10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2017

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 000-33001

NATUS MEDICAL INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware	77-0154833
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

6701 Koll Center Parkway, Suite 120, Pleasanton, CA 94566

(Address of principal executive offices) (Zip Code)

(925) 223-6700

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” or an “emerging growth” company in Rule 12b-2 of the Exchange Act.:

Large Accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	o  (Do not check if a smaller reporting company)	Smaller reporting  company	¨
Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý

The number of issued and outstanding shares of the registrant’s Common Stock, $0.001 par value, as of October 30, 2017 was 31,154,151.

EXPLANATORY NOTE

The purpose of this Amendment No. 1 to the Quarterly Report of Natus Medical, Incorporated (the "Company") on Form 10-Q for the period ended September 30, 2017, filed with the Securities and Exchange Commission on November 6, 2017 (the "Form 10-Q"), is solely to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulations S-T. Exhibit 101 to this report provides the consolidated financial statements and related notes from the Form 10-Q formatted in XBRL (eXtensive Business Reporting Language).

Other than the aforementioned, no other changes have been made to the Form 10-Q. This Amendment No. 1 to the Form 10-Q speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the original Form 10-Q.

Pursuant to Rule 406T of Regulations S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Act of 1934, as amended, and otherwise are not subject to liability under those sections.

PART II.    OTHER INFORMATION

ITEM 6.    Exhibits

(a) Exhibits

		Incorporated By Reference
Exhibit No.	Exhibit	Filing	Exhibit No.	File Date	Filed Herewith
31.1*	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002			11/6/2017
31.2*	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002			11/6/2017
32.1*	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002			11/6/2017
101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Income, (iii) Condensed Consolidated Statements of Cash Flows, and (iv) Notes to Condensed Consolidated Financial Statements.				X

*Previously filed with Form 10-Q for the period ended September 30, 2017 on November 6, 2017

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		NATUS MEDICAL INCORPORATED
Dated:	November 7, 2017	By:	/s/ James B. Hawkins
			James B. Hawkins President and Chief Executive Officer (Principal Executive Officer)
Dated:	November 7, 2017	By:	/s/ Jonathan A. Kennedy
			Jonathan A. Kennedy Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

--4-

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Oct. 30, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	NATUS MEDICAL INC
Entity Central Index Key	0000878526
Document Type	10-Q/A
Document Period End Date	Sep. 30, 2017
Amendment Flag	true
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		31,154,151
Amendment Description	To provide the consolidated financial statements and related notes from the Form 10-Q formatted in XBRL (eXtensive Business Reporting Language)

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Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 132,405	$ 213,551
Short-term investments	0	34,019
Accounts receivable, net of allowance for doubtful accounts of $10,171 in 2017 and $4,182 in 2016	116,666	86,638
Inventories	69,322	49,587
Prepaid expenses and other current assets	22,605	22,004
Total current assets	340,998	405,799
Property and equipment, net	20,677	17,333
Intangible assets, net	138,781	77,165
Goodwill	182,673	113,112
Deferred income tax	2,204	14,915
Other assets	18,952	20,688
Total assets	704,285	649,012
Current liabilities:
Accounts payable	17,961	18,700
Accrued liabilities	48,281	37,895
Deferred revenue	14,691	23,346
Total current liabilities	80,933	79,941
Long-term liabilities:
Other liabilities	9,263	8,013
Long-term debt, net	154,235	140,000
Deferred income tax	34,835	3,684
Total liabilities	279,266	231,638
Stockholders’ equity:
Common stock, $0.001 par value, 120,000,000 shares authorized; shares issued and outstanding 33,149,737 in 2017 and 32,920,246 in 2016	316,503	312,986
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding in 2017 and 2016	0	0
Retained earnings	136,210	149,408
Accumulated other comprehensive loss	(27,694)	(45,020)
Total stockholders’ equity	425,019	417,374
Total liabilities and stockholders’ equity	$ 704,285	$ 649,012

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Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 10,171	$ 4,182
Common Stock, par value (dollars per share)	$ 0.001	$ 0.001
Common Stock, shares authorized (in shares)	120,000,000	120,000,000
Common Stock, shares issued (in shares)	33,149,737	32,920,246
Common Stock, shares outstanding (in shares)	33,149,737	32,920,246
Preferred Stock, par value (dollars per share)	$ 0.001	$ 0.001
Preferred Stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred Stock, shares issued (in shares)	0	0
Preferred Stock, shares outstanding (in shares)	0	0

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Condensed Consolidated Statements of Income and Comprehensive Income (unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Statement [Abstract]
Revenue	$ 122,643	$ 90,906	$ 369,531	$ 274,193
Cost of revenue	47,112	32,194	158,615	102,542
Intangibles amortization	1,290	612	3,789	1,818
Gross profit	74,241	58,100	207,127	169,833
Operating expenses:
Marketing and selling	32,537	19,746	95,106	61,578
Research and development	11,632	7,689	38,098	22,596
General and administrative	17,329	12,821	57,501	37,225
Intangibles amortization	3,882	2,409	11,841	6,741
Restructuring	321	197	914	1,315
Total operating expenses	65,701	42,862	203,460	129,455
Income from operations	8,540	15,238	3,667	40,378
Other income (expense), net	150	(893)	(1,268)	(412)
Income before provision for income tax	8,690	14,345	2,399	39,966
Provision for income tax	17,203	1,032	15,597	7,605
Net income (loss)	$ (8,513)	$ 13,313	$ (13,198)	$ 32,361
Earnings (loss) per share:
Basic (dollars per share)	$ (0.26)	$ 0.41	$ (0.41)	$ 1.00
Diluted (dollars per share)	$ (0.26)	$ 0.40	$ (0.41)	$ 0.98
Weighted average shares used in the calculation of earnings (loss) per share:
Basic (in shares)	32,593	32,388	32,536	32,476
Diluted (in shares)	32,593	32,981	32,536	33,077
Other comprehensive income (loss):
Unrealized gain (loss) on available-for-sale investments	$ 0	$ 0	$ (45)	$ 0
Foreign currency translation adjustment	5,166	424	17,370	(999)
Total other comprehensive income (loss)	5,166	424	17,325	(999)
Comprehensive income (loss)	$ (3,347)	$ 13,737	$ 4,127	$ 31,362

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Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Operating activities:
Net income (loss)	$ (13,198)	$ 32,361
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Provision for losses on accounts receivable	8,704	940
Depreciation and amortization	20,859	12,820
Loss (gain) on disposal of property and equipment	14	(21)
Warranty reserve	5,307	3,273
Share-based compensation	7,223	6,957
Changes in operating assets and liabilities:
Accounts receivable	(13,660)	19,299
Inventories	6,791	(6,353)
Prepaid expenses and other assets	1,395	(13,261)
Accounts payable	(9,530)	(6,062)
Accrued liabilities	(8,537)	(6,488)
Deferred revenue	(7,890)	24,994
Deferred income tax	16,770	43
Net cash provided by operating activities	14,248	68,502
Investing activities:
Acquisition of businesses, net of cash acquired	(142,592)	(15,849)
Purchase of property and equipment	(2,749)	(2,176)
Purchase of intangible assets	0	(210)
Purchase of short-term investments	0	(25,429)
Sale of short-term investments	34,019	0
Net cash used in investing activities	(111,322)	(43,664)
Financing activities:
Proceeds from stock option exercises and Employee Stock Purchase Program purchases	2,247	2,550
Repurchase of common stock	(2,268)	(18,257)
Taxes paid related to net share settlement of equity awards	(3,685)	(3,937)
Contingent consideration	(2,946)	(1,284)
Proceeds from borrowings	60,000	16,000
Deferred debt issuance costs	(354)	(533)
Payments on borrowings	(45,000)	(16,000)
Net cash provided by (used in) financing activities	7,994	(21,461)
Exchange rate changes effect on cash and cash equivalents	7,934	(4,773)
Net decrease in cash and cash equivalents	(81,146)	(1,396)
Cash and cash equivalents, beginning of period	213,551	82,469
Cash and cash equivalents, end of period	132,405	81,073
Supplemental disclosure of cash flow information:
Cash paid for interest	3,056	41
Cash paid for income taxes	4,312	8,024
Non-cash investing activities:
Property and equipment included in accounts payable	57	159
Inventory transferred to property and equipment	$ 935	$ 1,240

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Basis of Presentation

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying interim condensed consolidated financial statements of Natus Medical Incorporated (“Natus,” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accounting policies followed in the preparation of the interim condensed consolidated financial statements are consistent in all material respects with those presented in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

Interim financial reports are prepared in accordance with the rules and regulations of the Securities and Exchange Commission; accordingly, the reports do not include all of the information and notes required by GAAP for annual financial statements. The interim financial information is unaudited, and reflects all normal adjustments that are, in the opinion of management, necessary for the fair presentation of our financial position, results of operations, and cash flows for the interim periods presented. The consolidated balance sheet as of December 31, 2016 was derived from audited financial statements, but does not include all disclosures required by GAAP. The accompanying financial statements should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The Company has made certain reclassifications to the prior period to conform to current period presentation.

