Annual report pursuant to Section 13 and 15(d)

Summary of Significant Accounting Policies (Tables)

v3.8.0.1
Summary of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2017
Accounting Policies [Abstract]  
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, 2017

 

 

 

 

 

 

 

Gross

 

 

 

 

 

 

Cash

 

 

 

 

 

 

 

Adjusted

 

 

unrealized

 

 

 

 

 

 

and cash

 

 

Marketable

 

(amounts in thousands)

 

cost

 

 

losses

 

 

Fair value

 

 

equivalents

 

 

securities

 

Cash

 

$

46,237

 

 

$

 

 

$

46,237

 

 

$

46,237

 

 

$

 

Level 1:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market accounts

 

 

93,430

 

 

 

 

 

 

93,430

 

 

 

93,430

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 2:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 

11,010

 

 

 

(4

)

 

 

11,006

 

 

 

490

 

 

 

10,516

 

Corporate bonds

 

 

20,789

 

 

 

(21

)

 

 

20,768

 

 

 

2,796

 

 

 

17,972

 

Agency mortgage-backed securities

 

 

2,005

 

 

 

(1

)

 

 

2,004

 

 

 

 

 

 

2,004

 

U.S. Treasury securities

 

 

499

 

 

 

 

 

 

499

 

 

 

 

 

 

499

 

Total

 

$

173,970

 

 

$

(26

)

 

$

173,944

 

 

$

142,953

 

 

$

30,991

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2016

 

 

 

 

 

 

 

Gross

 

 

 

 

 

 

Cash

 

 

 

 

 

 

 

Adjusted

 

 

unrealized

 

 

 

 

 

 

and cash

 

 

Marketable

 

(amounts in thousands)

 

cost

 

 

losses

 

 

Fair value

 

 

equivalents

 

 

securities

 

Cash

 

$

48,533

 

 

$

 

 

$

48,533

 

 

$

48,533

 

 

$

 

Level 1:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market accounts

 

 

39,277

 

 

 

 

 

 

39,277

 

 

 

39,277

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 2:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

 

15,904

 

 

 

(8

)

 

 

15,896

 

 

 

5,041

 

 

 

10,855

 

Corporate bonds

 

 

10,200

 

 

 

(22

)

 

 

10,178

 

 

 

 

 

 

10,178

 

Agency mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

113,914

 

 

$

(30

)

 

$

113,884

 

 

$

92,851

 

 

$

21,033

 

 

Summary of Estimated Fair Value of Company's Investments in Marketable Debt Securities, Accounted for as Available-for-Sale Securities

The following table summarizes the estimated fair value of the Company’s investments in marketable securities, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities:

 

 

December 31,

 

(amounts in thousands)

2017

 

Due within one year

$

30,991

 

Due in one year through five years

 

 

Total

$

30,991

 

 

Summary of Components of Accumulated Other Comprehensive Income (Loss)

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

 

 

Foreign

 

 

Unrealized

 

 

Unrealized

 

 

Accumulated

 

 

currency

 

 

gains (losses) on

 

 

gains (losses)

 

 

other

 

 

translation

 

 

available-for-

 

 

on cash

 

 

comprehensive

 

(amounts in thousands)

adjustments

 

 

sale investments

 

 

flow hedges

 

 

income (loss)

 

Balance as of December 31, 2016

$

 

 

$

(82

)

 

$

47

 

 

$

(35

)

Other comprehensive gain (loss)

 

363

 

 

 

65

 

 

 

(121

)

 

 

307

 

Balance as of December 31, 2017

$

363

 

 

$

(17

)

 

$

(74

)

 

$

272

 

 

Summary of Cash, Cash Equivalents and Short-term Investments

Cash, cash equivalents, and marketable securities consist of the following:

 

(amounts in thousands)

December 31,

 

Cash and cash equivalents

2017

 

 

2016

 

Cash

$

46,237

 

 

$

48,533

 

Money market accounts

 

93,430

 

 

 

39,277

 

Certificates of deposit

 

490

 

 

 

5,041

 

Corporate bonds

 

2,796

 

 

 

 

Total cash and cash equivalents

$

142,953

 

 

$

92,851

 

Marketable securities

 

 

 

 

 

 

 

Certificates of deposit

$

10,516

 

 

$

10,855

 

Corporate bonds

 

17,972

 

 

