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Delaware
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No. 41-1698056
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(State or other jurisdiction of
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(IRS Employer
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incorporation or organization)
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Identification No.)
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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PAGE
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ITEM 1.
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CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
|
December 31,
2017 |
|
June 30,
2017 |
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
107,345
|
|
|
$
|
107,912
|
|
Accounts receivable, net
|
27,861
|
|
|
28,472
|
|
||
Inventories
|
17,401
|
|
|
16,897
|
|
||
Marketable securities
|
636
|
|
|
704
|
|
||
Prepaid expenses and other current assets
|
2,556
|
|
|
5,074
|
|
||
Total current assets
|
155,799
|
|
|
159,059
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|
||
Property and equipment, net
|
28,729
|
|
|
29,696
|
|
||
Patents, net
|
5,386
|
|
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5,056
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Other assets
|
150
|
|
|
129
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|
||
Total assets
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$
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190,064
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|
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$
|
193,940
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LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
9,716
|
|
|
$
|
10,736
|
|
Accrued expenses
|
22,680
|
|
|
30,236
|
|
||
Deferred revenue
|
1,095
|
|
|
—
|
|
||
Total current liabilities
|
33,491
|
|
|
40,972
|
|
||
Long-term liabilities
|
|
|
|
||||
Financing obligation
|
21,088
|
|
|
21,100
|
|
||
Deferred revenue
|
8,905
|
|
|
10,000
|
|
||
Other liabilities
|
2,620
|
|
|
3,479
|
|
||
Total liabilities
|
66,104
|
|
|
75,551
|
|
||
Commitments and contingencies (see Note 7)
|
|
|
|
||||
Common stock, $0.001 par value; authorized 100,000,000 common shares at December 31, 2017 and June 30, 2017; issued and outstanding 33,213,195 at December 31, 2017 and 32,849,563 at June 30, 2017, respectively
|
33
|
|
|
33
|
|
||
Additional paid in capital
|
455,508
|
|
|
447,559
|
|
||
Accumulated other comprehensive income
|
112
|
|
|
100
|
|
||
Accumulated deficit
|
(331,693
|
)
|
|
(329,303
|
)
|
||
Total stockholders’ equity
|
123,960
|
|
|
118,389
|
|
||
Total liabilities and stockholders’ equity
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$
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190,064
|
|
|
$
|
193,940
|
|
|
Three Months Ended
December 31, |
|
Six Months Ended
December 31, |
||||||||||||
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2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net revenues
|
$
|
52,628
|
|
|
$
|
50,043
|
|
|
$
|
102,304
|
|
|
$
|
99,843
|
|
Cost of goods sold
|
9,499
|
|
|
9,163
|
|
|
18,701
|
|
|
18,629
|
|
||||
Gross profit
|
43,129
|
|
|
40,880
|
|
|
83,603
|
|
|
81,214
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
37,008
|
|
|
33,993
|
|
|
72,926
|
|
|
70,859
|
|
||||
Research and development
|
6,396
|
|
|
5,805
|
|
|
12,704
|
|
|
11,140
|
|
||||
Total expenses
|
43,404
|
|
|
39,798
|
|
|
85,630
|
|
|
