x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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DELAWARE
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51-0317849
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(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
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(I.R.S. EMPLOYER
IDENTIFICATION NO.)
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311 ENTERPRISE DRIVE
PLAINSBORO, NEW JERSEY
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08536
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
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(ZIP CODE)
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Large accelerated filer
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x
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Page
Number
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Exhibit 10.3
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Exhibit 10.4
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Exhibit 10.10
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Exhibit 31.1
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Exhibit 31.2
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Exhibit 32.1
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Exhibit 32.2
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EX-101 INSTANCE DOCUMENT
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EX-101 SCHEMA DOCUMENT
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EX-101 CALCULATION LINKBASE DOCUMENT
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EX-101 DEFINITION LINKBASE DOCUMENT
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EX-101 LABELS LINKBASE DOCUMENT
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EX-101 PRESENTATION LINKBASE DOCUMENT
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Three Months Ended March 31,
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||||||
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2013
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2012
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||||
Total revenue, net
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$
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196,652
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$
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196,185
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Costs and Expenses:
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||||
Cost of goods sold
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80,268
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74,675
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Research and development
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12,716
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11,912
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Selling, general and administrative
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100,161
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87,411
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Intangible asset amortization
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3,551
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4,720
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Total costs and expenses
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196,696
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178,718
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Operating (loss) income
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(44
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)
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17,467
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Interest income
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63
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378
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Interest expense
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(4,800
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)
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(7,929
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)
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Other income (expense), net
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(974
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)
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(323
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)
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(Loss) income before income taxes
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(5,755
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)
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9,593
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Income tax (benefit) expense
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(1,705
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)
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2,900
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Net (loss) income
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$
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(4,050
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)
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$
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6,693
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Basic net income per common share
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$
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(0.15
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)
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$
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0.24
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Diluted net income per common share
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$
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(0.15
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)
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$
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0.23
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Weighted average common shares outstanding (See Note 11):
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Basic
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27,796
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28,345
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Diluted
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27,796
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28,488
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Comprehensive (loss) income (See Note 12)
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$
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(10,534
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)
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$
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13,639
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March 31,
2013 |
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December 31,
2012 |
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ASSETS
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Current Assets:
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Cash and cash equivalents
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$
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89,691
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$
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96,938
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Trade accounts receivable, net of allowances of $10,528 and $7,221
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111,944
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114,916
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Inventories, net
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179,558
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171,806
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Deferred tax assets
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38,470
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39,100
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Prepaid expenses and other current assets
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27,396
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30,291
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Total current assets
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447,059
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453,051
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Property, plant and equipment, net
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179,352
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177,898
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Intangible assets, net
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212,274
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212,267
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Goodwill
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292,278
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294,067
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Deferred tax assets
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15,743
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15,957
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Other assets
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9,785
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10,359
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Total assets
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$
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1,156,491
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$
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1,163,599
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current Liabilities:
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Accounts payable, trade
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$
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43,875
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$
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36,742
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Deferred revenue
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3,868
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3,505
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Accrued compensation
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23,484
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34,914
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Accrued expenses and other current liabilities
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34,553
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31,768
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Total current liabilities
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105,780
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106,929
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Long-term borrowings under senior credit facility
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321,875
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321,875
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Long-term convertible securities
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199,511
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197,672
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Deferred tax liabilities
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5,397
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5,393
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Other liabilities
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14,039
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13,955
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Total liabilities
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$
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646,602
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$
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645,824
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Commitments and contingencies
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Stockholders’ Equity:
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Preferred Stock; no par value; 15,000 authorized shares; none outstanding
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Common stock; $0.01 par value; 60,000 authorized shares; 36,959 and 36,852 issued at March 31, 2013 and December 31, 2012, respectively
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370
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369
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Additional paid-in capital
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589,948
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587,301
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Treasury stock, at cost; 8,903 shares at March 31, 2013 and December 31, 2012
