2017 Form 10-K Financial Statement

#000139681418000009 Filed on February 28, 2018

View on sec.gov

Income Statement

Concept 2017 2016 Q4 2016 Q3
Revenue $286.6M $72.90M $68.36M
YoY Change 3.71% 5.17% 9.87%
Cost Of Revenue $87.92M $23.62M $43.15M
YoY Change -20.15% 21.59% 171.38%
Gross Profit $198.7M $49.28M $25.20M
YoY Change 19.52% -1.23% -45.58%
Gross Profit Margin 69.33% 67.6% 36.87%
Selling, General & Admin $161.5M $34.70M $36.31M
YoY Change 5.82% -7.71% 2.84%
% of Gross Profit 81.27% 70.41% 144.09%
Research & Development $57.29M $17.10M $9.754M
YoY Change 25.42% 29.55% 65.52%
% of Gross Profit 28.83% 34.7% 38.7%
Depreciation & Amortization $13.83M $3.260M $3.300M
YoY Change 7.07% 4.49% 17.86%
% of Gross Profit 6.96% 6.62% 13.09%
Operating Expenses $311.6M $75.36M $89.22M
YoY Change 1.03% 7.46% 56.24%
Operating Profit -$24.94M -$26.08M -$20.87M
YoY Change -22.13% 28.86% -508.4%
Interest Expense $18.05M -$1.500M $1.601M
YoY Change 155.59% -11.76% -15.96%
% of Operating Profit
Other Income/Expense, Net -$17.53M -$100.0K -$1.263M
YoY Change 201.27% 0.0% -27.5%
Pretax Income -$42.47M -$4.000M -$22.13M
YoY Change 12.23% 53.85% -757.2%
Income Tax $140.0K $0.00 $36.00K
% Of Pretax Income
Net Earnings -$42.61M -$3.973M -$22.16M
YoY Change 12.28% 59.05% -818.21%
Net Earnings / Revenue -14.87% -5.45% -32.42%
Basic Earnings Per Share -$1.07 -$0.59
Diluted Earnings Per Share -$1.07 -$107.0K -$0.59
COMMON SHARES
Basic Shares Outstanding 39.81M shares 37.40M shares 37.31M shares
Diluted Shares Outstanding 39.81M shares 37.31M shares

Balance Sheet

Concept 2017 2016 Q4 2016 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $311.3M $172.6M $161.1M
YoY Change 80.36% 8.55% 10.04%
Cash & Equivalents $54.10M $35.94M $24.44M
Short-Term Investments $257.2M $136.7M $136.7M
Other Short-Term Assets $6.700M $9.300M $10.10M
YoY Change -27.96% 52.46% 119.57%
Inventory $41.40M $31.28M $37.48M
Prepaid Expenses
Receivables $31.70M $29.94M $26.77M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $391.1M $243.1M $235.4M
YoY Change 60.88% -3.76% 1.01%
LONG-TERM ASSETS
Property, Plant & Equipment $107.0M $101.0M $100.4M
YoY Change 5.94% 11.84% 16.29%
Goodwill $46.74M $44.67M
YoY Change 51.35% 54.63%
Intangibles
YoY Change
Long-Term Investments $74.20M $0.00 $0.00
YoY Change -100.0% -100.0%
Other Assets $800.0K $624.0K $651.0K
YoY Change 33.33% 53.69% -74.91%
Total Long-Term Assets $237.3M $148.4M $145.7M
YoY Change 59.91% 9.78% 7.23%
TOTAL ASSETS
Total Short-Term Assets $391.1M $243.1M $235.4M
Total Long-Term Assets $237.3M $148.4M $145.7M
Total Assets $628.4M $391.5M $381.2M
YoY Change 60.51% 0.96% 3.3%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $14.70M $7.511M $7.287M
YoY Change 96.0% -14.05% -13.98%
Accrued Expenses $39.10M $36.67M $31.08M
YoY Change 17.77% 3.65% 2.58%
Deferred Revenue
YoY Change
Short-Term Debt $300.0K $0.00 $107.6M
YoY Change -100.0% 2.57%
Long-Term Debt Due $118.5M
YoY Change 0.0%
Total Short-Term Liabilities $56.20M $44.84M $146.8M
YoY Change 25.45% -70.07% 0.98%
LONG-TERM LIABILITIES
Long-Term Debt $276.2M $108.7M $0.00
YoY Change 154.09%
Other Long-Term Liabilities $16.50M $18.91M $12.56M
YoY Change -12.7% 64.86% 105.01%
Total Long-Term Liabilities $292.7M $18.91M $12.56M
YoY Change 129.39% 64.86% 105.01%
TOTAL LIABILITIES
Total Short-Term Liabilities $56.20M $44.84M $146.8M
Total Long-Term Liabilities $292.7M $18.91M $12.56M
Total Liabilities $348.9M $172.5M $167.0M
YoY Change 102.26% 1.86% 4.39%
SHAREHOLDERS EQUITY
Retained Earnings -$346.2M -$342.3M
YoY Change 12.31% 11.93%
Common Stock $37.00K $37.00K
YoY Change 0.0% 0.0%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares 0.000 shares 0.000 shares
Shareholders Equity $279.5M $219.0M $214.1M
YoY Change
Total Liabilities & Shareholders Equity $628.4M $391.5M $381.2M
YoY Change 60.51% 0.96% 3.3%

Cashflow Statement

Concept 2017 2016 Q4 2016 Q3
OPERATING ACTIVITIES
Net Income -$42.61M -$3.973M -$22.16M
YoY Change 12.28% 59.05% -818.21%
Depreciation, Depletion And Amortization $13.83M $3.260M $3.300M
YoY Change 7.07% 4.49% 17.86%
Cash From Operating Activities $17.79M $17.35M $11.68M
YoY Change -46.83% 8.03% 314.18%
INVESTING ACTIVITIES
Capital Expenditures $19.27M -$4.880M -$3.910M
YoY Change -22.03% -40.12% -59.31%
Acquisitions $0.00
YoY Change
Other Investing Activities -$204.5M -$2.040M -$9.410M
YoY Change 451.96% -112.45% -440.94%
Cash From Investing Activities -$223.8M -$6.910M -$13.32M
YoY Change 262.37% -183.96% 94.74%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities $224.2M 1.070M 770.0K
YoY Change 2987.63% -50.69% -57.92%
NET CHANGE
Cash From Operating Activities $17.79M 17.35M 11.68M
Cash From Investing Activities -$223.8M -6.910M -13.32M
Cash From Financing Activities $224.2M 1.070M 770.0K
Net Change In Cash $18.18M 11.51M -870.0K
YoY Change -186.42% -56.5% -60.27%
FREE CASH FLOW
Cash From Operating Activities $17.79M $17.35M $11.68M
Capital Expenditures $19.27M -$4.880M -$3.910M
Free Cash Flow -$1.481M $22.23M $15.59M
YoY Change -116.94% -8.18% 25.42%

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400000 USD
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317722000 USD
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19000 USD
