Restatement of the Consolidated Financial Statements (Tables)

12 Months Ended

Dec. 31, 2012

Text Block [Abstract]

Adjustments to Previously Filed Consolidated Income Statements

The results of the adjustments to the Company’s previously filed consolidated statements of operations detailed above are summarized in the tables below. The tax effect of the adjustments is estimated based on the Company’s effective tax rate.

	Year Ended December 31, 2012
				Adjustments by Category
(U.S. Dollars, in thousands)	Previously Reported			Distributor Revenue			Inventory Reserves			Royalties			Other			Total Adjustments			Restated
Net sales	$	462,320		$	(14,777	)	$	—		$	—		$	38		$	(14,739	)	$	447,581
Cost of sales		86,492			(2,032	)		5,647			8,190			(44	)		11,761			98,253
Gross profit		375,828			(12,745	)		(5,647	)		(8,190	)		82			(26,500	)		349,328
Operating expenses
Sales and marketing		200,343			(6,629	)		—			(8,190	)		1,607			(13,212	)		187,131
General and administrative		53,827			(2	)		—			—			(434	)		(436	)		53,391
Research and development		28,577			—			—			—			—			—			28,577
Amortization of intangibles assets		2,098			—			—			—			200			200			2,298
Charges related to U.S. Government resolutions		1,973			—			—			—			(678	)		(678	)		1,295
		286,818			(6,631	)		—			(8,190	)		695			(14,126	)		272,692
Operating income		89,010			(6,114	)		(5,647	)		—			(613	)		(12,374	)		76,636
Other income and (expense)		(6,282	)		—			—			—			(166	)		(166	)		(6,448	)
Income before income taxes		82,728			(6,114	)		(5,647	)		—			(779	)		(12,540	)		70,188
Income tax expense		(28,792	)		1,782			1,645			—			227			3,654			(25,138	)
Net income from continuing operations, net of tax	$	53,936		$	(4,332	)	$	(4,002	)	$	—		$	(552	)	$	(8,886	)	$	45,050

	Year Ended December 31, 2011
				Adjustments by Category
(U.S. Dollars, in thousands)	Previously Reported			Distributor Revenue			Inventory Reserves			Royalties			Other			Total Adjustments			Restated
Net sales	$	470,121		$	(29,135	)	$	—		$	—		$	985		$	(28,150	)	$	441,971
Cost of sales		92,619			(8,289	)		3,377			7,713			107			2,908			95,527
Gross profit		377,502			(20,846	)		(3,377	)		(7,713	)		878			(31,058	)		346,444
Operating expenses
Sales and marketing		200,145			(1,216	)		—			(7,713	)		2,295			(6,634	)		193,511
General and administrative		64,374			—			—			—			107			107			64,481
Research and development		22,861			—			—			—			—			—			22,861
Amortization of intangibles assets		2,350			—			—			—			200			200			2,550
Charges related to U.S. Government resolutions		56,463			—			—			—			678			678			57,141
		346,193			(1,216	)		—			(7,713	)		3,280			(5,649	)		340,544
Operating income		31,309			(19,630	)		(3,377	)		—			(2,402	)		(25,409	)		5,900
Other income and (expense)		(11,868	)		—			—			—			3,915			3,915			(7,953	)
Income (loss) before income taxes		19,441			(19,630	)		(3,377	)		—			1,513			(21,494	)		(2,053	)
Income tax expense		(21,181	)		6,408			1,102			—			(494	)		7,016			(14,165	)
Net loss from continuing operations, net of tax	$	(1,740	)	$	(13,222	)	$	(2,275	)	$	—		$	1,019		$	(14,478	)	$	(16,218	)

	Year Ended December 31, 2010
				Adjustments by Category
(U.S. Dollars, in thousands)	Previously Reported			Distributor Revenue			Inventory Reserves			Royalties			Other			Total Adjustments			Restated
Net sales	$	460,629		$	2,088		$	—		$	—		$	(146	)	$	1,942		$	462,571
Cost of sales		90,461			(323	)		2,281			5,386			(712	)		6,632			97,093
Gross profit		370,168			2,411			(2,281	)		(5,386	)		566			(4,690	)		365,478
Operating expenses
Sales and marketing		200,835			(275	)		—			(5,386	)		939			(4,722	)		196,113
General and administrative		72,912			—			—			—			98			98			73,010
Research and development		27,958			—			—			—			—			—			27,958
Amortization of intangibles assets		2,213			—			—			—			200			200			2,413
Charges related to U.S. Government resolutions		—			—			—			—			—			—			—
		303,918			(275	)		—			(5,386	)		1,237			(4,424	)		299,494
Operating income		66,250			2,686			(2,281	)		—			(671	)		(266	)		65,984
Other income and (expense)		(15,886	)		—			—			—			4,930			4,930			(10,956	)
Income before income taxes		50,364			2,686			(2,281	)		—			4,259			4,664			55,028
Income tax expense		(22,606	)		(821	)		697			—			(1,301	)		(1,425	)		(24,031	)
Net income from continuing operations, net of tax	$	27,758		$	1,865		$	(1,584	)	$	—		$	2,958		$	3,239		$	30,997