 

10,178

 

Agency mortgage-backed securities

 

2,004

 

 

 

 

U. S. Treasury securities

 

499

 

 

 

 

Total marketable securities

$

30,991

 

 

$

21,033

 

 

Schedule of Gross Accounts Receivable Balance Concentrations by Major Category

Gross accounts receivable balance concentrations by major category as of December 31, 2017 and December 31, 2016 were as follows:

 

 

 

As of

 

 

As of

 

(amounts in thousands)

 

December 31, 2017

 

 

December 31, 2016

 

Gross accounts receivable

 

$

 

 

%

 

 

$

 

 

%

 

Medicare

 

$

2,247

 

 

 

6.5

%

 

$

12,500

 

 

 

31.8

%

Medicaid/other government

 

 

295

 

 

 

0.8

%

 

 

617

 

 

 

1.6

%

Private insurance

 

 

1,411

 

 

 

4.1

%

 

 

3,475

 

 

 

8.8

%

Patient responsibility

 

 

2,283

 

 

 

6.6

%

 

 

3,227

 

 

 

8.2

%

Business-to-business & other receivables (1)

 

 

28,474

 

 

 

82.0

%

 

 

19,541

 

 

 

49.6

%

Total gross accounts receivable

 

$

34,710

 

 

 

100.0

%

 

$

39,360

 

 

 

100.0

%

(1)

Business-to business receivables included one customer with an accounts receivable balance of $10,394 and $9,791 as of December 31, 2017 and December 31, 2016, respectively. This customer received extended payment terms through a direct financing plan offered. The Company also has a credit insurance policy in place, which allocates up to $12,000 in coverage as of December 31, 2017 and allocated up to $9,000 in coverage as of December 31, 2016 for this customer with a $1,000 deductible and 10% retention.

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, 2017 and December 31, 2016 were as follows:

 

 

 

As of

 

 

As of

 

(amounts in thousands)

 

December 31, 2017

 

 

December 31, 2016

 

Net accounts receivable

 

$

 

 

%

 

 

$

 

 

%

 

Medicare

 

$

1,501

 

 

 

4.7

%

 

$

7,208

 

 

 

23.4

%

Medicaid/other government

 

 

244

 

 

 

0.8

%

 

 

410

 

 

 

1.3

%

Private insurance

 

 

1,249

 

 

 

4.0

%

 

 

1,832

 

 

 

6.0

%

Patient responsibility

 

 

1,218

 

 

 

3.9

%

 

 

2,538

 

 

 

8.2

%

Business-to-business & other receivables (1)

 

 

27,232

 

 

 

86.6

%

 

 

18,840

 

 

 

61.1

%

Total net accounts receivable

 

$

31,444

 

 

 

100.0

%

 

$

30,828

 

 

 

100.0

%

 

(1)

Business-to business receivables included one customer with an accounts receivable balance of $10,394 and $9,791 as of December 31, 2017 and December 31, 2016, respectively. This customer received extended payment terms through a direct financing plan offered. The Company also has a credit insurance policy in place, which allocates up to $12,000 in coverage as of December 31, 2017 and allocated up to $9,000 in coverage as of December 31, 2016 for this customer with a $1,000 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, 2017 and December 31, 2016.

 

 

 

As of

 

 

As of

 

(amounts in thousands)

 

December 31, 2017

 

 

December 31, 2016

 

Net accounts receivable by aging category

 

$

 

 

%

 

 

$

 

 

%

 

Held & Unbilled

 

$

537

 

 

 

1.7

%

 

$

4,163

 

 

 

13.5

%

Aged 0-90 days

 

 

29,237

 

 

 

93.0

%

 

 

22,634

 

 

 

73.4

%

Aged 91-180 days

 

 

435

 

 

 

1.4

%

 

 

1,452

 

 

 

4.7

%

Aged 181-365 days

 

 

602

 

 

 

1.9

%

 

 

1,801

 

 

 

5.9

%

Aged over 365 days

 

 

633

 

 

 

2.0

%

 

 

778

 

 

 

2.5

%

Total net accounts receivable

 

$

31,444

 

 

 

100.0

%

 

$

30,828

 

 

 

100.0

%

 

Schedule of Allowances for Accounts Receivable

 

The following table sets forth the accounts receivable allowances as of December 31, 2017 and December 31, 2016:

 

