What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-08 compared with 2022-08-04 · 90 added, 52 removed, 635 unchanged (18% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

(In thousands, except share and per share values)

27 unchanged sentences

Authorized 500,000,000 shares;

issued and outstanding 77,037,205 and 79,113,916 shares at June 30, 2022 and December 31, 2021, respectively

issued and outstanding 77,401,459 and 79,113,916 shares at September 30, 2022 and December 31, 2021, respectively

Class B common stock;

1 unchanged sentence

Authorized 275,000,000 shares;

issued and outstanding 22,430,097 and 22,430,097 shares at June 30, 2022 and December 31, 2021, respectively

issued and outstanding 22,430,097 and 22,430,097 shares at September 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

7 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands, except per share amounts)

45 unchanged sentences

Balance at June 30, 2022

Class B Common Stock

Stock-based compensation

Grant of restricted stock units

Exercise of stock options

Comprehensive income/(loss)

Balance at September 30, 2022

‎ Common Stock

Additional paid-in

13 unchanged sentences

Balance at June 30, 2021

Stock-based compensation

Grant of restricted stock units

Exercise of stock options

Comprehensive income/(loss)

Balance at September 30, 2021

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

65 unchanged sentences

As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2021.

In the opinion of management, these condensed consolidated financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of our financial position as of June 30, 2022, and results of operations for the three and six months ended June 30, 2022.

In the opinion of management, these condensed consolidated financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of our financial position as of September 30, 2022, and results of operations for the three and nine months ended September 30, 2022.

The results of operations for any interim period may not be indicative of results for the full year.

34 unchanged sentences

Maintenance and support services are generally invoiced annually, at the beginning of each contract period, and revenue is recognized ratably over the maintenance period.

For the three and six months ended June 30, 2022, there was an immaterial amount of revenue recognized from previously deferred revenue.

For the three and nine months ended September 30, 2022, there was an immaterial amount of revenue recognized from previously deferred revenue.

GLOBUS MEDICAL, INC.

4 unchanged sentences

(f) Marketable Securities

Our marketable securities include municipal bonds, corporate debt securities, commercial paper, asset-backed securities, and securities of government, federal agency, and other sovereign obligations and are classified as available-for-sale as of June 30, 2022 .

S hort-term and long-term marketable securities are recorded at fair value on our condensed consolidated balance sheets.

43 unchanged sentences

We consider qualitative indicators of the fair value of a reporting unit when it is unlikely that a reporting unit has impaired goodwill.

During the six months ended June 30, 2022 and 2021, we did no t record any impairment charges related to goodwill.

During the nine months ended September 30, 2022 and 2021, we did no t record any impairment charges related to goodwill.

Intangible assets consist of purchased in-process research and development (“IPR&D”), developed technology, supplier network, patents, customer relationships, re-acquired rights, and non-compete agreements.

3 unchanged sentences

Fair value is generally determined using a discounted future cash flow analysis.

There were no impairments of finite-lived intangible assets during the six months ended June 30, 2022 or 2021.

There were no impairments of finite-lived intangible assets during the nine months ended September 30, 2022 or 2021.

IPR&D has an indefinite life and is not amortized until completion of the project at which time the IPR&D becomes an amortizable asset.

1 unchanged sentence

If the related project is not completed in a timely manner, we may have an impairment related to the IPR&D, calculated as the excess of the asset’s carrying value over its fair value.

There were no impairments of IPR&D during the six months ended June 30, 2022 or 2021.

There were no impairments of IPR&D during the nine months ended September 30, 2022 or 2021.

(j) Stock -Based Compensation

38 unchanged sentences

Business Combinations

During 2022, the Company completed one acquisition in the second quarter that was not considered material to the condensed consolidated financial statements during the periods presented.

During the first nine months of 2022, the Company completed one acquisition in the second quarter that was not considered material to the condensed consolidated financial statements during the periods presented.

This acquisition has been included in the condensed consolidated financial statements from the date of acquisition.

18 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

4 unchanged sentences

The composition of our short-term and long-term marketable securities was as follows:

June 30, 2022

September 30, 2022

(In thousands)

26 unchanged sentences

Total long-term marketable securities

The short-term marketable securities have effective maturity dates of less than one year and the long-term marketable securities have effective maturity dates ranging from one to three years as of June 30, 2022 and December 31, 2021, respectively.

Purchases of marketable securities include amounts payable to brokers of $ 2.2 million as of December 31, 2021.

Purchases of marketable securities included no amounts payable to brokers as of June 30, 2022.

Purchases of marketable securities included no amounts payable to brokers as of September 30, 2022.

FAIR VALUE MEASUREMENTS

1 unchanged sentence

(In thousands)

September 30,

Cash equivalents

27 unchanged sentences

* The weighted average rates were calculated based on the relative fair value of each business acquisition liability.