Operating results for the nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance. The standard's core principle is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard creates a five-step model to achieve its core principle: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction's price to the separate performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In addition, entities must disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative and quantitative disclosures are required about: (i) the entity's contracts with customers; (ii) the significant judgments, and changes in judgments, made in applying the guidance to those contracts; and (iii) any assets recognized from the costs to obtain or fulfill a contract with a customer. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 616) - Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to interim and annual periods beginning January 1, 2018. The standard allows entities to apply the standard retrospectively to each prior period presented (“full retrospective adoption”) or retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application (“modified retrospective adoption”). The Company plans to adopt this guidance on January 1, 2018, and is currently in the process of determining the impact of the new revenue recognition guidance on its revenue transactions, including any impacts on associated processes, systems, and internal controls. The Company's preliminary assessment indicates implementation of this standard will not have a material impact on financial results. The Company's evaluation has included determining whether the unit of account (i.e., performance obligations) will change as compared to current GAAP, as well as determining the standalone selling price of each performance obligation. Standalone selling prices under the new guidance may not be substantially different from the Company's current methodologies of establishing fair value on multiple element arrangements. The Company continues to evaluate the impact of this guidance and its subsequent amendments on the consolidated financial position, results of operations, and cash flows, and any preliminary assessments are subject to change.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330). This standard requires an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is estimated selling prices in the ordinary course of business, less reasonable predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted ASU 2015-11 in January 2017 and no impact was recorded by the Company.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This standard requires a lessee to recognize the lease assets and lease liabilities arising from operating leases in the statement of financial position. Qualitative along with specific quantitative disclosures are required by lessees and lessors to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 including interim periods within those fiscal years. The Company is currently evaluating the impact that will result from adopting ASU 2016-02.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805). This update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisition (or disposals) of assets or businesses. The definition of a business affected many areas of accounting including acquisitions, disposals, goodwill, and consolidation. ASU 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those periods, and must be applied prospectively. The Company is currently evaluating the impact that will result from adopting ASU 2017-01.

Also in January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). This update modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Because these amendments eliminate Step 2 from the goodwill impairment test, they should reduce the cost and complexity of evaluating goodwill for impairment. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact that will result from adopting ASU 2017-04.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that year, and must be applied prospectively to an award modified on or after the adoption date. The Company will apply this guidance to modifications that occur on or after the effective date.

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Business Combinations

9 Months Ended

Sep. 30, 2017

Business Combinations [Abstract]

Business Combinations

Business Combinations

Otometrics

On January 3, 2017, the Company acquired the Otometrics business from GN Store Nord A/S for a cash purchase price of $149.2 million, which includes a $4.2 million net working capital adjustment. Otometrics is a manufacturer of hearing diagnostics and balance assessment equipment, disposables and software. Otometrics provides computer-based audiological, otoneurologic and vestibular instrumentation and sound rooms to hearing and balance care professionals worldwide. Otometrics has a complete product and brand portfolio known for its sophisticated design technology in the hearing and balance assessment markets.

The Company has accounted for the acquisition under the acquisition method of accounting for business combinations. Under the acquisition method of accounting, the assets acquired and liabilities assumed from Otometrics are recorded in the condensed consolidated financial statements at their respective fair values as of the acquisition date. The excess of the purchase price over the fair value of the acquired net assets is recorded as goodwill. The results of Otometrics are included in the condensed consolidated financial statements since the date of the acquisition.

The following table summarizes the preliminary purchase price allocation of the fair value of the assets acquired and liabilities assumed at the date of acquisition, (in thousands):

Cash and cash equivalents	$	6,758
Accounts receivable	30,052
Inventories	23,403
Property and equipment	2,770
Intangible assets	75,755
Goodwill	58,941
Other assets	1,987
Accounts payable	(8,663		)
Accrued liabilities	(14,907		)
Deferred revenue	(767		)
Deferred income tax	(26,082		)
Total purchase price	$	149,247

The goodwill recorded represents the future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized. The goodwill recorded as part of the acquisition of Otometrics is not amortized and includes the following:

• The expected synergies and other benefits that we believe will result from combining the operations of Otometrics with the operations of Natus;

• Any intangible assets that did not qualify for separate recognition, as well as future, yet unidentified projects and products; and

• The value of the going-concern element of Otometrics's existing businesses (the higher rate of return on the assembled collection of net assets versus if Natus has acquired all of the net assets separately).

Management is working with an independent valuation firm to determine fair values of the identifiable intangible assets. The Company will use a combination of income approaches including relief from royalty and multi-period excess earnings methods. The valuation models will be based on estimates of future operating projections of the acquired business and rights to sell products as well as judgments on the discount rates used and other variables. The Company is determining the forecasts based on a number of factors, including their best estimate of near-term net sales expectations and long-term projections, which include review of internal and independent market analyses.

The fair value of assets acquired and liabilities assumed was based on preliminary valuations, and our estimates and assumptions are subject to change as the valuations are finalized, within the measurement period not to exceed 12 months from the acquisition date. The Company is currently in the process of verifying data and finalizing information related to the Otometrics valuation and recording of inventory, accounts receivable, intangible assets, other liabilities, income taxes and the corresponding effect on goodwill. In the three months ended September 30, 2017, the Company made adjustments resulting from the continued purchase price allocation refinement.

Otometrics's revenue of $86.2 million and loss from operations of $4.6 million are included in the condensed consolidated statement of operations for the period from January 3, 2017 (acquisition date) to September 30, 2017.

The unaudited pro forma financial results presented below for the three and nine months ended September 30, 2017 and September 30, 2016, include the effects of pro forma adjustments as if the acquisition occurred on January 1, 2016. The pro forma results were prepared using the acquisition method of accounting and combine the historical results of Natus and Otometrics for the three and nine months ended September 30, 2017 and September 30, 2016, including the effects of the business combination, primarily amortization expense related to the fair value of identifiable intangible assets acquired, interest expense associated with the financing obtained by Natus in connection with the acquisition, and the elimination of acquisition-related costs incurred.

The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the earliest period presented, nor is it intended to be a projection of future results.

Unaudited Pro forma Financial Information

(in thousands)

	Three Months Ended   September 30,					Nine Months Ended   September 30,
	2017			2016		2017			2016
Revenue	$	122,643		$	118,431	$	369,531		$	356,769
Net income (loss)	$	(6,113	)	$	3,494	$	(6,398	)	$	3,311
Earnings (loss) per share:
Basic	$	(0.19	)	$	0.11	$	(0.20	)	$	0.10
Diluted	$	(0.19	)	$	0.11	$	(0.20	)	$	0.10
Weighted average shares used in the calculation of earnings per share:
Basic	32,593			32,388		32,536			32,476
Diluted	32,593			32,981		32,536			33,077

The pro forma results for the three and nine months ended September 30, 2017 were adjusted to exclude $2.4 million and $6.8 million, respectively of nonrecurring expense related to the fair value adjustment of acquisition-date inventory.

The pro forma results for the three and nine months ended September 30, 2016 were adjusted to exclude the aforementioned charges, along with $2.0 million and $6.0 million, respectively of amortization of intangible assets, and $1.0 million and $3.0 million, respectively of interest expense.

RetCam

On July 6, 2016, the Company acquired the portfolio of RetCam Imaging Systems ("RetCam") from Clarity Medical Systems, Inc. for $10.6 million in cash. RetCam is an imaging system used to diagnose and monitor a range of ophthalmic maladies in premature infants. The purchase agreement also included a holdback of $2.0 million which was paid on February 16, 2017. Subsequent to the acquisition, an additional $1.1 million was paid by the Company to Clarity Medical Systems as a result of a working capital adjustment. Results of operations for RetCam have been included in the Company's condensed consolidated financial statements from the date of acquisition. The total purchase price was allocated $7.2 million to tangible assets, $4.9 million to intangible assets with an assigned weighted average life of 5 years being amortized on the straight line method, and $1.7 million to goodwill, offset by $2.0 million to net liabilities. Pro forma financial information for the RetCam acquisition is not presented as it is not considered material.

NeuroQuest

On March 2, 2016, the Company acquired NeuroQuest, LLC (“NeuroQuest”) through an asset purchase. NeuroQuest complements our Global Neuro-Diagnostics (“GND”) and Monarch Medical Diagnostics, LLC (“Monarch”) acquisitions which offer patients a convenient way to complete routine-electroencephalography (“EEG”) and extended video electroencephalography (“VEEG”) testing. The cash consideration for NeuroQuest was $4.6 million. The purchase agreement also included an asset consideration holdback of $0.5 million which was paid on April 30, 2017. The total purchase price was allocated to $0.5 million of tangible assets, $1.3 million of intangible assets with an assigned weighted average life of 5 years being amortized on the straight line method, and $3.5 million of goodwill, offset by $0.1 million of net liabilities. Pro forma financial information for the NeuroQuest acquisition is not presented as it is not considered material.

