated statements of operations. Advertising Expenses Advertising expenses are expensed as incurred and reflected in selling, general and administrative expenses in our consolidated statements of operations and were $0.2 million in 2017, $0.1 million in 2016 and $0.2 million in 2015. Post-retirement and Post-employment Benefits We sponsor a Section 401(k) retirement plan ("plan") for employees. Our contributions to our 401(k) plan were approximately $2.0 million in 2017, $1.5 million in 2016 and $1.3 million in 2015. As a result of the HIS acquisition, we assumed certain post-retirement and post-employment obligations related to employees located in certain international countries. These obligations are immaterial to our financial statements taken as a whole. Research and Development Research and development costs are expensed as incurred. Research and development costs include salaries and related benefits, consulting fees, production supplies, samples, travel costs, utilities and other miscellaneous administrative costs. Net Income Per Share Net income per share is computed by dividing net income by the weighted average number of common shares outstanding. Diluted net income per share is computed by dividing net income by the weighted average number of common shares outstanding plus dilutive securities. Dilutive securities include outstanding common stock options and unvested restricted stock units, less the number of shares that could have been purchased with the proceeds from the exercise of the options, using the treasury stock method. Options that are anti-dilutive, where their exercise price exceeds the average market price of the common stock are not included in the treasury stock method calculation. There were 337 anti-dilutive shares in 2017. There were no anti-dilutive shares in 2016 or 2015. The following table presents the calculation of net earnings per common share (“EPS”) — basic and diluted (in thousands except per share data):
______________________________ (1) During the second quarter of 2016, we early adopted ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. Under this ASU, the change to the treasury stock method impacted weighted average common and common equivalent shares outstanding by 413,000 shares for the year ended December 31, 2016. On February 3, 2017, as part of the purchase price for the acquisition of Pfizer Inc.'s ("Pfizer") Hospira Infusion Systems ("HIS") business, we delivered to Pfizer 3.2 million newly issued common shares (see Note 2: Acquisitions, Strategic Transaction and Integration Expenses). New Accounting Pronouncements Recently Adopted Accounting Standards In July 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2015-11 Inventory (Topic 330): Simplifying the Measurement of Inventory. ASU 2015-11 changes the measurement of inventory within the scope of the ASU (e.g. FIFO or average cost) from lower of cost or market to lower of cost and net realizable value ("NRV"). NRV is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Prior to the ASU, U.S. generally accepted accounting principles required an entity to measure inventory at the lower of cost or market. Market is measured using replacement cost unless it is above NRV (commonly referred to as “ceiling”) or below NRV less an approximately normal profit margin (commonly referred to as “floor”). For inventory within its scope, the ASU eliminates the notions of replacement cost and NRV less a normal profit margin, which is intended to simplify the accounting for inventory. The amendments are effective prospectively for the fiscal years, and interim reporting periods within those years, beginning on or after December 15, 2016. We adopted this ASU on January 1, 2017. This ASU did not have a material impact on our consolidated financial statements. Recently Issued Accounting Standards In August, 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendments in this update change both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results to facilitate financial reporting that more closely reflects an entity's risk management activities. The amendments in this update also make certain targeted improvements to simplify the application of hedge accounting guidance and ease the administrative burden of hedge documentation requirements and assessing hedge effectiveness. The amendments are effective for the fiscal years, and interim reporting periods within those years, beginning on or after December 15, 2018. For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the update. We early-adopted this ASU on January 1, 2018. The adoption of this ASU will not materially impact our first quarter 2018 consolidated financial statements or related footnotes. In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Under the ASU, an entity will account for the effects of a modification unless (i) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified, (ii) the vesting conditions of the modified award are the same vesting conditions as the original award immediately before the original award is modified, and (iii) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments in this ASU are effective prospectively for annual periods, and interim periods within those annual periods, beginning December 15, 2017. This adoption of this ASU is not expected to have a material impact on our consolidated financial statements or related footnote disclosures. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this update remove the second step of the impairment test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. The amendments in ASU 2017-04 are effective for the annual or interim impairment test in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. This ASU is not expected to have a material impact on our consolidated financial statements or related footnote disclosures. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The amendments in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this update provide a screen to determine when a set (integrated set of assets and activities) is not a business. If the screen is not met, it (1) requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) removes the evaluation of whether a market participant could replace the missing elements. The amendments in ASU 2017-01 are effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. The amendments in this ASU should be applied prospectively on or after the effective date. This adoption of this ASU is not expected to have a material impact on our consolidated financial statements or related disclosures. In October 2016, the FASB issued No. ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. Current generally accepted accounting principles prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until after the asset has been sold to an outside party. The amendments in ASU 2016-16 eliminates this prohibition. Accordingly, an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Amendments in this update are effective for annual reporting periods beginning after December 15, 2017. The adoption of this ASU is not expected to have a material impact on our consolidated financial statements or related disclosures. In August 2016, the FASB issued No. ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 provides specific guidance on eight cash flow issues where current guidance is unclear or does not include any specifics on classification. The eight specific cash flow issues are: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with zero coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies, including bank-owned policies; distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. The amendments in ASU 2016-15 are effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. Early adoption is permitted. If adopted in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. Amendments should be applied using a retrospective transition method to each period presented. The adoption of this ASU is not expected to have a material impact on the consolidated financial statements and related disclosures. In June 2016, the FASB issued No. ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This update amends the FASB's guidance on the impairment of financial instruments by requiring timelier recording of credit losses on loans and other financial instruments. The ASU adds an impairment model that is based on expected losses rather than incurred losses. The ASU also amends the accounting for credit losses on available- for-sale debt securities and purchased financial assets with credit deterioration. The amendments in this update will be effective for fiscal years beginning after December 15, 2019. Early adoption is permitted as of the fiscal years beginning after December 15, 2018. The updated guidance requires a modified retrospective adoption. We are currently evaluating the impact of this ASU on the consolidated financial statements and related disclosures. In February 2016, the FASB issued No. ASU 2016-02, Leases (Topic 842). The amendments in this update require an entity to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as finance or operating lease. The amendments also require certain quantitative and qualitative disclosures about leasing arrangements. The amendments in this update will be effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. The updated guidance requires a modified retrospective adoption. We are currently evaluating the impact of this ASU on the consolidated financial statements and related disclosures. In January 2016, the FASB issued No. ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments. This amendment requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in the consolidation of the investee). The amendments in this update will be effective for fiscal years beginning after December 15, 2017. Early adoption of the amendments is not permitted with the exception of the provision requiring the recognition in other comprehensive income the fair value change from instrument-specific credit risk measured using the fair value option for financial instruments. The adoption of this ASU is not expected to have a material impact on the consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 removes inconsistencies and weaknesses in revenue requirements; provides a more robust framework for addressing revenue issues; improves comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets; provides more useful information to users of financial statements through improved disclosure requirements; and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. This guidance requires that an entity depict the consideration by applying a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. On April 1, 2015, the FASB voted for a one-year deferral of the effective date of the new revenue recognition standard, ASU 2014-09. On July 15, 2015, the FASB affirmed these changes, which requires public entities to apply the amendments in ASU 2014-09 for annual reporting beginning after December 15, 2017. Early adoption is permitted beginning after December 31, 2016, the original effective date in ASU 2014-09. Subsequent to the issuance of this ASU, the FASB issued three amendments: ASU No. 2016-08 which clarifies principal versus agent considerations; ASU 2016-10 which clarifies guidance related to identifying performance obligations and licensing implementation; and ASU 2016-12 which provides narrow-scope improvements and practical expedients. All of the amendments have the same effective dates mentioned above. We adopted the standard effective January 1, 2018 using the modified retrospective method applied to those contracts that were not completed as of January 1, 2018. Results for reporting beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and will continue to be reported in accordance with our historic accounting under ASC 605. Due to the cumulative impact of adopting ASC 606, we will record a net increase of $9.0 million to opening retained earnings as of January 1, 2018. The impact is primarily related to our bundled arrangements where we sell software licenses and implementation services, in addition to equipment and other consumables and solutions. We evaluated the effect ASU 2014-09 on our consolidated financial statements by reviewing each of the significant revenue streams. The following is the result of that evaluation:
In addition to the impact as mentioned above, we expect to have enhanced disclosures in our 2018 first quarter report on Form 10-Q. |
Acquisitions and Strategic Transaction Expenses (Notes) |
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Acquisitions and Strategic Transaction Expenses [Text Block] | ACQUISITIONS, STRATEGIC TRANSACTION AND INTEGRATION EXPENSES 2017 Acquisitions On February 1, 2017, we acquired 100% interest in Fannin for total consideration of approximately $1.5 million. Fannin provides infusion therapy consumable products to the healthcare sector in the United Kingdom and Ireland. On February 3, 2017, we acquired 100% interest in Pfizer's HIS business for total cash consideration of approximately $260.0 million (net of estimated working capital adjustments paid at closing), which was financed with existing cash balances and a $75 million three-year interest-only seller note. We also issued 3.2 million shares of our common stock. The fair value of the common shares issued to Pfizer was determined based on the closing price of our common shares on the closing date, discounted to reflect a contractual lock-up period whereby Pfizer cannot transfer the shares, subject to certain exceptions, until the earlier of (i) the expiration of Pfizer’s services to us in the related transitional services agreement or (ii) eighteen months from the closing date. Additionally, Pfizer also may be entitled up to an additional $225 million in cash contingent consideration based on the achievement of performance targets for the combined company for the three years ending December 31, 2019 ("Earnout Period"). In the event that the sum of our Adjusted EBITDA as defined in the Amended and Restated Stock and Asset Purchase Agreement between us and Pfizer (the “HIS Purchase Agreement”) for the three years in the Earnout Period (the "Cumulative Adjusted EBITDA") is equal to or exceeds approximately $1 billion ("the "Earnout Target"), then Pfizer will be entitled to receive the full amount of the earnout. In the event that the Cumulative Adjusted EBITDA is equal to or greater than 85% of the Earnout Target (but less than the Earnout Target), Pfizer will be entitled to receive the corresponding percentage of the earnout. In the event that the Cumulative Adjusted EBITDA is less than 85% of the Earnout Target, then no earnout amount will be earned by Pfizer. The initial fair value of the earn-out was determined by employing a Monte Carlo simulation in a risk neutral framework. The underlying simulated variable was adjusted EBITDA. The adjusted EBITDA volatility estimate was based on a study of historical asset volatility for a set of comparable public companies. The model includes other assumptions including the market price of risk, which was calculated as the weighted average cost of capital ("WACC") less the long term risk free rate. We believe that the acquisition of the HIS business, which includes IV pumps, solutions and consumable devices complements our pre-existing business by creating a company that has a complete infusion therapy product portfolio. We believe that the acquisition significantly enhances our global footprint and platform for continued competitiveness and growth. With the acquisition of HIS, pre-existing long-term supply and distribution contracts between ICU and HIS were effectively terminated. Deferred Closings In the HIS Purchase Agreement, we agreed with Pfizer to defer the local closing of the HIS business in certain foreign jurisdictions (the “Deferred Closing Businesses”) for periods ranging by jurisdiction from 3 to 12 months after the February 3, 2017 closing date (the "Deferred Closing Period"). The net assets in these jurisdictions represent an immaterial portion of the total HIS business net assets. At the February 3, 2017 HIS business transaction closing, we entered into a Net Economic Benefit Agreement with Pfizer under which we agreed that (i) during the Deferred Closing Period, the economic benefits and burdens of the Deferred Closing Businesses are for our account, and we are to be treated as the beneficial owner of the Deferred Closing Businesses and (ii) Pfizer would continue to operate the Deferred Closing Businesses under our direction. As of December 31, 2017, all of the deferred closing businesses were effectively closed. Purchase Price The following table summarizes the final purchase price and the final allocation of the purchase price related to the assets and liabilities purchased (in thousands, except per share data):
______________________________ (1) Identifiable intangible assets includes $48 million of customer relationships, $44 million of developed technology - pumps and dedicated sets, $34 million of developed technology - consumables, and $5 million of in-process research and development ("IPR&D"). The weighted amortization period for the total identifiable assets is approximately nine years, for customer relationships the weighted amortization period is eight years, for the developed technology - pumps and dedicated sets the weighted amortization period is ten years and for the developed technology - consumables the weighted amortization period is twelve years. The IPR&D is non-amortizing until the associated research and development efforts are complete. (2) Long-term liabilities primarily consisted of contract liabilities, product liabilities and long-term employee benefits. The fair value of the assets acquired and liabilities assumed exceeded the fair value of the consideration to be paid resulting in a bargain purchase gain. Before recognizing a gain on a bargain purchase, we reassessed the methods used in the purchase accounting and verified that we had identified all of the assets acquired and all of the liabilities assumed, and that there were no additional assets or liabilities to be considered. We also reevaluated the fair value of the contingent consideration transferred to determine that it was appropriate. We determined that the bargain purchase gain was primarily attributable to expected restructuring costs as well as a reduction to the initially agreed upon transaction price caused primarily by revenue shortfalls across all market segments of the HIS business, negative manufacturing variance due to the drop in revenue and higher operating and required stand up costs, when compared to forecasts of the HIS business at the time that the purchase price was agreed upon. After the continuing review of the product demand and operations of the HIS Business, including the resulting expected restructuring activities, we forecasted our estimated Adjusted EBITDA from the HIS business in 2017 to be $35 million - $40 million, which was considerably lower than the forecast contemplated in initial negotiations with Pfizer, which resulted in an estimated fair value of $19 million related to the $225 million earn out. Restructuring costs, if incurred, will be expensed in future periods (see Note 3: Restructuring Charges). The bargain purchase gain is separately stated below income from operations in the accompanying consolidated statements of operations for the year ended December 31, 2017. The identifiable intangible assets and other long-lived assets acquired have been valued as Level 3 assets at fair market value. The estimated fair value of identifiable intangible assets were developed using the income approach and are based on critical estimates, judgments and assumptions derived from: analysis of market conditions; discount rate; discounted cash flows; royalty rates; customer retention rates; and estimated useful lives. Fixed assets were valued with the consideration of remaining economic lives. The raw materials inventory was valued at historical cost and adjusted for any obsolescence, the work in process was valued at estimated sales proceeds less costs to complete and costs to sell, and finished goods inventory was valued at estimated sales proceeds less a nominal profit and costs to sell. The prepaid expenses and other current assets and assumed liabilities were recorded at their carrying values as of the date of the acquisition, as their carrying values approximated their fair values due to their short-term nature. The pro forma financial information in the table below summarizes the combined results of operations for ICU and HIS as though the companies were combined as of the beginning of fiscal 2016. The pro forma financial information for all periods presented also includes the business combination accounting effects resulting from this acquisition including our amortization charges from acquired intangible assets, nonrecurring expense related to the fair value adjustment to acquisition-date inventory, acquisition and integration-related costs, interest expense on the Pfizer seller note and the related tax effects as though the aforementioned companies were combined as of the beginning of fiscal 2016. The pro forma financial information as presented below is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place at the beginning of fiscal 2016.