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0 USD
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49000 USD
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454000 USD
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10000000 USD
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162885 shares
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CY2017 us-gaap Comprehensive Income Net Of Tax
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324000 USD
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656000 USD
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300000 USD
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11000 USD
CY2017 us-gaap Current Federal Tax Expense Benefit
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172000 USD
CY2016 us-gaap Current State And Local Tax Expense Benefit
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94000 USD
CY2017 us-gaap Current State And Local Tax Expense Benefit
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140000 USD
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2500000 shares
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10000 shares
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1.3
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6800000 USD
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595000 USD
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102000 USD
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CY2017Q4 us-gaap Deferred Tax Assets Inventory
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552000 USD
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0 USD
CY2017Q4 us-gaap Deferred Tax Assets Net
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95067000 USD
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52000 USD
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139000 USD
CY2016Q4 us-gaap Deferred Tax Assets Property Plant And Equipment
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2604000 USD
CY2017Q4 us-gaap Deferred Tax Assets Property Plant And Equipment
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2593000 USD
CY2016Q4 us-gaap Deferred Tax Assets Tax Credit Carryforwards Research
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13724000 USD
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15048000 USD
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4672000 USD
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2743000 USD
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120230000 USD
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14678000 USD
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1700000 USD
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1500000 USD
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1300000 USD
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11200000 USD
CY2016 us-gaap Depreciation
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12800000 USD
CY2017 us-gaap Depreciation
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13800000 USD
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11475000 USD
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0 USD
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1510000 USD
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0 USD
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0 USD
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5400000 USD
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0.05
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0.11
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0.04
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-1.02
CY2017 us-gaap Earnings Per Share Diluted
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-1.07
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0.1245
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-0.0028
CY2017 us-gaap Effective Income Tax Rate Continuing Operations
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-0.0033
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0.35
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0.35
CY2017 us-gaap Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate
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0.35
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0.1032
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-0.4396
CY2017 us-gaap Effective Income Tax Rate Reconciliation Change In Deferred Tax Assets Valuation Allowance
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0.0458
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0.0726
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-0.0054
CY2017 us-gaap Effective Income Tax Rate Reconciliation Nondeductible Expense Share Based Compensation Cost
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-0.0121
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0.1533
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-0.0204
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0.0790
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0.0071
CY2016 us-gaap Effective Income Tax Rate Reconciliation State And Local Income Taxes
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0.0220
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0.0226