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Earnings Per Share

9 Months Ended

Sep. 30, 2017

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The components of basic and diluted EPS are as follows (in thousands, except per share amounts):

	Three Months Ended   September 30,					Nine Months Ended   September 30,
	2017			2016		2017			2016
Net income (loss)	$	(8,513	)	$	13,313	$	(13,198	)	$	32,361
Weighted average common shares	32,593			32,388		32,536			32,476
Dilutive effect of stock based awards	—			593		—			601
Diluted Shares	32,593			32,981		32,536			33,077
Basic earnings (loss) per share	$	(0.26	)	$	0.41	$	(0.41	)	$	1.00
Diluted earnings (loss) per share	$	(0.26	)	$	0.40	$	(0.41	)	$	0.98
Shares excluded from calculation of diluted EPS	—			—		—			138

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Cash, Cash Equivalents, and Short-Term Investments

9 Months Ended

Sep. 30, 2017

Investments, Debt and Equity Securities [Abstract]

Cash, Cash Equivalents, and Short-Term Investments

Cash, Cash Equivalents, and Short-Term Investments

The Company has invested its excess cash in highly liquid marketable securities such as corporate debt instruments, U.S. government agency securities and asset-backed securities. Investments with maturities greater than one year are classified as current because management considers all investments to be available for current operations.

The Company's investments are designed to provide liquidity, preserve capital and maximize total return on invested assets with a focus on high credit-quality securities.

The Company's investments have been classified and accounted for as available-for-sale. Such investments are recorded at fair value and unrealized holding gains and losses are reported as a separate component of accumulated other comprehensive income (loss) in the stockholders' equity until realized. Realized gains and losses on sales of investments, if any, are determined on the specific identification method and are reclassified from accumulated other comprehensive income (loss) to results of operations as other income (expense).

The Company, to date, has not determined that any of the unrealized losses on its investments are considered to be other-than-temporary. The Company reviews its investment portfolio to determine if any security is other-than-temporarily impaired, which would require the Company to record an impairment charge in the period any such determination is made. In making this judgment, the Company evaluates, among other things: the duration and extent to which the fair value of a security is less than its cost; the financial condition of the issuer and any changes thereto; and the Company's intent and ability to hold its investment for a period of time sufficient to allow for any anticipated recovery in market value, or whether the Company will more likely than not be required to sell the security before recovery of its aggregated cost basis. The Company has evaluated its investments as of September 30, 2017 and has determined that no investments with unrealized losses are other-than-temporarily impaired. No investments have been in a continuous loss position greater than one year.     

Cash, cash equivalents and short-term investments consisted of the following (in thousands):

	September 30, 2017		December 31, 2016
Cash and cash equivalents:
Cash	$	132,405	$	213,551
Short-term investments:
U.S. investment grade bonds	—		24,477
Foreign investment grade bonds	—		9,542
Total short-term investments	—		34,019
Total cash, cash equivalents and short-term investments	$	132,405	$	247,570

Short-term investments by investment type are as follows (in thousands):

	September 30, 2017								December 31, 2016
	Aggregated Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses		Aggregated Fair Value		Aggregated Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Aggregated Fair Value
U.S. investment grade bonds	—		—		—		—		24,531		—		(54		)	24,477
Foreign investment grade bonds	—		—		—		—		9,567		—		(25		)	9,542
Total short-term investments	$	—	$	—	$	—	$	—	$	34,098	$	—	$	(79	)	$	34,019

Short-term investments by contractual maturity are as follows (in thousands):

	September 30, 2017		December 31, 2016
	Investments		Investments
Due in one year or less	$	—	$	21,655
Due after one year through five years	—		12,364
Total short-term investment	$	—	$	34,019

See Note 16 to these Condensed Consolidated Financial Statements for additional discussion regarding the fair value of the Company's short-term investments.

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Inventories

9 Months Ended

Sep. 30, 2017

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consist of the following (in thousands):

	September 30, 2017			December 31, 2016
Raw materials and subassemblies	$	35,425		$	28,245
Work in process	1,950			1,507
Finished goods	45,832			34,908
Total inventories	83,207			64,660
Less: Non-current inventories	(13,885		)	(15,073		)
Inventories, current	$	69,322		$	49,587

At September 30, 2017 and December 31, 2016, the Company has classified $13.9 million and $15.1 million, respectively, of inventories as other assets. This inventory consists primarily of service components used to repair products held by customers pursuant to warranty obligations and extended service contracts, including service components for products that the Company no longer sells, inventory purchased for lifetime buys, and inventory that has been impacted by ship holds. The Company believes that these inventories will be utilized for their intended purpose.

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Intangible Assets

9 Months Ended

Sep. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

The following table summarizes the components of gross and net intangible asset balances (in thousands):

	September 30, 2017										December 31, 2016
	Gross Carrying Amount		Accumulated Impairment			Accumulated Amortization			Net Book Value		Gross Carrying Amount		Accumulated Impairment			Accumulated Amortization			Net Book Value
Intangible assets with definite lives:
Technology	$	90,653	$	—		$	(40,465	)	$	50,188	$	64,563	$	—		$	(34,683	)	$	29,880
Customer related	80,989		—			(25,480		)	55,509		38,087		—			(17,610		)	20,477
Trade names	43,990		(3,460		)	(11,790		)	28,740		32,106		(3,290		)	(7,135		)	21,681
Internally developed software	15,722		—			(11,685		)	4,037		14,978		—			(10,220		)	4,758
Patents	2,759		—			(2,452		)	307		2,620		—			(2,251		)	369
Definite-lived intangible assets	$	234,113	$	(3,460	)	$	(91,872	)	$	138,781	$	152,354	$	(3,290	)	$	(71,899	)	$	77,165

Finite-lived intangible assets are amortized over their weighted average lives, which are 14 years for technology, 10 years for customer related intangibles, 6 years for internally developed software, 7 years for trade names, 13 years for patents, and 11 years in total.

Internally developed software consists of $13.3 million relating to costs incurred for development of internal use computer software and $2.2 million for development of software to be sold.

Amortization expense related to intangible assets with definite lives was as follows (in thousands):

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2017		2016		2017		2016
Technology	$	1,614	$	863	$	4,731	$	2,571
Customer related	2,264		848		6,627		2,495
Trade names	1,481		1,139		4,385		3,176
Internally developed software	504		602		1,511		1,618
Patents	29		28		85		84
Total amortization	$	5,892	$	3,480	$	17,339	$	9,944

Expected amortization expense related to amortizable intangible assets is as follows (in thousands):

Three months ending December 31, 2017	$	5,403
2018	21,383
2019	20,220
2020	18,018
2021	16,572
2022	12,806
Thereafter	44,379
Total expected amortization expense	$	138,781

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Goodwill

9 Months Ended

Sep. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Goodwill

The carrying amount of goodwill and the changes in the balance are as follows (in thousands):

December 31, 2016	$	113,112
Acquisitions/Purchase accounting adjustments	57,680
Foreign currency translation	11,881
September 30, 2017	$	182,673

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Property and Equipment, net

9 Months Ended

Sep. 30, 2017

Property, Plant and Equipment [Abstract]

Property and Equipment, net

Property and Equipment, net

Property and equipment, net consist of the following (in thousands):

	September 30, 2017			December 31, 2016
Land	$	2,833		$	2,856
Buildings	5,205			5,219
Leasehold improvements	3,706			2,386
Equipment and furniture	20,987			18,398
Computer software and hardware	9,648			9,100
Demonstration and loaned equipment	11,865			11,393
	54,244			49,352
Accumulated depreciation	(33,567		)	(32,019		)
Total	$	20,677		$	17,333

Depreciation expense of property and equipment was approximately $1.1 million and $3.4 million for the three and nine months ended September 30, 2017 and approximately $0.9 million and $2.9 million for the three and nine months ended September 30, 2016.

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Reserve for Product Warranties

9 Months Ended

Sep. 30, 2017

Product Warranties Disclosures [Abstract]

Reserve for Product Warranties

Reserve for Product Warranties

The Company provides a warranty for products that is generally one year in length, but in some cases regulations may require them to provide repair or remediation beyond the typical warranty period. If any of the products contain defects, the Company may be required to incur additional repair and remediation costs. Service for domestic customers is provided by Company-owned service centers that perform all service, repair, and calibration services. Service for international customers is provided by a combination of Company-owned facilities, vendors on a contract basis, and distributors.

A warranty reserve is included in accrued liabilities for the expected future costs of servicing products. Additions to the reserve are based on management’s best estimate of probable liability. The Company considers a combination of factors including material and labor costs, regulatory requirements, and other judgments in determining the amount of the reserve. The reserve is reduced as costs are incurred to honor existing warranty and regulatory obligations.