81,999
|
|
||||
Income (loss) from operations
|
(275
|
)
|
|
1,082
|
|
|
(2,027
|
)
|
|
(785
|
)
|
||||
Other (income) expense, net:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
430
|
|
|
46
|
|
|
862
|
|
|
46
|
|
||||
Interest income and other, net
|
(325
|
)
|
|
(31
|
)
|
|
(565
|
)
|
|
(64
|
)
|
||||
Total other (income) expense, net
|
105
|
|
|
15
|
|
|
297
|
|
|
(18
|
)
|
||||
Income (loss) before income taxes
|
(380
|
)
|
|
1,067
|
|
|
(2,324
|
)
|
|
(767
|
)
|
||||
Provision for income taxes
|
33
|
|
|
24
|
|
|
66
|
|
|
48
|
|
||||
Net income (loss)
|
$
|
(413
|
)
|
|
$
|
1,043
|
|
|
$
|
(2,390
|
)
|
|
$
|
(815
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
$
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(0.01
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.03
|
)
|
Diluted earnings per share
|
$
|
(0.01
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average shares outstanding
|
33,112,138
|
|
|
32,189,981
|
|
|
33,040,425
|
|
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32,060,973
|
|
||||
Diluted weighted average shares outstanding
|
33,112,138
|
|
|
32,804,305
|
|
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33,040,425
|
|
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32,060,973
|
|
|
Three Months Ended
December 31, |
|
Six Months Ended
December 31, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income (loss)
|
$
|
(413
|
)
|
|
$
|
1,043
|
|
|
$
|
(2,390
|
)
|
|
$
|
(815
|
)
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Unrealized gain on available for sale securities
|
16
|
|
|
16
|
|
|
28
|
|
|
37
|
|
||||
Adjustment for net gain realized and included in other income, net
|
(8
|
)
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
||||
Total change in unrealized gain on available for sale securities
|
8
|
|
|
16
|
|
|
12
|
|
|
37
|
|
||||
Comprehensive income (loss)
|
$
|
(405
|
)
|
|
$
|
1,059
|
|
|
$
|
(2,378
|
)
|
|
$
|
(778
|
)
|
|
Six Months Ended
December 31, |
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net loss
|
$
|
(2,390
|
)
|
|
$
|
(815
|
)
|
Adjustments to reconcile net loss to net cash used in operations
|
|
|
|
||||
Depreciation of property and equipment
|
1,988
|
|
|
1,940
|
|
||
Amortization and write-off of patents
|
128
|
|
|
831
|
|
||
Provision for (recovery of) doubtful accounts
|
(93
|
)
|
|
190
|
|
||
Stock-based compensation
|
5,740
|
|
|
5,933
|
|
||
Changes in assets and liabilities
|
|
|
|
||||
Accounts receivable
|
561
|
|
|
(2,460
|
)
|
||
Inventories
|
(504
|
)
|
|
1,271
|
|
||
Prepaid expenses and other assets
|
2,792
|
|
|
1,936
|
|
||
Accounts payable
|
(608
|
)
|
|
(1,028
|
)
|
||
Accrued expenses and other liabilities
|
(8,439
|
)
|
|
(3,976
|
)
|
||
Deferred revenue
|
—
|
|
|
10,000
|
|
||
Net cash (used in) provided by operating activities
|
(825
|
)
|
|
13,822
|
|
||
Cash flows from investing activities
|
|
|
|
||||
Purchases of property and equipment
|
(1,269
|
)
|
|
(481
|
)
|
||
Proceeds from convertible note receivable
|
143
|
|
|
—
|
|
||
Sales of marketable securities
|
96
|
|
|
—
|
|
||
Costs incurred in connection with patents
|
(622
|
)
|
|
(375
|
)
|
||
Net cash used in investing activities
|
(1,652
|
)
|
|
(856
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from employee stock purchase plan
|
1,385
|
|
|
1,400
|
|
||
Exercise of stock options
|
513
|
|
|
4,275
|
|
||
Other
|
12
|
|
|
—
|
|
||
Net cash provided by financing activities
|
1,910
|
|
|
5,675
|
|
||
Net change in cash and cash equivalents
|
(567
|
)
|
|
18,641
|
|
||