The change in the carrying value of the business acquisition liabilities during the three and six months ended June 30, 2022 and 2021, respectively included the following:

The change in the carrying value of the business acquisition liabilities during the three and nine months ended September 30, 2022 and 2021, respectively included the following:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

8 unchanged sentences

Inventories included the following:

September 30,

(In thousands)

3 unchanged sentences

Total inventories

During the three months ended June 30, 2022 and 2021, net adjustments to cost of sales related to excess and obsolete inventory were $ 2.3 million and $ 3.4 million, respectively.

The net adjustments for the three months ended June 30, 2022 and 2021 reflect a combination of additional expense for excess and obsolete related provisions ($ 5.2 million and $ 7.6 million, respectively) offset by sales and disposals ($ 2.9 million and $ 4.2 million, respectively) of inventory for which an excess and obsolete provision was provided previously through expense recognized in prior periods.

During the six months ended June 30, 2022 and 2021, net adjustments to cost of sales related to excess and obsolete inventory were $ 4.1 million and $ 5.0 million, respectively.

The net adjustments for the six months ended June 30, 2022 and 2021 reflect a combination of additional expense for excess and obsolete related provisions ($ 8.6 million and $ 11.4 million, respectively) offset by sales and disposals ($ 4.5 million and $ 6.4 million, respectively) of inventory for which an excess and obsolete provision was provided previously through expense recognized in prior periods.

During the three months ended September 30, 2022 and 2021, net adjustments to cost of sales related to excess and obsolete inventory were $ 1.8 million and $ 0.6 million, respectively.

The net adjustments for the three months ended September 30, 2022 and 2021 reflect a combination of additional expense for excess and obsolete related provisions ($ 10.4 million and $ 3.8 million, respectively) offset by sales and disposals ($ 8.6 million and $ 3.2 million, respectively) of inventory for which an excess and obsolete provision was provided previously through expense recognized in prior periods.

During the nine months ended September 30, 2022 and 2021, net adjustments to cost of sales related to excess and obsolete inventory were $ 5.9 million and $ 5.6 million, respectively.

The net adjustments for the nine months ended September 30, 2022 and 2021 reflect a combination of additional expense for excess and obsolete related provisions ($ 19.0 million and $ 15.2 million, respectively) offset by sales and disposals ($ 13.1 million and $ 9.6 million, respectively) of inventory for which an excess and obsolete provision was provided previously through expense recognized in prior periods.

GLOBUS MEDICAL, INC.

2 unchanged sentences

Property and equipment included the following:

September 30,

(In thousands)

7 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

GOODWILL AND INTANGIBLE ASSETS

The change in the carrying amount of goodwill during the twelve months ended December 31, 2021 and the six months ended June 30 , 2022, respectively included the following:

The change in the carrying amount of goodwill during the twelve months ended December 31, 2021 and the nine months ended September 30 , 2022, respectively included the following:

(In thousands)

5 unchanged sentences

Foreign exchange

June 30, 2022

September 30, 2022

The composition of intangible assets was as follows:

June 30, 2022

September 30, 2022

(In thousands)

13 unchanged sentences

Total intangible assets

The following table summarizes amortization of intangible assets for future periods as of June 30, 2022:

The following table summarizes amortization of intangible assets for future periods as of September 30, 2022:

(In thousands)

3 unchanged sentences

Accrued expense included the following:

September 30,

(In thousands)

15 unchanged sentences

The Credit Agreement contains financial and other customary covenants, including a maximum leverage ratio.

As of June 30 , 2022, we have no t borrowed under the Credit Agreement.

As of September 30 , 2022, we have no t borrowed under the Credit Agreement.

GLOBUS MEDICAL, INC.

4 unchanged sentences

The repurchase program has no time limit and may be suspended for periods or discontinued at any time.

As of June 30, 2022, the Company is authorized to repurchase a total of $ 150.8 million of Class A common stock.

As of September 30, 2022, the Company is authorized to repurchase a total of $ 150.8 million of Class A common stock.

The timing and actual number of shares repurchased will depend on various factors including price, corporate and regulatory requirements, debt covenant requirements, alternative investment opportunities and other market conditions.

18 unchanged sentences

April 1, 2022 - June 30, 2022

January 1, 2020 - June 30, 2022

July 1, 2022 - September 30, 2022

January 1, 2020 - September 30, 2022

(1) Inclusive of an immaterial amount of commission fees

10 unchanged sentences

Accumulated Other Comprehensive Income (Loss)

The tables below present the changes in each component of accumulated other comprehensive income/(loss), including current period other comprehensive income/(loss) and reclassifications out of accumulated other comprehensive income/(loss) for the six months ended June 30 , 2022 and 2021, respectively:

The tables below present the changes in each component of accumulated other comprehensive income/(loss), including current period other comprehensive income/(loss) and reclassifications out of accumulated other comprehensive income/(loss) for the nine months ended September 30 , 2022 and 2021, respectively:

(In thousands)

6 unchanged sentences

Other comprehensive income/(loss), net of tax

Accumulated other comprehensive income/(loss), net of tax, at June 30, 2022

Accumulated other comprehensive income/(loss), net of tax, at September 30, 2022

(In thousands)

6 unchanged sentences

Other comprehensive income/(loss), net of tax

Accumulated other comprehensive income/(loss), net of tax, at June 30, 2021

Accumulated other comprehensive income/(loss), net of tax, at September 30, 2021

Amounts reclassified from accumulated other comprehensive loss, net of tax, related to unrealized gains/losses on marketable securities were released to other income, net in our condensed consolidated statements of operations and comprehensive income.