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0.3063
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-0.0877
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CY2016Q4 us-gaap Employee Related Liabilities Current
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12295000 USD
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CY2017 us-gaap Gain Loss On Disposition Of Assets
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CY2017Q1 us-gaap Gains Losses On Extinguishment Of Debt
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CY2015Q4 us-gaap Goodwill
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8000000 USD
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5600000 USD
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3760000 USD
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CY2015 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
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2120000 USD
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CY2017 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
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264000 USD
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IncomeTaxExpenseBenefit
105000 USD
CY2017 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
140000 USD
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195000 USD
CY2016 us-gaap Income Taxes Paid
IncomeTaxesPaid
247000 USD
CY2017 us-gaap Income Taxes Paid
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129000 USD
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8966000 USD
CY2016 us-gaap Increase Decrease In Accounts Payable And Accrued Liabilities
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710000 USD
CY2017 us-gaap Increase Decrease In Accounts Payable And Accrued Liabilities
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9359000 USD
CY2015 us-gaap Increase Decrease In Accounts Receivable
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3489000 USD
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4082000 USD
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1721000 USD
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500000 USD
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32382000 USD
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-30367000 USD
CY2017 us-gaap Increase Decrease In Inventories
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10133000 USD
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4360000 USD
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-1339000 USD
CY2017 us-gaap Increase Decrease In Other Operating Liabilities
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-3555000 USD
CY2015 us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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2007000 USD
CY2016 us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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3377000 USD
CY2017 us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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-3476000 USD
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-1509000 USD
CY2016 us-gaap Increase Decrease In Restricted Cash
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0 USD
CY2017 us-gaap Increase Decrease In Restricted Cash
IncreaseDecreaseInRestrictedCash
0 USD
CY2015 us-gaap Incremental Common Shares Attributable To Call Options And Warrants
IncrementalCommonSharesAttributableToCallOptionsAndWarrants
6000 shares
CY2016 us-gaap Incremental Common Shares Attributable To Call Options And Warrants
IncrementalCommonSharesAttributableToCallOptionsAndWarrants
0 shares
CY2017 us-gaap Incremental Common Shares Attributable To Call Options And Warrants
IncrementalCommonSharesAttributableToCallOptionsAndWarrants
0 shares
CY2015 us-gaap Incremental Common Shares Attributable To Conversion Of Debt Securities
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3113000 shares
CY2016 us-gaap Incremental Common Shares Attributable To Conversion Of Debt Securities
IncrementalCommonSharesAttributableToConversionOfDebtSecurities
0 shares
CY2017 us-gaap Incremental Common Shares Attributable To Conversion Of Debt Securities
IncrementalCommonSharesAttributableToConversionOfDebtSecurities
0 shares
CY2015 us-gaap Incremental Common Shares Attributable To Equity Unit Purchase Agreements
IncrementalCommonSharesAttributableToEquityUnitPurchaseAgreements
1000 shares
CY2016 us-gaap Incremental Common Shares Attributable To Equity Unit Purchase Agreements
IncrementalCommonSharesAttributableToEquityUnitPurchaseAgreements
0 shares
CY2017 us-gaap Incremental Common Shares Attributable To Equity Unit Purchase Agreements
IncrementalCommonSharesAttributableToEquityUnitPurchaseAgreements
0 shares
CY2015 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
IncrementalCommonSharesAttributableToShareBasedPaymentArrangements
1638000 shares
CY2016 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
IncrementalCommonSharesAttributableToShareBasedPaymentArrangements
0 shares
CY2017 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
IncrementalCommonSharesAttributableToShareBasedPaymentArrangements
0 shares
CY2015 us-gaap Interest Costs Capitalized
