Basis of Presentation, Business Description and Summary of Significant Accounting Policies (Tables)

12 Months Ended

May 31, 2014

Fair value of assets and liabilities measured on recurring basis

The following tables provide information by level for assets and liabilities that are measured at fair value (in thousands):



	Fair Value Measurements using inputs considered as:
	Level 1		Level 2		Level 3		Fair Value at May 31, 2014
Financial Assets
Cash equivalents
Money market funds	$	445	$	—	$	—	$	445
Total	445		—		—		445
Marketable securities
U.S. government agency obligations	—		—		1,809		1,809
Total	—		—		1,809		1,809
Total Financial Assets	445		—		1,809		2,254
Financial Liabilities
Interest rate swap agreements	—		555		—		555
Contingent liability for acquisition earn out	—		—		67,421		67,421
Total Financial Liabilities	$	—	$	555	$	67,421	$	67,976



	Fair Value Measurements using inputs considered as:
	Level 1		Level 2		Level 3		Fair Value at May 31, 2013
Financial Assets
Cash equivalents
Money market funds	$	114	$	—	$	—	$	114
Total	114		—		—		114
Marketable securities
Corporate bond securities	—		303		—		303
U.S. government agency obligations	—		—		1,850		1,850
Total	—		303		1,850		2,153
Total Financial Assets	114		303		1,850		2,267
Financial Liabilities
Interest rate swap agreements	—		522		—		522
Contingent liability for acquisition earn out	—		—		75,049		75,049
Total Financial Liabilities	$	—	$	522	$	75,049	$	75,571

Fair value measurements using significant unobservable inputs

The components of Level 3 fair value instruments as of May 31, 2014 are shown below (in thousands):



	Financial Assets			Financial Liabilities
	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)			Fair Value Measurements Using Significant Unobservable Inputs
Balance at May 31, 2013	$	1,850		$	75,049
Total gains or losses (realized/unrealized):
Earnings revaluation gain - Included in earnings	—			(4,994		)
Earnings revaluation expense - Included in earnings	—			3,276
Included in other comprehensive income	(16		)	—
Purchases, issuances and settlements	(25		)	(10,880		)
Transfers in and/or (out) of Level 3	—			—
Contingent consideration - Clinical Devices	—			4,970
Balance at May 31, 2014	$	1,809		$	67,421

Summary showing the recurring fair value measurements of the contingent consideration liability

The recurring Level 3 fair value measurements of the contingent consideration liability related to the Vortex and Microsulis acquisitions include the following significant unobservable inputs ($ in thousands):



	Fair value at May 31, 2014		Valuation Technique	Unobservable Input	Range
Revenue based payments	$	64,051	Discounted cash flow	Discount rate Probability of payment Projected fiscal year of payment	4% - 10% 75% - 100% 2015 - 2022
Milestone based payments	3,370		Discounted cash flow	Discount rate Probability of payment Projected fiscal year of payment	16% 75% - 100% 2015
	$	67,421

Summary showing reconciliation of the contingent payments

The following table provides a reconciliation of the beginning and ending balances of contingent milestone payments associated with the Vortex, Microsulis and Clinical Devices acquisitions measured at fair value that used significant unobservable inputs (Level 3) (in thousands):



Balance at May 31, 2013	$	75,049
Purchase price contingent consideration	4,970
Contingent payments	(10,880		)
Earnings revaluation gain	(4,994		)
Earnings revaluation expense	3,276
Balance at May 31, 2014	$	67,421

Reconciliation of the weighted-average number of common shares

The following table sets forth the reconciliation of the weighted-average number of common shares:



	2014	2013	2012
Basic	35,135,689	34,817,279	25,382,293
Effect of dilutive securities	304,161	—	—
Diluted	35,439,850	34,817,279	25,382,293

- Definition

Tabular disclosure of liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

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- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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