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(367,121
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)
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(367,121
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)
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Accumulated other comprehensive (loss)
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(11,281
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)
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(4,797
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)
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Retained earnings
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297,973
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302,023
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Total stockholders’ equity
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$
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509,889
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$
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517,775
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Total liabilities and stockholders’ equity
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$
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1,156,491
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$
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1,163,599
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Three Months Ended March 31,
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||||||
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2013
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2012
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OPERATING ACTIVITIES:
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Net income (loss)
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$
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(4,050
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)
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$
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6,693
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Adjustments to reconcile net income (loss) to net cash provided by operating activities:
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Depreciation and amortization
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11,389
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12,576
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Deferred income tax (benefit) provision
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(1,055
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)
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(983
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)
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Amortization of debt issuance costs
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545
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760
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Non-cash interest expense
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1,610
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3,528
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Loss on disposal of property and equipment
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1,865
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—
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Share-based compensation
|
2,072
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2,070
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Excess tax benefits from stock-based compensation arrangements
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(23
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)
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(3
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)
|
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Other
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—
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277
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|
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Changes in assets and liabilities, net of business acquisitions:
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||||
Accounts receivable
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2,109
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4,800
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Inventories
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(8,885
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)
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(853
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)
|
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Prepaid expenses and other current assets
|
2,872
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|
1,619
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|
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Other non-current assets
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(115
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)
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(152
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)
|
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Accounts payable, accrued expenses and other current liabilities
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(515
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)
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2,121
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|
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Deferred revenue
|
391
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(534
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)
|
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Other non-current liabilities
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(364
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)
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|
399
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|
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Net cash provided by operating activities
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$
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7,846
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$
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32,318
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INVESTING ACTIVITIES:
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|
||||
Purchases of property and equipment
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(10,853
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)
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(10,412
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)
|
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Sales of property and equipment
|
532
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|
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—
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|
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Cash used in business acquisition, net of cash acquired
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(2,766
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)
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(175
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)
|
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Purchases of short-term investments
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—
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(53,248
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)
|
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Net cash used in investing activities
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$
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(13,087
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)
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$
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(63,835
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)
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FINANCING ACTIVITIES:
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|
||||
Repayments under senior credit facility
|
—
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(12,813
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)
|
||
Proceeds from exercised stock options
|
234
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|
250
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|
||
Excess tax benefits from stock-based compensation arrangements
|
23
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|
|
3
|
|
||
Net cash provided by (used in) financing activities
|
$
|
257
|
|
|
$
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(12,560
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
(2,263
|
)
|
|
1,911
|
|
||
Net change in cash and cash equivalents
|
(7,247
|
)
|
|
(42,166
|
)
|
||
Cash and cash equivalents at beginning of period
|
96,938
|
|
|
100,808
|
|
||
Cash and cash equivalents at end of period
|
$
|
89,691
|
|
|
$
|
58,642
|
|
|
Preliminary
Purchase Price
Allocation
|
|
|
||
|
(Dollars in thousands)
|
|
|
||
Cash
|
$
|
85
|
|
|
|
Prepaid expenses
|
13
|
|
|
|
|
Intangible assets
|
|
|
Wtd. Avg. Life:
|
||
Technology
|
5,040
|
|
|
10 - 14 years
|
|
In-process research and development
|
340
|
|
|
Indefinite
|
|
Deferred tax asset - long term
|
1,334
|
|
|
|
|
Goodwill
|
116
|
|
|
|
|
Total assets acquired
|
6,928
|
|
|
|
|
Accounts payable and other liabilities
|
111
|
|
|
|
|
Deferred tax liability
|
2,152
|
|
|
|
|
Net assets acquired
|
$
|
4,665
|
|
|
|
|
March 31,
2013 |
|
December 31,
2012 |
||||
|
(In thousands)
|
||||||
Finished goods
|
$
|
107,354
|
|
|
$
|
102,401
|
|
Work-in process
|
42,504
|
|
|
39,944
|
|
||
Raw materials
|
29,700
|
|
|
29,461
|
|
||
|
$
|
179,558
|
|
|
$
|
171,806
|
|
|
Weighted
Average
Life
|
March 31, 2013
|
|
Weighted
Average
Life
|
December 31, 2012
|
||||||||||||||||||||
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||
Completed technology
|
12 years
|
$
|
80,387
|
|
|
$
|
(39,761
|
)
|
|
$
|
40,626
|
|
|
12 years
|
$
|
75,692
|
|
|
$
|
(38,402
|
)
|
|
$
|
37,290
|
|
Customer relationships
|
12 years
|
147,290
|
|
|
(72,583
|
)
|
|
74,707
|
|
|
12 years
|
147,690
|
|
|
(70,005
|
)
|
|
77,685
|
|
||||||
Trademarks/brand names
|
31 years
|
33,651
|
|
|
(15,058
|
)
|
|
18,593
|
|
|
31 years
|
33,807
|
|
|
(15,034
|
)
|
|
18,773
|
|
||||||
Trademarks/brand names
|
Indefinite
|
48,484
|
|
|
—
|
|
|
48,484
|
|
|
Indefinite
|
48,484
|
|
|
—
|
|
|
48,484
|
|
||||||
Supplier relationships
|
27 years
|
34,721
|
|
|
(8,189
|
)
|
|
26,532
|
|
|
27 years
|
34,721
|
|
|
(7,817
|
)
|
|
26,904
|
|
||||||
All other
(1)
|
4 years
|
4,858
|
|
|
(1,526
|
)
|
|
3,332
|
|
|
4 years
|
4,519
|
|
|
(1,388
|
)
|
|
3,131
|
|
||||||
|
|
$
|
349,391
|
|
|
$
|
(137,117
|
)
|
|
$
|
212,274
|
|
|
|
$
|
344,913
|
|
|
$
|
(132,646
|
)
|
|
$
|
212,267
|
|
(1)
|
At
March 31, 2013
and
December 31, 2012
, all other included in-process research and development of
$2.1 million
and
$1.7 million
, respectively, which was indefinite-lived.
|
i.
|
increased the revolving credit component from
$450 million
to
$600 million
and eliminated the
$150 million
term loan component that existed under the original amended and restated credit agreement;
|
ii.
|
allows the Company to further increase the size of the revolving credit component by an aggregate of
$200 million
with additional commitments;
|
iii.
|
provides the Company with decreased borrowing rates and annual commitment fees, and provides more favorable financial covenants; and
|
iv.
|
extended the maturity date from
August 10, 2015
to
June 8, 2016
.
|
|
Three Months Ended March 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
2016 Notes:
|
|
|
|
||||
Amortization of the discount on the liability component
|
$
|
1,610
|
|
|
$
|
1,739
|
|
Cash interest related to the contractual interest coupon
|
818
|
|
|
934
|
|
||
Total
|
$
|
2,428
|
|
|
$
|
2,673
|
|
2012 Notes:
|
|
|
|
||||
Amortization of the discount on the liability component
|
$
|
—
|
|
|
$
|
1,789
|
|
Cash interest related to the contractual interest coupon
|
—
|
|
|
980
|
|
||
Total
|
$
|
—
|
|
|
$
|
2,769
|
|
|
Fair Value as of
|
||||||
Location on Balance Sheet
(1)
:
|
March 31,
2013 |
|
December 31,
2012 |
||||
|
(In thousands)
|
||||||
Derivatives designated as hedges — Liabilities:
|
|
|
|
||||
Interest rate swap — Accrued expenses and other current liabilities
(2)
|
$
|
1,815
|
|
|
$
|
1,888
|
|
Interest rate swap — Other liabilities
(2)
|
1,829
|
|
|
2,238
|
|
||
Total Derivatives designated as hedges — Liabilities
|
$
|
3,644
|
|
|
$
|
4,126
|
|
(1)
|
The Company classifies derivative assets and liabilities as current based on the cash flows expected to be incurred within the following 12 months.
|
(2)
|
At
March 31, 2013
and
December 31, 2012
, the notional amount related to the Company’s sole interest rate swap was
$123.8 million
and
$127.5 million
, respectively. In the next twelve months, the Company expects to reduce the notional amount by
$15.0 million
.