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800000 USD
CY2016 us-gaap Interest Costs Capitalized
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1500000 USD
CY2017 us-gaap Interest Costs Capitalized
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1100000 USD
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7725000 USD
CY2016 us-gaap Interest Expense
InterestExpense
7061000 USD
CY2017 us-gaap Interest Expense
InterestExpense
18047000 USD
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4224000 USD
CY2016 us-gaap Interest Paid
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3852000 USD
CY2017 us-gaap Interest Paid
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6896000 USD
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7915000 USD
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16540000 USD
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31278000 USD
CY2017Q4 us-gaap Inventory Net
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41411000 USD
CY2016Q4 us-gaap Inventory Raw Materials Net Of Reserves
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11742000 USD
CY2017Q4 us-gaap Inventory Raw Materials Net Of Reserves
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16500000 USD
CY2016Q4 us-gaap Inventory Work In Process Net Of Reserves
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11621000 USD
CY2017Q4 us-gaap Inventory Work In Process Net Of Reserves
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8371000 USD
CY2016 us-gaap Inventory Write Down
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20700000 USD
CY2015 us-gaap Investment Income Interest
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678000 USD
CY2016 us-gaap Investment Income Interest
InvestmentIncomeInterest
1323000 USD
CY2017 us-gaap Investment Income Interest
InvestmentIncomeInterest
4078000 USD
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172490000 USD
CY2017Q4 us-gaap Liabilities
Liabilities
348888000 USD
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391466000 USD
CY2017Q4 us-gaap Liabilities And Stockholders Equity
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628371000 USD
CY2016Q4 us-gaap Liabilities Current
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44838000 USD
CY2017Q4 us-gaap Liabilities Current
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56217000 USD
CY2016Q4 us-gaap Long Term Investments
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0 USD
CY2017Q4 us-gaap Long Term Investments
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60047000 USD
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19464000 USD
CY2016 us-gaap Net Cash Provided By Used In Continuing Operations
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-21040000 USD
CY2017 us-gaap Net Cash Provided By Used In Continuing Operations
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CY2017 us-gaap Description Of New Accounting Pronouncements Not Yet Adopted
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:10px;padding-top:4px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">RECENT ACCOUNTING PRONOUNCEMENTS</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Recently Adopted</font></div><div style="line-height:120%;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-top:0px;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In March 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2016-09,&#160;</font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Compensation&#8212;Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting</font><font style="font-family:inherit;font-size:10pt;">. This update includes multiple provisions intended to simplify various aspects of accounting for share-based payment transactions including accounting for excess tax benefits and tax deficiencies, classification of excess tax benefits and tax deficiencies in the statement of cash flows and accounting for award forfeitures. The update also removes the requirement to delay recognition of an excess tax benefit until it reduces current taxes payable, instead, it is required to be recognized at the time of settlement, subject to normal valuation allowance considerations. This update became effective for the Company beginning January 1, 2017. The Company elected an accounting policy change to record forfeitures as they occur rather than estimating forfeitures during each period and recorded a charge of </font><font style="font-family:inherit;font-size:10pt;">$0.3 million</font><font style="font-family:inherit;font-size:10pt;"> to retained earnings as of January 1, 2017 related to the reversal of cumulative forfeiture estimates. The adoption of this standard also resulted in the recognition of </font><font style="font-family:inherit;font-size:10pt;">$29.3 million</font><font style="font-family:inherit;font-size:10pt;"> of previously unrecognized excess tax benefits in deferred tax assets, fully offset by a valuation allowance. The changes have been applied prospectively in accordance with the update, and prior periods have not been adjusted. All tax-related cash flows resulting from stock-based compensation, including the excess tax benefits related to the settlement of stock-based awards, will be classified as cash flows from operating activities in the Company&#8217;s consolidated statements of cash flows.</font></div><div style="line-height:120%;padding-top:0px;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-top:0px;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In July 2015, the FASB issued ASU 2015-11, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Inventory (Topic 330): Simplifying the Measurement of Inventory</font><font style="font-family:inherit;font-size:10pt;">. The standard requires entities to measure most inventory &#8220;at the lower of cost and net realizable value&#8221;, thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market (market in this context is defined as one of three different measures, one of which is net realizable value). Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The standard became effective for the Company prospectively beginning January 1, 2017. The adoption of ASU 2015-11 did not have a material impact on the Company&#8217;s consolidated financial statements.</font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Not Adopted as of </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">December&#160;31, 2017</font></div><div style="line-height:120%;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In May 2014, the FASB issued ASU 2014-09, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Revenue from Contracts with Customers</font><font style="font-family:inherit;font-size:10pt;">, and has subsequently issued a number of amendments to this update. The new standard, as amended, provides a single comprehensive model to be used in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance. The standard&#8217;s stated core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, ASU 2014-09 provides a five-step model that includes (1) identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations and (5) recognizing revenue when, or as, an entity satisfies a performance obligation. In addition, the standard requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.</font></div><div style="line-height:120%;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The new standard will become effective for the Company beginning January 1, 2018 and permits two methods of adoption: the full retrospective&#160;method, which requires the standard to be applied to each prior period presented, or the modified retrospective method, which requires the cumulative effect of adoption to be recognized as an adjustment to opening retained earnings in the period of adoption. The Company will adopt this standard using the modified retrospective method.</font></div><div style="line-height:120%;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company has completed an analysis of existing contracts with its customers and assessed the differences in accounting for such contracts under ASU 2014-09 compared with the current revenue accounting standards. Based on its review of its current customer contracts, the implementation of ASU 2014-09 will not have a material quantitative impact on the Company&#8217;s consolidated financial statements, as the timing of revenue recognition for EXPAREL product sales is not expected to significantly change. The Company will recognize existing collaborative licensing, milestone and royalty revenue earlier, subject to the variable consideration constraints, than it would have under the current standard, however, such changes are not expected to be material to the Company&#8217;s consolidated financial statements. Adoption of the new standard will result in additional revenue-related disclosures in the footnotes to the Company&#8217;s consolidated financial statements.</font></div><div style="line-height:120%;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In January 2016, the FASB issued ASU 2016-01, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Financial Instruments&#8212;Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities</font><font style="font-family:inherit;font-size:10pt;">. ASU 2016-01 changes accounting for equity investments and presentation and disclosure requirements for financial instruments. ASU 2016-01 does not apply to equity investments in consolidated subsidiaries or those accounted for under the equity method of accounting. Equity investments with readily determinable fair values will be measured at fair value with changes in fair value recognized in net income (loss). Entities have the option to measure equity investments without readily determinable fair values either at fair value or at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The standard also simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value. ASU 2016-01 will become effective for the Company beginning January 1, 2018. The Company has elected to measure equity investments without readily determinable fair values at cost adjusted for changes in observable prices. The guidance related to equity investments without readily determinable fair values will be applied prospectively to equity investments that exist as of the date of adoption. The adoption of ASU 2016-01 may increase volatility in the Company&#8217;s net income as changes in observable prices of equity investments without readily determinable fair values will be recorded in net income (loss). The Company does not expect the implementation of this standard to have a material impact on its consolidated financial statements and related disclosures.