As of September 30, 2017, the Company had accrued $5.7 million of estimated costs to bring certain NeoBLUE® phototherapy products into U.S. regulatory compliance. The Company's estimate of these costs is primarily based upon the number of units outstanding that may require repair and costs associated with shipping and replacing or repairing the product. During the second quarter of 2017, the Company began to incur costs associated with bringing the products back into compliance.

As of September 30, 2017, the Company had accrued $0.8 million of estimated costs related to a product recall. During the third quarter of 2017, the Company began to incur costs associated with addressing the matters that led to the recall of the product.

The details of activity in the warranty reserve are as follows (in thousands):

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2017			2016			2017			2016
Balance, beginning of period	$	14,139		$	10,858		$	10,670		$	10,386
Assumed through acquisitions	722			—			1,888			—
Additions charged to expense	(401		)	960			5,307			3,273
Reductions	(2,027		)	(819		)	(5,432		)	(2,660		)
Balance, end of period	$	12,433		$	10,999		$	12,433		$	10,999

The estimates the Company uses in projecting future product warranty costs may prove to be incorrect. Any future determination that product warranty reserves are understated could result in increases to cost of sales and reductions in operating profits and results of operations.

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Share-Based Compensation

9 Months Ended

Sep. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

Share-Based Compensation

As of September 30, 2017, the Company has two active share-based compensation plans, the 2011 Stock Awards Plan and the 2011 Employee Stock Purchase Plan. The terms of awards granted during the nine months ended September 30, 2017 and the methods for determining grant-date fair value of the awards are consistent with those described in the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016.

Details of share-based compensation expense are as follows (in thousands):

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2017		2016		2017		2016
Cost of revenue	$	52	$	50	$	173	$	169
Marketing and selling	171		169		356		622
Research and development	299		320		1,076		1,185
General and administrative	1,727		1,415		5,618		4,981
Total	$	2,249	$	1,954	$	7,223	$	6,957

As of September 30, 2017, unrecognized compensation expense related to the unvested portion of stock options and other stock awards was approximately $14.1 million, which is expected to be recognized over a weighted average period of 2.2 years.

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Other Income (Expense), net

9 Months Ended

Sep. 30, 2017

Other Income and Expenses [Abstract]

Other Income (Expense), net

Other Income (Expense), net

Other income (expense), net consists of (in thousands):

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2017			2016			2017			2016
Interest income	$	—		$	76		$	413		$	94
Interest expense	(1,042		)	(223		)	(3,291		)	(351		)
Foreign currency gain (loss)	1,123			(783		)	1,591			(282		)
Other income	69			37			19			127
Total other income (expense), net	$	150		$	(893	)	$	(1,268	)	$	(412	)

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Income Taxes

9 Months Ended

Sep. 30, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company recorded an expense for income tax of $17.2 million and $15.6 million for the three and nine months ended September 30, 2017, respectively. The effective tax rate was 198.0% and 650.4% for the three and nine months ended September 30, 2017, respectively.

The Company recorded provisions for income tax of $1.0 million and $7.6 million for the three and nine months ended September 30, 2016, respectively. The effective tax rate was 7.2% and 19.0% for the three and nine months ended September 30, 2016, respectively.

The Company's effective tax rate for the three and nine months ended September 30, 2017 substantially differed from the federal statutory tax rate of 35% primarily due to a non-cash charge to record a valuation allowance for a significant portion of the Company's deferred tax assets.

The Company regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, the Company considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. In evaluating the need for a valuation allowance, the Company considered its cumulative loss in recent years in the United States as a significant piece of negative evidence. As a result, in the third quarter the Company determined that the negative evidence outweighed the positive evidence as of September 30, 2017 and recorded a non-cash charge to income tax expense in the third quarter of fiscal year 2017 in the amount of $11.4 million to establish a valuation allowance against a significant portion of its U.S. deferred tax asset balance. This accounting treatment has no effect on the Company's ability to utilize U.S. deferred tax assets such as loss carryforwards and tax credits to reduce future cash tax payments to the extent of future taxable income.The realizable value of the deferred tax assets will be evaluated at each reporting period and the valuation allowance will be adjusted accordingly.

The Company recorded $0.3 million of net tax benefit related to unrecognized tax benefits for the nine months ended September 30, 2017, primarily due to the lapse of the applicable statute of limitations. Within the next twelve months, it is possible our uncertain tax benefit may change with a range of approximately zero to $1.2 million. Our tax returns remain open to examination as follows: U.S Federal, 2014 through 2016, U.S. States, 2013 through 2016, and significant foreign jurisdictions, 2013 through 2016.

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Restructuring Reserves

9 Months Ended

Sep. 30, 2017

Restructuring and Related Activities [Abstract]

Restructuring Reserves

Restructuring Reserves

Historically, the Company has completed multiple acquisitions of other companies and businesses. Following an acquisition the Company will, as it determines appropriate, initiate restructuring events to eliminate redundant costs to maintain a competitive cost structure. Restructuring expenses are related to permanent reductions in workforce and redundant facility closures.

The balance of the restructuring reserve is included in accrued liabilities on the accompanying condensed consolidated balance sheets. Employee termination benefits are included as a part of restructuring expenses.

Activity in the restructuring reserves for the nine months ended September 30, 2017 is as follows (in thousands):

	Personnel Related			Facility Related			Total
Balance at December 31, 2016	$	343		$	152		$	495
Additions	431			—			431
Reversals	(141		)	—			(141		)
Payments	(584		)	(73		)	(657		)
Balance at September 30, 2017	$	49		$	79		$	128

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Debt and Credit Arrangements

9 Months Ended

Sep. 30, 2017

Debt Disclosure [Abstract]

Debt and Credit Arrangements

Debt and Credit Arrangements

The Company has a Credit Agreement with JP Morgan Chase Bank ("JP Morgan") and Citibank, NA (“Citibank”). The Credit Agreement provides for an aggregate $150.0 million of secured revolving credit facility. In the third quarter of 2017, the Company exercised the right to increase the amount available under the facility by $75.0 million, bringing the aggregate revolving credit facility to $225.0 million. The Credit Agreement contains covenants, including covenants relating to maintenance of books and records, financial reporting and notification, compliance with laws, maintenance of properties and insurance, and limitations on guaranties, investments, issuance of debt, lease obligations and capital expenditures, and is secured by virtually all of the Company's assets. The Credit Agreement provides for events of default, including failure to pay any principal or interest when due, failure to perform or observe covenants, bankruptcy or insolvency events and the occurrence of a material adverse effect. The Company has no other significant credit facilities.

In addition to the customary restrictive covenants listed above, the Credit Agreement also contains financial covenants that require the Company to maintain a certain leverage ratio and fixed charge coverage ratio, each as defined in the Credit Agreement:

• Leverage Ratio, as defined, to be no higher than 2.75 to 1.00.

• Interest Coverage Ratio, as defined, to be at least 1.75 to 1.00 at all times.

At September 30, 2017, the Company was in compliance with the Leverage Ratio at 2.29 to 1.00 and the Interest Coverage Ratio at 14.28 to 1.00.

At September 30, 2017, the Company had $155.0 million outstanding under the Credit Agreement.

Pursuant to the terms of the Credit Agreement, the outstanding principal balance will bear interest at either (a) a fluctuating rate per annum equal to the Applicable Rate, as defined in the Credit Agreement, depending on our leverage ratio plus the higher of (i) the federal funds rate plus one-half of one percent per annum; (ii) the prime rate in effect on such a day; and (iii) the LIBOR rate plus one percent, or (b) a fluctuating rate per annum of LIBOR Rate plus the Applicable Rate, which ranges between 1.75% to 2.75%. The effective interest rate during the nine months ended September 30, 2017 was 3.49%. The Credit Agreement matures on September 23, 2021, at which time all principal amounts outstanding under the Credit Agreement will be due and payable.

Long-term debt consists of (in thousands):

	September 30, 2017			December 31, 2016
Revolving credit facility	$	155,000		$	140,000
Debt issuance costs	(765		)	—
Less: current portion of long-term debt	—			—
Total long-term debt	$	154,235		$	140,000

As of September 30, 2017, the carrying value of total debt approximated fair market value. The fair value of the Company's debt is considered a Level 2 measurement. See Note 16 to these Condensed Consolidated Financial Statements for additional discussion regarding the fair value measurement of debt.

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Segment, Customer and Geographic Information

9 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Segment, Customer and Geographic Information

Segment, Customer and Geographic Information

The Company operates in one reportable segment in which the Company provides healthcare products and services used for the screening, detection, treatment, monitoring and tracking of common medical ailments.

End-user customer base includes hospitals, clinics, laboratories, physicians, nurses, audiologists, and governmental agencies. Most of the Company's international sales are to distributors who resell products to end users or sub-distributors.

