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Restatement of the Consolidated Financial Statements (Tables) | 12 Months Ended
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Dec. 31, 2013
Text Block [Abstract] |
Adjustments to Previously Filed Consolidated Income Statements | The results of the adjustments to the Company’s previously filed consolidated statements of operations detailed above are summarized in the tables below. The tax effect of the adjustments is estimated based on the Company’s effective tax rate.
|  | Year Ended December 31, 2012 |
|  |  |  |  | Adjustments by Category |  |  |  |
(U.S. Dollars, in thousands) |  | Previously Reported |  |  | Distributor Revenue |  |  | Inventory Reserves |  |  | Royalties |  |  | Other |  |  | Total Adjustments |  |  | Restated |
Net sales |  | $ | 462,320 |  |  | $ | (14,777 | ) |  | $ | — |  |  | $ | — |  |  | $ | 38 |  |  | $ | (14,739 | ) |  | $ | 447,581 |
Cost of sales |  |  | 86,492 |  |  |  | (2,032 | ) |  |  | 5,647 |  |  |  | 8,190 |  |  |  | (44 | ) |  |  | 11,761 |  |  |  | 98,253 |
Gross profit |  |  | 375,828 |  |  |  | (12,745 | ) |  |  | (5,647 | ) |  |  | (8,190 | ) |  |  | 82 |  |  |  | (26,500 | ) |  |  | 349,328 |
Operating expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales and marketing |  |  | 200,343 |  |  |  | (6,629 | ) |  |  | — |  |  |  | (8,190 | ) |  |  | 1,607 |  |  |  | (13,212 | ) |  |  | 187,131 |
General and administrative |  |  | 53,827 |  |  |  | (2 | ) |  |  | — |  |  |  | — |  |  |  | (434 | ) |  |  | (436 | ) |  |  | 53,391 |
Research and development |  |  | 28,577 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 28,577 |
Amortization of intangible assets |  |  | 2,098 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 200 |  |  |  | 200 |  |  |  | 2,298 |
Charges related to U.S. Government resolutions |  |  | 1,973 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (678 | ) |  |  | (678 | ) |  |  | 1,295 |
|  |  | 286,818 |  |  |  | (6,631 | ) |  |  | — |  |  |  | (8,190 | ) |  |  | 695 |  |  |  | (14,126 | ) |  |  | 272,692 |
Operating income |  |  | 89,010 |  |  |  | (6,114 | ) |  |  | (5,647 | ) |  |  | — |  |  |  | (613 | ) |  |  | (12,374 | ) |  |  | 76,636 |
Other income and (expense) |  |  | (6,282 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (166 | ) |  |  | (166 | ) |  |  | (6,448 | )
Income before income taxes |  |  | 82,728 |  |  |  | (6,114 | ) |  |  | (5,647 | ) |  |  | — |  |  |  | (779 | ) |  |  | (12,540 | ) |  |  | 70,188 |
Income tax expense |  |  | (28,792 | ) |  |  | 1,782 |  |  |  | 1,645 |  |  |  | — |  |  |  | 227 |  |  |  | 3,654 |  |  |  | (25,138 | )
Net income from continuing operations |  | $ | 53,936 |  |  | $ | (4,332 | ) |  | $ | (4,002 | ) |  | $ | — |  |  | $ | (552 | ) |  | $ | (8,886 | ) |  | $ | 45,050 |
|  | Year Ended December 31, 2011 |
|  |  |  |  | Adjustments by Category |  |  |  |
(U.S. Dollars, in thousands) |  | Previously Reported |  |  | Distributor Revenue |  |  | Inventory Reserves |  |  | Royalties |  |  | Other |  |  | Total Adjustments |  |  | Restated |