Cash and cash equivalents
|
|
|
|
||||
Beginning of period
|
107,912
|
|
|
60,638
|
|
||
End of period
|
$
|
107,345
|
|
|
$
|
79,279
|
|
|
December 31,
|
|
June 30,
|
||||
|
2017
|
|
2017
|
||||
Accounts receivable
|
$
|
28,687
|
|
|
$
|
29,336
|
|
Less: Allowance for doubtful accounts
|
(826
|
)
|
|
(864
|
)
|
||
Accounts receivable, net
|
$
|
27,861
|
|
|
$
|
28,472
|
|
|
December 31,
|
|
June 30,
|
||||
|
2017
|
|
2017
|
||||
Raw materials
|
$
|
9,234
|
|
|
$
|
7,898
|
|
Work in process
|
771
|
|
|
1,221
|
|
||
Finished goods
|
7,396
|
|
|
7,778
|
|
||
Inventories
|
$
|
17,401
|
|
|
$
|
16,897
|
|
|
December 31,
|
|
June 30,
|
||||
|
2017
|
|
2017
|
||||
Land
|
$
|
500
|
|
|
$
|
500
|
|
Building
|
22,420
|
|
|
22,420
|
|
||
Equipment
|
16,991
|
|
|
16,502
|
|
||
Furniture
|
2,709
|
|
|
2,709
|
|
||
Leasehold improvements
|
438
|
|
|
86
|
|
||
Construction in progress
|
601
|
|
|
421
|
|
||
|
43,659
|
|
|
42,638
|
|
||
Less: Accumulated depreciation
|
(14,930
|
)
|
|
(12,942
|
)
|
||
Property and equipment, net
|
$
|
28,729
|
|
|
$
|
29,696
|
|
|
December 31,
|
|
June 30,
|
||||
|
2017
|
|
2017
|
||||
Salaries and bonus
|
$
|
6,064
|
|
|
$
|
8,247
|
|
Commissions
|
5,600
|
|
|
8,217
|
|
||
Accrued vacation
|
3,552
|
|
|
3,436
|
|
||
Accrued excise, sales and other taxes
|
3,407
|
|
|
3,497
|
|
||
Accrued legal
|
—
|
|
|
2,600
|
|
||
Legal settlement
|
1,831
|
|
|
1,814
|
|
||
Clinical studies
|
456
|
|
|
657
|
|
||
Other accrued expenses
|
1,770
|
|
|
1,768
|
|
||
Accrued expenses
|
$
|
22,680
|
|
|
$
|
30,236
|
|
|
December 31,
|
|
June 30,
|
||||
|
2017
|
|
2017
|
||||
Legal settlement
|
$
|
1,395
|
|
|
$
|
2,314
|
|
Deferred compensation
|
440
|
|
|
519
|
|
||
Deferred grant incentive
|
467
|
|
|
473
|
|
||
Other non-current liabilities
|
318
|
|
|
173
|
|
||
Other liabilities
|
$
|
2,620
|
|
|
$
|
3,479
|
|
Six months ended June 30, 2018
|
$
|
831
|
|
Fiscal 2019
|
1,699
|
|
|
Fiscal 2020
|
1,750
|
|
|
Fiscal 2021
|
1,803
|
|
|
Fiscal 2022
|
1,857
|
|
|
Thereafter
|
21,288
|
|
|
|
$
|
29,228
|
|
|
|
As of December 31, 2017
|
||||||||||||||
|
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||||||
Mutual funds
|
|
$
|
524
|
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
636
|
|
Total short-term investments
|
|
$
|
524
|
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
636
|
|
|
|
As of June 30, 2017
|
||||||||||||||
|
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||||||
Mutual funds
|
|
$
|
604
|
|
|
$
|
100
|
|
|
$
|
—
|
|
|
$
|
704
|
|
Total short-term investments
|
|
$
|
604
|
|
|
$
|
100
|
|
|
$
|
—
|
|
|
$
|
704
|
|
|
|
|
|
Fair Value Measurements as of December 31, 2017 Using Inputs Considered as
|
||||||||||||
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Mutual funds
|
|
$
|
636
|
|
|
$
|
252
|
|
|
$
|
384
|
|
|
$
|
—
|
|
Total short-term investments
|
|
$
|
636
|
|
|
$
|
252
|
|
|
$
|
384
|
|
|
$
|
—
|
|
|
|
|
|
Fair Value Measurements as of June 30, 2017
Using Inputs Considered as
|
||||||||||||
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Mutual funds
|
|
$
|
704
|
|
|
$
|
281
|
|
|
$
|
423
|
|
|
$
|
—
|
|
Total short-term investments
|
|
$
|
704
|
|
|
$
|
281
|
|
|
$
|
423
|
|
|
$
|
—
|
|
|
Number of
Options
(a)
|
|
Weighted
Average
Exercise Price
|
|||
Options outstanding at June 30, 2017
|
78,201
|
|
|
$
|
9.07
|
|
Options exercised
|
(55,880
|
)
|
|
$
|
9.20
|
|
Options outstanding at December 31, 2017
|
22,321
|
|
|
$
|
8.75
|
|
(a) Includes the effect of options granted, exercised, forfeited or expired from the 2007 Plan.