Revenue and long-lived asset information are as follows (in thousands):

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2017		2016		2017		2016
Consolidated Revenue:
United States	$	68,685	$	62,515	$	200,506	$	186,933
Foreign countries	53,958		28,391		169,025		87,260
Totals	$	122,643	$	90,906	$	369,531	$	274,193

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2017		2016		2017		2016
Revenue by End Market:
Neurology Products
Devices and Systems	$	42,207	$	39,332	$	122,009	$	121,461
Supplies	14,151		14,381		44,220		44,482
Services	3,010		3,131		8,753		8,794
Total Neurology Revenue	59,368		56,844		174,982		174,737
Newborn Care Products
Devices and Systems	16,785		16,171		58,360		46,455
Supplies	10,988		11,792		33,733		35,677
Services	5,893		6,099		16,288		17,324
Total Newborn Care Revenue	33,666		34,062		108,381		99,456
Otometrics Products
Devices and Systems	18,739		—		57,739		—
Supplies	9,789		—		22,449		—
Services	1,081		—		5,980		—
Total Otometrics Revenue	29,609		—		86,168		—
Total Revenue	$	122,643	$	90,906	$	369,531	$	274,193

	September 30, 2017		December 31, 2016
Property and equipment, net:
United States	$	8,519	$	7,024
Canada	5,098		4,941
Argentina	1,738		2,530
Ireland	3,011		2,121
Denmark	1,418		17
Other foreign countries	893		700
Totals	$	20,677	$	17,333

During the three and nine months ended September 30, 2017 and 2016, no single customer or foreign country contributed to more than 10% of revenue.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined under ASC 820 as the exit price associated with the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes the following three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value:

Level 1 - Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

The Company does not have any financial assets or liabilities measured at fair value on a recurring basis.

The following financial instruments are not measured at fair value on the Company’s consolidated balance sheet as of September 30, 2017 and December 31, 2016, but require disclosure of their fair values: cash and cash equivalents, accounts receivable, and accounts payable. The carrying value of these financial instruments approximates fair values because of their relatively short maturity.

In the third quarter of 2014, the Company listed its facility in Mundelein, Illinois for sale. This asset was measured at fair value less cost to sell as of September 30, 2014 based on market price and is classified as a Level 2 asset. The book value of this asset on June 30, 2014 was $3.6 million. The Company expensed $2.2 million during the third quarter of 2014 for this impairment. As of September 30, 2017, the Company is carrying the asset as held for sale in other current assets on the accompanying condensed consolidated balance sheet at a value of $1.4 million.

The Company also has contingent consideration associated with earn-outs from acquisitions. Contingent consideration liabilities are classified as Level 3 liabilities, as the Company uses unobservable inputs to value them, which is a probability-based income approach. Contingent consideration is classified as accrued liabilities on the condensed consolidated balance sheet. Subsequent changes in the fair value of contingent consideration liabilities are recorded within the Company's income statement as an operating expense.

	December 31, 2016		Additions		Payments			Adjustments			September 30, 2017
Liabilities:
Contingent consideration	$	3,043	$	693	$	(2,946	)	$	(542	)	$	248
Total	$	3,043	$	693	$	(2,946	)	$	(542	)	$	248

The significant unobservable inputs used in the fair value measurement of contingent consideration related to the acquisitions are annualized revenue forecasts developed by the Company’s management and the probability of achievement of those revenue forecasts. Significant changes in these unobservable inputs may result in a significant impact to the fair value measurement.

The Company's Level 2 securities are valued using third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spread, benchmark securities, prepayment/default projections based on historical data and other observable inputs. The Company validates the prices provided by its third-party pricing services by understanding the models used, obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming those securities traded in active markets. See Note 4 to these Condensed Consolidated Financial Statements for further information regarding the Company's financial instruments.

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Subsequents Events

9 Months Ended

Sep. 30, 2017

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On October 6, 2017, the Company acquired certain neurosurgery assets from Integra LifeSciences for $47.5 million in cash. As part of the acquisition, the Company acquired the monitoring products, fixed pressure shunts, a dural graft implant, EVD catheters and CSF collection systems.

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Basis Of Presentation (Policies)

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance. The standard's core principle is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard creates a five-step model to achieve its core principle: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction's price to the separate performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In addition, entities must disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative and quantitative disclosures are required about: (i) the entity's contracts with customers; (ii) the significant judgments, and changes in judgments, made in applying the guidance to those contracts; and (iii) any assets recognized from the costs to obtain or fulfill a contract with a customer. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 616) - Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to interim and annual periods beginning January 1, 2018. The standard allows entities to apply the standard retrospectively to each prior period presented (“full retrospective adoption”) or retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application (“modified retrospective adoption”). The Company plans to adopt this guidance on January 1, 2018, and is currently in the process of determining the impact of the new revenue recognition guidance on its revenue transactions, including any impacts on associated processes, systems, and internal controls. The Company's preliminary assessment indicates implementation of this standard will not have a material impact on financial results. The Company's evaluation has included determining whether the unit of account (i.e., performance obligations) will change as compared to current GAAP, as well as determining the standalone selling price of each performance obligation. Standalone selling prices under the new guidance may not be substantially different from the Company's current methodologies of establishing fair value on multiple element arrangements. The Company continues to evaluate the impact of this guidance and its subsequent amendments on the consolidated financial position, results of operations, and cash flows, and any preliminary assessments are subject to change.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330). This standard requires an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is estimated selling prices in the ordinary course of business, less reasonable predictable costs of completion, disposal, and transportation. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted ASU 2015-11 in January 2017 and no impact was recorded by the Company.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This standard requires a lessee to recognize the lease assets and lease liabilities arising from operating leases in the statement of financial position. Qualitative along with specific quantitative disclosures are required by lessees and lessors to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 including interim periods within those fiscal years. The Company is currently evaluating the impact that will result from adopting ASU 2016-02.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805). This update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisition (or disposals) of assets or businesses. The definition of a business affected many areas of accounting including acquisitions, disposals, goodwill, and consolidation. ASU 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those periods, and must be applied prospectively. The Company is currently evaluating the impact that will result from adopting ASU 2017-01.

Also in January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). This update modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Because these amendments eliminate Step 2 from the goodwill impairment test, they should reduce the cost and complexity of evaluating goodwill for impairment. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact that will result from adopting ASU 2017-04.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that year, and must be applied prospectively to an award modified on or after the adoption date. The Company will apply this guidance to modifications that occur on or after the effective date.

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Business Combinations (Tables)

9 Months Ended

Sep. 30, 2017

Business Combinations [Abstract]

Schedule of Preliminary Purchase Price Allocation

The following table summarizes the preliminary purchase price allocation of the fair value of the assets acquired and liabilities assumed at the date of acquisition, (in thousands):

Cash and cash equivalents	$	6,758
Accounts receivable	30,052
Inventories	23,403
Property and equipment	2,770
Intangible assets	75,755
Goodwill	58,941
Other assets	1,987
Accounts payable	(8,663		)
Accrued liabilities	(14,907		)
Deferred revenue	(767		)
Deferred income tax	(26,082		)
Total purchase price	$	149,247

Unaudited Pro forma Financial Information

The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the earliest period presented, nor is it intended to be a projection of future results.

Unaudited Pro forma Financial Information

(in thousands)

	Three Months Ended   September 30,					Nine Months Ended   September 30,
	2017			2016		2017			2016
Revenue	$	122,643		$	118,431	$	369,531		$	356,769
Net income (loss)	$	(6,113	)	$	3,494	$	(6,398	)	$	3,311
Earnings (loss) per share:
Basic	$	(0.19	)	$	0.11	$	(0.20	)	$	0.10
Diluted	$	(0.19	)	$	0.11	$	(0.20	)	$	0.10
Weighted average shares used in the calculation of earnings per share:
Basic	32,593			32,388		32,536			32,476
Diluted	32,593			32,981		32,536			33,077

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2017

Earnings Per Share [Abstract]

Earnings Per Share

The components of basic and diluted EPS are as follows (in thousands, except per share amounts):

	Three Months Ended   September 30,					Nine Months Ended   September 30,
	2017			2016		2017			2016
Net income (loss)	$	(8,513	)	$	13,313	$	(13,198	)	$	32,361
Weighted average common shares	32,593			32,388		32,536			32,476
Dilutive effect of stock based awards	—			593		—			601
Diluted Shares	32,593			32,981		32,536			33,077
Basic earnings (loss) per share	$	(0.26	)	$	0.41	$	(0.41	)	$	1.00
Diluted earnings (loss) per share	$	(0.26	)	$	0.40	$	(0.41	)	$	0.98
Shares excluded from calculation of diluted EPS	—			—		—			138

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Cash, Cash Equivalents, and Short-Term Investments (Tables)

9 Months Ended

Sep. 30, 2017

Investments, Debt and Equity Securities [Abstract]

Cash, Cash Equivalents and Investments

Cash, cash equivalents and short-term investments consisted of the following (in thousands):