Net sales |  | $ | 470,121 |  |  | $ | (29,135 | ) |  | $ | — |  |  | $ | — |  |  | $ | 985 |  |  | $ | (28,150 | ) |  | $ | 441,971 |
Cost of sales |  |  | 92,619 |  |  |  | (8,289 | ) |  |  | 3,377 |  |  |  | 7,713 |  |  |  | 107 |  |  |  | 2,908 |  |  |  | 95,527 |
Gross profit |  |  | 377,502 |  |  |  | (20,846 | ) |  |  | (3,377 | ) |  |  | (7,713 | ) |  |  | 878 |  |  |  | (31,058 | ) |  |  | 346,444 |
Operating expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales and marketing |  |  | 200,145 |  |  |  | (1,216 | ) |  |  | — |  |  |  | (7,713 | ) |  |  | 2,295 |  |  |  | (6,634 | ) |  |  | 193,511 |
General and administrative |  |  | 64,374 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 107 |  |  |  | 107 |  |  |  | 64,481 |
Research and development |  |  | 22,861 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 22,861 |
Amortization of intangible assets |  |  | 2,350 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 200 |  |  |  | 200 |  |  |  | 2,550 |
Charges related to U.S. Government resolutions |  |  | 56,463 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 678 |  |  |  | 678 |  |  |  | 57,141 |
|  |  | 346,193 |  |  |  | (1,216 | ) |  |  | — |  |  |  | (7,713 | ) |  |  | 3,280 |  |  |  | (5,649 | ) |  |  | 340,544 |
Operating income |  |  | 31,309 |  |  |  | (19,630 | ) |  |  | (3,377 | ) |  |  | — |  |  |  | (2,402 | ) |  |  | (25,409 | ) |  |  | 5,900 |
Other income and (expense) |  |  | (11,868 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,915 |  |  |  | 3,915 |  |  |  | (7,953 | )
Income (loss) before income taxes |  |  | 19,441 |  |  |  | (19,630 | ) |  |  | (3,377 | ) |  |  | — |  |  |  | 1,513 |  |  |  | (21,494 | ) |  |  | (2,053 | )
Income tax expense |  |  | (21,181 | ) |  |  | 6,408 |  |  |  | 1,102 |  |  |  | — |  |  |  | (494 | ) |  |  | 7,016 |  |  |  | (14,165 | )
Net loss from continuing operations |  | $ | (1,740 | ) |  | $ | (13,222 | ) |  | $ | (2,275 | ) |  | $ | — |  |  | $ | 1,019 |  |  | $ | (14,478 | ) |  | $ | (16,218 | )
Effects of Restatements on Consolidated Balance Sheet | The effects of the restatements on the Company’s consolidated balance sheet as of December 31, 2012 are as follows:
|  | As of December 31, 2012 |
(U.S. Dollars, in thousands except share and per share data) |  | Previously Reported |  |  | Adjustments |  |  | Restated |
Assets |  |  |  |  |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 31,055 |  |  | $ | — |  |  | $ | 31,055 |
Restricted cash |  |  | 21,314 |  |  |  | — |  |  |  | 21,314 |
Trade accounts receivable, less allowances of $13,543 |  |  | 150,316 |  |  |  | (43,004 | ) |  |  | 107,312 |
Inventories |  |  | 88,744 |  |  |  | (5,371 | ) |  |  | 83,373 |
Deferred income taxes |  |  | 16,959 |  |  |  | 16,491 |  |  |  | 33,450 |
Prepaid expenses and other current assets |  |  | 32,056 |  |  |  | 2,023 |  |  |  | 34,079 |
Total current assets |  |  | 340,444 |  |  |  | (29,861 | ) |  |  | 310,583 |
Property, plant and equipment, net |  |  | 51,362 |  |  |  | 2,473 |  |  |  | 53,835 |
Patents and other intangible assets, net |  |  | 6,880 |  |  |  | 410 |  |  |  | 7,290 |
Goodwill |  |  | 74,388 |  |  |  | — |  |  |  | 74,388 |
Deferred income taxes |  |  | 19,904 |  |  |  | (1,023 | ) |  |  | 18,881 |
Other long-term assets |  |  | 11,303 |  |  |  | (3,383 | ) |  |  | 7,920 |
Total assets |  | $ | 504,281 |  |  | $ | (31,384 | ) |  | $ | 472,897 |
Liabilities and shareholders’ equity |  |  |  |  |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Bank borrowings |  | $ | 16 |  |  | $ | — |  |  | $ | 16 |
Trade accounts payable |  |  | 21,812 |  |  |  | 763 |  |  |  | 22,575 |
Other current liabilities |  |  | 46,969 |  |  |  | (7,375 | ) |  |  | 39,594 |
Total current liabilities |  |  | 68,797 |  |  |  | (6,612 | ) |  |  | 62,185 |
Long-term debt |  |  | 20,000 |  |  |  | — |  |  |  | 20,000 |
Deferred income taxes |  |  | 11,456 |  |  |  | — |  |  |  | 11,456 |
Other long-term liabilities |  |  | 4,930 |  |  |  | 6,494 |  |  |  | 11,424 |
Total liabilities |  |  | 105,183 |  |  |  | (118 | ) |  |  | 105,065 |
Contingencies (Note 17) |  |  |  |  |  |  |  |  |  |  |  |
Shareholders’ equity |  |  |  |  |  |  |  |  |  |  |  |
Common shares $0.10 par value; 50,000,000 shares authorized; 19,339,329 issued and outstanding |  |  | 1,934 |  |  |  | — |  |  |  | 1,934 |
Additional paid-in capital |  |  | 246,111 |  |  |  | 195 |  |  |  | 246,306 |
Retained earnings |  |  | 148,549 |  |  |  | (33,702 | ) |  |  | 114,847 |
Accumulated other comprehensive income |  |  | 2,504 |  |  |  | 2,241 |  |  |  | 4,745 |
Total shareholders’ equity |  |  | 399,098 |  |  |  | (31,266 | ) |  |  | 367,832 |
Total liabilities and shareholders’ equity |  | $ | 504,281 |  |  | $ | (31,384 | ) |  | $ | 472,897 |
Effects of Restatements of Consolidated Statement of Operations and Comprehensive Income (Loss) | The effects of the restatements on the Company’s consolidated statement of operations and comprehensive income for the year ended December 31, 2012 are as follows:
|  | Year Ended December 31, 2012 |
(U.S. Dollars, in thousands, except share and per share data) |  | Previously Reported |  |  | Adjustments |  |  | Restated |
Product sales |  | $ | 415,850 |  |  |  | (14,811 | ) |  | $ | 401,039 |
Marketing service fees |  |  | 46,470 |  |  |  | 72 |  |  |  | 46,542 |
Net sales |  |  | 462,320 |  |  |  | (14,739 | ) |  |  | 447,581 |
Cost of sales |  |  | 86,492 |  |  |  | 11,761 |  |  |  | 98,253 |
Gross profit |  |  | 375,828 |  |  |  | (26,500 | ) |  |  | 349,328 |
Operating expenses |  |  |  |  |  |  |  |  |  |  |  |
Sales and marketing |  |  | 200,343 |  |  |  | (13,212 | ) |  |  | 187,131 |
General and administrative |  |  | 53,827 |  |  |  | (436 | ) |  |  | 53,391 |
Research and development |  |  | 28,577 |  |  |  | — |  |  |  | 28,577 |
Amortization of intangible assets |  |  | 2,098 |  |  |  | 200 |  |  |  | 2,298 |
Charges related to U.S. Government resolutions (Note 17) |  |  | 1,973 |  |  |  | (678 | ) |  |  | 1,295 |
|  |  | 286,818 |  |  |  | (14,126 | ) |  |  | 272,692 |
Operating income |  |  | 89,010 |  |  |  | (12,374 | ) |  |  | 76,636 |
Other income and (expense) |  |  |  |  |  |  |  |  |  |  |  |