|
|
Number of
Shares
|
|
Weighted
Average Fair
Value
|
|||
Outstanding at June 30, 2017
|
486,584
|
|
|
$
|
21.26
|
|
Granted
|
209,796
|
|
|
$
|
29.64
|
|
Forfeited
|
(39,545
|
)
|
|
$
|
21.46
|
|
Vested
|
(197,052
|
)
|
|
$
|
22.74
|
|
Outstanding at December 31, 2017
|
459,783
|
|
|
$
|
24.43
|
|
|
Number of
Shares
|
|
Weighted
Average Fair
Value
|
|||
Outstanding at June 30, 2017
|
318,584
|
|
|
$
|
11.97
|
|
Granted
|
278,889
|
|
|
$
|
13.63
|
|
Forfeited
|
(11,641
|
)
|
|
$
|
12.73
|
|
Outstanding at December 31, 2017
|
585,832
|
|
|
$
|
12.75
|
|
Six months ended June 30, 2018
|
$
|
250
|
|
Fiscal 2019
|
472
|
|
|
Fiscal 2020
|
354
|
|
|
|
$
|
1,076
|
|
|
Three Months Ended
December 31, |
|
Six Months Ended
December 31, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerator
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(413
|
)
|
|
$
|
1,043
|
|
|
$
|
(2,390
|
)
|
|
$
|
(815
|
)
|
Income allocated to participating securities
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
||||
Net income (loss) available to common stockholders
|
$
|
(413
|
)
|
|
$
|
1,025
|
|
|
$
|
(2,390
|
)
|
|
$
|
(815
|
)
|
Denominator
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding – basic
|
33,112,138
|
|
|
32,189,981
|
|
|
33,040,425
|
|
|
32,060,973
|
|
||||
Effect of dilutive stock options
(1)
|
—
|
|
|
111,874
|
|
|
—
|
|
|
—
|
|
||||
Effect of dilutive restricted stock units
(2)
|
—
|
|
|
313,820
|
|
|
—
|
|
|
—
|
|
||||
Effect of performance-based restricted stock awards
(3)
|
—
|
|
|
188,630
|
|
|
—
|
|
|
—
|
|
||||
Weighted average common shares outstanding – diluted
|
33,112,138
|
|
|
32,804,305
|
|
|
33,040,425
|
|
|
32,060,973
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per common share – basic
|
$
|
(0.01
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.03
|
)
|
Earnings per common share – diluted
|
$
|
(0.01
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.03
|
)
|
(1)
|
At December 31, 2017 and 2016,
22,321
and
181,040
stock options were outstanding, respectively. The effect of the shares that would be issued upon exercise of these options has been excluded from the calculation of diluted loss per share, for the three and six months ended December 31, 2017 and six months ended December 31, 2016, because those shares are anti-dilutive.
|
(2)
|
At December 31, 2017 and 2016,
335,869
and
350,771
additional shares of common stock, respectively, were issuable upon the settlement of outstanding restricted stock units. The effect of the shares that would be issued upon settlement of these restricted stock units has been excluded from the calculation of diluted loss per share, for the three and six months ended December 31, 2017 and six months ended December 31, 2016, because those shares are anti-dilutive.
|
(3)
|
At December 31, 2017 and 2016,
585,832
and
336,826
performance-based restricted stock awards, respectively, were outstanding. The effect of the shares that would be issued upon vesting of these awards has been excluded from the calculation of diluted loss per share, for the three and six months ended December 31, 2017 and six months ended December 31, 2016, because those shares are anti-dilutive.
