Annual report pursuant to Section 13 and 15(d)

Summary of Significant Accounting Policies (Tables)

v3.20.4
Summary of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2020
Accounting Policies [Abstract]  
Sales Revenue Disaggregated by Sales Channel and Geographic Region The following table sets forth the Company’s sales revenue disaggregated by sales channel and geographic region:

 

(amounts in thousands)

 

Years ended December 31,

 

Revenue by region and category

 

2020

 

 

2019

 

 

2018

 

Business-to-business domestic sales

 

$

96,423

 

 

$

106,428

 

 

$

116,581

 

Business-to-business international sales

 

 

62,147

 

 

 

77,960

 

 

 

77,333

 

Direct-to-consumer domestic sales

 

 

121,619

 

 

 

156,158

 

 

 

142,101

 

Total sales revenue

 

$

280,189

 

 

$

340,546

 

 

$

336,015

 

 

Summary of Fair Value Assets Measured on Recurring Basis for Cash, Cash Equivalents and Marketable Securities

The following table summarizes fair value measurements by level for the assets measured at fair value on a recurring basis for cash, cash equivalents and marketable securities:

 

 

 

As of December 31, 2020

 

 

 

 

 

 

 

Gross

 

 

 

 

 

 

Cash

 

 

 

 

 

 

 

Adjusted

 

 

unrealized

 

 

 

 

 

 

and cash

 

 

Marketable

 

(amounts in thousands)

 

cost

 

 

gains (losses)

 

 

Fair value

 

 

equivalents

 

 

securities

 

Cash

 

$

52,812

 

 

$

 

 

$

52,812

 

 

$

52,812

 

 

$

 

Level 1:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market accounts

 

 

159,150

 

 

 

 

 

 

159,150

 

 

 

159,150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 2:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

 

11,549

 

 

 

(1

)

 

 

11,548

 

 

 

 

 

 

11,548

 

U.S. Treasury securities

 

 

4,107

 

 

 

 

 

 

4,107

 

 

 

 

 

 

4,107

 

Agency mortgage-backed securities

 

 

3,601

 

 

 

1

 

 

 

3,602

 

 

 

 

 

 

3,602

 

Total

 

$

231,219

 

 

$

 

 

$

231,219

 

 

$

211,962

 

 

$

19,257

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2019

 

 

 

 

 

 

 

Gross

 

 

 

 

 

 

Cash

 

 

 

 

 

 

 

Adjusted

 

 

unrealized

 

 

 

 

 

 

and cash

 

 

Marketable

 

(amounts in thousands)

 

cost

 

 

gains (losses)

 

 

Fair value

 

 

equivalents

 

 

securities

 

Cash

 

$

51,560

 

 

$

 

 

$

51,560

 

 

$

51,560

 

 

$

 

Level 1:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market accounts

 

 

146,477

 

 

 

 

 

 

146,477

 

 

 

146,477

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 2:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

 

2,011

 

 

 

2

 

 

 

2,013

 

 

 

 

 

 

2,013

 

U.S. Treasury securities

 

 

9,038

 

 

 

6

 

 

 

9,044

 

 

 

 

 

 

9,044

 

Total

 

$

209,086

 

 

$

8

 

 

$

209,094

 

 

$

198,037

 

 

$

11,057

 

Summary of Estimated Fair Value of Company's Investments in Marketable Securities Classified by Contractual Maturity Date

The following table summarizes the estimated fair value of the Company’s investments in marketable securities, classified by the contractual maturity date of the securities:

 

 

 

December 31,

 

(amounts in thousands)

 

2020

 

Due within one year

 

$

19,257

 

Due in one year through five years

 

 

 

Total

 

$

19,257

 

Summary of Components of Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) were as follows:

 

 

As of December 31, 2020

 

 

Foreign

 

 

Unrealized

 

 

Unrealized

 

 

Accumulated

 

 

currency

 

 

gains (losses)

 

 

gains (losses)

 

 

other

 

 

translation

 

 

on marketable

 

 

on cash

 

 

comprehensive

 

(amounts in thousands)

adjustments

 

 

securities

 

 

flow hedges

 

 

income (loss)

 

Balance as of December 31, 2019

$

271

 

 

$

6

 

 

$

(364

)

 

$

(87

)

