XML 35 R24.htm IDEA: XBRL DOCUMENT v3.10.0.1
Revenue from Contracts with Customers (Tables)
6 Months Ended
Jun. 30, 2018
Revenue from Contract with Customer [Abstract]  
Disaggregation of Revenue
The following table summarizes revenue from contracts with customers for the three and six months ended June 30, 2018 and 2017:

 
Three months
 
Six months
(in thousands)
2018
 
2017
 
2018
 
2017
U.S. Omnipod
$
78,047

 
$
65,361

 
$
148,319

 
$
125,016

International Omnipod
28,509

 
26,575

 
66,913

 
51,719

Drug Delivery
17,706

 
17,820

 
32,608

 
34,734

Total
$
124,262

 
$
109,756

 
$
247,840

 
$
211,469

Summary of Financial Statement Impact of ASC 606 Adoption
The table also compares the reported condensed consolidated balance sheet accounts as of June 30, 2018 that were impacted by the new guidance to pro forma balance sheet amounts had the previous guidance been in effect.

 
As Reported (1)
 
Adjustments (2)
 
As Adjusted
 
As Reported (3)
 
Adjustments
 
Pro forma (4)
(in thousands)
12/31/2017
 
1/1/2018
 
1/1/2018
 
6/30/2018
 
6/30/2018
 
6/30/2018
Assets
 
 
 
 
 
 
 
 
 
 
 
Unbilled receivable (a)
$

 
$
5,119

 
$
5,119

 
$
13,958

 
$
(13,958
)
 
$

Inventories
33,793

 
(753
)
 
33,040

 
40,808

 
2,103

 
42,911

Prepaid expenses and other current assets (b)
9,949

 
5,568

 
15,517

 
17,559

 
(6,554
)
 
11,005

Total current assets
537,171

 
9,934

 
547,105

 
421,793

 
(18,409
)
 
403,384

Other assets (b)
1,969

 
13,326

 
15,295

 
17,961

 
(15,491
)
 
2,470

Total assets
816,744

 
23,260

 
840,004

 
838,856

 
(33,900
)
 
804,956

Liabilities and Stockholder's Equity
 
 
 
 
 
 
 
 
 
 
Deferred revenue (c)
2,356

 
2,625

 
4,981

 
2,338

 
(854
)
 
1,484

Total current liabilities
86,025

 
2,625

 
88,650

 
76,109

 
(854
)
 
75,255

Other long-term liabilities
6,030

 
271

 
6,301

 
6,480

 
(270
)
 
6,210

Total liabilities
658,228

 
2,896

 
661,124

 
659,708

 
(1,124
)
 
658,584

Accumulated deficit
(707,255
)
 
20,349

 
(686,906
)
 
(695,166
)
 
(32,786
)
 
(727,952
)
Total stockholders' equity
158,516

 
20,364

 
178,880

 
179,148

 
(32,776
)
 
146,372

Total liabilities and stockholders' equity
816,744

 
23,260

 
840,004

 
838,856

 
(33,900
)
 
804,956


(1) Financial statement amounts as reported in the Company's consolidated balance sheet as of December 31, 2017. Financial statement amounts that are not shown on the above table were not impacted by the adoption of ASC 606.
(2) Adjustments made on January 1, 2018 to adopt ASC 606.
(3) Financial statement amounts as reported in the interim condensed consolidated balance sheet as of June 30, 2018. Financial statement amounts that are not shown on the above table were not impacted by the adoption of ASC 606.
(4) Pro forma balance sheet amounts that would have been reported as of June 30, 2018 had the Company applied the previous guidance under ASC 605.