______________________________ * Impracticable to calculate. (1) 2017 supplemental pro forma earnings were adjusted to exclude $66.3 million of nonrecurring expense related to the fair value adjustment to acquisition-date inventory and $69.5 million of acquisition and integration-related costs. 2016 supplemental pro forma earnings were adjusted to include these charges. (2) Unaudited. (3) Amount represents activity of HIS from the date of the acquisition. On November 29, 2017, we acquired all of the outstanding shares of MLA. Total cash consideration paid was approximately $9.0 million. MLA delivers similar consumable Infusion products as our current businesses to Australia and surrounding regions. The purchase price allocation is preliminary and subject to future revision as the acquired assets and liabilities assumed are dependent upon the finalization of the related valuations. 2016 Acquisitions On April 4, 2016, we acquired all of the outstanding shares of Tangent Medical Technologies, Inc. ("Tangent") for $2.6 million in cash. Tangent designs, develops, and commercializes intravenous catheters and associated products for the improvement of infusion therapy. Tangent's products enhance our infusion therapy product offering. For the year ended December 31, 2016, we recognized a $1.5 million bargain purchase gain related to the acquisition, which is separately stated in our consolidated statements of income. The bargain purchase gain represents the excess of the estimated fair market value of the identifiable tangible and intangible assets acquired, liabilities assumed and deferred tax assets over the total purchase consideration. The bargain purchase was driven by our ability to realize acquired deferred tax assets. The purchase price allocation is final. 2015 Acquisitions On October 6, 2015, we acquired 100% of the outstanding shares of EXC, for approximately $59.5 million in cash. Immediately following the completion of the acquisition of EXC, we sold certain assets to Excelsior Medical, LLC for a final purchase price including working capital adjustments of $29.0 million in cash. We retained all of the assets related to the business of manufacturing and selling the needleless connector disinfection cap. The acquisition of EXC's SwabCap business enhances our infusion therapy product offering across our existing direct and original equipment manufacturer business lines. The goodwill recognized for this acquisition is attributable to the benefits expected to be derived from product line expansion, new customers and operational synergies. The goodwill is nondeductible for income tax purposes. The following table summarizes the final purchase price and the allocation of the purchase price related to the assets and liabilities retained (in thousands):
______________________________ (1) Identifiable intangible assets included $7.1 million of non-contractual customer relationships, $3.7 million of developed technology and $7.3 million of trade name. The weighted-average amortization period for the total identifiable intangible assets is approximately fourteen years. The weighted-average amortization period for customer relationships and trade name is fifteen years and the weighted-average amortization period for the developed technology is ten years. The identifiable intangible assets and other long-lived assets acquired have been valued as Level 3 assets at fair market The estimated fair value of identifiable intangible assets was developed using the income approach and is based on critical estimates, judgments and assumptions derived from: analysis of market conditions; discount rate; discounted cash flows; royalty rates; customer retention rates; and estimated useful lives. The prepaid expenses and other current assets and assumed liabilities were recorded at their carrying values as of the date of the acquisition, as their carrying values approximated their fair values due to their short-term nature. Strategic Transaction and Integration Expenses In 2017, we incurred $59.2 million in transaction and integration costs primarily related to our acquisition of HIS. In 2016, we incurred $14.3 million in transaction costs related to our 2017 acquisition of HIS, our acquisition of Tangent and our acquisition of EXC. In 2015, we incurred $1.8 million in charges primarily associated with the acquisition of EXC. Transaction expenses are presented on a separate line item on our statements of income and are combined with restructuring charges. |
Restructuring Charges (Notes) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities Disclosure [Text Block] | e incurred restructuring charges related to the acquisition of the HIS business (see Note 2: Acquisitions, Strategic Transaction and Integration Expenses). The restructuring charges were incurred as a result of integrating the acquired operations into our business and include severance costs related to involuntary employee terminations and facility exit costs related to the closure of the Dominican Republic manufacturing facilities acquired from Pfizer. All material charges in regard to these restructuring activities have been paid as of December 31, 2017. In 2016, we incurred an additional $0.8 million related to the closure of the Slovakian manufacturing facility, described below. Additionally, we incurred $0.2 million related to a one-time charge unrelated to the events disclosed in the table below. In 2015, we incurred $6.7 million in total restructuring charges related to: (i) a commitment to a plan to sell our Slovakia manufacturing facility, which was sold during 2016. The plan to sell the facility resulted in a pre-tax restructuring charge of $4.2 million for employee termination benefits, government incentive repayments and other associated costs; (ii) an agreement with Dr. Lopez, a member of our Board of Directors and a former employee in our research and development department, pursuant to which we bought out Dr. Lopez's right to employment under his then-existing employment agreement-the $1.9 million buy-out, including payroll taxes, will be paid in equal monthly installments until December 2020 and payments that will exceed one year have been accrued under long-term liabilities in our consolidated balance sheet; and (iii) the reorganization of our corporate infrastructure, resulting in one-time employee termination benefits and other associated costs and corporate restructuring actions resulted in a total charge of $0.6 million. The following table summarizes the activity for the restructuring-related charges discussed above and related accrual (in thousands):
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Gain on Sale of Building (Notes) |
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Gain on Sale of Building [Abstract] | |
Gain on sale of building [Text Block] | GAIN ON SALE OF BUILDING During 2015, we sold an office building in our San Clemente location to George A. Lopez, M.D., a member of our Board of Directors. The building was sold for $3.6 million, its fair market value as determined by a third party. The net book value of the land and building was $2.5 million resulting in a gain on the sale of the land and building of $1.1 million. |
Legal settlements (Notes) |
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Legal Settlements [Abstract] | |
Legal settlement [Text Block] | LEGAL SETTLEMENTS During 2015, we recorded a net settlement charge of $1.8 million due to the following claims: An arbitrator ruled on a breach of contract claim between us and a service provider, awarding us a gross settlement of $8.8 million. Our legal counsel for this matter represented us under a contingency fee agreement. We recorded a settlement award, net of legal fees and costs, of $5.3 million; and An arbitrator ruled on a breach of contract claim between us and a customer, Hospira, Inc., awarding Hospira $8.2 million Canadian dollars ($6.5 million U.S. dollars). The arbitrator also ruled that we pay 75% of Hospira's legal fees and expenses, which were $0.7 million U.S. dollars. We made a $7.5 million U.S. dollars settlement payment during 2015, which includes a foreign exchange transaction adjustment to Canadian dollars at the time of payment. |
Impairment on assets held for sale (Notes) |
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Impairment of assets held for sale [Abstract] | |
Asset Impairment Charges [Text Block] | IMPAIRMENT OF ASSETS HELD FOR SALE During 2015, our Board of Directors authorized us to close our Vrable, Slovakia manufacturing facility. The closure was to enable for greater efficiency of our Ensenada, Mexico facility. After receiving the Board of Director's authorization, we reclassified the land and building related to the Slovakia facility as held-for-sale, and recorded the value of those assets at the lower of their carrying value or their estimated fair value less costs to sell, which was based on a third party fair market valuation. As the estimated fair value less cost to sell was lower than the carrying value of the assets held-for-sale, we recorded an impairment charge of $4.1 million in 2015. During 2016, we completed the closure of our Slovakia manufacturing facility and sold the land and building held-for- sale for $3.3 million, net of costs to sell, resulting in an additional $0.7 million impairment charge on those assets. The impairment charges are separately stated in our consolidated statements of operations above income from operations. |
Share Based Award Share awards (Notes) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | SHARE BASED AWARDS We have a stock incentive plan for employees and directors and an employee stock purchase plan. Shares to be issued under these plans will be issued either from authorized but unissued shares or from treasury shares. We incur stock compensation expense for stock options, restricted stock units ("RSU"), performance restricted stock units ("PRSU") and stock purchased under our employee stock purchase plan ("ESPP"). We receive a tax benefit on stock compensation expense and direct tax benefits from the exercise of stock options. We also have indirect tax benefits upon exercise of stock options related to research and development tax credits which are recorded as a reduction of income tax expense. The table below summarizes compensation costs and related tax benefits (in thousands):
As of December 31, 2017, we had $23.3 million of unamortized stock compensation cost which we will recognize as an expense over approximately 0.8 years. Stock Incentive and Stock Option Plans Our 2011 Stock Incentive Plan ("2011 Plan") replaced our 2003 Stock Option Plan (“2003 Plan”). Our 2011 Plan initially had 650,000 shares available for issuance, plus the remaining available shares for grant from the 2003 Plan. In 2012, 2014 and 2017, our stockholders approved amendments to the 2011 plan that increased the shares available for issuance by 3,275,000, bringing the initial shares available for issuance to 3,925,000, plus the remaining 248,700 shares that remained available for grant from the 2003 Plan. In addition, any forfeited, terminated or expired shares that would otherwise return to the 2003 Plan are available under the 2011 Plan. As of December 31, 2017, the 2011 Plan has 4,188,300 shares of common stock reserved for issuance to employees, which includes 263,300 shares that transferred from the 2003 Plan. Shares issued as options or stock appreciation rights ("SARs") are charged against the 2011 Plan's share reserve as one share for one share issued. Shares subject to awards other than options and SARs are charged against the 2011 Plan's share reserve as 2.09 shares for 1 share issued. Options may be granted with exercise prices at no less than fair market value at date of grant. Options granted under the 2011 Plan may be “non-statutory stock options” which expire no more than ten years from date of grant or “incentive stock options” as defined in Section 422 of the Internal Revenue Code of 1986, as amended. Upon exercise of non-statutory stock options, we are generally entitled to a tax deduction on the exercise of the option for an amount equal to the excess over the exercise price of the fair market value of the shares at the date of exercise; we are generally not entitled to any tax deduction on the exercise of an incentive stock option. The 2011 Plan includes conditions whereby unvested options are cancelled if employment is terminated. In 2014, our Compensation Committee of the Board of Directors awarded our then new Chief Executive Officer an employment inducement option to purchase 182,366 shares of our common stock and an employment inducement grant of restricted stock units with respect to 68,039 shares of our common stock. The inducement grants were made out of our 2014 Inducement Incentive Plan ("2014 Plan"). Our 2001 Directors’ Stock Option Plan (the “Directors’ Plan”), initially had 750,000 shares reserved for issuance to members of our Board of Directors, expired in November 2011. Although no new grants may be made under the Director's Plan, grants made under the Director's Plan prior to its expiration continue to remain outstanding. Options not vested terminate if the directorship is terminated. Time-based Stock Options To date, all options granted under the 2014 Plan, 2011 Plan, 2003 Plan and Directors' Plan have been non-statutory stock options. The majority of the time-based outstanding employee option grants vest 25% after one year from the grant date and the balance vests ratably on a monthly basis over 36 months. The majority of the outstanding options granted to non-employee directors vest one year from the grant date. The options generally expire 10 years from the grant date. The fair value of time-based option grants is calculated using the Black-Scholes option valuation model. The expected term for the option grants was based on historical experience and expected future employee behavior. We estimate the volatility of our common stock at the date of grant based on the historical volatility of our common stock, based on the average expected exercise term. The table below summarizes the total time-based stock options granted, total valuation and the weighted average assumptions (dollars in thousands):
Performance Stock Options In 2015, we granted performance stock option grants which are exercisable if the common stock price condition and the time-based vesting have been met. The 2015 performance based stock option grants vest ratably at 33% per year over three years. For the 2015 grants, the vested performance stock options became exercisable when the closing price of our common stock was equal to or more than 130% of the exercise price for 30 consecutive trading days during the term of the grant. All of the 2015 performance stock option grant's common stock price conditions have been met. The fair value of performance option grants is calculated using the Monte Carlo Simulation. The expected term of the performance option grants is based on the expected number of years to achieve the exercisable goal trigger and assumes that the vested option will be immediately exercised or cancelled, if underwater. We estimate the volatility of our common stock at the date of grant based on the historical volatility of our common stock over a 10-year period. The table below summarizes the performance stock options granted, the total valuation and the weighted average assumptions (dollars in thousands). There were no performance option grants in 2017 or 2016.