Other comprehensive income (loss)

 

857

 

 

 

(6

)

 

 

(289

)

 

 

562

 

Balance as of December 31, 2020

$

1,128

 

 

$

 

 

$

(653

)

 

$

475

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2019

 

 

Foreign

 

 

Unrealized

 

 

Unrealized

 

 

Accumulated

 

 

currency

 

 

gains on

 

 

gains (losses)

 

 

other

 

 

translation

 

 

marketable

 

 

on cash

 

 

comprehensive

 

(amounts in thousands)

adjustments

 

 

securities

 

 

flow hedges

 

 

income (loss)

 

Balance as of December 31, 2018

$

394

 

 

$

 

 

$

330

 

 

$

724

 

Other comprehensive income (loss)

 

(123

)

 

 

6

 

 

 

(694

)

 

 

(811

)

Balance as of December 31, 2019

$

271

 

 

$

6

 

 

$

(364

)

 

$

(87

)

Summary of Quantitative Information about Level 3 Inputs for Fair Value Measurement of Earnout Liability

The following table provides quantitative information about Level 3 inputs for fair value measurement of the earnout liability as of the acquisition date, December 31, 2019 and December 31, 2020. Significant increases or decreases in these inputs in isolation could result in a significant impact on our fair value measurement:

 

 

 

At acquisition

 

 

As of

 

 

As of

 

Simulation input

 

August 9, 2019

 

 

December 31, 2019

 

 

December 31, 2020

 

Revenue volatility

 

 

35.00

%

 

 

35.00

%

 

 

35.00

%

WACC

 

 

12.50

%

 

 

13.00

%

 

 

12.00

%

20-year risk free rate

 

 

2.03

%

 

 

2.25

%

 

 

1.45

%

Market price of risk

 

 

9.00

%

 

 

10.00

%

 

 

8.00

%

Summary of Reconciliation of Earnout Liability Measured and Carried Fair Value on a Recurring Basis

The reconciliation of the earnout liability measured and carried at fair value on a recurring basis is as follows:

 

(amounts in thousands)

 

 

 

 

Balance as of December 31, 2018

 

$

 

Addition for acquisition

 

 

25,749

 

Change in fair value

 

 

810

 

Balance as of December 31, 2019

 

$

26,559

 

Change in fair value

 

 

1,053

 

Balance as of December 31, 2020

 

$

27,612

 

Summary of Cash, Cash Equivalents and Short-term Investments .  

 

(amounts in thousands)

 

December 31,

 

Cash and cash equivalents

 

2020

 

 

2019

 

Cash

 

$

52,812

 

 

$

51,560

 

Money market accounts

 

 

159,150

 

 

 

146,477

 

Total cash and cash equivalents

 

$

211,962

 

 

$

198,037

 

Marketable securities

 

 

 

 

 

 

 

 

Corporate bonds

 

 

11,548

 

 

 

2,013

 

U. S. Treasury securities

 

 

4,107

 

 

 

9,044

 

Agency mortgage-backed securities

 

 

3,602

 

 

 

 

Total marketable securities

 

$

19,257

 

 

$

11,057

 

 

Schedule of Gross Accounts Receivable Balance Concentrations by Major Category

Gross accounts receivable balance concentrations by major category as of December 31, 2020 and December 31, 2019 were as follows:

 

 

 

As of

 

 

As of

 

(amounts in thousands)

 

December 31, 2020

 

 

December 31, 2019

 

Gross accounts receivable

 

$

 

 

%

 

 

$

 

 

%

 

Rental (1)

 

$

4,190

 

 

 

13.6

%

 

$

3,003

 

 

 

8.3

%

Business-to-business and other receivables (2)

 

 

26,717

 

 

 

86.4

%

 

 

33,101

 

 

 

91.7

%

Total gross accounts receivable

 

$

30,907

 

 

 

100.0

%

 

$

36,104

 

 

 

100.0

%

Schedule of Net Accounts Receivable Balance Concentrations by Major Category

Net accounts receivable (gross accounts receivable, net of allowances) balance concentrations by major category as of December 31, 2020 and December 31, 2019 were as follows:

 

 

 

As of

 

 

As of

 

(amounts in thousands)

 

December 31, 2020

 

 

December 31, 2019

 

Net accounts receivable

 

$

 

 

%

 

 

$

 

 

%

 

Rental (1)

 

$

3,794

 

 

 

12.8

%

 

$

2,464

 

 

 

7.2

%

Business-to-business and other receivables (2)

 

 

25,923

 

 

 

87.2

%

 

 

31,861

 

 

 

92.8

%

Total net accounts receivable

 

$

29,717

 

 

 

100.0

%

 

$

34,325

 

 

 

100.0

%

(1)

Rental includes Medicare, Medicaid/other government, private insurance and patient pay.

