2018 Guidance Range ^{1, 2}

Prior

(in million's; except %'s and EPS)

GAAP

Non-GAAP

GAAP

Non-GAAP

Revenue

$1,095 - $1,105

$1,095 - $1,105

$1,105 - $1,110

$1,105 - $1,110

   % Growth - Reported

6.7% - 7.6%

6.7% - 7.6%

7.6% - 8.1%

7.6% - 8.1%

% Growth - Constant Currency ³

6.3% - 7.3%

7.4% - 7.9%

Operating margin

8.0% - 8.1%

16.7%

5.4% - 5.9%

15.0% - 15.5%

Earnings per share

$0.45 - $0.48

$2.37 - $2.40

$0.22 - $0.31

$2.15 - $2.23

EBITDA

18.3%

25.9%

16.1% - 16.6%

24.4% - 24.9%

Tax Rate

~33%

~21%

~18%

~21%

1

Prior guidance reflects the range provided July 31, 2018. Current guidance reflects the range provided October 30, 2018.

2

Amounts for 2017 have been recasted and presented based on our full retrospective method of adoption of ASC 606. Commencing with the fourth quarter of 2017, amounts also reflect expenses associated with ongoing litigation with a former Board member and his current employer related to various matters, including infringement of the Company's intellectual property.

3

Constant currency is a measure that adjusts US GAAP revenue for the impact of currency over the same period in the prior year.

2017

Actuals ^{1, 2}

2018 Guidance Range ^{1, 3}

Prior ⁴

Current  ⁵

GAAP net income per share

$

1.48

$0.45 - $0.48

$0.22 - $0.31

Impact of change to diluted share count

0.08

—

—

GAAP net income per share, adjusted to diluted Non-GAAP share count

$

1.56

$0.45 - $0.48

$0.22 - $0.31

Business transition costs ⁶

0.08

0.13

0.15

Non-cash purchase accounting adjustments on acquisitions ⁷

0.01

0.02

0.02

Non-cash interest expense on convertible notes

0.33

0.32

0.32

Litigation related expenses and settlements ⁸

0.09

0.60

0.63

Non-recurring consulting fees ⁹

—

0.13

0.12

Net loss on strategic investments

—

0.17

0.07

Amortization of intangible assets ¹⁰

0.89

0.95

0.95

Purchase of in-process research and development ¹¹

—

—

0.17

Tax effect of adjustments ¹²

(1.08)

(0.40)

(0.50)

Non-GAAP earnings per share

$

1.89

$2.37 - $2.40

$2.15 - $2.23

GAAP Weighted shares outstanding - basic

50,874

51,397

51,396

GAAP Weighted shares outstanding - diluted

55,193

52,131

52,853

Non-GAAP Weighted shares outstanding - diluted ¹³

52,345

52,131

52,295

1

Items may not foot due to rounding.

2

Amounts for 2017 have been recasted and presented based on our full retrospective method of adoption of ASC 606.   Commencing with the fourth quarter of 2017, amounts also reflect expenses associated with ongoing litigation with a former Board member and his current employer related to various matters, including infringement of the Company's intellectual property.

3

Prior guidance reflects the range provided July 31, 2018. Current guidance reflects the range provided October 30, 2018.

4

Effective tax expense rate of ~33% applied to GAAP earnings and ~21% applied to Non-GAAP earnings.

5

Effective tax expense rate of ~18% applied to GAAP earnings and ~21% applied to Non-GAAP earnings.

6

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs, contingent consideration fair value adjustments, and other costs directly associated with such activities.

7

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

8

For 2017, amounts relate primarily to the Medtronic litigation matter.  For 2018, amounts relate primarily to the loss recorded in connection with the settlement of the Madsen Medical, Inc. litigation matter.  Commencing with the fourth quarter of 2017, amounts also reflect expenses associated with ongoing litigation with a former Board member and his current employer related to various matters, including infringement of the Company's intellectual property.

9

Non-recurring consulting fees associated with the implementation of our state tax-planning strategy.

10

For 2017, amortization excludes the amortization attributable to non-controlling interest.  In January 2018, the Company completed the acquisition of the non-controlling interest.

11

Purchase of an in-process research and development asset which had no future alternative use.

12

The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. The Company also includes those adjustments that would have benefited the tax rate in lieu of the above adjustments as part of the Company's tax filings. The impact of the changes to the tax rate results in an annual estimated rate of ~18% on a GAAP basis and ~21% on a non-GAAP basis.

13

Adjusted non-GAAP diluted WASO excludes the impact of dilutive convertible notes and warrants for which the Company is economically hedged through its anti-dilutive bond hedge arrangements.