A summary of our stock option activity as of and for the year ended December 31, 2017 is as follows:
The intrinsic values for options exercisable, outstanding and vested or expected to vest at December 31, 2017 is based on our closing stock price of $216.00 at December 31, 2017 and are before applicable taxes.
Stock Awards In 2017, we granted performance restricted stock units ("PRSU") to our executive officers. The PRSUs will vest, if at all, upon the achievement of a minimum Cumulative Adjusted EBITDA, subject to a three-year cliff vesting ending on December 31, 2019. If at that date, our Cumulative Adjusted EBITDA is at least $600 million but less than $650 million, 100% of the awarded units will vest. If our Cumulative Adjusted EBITDA is at least $650 million but less than $700 million, 200% of the awarded units will vest. If our Cumulative Adjusted EBITDA is at least $700 million, 300% of the awarded units will vest. In 2016, we granted PRSUs to our executive officers, which will vest, if at all, upon the achievement of a minimum specified compound annual growth rate ("CAGR") in adjusted EBITDA per share, subject to a three-year cliff vesting ending on December 31, 2018. If at that date, our adjusted EBITDA per share CAGR is at least 8% but less than 10%, 100% of the awarded units will vest. If our adjusted EBITDA per share CAGR is at least 10% but less than 12%, 200% of the awarded units will vest. If our adjusted EBITDA per share CAGR is greater than 12%, 300% of the awarded units will vest. As of October 1, 2017 we expect our adjusted EBITDA per share CAGR to be greater than 12% at December 31, 2018. Restricted stock units ("RSU") are granted annually to our Board of Directors and vest on the first anniversary of the grant date. In 2017, 2016 and 2015, we granted RSUs to certain employees that vest ratably on the anniversary of the grant over three years. Additionally in 2015, we granted RSUs to certain new hire employees that vest ratably on the anniversary of the grant over two years. The table below summarizes our restricted stock award activity (dollars in thousands):
The table below provides a summary of our PRSU and RSU activity as of and for the year ended December 31, 2017.
(a) Relates to the 2016 PRSUs, assumes attainment of maximum payout rate as set forth in performance criteria. ESPP We have an ESPP under which U.S. employees may purchase up to $25,000 annually of common stock at 85% of its fair market value at the beginning or the end of a six-month offering period, whichever is lower. There are 750,000 shares of common stock reserved for issuance under the ESPP, which is subject to an annual increase of the least of 300,000 shares, two percent of the shares outstanding or such a number as determined by the Board. To date, there have been no increases. As of December 31, 2017, there were 133,487 shares available for future issuance. The ESPP is intended to constitute an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code. During 2017, we suspended our ESPP. The fair value of rights to purchase shares under the ESPP is calculated using the Black-Scholes option valuation model. The table below summarizes the number and intrinsic value of ESPP share purchases and the weighted average valuation assumptions for the 2017, 2016 and 2015 purchase periods.
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Derivatives and Hedging Activities (Notes) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Text Block] | DERIVATIVES AND HEDGING ACTIVITIES Hedge Accounting and Hedging Program During the second quarter of 2017, we implemented a cash flow hedging program. The purpose of our hedging program is to manage the foreign currency exchange rate risk on forecasted expenses denominated in currencies other than the functional currency of the operating unit. We do not issue derivatives for trading or speculative purposes. In May 2017, we entered into a two-year cross-currency par forward contract to hedge a portion of our Mexico forecasted expenses denominated in Pesos ("MXN"). To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on hedged transactions. The par forward contract is designated and qualifies as a cash flow hedge. Our derivative instrument is recorded at fair value on the Consolidated Balance Sheets and is classified based on the instrument's maturity date. We record changes in the intrinsic value of the effective portion of the gain or loss on the derivative instrument as a component of Other Comprehensive (Loss) Income and we reclassify that gain or loss into earnings in the same line item associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings. Any gain or loss on the derivative instrument due to ineffectiveness of the hedge will be recognized in the Consolidated Statements of Operations during the current period. The total notional amount of our outstanding derivative as of December 31, 2017 was approximately 510.3 million MXN. The term of our currency forward contract is May 1, 2017 to May 1, 2019. The derivative instrument matures in equal monthly amounts at a fixed forward rate of 20.01MXN/USD over the term of the two-year contract. The following table presents the fair values of our derivative instrument included within the Consolidated Balance Sheet as of December 31, 2017 (in thousands):
The following table presents the amounts affecting the Consolidated Statements of Operations for the year ended December 31, 2017 (in thousands):
We recognized the following gains on our foreign exchange contract designated as a cash flow hedge (in thousands):
As of December 31, 2017, we expect approximately $0.2 million of the deferred losses on the outstanding derivatives in accumulated other comprehensive income to be reclassified to net income during the next 12 months concurrent with the underlying hedged transactions also being reported in net income. |
Fair Value Measurements (Notes) |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Text Block] | FAIR VALUE MEASUREMENTS Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
During the first quarter of 2017, we recognized an earn-out liability upon the acquisition of HIS from Pfizer. Pfizer may be entitled up to $225 million in cash if certain performance targets for the combined company for the three years ending December 31, 2019 are achieved. The initial fair value of the earn-out was determined by employing a Monte Carlo simulation in a risk neutral framework. The underlying simulated variable was adjusted EBITDA. The adjusted EBITDA volatility estimate was based on a study of historical asset volatility for a set of comparable public companies. The model includes other assumptions including the market price of risk, which was calculated as the weighted average cost of capital ("WACC") less the long term risk free rate. The initial value assigned to the contingent consideration was a result of forecasted product demand of our HIS business, as discussed further in Note 2: Acquisition, Strategic Transaction and Integration Expenses. At each reporting date subsequent to the acquisition we remeasure the earn-out using the same methodology above and recognize any changes in value. If the probability of achieving the performance target significantly changes from what we initially anticipated, the change could have a significant impact on our financial statements in the period recognized. Our contingent earn-out liability is separately stated in our consolidated balance sheets. The following table provides a reconciliation of the Level 3 earn-out liability measured at estimated fair value based on an initial valuation and updated quarterly for the year ended December 31, 2017 (in thousands):
The fair value of the earn-out at December 31, 2017 changed from the fair value calculated at acquisition due to a change in the forecast of the underlying target, adjusted EBITDA, and due to changes in other assumptions used in the Monte Carlo simulation, as detailed in the below table. The following table provides quantitative information about Level 3 inputs for fair value measurement of our earn-out liability as of the acquisition date and December 31, 2017. Significant increases or decreases in these inputs in isolation could result in a significant impact on our fair value measurement:
The fair value of our investments, which consisted of corporate bonds, is estimated using observable market based inputs such as quoted prices, interest rates and yield curves or Level 2 inputs. The fair value of our Level 2 forward currency contract is estimated using observable market inputs such as known notional value amounts, spot and forward exchange rates. These inputs relate to liquid, heavily traded currencies with active markets which are available for the full term of the derivative. The assets related to our Dominican Republic manufacturing facilities are classified as assets held-for-sale. These assets are separately stated in our consolidated balance sheet. The fair value of these Level 3 assets was determined as part of the HIS business valuation and was based on a market approach using comparable building and land sales data and the analysis of market conditions. There were no transfers between levels in 2017. Our assets and liabilities measured at fair value on a recurring basis consisted of the following (Level 1, 2 and 3 inputs as defined above) (in thousands):
Our assets measured at fair value on a nonrecurring basis consisted of the following (Level 1, 2 and 3 inputs as defined above (in thousands):
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Prepaids and Other Current Assets (Notes) |
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Other Current Assets [Text Block] | Prepaid expenses and other current assets consist of the following (in thousands):
Related-party receivables consist of the following (in thousands):
Third-party receivables due from Pfizer relates to trade accounts receivable that has already been collected from customers by Pfizer on our behalf. |
Accrued Liabilities an Other Long-term Liabilities |
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Accounts Payable and Accrued Liabilities Disclosure [Text Block] | ACCRUED LIABILITIES AND OTHER LONG-TERM LIABILITIES Accrued liabilities consist of the following (in thousands):
Other long-term liabilities consist of the following (in thousands):
__________________________________________ (1) Consists of multiple contracts with customers and suppliers that were valued at below market at the time of the HIS acquisition. |
Long-Term Obligations (Notes) |
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LOng-Term Obligations Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||
Debt Disclosure [Text Block] | LONG-TERM OBLIGATIONS Five-year Revolving Credit Facility ("Credit Facility") On November 8, 2017, we entered into a five-year Revolving Credit Facility ("Credit Facility") with various lenders for $150 million, with Wells Fargo Bank, N.A. as the administrative agent, swingline lender and issuing lender. As of December 31, 2017, we had no borrowings and $150 million of availability under the Credit Facility. The Credit Facility matures on November 8, 2022. The Credit Facility has an accordion feature that would enable us to increase the borrowing capacity of the Credit Facility by the greater of (i) $100 million and (ii) 2.00x Total Leverage. In connection with the Credit Facility, for the year ended December 31, 2017, we incurred $1.4 million in financing costs, which were capitalized and are included in prepaid expenses and other current assets and other assets in our consolidated balance sheets, in accordance with the appropriate short-term or long-term classification. These fees will be amortized to interest expense over the remaining term of the Credit Facility. Principal payments Principal payments, when drawn on the Credit Facility, are made at our discretion with the entire unpaid amount due at maturity. Interest rate In general, borrowing under the Credit Facility (other than Swingline loans) bears interest, at our option, based on the Base Rate plus applicable margin or the London Interbank Offered Rate ("LIBOR") rate plus applicable margin, as defined below: (A) Base Rate is defined as the highest of: (a) the Prime Rate; (b) the Federal Funds Rate plus 0.50%; and (c) the daily LIBOR (as defined below) for a one month Interest Period plus 1%. (B) LIBOR Rate, as determined by the Administrative Agent, is defined as the rate per annum obtained by dividing (1) LIBOR by (2) 1.00 - Eurodollar Reserve Percentage. Swingline loans will bear interest at the Base Rate plus the applicable Interest Margin. The Credit Facility has a per annum commitment fee (see table below) that will accrue on the unused amounts of the commitments under the Credit Facility. The applicable interest margins and the commitment fee with respect to the Credit Facility shall be based on the Total Leverage Ratio pursuant to the following pricing grid:
Guarantors and Collateral Our obligations under the Credit Facility are unconditionally guaranteed, on a joint and several basis, by ICU Medical, Inc. and certain of our existing subsidiaries. Our obligations are secured by: (i) 100% of the equity interests of our guarantor subsidiaries; and (ii) all of the tangible and intangible personal property and assets related to us and our guarantor subsidiaries (including, without limitation, all accounts, equipment, inventory and other goods, all instruments, intellectual property and other general intangibles, deposit accounts, securities accounts and other investment property and cash), and (iii) all products, profits and proceeds of the foregoing. Notwithstanding the foregoing, the collateral shall not include certain excluded property. Debt Covenants The Credit Facility contains certain financial covenants pertaining to Consolidated Fixed Charge Coverage and Consolidated Total Leverage Ratios. In addition, the Credit Facility has restrictions pertaining to limitations on debt, liens, negative pledges, loans, advances, acquisitions, other investments, dividends, distributions, redemptions, repurchases of equity interests, fundamental changes and asset sales and other dispositions, prepayments, redemptions and purchases of subordinated debt and other junior debt, transactions with affiliates, dividend and payment restrictions affecting subsidiaries, changes in line of business, fiscal year and accounting practices and amendment of organizational documents and junior debt documents. The Consolidated Leverage Ratio is defined as the ratio of Consolidated Total Funded Indebtedness on such date, to Consolidated Adjusted EBITDA, as defined under the Credit Facility Agreement, for the most recently completed four fiscal quarters. The maximum Consolidated Leverage Ratio is not more than 3.00 to 1.00. The Consolidated Fixed Charge Coverage Ratio is defined as the ratio of: (a) Consolidated Adjusted EBITDA less the sum of (i) capital expenditures, (ii) federal, state, local and foreign income taxes paid in cash and (iii) cash restricted payments made after the closing date, to (b) Consolidated Fixed Charges for the most recently completed four fiscal quarters, calculated on a pro forma basis. The minimum Consolidated Fixed Charge Coverage Ratio is 2.00 to 1.00. We were in compliance with all financial covenants as of December 31, 2017. Three-Year Interest-Only Senior Note On February 3, 2017, we partially funded the acquisition of the HIS business from Pfizer with a $75 million Seller Note issued by Pfizer contemporaneous with the acquisition. We had fully repaid the seller note as of December 31, 2017. |
Income Taxes: |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Text Block] | Income from continuing operations before taxes consisted of the following (in thousands):
The (benefit) provision for income taxes consisted of the following (in thousands):