	September 30, 2017		December 31, 2016
Cash and cash equivalents:
Cash	$	132,405	$	213,551
Short-term investments:
U.S. investment grade bonds	—		24,477
Foreign investment grade bonds	—		9,542
Total short-term investments	—		34,019
Total cash, cash equivalents and short-term investments	$	132,405	$	247,570

Investments by Investment Type

Short-term investments by investment type are as follows (in thousands):

	September 30, 2017								December 31, 2016
	Aggregated Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses		Aggregated Fair Value		Aggregated Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Aggregated Fair Value
U.S. investment grade bonds	—		—		—		—		24,531		—		(54		)	24,477
Foreign investment grade bonds	—		—		—		—		9,567		—		(25		)	9,542
Total short-term investments	$	—	$	—	$	—	$	—	$	34,098	$	—	$	(79	)	$	34,019

Investments by Contractual Maturity

Short-term investments by contractual maturity are as follows (in thousands):

	September 30, 2017		December 31, 2016
	Investments		Investments
Due in one year or less	$	—	$	21,655
Due after one year through five years	—		12,364
Total short-term investment	$	—	$	34,019

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Inventories (Tables)

9 Months Ended

Sep. 30, 2017

Inventory Disclosure [Abstract]

Summary of Inventories

Inventories consist of the following (in thousands):

	September 30, 2017			December 31, 2016
Raw materials and subassemblies	$	35,425		$	28,245
Work in process	1,950			1,507
Finished goods	45,832			34,908
Total inventories	83,207			64,660
Less: Non-current inventories	(13,885		)	(15,073		)
Inventories, current	$	69,322		$	49,587

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Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Amortization expense related to intangible assets with definite lives

The following table summarizes the components of gross and net intangible asset balances (in thousands):

	September 30, 2017										December 31, 2016
	Gross Carrying Amount		Accumulated Impairment			Accumulated Amortization			Net Book Value		Gross Carrying Amount		Accumulated Impairment			Accumulated Amortization			Net Book Value
Intangible assets with definite lives:
Technology	$	90,653	$	—		$	(40,465	)	$	50,188	$	64,563	$	—		$	(34,683	)	$	29,880
Customer related	80,989		—			(25,480		)	55,509		38,087		—			(17,610		)	20,477
Trade names	43,990		(3,460		)	(11,790		)	28,740		32,106		(3,290		)	(7,135		)	21,681
Internally developed software	15,722		—			(11,685		)	4,037		14,978		—			(10,220		)	4,758
Patents	2,759		—			(2,452		)	307		2,620		—			(2,251		)	369
Definite-lived intangible assets	$	234,113	$	(3,460	)	$	(91,872	)	$	138,781	$	152,354	$	(3,290	)	$	(71,899	)	$	77,165

Amortization expense

Amortization expense related to intangible assets with definite lives was as follows (in thousands):

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2017		2016		2017		2016
Technology	$	1,614	$	863	$	4,731	$	2,571
Customer related	2,264		848		6,627		2,495
Trade names	1,481		1,139		4,385		3,176
Internally developed software	504		602		1,511		1,618
Patents	29		28		85		84
Total amortization	$	5,892	$	3,480	$	17,339	$	9,944

Expected amortization expense related to amortizable intangible assets

Expected amortization expense related to amortizable intangible assets is as follows (in thousands):

Three months ending December 31, 2017	$	5,403
2018	21,383
2019	20,220
2020	18,018
2021	16,572
2022	12,806
Thereafter	44,379
Total expected amortization expense	$	138,781

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Goodwill (Tables)

9 Months Ended

Sep. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Carrying amount of Goodwill

The carrying amount of goodwill and the changes in the balance are as follows (in thousands):

December 31, 2016	$	113,112
Acquisitions/Purchase accounting adjustments	57,680
Foreign currency translation	11,881
September 30, 2017	$	182,673

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Property and Equipment, net (Tables)

9 Months Ended

Sep. 30, 2017

Property, Plant and Equipment [Abstract]

Property and Equipment net

Property and equipment, net consist of the following (in thousands):

	September 30, 2017			December 31, 2016
Land	$	2,833		$	2,856
Buildings	5,205			5,219
Leasehold improvements	3,706			2,386
Equipment and furniture	20,987			18,398
Computer software and hardware	9,648			9,100
Demonstration and loaned equipment	11,865			11,393
	54,244			49,352
Accumulated depreciation	(33,567		)	(32,019		)
Total	$	20,677		$	17,333

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Reserve for Product Warranties (Tables)

9 Months Ended

Sep. 30, 2017

Product Warranties Disclosures [Abstract]

Reserve for Product Warranties

The details of activity in the warranty reserve are as follows (in thousands):

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2017			2016			2017			2016
Balance, beginning of period	$	14,139		$	10,858		$	10,670		$	10,386
Assumed through acquisitions	722			—			1,888			—
Additions charged to expense	(401		)	960			5,307			3,273
Reductions	(2,027		)	(819		)	(5,432		)	(2,660		)
Balance, end of period	$	12,433		$	10,999		$	12,433		$	10,999

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Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation Expense

Details of share-based compensation expense are as follows (in thousands):

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2017		2016		2017		2016
Cost of revenue	$	52	$	50	$	173	$	169
Marketing and selling	171		169		356		622
Research and development	299		320		1,076		1,185
General and administrative	1,727		1,415		5,618		4,981
Total	$	2,249	$	1,954	$	7,223	$	6,957

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Other Income (Expense), net (Tables)

9 Months Ended

Sep. 30, 2017

Other Income and Expenses [Abstract]

Other Income (Expense), net

Other income (expense), net consists of (in thousands):

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2017			2016			2017			2016
Interest income	$	—		$	76		$	413		$	94
Interest expense	(1,042		)	(223		)	(3,291		)	(351		)
Foreign currency gain (loss)	1,123			(783		)	1,591			(282		)
Other income	69			37			19			127
Total other income (expense), net	$	150		$	(893	)	$	(1,268	)	$	(412	)

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Restructuring Reserves (Tables)

9 Months Ended

Sep. 30, 2017

Restructuring and Related Activities [Abstract]

Detail of Activity in the Restructuring Reserve

Activity in the restructuring reserves for the nine months ended September 30, 2017 is as follows (in thousands):

	Personnel Related			Facility Related			Total
Balance at December 31, 2016	$	343		$	152		$	495
Additions	431			—			431
Reversals	(141		)	—			(141		)
Payments	(584		)	(73		)	(657		)
Balance at September 30, 2017	$	49		$	79		$	128

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Debt and Credit Arrangements (Tables)

9 Months Ended

Sep. 30, 2017

Debt Disclosure [Abstract]

Schedule of Long-term debt

Long-term debt consists of (in thousands):

	September 30, 2017			December 31, 2016
Revolving credit facility	$	155,000		$	140,000
Debt issuance costs	(765		)	—
Less: current portion of long-term debt	—			—
Total long-term debt	$	154,235		$	140,000

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Segment, Customer and Geographic Information (Tables)

9 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Revenue and Long-lived Asset Information by Geographic Region

Revenue and long-lived asset information are as follows (in thousands):

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2017		2016		2017		2016
Consolidated Revenue:
United States	$	68,685	$	62,515	$	200,506	$	186,933
Foreign countries	53,958		28,391		169,025		87,260
Totals	$	122,643	$	90,906	$	369,531	$	274,193

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2017		2016		2017		2016
Revenue by End Market:
Neurology Products
Devices and Systems	$	42,207	$	39,332	$	122,009	$	121,461
Supplies	14,151		14,381		44,220		44,482
Services	3,010		3,131		8,753		8,794
Total Neurology Revenue	59,368		56,844		174,982		174,737
Newborn Care Products
Devices and Systems	16,785		16,171		58,360		46,455
Supplies	10,988		11,792		33,733		35,677
Services	5,893		6,099		16,288		17,324
Total Newborn Care Revenue	33,666		34,062		108,381		99,456
Otometrics Products
Devices and Systems	18,739		—		57,739		—
Supplies	9,789		—		22,449		—
Services	1,081		—		5,980		—
Total Otometrics Revenue	29,609		—		86,168		—
Total Revenue	$	122,643	$	90,906	$	369,531	$	274,193

	September 30, 2017		December 31, 2016
Property and equipment, net:
United States	$	8,519	$	7,024
Canada	5,098		4,941
Argentina	1,738		2,530
Ireland	3,011		2,121
Denmark	1,418		17
Other foreign countries	893		700
Totals	$	20,677	$	17,333

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Changes in fair value of contingent consideration

Subsequent changes in the fair value of contingent consideration liabilities are recorded within the Company's income statement as an operating expense.