|
|
Balance in AOCI
Beginning of
Quarter
|
|
Amount of
Gain (Loss)
Recognized in
AOCI-
Effective Portion
|
|
Amount of Gain (Loss)
Reclassified from
AOCI into
Earnings-Effective
Portion
|
|
Balance in AOCI
End of Quarter
|
|
Location in
Statements of
Operations
|
||||||||
|
(In thousands)
|
||||||||||||||||
Three Months Ended March 31, 2013
|
|
|
|
|
|
|
|
|
|
||||||||
Forward currency forward contracts
|
$
|
(34
|
)
|
|
$
|
—
|
|
|
$
|
(34
|
)
|
|
$
|
—
|
|
|
Costs of goods sold
|
Interest rate swap
|
(4,125
|
)
|
|
(9
|
)
|
|
(490
|
)
|
|
(3,644
|
)
|
|
Interest (expense)
|
||||
|
$
|
(4,159
|
)
|
|
$
|
(9
|
)
|
|
$
|
(524
|
)
|
|
$
|
(3,644
|
)
|
|
|
Three Months Ended March 31, 2012
|
|
|
|
|
|
|
|
|
|
||||||||
Forward currency forward contracts
|
$
|
(216
|
)
|
|
$
|
207
|
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
Costs of goods sold
|
Interest rate swap
|
(4,091
|
)
|
|
(492
|
)
|
|
(449
|
)
|
|
(4,134
|
)
|
|
Interest (expense)
|
||||
|
$
|
(4,307
|
)
|
|
$
|
(285
|
)
|
|
$
|
(449
|
)
|
|
$
|
(4,143
|
)
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
Service cost
|
$
|
—
|
|
|
$
|
6
|
|
Interest cost
|
137
|
|
|
160
|
|
||
Return on plan assets
|
(100
|
)
|
|
(144
|
)
|
||
Net period benefit cost
|
$
|
37
|
|
|
$
|
22
|
|
|
Three Months Ended March 31,
|
||||
|
2013
|
|
2012
|
||
Reported tax rate
|
29.6
|
%
|
|
30.2
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands, except per share amounts)
|
||||||
Basic net income per share:
|
|
|
|
||||
Net income (loss)
|
$
|
(4,050
|
)
|
|
$
|
6,693
|
|
Weighted average common shares outstanding
|
27,796
|
|
|
28,345
|
|
||
Basic net income per common share
|
$
|
(0.15
|
)
|
|
$
|
0.24
|
|
Diluted net income per share:
|
|
|
|
||||
Net income (loss)
|
$
|
(4,050
|
)
|
|
$
|
6,693
|
|
Weighted average common shares outstanding — Basic
|
27,796
|
|
|
28,345
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Stock options and restricted stock
|
—
|
|
|
143
|
|
||
Weighted average common shares for diluted earnings per share
|
27,796
|
|
|
28,488
|
|
||
Diluted net income per common share
|
$
|
(0.15
|
)
|
|
$
|
0.23
|
|
|
Three Months Ended March 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
Net (loss) income
|
$
|
(4,050
|
)
|
|
$
|
6,693
|
|
Foreign currency translation adjustment
|
(6,780
|
)
|
|
6,845
|
|
||
Change in unrealized gain on derivatives, net of tax
|
296
|
|
|
105
|
|
||
Pension liability adjustment, net of tax
|
—
|
|
|
(4
|
)
|
||
Comprehensive (loss) income
|
$
|
(10,534
|
)
|
|
$
|
13,639
|
|
|
|
Gains and Losses on Cash Flow Hedges
|
|
Defined Benefit Pension Items
|
|
Foreign Currency Items
|
|
Total
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Beginning balance
|
|
$
|
(2,373
|
)
|
|
$
|
(1,154
|
)
|
|
$
|
(1,270
|
)
|
|
$
|
(4,797
|
)
|
Other comprehensive income before reclassifications
|
|
(9
|
)
|
|
|
|
(6,780
|
)
|
|
(6,789
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income
|
|
(305
|
)
|
|
|
|
—
|
|
|
(305)
|
||||||
Net current-period other comprehensive income (loss)
|
|
296
|
|
|
—
|
|
|
(6,780
|
)
|
|
(6,484
|
)
|
||||
Ending balance
|
|
$
|
(2,077
|
)
|
|
$
|
(1,154
|
)
|
|
$
|
(8,050
|
)
|
|
$
|
(11,281
|
)
|
Three Months Ended March 31, 2013
|
||||||
Details about Accumulated Other Comprehensive Income Components
|
|
Amount Reclassified from Accumulated Other Comprehensive Income
|
|
Affected Line Item in the Statement where Net Income (loss) is Presented
|
||
|
|
(In thousands)
|
|
|
||
Gains and losses on cash flow hedges
|
|
|
|
|
||
Interest rate swap
|
|
$
|
(490
|
)
|
|
Interest (expense)
|
Foreign currency forwards
|
|
(34
|
)
|
|
Cost of goods sold
|
|
|
|
(524
|
)
|
|
Total before tax
|
|
|
|
219
|
|
|
Tax (expense) or benefit
|
|
|
|
$
|
(305
|
)
|
|
Net of tax
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2013
|
|
2012
|
||||
|
|
(In thousands)
|
||||||
Segment Net Sales
|
|
|
|
|
||||
U.S. Neurosurgery
|
|
$
|
38,996
|
|
|
$
|
40,183
|
|
U.S. Instruments
|
|
36,948
|
|
|
37,994
|
|
||
U.S. Extremities
|
|
31,361
|
|
|
26,587
|
|
||
U.S. Spine and Other
|
|
43,548
|
|
|
44,810
|
|
||
International
|
|
45,799
|
|
|
46,611
|
|
||
Total revenues
|
|
$
|
196,652
|
|
|
$
|
196,185
|
|
Segment Profit
|
|
|
|
|
||||
U.S. Neurosurgery
|
|
$
|
17,768
|
|
|
$
|
21,156
|
|
U.S. Instruments
|
|
10,084
|
|
|
10,067
|
|
||
U.S. Extremities
|
|
10,791
|
|
|
9,183
|
|
||
U.S. Spine and Other
|
|
13,213
|
|
|
13,533
|
|
||
International
|
|
12,878
|
|
|
17,465
|
|
||
Segment profit
|
|
64,734
|
|
|
71,404
|
|
||
Amortization
|
|
(3,551
|
)
|
|
(4,720)
|
|
||
Corporate and other
|
|
(61,227
|
)
|
|
(49,217
|
)
|
||
Operating (loss) income
|
|
$
|
(44
|
)
|
|
$
|
17,467
|
|
•
|
Regenerative Medicine Platform
. We have developed numerous product lines through our proprietary collagen matrix and demineralized bone matrix technologies that are sold through every one of our sales channels.
|
•
|
Diversification and Platform Synergies
. Each of our three selling platforms contributes a different strength to our core business. Orthopedics enables us to grow our top line and increase gross margins. Neurosurgery provides stable growth as a market with few elective procedures. The Instruments business has a strong capacity to generate cash flows. We have unique synergies among these platforms, such as our regenerative medicine technology, instrument sourcing capabilities, and Group Purchasing Organization (“GPO”) contract management.
