Annual report pursuant to Section 13 and 15(d)

Composition of Certain Financial Statement Captions

v3.10.0.1
Composition of Certain Financial Statement Captions
12 Months Ended
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Composition of Certain Financial Statement Captions Composition of Certain Financial Statement Captions

 
For the years ended December 31,
(In thousands)
2018
 
2017
Accounts receivable, net
 
 
 
Accounts receivable
$
145,665

 
$
166,962

Less: allowance for doubtful accounts
(1,758
)
 
(1,446
)
 
$
143,907

 
$
165,516

Inventories, net
 
 
 
Consumable supplies
$
23,264

 
$
21,546

Finished products
15,259

 
21,012

Work in-process
2,473

 
5,873

Raw materials
4,259

 
7,467

Less: inventory reserve
(2,956
)
 
(6,565
)
 
$
42,299

 
$
49,333

Other current assets and prepaid expenses
 
 
 
Other receivables
$
2,368

 
$
3,398

Taxes recoverable
15,708

 
18,138

Prepaid supplies
9,693

 
8,207

Prepaid insurance
3,436

 
3,532

Other
3,847

 
9,238

 
$
35,052

 
$
42,513

Property, plant and equipment, net:
 
 
 
Machinery, medical and other equipment
$
147,757

 
$
112,961

Leasehold improvements
34,607

 
34,121

Furniture and fixtures
12,737

 
11,540

Automobiles and aircraft
10,133

 
11,137

Software
13,425

 
12,469

Building
18,554

 
8,227

Land
2,453

 
2,552

Construction in process
16,670

 
39,397

Less: accumulated depreciation
(111,662
)
 
(85,847
)
 
$
144,674

 
$
146,557

Intangible assets, net:
 
 
 
Customer relationships
$
446,296

 
$
448,345

Technologies
340,729

 
340,921

Trade names
50,404

 
50,553

Covenants not to compete
16,322

 
16,372

Licenses
5,766

 
10,305

Product registrations
7,861

 
10,475

Other
5,613

 
5,799

Less: accumulated amortization
(258,539
)
 
(198,935
)
 
$
614,452

 
$
683,835

 
For the years ended December 31,
(In thousands)
2018
 
2017
Accrued expenses:
 
 
 
Contract liabilities
$
63,503

 
$
56,883

Employee benefits
45,621

 
50,377

Taxes payable
3,233

 
4,609

Contingent consideration
2,375

 
11,750

Clinical trials
10,401

 
12,191

Capital leases short-term
3,280

 
3,399

Milestone payment
4,871

 
4,868

Professional fees
7,935

 
2,355

Other
62,294

 
79,364

 
$
203,513

 
$
225,796

 
 
 
 
Other long-term liabilities:
 
 
 
Contract liabilities
$
27,566

 
$
95,450

Line of credit
105,198

 
104,152

Contingent consideration
22,162

 
29,603

Capital leases long-term
5,620

 
7,786

Mortgages and other debts payable
4,654

 
1,567

Other
33,768

 
17,857

 
$
198,968

 
$
256,415


All of our intangible assets and goodwill acquired relate to our acquisitions of principally OPKO Renal, OPKO Biologics, EirGen Pharma Limited (“EirGen”) and BioReference. We amortize intangible assets with definite lives on a straight-line basis over their estimated useful lives. The estimated useful lives by asset class are as follows: technologies - 5-17 years, customer relationships - 7-20 years, product registrations - 7-10 years, covenants not to compete - 5 years, trade names - 5-10 years, other 9-10 years. We do not anticipate capitalizing the cost of product registration renewals, rather we expect to expense these costs, as incurred. Our goodwill is not tax deductible for income tax purposes in any jurisdiction in which we operate.
The changes in value of the intangible assets and goodwill during the years ended December 31, 2018 and 2017 are primarily due to foreign currency fluctuations between the Chilean Peso, the Euro and the Shekel against the U.S. dollar.
The following table reflects the changes in the allowance for doubtful accounts, provision for inventory reserve and tax valuation allowance accounts:
(In thousands)
Beginning
balance
 
Charged
to
expense
 
Written-off
 
Charged
to other
 
Ending
balance
2018
 
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
$
(1,446
)
 
(665
)
 
353

 

 
$
(1,758
)
Inventory reserve
$
(6,565
)
 
(1,915
)
 
5,524

 

 
$
(2,956
)
Tax valuation allowance
$
(142,062
)
 
(12,854
)
 

 

 
$
(154,916
)
2017
 
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
$
(1,671
)
 
(891
)
 
1,063

 
53

 
$
(1,446
)
Inventory reserve
$
(945
)
 
(5,390
)
 
(230
)
 

 
$
(6,565
)
Tax valuation allowance
$
(55,415
)
 
(82,358
)
 

 
(4,289
)
 
$
(142,062
)

The following table summarizes the changes in Goodwill during the years ended December 31, 2018 and 2017.
 
2018
 
2017
(In thousands)
Balance at January 1
 
Goodwill impairment
 
Foreign exchange and other
 
Balance at December 31st
 
Balance at January 1
 
Foreign exchange
 
Balance at December 31
Pharmaceuticals
 
 
 
 
 
 
 
 
 
 
 
 
 
CURNA
$
4,827

 

 
$

 
$
4,827

 
$
4,827

 
$

 
$
4,827

EirGen
89,226

 

 
(3,981
)
 
85,245

 
78,358

 
10,868

 
89,226

FineTech
11,698

 
(11,698
)
 

 

 
11,698

 

 
11,698

OPKO Biologics
139,784

 

 

 
139,784

 
139,784

 

 
139,784

OPKO Chile
5,203

 

 
(589
)
 
4,614

 
4,785

 
418

 
5,203

OPKO Health Europe
7,898

 

 
(352
)
 
7,546

 
6,936

 
962

 
7,898

OPKO Renal
2,069

 

 

 
2,069

 
2,069

 

 
2,069

Transition Therapeutics
3,608

 

 
(286
)
 
3,322

 
3,360

 
248

 
3,608

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diagnostics
 
 
 
 
 
 
 
 

 

 

BioReference
401,821

 

 

 
401,821

 
401,821

 

 
401,821

OPKO Diagnostics
17,977

 

 

 
17,977

 
17,977

 

 
17,977

OPKO Lab
32,988

 

 

 
32,988

 
32,988

 

 
32,988

 
$
717,099

 
$
(11,698
)
 
$
(5,208
)
 
$
700,193

 
$
704,603

 
$
12,496

 
$
717,099