Effects of Restatements on Consolidated Balance Sheet

The effects of the restatements on the Company’s consolidated balance sheet as of December 31, 2012 are as follows:

	As of December 31, 2012
(U.S. Dollars, in thousands except share and per share data)	Previously Reported		Adjustments			Restated
Assets
Current assets:
Cash and cash equivalents	$	31,055	$	—		$	31,055
Restricted cash		21,314		—			21,314
Trade accounts receivable, less allowances of $13,543		150,316		(43,004	)		107,312
Inventories		88,744		(5,371	)		83,373
Deferred income taxes		16,959		16,491			33,450
Escrow receivable		—		—			—
Prepaid expenses and other current assets		32,056		2,023			34,079
Assets held for sale		—		—			—
Total current assets		340,444		(29,861	)		310,583
Property, plant and equipment, net		51,362		2,473			53,835
Patents and other intangible assets, net		6,880		410			7,290
Goodwill		74,388		—			74,388
Deferred income taxes		19,904		(1,023	)		18,881
Other long-term assets		11,303		(3,383	)		7,920
Total assets	$	504,281	$	(31,384	)	$	472,897
Liabilities and shareholders’ equity
Current liabilities:
Bank borrowings	$	16	$	—		$	16
Current portion of long-term debt		—		—			—
Trade accounts payable		21,812		763			22,575
Accrued charges related to U.S. Government resolutions		—		—			—
Other current liabilities		46,969		(7,375	)		39,594
Liabilities held for sale		—		—			—
Total current liabilities		68,797		(6,612	)		62,185
Long-term debt		20,000		—			20,000
Deferred income taxes		11,456		—			11,456
Other long-term liabilities		4,930		6,494			11,424
Total liabilities		105,183		(118	)		105,065
Contingencies (Note 17)
Shareholders’ equity
Common shares $0.10 par value; 50,000,000 shares authorized; 19,339,329 issued and outstanding		1,934		—			1,934
Additional paid-in capital		246,111		195			246,306
Retained earnings		148,549		(33,702	)		114,847
Accumulated other comprehensive income		2,504		2,241			4,745
Total shareholders’ equity		399,098		(31,266	)		367,832
Total liabilities and shareholders’ equity	$	504,281	$	(31,384	)	$	472,897

The effects of the restatements on the Company’s consolidated balance sheet as of December 31, 2011 are as follows:

	As of December 31, 2011
(U.S. Dollars, in thousands except share and per share data)	Previously Reported		Adjustments			Restated
Assets
Current assets:
Cash and cash equivalents	$	33,207	$	—		$	33,207
Restricted cash		45,476		—			45,476
Trade accounts receivable, less allowances of $9,341		132,828		(32,940	)		99,888
Inventories		82,969		(1,441	)		81,528
Deferred income taxes		16,349		19,964			36,313
Escrow receivable		41,537		—			41,537
Prepaid expenses and other current assets		26,069		(4,070	)		21,999
Assets held for sale		171,185		—			171,185
Total current assets		549,620		(18,487	)		531,133
Property, plant and equipment, net		43,368		2,769			46,137
Patents and other intangible assets, net		8,236		610			8,846
Goodwill		73,094		—			73,094
Deferred income taxes		18,584		(1,843	)		16,741
Other long-term assets		11,570		(2,141	)		9,429
Total assets	$	704,472	$	(19,092	)	$	685,380
Liabilities and shareholders’ equity
Current liabilities:
Bank borrowings	$	1,318	$	—		$	1,318
Current portion of long-term debt		17,500		—			17,500
Trade accounts payable		16,488		1,743			18,231
Accrued charges related to U.S. Government resolutions		82,500		638			83,138
Other current liabilities		45,327		(4,491	)		40,836
Liabilities held for sale		22,676		—			22,676
Total current liabilities		185,809		(2,110	)		183,699
Long-term debt		191,195		—			191,195
Deferred income taxes		9,778					9,778
Other long-term liabilities		2,519		6,115			8,634
Total liabilities		389,301		4,005			393,306
Contingencies (Note 17)
Shareholders’ equity
Common shares $0.10 par value; 50,000,000 shares authorized; 18,465,444 issued and outstanding		1,846		—			1,846
Additional paid-in capital		214,310		195			214,505
Retained earnings		97,254		(25,245	)		72,009
Accumulated other comprehensive income		1,761		1,953			3,714
Total shareholders’ equity		315,171		(23,097	)		292,074
Total liabilities and shareholders’ equity	$	704,472	$	(19,092	)	$	685,380