|
•
|
Unique Sales Footprint
. Our sales footprint provides us with a unique set of customer call-points and synergies. Each of our sales channels can benefit from the GPO and Integrated Delivery Network (“IDN”) relationships that our Instruments group manages. We have market-leading products for neurosurgeons, many of whom also perform spine surgeries, and we have yet to fully leverage those relationships to sell our spine products. We also have clinical expertise across all of our channels in the United States, and have an opportunity to expand and leverage this expertise in markets worldwide.
|
•
|
Ability to Change and Adapt
. Our corporate culture is truly what enables us to adapt and reinvent ourselves. We have demonstrated that we can quickly and profitably integrate new products and businesses. This core strength has made it possible for us to grow over the years, and is key to our ability to grow into a multi-billion dollar company.
|
|
Three Months Ended March 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
Manufacturing facility remediation costs
|
$
|
2,125
|
|
|
$
|
1,635
|
|
Certain expenses associated with product recalls
|
1,279
|
|
|
—
|
|
||
Global ERP implementation charges
|
6,149
|
|
|
3,669
|
|
||
Facility optimization charges
|
3,408
|
|
|
1,636
|
|
||
Certain employee termination charges
|
—
|
|
|
501
|
|
||
Discontinued product lines charges
|
—
|
|
|
835
|
|
||
Acquisition-related charges
|
388
|
|
|
702
|
|
||
Impairment charges
|
—
|
|
|
141
|
|
||
Convertible debt non-cash interest
|
1,610
|
|
|
3,528
|
|
||
Total
|
$
|
14,959
|
|
|
$
|
12,647
|
|
|
Three Months Ended March 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
Cost of goods sold
|
$
|
4,501
|
|
|
$
|
4,544
|
|
Selling, general and administrative
|
8,848
|
|
|
4,575
|
|
||
Interest expense
|
1,610
|
|
|
3,528
|
|
||
Total
|
$
|
14,959
|
|
|
$
|
12,647
|
|
|
Three Months Ended March 31,
|
||||||
|
2013
|
|
2012
|
||||
Segment Net Sales
|
(In thousands)
|
||||||
U.S. Neurosurgery
|
$
|
38,996
|
|
|
$
|
40,183
|
|
U.S. Instruments
|
36,948
|
|
|
37,994
|
|
||
U.S. Extremities
|
31,361
|
|
|
26,587
|
|
||
U.S. Spine and Other
|
43,548
|
|
|
44,810
|
|
||
International *
|
45,799
|
|
|
46,611
|
|
||
Total revenue
|
196,652
|
|
|
196,185
|
|
||
Cost of goods sold
|
80,268
|
|
|
74,675
|
|
||
Gross margin on total revenues
|
$
|
116,384
|
|
|
$
|
121,510
|
|
Gross margin as a percentage of total revenues
|
59.2
|
%
|
|
61.9
|
%
|
|
Three Months Ended March 31,
|
||||
|
2013
|
|
2012
|
||
Research and development
|
6.5
|
%
|
|
6.1
|
%
|
Selling, general and administrative
|
50.9
|
%
|
|
44.6
|
%
|
Intangible asset amortization
|
1.8
|
%
|
|
2.4
|
%
|
Total operating expenses
|
59.2
|
%
|
|
53.1
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
Interest income
|
$
|
63
|
|
|
$
|
378
|
|
Interest expense
|
(4,800
|
)
|
|
(7,929
|
)
|
||
Other income (expense)
|
(974
|
)
|
|
(323
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
(Loss) income before income taxes
|
$
|
(5,755
|
)
|
|
$
|
9,593
|
|
Income tax (benefit) expense
|
(1,705
|
)
|
|
2,900
|
|
||
Effective tax rate
|
29.6
|
%
|
|
30.2
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
United States
|
$
|
150,019
|
|
|
$
|
148,674
|
|
Europe
|
23,617
|
|
|
23,668
|
|
||
Rest of World
|
23,016
|
|
|
23,843
|
|
||
Total Revenues
|
$
|
196,652
|
|
|
$
|
196,185
|
|
|
Three Months Ended March 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
Net cash provided by operating activities
|
$
|
7,846
|
|
|
$
|
32,318
|
|
Net cash used in investing activities
|
(13,087
|
)
|
|
(63,835
|
)
|
||
Net cash provided by (used in) financing activities
|
257
|
|
|
(12,560
|
)
|
||
Effect of exchange rate fluctuations on cash
|
(2,263
|
)
|
|
1,911
|
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
(7,247
|
)
|
|
$
|
(42,166
|
)
|
•
|
economic conditions in the United States or abroad, especially in Europe, which could affect the ability of hospitals and other customers to purchase our products and could result in a reduction in elective and non-reimbursed operative procedures;
|
•
|
the impact of acquisitions;
|
•
|
the impact of our restructuring activities;
|
•
|
the timing of significant customer orders, which tend to increase in the fourth quarter to coincide with the end of budget cycles for many hospitals;
|
•
|
market acceptance of our existing products, as well as products in development;
|
•
|
the timing of regulatory approvals;
|
•
|
changes in the rates of exchange between the U.S. dollar and other currencies of foreign countries in which we do business, such as the euro, the British pound and the Japanese yen;
|
•
|
expenses incurred and business lost in connection with product field correction actions or recalls;
|
•
|
potential backorders and lost sales resulting from stoppages in production relating to product recalls or field corrective actions;
|
•
|
changes in the cost or decreases in the supply of raw materials, including energy and steel;
|
•
|
our ability to manufacture and ship our products efficiently or in sufficient quantities to meet sales demands;
|
•
|
the timing of our research and development expenditures;
|
•
|
reimbursement for our products by third-party payors such as Medicare, Medicaid and private health insurers;
|
•
|
inspections of our manufacturing facilities for compliance with Quality System Regulations (Good Manufacturing Practices) which could result in Form 483 observations, warning letters, injunctions or other adverse findings from the FDA or from equivalent regulatory bodies, and corrective actions, procedural changes and other actions that we determine are necessary or appropriate to address the results of those inspections, any of which may affect production and our ability to supply our customers with our products; and
|
•
|
the increased regulatory scrutiny of certain of our products, including products which we manufacture for others, could result in their being removed from the market.