Current income taxes payable were reduced from the amounts in the above table by $9.3 million in 2015, equal to the direct tax benefit that we receive upon exercise of stock options and the vesting of restricted stock units by employees and directors. We have accrued for tax contingencies for potential tax assessments, and in 2017 we recognized a $3.0 million net increase, most of which related to various federal and state tax reserves. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted into legislation, which includes a broad range of provisions affecting businesses. The Tax Act significantly revises how companies compute their U.S. corporate tax liability by, among other provisions, reducing the corporate tax rate from 35% to 21% for tax years beginning after December 31, 2017, implementing a territorial tax system, and requiring a mandatory one-time tax on U.S. owned undistributed foreign earnings and profits known as the toll charge or transition tax. Pursuant to the SEC Staff Accounting Bulletin ("SAB") No. 118, "Income Tax Accounting Implications of the Tax Cuts and Jobs Act" ("SAB 118"), a company selects between one of three scenarios to reflect the impact of the Tax Act in its financial statements within a measurement period. Those scenarios are (i) a final estimate which effectively closes the measurement period; (ii) a reasonable estimate leaving the measurement period open for future revisions; and (iii) no estimate as the law is still being analyzed in which case a company continues to apply its accounting on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. SAB 118 allows for the reporting provisional amounts for certain income tax effects in scenario (ii) and (iii). The measurement period begins in the reporting period that includes the Act’s enactment date and ends when an entity has obtained, prepared, and analyzed the information that was needed in order to complete the accounting requirements under ASC Topic 740. We were able to provide a reasonable estimate for the revaluation of deferred taxes and the effects of the toll charge on undistributed foreign earnings and profits, with our measurement period open for future revisions. As such, we recorded a provisional tax expense in the amount of $1.1 million and a provisional tax expense in the amount of $2.0 million related to the revaluation of deferred taxes and the toll charge, respectively. We are still evaluating various international provisions included in the Tax Act and have therefore not completed our assessment. These provisions include, but are not limited to, the anti-base-erosion and anti-abuse tax regime (BEAT), the global intangible low-taxed income (GILTI) provisions, the foreign derived intangible income (FDII) provisions, and the changes to the deductibility of interest. These provisions will be effective for us beginning on January 1, 2018, and may materially impact our effective tax rate in future years. A reconciliation of the provision for income taxes at the statutory rate to our effective tax rate is as follows (dollars in thousands):
Tax credits in 2017, 2016 and 2015 consist principally of research and developmental tax credits. The components of our deferred income tax assets (liabilities) are as follows (in thousands):
Tax Holidays and Carryforwards Acquired future tax deductions consist of: (a) the net tax benefit of items expensed for financial statement purposes but capitalized and amortized for tax purposes, (b) the total tax benefited portion of the federal net operating loss ("NOL") carry-forwards of $4.9 million which will expire at various dates from 2020 to 2035 and (c) the net tax benefited portion of the foreign NOLs of $1.1 million, consisting of a NOL of $6.6 million with a valuation allowance of $5.5 million. Under Section 382 of the Internal Revenue Code, certain ownership changes limit the utilization of the NOL carry-forwards, and the amount of federal NOL carry-forwards recorded is the net federal benefit available. Other carryforwards include research and development (“R&D”) state tax credit carryforwards of $9.5 million and $0.3 million for California and Utah, respectively, and a foreign tax credit carryforward of $2.7 million. A substantial portion of our manufacturing operations in Costa Rica operate under various tax holidays and tax incentive programs which will expire in whole or in part in 2027. Certain of the holidays and may be extended if specific conditions are met. The net impact of these tax holidays and tax incentives was an increase to our net earnings by $5.7 million or $0.27 per diluted share in 2017. Foreign currency translation adjustments, and related tax effects, are an element of “other comprehensive income” and are not included in net income other than the revaluation of the associated deferred tax asset due to the Tax Act. As of December 31, 2017, we had estimated $24 million of undistributed foreign earnings and profits. Pursuant to the Tax Act, our undistributed foreign earnings and profits were deemed repatriated as of December 31, 2017. We have not provided deferred tax liabilities for foreign withholding taxes and certain state income taxes on the undistributed earnings and profits from certain non-U.S. subsidiaries that will be permanently reinvested outside the United States. Upon the distribution of foreign earnings and profits, certain foreign countries impose withholding taxes, subject to certain limitations, for use as credits against our U.S. tax liability, if any. If the foreign earnings and profits were distributed, we would need to accrue an additional income tax liability. However, we may also be allowed a credit against substantially all our U.S. tax liability for the taxes paid in foreign jurisdictions. We are subject to taxation in the United States and various states and foreign jurisdictions. Our United States federal income tax returns for tax years 2014 and forward are subject to examination by the Internal Revenue Service. Our principal state income tax returns for tax years 2012 and forward are subject to examination by the state tax authorities. The total gross amount of unrecognized tax benefits as of December 31, 2017 was $6.5 million which, if recognized, would impact the effective tax rate. We believe that adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax examinations cannot be predicted with certainty. As of December 31, 2017, it is not possible to estimate the amount of change, if any, in the unrecognized tax benefits that is reasonably possible within the next twelve months. We recognize accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. We have not accrued any penalties or interest as of December 31, 2017 or December 31, 2016 The following table summarizes our cumulative gross unrecognized tax benefits (in thousands):
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Market Segments, Geographic Information and Significant Customers Market Segments, Geographic Information and Significant Customers (Notes) |
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Information by Geographic Area and Customer Concentration [Text Block] | PRODUCT LINES, GEOGRAPHIC INFORMATION AND SIGNIFICANT CUSTOMERS Our primary product lines are Infusion Consumables, IV Solutions, Infusion Systems and Critical Care. The following table sets forth for the periods indicated, total revenue by product line as a percentage of total revenue:
We sell products worldwide, on credit terms on an unsecured basis, as an OEM supplier, to independent medical supply distributors and directly to the end customer. The manufacturers and distributors, in turn, sell our products to healthcare providers. For the years ended December 31, 2016 and 2015, we had worldwide sales to one manufacturer, Pfizer, of 30% and 36%, respectively, of consolidated revenue and as of December 31, 2016, accounts receivable from Pfizer was 23% of consolidated accounts receivable. In February 2017, we completed the acquisition of Pfizer's HIS business, which we acquired in part to protect against the significant earnings exposure indicated above (see Note 2: Acquisitions and Strategic Transaction Expenses). We report revenue on a “where-sold” basis, which reflects the revenue within the country or region in which the ultimate sale is made to our external customer. The table below presents total company revenues, by major country or region (in thousands):
Domestic sales accounted for 76%, 70% and 71% of total revenue in 2017, 2016 and 2015, respectively. International sales accounted for 24%, 30% and 29% of total revenue in 2017, 2016 and 2015, respectively. The table below presents our gross long-lived assets, consisting of property, plant and equipment, by country or region (in thousands):
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Stockholders' Equity |
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Treasury Stock [Text Block] | Stockholders' Equity Treasury Stock In July 2010, our Board of Directors approved a common stock purchase plan to purchase up to $40.0 million of our common stock. This plan has no expiration date and we have $7.2 million remaining on this purchase plan. During 2016, we purchased $15.4 million of our common stock. We did not purchase any of our common stock under our purchase plan in 2017 or 2015. We used the treasury stock to issue shares for stock option exercises, restricted stock grants and employee stock purchase plan stock purchases. We are currently limited on share purchases in accordance with the terms and conditions of our Credit Facility, (see Note 12: Long-Term Obligations). In 2017, we withheld 27,636 shares of our common stock from employee vested restricted stock units in consideration for $4.1 million in payments for the employee's share award income tax withholding obligations. We have no shares remaining in treasury at December 31, 2017. In 2016, we withheld 20,261 shares of our common stock from employee vested restricted stock units in consideration for $1.9 million in payments for the employee's share award income tax withholding obligations. We had 93 shares remaining in treasury at December 31, 2016. Accumulated Other Comprehensive Income (Loss) The components of AOCI, net of tax, were as follows (in thousands):
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Text Block] | Lease Commitments We have entered into various non-cancellable operating lease agreements for certain of our offices and facilities throughout the world with original lease periods expiring primarily between 2018 and 2024. Some of these agreements have escalating rent payment provisions. We recognize rent expense under such agreements on a straight-line basis. Our rent expense under operating leases was $7.9 million in 2017, $0.6 million in 2016 and $0.4 million in 2015. As of December 31, 2017, future minimum lease payments under our non-cancelable operating leases are as follows over each of the next five years and thereafter (in millions):
Legal Proceedings Beginning in November 2016, purported class actions were filed in the U.S. District Court for the Northern District of Illinois against Pfizer subsidiaries, Hospira, Inc., Hospira Worldwide, Inc. and certain other defendants relating to the intravenous saline solutions part of the HIS business. Plaintiffs seek to represent classes consisting of all persons and entities in the U.S. who directly purchased intravenous saline solution sold by any of the defendants from January 1, 2013 until the time the defendants’ allegedly unlawful conduct ceases. Plaintiffs allege that the defendants’ conduct restricts output and artificially fixes, raises, maintains and/or stabilizes the prices of intravenous saline solution sold throughout the U.S. in violation of federal antitrust laws. Plaintiffs seek treble damages (for themselves and on behalf of the putative classes) and an injunction against defendants for alleged price overcharges for intravenous saline solution in the U.S. since January 1, 2013. On February 3, 2017, we completed the acquisition of the HIS business from Pfizer. This litigation is the subject of a claim for indemnification against us by Pfizer and a cross-claim for indemnification against Pfizer by us under the HIS stock and asset purchase agreement ("SAPA"). In addition, in August 2015, the New York Attorney General issued a subpoena to Hospira, Inc. requesting that the company provide information regarding certain business practices in the intravenous solutions part of the HIS business. Separately, in April 2017, we received a grand jury subpoena issued by the United States District Court for the Eastern District of Pennsylvania, in connection with an investigation by the U.S. Department of Justice, Antitrust Division. The subpoena calls for production of documents related to the manufacturing, selling, pricing and shortages of intravenous solutions, including saline, as well as communications among market participants regarding these issues. The Department of Justice investigation is the subject of cross-claims for indemnification by both us and Pfizer under the SAPA. We will coordinate with Pfizer to produce records to the New York Attorney General and the Department of Justice. We have an ongoing dispute with a product partner that may result in a redefinition of our contractual arrangement or in the rights or remedies determined under such arrangement. We do not expect this dispute to have a material adverse effect on our financial position or results of operations. In addition to the legal matters described above, we are from time to time involved in various legal proceedings, either as a defendant or plaintiff, most of which are routine litigation in the normal course of business. We believe that the resolution of the legal proceedings in which we are involved will not have a material adverse effect on our financial position or results of operations. Off Balance Sheet Arrangements In the normal course of business, we have agreed to indemnify our officers and directors to the maximum extent permitted under Delaware law and to indemnify customers as to certain intellectual property matters related to sales of our products. There is no maximum limit on the indemnification that may be required under these agreements. We have never incurred, nor do we expect to incur, any liability for indemnification. Contingencies We have a contractual earn-out arrangement in connection with our acquisition of the HIS business, whereby Pfizer may be entitled up to an additional $225 million in cash upon achievement of performance targets for the company for the three years ending December 31, 2019, see (Note 2: Acquisitions and Strategic Transaction Expenses). The amount to be paid cannot be determined until the earn-out period has expired. |
Commitments and Contingencies Leases (Notes) |
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Leases of Lessee Disclosure [Text Block] | Lease Commitments We have entered into various non-cancellable operating lease agreements for certain of our offices and facilities throughout the world with original lease periods expiring primarily between 2018 and 2024. Some of these agreements have escalating rent payment provisions. We recognize rent expense under such agreements on a straight-line basis. Our rent expense under operating leases was $7.9 million in 2017, $0.6 million in 2016 and $0.4 million in 2015. As of December 31, 2017, future minimum lease payments under our non-cancelable operating leases are as follows over each of the next five years and thereafter (in millions):
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Collaborative and Other Arrangements (Notes) |
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Collaborative and Other Arrangements [Abstract] | |