(a) Unbilled receivable that reflects revenue for a portion of the Company's drug delivery product line as the product is produced. The unbilled receivable is reclassified to accounts receivable as the product is completed and shipped to the customer.
(b) Other current and non-current assets include contract acquisition costs related to the sale of the Omnipod. These costs are amortized over the estimated period of benefit.
(c) The Company recorded deferred revenue for a material right associated with a volume-based pricing discount granted to the Company's European distributor at the outset of the distribution contract in 2010. The deferred revenue related to this material right was recognized as revenue through the completion of the distributor contract during the first half of 2018.
The following summarizes the significant changes on the Company’s consolidated statement of operations for the three and six months ended June 30, 2018 as a result of the adoption of ASC 606 on January 1, 2018 compared to if the Company had continued to recognize revenue under ASC 605:

 
 
Three months ended June 30, 2018
 
Six months ended June 30, 2018
(in thousands, except per share amounts)
 
As reported
 
Adjustments
 
Pro forma as if the previous accounting guidance was in effect
 
As reported
 
Adjustments
 
Pro forma as if the previous accounting guidance was in effect
U.S. Omnipod
 
$
78,047

 
$
77

 
$
78,124

 
$
148,319

 
$
126

 
$
148,445

International Omnipod (a)
 
28,509

 
(621
)
 
27,888

 
66,913

 
(1,898
)
 
65,015

Drug Delivery (b)
 
17,706

 
(8,512
)
 
9,194

 
32,608

 
(8,839
)
 
23,769

Revenue
 
124,262

 
(9,056
)
 
115,206

 
247,840

 
(10,611
)
 
237,229

Cost of revenue
 
42,190

 
(1,283
)
 
40,907

 
89,953

 
(1,351
)
 
88,602

Gross profit
 
82,072

 
(7,773
)
 
74,299

 
157,887

 
(9,260
)
 
148,627

Sales and marketing (c)
 
35,605

 
736

 
36,341

 
67,738

 
3,173

 
70,911

Total operating expenses
 
77,747

 
736

 
78,483

 
153,562

 
3,173

 
156,735

Operating income (loss)
 
4,325

 
(8,509
)
 
(4,184
)
 
4,325

 
(12,433
)
 
(8,108
)
Loss before income taxes
 
(1,279
)
 
(8,509
)
 
(9,788
)
 
(7,515
)
 
(12,433
)
 
(19,948
)
Net loss
 
$
(1,691
)
 
$
(8,509
)
 
$
(10,200
)
 
$
(8,260
)
 
$
(12,433
)
 
$
(20,693
)
Net loss per basic and diluted share
 
$
(0.03
)
 
$
(0.14
)
 
$
(0.17
)
 
$
(0.14
)
 
$
(0.21
)
 
$
(0.35
)
(a) International Omnipod revenue under ASC 606 includes the amortization of a material right associated with a volume-based pricing discount granted to the Company's European distributor at the outset of the distribution contract in 2010. The deferred revenue was recognized as revenue through the completion of the distributor contract during the first half of 2018.
(b) ASC 606 accelerated the recognition of revenue and fulfillment costs related to certain drug delivery contracts for which recognition was previously recorded when the product was shipped to the customer and is recorded as the product is produced under ASC 606.
(c) ASC 606 resulted in the amortization of capitalized commission costs that were recorded as part of the cumulative effect adjustment upon adoption and during the six months ended June 30, 2018. Amortization of these capitalized costs to selling and marketing expenses, net of commission costs that were capitalized in the three and six month periods, reduced sales and marketing expenses in each period.
 
 
Six Months Ended June 30, 2018
Statement of Cash Flows (in thousands)
 
As Reported
 
Adjustments
 
Pro Forma
Net loss
 
$
(8,260
)
 
$
(12,433
)
 
$
(20,693
)
Adjustments to reconcile net loss to net cash used in operating activities
 
 
 
 
 
 
Non-cash items
 
38,131

 

 
38,131

Changes in operating assets and liabilities:
 
 
 
 
 

Accounts receivable and unbilled receivable
 
(7,217
)
 
8,839

 
1,622

Inventories
 
(7,959
)
 
(1,351
)
 
(9,310
)
Prepaid expenses and other assets
 
(4,823
)
 
3,174

 
(1,649
)
Accounts payable, accrued expenses and other current liabilities
 
(17,873
)
 

 
(17,873
)
Deferred revenue
 
(2,626
)
 
1,771

 
(855
)
Other long-term liabilities
 
232

 

 
232

Net cash used in operating activities
 
$
(10,395
)
 
$

 
$
(10,395
)