|
•
|
as mentioned above, new legislation, which is intended to expand access to health insurance coverage over time, will result in major changes in the United States healthcare system that could have an adverse effect on our business, including a 2.3% excise tax on U.S. sales of most medical devices, implemented in 2013, which will adversely affect our earnings;
|
•
|
third-party payors of hospital services and hospital outpatient services, including Medicare, Medicaid and private healthcare insurers, annually revise their payment methodologies, which can result in stricter standards for reimbursement of hospital charges for certain medical procedures or the elimination of reimbursement;
|
•
|
Medicare, Medicaid and private healthcare insurer cutbacks could create downward price pressure on our products;
|
•
|
local Medicare coverage as well as commercial carrier coverage determinations will eliminate reimbursement or coverage for certain of our matrix wound dressing products as well as other collagen products in most regions, negatively affecting our market for these products, and future determinations could eliminate reimbursement or coverage for these products in other regions and could eliminate reimbursement or coverage for other products;
|
•
|
there has been a consolidation among healthcare facilities and purchasers of medical devices in the United States some of whom prefer to limit the number of suppliers from whom they purchase medical products, and these entities may decide to stop purchasing our products or demand discounts on our prices;
|
•
|
we are party to contracts with group purchasing organizations, which negotiate pricing for many member hospitals, that require us to discount our prices for certain of our products and limit our ability to raise prices for certain of our products, particularly surgical instruments;
|
•
|
there is economic pressure to contain healthcare costs in domestic and international markets, and, regardless of the consolidation discussed above, providers generally are exploring ways to cut costs by eliminating purchases or driving reductions in the prices that they pay for medical devices;
|
•
|
there are proposed and existing laws, regulations and industry policies in domestic and international markets regulating the sales and marketing practices and the pricing and profitability of companies in the healthcare industry;
|
•
|
proposed laws or regulations will permit hospitals to provide financial incentives to doctors for reducing hospital costs (known as gainsharing), will award physician efficiency (known as physician profiling), and will encourage partnerships with healthcare service and goods providers to reduce prices;
|
•
|
the growing prevalence of physician-owned distributorships catering to the spinal surgery market has reduced and may continue to reduce our ability to compete effectively for business from surgeons who own such distributorships; and
|
•
|
there have been initiatives by third-party payors to challenge the prices charged for medical products that could affect our ability to sell products on a competitive basis.
|
|
|
|
10.1
|
|
Letter Agreement dated February 19, 2013 between Peter J. Arduini and Integra LifeSciences Holdings Corporation (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on February 25, 2013)
|
|
|
|
10.2
|
|
Form of Performance Stock Agreement (Executive Officers) (Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on February 25, 2013)
|
|
|
|
*10.3
|
|
Performance Incentive Compensation Plan effective January 1, 2013
|
|
|
|
*10.4
|
|
Amendment to Second Amended and Restated 2003 Equity Incentive Plan effective January 1, 2013
|
|
|
|
10.5
|
|
Amendment to 2000 Equity Incentive Plan (effective as of January 1, 2013) (Incorporated by reference to Exhibit 10.8(c) to the Company's Annual Report on Form 10-K for the year ended December 31, 2012)
|
|
|
|
10.6
|
|
Amendment to 2001 Equity Incentive Plan (effective as of January 1, 2013) (Incorporated by reference to Exhibit 10.9(c) to the Company's Annual Report on Form 10-K for the year ended December 31, 2012)
|
|
|
|
10.7
|
|
New Form of Restricted Stock Agreement for Non-Employee Directors under the 2003 Equity Incentive Plan (Incorporated by reference to Exhibit 10.38(b) to the Company's Annual Report on Form 10-K for the year ended December 31, 2012)
|
|
|
|
10.8
|
|
New Form of Restricted Stock Agreement for Executive Officers - Annual Vesting (Incorporated by reference to Exhibit 10.38(e) to the Company's Annual Report on Form 10-K for the year ended December 31, 2012)
|
|
|
|
10.9
|
|
New Form of Restricted Stock Agreement for Executive Officers - Cliff Vesting (Incorporated by reference to Exhibit 10.38(h) to the Company's Annual Report on Form 10-K for the year ended December 31, 2012)
|
|
|
|
*10.10
|
|
Severance Agreement between Richard D. Gorelick and the Company dated as of January 3, 2012
|
|
|
|
*31.1
|
|
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
*31.2
|
|
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
*32.1
|
|
Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
*32.2
|
|
Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
*†101.INS
|
|
XBRL Instance Document
|
|
|
|
*†101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
*†101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
*†101.DEF
|
|
XBRL Definition Linkbase Document
|
|
|
|
*†101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
|
*†101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith
|
†
|
The financial information of Integra LifeSciences Holdings Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2013
filed on May 2, 2013
formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations and Comprehensive Income, (ii) the Condensed Consolidated Balance Sheets, (iii) Parenthetical Data to the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements, is furnished electronically herewith.
|
|
|
|
|
|
|
|
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
|
|
|
|
|
Date:
|
May 2, 2013
|
|
/s/ Peter J. Arduini
|
|
|
|
Peter J. Arduini
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
Date:
|
May 2, 2013
|
|
/s/ John B. Henneman, III
|
|
|
|
John B. Henneman, III
|
|
|
|
Corporate Vice President, Finance and Administration,
and Chief Financial Officer
|
Exhibits
|
|
|
|
|
|
10.1
|
|
Letter Agreement dated February 19, 2013 between Peter J. Arduini and Integra LifeSciences Holdings Corporation (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on February 25, 2013)
|
|
|
|
10.2
|
|
Form of Performance Stock Agreement (Executive Officers) (Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on February 25, 2013)
|
|
|
|
*10.3
|
|
Performance Incentive Compensation Plan effective January 1, 2013
|
|
|
|
*10.4
|
|
Amendment to Second Amended and Restated 2003 Equity Incentive Plan effective January 1, 2013
|
|
|
|
10.5
|
|
Amendment to 2000 Equity Incentive Plan (effective as of January 1, 2013) (Incorporated by reference to Exhibit 10.8(c) to the Company's Annual Report on Form 10-K for the year ended December 31, 2012)
|
|
|
|
10.6
|
|
Amendment to 2001 Equity Incentive Plan (effective as of January 1, 2013) (Incorporated by reference to Exhibit 10.9(c) to the Company's Annual Report on Form 10-K for the year ended December 31, 2012)
|
|
|
|
10.7
|
|
New Form of Restricted Stock Agreement for Non-Employee Directors under the 2003 Equity Incentive Plan (Incorporated by reference to Exhibit 10.38(b) to the Company's Annual Report on Form 10-K for the year ended December 31, 2012)
|
|
|
|
10.8
|
|
New Form of Restricted Stock Agreement for Executive Officers - Annual Vesting (Incorporated by reference to Exhibit 10.38(e) to the Company's Annual Report on Form 10-K for the year ended December 31, 2012)
|
|
|
|
10.9
|
|
New Form of Restricted Stock Agreement for Executive Officers - Cliff Vesting (Incorporated by reference to Exhibit 10.38(h) to the Company's Annual Report on Form 10-K for the year ended December 31, 2012)
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*10.10
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Severance Agreement between Richard D. Gorelick and the Company dated as of January 3, 2012
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*31.1
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Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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*31.2
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Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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*32.1
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Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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*32.2
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Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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*†101.INS
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XBRL Instance Document
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*†101.SCH
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XBRL Taxonomy Extension Schema Document
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*†101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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*†101.DEF
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XBRL Definition Linkbase Document
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*†101.LAB
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XBRL Taxonomy Extension Labels Linkbase Document
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*†101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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*
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Filed herewith
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†
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The financial information of Integra LifeSciences Holdings Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 filed on May 2, 2013 formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations and Comprehensive Income, (ii) the Condensed Consolidated Balance Sheets, (iii) Parenthetical Data to the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements, is furnished electronically herewith.