	December 31, 2016		Additions		Payments			Adjustments			September 30, 2017
Liabilities:
Contingent consideration	$	3,043	$	693	$	(2,946	)	$	(542	)	$	248
Total	$	3,043	$	693	$	(2,946	)	$	(542	)	$	248

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Business Combinations - Narrative (Details) - USD ($) $ in Thousands				3 Months Ended			9 Months Ended
	Jan. 03, 2017	Jul. 06, 2016	Mar. 02, 2016	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Business Acquisition [Line Items]
Revenues				$ 122,643		$ 90,906		$ 369,531	$ 274,193
Loss from operations				8,540		15,238		3,667	40,378
Goodwill				182,673			$ 182,673	182,673		$ 113,112
Otometric
Business Acquisition [Line Items]
Purchase price paid in cash to acquire entity	$ 149,200
Net working capital adjustment	4,200
Revenues							86,200
Loss from operations							$ (4,600)
Goodwill	$ 58,941
Otometric | Pro forma
Business Acquisition [Line Items]
Pre-tax acquisition-related costs				$ 2,400				$ 6,800
Pre-tax amortization of intangible assets						2,000			6,000
Interest expense						$ 1,000			$ 3,000
RetCam
Business Acquisition [Line Items]
Purchase price paid in cash to acquire entity		$ 10,600
Contingent consideration earn-out		2,000
Additional consideration paid					$ 1,100
Tangible assets		7,200
Intangible assets		$ 4,900
Weighted average life of intangible assets		5 years
Goodwill		$ 1,700
Net liabilities		$ 2,000
NeuroQuest
Business Acquisition [Line Items]
Purchase price paid in cash to acquire entity			$ 4,600
Contingent consideration earn-out			500
Tangible assets			500
Intangible assets			$ 1,300
Weighted average life of intangible assets			5 years
Goodwill			$ 3,500
Net liabilities			$ 100

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Business Combinations - Preliminary Purchase Price Allocation (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Jan. 03, 2017	Dec. 31, 2016
Business Acquisition [Line Items]
Goodwill	$ 182,673		$ 113,112
Otometric
Business Acquisition [Line Items]
Cash and cash equivalents		$ 6,758
Accounts receivable		30,052
Inventories		23,403
Property and equipment		2,770
Intangible assets		75,755
Goodwill		58,941
Other assets		1,987
Accounts payable		(8,663)
Accrued liabilities		(14,907)
Deferred revenue		(767)
Deferred income tax		(26,082)
Total purchase price		$ 149,247

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Business Combinations - Unaudited Pro forma Financial Information (Details) - Otometric - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Business Acquisition [Line Items]
Revenue	$ 122,643	$ 118,431	$ 369,531	$ 356,769
Net income (loss)	$ (6,113)	$ 3,494	$ (6,398)	$ 3,311
Earnings (loss) per share:
Basic (usd per share)	$ (0.19)	$ 0.11	$ (0.20)	$ 0.10
Diluted (usd per share)	$ (0.19)	$ 0.11	$ (0.20)	$ 0.10
Weighted average shares used in the calculation of earnings per share:
Basic (shares)	32,593	32,388	32,536	32,476
Diluted (shares)	32,593	32,981	32,536	33,077

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Earnings Per Share [Abstract]
Net income (loss)	$ (8,513)	$ 13,313	$ (13,198)	$ 32,361
Weighted average common shares (in shares)	32,593	32,388	32,536	32,476
Dilutive effect of stock based awards (in shares)	0	593	0	601
Diluted Shares (in shares)	32,593	32,981	32,536	33,077
Basic earnings per share (dollars per share)	$ (0.26)	$ 0.41	$ (0.41)	$ 1.00
Diluted earnings per share (dollars per share)	$ (0.26)	$ 0.40	$ (0.41)	$ 0.98
Diluted earnings per share (in shares)	0	0	0	138

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Cash, Cash Equivalents, and Short-Term Investments (Details) $ in Thousands	Sep. 30, 2017 USD ($) investment	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)
Cash and Cash Equivalents [Line Items]
Cash	$ 132,405	$ 213,551	$ 81,073	$ 82,469
Schedule of Available-for-sale Securities [Line Items]
Short-term investments	0	34,019
Total cash, cash equivalents and short-term investments	$ 132,405	247,570
Number of investments have been in a continuous loss position greater than one year | investment	0
U.S. investment grade bonds
Schedule of Available-for-sale Securities [Line Items]
Short-term investments	$ 0	24,477
Foreign investment grade bonds
Schedule of Available-for-sale Securities [Line Items]
Short-term investments	0	9,542
Cash
Cash and Cash Equivalents [Line Items]
Cash	$ 132,405	$ 213,551

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Cash, Cash Equivalents, and Short-Term Investments - Schedule of Short-term Investments (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Aggregated Cost Basis	$ 0	$ 34,098
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	(79)
Aggregated Fair Value	0	34,019
U.S. investment grade bonds
Schedule of Available-for-sale Securities [Line Items]
Aggregated Cost Basis	0	24,531
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	(54)
Aggregated Fair Value	0	24,477
Foreign investment grade bonds
Schedule of Available-for-sale Securities [Line Items]
Aggregated Cost Basis	0	9,567
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	(25)
Aggregated Fair Value	$ 0	$ 9,542

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Cash, Cash Equivalents, and Short-Term Investments - Schedule of Short-term Investments Contractual Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]
Due in one year or less	$ 0	$ 21,655
Due after one year through five years	0	12,364
Total short-term investment	$ 0	$ 34,019

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Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Summary of Inventories
Raw materials and subassemblies	$ 35,425	$ 28,245
Work in process	1,950	1,507
Finished goods	45,832	34,908
Total inventories	83,207	64,660
Less: Non-current inventories	(13,885)	(15,073)
Inventories, current	$ 69,322	$ 49,587

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Intangible Assets - Components of Gross and Net Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 234,113	$ 152,354
Accumulated Impairment	(3,460)	(3,290)
Accumulated Amortization	(91,872)	(71,899)
Net Book Value	138,781	77,165
Technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	90,653	64,563
Accumulated Amortization	(40,465)	(34,683)
Net Book Value	50,188	29,880
Customer related
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	80,989	38,087
Accumulated Amortization	(25,480)	(17,610)
Net Book Value	55,509	20,477
Trade names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	43,990	32,106
Accumulated Impairment	(3,460)	(3,290)
Accumulated Amortization	(11,790)	(7,135)
Net Book Value	28,740	21,681
Internally developed software
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	15,722	14,978
Accumulated Amortization	(11,685)	(10,220)
Net Book Value	4,037	4,758
Patents
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	2,759	2,620
Accumulated Amortization	(2,452)	(2,251)
Net Book Value	$ 307	$ 369

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Intangible Assets - Narrative (Details) $ in Millions	9 Months Ended
	Sep. 30, 2017 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	11 years
Developed Technology Rights [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	14 years
Customer related
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	10 years
Internally developed software
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	6 years
Costs incurred for development of internal use computer software	$ 13.3
Costs incurred for development of software to be sold	$ 2.2
Trade names
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	7 years
Patents
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	13 years

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Intangible Assets - Schedule of Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Finite-Lived Intangible Assets [Line Items]
Total amortization	$ 5,892	$ 3,480	$ 17,339	$ 9,944
Technology
Finite-Lived Intangible Assets [Line Items]
Total amortization	1,614	863	4,731	2,571
Customer related
Finite-Lived Intangible Assets [Line Items]
Total amortization	2,264	848	6,627	2,495
Trade names
Finite-Lived Intangible Assets [Line Items]
Total amortization	1,481	1,139	4,385	3,176
Internally developed software
Finite-Lived Intangible Assets [Line Items]
Total amortization	504	602	1,511	1,618
Patents
Finite-Lived Intangible Assets [Line Items]
Total amortization	$ 29	$ 28	$ 85	$ 84

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Intangible Assets - Schedule of Expected Amortization Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Expected annual amortization expense related to amortizable intangible assets
Three months ending December 31, 2017	$ 5,403
2018	21,383
2019	20,220
2020	18,018
2021	16,572
2022	12,806
Thereafter	44,379
Net Book Value	$ 138,781	$ 77,165

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Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2017 USD ($)
Carrying amount of goodwill
December 31, 2016	$ 113,112
Acquisitions/Purchase accounting adjustments	57,680
Foreign currency translation	11,881
September 30, 2017	$ 182,673

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Property and Equipment, net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 54,244		$ 54,244		$ 49,352
Accumulated depreciation	(33,567)		(33,567)		(32,019)
Total	20,677		20,677		17,333
Depreciation	1,100	$ 900	3,400	$ 2,900
Land
Property, Plant and Equipment [Line Items]
Property and equipment, gross	2,833		2,833		2,856
Buildings
Property, Plant and Equipment [Line Items]
Property and equipment, gross	5,205		5,205		5,219
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	3,706		3,706		2,386
Equipment and furniture
Property, Plant and Equipment [Line Items]
Property and equipment, gross	20,987		20,987		18,398
Computer software and hardware
Property, Plant and Equipment [Line Items]
Property and equipment, gross	9,648		9,648		9,100
Demonstration and loaned equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 11,865		$ 11,865		$ 11,393

