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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________________
Form 10-Q
 _____________________________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 001-33462
___________________________________________________________
INSULET CORPORATION
(Exact name of Registrant as specified in its charter)
__________________________________________________________________________________________________
Delaware 04-3523891
(State or Other Jurisdiction of
Incorporation or Organization)
 (I.R.S. Employer
Identification No.)
100 Nagog ParkActonMassachusetts 01720
(Address of Principal Executive Offices) (Zip Code)
Registrant’s Telephone Number, Including Area Code: (978600-7000
________________________________________________________________________________________________________
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes       No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 Par Value Per SharePODDThe NASDAQ Stock Market, LLC

As of October 28, 2020, the registrant had 65,927,871 shares of common stock outstanding.




TABLE OF CONTENTS
 
Condensed Consolidated Balance Sheets (Unaudited) as of September 30, 2020 and December 31, 2019
Condensed Consolidated Statements of Operations (Unaudited) for the three and nine months ended September 30, 2020 and 2019
Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the three and nine months ended September 30, 2020 and 2019
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) for the three and nine months ended September 30, 2020 and 2019
Condensed Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2020 and 2019


Table of Contents
PART I - FINANCIAL INFORMATION
Item 1.
Condensed Consolidated Financial Statements (Unaudited)
INSULET CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except share and per share data)September 30, 2020December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents$838.1 $213.7 
Short-term investments58.6 162.4 
Accounts receivable trade, less allowance for credit losses of $3.6 and $3.8
85.4 69.3 
Inventories124.9 101.0 
Prepaid expenses and other current assets53.4 44.6 
Total current assets1,160.4 591.0 
Long-term investments0.5 58.4 
Property, plant and equipment, net449.2 399.4 
Other intangible assets, net10.4 13.2 
Goodwill39.7 39.8 
Other assets50.4 41.1 
Total assets$1,710.6 $1,142.9 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable$57.0 $54.5 
Accrued expenses and other current liabilities118.2 103.2 
Total current liabilities175.2 157.7 
Convertible debt, net921.5 887.9 
Other liabilities18.9 21.4 
Total liabilities1,115.6 1,067.0 
Commitments and contingencies (Note 9)
Stockholders’ Equity
Preferred stock, $.001 par value, 5,000,000 authorized; none issued and outstanding
  
Common stock, $.001 par value, 100,000,000 authorized; 65,871,736 and 62,685,492 issued and outstanding
0.1 0.1 
Additional paid-in capital1,244.7 749.0 
Accumulated deficit(649.2)(672.0)
Accumulated other comprehensive loss(0.6)(1.2)
Total stockholders’ equity595.0 75.9 
Total liabilities and stockholders’ equity$1,710.6 $1,142.9 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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INSULET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 
 Three Months Ended September 30,Nine Months Ended September 30,
(in millions, except share and per share data)2020201920202019
Revenue$234.0 $192.1 $658.3 $528.8 
Cost of revenue82.2 69.0 237.1 182.6 
Gross profit151.8 123.1 421.2 346.2 
Research and development expenses38.8 31.3 108.5 96.8 
Selling, general and administrative expenses89.2 74.8 253.9 217.5 
Operating income23.8 17.0 58.8 31.9 
Interest expense, net(11.4)(7.7)(32.6)(18.3)
Loss on extinguishment of debt (6.4) (6.4)
Other income (expense), net1.0 (1.8)2.0 0.5 
Income before income taxes13.4 1.1 28.2 7.7 
Income tax expense(1.8)(0.3)(4.3)(1.1)
Net income$11.6 $0.8 $23.9 $6.6 
Net income per share:
Basic$0.18 $0.01 $0.37 $0.11 
Diluted$0.17 $0.01 $0.36 $0.11 
Weighted-average number of common shares outstanding:
Basic65,717,820 60,743,211 64,329,181 59,986,163 
Diluted66,827,692 62,335,679 65,598,197 61,728,018 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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INSULET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
 Three Months Ended September 30,Nine Months Ended September 30,
(in millions)2020201920202019
Net income$11.6 $0.8 $23.9 $6.6 
Other comprehensive income (loss), net of tax:
Currency translation adjustment3.3 (1.8)0.5 (3.0)
Unrealized (loss) gain on available-for-sale debt securities(0.3) 0.1 1.3 
Total other comprehensive income (loss), net of tax3.0 (1.8)0.6 (1.7)
Comprehensive income (loss)$14.6 $(1.0)$24.5 $4.9 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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INSULET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)

Three Months Ended September 30, 2020
 Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated Other Comprehensive LossTotal
Shareholders’
Equity
(in millions, except share data)SharesAmount
Balance at June 30, 202065,604,347 $0.1 $1,227.6 $(660.8)$(3.6)$563.3 
Exercise of options to purchase common stock264,456  10.6   10.6 
Stock-based compensation  6.6   6.6 
Restricted stock units vested, net of shares withheld for taxes2,933  (0.1)  (0.1)
Net income   11.6  11.6 
Other comprehensive income    3.0 3.0 
Balance at September 30, 202065,871,736 $0.1 $1,244.7 $(649.2)$(0.6)$595.0 