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(a)
|
“
Base Salary
” shall mean a minimum base salary of $340,000 per year, payable in periodic installments in accordance with the Company’s regular payroll practices in effect from time to time. Executive’s Base Salary shall be subject to annual reviews, and may increase pursuant to such reviews, in which case the increased annual Base Salary shall become the “Base Salary.”
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(b)
|
“
Board
” shall mean the Board of Directors of the Company, or any successor thereto.
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(c)
|
“
Cause
,” as determined by the Board in good faith, shall mean Executive has --
|
(1)
|
failed to perform his stated duties in all material respects, which failure continues for 15 days after his receipt of written notice of the failure;
|
(2)
|
intentionally and materially breached any provision of this Agreement and not cured such breach (if curable) within 15 days of his receipt of written notice of the breach;
|
(3)
|
demonstrated his personal dishonesty in connection with his employment by the Company;
|
(4)
|
engaged in a breach of fiduciary duty in connection with his employment with the Company;
|
(5)
|
engaged in willful misconduct that is materially and demonstrably injurious to the Company or any of its subsidiaries; or
|
(6)
|
been convicted or entered a plea of guilty or
nolo
contendere
to a felony or to any other crime involving moral turpitude which conviction or plea is materially and demonstrably injurious to the Company or any of its subsidiaries.
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(d)
|
A “
Change in Control
” of the Company shall be deemed to have occurred:
|
(1)
|
if the “beneficial ownership” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of securities representing more than fifty percent (50%) of the combined voting power of Company Voting Securities (as herein defined) is acquired by any individual, entity or group (a “
Person
”), other than the Company, any trustee or other fiduciary holding securities under any employee benefit plan of the Company or an affiliate thereof, or any
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(2)
|
if individuals who, as of the date hereof, constitute the Board (the “
Incumbent Board
”) cease for any reason during any period of at least 24 months to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
|
(3)
|
upon consummation by the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets or stock of any entity (a
“Business Combination
”), in each case, unless immediately following such Business Combination: (i) Company Voting Securities outstanding immediately prior to such Business Combination (or if such Company Voting Securities were converted pursuant to such Business Combination, the shares into which such Company Voting Securities were converted) (x) represent, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation resulting from such Business Combination (the “
Surviving Corporation
”), or, if applicable, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries (the “
Parent Corporation
”) and (y) are held in substantially the same proportions after such Business Combination as they were immediately prior to such Business Combination; (ii) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 50% or more of the combined voting power of the then outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) except to the extent that such ownership of the Company existed prior to the Business Combination; and (iii) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) were members of the Incumbent Board at the time of the execution of the initial agreement, or the action of the Board, providing for such Business Combination; or
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(4)
|
upon approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.
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(e)
|
“
Code
” shall mean the Internal Revenue Code of 1986, as amended.
|
(f)
|
“
Company
” shall mean Integra LifeSciences Holdings Corporation and any corporation, partnership or other entity owned directly or indirectly, in whole or in part, by Integra LifeSciences Holdings Corporation.
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(g)
|
“
Disability
” shall mean Executive’s inability to perform his duties hereunder by reason of any medically determinable physical or mental impairment which is expected to result in death or which has lasted or is expected to last for a continuous period of not fewer than six months.
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(h)
|
“
Good Reason
” shall mean:
|
(1)
|
a material breach of this Agreement by the Company which is not cured by the Company within 15 days of its receipt of written notice of the breach;
|
(2)
|
the relocation by the Company of Executive’s office to a location more than forty (40) miles from Princeton, New Jersey, or, where Executive’s office is located other than at the Company’s headquarters in Plainsboro, New Jersey, to a location more than forty (40) miles from the location of Executive’s office on the date hereof;
|
(3)
|
the Company’s failure to obtain the assumption of this Agreement by any successor to the Company; or
|
(4)
|
without Executive’s express written consent, the Company effects: (i) a reduction in Executive’s Base Salary, bonus opportunity (if applicable) or the aggregate fringe benefits provided to Executive; or (ii) a substantial alteration of Executive’s authority and/or title or other substantial diminution in the nature or status of Executive’s responsibilities in a manner reasonably construed to constitute a demotion.
|
(i)
|
“
Retirement
” shall mean the termination of Executive’s employment with the Company in accordance with the retirement policies, including early retirement policies, generally applicable to the Company’s salaried employees.