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Property and Equipment, Net (Details Textual) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Property, Plant and Equipment [Abstract]
Depreciation expense of property and equipment	$ 1.1	$ 0.9	$ 3.4	$ 2.9

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Reserve for Product Warranties - Narrative (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Product Warranties Disclosures [Abstract]
Product warranty period (in years)	1 year
Product Liability Contingency [Line Items]
Accrual of estimated costs	$ 12,433	$ 14,139	$ 10,670	$ 10,999	$ 10,858	$ 10,386
Certain NeoBLUE Phototherapy Products
Product Liability Contingency [Line Items]
Accrual of estimated costs	5,700
Product Related Recall
Product Liability Contingency [Line Items]
Accrual of estimated costs	$ 800

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Reserve for Product Warranties - Schedule of Warranty Reserve (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Reserve for Product Warranties
Balance, beginning of period	$ 14,139	$ 10,858	$ 10,670	$ 10,386
Assumed through acquisitions	722	0	1,888	0
Additions charged to expense	(401)	960	5,307	3,273
Reductions	(2,027)	(819)	(5,432)	(2,660)
Balance, end of period	$ 12,433	$ 10,999	$ 12,433	$ 10,999

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Share-Based Compensation - Narrative (Details) $ in Millions	9 Months Ended
	Sep. 30, 2017 USD ($) plan
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Number of active share based compensation plans | plan	2
Unrecognized compensation expense related to unvested portion of stock options | $	$ 14.1
Weighted average period of recognition of unrecognized compensation expense	2 years 2 months

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Share-Based Compensation - Schedule of Share-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 2,249	$ 1,954	$ 7,223	$ 6,957
Cost of revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	52	50	173	169
Marketing and selling
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	171	169	356	622
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	299	320	1,076	1,185
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 1,727	$ 1,415	$ 5,618	$ 4,981

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Other Income (Expense), net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Other expense, net
Interest income	$ 0	$ 76	$ 413	$ 94
Interest expense	(1,042)	(223)	(3,291)	(351)
Foreign currency gain (loss)	1,123	(783)	1,591	(282)
Other income	69	37	19	127
Total other income (expense), net	$ 150	$ (893)	$ (1,268)	$ (412)

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Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Provision for income tax	$ 17,203,000	$ 1,032,000	$ 15,597,000	$ 7,605,000
Effective income tax rate	198.00%	7.20%	650.40%	19.00%
Statutory tax rate			35.00%
Valuation allowance established against deferred tax asset	$ 11,400,000
Unrecognized Tax Benefits, Reduction Resulting from Lapse of Applicable Statute of Limitations			$ 300,000
Worldwide pre-tax (losses) income	8,690,000	$ 14,345,000	2,399,000	$ 39,966,000
Minimum
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit	0		0
Maximum
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit	$ 1,200,000		$ 1,200,000

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Restructuring Reserves (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2017 USD ($)
Detail of activity in the restructuring reserve
Beginning balance	$ 495
Additions	431
Reversals	(141)
Payments	(657)
Ending balance	128
Personnel Related
Detail of activity in the restructuring reserve
Beginning balance	343
Additions	431
Reversals	(141)
Payments	(584)
Ending balance	49
Facility Related
Detail of activity in the restructuring reserve
Beginning balance	152
Additions	0
Reversals	0
Payments	(73)
Ending balance	$ 79

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Debt and Credit Arrangements - Narrative (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)
Line of Credit Facility [Line Items]
Revolving credit facility	$ 154,235,000	$ 154,235,000		$ 140,000,000
Revolving credit facility | Line of Credit
Line of Credit Facility [Line Items]
Revolving credit facility	155,000,000	155,000,000		$ 140,000,000
Credit Agreement | Citibank, National Association
Line of Credit Facility [Line Items]
Aggregate secured revolving credit facility	225,000,000.0	$ 225,000,000.0	$ 150,000,000
Increase in credit facility	$ 75,000,000
Leverage Ratio	2.29	2.29
Interest Coverage Ratio	14.28	14.28
All-in rate	3.49%	3.49%
Credit Agreement | Citibank, National Association | Federal Funds Rate
Line of Credit Facility [Line Items]
Interest rate		0.50%
Credit Agreement | Citibank, National Association | LIBOR rate
Line of Credit Facility [Line Items]
Interest rate		1.00%
Credit Agreement | Citibank, National Association | Maximum
Line of Credit Facility [Line Items]
Leverage Ratio	2.75	2.75
Credit Agreement | Citibank, National Association | Maximum | LIBOR rate
Line of Credit Facility [Line Items]
Interest rate		275.00%
Credit Agreement | Citibank, National Association | Minimum
Line of Credit Facility [Line Items]
Interest Coverage Ratio	1.75	1.75
Credit Agreement | Citibank, National Association | Minimum | LIBOR rate
Line of Credit Facility [Line Items]
Interest rate		175.00%

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Debt and Credit Arrangements - Schedule of Long-term debt (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Revolving credit facility	$ 154,235	$ 140,000
Debt issuance costs	(765)	0
Less: current portion of long-term debt	0	0
Total long-term debt	154,235	140,000
Revolving credit facility | Line of Credit
Debt Instrument [Line Items]
Revolving credit facility	$ 155,000	$ 140,000

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Segment, Customer and Geographic Information - Narrative (Details)	9 Months Ended
	Sep. 30, 2017 segment
Segment Reporting [Abstract]
Number of reportable segments (segments)	1

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Segment, Customer and Geographic Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Consolidated Revenue:
Revenue	$ 122,643	$ 90,906	$ 369,531	$ 274,193
Revenue by End Market:
Total Revenue	122,643	90,906	369,531	274,193
Property and equipment, net:
Property and equipment, net	20,677		20,677		$ 17,333
Neurology Products
Revenue by End Market:
Total Revenue	59,368	56,844	174,982	174,737
Neurology Products | Devices and Systems
Revenue by End Market:
Total Revenue	42,207	39,332	122,009	121,461
Neurology Products | Supplies
Revenue by End Market:
Total Revenue	14,151	14,381	44,220	44,482
Neurology Products | Services
Revenue by End Market:
Total Revenue	3,010	3,131	8,753	8,794
Newborn Care Products
Revenue by End Market:
Total Revenue	33,666	34,062	108,381	99,456
Newborn Care Products | Devices and Systems
Revenue by End Market:
Total Revenue	16,785	16,171	58,360	46,455
Newborn Care Products | Supplies
Revenue by End Market:
Total Revenue	10,988	11,792	33,733	35,677
Newborn Care Products | Services
Revenue by End Market:
Total Revenue	5,893	6,099	16,288	17,324
Otometrics Products
Revenue by End Market:
Total Revenue	29,609	0	86,168	0
Otometrics Products | Devices and Systems
Revenue by End Market:
Total Revenue	18,739	0	57,739	0
Otometrics Products | Supplies
Revenue by End Market:
Total Revenue	9,789	0	22,449	0
Otometrics Products | Services
Revenue by End Market:
Total Revenue	1,081	0	5,980	0
United States
Consolidated Revenue:
Revenue	68,685	62,515	200,506	186,933
Property and equipment, net:
Property and equipment, net	8,519		8,519		7,024
Foreign countries
Consolidated Revenue:
Revenue	53,958	$ 28,391	169,025	$ 87,260
Property and equipment, net:
Property and equipment, net	893		893		700
Canada
Property and equipment, net:
Property and equipment, net	5,098		5,098		4,941
Argentina
Property and equipment, net:
Property and equipment, net	1,738		1,738		2,530
Ireland
Property and equipment, net:
Property and equipment, net	3,011		3,011		2,121
Denmark
Property and equipment, net:
Property and equipment, net	$ 1,418		$ 1,418		$ 17

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Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2017	Sep. 30, 2016	Jun. 30, 2014
Long Lived Assets Held-for-sale [Line Items]
Loss on disposal of property and equipment		$ 14	$ (21)
Mundelein Facility | Level II
Long Lived Assets Held-for-sale [Line Items]
Asset held-for-sale book value				$ 3,600
Loss on disposal of property and equipment	$ 2,200
Asset held-for-sale at fair value		$ 1,400

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Fair Value Measurements - Schedule of Contingent Consideration Liabilities (Details) - Level III $ in Thousands	9 Months Ended
	Sep. 30, 2017 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Contingent consideration, beginning balance	$ 3,043
Additions	693
Payments	(2,946)
Adjustments	(542)
Contingent consideration, ending balance	248
Contingent consideration
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Contingent consideration, beginning balance	3,043
Additions	693
Payments	(2,946)
Adjustments	(542)
Contingent consideration, ending balance	$ 248

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Subsequent Events (Details) $ in Millions	Oct. 06, 2017 USD ($)
Subsequent Event
Subsequent Event [Line Items]
Payments to acquire neurosurgery assets	$ 47.5