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended
December 31, |
|
Six Months Ended
December 31, |
||||||||||||||||||
|
2017
|
|
2016
|
|
Percent
Change
|
|
2017
|
|
2016
|
|
Percent
Change
|
||||||||||
Net revenues
|
$
|
52,628
|
|
|
$
|
50,043
|
|
|
5.2
|
%
|
|
$
|
102,304
|
|
|
$
|
99,843
|
|
|
2.5
|
%
|
Cost of goods sold
|
9,499
|
|
|
9,163
|
|
|
3.7
|
|
|
18,701
|
|
|
18,629
|
|
|
0.4
|
|
||||
Gross profit
|
43,129
|
|
|
40,880
|
|
|
5.5
|
|
|
83,603
|
|
|
81,214
|
|
|
2.9
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
37,008
|
|
|
33,993
|
|
|
8.9
|
|
|
72,926
|
|
|
70,859
|
|
|
2.9
|
|
||||
Research and development
|
6,396
|
|
|
5,805
|
|
|
10.2
|
|
|
12,704
|
|
|
11,140
|
|
|
14.0
|
|
||||
Total expenses
|
43,404
|
|
|
39,798
|
|
|
9.1
|
|
|
85,630
|
|
|
81,999
|
|
|
4.4
|
|
||||
Income (loss) from operations
|
(275
|
)
|
|
1,082
|
|
|
(125.4
|
)
|
|
(2,027
|
)
|
|
(785
|
)
|
|
158.2
|
|
||||
Other (income) expense, net
|
105
|
|
|
15
|
|
|
600.0
|
|
|
297
|
|
|
(18
|
)
|
|
(1,750.0
|
)
|
||||
Income (loss) before income taxes
|
(380
|
)
|
|
1,067
|
|
|
(135.6
|
)
|
|
(2,324
|
)
|
|
(767
|
)
|
|
203.0
|
|
||||
Provision for income taxes
|
33
|
|
|
24
|
|
|
37.5
|
|
|
66
|
|
|
48
|
|
|
37.5
|
|
||||
Net income (loss)
|
$
|
(413
|
)
|
|
$
|
1,043
|
|
|
(139.6
|
)
|
|
$
|
(2,390
|
)
|
|
$
|
(815
|
)
|
|
193.3
|
|
•
|
the funding of clinical trials and studies;
|
•
|
sales and marketing programs;
|
•
|
expansion into international markets; and
|
•
|
development of new products.
|
•
|
Cash provided by (used in) accounts receivable was
$561,000
and
$(2.5) million
during the
six
months ended
December 31, 2017
and
2016
, respectively, primarily due to the amount and timing of revenue and collections.
|
•
|
Cash (used in) provided by inventories was
$(504,000)
and
$1.3 million
during the
six
months ended
December 31, 2017
and
2016
, respectively. For the
six
months ended
December 31, 2017
, the amount of cash used in inventories was primarily due to higher levels of raw materials related to new products. For the
six
months ended
December 31, 2016
, the amount of cash provided by inventories was primarily due to lower inventory levels from better inventory management.
|
•
|
Cash provided by prepaid expenses and other current assets was
$2.8 million
and
$1.9 million
during the
six
months ended
December 31, 2017
and
2016
, respectively, primarily due to payment timing of vendor deposits and other expenditures. During the six months ended December 31, 2017, we also received proceeds from an insurance receivable related to a litigation settlement payment.
|
•
|
Cash used in accounts payable was
$608,000
and
$1.0 million
during the
six
months ended
December 31, 2017
and
2016
, respectively, due to the amount and timing of purchases and vendor payments.
|
•
|
Cash used in accrued expenses and other liabilities was
$8.4 million
and
$4.0 million
during the
six
months ended
December 31, 2017
and
2016
, respectively. For the
six
months ended
December 31, 2017
, the change in accrued expenses was primarily due to the amount and timing of compensation payments, as well as a litigation settlement payment. For the
six
months ended
December 31, 2016
, the change in accrued expenses and other liabilities was primarily due to the initial $3.0 million Department of Justice settlement payment (discussed below), reduction of clinical accruals, severance payments and the amount and timing of compensation payments.