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(j)
|
“
Term
” shall have the meaning set forth Section 2 hereof.
|
(k)
|
“
Termination Date
” shall mean the date on which Executive’s employment with the Company terminates, as specified in the Termination Notice.
|
(l)
|
“
Termination Notice
” shall mean a dated notice which: (i) indicates the specific termination provision in this Agreement relied upon (if any); (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for the termination of Executive’s employment under such provision; (iii) specifies a Termination Date; and (iv) is given in the manner specified in Section 16(i).
|
(a)
|
General
. During the Term, the Company shall not terminate Executive from employment with the Company except as provided in this Section 3 or as a result of Executive’s Disability, Retirement or death.
|
(b)
|
For Cause
. During the Term, the Company shall have the right to terminate Executive from employment with the Company at any time during the Term for Cause, by written notice to Executive, specifying the particulars of the conduct of Executive forming the basis for such termination.
|
(c)
|
Without Cause or for Good Reason
. Subject to Section 4 below, during the Term: (x) the Company shall have the right to terminate Executive’s employment without Cause, at any time; and (y) Executive shall have the right to voluntarily terminate his employment for Good Reason.
|
(a)
|
As consideration for the restrictive covenants contained in Section 6, in the event that, during the Term, Executive terminates his employment for Good Reason, or Executive’s employment is terminated by the Company for a reason other than Retirement, Disability, death or Cause, then the Company shall:
|
(i)
|
pay Executive a lump-sum severance amount equal to the sum of (x) Executive’s annual Base Salary (determined without regard to any reduction that would give rise to Good Reason) as of his last day of active employment, plus (y) Executive’s target annual cash bonus for the fiscal year of the Company in which the Termination Date occurs; the severance amount shall be paid in a single sum on the first business day of the month following the Termination Date; and
|
(ii)
|
maintain and provide to Executive, for a period commencing on the Termination Date and ending on the earlier of (A) the end of the twelfth month after the Termination Date, or (B) Executive’s death, continued health coverage in the plan in which Executive was participating immediately prior to the Termination Date; provided that the continuation of such coverage is not prohibited by the terms of the plan or by the Company for legal reasons; and provided further, that in order to receive such continued coverage, Executive shall be required to pay to the Company at the same time that premium payments are due for the month an amount equal to the full monthly premium payments required to pay for such coverage and the Company shall reimburse to Executive the amount of such monthly premium, less the amount that Executive was required to pay for such coverage immediately prior to the Termination Date (the “
Health Payment
”), no later than the next payroll date of the Company that occurs after the date the premium for the month is paid by Executive
.
To the extent not otherwise exempt from Section 409A of the Code, the Health Payment shall be reimbursed to Executive in a manner that complies with the requirements of Treas. Reg. §1.409A-3(i)(1)(iv); and
|
(iii)
|
pay to Executive a lump sum cash payment within thirty (30) days following Executive’s Termination Date equal to the premium cost of continuing the life and disability insurance in effect on Executive’s Termination Date for the period ending on the end of the twelfth month after the Termination Date; provided that the continuation of such benefits is not prohibited by the terms of the plan or by the Company for legal reasons.
|
(iv)
|
If any payment or benefit to Executive under this Agreement would be considered a “parachute payment” within the meaning of Section 280G(b)(2) of the Code and, if, after reduction for any applicable federal excise tax imposed by Section 4999 of the Code (the
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(v)
|
Notwithstanding any provision to the contrary herein, if at the time of Executive’s termination of employment the Company’s stock is publicly traded and Executive is a “specified employee” (as such term is defined in Section 409A(2)(B)(i) of the Code and its corresponding regulations), then, to the extent that
paying such amounts at the time or times indicated in this Agreement would be a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code,
all payments to Executive pursuant to this Section 4(a) that are deemed as deferred compensation subject to the requirements of Section 409A of the Code shall not be paid to Executive until as soon as administratively practicable following the expiration of the six month period following the date of Executive’s Termination Date, but not later than the first Company payroll date that occurs after the end of such six month period. If Executive dies during such six-month period and prior to the payment of the postponed amounts hereunder, the amounts withheld on account of Section 409A of the Code shall be paid to the personal representative of Executive’s estate within thirty (30) days after the date of Executive’s death.
If any of the payments payable pursuant to this Section 4(a) are deferred due to such requirements, there shall be added to such payments interest during the deferral period at a rate, per annum, equal to the applicable federal short-term deferral rate (compounded monthly) in effect under Section 1274(d) of the Code on Executive’s Termination Date.
|
(b)
|
Other Termination
. In the event that Executive’s employment terminates other than as set forth in Section 4(a), Executive’s rights upon termination shall be governed by the Company’s standard employment termination policies and practices applicable to Executive in effect at the time of termination or, if applicable, any written employment agreement between the Company and Executive other than this Agreement in effect at the time of termination.
|
(c)
|
Termination Notice
. Except in the event of Executive’s death, a termination under this Agreement shall be effected by means of a Termination Notice.
|
(a)
|
Covenant Not to Compete
. To the extent enforceable under the laws of the State of New Jersey, during the Term and for a period of one year following the Termination Date of Executive’s employment, Executive shall not, without the express written consent of the Company, directly or indirectly: (I) engage, anywhere within the geographical areas in which the Company is conducting business operations or providing services as of the date of Executive’s termination of employment, in the tissue engineering business (the use of implantable absorbable materials, with or without a bioactive component, to attempt to elicit a specific cellular response in order to regenerate tissue or to impede the growth of tissue or migration of cells) (the
“Tissue Engineering Business
”), neurosurgery business (the use of surgical instruments, implants, monitoring products or disposable products to treat the brain or central nervous system) (“
Neurosurgery Business
”), instrument business (general surgical handheld instruments used for general purposes in surgical procedures) (“
Instrument Business
”), reconstruction business (bone fixation devices for foot and ankle reconstruction procedures) (“
Reconstruction Business
”) or in any other line of business the revenues of which constituted at least 50% of the Company’s revenues during the six (6) month period prior to the Termination Date (together with the Tissue Engineering Business, Neurosurgery Business, Instrument Business and Reconstruction Business, the “
Business
”); (II) be or become a stockholder, partner, owner, officer, director or employee or agent of, or a consultant to or give financial or other assistance to, any person or entity engaged in the Business; (III) seek in competition with the Business to procure orders from or do business with any customer of the Company; (IV) solicit, or contact with a view to the engagement or employment by any person or entity of, any person who is an employee of the Company; (V) seek to contract with or engage (in such a way as to adversely affect or interfere with the business of the Company) any person or entity who has been contracted with or engaged to manufacture, assemble, supply or deliver products, goods, materials or services to the Company; or (VI) engage in or participate in any effort or act to induce any of the customers, associates, consultants, or employees of the Company to take any action which might be disadvantageous to the Company; provided, however, that nothing herein shall prohibit Executive and his affiliates from owning, as passive investors, in the aggregate not more than 5% of the outstanding publicly traded stock of any corporation so engaged and provided, further, however, that nothing set forth in this Section 6(a) shall prohibit Executive from becoming an employee or agent of, or consultant to, any entity that is engaged in the Business so long as Executive does not engage in any activities in the Business in any capacity for said entity.