 

 

As of

 

 

As of

 

(amounts in thousands)

 

December 31, 2017

 

 

December 31, 2016

 

Allowances - accounts receivable

 

$

 

 

%

 

 

$

 

 

%

 

Doubtful accounts

 

$

1,415

 

 

 

4.1

%

 

$

1,869

 

 

 

4.7

%

Rental revenue adjustments

 

 

947

 

 

 

2.7

%

 

 

6,078

 

 

 

15.4

%

Sales returns

 

 

904

 

 

 

2.6

%

 

 

585

 

 

 

1.5

%

Total allowances - accounts receivable

 

$

3,266

 

 

 

9.4

%

 

$

8,532

 

 

 

21.6

%

 

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 73.5% of the non-U.S. revenue for 2017 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, 2017, 2016 and 2015 is as follows:

 

 

Years ended December 31,

 

(amounts in thousands)

2017

 

 

2016

 

 

2015

 

U.S. revenue

$

193,919

 

 

$

152,723

 

 

$

123,660

 

Non-U.S. revenue

 

55,519

 

 

 

50,106

 

 

 

35,345

 

Total revenue

$

249,438

 

 

$

202,829

 

 

$

159,005

 

 

Schedule of Inventories

Inventories that are considered current consist of the following:

 

 

December 31,

 

(amounts in thousands)

2017

 

 

2016

 

Raw materials and work-in-progress

$

16,324

 

 

$

12,382

 

Finished goods

 

2,917

 

 

 

2,152

 

Less: reserves

 

(399

)

 

 

(191

)

Inventories

$

18,842

 

 

$

14,343

 

 

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

2-5 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, 2017, 2016 and 2015, respectively.

 

 

Years ended December 31,

 

(amounts in thousands)

2017

 

 

2016

 

 

2015

 

Rental equipment

$

9,835

 

 

$

11,429

 

 

$

11,965

 

Other property and equipment

 

1,960

 

 

 

2,028

 

 

 

1,961

 

Total depreciation and amortization

$

11,795

 

 

$

13,457

 

 

$

13,926

 

 

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, 2017 and 2016, respectively.

 

(amounts in thousands)

December 31,

 

Property and equipment

2017

 

 

2016

 

Rental equipment, net of allowances of $754 and $725, respectively

$

49,349

 

 

$

54,582

 

Other property and equipment

 

15,219

 

 

 

12,633

 

Property and equipment

 

64,568

 

 

 

67,215

 

 

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

 

Rental equipment

 

34,754

 

 

 

33,937

 

Other property and equipment

 

9,711

 

 

 

8,079

 

Accumulated depreciation

 

44,465

 

 

 

42,016

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

 

 

 

 

 

Rental equipment, net of allowances of $754 and $725, respectively

 

14,595

 

 

 

20,645

 

Other property and equipment

 

5,508

 

 

 

4,554

 

Property and equipment, net

$

20,103

 

 

$

25,199

 

 

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)

2017

 

 

2016

 

 

2015

 

Numerator—basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

Net income

$

21,002

 

 

$

20,519

 

 

$

11,585

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

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

 

20,683,807

 

 

 

20,067,152

 

 

 

19,398,991

 

Weighted-average common shares - diluted common stock

 

21,897,988

 

 

 

21,095,867

 

 

 

20,708,170

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share - basic common stock

$

1.02

 

 

$

1.02

 

 

$

0.60

 

Net income per share - diluted common stock

$

0.96

 

 

$

0.97

 

 

$

0.56

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator calculation from basic to diluted:

 

 

 

 

 

 

 

 

 

 

 

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

 

20,683,807

 

 

 

20,067,152

 

 

 

19,398,991

 

Warrants

 

 

 

 

 

 

 

10,579

 

Stock options and other dilutive awards

 

1,214,181

 

 

 

1,028,715

 

 

 

1,298,600

 

Weighted-average common shares - diluted common stock

 

21,897,988

 

 

 

21,095,867

 

 

 

20,708,170

 

Shares excluded from diluted weighted-average shares:

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

37,249

 

 

 

841,760

 

 

 

744,301

 

Restricted stock units and restricted stock awards

 

26,064

 

 

 

 

 

 

 

Shares excluded from diluted weighted-average shares

 

63,313

 

 

 

841,760

 

 

 

744,301

 

 

(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.