|
•
|
Cash provided by deferred revenue was $10.0 million during the six months ended December 31, 2016. In connection with the exclusive distribution agreement with Medikit to sell our Coronary and Peripheral OAS in Japan, Medikit made an upfront payment of $10.0 million to us, which will be recognized in relation to the estimated future sales under the agreement.
|
|
Six Months Ended
December 31, |
||||||
|
2017
|
|
2016
|
||||
Net loss
|
$
|
(2,390
|
)
|
|
$
|
(815
|
)
|
Less: Other (income) expense, net
|
297
|
|
|
(18
|
)
|
||
Less: Provision for income taxes
|
66
|
|
|
48
|
|
||
Loss from operations
|
(2,027
|
)
|
|
(785
|
)
|
||
Add: Stock-based compensation
|
5,740
|
|
|
5,933
|
|
||
Add: Depreciation and amortization
|
2,090
|
|
|
2,056
|
|
||
Adjusted EBITDA
|
$
|
5,803
|
|
|
$
|
7,204
|
|
•
|
Stock-based compensation.
Our management believes that excluding this item from our non-GAAP results is useful to investors to understand the application of stock-based compensation guidance and its impact on our operational performance and ability to make additional investments in the Company, and it allows for greater transparency to certain line items in our financial statements.
|
•
|
Depreciation and amortization expense.
Our management believes that excluding these items from our non-GAAP results is useful to investors to understand our operational performance and ability to make additional investments in the company.
|
•
|
Items such as stock-based compensation do not directly affect our cash flow position; however, such items reflect economic costs to us and are not reflected in our Adjusted EBITDA, and therefore these non-GAAP measures do not reflect the full economic effect of these items.
|
•
|
Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and therefore other companies may calculate similarly titled non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.
|
•
|
Our management exercises judgment in determining which types of charges or other items should be excluded from the non-GAAP financial measures we use.
|
Exhibit No.
|
|
Description
|
|
|
|
10.1*
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
10.7
|
|
|
|
|
|
10.8
|
|
|
|
|
|
10.9
|
|
|
|
|
|
10.10
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
101*
|
|
Financial statements from the quarterly report on Form 10-Q of the Company for the quarter ended December 31, 2017, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Loss, (iv) the Consolidated Statements of Cash Flows, and (v) the Notes to Financial Statements.
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
Dated: February 9, 2018
|
|
|
CARDIOVASCULAR SYSTEMS, INC.
|
|
|
|
|
|
By
|
|
/s/ Scott R. Ward
|
|
|
|
Scott R. Ward
|
|
|
|
Chairman, President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
By
|
|
/s/ Jeffrey S. Points
|
|
|
|
Jeffrey S. Points
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
1.
|
Recitals
. The Recitals are hereby incorporated herein by reference. Capitalized terms used herein shall have the meanings given to them in the Lease unless otherwise defined herein.
|
2.
|
Sec. 1 Leased Premises
. The Leased Premises shall be redefined as: (i) the tract of land in Pearland, Texas (the “Land”), more particularly depicted on
Exhibit A
attached hereto, together with any and all easements, rights and appurtenances appertaining to same, and (ii) that certain building (the “Building”) previously constructed by Landlord and containing approximately 46,000 square feet. For greater certainty, Landlord and Tenant agree that the term “Leased Premises” shall include, but not be limited to, the Improvements.
|
3.
|
Sec. 51 Purchase Option
. Tenant’s Purchase Option set forth in Section 51 of the Lease shall only apply to the redefined Leased Premised depicted on
Exhibit A
attached hereto.
|
4.
|
Sec. 54 Tenant’s Right of First Refusal
. Tenant’s right of first refusal set forth in Section 54 of the Lease shall only apply to those portions of the
First Expansion Option Land not included in the Adjacent Property as depicted on
Exhibit A
attached hereto.
|
5.
|
Parking Improvements
– Landlord, at its sole cost and expense, shall construct the Parking Improvements on the Leased Premises. Landlord shall commence construction of the
|
6.