Collaborative Arrangement Disclosure [Text Block] | COLLABORATIVE AND OTHER ARRANGEMENTS On February 3, 2017, we entered into two MSA's, (i) whereby Pfizer will manufacture and supply us with certain agreed upon products for an initial five-year term with a one-time two-year option to extend and (ii) whereby we will manufacture and supply Pfizer certain agreed upon products for a term of five or ten years depending on the product, also with a one-time two-year option to extend. The MSA's provide each party with mutually beneficial interests and both of the MSA's are to be jointly managed by both Pfizer and ICU. The initial supply price, which will be annually updated, is in full consideration for all costs associated with the manufacture, documentation, packaging and certification of the products. On February 3, 2017, as part of the HIS business acquisition, we entered into an agreement with Pfizer, whereby Pfizer will provide certain transitional services to us for finance, business technology, regulatory, human resources, global operations, procurement, quality and global commercial operation services ("Enabling Function Services"). We pay a monthly service fee for each service provided, and share equally with Pfizer in certain set-up costs and, as applicable, service exit costs. Our share of the set-up costs and service exit costs, in the aggregate, are not to exceed $22.0 million. The service fees are subject to a fee cap of (i) $62.5 million during the initial twelve month period and (ii) $31.3 million during the subsequent six month period. Only the Enabling Function Services are subject to the fee cap, any services provided after expiration of the agreement or services that are not Enabling Function Services may result in service fees outside the fee cap. The service fees are intended to reasonably approximate Pfizer’s cost of providing the Enabling Function Services. We may terminate, in whole only, any particular service and the fee cap would be reduced proportionate to the services terminated. Partial reduction in the provision of any specific service may be made but only with the prior written consent of Pfizer. On February 3, 2017, as part of the HIS business acquisition, we also entered into a reverse transitional services agreement, where we will provide to Pfizer certain transitional services ranging in term from three to eighteen months. Services include support for real estate, research and development, infrastructure, logistics, quality, site operations, safety, commercial and finance, and regulatory support services. |
Selected Quarterly Financial Data - Unaudited |
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Quarterly Financial Information [Text Block] | SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
______________________________________ On February 3, 2017, we acquired HIS, see Note 2, Acquisitions, Strategic Transaction and Integration Costs. |
General and Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||
Business Description and Basis of Presentation [Text Block] | Basis of Presentation and Preparation ICU Medical, Inc. ("ICU"), a Delaware corporation, operates in one business segment engaged in the development, manufacturing and sale of innovative medical devices used in vascular therapy, and critical care applications. ICU's product portfolio includes intravenous smart pumps, sets, connectors, closed transfer devices for hazardous drugs, cardiac monitoring systems, along with pain management and safety software technology. We sell the majority of our products through our direct sales force and through independent distributors throughout the U. S. and internationally. Additionally, we sell our products on an original equipment manufacturer basis to other medical device manufacturers. The manufacturing for all product groups occurs in Salt Lake City, Utah, Austin, Texas, Mexico and Costa Rica. All subsidiaries are wholly owned and are included in the consolidated financial statements. All intercompany accounts and transactions have been eliminated. Results of operations of companies purchased are included from the dates of acquisition. In our opinion, the consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. These consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). |
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Use of Estimates, Policy [Policy Text Block] | Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount 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. Actual results could differ from those estimates. |
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Cash and Cash Equivalents, Policy [Policy Text Block] | Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less from the date of purchase as cash equivalents. |
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Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block] | Accounts receivable are stated at net realizable value. An allowance is provided for estimated collection losses based on an assessment of various factors. We consider prior payment trends, the age of the accounts receivable balances, financial status and other factors to estimate the cash which ultimately will be received. Such amounts cannot be known with certainty at the financial statement date. We regularly review individual past due balances for collectability. |
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Inventory, Policy [Policy Text Block] | Inventories are stated at the lower of cost or net realizable value with cost determined using the first-in, first-out method. |
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Property, Plant and Equipment, Policy [Policy Text Block] | All property, plant and equipment are stated at cost. We use the straight-line method for depreciating property, plant and equipment over their estimated useful lives. Estimated useful lives are:
We capitalize expenditures that materially increase the life of the related assets; maintenance and repairs are expensed as incurred. The costs and related accumulated depreciation applicable to property, plant and equipment sold or retired are removed from the accounts and any gain or loss is reflected in the statements of income at the time of disposal. Depreciation expense was $51.6 million, $16.3 million and $15.9 million in the years ended December 31, 2017, 2016 and 2015, respectively. |
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Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill We test goodwill for impairment on an annual basis in the month of November. If the carrying amount of goodwill exceeds the implied estimated fair value, an impairment charge to current operations is recorded to reduce the carrying value to the implied estimated fair value. |
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Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | Intangible assets, carried at cost less accumulated amortization and amortized on a straight-lined basis |
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Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Long-Lived Assets We periodically evaluate the recoverability of long-lived assets whenever events and changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. When indicators of impairment are present, the carrying values of the assets are evaluated in relation to the operating performance and future undiscounted cash flows of the underlying business. The net book value of the underlying asset is adjusted to fair value if the sum of the expected discounted cash flows is less than book value. Fair values are based on estimates of market prices and assumptions concerning the amount and timing of estimated future cash flows and discount rates, reflecting varying degrees of perceived risk. |
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Investment, Policy [Policy Text Block] | Investment Securities Short-term investments, exclusive of cash equivalents, are marketable securities intended to be sold within one year and may include trading securities, available-for-sale securities, and held-to-maturity securities (if maturing within one year). Long-term investments are marketable securities intended to be sold after one year and may include trading securities, available-for-sale securities, and held-to-maturity securities. Our investment securities are considered available-for-sale and are “investment grade” and carried at fair value. Our investments currently consist of corporate bonds. Available-for-sale securities are recorded at fair value, and unrealized holding gains and losses are recorded, net of tax, as a component of accumulated other comprehensive income (loss). Unrealized losses on available-for-sale securities are charged against net earnings when a decline in fair value is determined to be other than temporary. Our management reviews several factors to determine whether a loss is other than temporary, such as the length and extent of the fair value decline, the financial condition and near term prospects of the issuer, and for equity investments, our intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. For debt securities, management also evaluates whether we have the intent to sell or will likely be required to sell before its anticipated recovery. Realized gains and losses are accounted for on the specific identification method. There have been no realized gains or losses on their disposal. The scheduled maturities of the equity securities are between 2018 and 2020. All short-term investment securities are all callable within one year. |
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Income Tax, Policy [Policy Text Block] | Income Taxes Deferred taxes are determined based on the differences between the financial statements and the tax bases using rates as enacted in the laws. A valuation allowance is established if it is “more likely than not” that all or a portion of the deferred tax assets will not be realized. We recognize interest and penalties related to unrecognized tax benefits in the tax provision. We recognize liabilities for uncertain tax positions when it is more likely than not that a tax position will not be sustained upon examination and settlement with various taxing authorities. Liabilities for uncertain tax positions are measured based upon the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. We have not recorded any material interest or penalties during any of the years presented. |
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Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Generally, the functional currency of our international subsidiaries is the local currency. Generally, we translate the financial statements of these subsidiaries to U.S. dollars at the exchange rate in effect at the balance sheet date and revenues and expenses are translated at the average monthly exchange rates during the year. Certain of our international subsidiaries consolidate first with another subsidiary that utilizes a functional currency other than U.S. dollars. In those cases, we follow a step by step translation process utilizing the same sequence as the consolidation process. Translation adjustments are recorded as a component of accumulated other comprehensive income, a separate component of stockholders' equity on our consolidated balance sheets and the effect of exchange rate changes on cash and cash equivalents are reflected on our consolidated statements of cash flows. Gains and losses for transactions denominated in a currency other than the functional currency of the entity are included in our statements of operations in other (expense) income, net. Foreign currency transaction losses, net were $1.8 million in 2017, $0.3 million in 2016 and less than $0.2 million in 2015. |
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Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition Most of our product sales are free on board shipping point and ownership of the product transfers to the customer on shipment. We record sales and related costs when ownership of the product transfers to the customer, persuasive evidence of an arrangement exists, collectability is reasonably assured and the sales price is determinable. Our customers are distributors, medical product manufacturers and end-users. Our only post-sale obligations are warranty and certain rebates. We warrant products against defects and have a policy permitting the return of defective products. We reserve for warranty and returns based on historical experience. We accrue rebates based on agreements and on historical experience as a reduction in revenue at the time of sale. Other revenue consists of license, royalty and revenue sharing payments. Payments expected to be received are estimated and recorded in the period earned and adjusted to actual amounts when reports are received from payers; if there is insufficient data to make such estimates, payments are not recorded until reported by the payers. Arrangements with Multiple Deliverables |
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Shipping and Handling Cost, Policy [Policy Text Block] | Shipping Costs Costs to ship finished goods to our customers are included in cost of goods sold on the consolidated statements of operations. |
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Advertising Costs, Policy [Policy Text Block] | Advertising Expenses Advertising expenses are expensed as incurred and reflected in selling, general and administrative expenses in our consolidated statements of operations and were $0.2 million in 2017, $0.1 million in 2016 and $0.2 million in 2015. |
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Pension and Other Postretirement Plans, Policy [Policy Text Block] | Post-retirement and Post-employment Benefits We sponsor a Section 401(k) retirement plan ("plan") for employees. Our contributions to our 401(k) plan were approximately $2.0 million in 2017, $1.5 million in 2016 and $1.3 million in 2015. As a result of the HIS acquisition, we assumed certain post-retirement and post-employment obligations related to employees located in certain international countries. These obligations are immaterial to our financial statements taken as a whole. |
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Research and Development Expense, Policy [Policy Text Block] | Research and Development Research and development costs are expensed as incurred. Research and development costs include salaries and related benefits, consulting fees, production supplies, samples, travel costs, utilities and other miscellaneous administrative costs. |
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Earnings Per Share, Policy [Policy Text Block] | Net Income Per Share Net income per share is computed by dividing net income by the weighted average number of common shares outstanding. Diluted net income per share is computed by dividing net income by the weighted average number of common shares outstanding plus dilutive securities. Dilutive securities include outstanding common stock options and unvested restricted stock units, less the number of shares that could have been purchased with the proceeds from the exercise of the options, using the treasury stock method. Options that are anti-dilutive, where their exercise price exceeds the average market price of the common stock are not included in the treasury stock method calculation. |