8 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands, except per share amounts)

29 unchanged sentences

The 2021 Plan Amendment also increased the aggregate number of shares of Class A Common that may be issued or transferred under the 2021 Plan pursuant to incentive stock options under Section 422 of the Code from 2,000,000 to 4,000,000 .

As of June 30, 2022, pursuant to the 2021 Plan, there were 5,514,293 shares of Class A Common reserved and 3,520,451 shares of Class A Common available for future grants.

As of September 30, 2022, pursuant to the 2021 Plan, there were 5,649,132 shares of Class A Common reserved and 2,858,843 shares of Class A Common available for future grants.

GLOBUS MEDICAL, INC.

1 unchanged sentence

Stock Options

Stock option activity during the six months ended June 30 , 2022 is summarized as follows:

Stock option activity during the nine months ended September 30 , 2022 is summarized as follows:

‎ Shares (thousands)

3 unchanged sentences

Outstanding at December 31, 2021

Outstanding at June 30, 2022

Exercisable at June 30, 2022

Expected to vest at June 30, 2022

The total intrinsic value of stock options exercised was $ 2.7 million and $ 25.0 million during the three months ended June 30, 2022, and 2021, respectively.

The total intrinsic value of stock options exercised was $ 7.4 million and $ 35.1 million during the six months ended June 30, 2022, and 2021, respectively.

Outstanding at September 30, 2022

Exercisable at September 30, 2022

Expected to vest at September 30, 2022

The total intrinsic value of stock options exercised was $ 7.9 million and $ 33.8 million during the three months ended September 30, 2022, and 2021, respectively.

The total intrinsic value of stock options exercised was $ 15.3 million and $ 68.9 million during the nine months ended September 30, 2022, and 2021, respectively.

The fair value of the options was estimated on the date of the grant using a Black-Scholes option pricing model with the following assumptions:

Six Months Ended

Nine Months Ended

September 30,

Risk-free interest rate

2 unchanged sentences

Expected dividend yield

The weighted average grant date fair value of stock options granted during the three months ended June 30, 2022, and 2021 was $ 23.93 and $ 21.30 per share, respectively.

The weighted average grant date fair value of stock options granted during the six months ended June 30, 2022, and 2021 was $ 21.05 and $ 19.58 per share, respectively.

The weighted average grant date fair value of stock options granted during the three months ended September 30, 2022, and 2021 was $ 23.16 and $ 24.11 per share, respectively.

The weighted average grant date fair value of stock options granted during the nine months ended September 30, 2022, and 2021 was $ 21.78 and $ 20.19 per share, respectively.

Restricted Stock Units

Restricted stock unit activity during the six months ended June 30, 2022 is summarized as follows:

Restricted stock unit activity during the nine months ended September 30, 2022 is summarized as follows:

Restricted Stock

4 unchanged sentences

Outstanding at December 31, 2021

Outstanding at June 30, 2022

Outstanding at September 30, 2022

GLOBUS MEDICAL, INC.

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

2 unchanged sentences

Total stock-based compensation cost

As of June 30, 2022, there was $ 68.8 million of unrecognized compensation expense related to unvested employee stock options that are expected to vest over a weighted average period of approximately three years .

As of September 30, 2022, there was $ 78.8 million of unrecognized compensation expense related to unvested employee stock options that are expected to vest over a weighted average period of approximately three years .

In computing our income tax provision, we make certain estimates and judgments, such as estimated annual taxable income or loss, annual effective tax rate, the nature and timing of permanent and temporary differences between taxable income for financial reporting and tax reporting, and the recoverability of deferred tax assets.

1 unchanged sentence

Should facts and circumstances change during a quarter causing a material change to the estimated effective income tax rate, a cumulative adjustment is recorded.

The following table provides a summary of our effective tax rate for the three and six months ended June 30, 2022 and 2021, respectively:

The following table provides a summary of our effective tax rate for the three and nine months ended September 30, 2022 and 2021, respectively:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Effective income tax rate

16 unchanged sentences

District Court for the Eastern District of Pennsylvania.

The outcome of this litigation cannot be determined, nor can we estimate a range of potential loss, therefore, we have no t recorded a liability related to this litigation as of June 30, 2022.

The outcome of this litigation cannot be determined, nor can we estimate a range of potential loss, therefore, we have no t recorded a liability related to this litigation as of September 30, 2022.

GLOBUS MEDICAL, INC.

5 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

2 unchanged sentences

Total net sales

SUBSEQUENT EVENT

On October 11, 2022, the Company acquired the membership interests of Harvest Biologics, LLC, which engages in the business of selling systems that produce autologous biologics.

The purchase price is a cash payment of $ 30 million, subject to post-closing adjustments, if applicable.

GLOBUS MEDICAL, INC.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements