XML 67 R13.htm IDEA: XBRL DOCUMENT v2.4.1.9
Derivative instruments
 9 Months Ended
Sep. 30, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative instruments

8. Derivative instruments

The tables below disclose the types of derivative instruments the Company owns, the classifications and fair values of these instruments within the balance sheet, and the amount of gain (loss) recognized in other comprehensive income (loss) (“OCI”) or net income (loss).

 

(U.S. Dollars, in thousands)

As of September 30, 2014

    Fair value: favorable
(unfavorable)		     

Balance sheet location

Cross-currency swap

    $ 1,838       Other long-term assets

Warrants

    $ 329       Other long-term assets

As of December 31, 2013

            

Cross-currency swap

    $ (1,036 )     Other long-term liabilities

Warrants

    $ 107       Other long-term assets

 

     Three Months Ended
September 30,		      Nine Months Ended
September 30,		  

(U.S. Dollars, in thousands)

    2014      2013      2014      2013  

Cross-currency swap and warrants unrealized gain (loss) recorded in other comprehensive income (loss), net of taxes

    $ 112       $ 583       $ 184       $ 487   

Cross-currency swap

On September 30, 2010, the Company entered into a cross-currency swap agreement (the “replacement swap agreement”) with JPMorgan Chase Bank and Royal Bank of Scotland PLC (the “counterparties”) to manage its cash flows related to foreign currency exposure for a portion of the Company’s intercompany receivable of a U.S. dollar functional currency subsidiary that is denominated in Euro.

Under the terms of the swap agreement, the Company pays Euros based on a €28.7 million notional value and a fixed rate of 5.00% and receives U.S. dollars based on a notional value of $39 million and a fixed rate of 4.635%. The expiration date is December 30, 2016, the date upon which the underlying intercompany debt, to which the swap agreement applies, matures. The swap agreement is designated as a cash flow hedge and therefore the Company recognized an unrealized gain (loss) on the change in fair value, net of tax, within other comprehensive income (loss).

Warrants

In 2013 and 2014, the Company purchased notes receivable from Bone Biologics, Inc. (“Bone Biologics”) totaling $750 thousand, all of which were issued with detachable warrants to purchase common stock of Bone Biologics. In addition, on July 1, 2014, the Company purchased 500 thousand shares of Bone Biologics for $500 thousand in a stock subscription agreement, resulting in a total investment in Bone Biologics as of September 30, 2014 of $1.25 million. As of December 31, 2013, the Company held warrants for 125 thousand shares of Bone Biologics, at an exercise price of $1.00 per share. As of September 30, 2014, the Company held warrants for 458 thousand shares of Bone Biologics, with a weighted average exercise price of $1.36 per share.

Under the terms of the note and warrant purchase agreements, the warrants to purchase common stock in Bone Biologics are both detachable from the note, exercisable over a seven year period, and transferable by the holder to other parties.