Effects of Restatements of Consolidated Statement of Operations and Comprehensive Income (Loss)

The effects of the restatements on the Company’s consolidated statement of operations and comprehensive income for the year ended December 31, 2012 are as follows:

	Year Ended December 31, 2012
(U.S. Dollars, in thousands, except share and per share data)	Previously Reported			Adjustments			Restated
Product sales	$	415,850			(14,811	)	$	401,039
Marketing service fees		46,470			72			46,542
Net sales		462,320			(14,739	)		447,581
Cost of sales		86,492			11,761			98,253
Gross profit		375,828			(26,500	)		349,328
Operating expenses
Sales and marketing		200,343			(13,212	)		187,131
General and administrative		53,827			(436	)		53,391
Research and development		28,577			—			28,577
Amortization of intangible assets		2,098			200			2,298
Charges related to U.S. Government resolutions (Note 17)		1,973			(678	)		1,295
		286,818			(14,126	)		272,692
Operating income		89,010			(12,374	)		76,636
Other income and (expense)
Interest expense, net		(4,577	)		(166	)		(4,743	)
Other expense		(1,705	)		—			(1,705	)
		(6,282	)		(166	)		(6,448	)
Income before income taxes		82,728			(12,540	)		70,188
Income tax expense		(28,792	)		3,654			(25,138	)
Net income from continuing operations, net of tax		53,936			(8,886	)		45,050
Discontinued operations (Note 16)
Gain on sale of Breg, Inc., net of tax		1,345			—			1,345
Gain on sale of vascular operations, net of tax (Note 22)		—			—			—
Loss from discontinued operations		(4,012	)		1,018			(2,994	)
Income tax benefit (expense)		26			(589	)		(563	)
Net loss from discontinued operations, net of tax		(2,641	)		429			(2,212	)
Net income	$	51,295			(8,457	)	$	42,838
Net income (loss) per common share—basic:
Net income from continuing operations, net of tax	$	2.84			(0.47	)	$	2.37
Net loss from discontinued operations, net of tax		(0.14	)		0.02			(0.12	)
Net income per common share—basic	$	2.70			(0.45	)	$	2.25
Net income (loss) per common share—diluted:
Net income from continuing operations, net of tax	$	2.78			(0.46	)	$	2.32
Net loss from discontinued operations, net of tax		(0.14	)		0.03			(0.11	)
Net income per common share—diluted:	$	2.64			(0.43	)	$	2.21
Weighted average number of common shares:
Basic		18,977,263			—			18,977,263
Diluted		19,390,413			—			19,390,413
Other comprehensive income, before tax:
Translation adjustment	$	480			288		$	768
Unrealized gain on derivative instrument		416			—			416
Other comprehensive income, before tax		896			288			1,184
Income tax expense related to components of other comprehensive income		(153	)		—			(153	)
Other comprehensive income, net of tax		743			288			1,031
Comprehensive income	$	52,038			(8,169	)	$	43,869

The effects of the restatements on the Company’s consolidated statement of operations and comprehensive loss for the year ended December 31, 2011 are as follows:

	Year Ended December 31, 2011
(U.S. Dollars, in thousands, except share and per share data)	Previously Reported			Adjustments			Restated
Product sales	$	432,975			(27,828	)	$	405,147
Marketing service fees		37,146			(322	)		36,824
Net sales		470,121			(28,150	)		441,971
Cost of sales		92,619			2,908			95,527
Gross profit		377,502			(31,058	)		346,444
Operating expenses
Sales and marketing		200,145			(6,634	)		193,511
General and administrative		64,374			107			64,481
Research and development		22,861			—			22,861
Amortization of intangible assets		2,350			200			2,550
Charges related to U.S. Government resolutions (Note 17)		56,463			678			57,141
		346,193			(5,649	)		340,544
Operating income		31,309			(25,409	)		5,900
Other income and (expense)
Interest expense, net		(9,456	)		3,915			(5,541	)
Other expense		(2,412	)		—			(2,412	)
		(11,868	)		3,915			(7,953	)
Income (loss) before income taxes		19,441			(21,494	)		(2,053	)
Income tax expense		(21,181	)		7,016			(14,165	)
Net loss from continuing operations, net of tax		(1,740	)		(14,478	)		(16,218	)
Discontinued operations (Note 16)
Gain on sale of Breg, Inc., net of tax		—			—			—
Gain on sale of vascular operations, net of tax (Note 22)		—			—			—
Income (loss) from discontinued operations		1,263			(3,968	)		(2,705	)
Income tax (expense) benefit		(596	)		1,409			813
Net income (loss) from discontinued operations, net of tax		667			(2,559	)		(1,892	)
Net loss	$	(1,073	)		(17,037	)	$	(18,110	)
Net income (loss) per common share—basic:
Net loss from continuing operations, net of tax	$	(0.10	)		(0.79	)	$	(0.89	)
Net income (loss) from discontinued operations, net of tax		0.04			(0.14	)		(0.10	)
Net loss per common share—basic	$	(0.06	)		(0.93	)	$	(0.99	)
Net income (loss) per common share—diluted:
Net loss from continuing operations, net of tax	$	(0.10	)		(0.79	)	$	(0.89	)
Net income (loss) from discontinued operations, net of tax		0.04			(0.14	)		(0.10	)
Net loss per common share—diluted:	$	(0.06	)		(0.93	)	$	(0.99	)
Weighted average number of common shares:
Basic		18,219,343			—			18,219,343
Diluted		18,219,343			—			18,219,343
Other comprehensive loss, before tax:
Translation adjustment	$	(3,192	)		913		$	(2,279	)
Unrealized loss on derivative instrument		(693	)		—			(693	)
Other comprehensive loss, before tax		(3,885	)		913			(2,972	)
Income tax benefit related to components of other comprehensive income		256			—			256
Other comprehensive loss, net of tax		(3,629	)		913			(2,716	)
Comprehensive loss	$	(4,702	)		(16,124	)	$	(20,826	)

The effects of the restatements on the Company’s consolidated statement of operations and comprehensive income for the year ended December 31, 2010 are as follows:

	Year Ended December 31, 2010
(U.S. Dollars, in thousands, except share and per share data)	Previously Reported			Adjustments			Restated
Product sales	$	430,783			2,062		$	432,845
Marketing service fees		29,846			(120	)		29,726
Net sales		460,629			1,942			462,571
Cost of sales		90,461			6,632			97,093
Gross profit		370,168			(4,690	)		365,478
Operating expenses
Sales and marketing		200,835			(4,722	)		196,113
General and administrative		72,912			98			73,010
Research and development		27,958			—			27,958
Amortization of intangible assets		2,213			200			2,413
Charges related to U.S. Government resolutions (Note 17)		—			—			—
		303,918			(4,424	)		299,494
Operating income		66,250			(266	)		65,984
Other income and (expense)
Interest expense, net		(16,217	)		4,930			(11,287	)
Other expense		331			—			331
		(15,886	)		4,930			(10,956	)
Income before income taxes		50,364			4,664			55,028
Income tax expense		(22,606	)		(1,425	)		(24,031	)
Net income from continuing operations, net of tax		27,758			3,239			30,997
Discontinued operations (Note 16)
Gain on sale of Breg, Inc., net of tax		—			—			—
Gain on sale of vascular operations, net of tax (Note 22)		12,019			(3,498	)		8,521
Income from discontinued operations		10,015			(4,926	)		5,089
Income tax expense		(5,584	)		5,273			(311	)
Net income from discontinued operations, net of tax		16,450			(3,151	)		13,299
Net income	$	44,208			88		$	44,296
Net income per common share—basic:
Net income from continuing operations, net of tax	$	1.58			0.18		$	1.76
Net income from discontinued operations, net of tax		0.93			(0.17	)		0.76
Net income per common share—basic	$	2.51			0.01		$	2.52
Net income per common share—diluted:
Net income from continuing operations, net of tax	$	1.55			0.18		$	1.73
Net income from discontinued operations, net of tax		0.92			(0.18	)		0.74
Net income per common share—diluted:	$	2.47			—		$	2.47
Weighted average number of common shares:
Basic		17,601,956			—			17,601,956
Diluted		17,913,545			—			17,913,545
Other comprehensive income (loss), before tax:
Translation adjustment	$	(1,710	)		393		$	(1,317	)
Unrealized loss on derivative instrument		(126	)		—			(126	)
Other comprehensive loss, before tax		(1,836	)		393			(1,443	)
Income tax benefit related to components of other comprehensive income		36			—			36
Other comprehensive loss, net of tax		(1,800	)		393			(1,407	)
Comprehensive income	$	42,408			481		$	42,889