|
Platting
– Prior to Landlord’s sale of the Adjacent Property, Landlord shall replat the Leased Premises and the Adjacent Property in accordance with City of Pearland platting requirements, including the dedication of all necessary easements. Tenant agrees cooperate with Landlord to effectuate the replatting of Landlord’s Property to carry out the terms of this Lease Amendment, and no required approvals from Tenant shall be unreasonably withheld; provided, however, in no event shall the replat adversely affect (a) Tenant’s ability to access the Leased Premises or (b) Tenant’s business operations at the Leased Premises.
|
7.
|
Contingency
– The terms of this Lease Amendment shall be contingent upon Landlord’s closing on the sale of the Adjacent Property on or before June 1, 2018. Landlord shall provide to Tenant written notice of the closing of such sale within five (5) days of the closing date. If such closing does not occur on or before June 1, 2018, then this Amendment shall be null and void. Notwithstanding the foregoing, Landlord’s obligations to make the Building Repairs, as defined in Section 8 herein, shall not be contingent on the sale of the Adjacent Property and shall survive any termination of this Amendment.
|
8.
|
Building Repairs
– Landlord, at its sole cost and expense, shall have all repairs completed as presented in
Exhibit C
by February 28, 2018 (the “Building Repairs”). If Landlord fails to complete the Building Repairs by February 28, 2018, then Tenant, in addition to all rights and remedies available under the Lease upon Landlord’s default, shall have the rights set forth in Section 55 of the Lease.
|
9.
|
Building Finish Floor:
The parties acknowledge that certain cracks exist in the finish floor of the Building. Tenant will hire a structural engineer to monitor the finish floor annually. If the engineering assessment, utilizing L/360 guidelines, discloses any movement or deflection of the Finish Floor the Tenant will present its findings to the Landlord and the parties will work on corrective measure to ensure there is no adverse affect on Tenant’s ability to use and operate the Leased Premises. If Landlord and Tenant are unable to come to an agreement, then Tenant, in addition to all rights and remedies available under the Lease, shall have the rights set forth in Section 55 of the Lease.
|
10.
|
Section 49 Renewal Options
–
|
a.
|
The first paragraph of Section 49 shall be amended to read as follows: “Tenant shall have, and is hereby granted, the options (the “Renewal Options”) to extend the Term of this Lease Agreement for three (3) consecutive additional periods (as applicable, the “Extended Term”). The first Extended Term shall be for a period of one (1) year and shall only be available to Tenant following the initial Term of this Lease Agreement. The second and third Extended Terms shall be for a period of five (5) years each, and shall be available to Tenant following the first Extended Term. If, at the conclusion of the initial Term, Tenant elects to waive Tenant’s right to the first Extended Term of one (1) year, Tenant shall have the option to transition directly into the second Extended Term of five (years). Each of the Extended Terms shall be subject to the following terms, conditions and provisions:
|
b.
|
The terms of Section 49 B of the Lease Agreement shall continue to apply to the Renewal Options, except that the Annual Base Rent for the first Extended Term shall be $10.00 per square foot.
|
HealthTrust Signee Title: AVP
|
Vendor Signee Title: VP, Corporate Controller
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cardiovascular Systems, Inc.;
|
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 13a-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 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.
|
|
By:
|
/s/ Scott R. Ward
|
Dated: February 9, 2018
|
|
Scott R. Ward
|
|
|
Chairman, President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cardiovascular Systems, Inc.;
|
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 13a-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 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.
|
|
By:
|
/s/ Jeffrey S. Points
|
Dated: February 9, 2018
|
|
Jeffrey S. Points
|
|
|
Chief Financial Officer
|
|
By:
|
/s/ Scott R. Ward
|
Dated: February 9, 2018
|
|
Scott R. Ward
|
|
|
Chairman, President and Chief Executive Officer
|
|
By:
|
/s/ Jeffrey S. Points
|
Dated: February 9, 2018
|
|
Jeffrey S. Points
|
|
|
Chief Financial Officer
|