</font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-top:0px;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2016, the FASB issued ASU 2016-02,&#160;</font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Leases (Topic 842)</font><font style="font-family:inherit;font-size:10pt;">.&#160;This update requires lessees to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. The lease liability will be equal to the present value of lease payments and the right-of-use asset will be based on the lease liability, subject to adjustment for items such as initial direct costs. For income statement purposes, the new standard retains a dual model similar to Accounting Standards Codification, or ASC, 840, requiring leases to be classified as either operating or financing. For lessees, operating leases will result in straight-line expense (similar to current accounting by lessees for operating leases under ASC 840) while financing leases will result in a front-loaded expense pattern (similar to current accounting by lessees for capital leases under ASC 840). This update also introduces new disclosure requirements for leasing arrangements. The standard will become effective for the Company beginning January 1, 2019. Early adoption is permitted, although the Company does not expect to do so. The Company is currently evaluating the impact of ASU 2016-02 on its consolidated financial statements. For operating leases it will result in the recognition of lease liabilities and corresponding right-of-use assets upon adoption, which will have a material impact on the Company&#8217;s consolidated balance sheet. The Company does not believe the adoption of this ASU will have a significant impact on its consolidated statements of operations, stockholders&#8217; equity or cash flows. At adoption, this update will be applied using a modified retrospective approach. Refer to Note&#160;17, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Commitments and Contingencies</font><font style="font-family:inherit;font-size:10pt;">, for further discussion on the Company&#8217;s leases.</font></div><div style="line-height:120%;padding-top:0px;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In June 2016, the FASB issued ASU 2016-13, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Financial Instruments&#8212;Credit Losses (Topic 326)</font><font style="font-family:inherit;font-size:10pt;">, which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. Entities will now use forward-looking information to better form their credit loss estimates. This update also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity&#8217;s portfolio. This ASU will become effective for the Company beginning January 1, 2020, with early adoption permitted. The Company is currently evaluating the impact of ASU 2016-13 on its consolidated financial statements.</font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In August 2016, the FASB issued&#160;ASU&#160;2016-15,&#160;</font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Statement of Cash Flows (Topic&#160;230): Classification of Certain Cash Receipts and Cash Payments</font><font style="font-family:inherit;font-size:10pt;">, which clarifies existing guidance on how companies present and classify certain cash receipts and cash payments in the statement of cash flows by addressing specific cash flow issues in an effort to reduce diversity in practice, including guidance on debt prepayment or extinguishment costs and contingent consideration payments made after a&#160;business combination.&#160;ASU&#160;2016-15&#160;will become effective for the Company in the first quarter of fiscal year 2018. The Company does not expect any changes to its consolidated statement of cash flows upon the adoption of this standard.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or not significant to the consolidated financial statements of the Company.</font></div></div>
CY2017 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:10px;padding-top:10px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Use of Estimates</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingent assets and contingent liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, among other things, revenue recognition, inventory costs, impairments of goodwill and long-lived assets, liabilities and accruals and the valuation of deferred tax assets. The Company&#8217;s critical accounting policies are those that are both most important to the Company&#8217;s consolidated financial condition and results of operations and require the most difficult, subjective or complex judgments on the part of management in their application, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Because of the uncertainty of factors surrounding the estimates or judgments used in the preparation of the consolidated financial statements, actual results could differ from these estimates.</font></div></div>

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