Interest expense, net |  |  | (4,577 | ) |  |  | (166 | ) |  |  | (4,743 | )
Other expense |  |  | (1,705 | ) |  |  | — |  |  |  | (1,705 | )
|  |  | (6,282 | ) |  |  | (166 | ) |  |  | (6,448 | )
Income before income taxes |  |  | 82,728 |  |  |  | (12,540 | ) |  |  | 70,188 |
Income tax expense |  |  | (28,792 | ) |  |  | 3,654 |  |  |  | (25,138 | )
Net income from continuing operations |  |  | 53,936 |  |  |  | (8,886 | ) |  |  | 45,050 |
Discontinued operations (Note 16) |  |  |  |  |  |  |  |  |  |  |  |
Gain on sale of Breg, Inc., |  |  | 1,345 |  |  |  | — |  |  |  | 1,345 |
Loss from discontinued operations |  |  | (4,012 | ) |  |  | 1,018 |  |  |  | (2,994 | )
Income tax benefit (expense) |  |  | 26 |  |  |  | (589 | ) |  |  | (563 | )
Net loss from discontinued operations |  |  | (2,641 | ) |  |  | 429 |  |  |  | (2,212 | )
Net income |  | $ | 51,295 |  |  |  | (8,457 | ) |  | $ | 42,838 |
Net income (loss) per common share—basic: |  |  |  |  |  |  |  |  |  |  |  |
Net income from continuing operations |  | $ | 2.84 |  |  |  | (0.47 | ) |  | $ | 2.37 |
Net loss from discontinued operations |  |  | (0.14 | ) |  |  | 0.02 |  |  |  | (0.12 | )
Net income per common share—basic |  | $ | 2.70 |  |  |  | (0.45 | ) |  | $ | 2.25 |
Net income (loss) per common share—diluted: |  |  |  |  |  |  |  |  |  |  |  |
Net income from continuing operations |  | $ | 2.78 |  |  |  | (0.46 | ) |  | $ | 2.32 |
Net loss from discontinued operations |  |  | (0.14 | ) |  |  | 0.03 |  |  |  | (0.11 | )
Net income per common share—diluted: |  | $ | 2.64 |  |  |  | (0.43 | ) |  | $ | 2.21 |
Weighted average number of common shares: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 18,977,263 |  |  |  | — |  |  |  | 18,977,263 |
Diluted |  |  | 19,390,413 |  |  |  | — |  |  |  | 19,390,413 |
Other comprehensive income, before tax: |  |  |  |  |  |  |  |  |  |  |  |
Translation adjustment |  | $ | 480 |  |  |  | 288 |  |  | $ | 768 |
Unrealized gain on derivative instrument |  |  | 416 |  |  |  | — |  |  |  | 416 |
Other comprehensive income, before tax |  |  | 896 |  |  |  | 288 |  |  |  | 1,184 |
Income tax expense related to components of other comprehensive income |  |  | (153 | ) |  |  | — |  |  |  | (153 | )
Other comprehensive income, net of tax |  |  | 743 |  |  |  | 288 |  |  |  | 1,031 |
Comprehensive income |  | $ | 52,038 |  |  |  | (8,169 | ) |  | $ | 43,869 |
The effects of the restatements on the Company’s consolidated statement of operations and comprehensive loss for the year ended December 31, 2011 are as follows:
|  | Year Ended December 31, 2011 |
(U.S. Dollars, in thousands, except share and per share data) |  | Previously Reported |  |  | Adjustments |  |  | Restated |
Product sales |  | $ | 432,975 |  |  |  | (27,828 | ) |  | $ | 405,147 |
Marketing service fees |  |  | 37,146 |  |  |  | (322 | ) |  |  | 36,824 |
Net sales |  |  | 470,121 |  |  |  | (28,150 | ) |  |  | 441,971 |
Cost of sales |  |  | 92,619 |  |  |  | 2,908 |  |  |  | 95,527 |
Gross profit |  |  | 377,502 |  |  |  | (31,058 | ) |  |  | 346,444 |
Operating expenses |  |  |  |  |  |  |  |  |  |  |  |
Sales and marketing |  |  | 200,145 |  |  |  | (6,634 | ) |  |  | 193,511 |
General and administrative |  |  | 64,374 |  |  |  | 107 |  |  |  | 64,481 |
Research and development |  |  | 22,861 |  |  |  | — |  |  |  | 22,861 |
Amortization of intangible assets |  |  | 2,350 |  |  |  | 200 |  |  |  | 2,550 |
Charges related to U.S. Government resolutions (Note 17) |  |  | 56,463 |  |  |  | 678 |  |  |  | 57,141 |
|  |  | 346,193 |  |  |  | (5,649 | ) |  |  | 340,544 |
Operating income |  |  | 31,309 |  |  |  | (25,409 | ) |  |  | 5,900 |
Other income and (expense) |  |  |  |  |  |  |  |  |  |  |  |
Interest expense, net |  |  | (9,456 | ) |  |  | 3,915 |  |  |  | (5,541 | )
Other expense |  |  | (2,412 | ) |  |  | — |  |  |  | (2,412 | )
|  |  | (11,868 | ) |  |  | 3,915 |  |  |  | (7,953 | )
Income (loss) before income taxes |  |  | 19,441 |  |  |  | (21,494 | ) |  |  | (2,053 | )
Income tax expense |  |  | (21,181 | ) |  |  | 7,016 |  |  |  | (14,165 | )
Net loss from continuing operations |  |  | (1,740 | ) |  |  | (14,478 | ) |  |  | (16,218 | )
Discontinued operations (Note 16) |  |  |  |  |  |  |  |  |  |  |  |
Gain on sale of Breg, Inc. |  |  | — |  |  |  | — |  |  |  | — |
Income (loss) from discontinued operations |  |  | 1,263 |  |  |  | (3,968 | ) |  |  | (2,705 | )
Income tax (expense) benefit |  |  | (596 | ) |  |  | 1,409 |  |  |  | 813 |
Net income (loss) from discontinued operations |  |  | 667 |  |  |  | (2,559 | ) |  |  | (1,892 | )
Net loss |  | $ | (1,073 | ) |  |  | (17,037 | ) |  | $ | (18,110 | )
Net income (loss) per common share—basic: |  |  |  |  |  |  |  |  |  |  |  |
Net loss from continuing operations |  | $ | (0.10 | ) |  |  | (0.79 | ) |  | $ | (0.89 | )
Net income (loss) from discontinued operations |  |  | 0.04 |  |  |  | (0.14 | ) |  |  | (0.10 | )
Net loss per common share—basic |  | $ | (0.06 | ) |  |  | (0.93 | ) |  | $ | (0.99 | )
Net income (loss) per common share—diluted: |  |  |  |  |  |  |  |  |  |  |  |
Net loss from continuing operations |  | $ | (0.10 | ) |  |  | (0.79 | ) |  | $ | (0.89 | )
Net income (loss) from discontinued operations |  |  | 0.04 |  |  |  | (0.14 | ) |  |  | (0.10 | )
Net loss per common share—diluted: |  | $ | (0.06 | ) |  |  | (0.93 | ) |  | $ | (0.99 | )
Weighted average number of common shares: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 18,219,343 |  |  |  | — |  |  |  | 18,219,343 |
Diluted |  |  | 18,219,343 |  |  |  | — |  |  |  | 18,219,343 |
Other comprehensive loss, before tax: |  |  |  |  |  |  |  |  |  |  |  |
Translation adjustment |  | $ | (3,192 | ) |  |  | 913 |  |  | $ | (2,279 | )
Unrealized loss on derivative instrument |  |  | (693 | ) |  |  | — |  |  |  | (693 | )
Other comprehensive loss, before tax |  |  | (3,885 | ) |  |  | 913 |  |  |  | (2,972 | )
Income tax benefit related to components of other comprehensive income |  |  | 256 |  |  |  | — |  |  |  | 256 |
Other comprehensive loss, net of tax |  |  | (3,629 | ) |  |  | 913 |  |  |  | (2,716 | )
Comprehensive loss |  | $ | (4,702 | ) |  |  | (16,124 | ) |  | $ | (20,826 | )

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