 

(2)

Business-to business receivables included one customer with a gross accounts receivable balance of $7,044 and $10,695 as of December 31, 2020 and December 31, 2019, respectively. This customer received extended payment terms through a direct financing plan offered. The Company also has a credit insurance policy in place, which allocated up to $10,000 in coverage as of December 31, 2020 and allocated up to $20,000 in coverage as of December 31, 2019 for this customer with a $400 deductible and 10% retention.

Schedule of Percentage Breakdown of Net Accounts Receivable by Aging Category by Invoice Due Date

The following table sets forth the percentage breakdown of the Company’s net accounts receivable (gross accounts receivable net of allowances) by aging category by invoice due date as of December 31, 2020 and December 31, 2019.

 

 

 

As of

 

 

As of

 

(amounts in thousands)

 

December 31, 2020

 

 

December 31, 2019

 

Net accounts receivable by aging category

 

$

 

 

%

 

 

$

 

 

%

 

Held and Unbilled

 

$

298

 

 

 

1.0

%

 

$

294

 

 

 

0.8

%

Aged 0-90 days

 

 

28,604

 

 

 

96.2

%

 

 

33,427

 

 

 

97.4

%

Aged 91-180 days

 

 

560

 

 

 

1.9

%

 

 

343

 

 

 

1.0

%

Aged 181-365 days

 

 

230

 

 

 

0.8

%

 

 

261

 

 

 

0.8

%

Aged over 365 days

 

 

25

 

 

 

0.1

%

 

 

 

 

 

0.0

%

Total net accounts receivable

 

$

29,717

 

 

 

100.0

%

 

$

34,325

 

 

 

100.0

%

Schedule of Allowances for Accounts Receivable

The following table sets forth the accounts receivable allowances as of December 31, 2020 and December 31, 2019:

 

 

 

As of

 

 

As of

 

(amounts in thousands)

 

December 31, 2020

 

 

December 31, 2019

 

Allowances - accounts receivable

 

$

 

 

%

 

 

$

 

 

%

 

Doubtful accounts

 

$

52

 

 

 

0.2

%

 

$

205

 

 

 

0.6

%

Rental revenue adjustments

 

 

396

 

 

 

1.3

%

 

 

411

 

 

 

1.1

%

Sales returns

 

 

742

 

 

 

2.4

%

 

 

1,163

 

 

 

3.2

%

Total allowances - accounts receivable

 

$

1,190

 

 

 

3.9

%

 

$

1,779

 

 

 

4.9

%

Breakdown of Company's Revenue from U.S. and Non-U.S. Sources

A portion of revenue is earned from sales outside the United States. Approximately 73.6% and 70.2% of the non-U.S. revenue for the years ended December 31, 2020 and 2019, respectively, were invoiced in Euros. A breakdown of the Company’s revenue from U.S. and non-U.S. sources for the years ended December 31, 2020, 2019 and 2018, respectively, is as follows:

 

 

Years ended December 31,

 

(amounts in thousands)

2020

 

 

2019

 

 

2018

 

U.S. revenue

$

246,340

 

 

$

283,983

 

 

$

280,778

 

Non-U.S. revenue

 

62,147

 

 

 

77,960

 

 

 

77,333

 

Total revenue

$

308,487

 

 

$

361,943

 

 

$

358,111

 

 

Schedule of Inventories Inventories that are considered current consist of the following:

 

 

December 31,

 

(amounts in thousands)

2020

 

 

2019

 

Raw materials and work-in-progress

$

22,318

 

 

$

31,676

 

Finished goods

 

3,743

 

 

 

5,174

 

Less: reserves

 

(1,246

)

 

 

(1,186

)

Inventories, net

$

24,815

 

 

$

35,664

 

 

 