Reconciliation of Non-GAAP Operating Margin %

2018 Guidance Range ^{2, 3}

(in thousands, except %)

2017

Actuals ^{1, 2}

Prior

Current

Non-GAAP Gross Margin % [A]

73.9%

72.6%

72.3%

Non-cash purchase accounting adjustments on acquisitions ⁴

(0.1%)

(0.1%)

(0.1%)

GAAP Gross Margin [B]

73.9%

72.5%

72.2%

Non-GAAP Sales, Marketing & Administrative Expense [C]

52.5%

50.6%

51.5% - 52.0%

Non-recurring consulting fees ⁵

0.0%

0.6%

0.6%

GAAP Sales, Marketing & Administrative Expense [D]

52.5%

51.2%

52.1% - 52.6%

GAAP & Non-GAAP Research & Development Expense [E]

4.9%

5.3%

5.3%

Purchase of in-process research and development [F] ⁶

0.0%

0.0%

0.8%

Litigation related expenses and settlements [G] ⁷

0.5%

2.9%

3.0%

Amortization of intangible assets [H] ⁸

4.7%

4.5%

4.5%

Business transition costs [I] ⁹

0.5%

0.6%

0.6%

Non-GAAP Operating Margin % [A - C - E]

16.5%

16.7%

15.0% - 15.5%

GAAP Operating Margin % [B - D - E - F - G - H - I]

10.9%

8.0%

5.4% - 5.9%

1

Amounts for 2017 have been recasted and presented based on our full retrospective method of adoption of ASC 606.   Commencing with the fourth quarter of 2017, amounts also reflect expenses associated with ongoing litigation with a former Board member and his current employer related to various matters, including infringement of the Company's intellectual property.

2

Items may not foot due to rounding.

3

Prior guidance reflects the range provided July 31, 2018. Current guidance reflects the range provided October 30, 2018.

4

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

5

Non-recurring consulting fees associated with the implementation of our state tax-planning strategy.

6

Purchase of an in-process research and development asset which had no future alternative use.

7

For 2017, amounts relate primarily to the Medtronic litigation matter.  For 2018, amounts relate primarily to the loss recorded in connection with the settlement of the Madsen Medical, Inc. litigation matter.  Commencing with the fourth quarter of 2017, amounts also reflect expenses associated with ongoing litigation with a former Board member and his current employer related to various matters, including infringement of the Company's intellectual property.

8

For fiscal year 2017 amortization excludes the amortization attributable to non-controlling interest. In January 2018, the Company completed the acquisition of the non-controlling interest.

9

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs, contingent consideration fair value adjustments, and other costs directly associated with such activities.

Reconciliation of EBITDA %

2018 Guidance Range ^{2, 3}

(in thousands, except %)

2017

Actuals ^{1, 2}

Prior

Current

Net Income / (Loss)

7.9%

2.2%

1.0% - 1.4%

Interest (income) / expense, net

3.7%

3.5%

3.4%

Provision for income taxes

1.1%

0.2%

Depreciation and amortization ⁴

11.7%

11.5%

11.5%

EBITDA

22.6%

18.3%

16.1% - 16.6%

Non-cash stock based compensation

2.2%

2.6%

2.8%

Business transition costs ⁵

0.4%

0.6%

0.7%

Non-cash purchase accounting adjustments on acquisitions ⁶

0.1%

0.1%

0.1%

Litigation related expenses and settlements ⁷

0.5%

2.9%

3.0%

Non-recurring consulting fees ⁸

0.0%

0.6%

0.6%

Purchase of in-process research and development ⁹

0.0%

0.0%

0.8%

Net loss on strategic investments

0.0%

0.8%

0.3%

Adjusted EBITDA

25.7%

25.9%

24.4% - 24.9%

1

Amounts for 2017 have been recasted and presented based on our full retrospective method of adoption of ASC 606.   Commencing with the fourth quarter of 2017, amounts also reflect expenses associated with ongoing litigation with a former Board member and his current employer related to various matters, including infringement of the Company's intellectual property.

2

Items may not foot due to rounding.

3

Prior guidance reflects the range provided July 31, 2018. Current guidance reflects the range provided October 30, 2018.

4

For fiscal year 2017 amortization excludes the amortization attributable to non-controlling interest. In January 2018, the Company completed the acquisition of the non-controlling interest.

5

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs, contingent consideration fair value adjustments, and other costs directly associated with such activities.

6

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

7

For 2017, amounts relate primarily to the Medtronic litigation matter.  For 2018, amounts relate primarily to the loss recorded in connection with the settlement of the Madsen Medical, Inc. litigation matter.  Commencing with the fourth quarter of 2017, amounts also reflect expenses associated with ongoing litigation with a former Board member and his current employer related to various matters, including infringement of the Company's intellectual property.

8

Non-recurring consulting fees associated with the implementation of our state tax-planning strategy.

9

Purchase of an in-process research and development asset which had no future alternative use.