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New Accounting Pronouncements, Policy [Policy Text Block] | Recently Adopted Accounting Standards In July 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2015-11 Inventory (Topic 330): Simplifying the Measurement of Inventory. ASU 2015-11 changes the measurement of inventory within the scope of the ASU (e.g. FIFO or average cost) from lower of cost or market to lower of cost and net realizable value ("NRV"). NRV is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Prior to the ASU, U.S. generally accepted accounting principles required an entity to measure inventory at the lower of cost or market. Market is measured using replacement cost unless it is above NRV (commonly referred to as “ceiling”) or below NRV less an approximately normal profit margin (commonly referred to as “floor”). For inventory within its scope, the ASU eliminates the notions of replacement cost and NRV less a normal profit margin, which is intended to simplify the accounting for inventory. The amendments are effective prospectively for the fiscal years, and interim reporting periods within those years, beginning on or after December 15, 2016. We adopted this ASU on January 1, 2017. This ASU did not have a material impact on our consolidated financial statements. Recently Issued Accounting Standards In August, 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendments in this update change both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results to facilitate financial reporting that more closely reflects an entity's risk management activities. The amendments in this update also make certain targeted improvements to simplify the application of hedge accounting guidance and ease the administrative burden of hedge documentation requirements and assessing hedge effectiveness. The amendments are effective for the fiscal years, and interim reporting periods within those years, beginning on or after December 15, 2018. For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the update. We early-adopted this ASU on January 1, 2018. The adoption of this ASU will not materially impact our first quarter 2018 consolidated financial statements or related footnotes. In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Under the ASU, an entity will account for the effects of a modification unless (i) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified, (ii) the vesting conditions of the modified award are the same vesting conditions as the original award immediately before the original award is modified, and (iii) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments in this ASU are effective prospectively for annual periods, and interim periods within those annual periods, beginning December 15, 2017. This adoption of this ASU is not expected to have a material impact on our consolidated financial statements or related footnote disclosures. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this update remove the second step of the impairment test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. The amendments in ASU 2017-04 are effective for the annual or interim impairment test in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. This ASU is not expected to have a material impact on our consolidated financial statements or related footnote disclosures. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The amendments in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this update provide a screen to determine when a set (integrated set of assets and activities) is not a business. If the screen is not met, it (1) requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) removes the evaluation of whether a market participant could replace the missing elements. The amendments in ASU 2017-01 are effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. The amendments in this ASU should be applied prospectively on or after the effective date. This adoption of this ASU is not expected to have a material impact on our consolidated financial statements or related disclosures. In October 2016, the FASB issued No. ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. Current generally accepted accounting principles prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until after the asset has been sold to an outside party. The amendments in ASU 2016-16 eliminates this prohibition. Accordingly, an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Amendments in this update are effective for annual reporting periods beginning after December 15, 2017. The adoption of this ASU is not expected to have a material impact on our consolidated financial statements or related disclosures. In August 2016, the FASB issued No. ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 provides specific guidance on eight cash flow issues where current guidance is unclear or does not include any specifics on classification. The eight specific cash flow issues are: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with zero coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies, including bank-owned policies; distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. The amendments in ASU 2016-15 are effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. Early adoption is permitted. If adopted in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. Amendments should be applied using a retrospective transition method to each period presented. The adoption of this ASU is not expected to have a material impact on the consolidated financial statements and related disclosures. In June 2016, the FASB issued No. ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This update amends the FASB's guidance on the impairment of financial instruments by requiring timelier recording of credit losses on loans and other financial instruments. The ASU adds an impairment model that is based on expected losses rather than incurred losses. The ASU also amends the accounting for credit losses on available- for-sale debt securities and purchased financial assets with credit deterioration. The amendments in this update will be effective for fiscal years beginning after December 15, 2019. Early adoption is permitted as of the fiscal years beginning after December 15, 2018. The updated guidance requires a modified retrospective adoption. We are currently evaluating the impact of this ASU on the consolidated financial statements and related disclosures. In February 2016, the FASB issued No. ASU 2016-02, Leases (Topic 842). The amendments in this update require an entity to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as finance or operating lease. The amendments also require certain quantitative and qualitative disclosures about leasing arrangements. The amendments in this update will be effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. The updated guidance requires a modified retrospective adoption. We are currently evaluating the impact of this ASU on the consolidated financial statements and related disclosures. In January 2016, the FASB issued No. ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments. This amendment requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in the consolidation of the investee). The amendments in this update will be effective for fiscal years beginning after December 15, 2017. Early adoption of the amendments is not permitted with the exception of the provision requiring the recognition in other comprehensive income the fair value change from instrument-specific credit risk measured using the fair value option for financial instruments. The adoption of this ASU is not expected to have a material impact on the consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 removes inconsistencies and weaknesses in revenue requirements; provides a more robust framework for addressing revenue issues; improves comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets; provides more useful information to users of financial statements through improved disclosure requirements; and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. This guidance requires that an entity depict the consideration by applying a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. On April 1, 2015, the FASB voted for a one-year deferral of the effective date of the new revenue recognition standard, ASU 2014-09. On July 15, 2015, the FASB affirmed these changes, which requires public entities to apply the amendments in ASU 2014-09 for annual reporting beginning after December 15, 2017. Early adoption is permitted beginning after December 31, 2016, the original effective date in ASU 2014-09. Subsequent to the issuance of this ASU, the FASB issued three amendments: ASU No. 2016-08 which clarifies principal versus agent considerations; ASU 2016-10 which clarifies guidance related to identifying performance obligations and licensing implementation; and ASU 2016-12 which provides narrow-scope improvements and practical expedients. All of the amendments have the same effective dates mentioned above. We adopted the standard effective January 1, 2018 using the modified retrospective method applied to those contracts that were not completed as of January 1, 2018. Results for reporting beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and will continue to be reported in accordance with our historic accounting under ASC 605. Due to the cumulative impact of adopting ASC 606, we will record a net increase of $9.0 million to opening retained earnings as of January 1, 2018. The impact is primarily related to our bundled arrangements where we sell software licenses and implementation services, in addition to equipment and other consumables and solutions. We evaluated the effect ASU 2014-09 on our consolidated financial statements by reviewing each of the significant revenue streams. The following is the result of that evaluation:
In addition to the impact as mentioned above, we expect to have enhanced disclosures in our 2018 first quarter report on Form 10-Q. |
General and Summary of Significant Accounting Policies (Tables) |
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Schedule of Inventory, Current [Table Text Block] | Inventories consist of the following at December 31 (in thousands):
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Property, Plant and Equipment [Table Text Block] | Property, plant and equipment consist of the following at December 31 (in thousands):
______________________________ *Instruments placed with customers consist of drug-delivery and monitoring systems placed with customer under operating leases. All property, plant and equipment are stated at cost. We use the straight-line method for depreciating property, plant and equipment over their estimated useful lives. Estimated useful lives are:
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Schedule of Intangible Assets and Goodwill [Table Text Block] | The following table presents the changes in the carrying amount of our goodwill for 2017 and 2016 (in thousands):
______________________________ (1) In 2016, "other" relates to measurement period adjustments on the net assets of our 2015 acquisition of EXC Holding Corp. ("EXC"). (2) In 2017, our Fannin (UK) Limited ("Fannin") acquisition resulted in $1.0 million of goodwill and our Medical Australia Limited ("MLA") acquisition resulted in $5.5 million of goodwill. The goodwill related to MLA is preliminary and subject to adjustment. (3) In 2017, "other" relates to foreign currency translation. Intangible Assets Intangible assets, carried at cost less accumulated amortization and amortized on a straight-lined basis, were as follows (in thousands):
*MCDA contract: Manufacturing, Commercialization and Development Agreement with Hospira, Inc., dated May 1, 2005 (the "MCDA”). The MCDA was terminated in connection with the acquisition of the HIS business on February 3, 2017. |
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | As of December 31, 2017 estimated annual amortization for our intangible assets for each of the next five years is approximately (in thousands):
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Available-for-sale Securities [Table Text Block] | As of December 31, 2017, our investment securities consist of the following (in thousands):
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Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table presents the calculation of net earnings per common share (“EPS”) — basic and diluted (in thousands except per share data):
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Acquisitions and Strategic Transaction Expenses Business Combination (Tables) |
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Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information [Table Text Block] |
______________________________ * Impracticable to calculate. (1) 2017 supplemental pro forma earnings were adjusted to exclude $66.3 million of nonrecurring expense related to the fair value adjustment to acquisition-date inventory and $69.5 million of acquisition and integration-related costs. 2016 supplemental pro forma earnings were adjusted to include these charges. |
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Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following table summarizes the final purchase price and the allocation of the purchase price related to the assets and liabilities retained (in thousands):
______________________________ (1) Identifiable intangible assets included $7.1 million of non-contractual customer relationships, $3.7 million of developed technology and $7.3 million of trade name. The weighted-average amortization period for the total identifiable intangible assets is approximately fourteen years. The weighted-average amortization period for customer relationships and trade name is fifteen years and the weighted-average amortization period for the developed technology is ten years. |
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Hospira [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following table summarizes the final purchase price and the final allocation of the purchase price related to the assets and liabilities purchased (in thousands, except per share data):
______________________________ (1) Identifiable intangible assets includes $48 million of customer relationships, $44 million of developed technology - pumps and dedicated sets, $34 million of developed technology - consumables, and $5 million of in-process research and development ("IPR&D"). The weighted amortization period for the total identifiable assets is approximately nine years, for customer relationships the weighted amortization period is eight years, for the developed technology - pumps and dedicated sets the weighted amortization period is ten years and for the developed technology - consumables the weighted amortization period is twelve years. The IPR&D is non-amortizing until the associated research and development efforts are complete. (2) Long-term liabilities primarily consisted of contract liabilities, product liabilities and long-term employee benefits. |
Restructuring Charges Schedule of Restructuring and Related Costs (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs [Table Text Block] | The following table summarizes the activity for the restructuring-related charges discussed above and related accrual (in thousands):
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Share Based Award (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of stock compensation and related tax benefits [Table Text Block] | The table below summarizes compensation costs and related tax benefits (in thousands):
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The table below summarizes the total time-based stock options granted, total valuation and the weighted average assumptions (dollars in thousands):
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Schedule of Share-based compensation, performance stock option activity [Table Text Block] | The table below summarizes the performance stock options granted, the total valuation and the weighted average assumptions (dollars in thousands). There were no performance option grants in 2017 or 2016.
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Share-based Compensation, Stock Options, Activity [Table Text Block] | A summary of our stock option activity as of and for the year ended December 31, 2017 is as follows:
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Exercised Options Data [Table Text Block] |
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Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block] | The table below summarizes our restricted stock award activity (dollars in thousands):
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Nonvested Restricted Stock Shares Activity [Table Text Block] | The table below provides a summary of our PRSU and RSU activity as of and for the year ended December 31, 2017.
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Schedule of employee stock purchase plan (ESPP) [Table Text Block] | The table below summarizes the number and intrinsic value of ESPP share purchases and the weighted average valuation assumptions for the 2017, 2016 and 2015 purchase periods.
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Derivatives and Hedging Activities (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block] | The following table presents the fair values of our derivative instrument included within the Consolidated Balance Sheet as of December 31, 2017 (in thousands):
The following table presents the amounts affecting the Consolidated Statements of Operations for the year ended December 31, 2017 (in thousands):
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Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) [Table Text Block] | We recognized the following gains on our foreign exchange contract designated as a cash flow hedge (in thousands):
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The following table provides a reconciliation of the Level 3 earn-out liability measured at estimated fair value based on an initial valuation and updated quarterly for the year ended December 31, 2017 (in thousands):
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Fair Value Inputs, Liabilities, Quantitative Information [Table Text Block] | The following table provides quantitative information about Level 3 inputs for fair value measurement of our earn-out liability as of the acquisition date and December 31, 2017. Significant increases or decreases in these inputs in isolation could result in a significant impact on our fair value measurement:
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Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | Our assets and liabilities measured at fair value on a recurring basis consisted of the following (Level 1, 2 and 3 inputs as defined above) (in thousands):
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Fair Value Measurements, Nonrecurring [Table Text Block] | Our assets measured at fair value on a nonrecurring basis consisted of the following (Level 1, 2 and 3 inputs as defined above (in thousands):
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Prepaids and Other Current Assets (Tables) |
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Prepaid Expense and Other Assets, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses and Other Current Assets [Table Text Block] | Prepaid expenses and other current assets consist of the following (in thousands):
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Schedule of Related Party Transactions [Table Text Block] | Related-party receivables consist of the following (in thousands):
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Accrued Liabilities an Other Long-term Liabilities (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities [Table Text Block] | Accrued liabilities consist of the following (in thousands):
Other long-term liabilities consist of the following (in thousands):
__________________________________________ (1) Consists of multiple contracts with customers and suppliers that were valued at below market at the time of the HIS acquisition. |
Long-Term Obligations (Tables) |
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||
LOng-Term Obligations Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||
Interest Margin and Commitment Fee [Table Text Block] | The applicable interest margins and the commitment fee with respect to the Credit Facility shall be based on the Total Leverage Ratio pursuant to the following pricing grid:
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Income Taxes Income tax disclosure (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | Income from continuing operations before taxes consisted of the following (in thousands):
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Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The (benefit) provision for income taxes consisted of the following (in thousands):
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Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | A reconciliation of the provision for income taxes at the statutory rate to our effective tax rate is as follows (dollars in thousands):
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Deferred tax provision table text block [Table Text Block] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The components of our deferred income tax assets (liabilities) are as follows (in thousands):
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Summary of Positions for which Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Table Text Block] | The following table summarizes our cumulative gross unrecognized tax benefits (in thousands):
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Market Segments, Geographic Information and Significant Customers Market Segment Breakdown (Tables) |
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Market Segment Breakdown [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from External Customers by Products and Services [Table Text Block] | The following table sets forth for the periods indicated, total revenue by product line as a percentage of total revenue:
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Revenue from External Customers by Geographic Areas [Table Text Block] | The table below presents total company revenues, by major country or region (in thousands):
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Long-lived Assets by Geographic Areas [Table Text Block] | The table below presents our gross long-lived assets, consisting of property, plant and equipment, by country or region (in thousands):
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Stockholders' Equity (Tables) |
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Stockholders' Equity Attributable to Parent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The components of AOCI, net of tax, were as follows (in thousands):
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Commitments and Contingencies Leases (Tables) |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | As of December 31, 2017, future minimum lease payments under our non-cancelable operating leases are as follows over each of the next five years and thereafter (in millions):
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Selected Quarterly Financial Data - Unaudited (Tables) |
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Quarterly Financial Data - Unaudited [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information [Table Text Block] |
______________________________________ On February 3, 2017, we acquired HIS, see Note 2, Acquisitions, Strategic Transaction and Integration Costs. |
General and Summary of Significant Accounting Policies Inventory (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Accounting Policies [Abstract] | ||
Raw Materials | $ 82,397 | $ 28,435 |
Work in Process | 42,304 | 4,415 |
Finished Goods | 163,956 | 16,414 |
Total | $ 288,657 | $ 49,264 |
General and Summary of Significant Accounting Policies Property and Equipment #3 (Details) - USD ($) $ in Millions |
12 Months Ended | ||
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Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Accounting Policies [Abstract] | |||
Depreciation | $ 51.6 | $ 16.3 | $ 15.9 |
General and Summary of Significant Accounting Policies Goodwill (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Goodwill [Line Items] | |||
GOODWILL | $ 5,577 | $ 6,463 | |
Goodwill, Acquired During Period | 6,536 | 0 | $ 0 |
Goodwill, Foreign Currency Translation Gain (Loss) | 244 | ||
Goodwill, Purchase Accounting Adjustments | (886) | ||
GOODWILL | 12,357 | $ 5,577 | $ 6,463 |
Fannin [Member] | |||
Goodwill [Line Items] | |||
Goodwill, Acquired During Period | 1,000 | ||
Medical Australia Limited [Member] | |||
Goodwill [Line Items] | |||
Goodwill, Acquired During Period | $ 5,500 |
General and Summary of Significant Accounting Policies Foreign Currency (Details) - USD ($) $ in Millions |
12 Months Ended | ||
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Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Foreign Currency [Abstract] | |||
Foreign Currency Transaction Gain (Loss), Realized | $ 1.8 | $ 0.3 | $ 0.2 |
General and Summary of Significant Accounting Policies Intangible Assets #2 (Details) - USD ($) $ in Millions |
12 Months Ended | ||
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Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Accounting Policies [Abstract] | |||
Amortization of Intangible Assets | $ 15.0 | $ 2.8 | $ 2.2 |
General and Summary of Significant Accounting Policies Future Estimated Amortization Expense (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | $ 15,996 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 15,582 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 15,444 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 15,361 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 15,242 | |
Finite-Lived Intangible Assets, Amortization Expense, after Year Five | 57,903 | |
Finite-Lived Intangible Assets, Net | $ 135,528 | $ 22,383 |
General and Summary of Significant Accounting Policies Investments (Details) $ in Thousands |
12 Months Ended |
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Dec. 31, 2017
USD ($)
| |
Schedule of Available-for-sale Securities [Line Items] | |
Available-for-sale Equity Securities, Amortized Cost Basis | $ 24,640 |
Available-for-sale Securities, Gross Unrealized Gain (Loss) | 0 |
Available-for-sale Securities | $ 24,640 |
Investment Contract Settlement Date Range End | Jul. 22, 2020 |
Investment Contract Settlement Date Range Start | Jan. 15, 2018 |
Long-term Investments [Domain] | |
Schedule of Available-for-sale Securities [Line Items] | |
Available-for-sale Equity Securities, Amortized Cost Basis | $ 14,579 |
Available-for-sale Securities, Gross Unrealized Gain (Loss) | 0 |
Available-for-sale Securities | 14,579 |
Short-term Investments [Member] | |
Schedule of Available-for-sale Securities [Line Items] | |
Available-for-sale Equity Securities, Amortized Cost Basis | 10,061 |
Available-for-sale Securities, Gross Unrealized Gain (Loss) | 0 |
Available-for-sale Securities | $ 10,061 |
General and Summary of Significant Accounting Policies Advertising Expenses (Details) - USD ($) $ in Millions |
12 Months Ended | ||
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Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Accounting Policies [Abstract] | |||
Advertising Expense | $ 0.2 | $ 0.1 | $ 0.2 |
General and Summary of Significant Accounting Policies Post-retirement and Post-employment Benefits (Details) - USD ($) $ in Millions |
12 Months Ended | ||
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Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Accounting Policies [Abstract] | |||
Pension and Other Postretirement Benefits Cost (Reversal of Cost) | $ 2.0 | $ 1.5 | $ 1.3 |
General and Summary of Significant Accounting Policies Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
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Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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NET INCOME PER SHARE | |||||||||||
Net Income | $ 49,705 | $ 136 | $ (37,060) | $ 55,863 | $ 9,512 | $ 18,806 | $ 16,606 | $ 18,160 | $ 68,644 | $ 63,084 | $ 44,985 |
Weighted average number of common shares outstanding (basic) | 19,614,000 | 16,168,000 | 15,848,000 | ||||||||
Weighted Average Number Diluted Shares Outstanding Adjustment | 1,244,000 | 1,086,000 | 648,000 | ||||||||
Weighted Average common and common equivalent shares outstandding (diluted) | 20,858,000 | 17,254,000 | 16,496,000 | ||||||||
Basic | $ 2.47 | $ 0.01 | $ (1.87) | $ 3.03 | $ 0.58 | $ 1.16 | $ 1.03 | $ 1.13 | $ 3.50 | $ 3.90 | $ 2.84 |
Diluted | $ 2.33 | $ 0.01 | $ (1.87) | $ 2.86 | $ 0.54 | $ 1.09 | $ 0.98 | $ 1.08 | $ 3.29 | $ 3.66 | $ 2.73 |
Weighted Average Number Diluted Shares Outstanding Adjustment | 413,000 | ||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 337 | 0 | 0 | ||||||||
Stock Issued During Period, Shares, Acquisitions | 3,200,000 |
General and Summary of Significant Accounting Policies New Accounting Pronouncements (Details) $ in Millions |
12 Months Ended |
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Dec. 31, 2017
USD ($)
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New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 9.0 |
Acquisitions and Strategic Transaction Expenses Pro Forma (Details) - USD ($) $ in Thousands |
12 Months Ended | |
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Dec. 31, 2017 |
Dec. 31, 2016 |
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Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Revenues | $ 1,062 | |
Business Acquisition, Pro Forma Revenue | 1,293 | $ 180 |
Business Acquisition, Pro Forma Net Income (Loss) | 1,418 | $ 22 |
Fair Value Adjustment to Inventory [Member] | ||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 66,300 | |
Acquisition-related Costs [Member] | ||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Business Acquisition, Transaction Costs | $ 69,500 |
Acquisitions and Strategic Transaction Expenses Tangent (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Business Acquisition [Line Items] | |||
Bargain Purchase Gain | $ 70,890 | $ 1,456 | $ 0 |
Tangent [Member] | |||
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Gross | 2,600 | ||
Bargain Purchase Gain | $ 1,500 |
Acquisitions and Strategic Transaction Expenses MLA (Details) $ in Millions |
12 Months Ended |
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Dec. 31, 2017
USD ($)
| |
Business Acquisition [Line Items] | |
contingent consideration gross | $ 225.0 |
Medical Australia Limited [Member] | |
Business Acquisition [Line Items] | |
Payments to Acquire Businesses, Gross | $ 9.0 |
Acquisitions and Strategic Transaction Expenses Fannin (Details) - Fannin [Member] $ in Millions |
12 Months Ended |
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Dec. 31, 2017
USD ($)
| |
Business Acquisition [Line Items] | |
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% |
Payments to Acquire Businesses, Gross | $ 1.5 |
Acquisitions and Strategic Transaction Expenses Strategic Transaction and Integration Expenses - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Business Combinations [Abstract] | |||
Strategic Transaction Costs | $ 59.2 | $ 14.3 | $ 1.8 |
Restructuring Charges (Details 1) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges | $ 800 | $ 6,700 | |
Other Restructuring Costs | $ 200 | ||
Business Restructuring Reserves [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges | 4,200 | ||
Special Termination Benefits [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Buy-out agreement | 0 | ||
Employee Severance [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges | $ 600 | $ 1,900 |
Gain on Sale of Building (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Gain on Sale of Building [Abstract] | |||
Selling price of building | $ 3,600 | ||
Net Book Value of Building | 2,500 | ||
Gain (Loss) on Disposition of Assets | $ 0 | $ 0 | $ 1,086 |
Legal settlements (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Legal Settlements [Abstract] | |||
Legal settlements, including amounts awarded in a dispute and charges/amounts paid out in a separate dispute. | $ 0 | $ 0 | $ 1,798 |
Legal settlement charge | 6,500 | ||
LegalSettlementChargeForLegalFees | 700 | ||
Payments for Legal Settlements | 7,500 | ||
Gross legal settlement award | 8,800 | ||
Legal settlements | $ 5,300 |
Impairment on assets held for sale (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Impairment of assets held for sale [Abstract] | |||
Impairment of assets held for sale | $ 0 | $ 728 | $ 4,139 |
Proceeds from Sale of Buildings | $ 3,300 |
Share Based Award Stock Based Compensation (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Stock compensation | $ 19,352 | $ 15,242 | $ 12,827 |
Tax benefit from stock-based compensation cost | 7,247 | 5,682 | 4,922 |
Indirect tax benefit | 1,374 | $ 0 | $ 1,997 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 23,300 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 10 months |
Share Based Award Share Award data (Details) |
Dec. 31, 2017
$ / shares
|
---|---|
Share award data [Abstract] | |
Share Price | $ 216.00 |
Share Based Award Options exercised data (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Intrinsic value of options exercised | $ 71,283 | $ 25,065 | $ 28,071 |
Cash received from exercise of stock options | 32,003 | 17,346 | 15,042 |
Tax benefit from stock option exercises | $ 20,004 | $ 7,556 | $ 9,330 |
Share Based Award ESPP Narrative (Details) |
Dec. 31, 2017
shares
|
---|---|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
ESPP Original Issuance | 750,000 |
ESPP Annual Issuance Increase Limit | 300,000 |
Shares available in employee stock purchase plan | 133,487 |
Share Based Award ESPP Table (Details) - Employee Stock [Member] - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 23,426 | 31,227 | 34,299 |
Stock Issued During Period, Value, Employee Stock Purchase Plan | $ 986 | $ 955 | $ 1,382 |
Fair Value Assumptions, Expected Term | 6 months | 6 months | 6 months |
Expected stock price volatility | 28.10% | 32.50% | 27.00% |
Risk-Free Interest Rate | 0.60% | 0.30% | 0.60% |
Expected Dividend Yield | 0.00% | 0.00% | 0.00% |
Derivatives and Hedging Activities (Details) $ in Millions, $ in Millions |
Dec. 31, 2017
USD ($)
|
Dec. 31, 2017
MXN ($)
|
---|---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months | $ (0.2) | |
Derivative, Notional Amount | $ 510.3 | |
Derivative, Forward Exchange Rate | 20.01 | 20.01 |
Derivatives and Hedging Activities Derivative Balance Sheet Location (Details) - Foreign Exchange Forward [Member] - Designated as Hedging Instrument [Member] $ in Thousands |
Dec. 31, 2017
USD ($)
|
---|---|
Accrued Liabilities [Member] | |
Derivatives, Fair Value [Line Items] | |
Derivative Liability | $ 187 |
Other Noncurrent Liabilities [Member] | |
Derivatives, Fair Value [Line Items] | |
Derivative Liability | 402 |
Derivative Financial Instruments, Liabilities [Member] | |
Derivatives, Fair Value [Line Items] | |
Derivative Liability | $ 589 |
Derivatives and Hedging Activities Derivative Instruments and Hedging Activities - Amounts Affecting Consolidated Statements of Income (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
| |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative, Gain (Loss) on Derivative, Net | $ 885 |
Derivatives and Hedging Activities Derivative Instruments and Hedging Activities - Cash Flow Hedge Activity Included in Accumulated Other Comprehensive Income (Loss) (Details) - Cash Flow Hedging [Member] - Cost of Sales [Member] - Foreign Exchange Forward [Member] $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
| |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Derivative Instruments, Gain Recognized in Other Comprehensive Income (Loss), Effective Portion | $ 296 |
Derivative Instruments, Gain Reclassified from Accumulated OCI into Income, Effective Portion | $ 885 |
Fair Value Measurements Fair Value Measurement (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
| |
Fair Value Disclosures [Abstract] | |
contingent consideration gross | $ 225 |
Fair Value Measurements Fair Value Liabilities Measured on Recurring Basis, Unobservable Inputs (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
| |
Fair Value Disclosures [Abstract] | |
Contingent Earn-out Liability | $ 0 |
Acquisition date fair value estimate of earn-out | 19,000 |
Change in fair value of contingent earn-out (included in income from operations as a separate line item) | 8,000 |
Contingent Earn-out Liability | $ 27,000 |
Fair Value Measurements Fair Value Inputs, Liabilities, Quantitative Information (Details) |
12 Months Ended | |
---|---|---|
Feb. 03, 2017 |
Dec. 31, 2017 |
|
Fair Value Disclosures [Abstract] | ||
Adjusted EBITDA Volatility | 29.00% | 26.00% |
WACC | 10.00% | 8.75% |
20-year risk free rate | 2.82% | 2.58% |
Market price of risk | 6.93% | 5.99% |
Cost of debt | 4.16% | 4.08% |
Prepaids and Other Current Assets Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Prepaid Expense and Other Assets, Current [Abstract] | ||
Deposit Assets | $ 21,940 | $ 0 |
Other Prepaid Expense, Current | 4,208 | 2,948 |
Prepaid insurance and property taxes | 2,580 | 1,649 |
Prepaid other taxes | 8,097 | 1,018 |
Deferred tax charge | 1,326 | 0 |
Other Assets, Current | 3,135 | 1,740 |
Prepaid Expense and Other Assets, Current | $ 41,286 | $ 7,355 |
Prepaids and Other Current Assets Related Party (Details) - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Related Party Transaction [Line Items] | ||
Due from Related Parties, Current | $ 98,807 | $ 0 |
Pfizer MSA Product Costs | 72,400 | |
ICU Medical MSA Revenue | 70,200 | |
Accounts Receivable [Member] | ||
Related Party Transaction [Line Items] | ||
Due from Related Parties, Current | 36,425 | 0 |
Prepaid Expenses and Other Current Assets [Member] | ||
Related Party Transaction [Line Items] | ||
Due from Related Parties, Current | $ 62,382 | $ 0 |
Hospira [Member] | ||
Related Party Transaction [Line Items] | ||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 3,200 |
Accrued Liabilities an Other Long-term Liabilities (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Accrued Liabilities [Abstract] | |||
Salaries and benefits | $ 20,745 | $ 5,702 | |
Incentive compensation | 40,682 | 7,912 | |
Accrued Professional Fees | 13,319 | 0 | |
Accrued Product Field Action. | 11,810 | 0 | |
Consigned inventory | 5,210 | 0 | |
Third-party Inventory | 4,284 | 0 | |
Legal accrual | 3,538 | 4,177 | |
Accrued sales taxes | 6,291 | 1,472 | |
Warranties and Returns | 3,360 | 0 | |
Deferred Revenue and Credits, Current | 3,326 | 18 | |
Accrued other taxes | 2,771 | 0 | |
Outside commissions | 725 | 1,141 | |
Accrued freight | 5,696 | 0 | |
Restructuring Reserve, Current | 1,290 | 423 | $ 6,539 |
Acquisition-related accrual | 0 | 2,750 | |
Other | 9,017 | 2,301 | |
Accrued liabilities | $ 132,064 | $ 25,896 |
Accrued Liabilities an Other Long-term Liabilities Other Long-term Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Other Long-term Liabilities [Abstract] | ||
Contract liabilities | $ 40,148 | $ 0 |
Deferred Revenue, Noncurrent | 7,099 | 0 |
Benefits | 2,104 | 1,107 |
Other | 5,975 | 0 |
OTHER LONG-TERM LIABILITIES | $ 55,326 | $ 1,107 |
Long-Term Obligations Credit Facility (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
| |
LOng-Term Obligations Disclosure [Abstract] | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 150.0 |
Line of Credit Facility, Remaining Borrowing Capacity | $ 150.0 |
Line of Credit Facility, Expiration Date | Nov. 08, 2022 |
Line of Credit Accordion | $ 100.0 |
Debt Issuance Costs, Line of Credit Arrangements, Gross | $ 1.4 |
Debt Instrument, Interest Rate Terms | In general, borrowing under the Credit Facility (other than Swingline loans) bears interest, at our option, based on the Base Rate plus applicable margin or the London Interbank Offered Rate ("LIBOR") rate plus applicable margin, as defined below: |
Line of Credit Facility, Collateral | Our obligations are secured by: (i) 100% of the equity interests of our guarantor subsidiaries; and (ii) all of the tangible and intangible personal property and assets related to us and our guarantor subsidiaries (including, without limitation, all accounts, equipment, inventory and other goods, all instruments, intellectual property and other general intangibles, deposit accounts, securities accounts and other investment property and cash), and (iii) all products, profits and proceeds of the foregoing. Notwithstanding the foregoing, the collateral shall not include certain excluded property |
Line of Credit Facility, Covenant Terms | The Credit Facility contains certain financial covenants pertaining to Consolidated Fixed Charge Coverage and Consolidated Total Leverage Ratios. In addition, the Credit Facility has restrictions pertaining to limitations on debt, liens, negative pledges, loans, advances, acquisitions, other investments, dividends, distributions, redemptions, repurchases of equity interests, fundamental changes and asset sales and other dispositions, prepayments, redemptions and purchases of subordinated debt and other junior debt, transactions with affiliates, dividend and payment restrictions affecting subsidiaries, changes in line of business, fiscal year and accounting practices and amendment of organizational documents and junior debt documents. |
Long-Term Obligations Senior Note (Details) $ in Millions |
Dec. 31, 2017
USD ($)
|
---|---|
Long-Term Obligations [Abstract] | |
Senior Notes | $ 75 |
Income Taxes Income from continuing operations (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | |||
Foreign Earnings Repatriated | $ 24,000 | ||
Income (Loss) from Continuing Operations before Income Taxes, Domestic | 59,872 | $ 80,714 | $ 74,288 |
Income (Loss) from Continuing Operations before Income Taxes, Foreign | $ (8,589) | $ 4,450 | $ (4,589) |
Income Taxes Provision for income taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | |||
Current Federal Tax Expense (Benefit) | $ 2,774 | $ 21,123 | $ 18,601 |
Current State and Local Tax Expense (Benefit) | 2,263 | 2,347 | 745 |
Current Foreign Tax Expense (Benefit) | 3,170 | 1,118 | 1,426 |
Current Income Tax Expense (Benefit) | 8,207 | 24,588 | 20,772 |
Deferred Federal Income Tax Expense (Benefit) | (20,878) | (2,045) | 4,524 |
Deferred State and Local Income Tax Expense (Benefit) | (4,619) | (767) | (960) |
Deferred Foreign Income Tax Expense (Benefit) | (71) | 304 | 378 |
Deferred Income Tax Expense (Benefit) | (25,568) | (2,508) | 3,942 |
PROVISION FOR INCOME TAXES | $ (17,361) | $ 22,080 | $ 24,714 |
Income Taxes Tax benefit from exercise of stock options (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | |||
Employee Service Share-based Compensation, Tax Benefit from Exercise of Stock Options | $ 20,004 | $ 7,556 | $ 9,330 |
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | $ 7,247 | $ 5,682 | $ 4,922 |
Income Taxes Tax Reform (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | |||
Foreign Earnings Repatriated | $ 24.0 | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | 35.00% | 35.00% |
Income Tax Expense (Benefit) | $ 1.1 | ||
RepatriationTollCharge | $ 2.0 |
Income Taxes Change in taxes payable (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
| |
Income Tax Disclosure [Abstract] | |
Increase (Decrease) in Income Taxes Payable | $ 3.0 |
Income Taxes Deferred income tax provision (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Components of deferred tax provision [Line Items] | |||
Deferred Income Tax Expense (Benefit) | $ (25,568) | $ (2,508) | $ 3,942 |
Income Taxes Operating Loss Carryforwards (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Operating loss carryforwards [Abstract] | |||
Employee Service Share-based Compensation, Tax Benefit from Exercise of Stock Options | $ 20,004 | $ 7,556 | $ 9,330 |
UNITED STATES | |||
Operating Loss Carryforwards [Line Items] | |||
Operating Loss Carryforwards | 4,900 | ||
Foreign Tax Authority [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating Loss Carryforwards | 6,600 | ||
OperatingLossCarryforwardNet | 1,100 | ||
Operating Loss Carryforwards, Valuation Allowance | $ 5,500 |
Income Taxes Unrecognized tax benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Unrecognized tax benefits [Abstract] | ||||
Unrecognized Tax Benefits, Increases Resulting from Prior Period Tax Positions | $ 77 | $ 77 | $ 25 | |
Unrecognized Tax Benefits, Increase Resulting from Acquisition | 640 | 0 | 0 | |
Unrecognized Tax Benefits, Increases Resulting from Current Period Tax Positions | 3,992 | 345 | 345 | |
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions | (12) | (46) | (2,399) | |
Unrecognized Tax Benefits, Decreases Resulting from Settlements with Taxing Authorities | 0 | 0 | (314) | |
Unrecognized Tax Benefits, Reductions Resulting from Lapse of Applicable Statute of Limitations | (170) | (148) | 0 | |
Unrecognized Tax Benefits | $ 6,527 | $ 2,000 | $ 1,772 | $ 4,115 |
Income Taxes Tax Carryforwards (Details) $ in Millions |
Dec. 31, 2017
USD ($)
|
---|---|
CALIFORNIA | |
Tax Credit Carryforward [Line Items] | |
Tax Credit Carryforward, Amount | $ 9.5 |
UTAH | |
Tax Credit Carryforward [Line Items] | |
Tax Credit Carryforward, Amount | 0.3 |
Foreign Tax Authority [Member] | |
Tax Credit Carryforward [Line Items] | |
Tax Credit Carryforward, Amount | $ 2.7 |
Income Taxes Tax Holiday (Details) $ / shares in Units, $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
$ / shares
| |
Income Tax Holiday [Line Items] | |
Income Tax Holiday, Aggregate Dollar Amount | $ | $ 5.7 |
Income Tax Holiday, Income Tax Benefits Per Share | $ / shares | $ 0.27 |
Market Segments, Geographic Information and Significant Customers Market Segment Revenue as a % of Total Revenue (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Infusion Consumables [Member] | |||
Market Segment Revenue as a % of Total Revenue [Line Items] | |||
Percent of total revenue | 28.00% | 86.00% | 84.00% |
IV Solutions [Member] | |||
Market Segment Revenue as a % of Total Revenue [Line Items] | |||
Percent of total revenue | 40.00% | 0.00% | 0.00% |
Infusion Systems [Member] | |||
Market Segment Revenue as a % of Total Revenue [Line Items] | |||
Percent of total revenue | 23.00% | 0.00% | 0.00% |
Critical Care [Member] | |||
Market Segment Revenue as a % of Total Revenue [Line Items] | |||
Percent of total revenue | 4.00% | 14.00% | 16.00% |
Other Revenue [Member] | |||
Market Segment Revenue as a % of Total Revenue [Line Items] | |||
Percent of total revenue | 5.00% | 0.00% | 0.00% |
Market Segments, Geographic Information and Significant Customers Revenue (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
UNITED STATES | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Percent of total revenue | 76.00% | 70.00% | 71.00% |
International Sales [Domain] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Percent of total revenue | 24.00% | 30.00% | 29.00% |
Hospira [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration Risk, Percentage | 30.00% | 36.00% | |
Hospira [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Percentage of total accounts receivable | 23.00% |
Stockholders' Equity (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Equity, Class of Treasury Stock [Line Items] | ||
Treasury stock purchase plan | $ 40.0 | |
Treasury stock purchase plan remaining available | $ 7.2 | |
Stock Repurchased and Retired During Period, Shares | $ 15.4 | |
Shares Paid for Tax Withholding for Share Based Compensation | 27,636 | 20,261 |
Payments Related to Tax Withholding for Share-based Compensation | $ 4.1 | $ 1.9 |
Treasury Stock, Common, Shares | 0 | 93 |
Commitments and Contingencies Lease Commitments (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Leases [Abstract] | |||
Operating Leases, Rent Expense | $ 7,900 | $ 600 | $ 400 |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | 8,775 | ||
Operating Leases, Future Minimum Payments, Due in Two Years | 5,907 | ||
Operating Leases, Future Minimum Payments, Due in Three Years | 4,059 | ||
Operating Leases, Future Minimum Payments, Due in Four Years | 3,214 | ||
Operating Leases, Future Minimum Payments, Due in Five Years | 3,105 | ||
Operating Leases, Future Minimum Payments, Due Thereafter | 6,446 | ||
Operating Leases, Future Minimum Payments Due | $ 31,506 |
Commitments and Contingencies Contingencies (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
| |
Commitments and Contingencies Disclosure [Abstract] | |
contingent consideration gross | $ 225 |
Collaborative and Other Arrangements (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
| |
Collaborative and Other Arrangements [Abstract] | |
Fee Cap Six months subsequent to first twelve months | $ 31.3 |
Transitional Service Agreement Set-up Costs | 22.0 |
Fee Cap - First Twelve Months | $ 62.5 |
Selected Quarterly Financial Data - Unaudited (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Revenue, Net | $ 370,124 | $ 343,236 | $ 331,514 | $ 247,739 | $ 95,688 | $ 97,108 | $ 96,721 | $ 89,855 | |||
Gross Profit | 137,490 | 111,598 | 88,062 | 88,945 | 50,760 | 51,273 | 50,132 | 49,233 | $ 426,095 | $ 201,398 | $ 180,797 |
Net Income | $ 49,705 | $ 136 | $ (37,060) | $ 55,863 | $ 9,512 | $ 18,806 | $ 16,606 | $ 18,160 | $ 68,644 | $ 63,084 | $ 44,985 |
Basic | $ 2.47 | $ 0.01 | $ (1.87) | $ 3.03 | $ 0.58 | $ 1.16 | $ 1.03 | $ 1.13 | $ 3.50 | $ 3.90 | $ 2.84 |
Diluted | $ 2.33 | $ 0.01 | $ (1.87) | $ 2.86 | $ 0.54 | $ 1.09 | $ 0.98 | $ 1.08 | $ 3.29 | $ 3.66 | $ 2.73 |
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