Computation of Depreciation and Amortization using Straight Line Method Over Estimated Useful Lives of Assets

Property and equipment are stated at cost. Depreciation and amortization are calculated using the straight-line method over the assets’ estimated useful lives as follows:

 

Rental equipment

1.5-5 years

Manufacturing equipment and tooling

3-5 years

Computer equipment and software

2-3 years

Furniture and equipment

3-5 years

Leasehold improvements

Lesser of estimated useful life or remaining lease term

Summary of Depreciation and Amortization Expense of Rental Equipment and Other Property and Equipment

Depreciation and amortization expense related to rental equipment and other property and equipment are summarized below for the years ended December 31, 2020, 2019 and 2018, respectively.

 

 

Years ended December 31,

 

(amounts in thousands)

2020

 

 

2019

 

 

2018

 

Rental equipment

$

5,695

 

 

$

6,253

 

 

$

7,567

 

Other property and equipment

 

3,882

 

 

 

3,421

 

 

 

2,463

 

Total depreciation and amortization

$

9,577

 

 

$

9,674

 

 

$

10,030

 

Summary of Property Plant and Equipment and Rental Equipment with Associated Accumulated Depreciation

Property and equipment and rental equipment with associated accumulated depreciation is summarized below as of December 31, 2020 and 2019, respectively.

 

(amounts in thousands)

 

December 31,

 

Property and equipment

 

2020

 

 

2019

 

Rental equipment, net of allowances of $575 and $395, respectively

 

$

46,953

 

 

$

39,308

 

Other property and equipment

 

 

27,071

 

 

 

24,986

 

Property and equipment

 

 

74,024

 

 

 

64,294

 

 

 

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

 

 

Rental equipment

 

 

30,283

 

 

 

30,984

 

Other property and equipment

 

 

15,511

 

 

 

13,872

 

Accumulated depreciation

 

 

45,794

 

 

 

44,856

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

 

 

 

 

 

 

Rental equipment, net of allowances of $575 and $395, respectively

 

 

16,670

 

 

 

8,324

 

Other property and equipment

 

 

11,560

 

 

 

11,114

 

Property and equipment, net

 

$

28,230

 

 

$

19,438

 

Computation of Earnings Per Share

The computation of EPS is as follows:

 

 

Years ended December 31,

 

(amounts in thousands, except share and per share amounts)

2020

 

 

2019

 

 

2018

 

Numerator—basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

(5,829

)

 

$

20,950

 

 

$

51,845

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares - basic common stock (1)

 

21,980,326

 

 

 

21,821,104

 

 

 

21,266,696

 

Weighted-average common shares - diluted common stock

 

21,980,326

 

 

 

22,241,064

 

 

 

22,514,513

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share - basic common stock

$

(0.27

)

 

$

0.96

 

 

$

2.44

 

Net income (loss) per share - diluted common stock (2)

$

(0.27

)

 

$

0.94

 

 

$

2.30

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator calculation from basic to diluted:

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares - basic common stock (1)

 

21,980,326

 

 

 

21,821,104

 

 

 

21,266,696

 

Stock options and other dilutive awards

 

64,471

 

 

 

419,960

 

 

 

1,247,817

 

Weighted-average common shares - diluted common stock

 

22,044,797

 

 

 

22,241,064

 

 

 

22,514,513

 

Shares excluded from diluted weighted-average shares:

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

467,378

 

 

 

53,888

 

 

 

 

Restricted stock units and restricted stock awards

 

292,795

 

 

 

169,305

 

 

 

39,330

 

Shares excluded from diluted weighted-average shares

 

760,173

 

 

 

223,193

 

 

 

39,330

 

 

(1)

Unvested restricted stock units and restricted stock awards are not included as shares outstanding in the calculation of basic earnings per share. Vested restricted stock units and restricted stock awards are included in basic earnings per share if all vesting and performance criteria have been met. Performance-based restricted stock units and restricted stock awards are included in the number of shares used to calculate diluted earnings per share as long as all applicable performance criteria are met, and their effect is dilutive. Restricted stock awards are eligible to receive all dividends declared on the Company’s common shares during the vesting period; however, such dividends are not paid until the restrictions lapse.

(2)

Due to a net loss for the year ended December 31, 2020, diluted loss per share is the same as basic.