|
(b)
|
Confidentiality
. Executive acknowledges a duty of confidentiality owed to the Company and shall not, at any time during or after his employment by the Company, retain in writing, use, divulge, furnish, or make accessible to anyone, without the express authorization of the Board, any trade secret, private or confidential information or knowledge of the Company obtained or acquired by him while so employed. All computer software, business cards, telephone lists, customer lists, price lists, contract forms, catalogs, the Company books, records, files and know-how acquired while an employee of the Company are acknowledged to be the property of the Company and shall not be duplicated, removed from the Company’s possession or premises or made use of other than in pursuit of the Company’s business or as may otherwise be required by law or any legal process, or as is necessary in connection with any adversarial proceeding against the Company and, upon termination of employment for any reason, Executive shall deliver to the Company all copies
|
(c)
|
Inventions and Improvements
. Executive shall promptly communicate to the Company all ideas, discoveries and inventions which are or may be useful to the Company or its business. Executive acknowledges that all such ideas, discoveries, inventions, and improvements which heretofore have been or are hereafter made, conceived, or reduced to practice by him at any time during his employment with the Company heretofore or hereafter gained by him at any time during his employment with the Company are the property of the Company, and Executive hereby irrevocably assigns all such ideas, discoveries, inventions and improvements to the Company for its sole use and benefit, without additional compensation. The provisions of this Section 6(c) shall apply whether such ideas, discoveries, inventions, or improvements were or are conceived, made or gained by him alone or with others, whether during or after usual working hours, whether on or off the job, whether applicable to matters directly or indirectly related to the Company’s business interests (including potential business interests), and whether or not within the specific realm of his duties. Executive shall, upon request of the Company, but at no expense to Executive, at any time during or after his employment with the Company, sign all instruments and documents reasonably requested by the Company and otherwise cooperate with the Company to protect its right to such ideas, discoveries, inventions, or improvements including applying for, obtaining and enforcing patents and copyrights thereon in such countries as the Company shall determine.
|
(d)
|
Breach of Covenant
. Executive expressly acknowledges that damages alone will be an inadequate remedy for any breach or violation of any of the provisions of this Section 6 and that the Company, in addition to all other remedies, shall be entitled as a matter of right to equitable relief, including injunctions and specific performance, in any court of competent jurisdiction. If any of the provisions of this Section 6 are held to be in any respect unenforceable, then they shall be deemed to extend only over the maximum period of time, geographic area, or range of activities as to which they may be enforceable.
|
(e)
|
Survivability
. Executive’s obligations under this Section 6 shall survive termination of this Agreement and/or termination of Executive’s employment regardless of the manner of termination and shall be binding upon Executive’s heirs, executors, administrators and legal representatives.
|
(a)
|
Amendment
. No provision of this Agreement may be amended unless such amendment is signed by Executive and such officer as may be specifically designated by the Board to sign on the Company’s behalf.
|
(b)
|
Nature of Obligations
. Nothing contained herein shall create or require the Company to create a trust of any kind to fund any benefits which may be payable hereunder, and to the extent that Executive acquires a right to receive benefits from the Company hereunder, such right shall be no greater than the right of any unsecured general creditor of the Company.
|
(c)
|
ERISA
. For purposes of the Employee Retirement Income Security Act of 1974, as amended, this Agreement is intended to be a severance pay employee welfare benefit plan, and not an employee pension plan, and shall be construed and administered with that intention.
|
(d)
|
Prior Employment
. Executive represents and warrants that his employment with the Company has not breached, and the performance of his duties for the Company will not breach, any duty owed by him to any prior employer or other person.
|
(e)
|
Headings
. The Section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation or this Agreement. In the event of a conflict between a heading and the content of a Section, the content of the Section shall control.
|
(f)
|
Gender and Number
. Whenever used in this Agreement, a masculine pronoun is deemed to include the feminine and a neuter pronoun is deemed to include both the masculine and the
|
(g)
|
Severability
. If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable under any applicable law, such event shall not affect or render invalid or unenforceable any other provision of this Agreement and shall not affect the application of any provision to other persons or circumstances.
|
(h)
|
Binding Effect
. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, permitted assigns, heirs, executors and administrators.
|
(i)
|
Notice
. For purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given if hand-delivered, sent by documented overnight delivery service or by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below:
|
(j)
|
Entire Agreement
. This Agreement sets forth the entire understanding of the parties and supersedes all prior agreements, arrangements and communications, whether oral or written, pertaining to the subject matter hereof.
|
(k)
|
Governing Law
. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the United States where applicable and otherwise by the laws of the State of New Jersey.
|
(l)
|
Section 409A
.
|
(i)
|
This Agreement shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder and to avoid any penalty sanctions under Section 409A of the Code. If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions under Section 409A of the Code, then such benefit or payment shall be provided in full at the earliest time thereafter when such sanctions will not be imposed. All payments to be made upon a termination of employment under this Agreement may only be made upon a
|
(ii)
|
All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (A) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement), (B) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (C) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (D) the right to reimbursement is not subject to liquidation or exchange for another benefit. If expenses are incurred in connection with litigation, any reimbursements under the Agreement shall be paid not later than the end of the calendar year following the year in which the litigation is resolved
.
|
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
By:
/s/ Peter J. Arduini
Its: President and Chief Executive Officer
|
EXECUTIVE
/s/ Richard D. Gorelick
Richard D. Gorelick
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Integra LifeSciences Holdings Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13 a-15(e): and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: May 2, 2013
|
/s/ Peter J. Arduini
|
|
Peter J. Arduini
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Integra LifeSciences Holdings Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13 a-15(e): and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: May 2, 2013
|
/s/ John B. Henneman, III
|
|
John B. Henneman, III
|
|
Corporate Vice President, Finance and Administration,
and Chief Financial Officer
|
1.
|
The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2013 (the “Report”) fully complies with the requirement of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: May 2, 2013
|
/s/ Peter J. Arduini
|
|
Peter J. Arduini
|
|
President and Chief Executive Officer
|
1.
|
The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2013 (the “Report”) fully complies with the requirement of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: May 2, 2013
|
/s/ John B. Henneman, III
|
|
John B. Henneman, III
|
|
Corporate Vice President, Finance and Administration,
and Chief Financial Officer
|