For the Three Months Ended September 30, 2018

Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures

(Unaudited - in thousands, except per share data)

Gross

Profit

Operating Profit

Net Income

Diluted EPS

Diluted WASO ⁶

Net

Income to Adjusted

EBITDA

Reported GAAP

$

197,141

$

17,971

$

15,923

$

0.30

53,189

$

15,923

% of revenue

72.7

%

6.6

%

Non-cash purchase accounting adjustments on acquisitions ¹

270

270

270

270

Amortization of intangible assets

12,349

12,349

Litigation related expenses and settlements ²

1,333

1,333

1,333

Business transition costs ³

1,443

1,443

1,443

Purchase of in-process research and development ⁴

8,913

8,913

8,913

Non-cash interest expense on convertible notes

4,208

Net gain on strategic investments

(5,137)

(5,137)

Tax effect of adjustments ⁵

(9,798)

Interest expense/(income), net

8,905

Income tax benefit

(2,618)

Depreciation and amortization

32,258

Non-cash stock based compensation

11,068

Adjusted Non-GAAP

$

197,411

$

42,279

$

29,504

$

0.56

52,539

$

72,358

% of revenue

72.8

%

15.6

%

26.7

%

1

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

2

Represents expenses associated with ongoing litigation with a former Board member and his current employer related to various matters, including infringement of the Company's intellectual property.

3

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs, contingent consideration fair value adjustments, and other costs directly associated with such activities.

4

Purchase of an in-process research and development asset which had no future alternative use.

5

The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. The Company also includes those adjustments that would have benefited the tax rate in lieu of the above adjustments as part of the Company's tax filings. The impact of the changes to the tax rate results in an annual estimated rate of ~18% on a GAAP basis and ~21% on a non-GAAP basis.

6

Adjusted non-GAAP diluted WASO excludes the impact of dilutive convertible notes and warrants for which the Company is economically hedged through its anti-dilutive bond hedge arrangements.

For the Nine Months Ended September 30, 2018

Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures

(Unaudited - in thousands, except per share data)

Gross

Profit

Operating Profit

Net

Income

Diluted EPS

Diluted WASO ⁷

Net Loss to Adjusted

EBITDA

Reported GAAP

$

588,357

$

28,312

$

322

$

0.01

52,296

$

322

% of revenue

72.3

%

3.5

%

Non-cash purchase accounting adjustments on acquisitions ¹

1,080

1,080

1,080

1,080

Non-recurring consulting fees ²

6,084

6,084

6,084

Amortization of intangible assets

37,402

37,402

Litigation related expenses and settlements ³

31,302

31,302

31,302

Business transition costs ⁴

7,694

7,694

7,694

Purchase of in-process research and development ⁵

8,913

8,913

8,913

Non-cash interest expense on convertible notes

12,460

Net loss on strategic investments

3,867

3,867

Tax effect of adjustments ⁶

(28,682)

Interest expense/(income), net

28,078

Income tax benefit

(7,931)

Depreciation and amortization

96,409

Non-cash stock based compensation

22,062

Adjusted Non-GAAP

$

589,437

$

120,787

$

80,442

$

1.54

52,079

$

197,880

% of revenue

72.5

%

14.8

%

24.3

%

1

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

2

Non-recurring consulting fees associated with the implementation of our state tax-planning strategy.

3

Represents the loss recorded in connection with the settlement of the Madsen Medical, Inc. litigation matter, as well as expenses associated with ongoing litigation with a former Board member and his current employer related to various matters, including infringement of the Company's intellectual property.

4

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs, contingent consideration fair value adjustments, and other costs directly associated with such activities.

5

Purchase of an in-process research and development asset which had no future alternative use.

6

The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. The Company also includes those adjustments that would have benefited the tax rate in lieu of the above adjustments as part of the Company's tax filings. The impact of the changes to the tax rate results in an annual estimated rate of ~18% on a GAAP basis and ~21% on a non-GAAP basis.

7

Adjusted non-GAAP diluted WASO excludes the impact of dilutive convertible notes and warrants for which the Company is economically hedged through its anti-dilutive bond hedge arrangements.

For the Three Months Ended September 30, 2017

Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures

(Unaudited - in thousands, except per share data)

Gross

Profit

Operating Profit

Net

Income

Diluted EPS

Diluted WASO ⁶

Net Income to Adjusted EBITDA

Reported GAAP ¹

$

181,544

$

30,450

$

33,528

$

0.64

52,794

$

33,528

% of revenue

73.5

%

12.3

%

Non-cash purchase accounting adjustments on acquisitions ²

136

136

136

136

Amortization of intangible assets ³

11,630

11,307

Litigation related expenses and settlements

750

750

750

Business transition costs ⁴

345

345

345

Non-cash interest expense on convertible notes

3,980

Tax effect of adjustments ⁵

(23,413)

Interest expense/(income), net

8,819

Income tax benefit

(11,604)

Depreciation and amortization ³

29,858

Non-cash stock based compensation

(427)

Adjusted Non-GAAP

$

181,680

$

43,311

$

26,633

$

0.51

51,751

$

61,405

% of revenue

73.5

%

17.5

%