Three Months Ended September 30, 2019
 Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated Other Comprehensive LossTotal
Shareholders’
Equity
(in millions, except share data)SharesAmount
Balance at June 30, 201960,149,926 $0.1 $930.3 $(677.8)$(2.8)$249.8 
Exercise of options to purchase common stock471,356 — 17.3 — — 17.3 
Stock-based compensation expense— — 6.6 — — 6.6 
Restricted stock units vested, net of shares withheld for taxes8,195 — (0.3)— — (0.3)
Conversion feature of 0.375% Notes, net of issuance costs
— — 207.8 — — 207.8 
Extinguishment of conversion feature on 1.25% Notes, net of issuance costs
— — (438.6)— — (438.6)
Issuance of shares for debt repayment1,157,492 — 194.4 — — 194.4 
Purchase of capped call options— — (85.4)— — (85.4)
Net income— — — 0.8 — 0.8 
Other comprehensive loss— — — — (1.8)(1.8)
Balance at September 30, 201961,786,969 $0.1 $832.1 $(677.0)$(4.6)$150.6 


The accompanying notes are an integral part of these condensed consolidated financial statements.
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Nine Months Ended September 30, 2020
 Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated Other Comprehensive LossTotal
Shareholders’
Equity
(in millions, except share data)SharesAmount
Balance at December 31, 201962,685,492 $0.1 $749.0 $(672.0)$(1.2)$75.9 
Adoption of ASU 2016-13 (Note 1)   (1.1) (1.1)
Issuance of common stock2,369,668  477.5   477.5 
Exercise of options to purchase common stock568,830  21.9   21.9 
Issuance for employee stock purchase plan18,685  2.9   2.9 
Stock-based compensation  20.3   20.3 
Restricted stock units vested, net of shares withheld for taxes229,061  (26.9)  (26.9)
Net income   23.9  23.9 
Other comprehensive income    0.6 0.6 
Balance at September 30, 202065,871,736 $0.1 $1,244.7 $(649.2)$(0.6)$595.0 

Nine Months Ended September 30, 2019
 Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated Other Comprehensive LossTotal
Shareholders’
Equity
(in millions, except share data)SharesAmount
Balance at December 31, 201859,188,758 $0.1 $898.5 $(683.6)$(2.9)$212.1 
Exercise of options to purchase common stock1,188,043 — 40.9 — — 40.9 
Issuance of shares for employee stock purchase plan27,613 — 2.0 — — 2.0 
Stock-based compensation expense— 20.7 — — 20.7 
Restricted stock units vested, net of shares withheld for taxes225,063 — (8.2)— — (8.2)
Conversion feature of 0.375% Notes, net of issuance costs
— — 207.8 — — 207.8 
Extinguishment of conversion feature on 1.25% Notes, net of issuance costs
— — (438.6)— — (438.6)
Issuance of shares for debt repayment1,157,492 — 194.4 — — 194.4 
Purchase of capped call options— — (85.4)— — (85.4)
Net income— — — 6.6 — 6.6 
Other comprehensive loss— — — — (1.7)(1.7)
Balance at September 30, 201961,786,969 $0.1 $832.1 $(677.0)$(4.6)$150.6 







The accompanying notes are an integral part of these condensed consolidated financial statements.
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INSULET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended September 30,
(in millions)20202019
Cash flows from operating activities
Net income$23.9 $6.6 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization29.7 18.8 
Non-cash interest33.6 24.3 
Stock-based compensation20.3 20.7 
Loss on extinguishment of debt 6.4 
Provision for credit losses3.1 2.6 
Other0.3 1.9 
Changes in operating assets and liabilities:
Accounts receivable(19.9)(6.8)
Inventories(22.9)(20.0)
Prepaid expenses and other assets(16.8)(4.0)
Accounts payable, accrued expenses and other current liabilities36.1 (1.7)
Other liabilities(2.4)2.7 
Net cash provided by operating activities85.0 51.5 
Cash flows from investing activities
Capital expenditures(88.5)(114.6)
Acquisition of intangible assets(8.3)(6.4)
Purchases of investments(37.9)(63.9)
Receipts from the maturity or sale of investments200.0 165.3 
Net cash provided by (used in) investing activities65.3 (19.6)
Cash flows from financing activities
Proceeds from issuance of common stock, net of issuance costs477.5  
Proceeds from issuance of convertible notes, net of issuance costs 780.2 
Repayment of convertible debt (453.6)
Purchase of capped call options (85.4)
Proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan24.8 42.9 
Payment of withholding taxes in connection with vesting of restricted stock units(26.9)(8.2)
Net cash provided by financing activities475.4 275.9 
Effect of exchange rate changes on cash(1.3)(1.8)
Net increase in cash, cash equivalents and restricted cash624.4 306.0 
Cash, cash equivalents and restricted cash at beginning of period213.7 113.9 
Cash, cash equivalents and restricted cash at end of period$838.1 $419.9 
Supplemental noncash information:
Purchases of property and equipment included in accounts payable and accrued expenses$4.7 $10.2 
Lease liabilities arising from obtaining right-of-use assets$2.1 $5.1 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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INSULET CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements reflect the consolidated operations of Insulet Corporation and its subsidiaries (“Insulet” or the “Company”). The unaudited consolidated financial statements have been prepared in United States dollars, in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the consolidated financial statements in conformity with GAAP requires management to make use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results may differ from those estimates. In management’s opinion, the unaudited consolidated financial statements contain all normal recurring adjustments necessary for a fair statement of the interim results reported. Operating results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2020, or for any other subsequent interim period.
The year-end balance sheet data was derived from audited consolidated financial statements. These unaudited consolidated financial statements do not include all of the annual disclosures required by GAAP; accordingly, they should be read in conjunction with the Company’s audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
Accounts Receivable and Allowance for Credit Losses
Trade accounts receivable consist of amounts due from third-party payors, customers and intermediaries and are presented at amortized cost. The allowance for credit losses reflects an estimate of losses inherent in the Company’s accounts receivable portfolio determined based on historical experience, specific allowances for known troubled accounts and other available evidence. Accounts receivable are written off when management determines they are uncollectable.
The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. The Company has identified the following portfolio segments and measures the allowance for credit losses using the following methods:
Direct Customer Receivables—The Company measures expected credit losses on direct customer receivables using an aging methodology. The risk of loss for direct customer receivables is higher than other portfolios. The Company relies on third-party payors to accept and timely process claims and on direct consumers to have the ability to pay. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and supportable forecasts.
Distributor Receivables—The Company measures expected credit losses on distributor receivables using an individual reserve methodology. The risk of loss in this portfolio is low based on the Company’s historical experience. The estimate of expected credit losses considers payment history as well as credit ratings of the distributors, in addition to current conditions and supportable forecasts.
National Healthcare System Receivables—The Company measures expected credit losses on national healthcare system receivables using an individual reserve methodology. The risk of loss in this portfolio is low based on the Company’s historical experience. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and supportable forecasts.
Shipping and Handling Costs
Shipping and handling costs are included in selling, general and administrative expenses and were $3.2 million and $2.2 million for the three months ended September 30, 2020 and 2019, respectively, and were $7.0 million and $7.1 million for the nine months ended September 30, 2020 and 2019, respectively.
Fair Value Measurements
Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. To measure fair value of assets and liabilities, the Company uses the following fair value hierarchy based on three levels of inputs:
Level 1—observable inputs, such as quoted prices in active markets for identical assets or liabilities;
Level 2—significant other observable inputs that are observable either directly or indirectly; and
Level 3—significant unobservable inputs for which there are little or no market data, which require the Company to develop its own assumptions.
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Certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other liabilities are carried at cost, which approximates their fair value because of their short-term maturity. See Notes 3 and 8 for financial assets and liabilities held at carrying amount on the consolidated balance sheet and Note 4 for investments measured at fair value on a recurring basis.
Advertising Costs
The Company expenses advertising costs as they are incurred. Advertising expenses were $10.0 million and $3.4 million for the three months ended September 30, 2020 and 2019, respectively and $15.6 million and $8.6 million for the nine months ended September 30, 2020 and 2019, respectively.
Reclassification of Prior Period Amounts
Certain reclassifications have been made to prior period amounts to conform to the current period financial statement presentation. A portion of facility costs and certain information technology costs have been allocated from selling, general and administrative to research and development expenses based on square foot and system usage, respectively. In addition, certain quality assurance costs were reclassified from research and development expenses to selling, general and administrative expenses. The net impact of these adjustments was a $0.6 million and $1.9 million increase to research and development expenses and a corresponding decrease to selling, general and administrative expenses for the three and nine months ended September 30, 2019, respectively. There was no change to previously reported operating or net income. Further, the Company reclassified the $0.9 million change in unbilled receivables from the change in accounts and unbilled receivables to the change in prepaid expenses and other assets in the prior year statement of cash flows. This reclassification had no effect on previously reported net cash provided by operating activities.
Recently Adopted Accounting Standards
Effective January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Credit Losses (Topic 326) (“ASU 2016-13”). ASU 2016-13 requires financial assets measured at amortized cost, such as the Company’s trade receivables and contract assets, to be presented net of expected credit losses, which may be estimated based on relevant information such as historical experience, current conditions and future expectation for each pool of similar financial assets. The new guidance also requires enhanced disclosures related to trade receivables and associated credit losses. The Company adopted ASU 2016-13 using the modified retrospective method, whereby the guidance is applied prospectively as of the date of adoption and prior periods are not restated. The cumulative effect of adopting ASU 2016-13 resulted in a $1.1 million increase to the opening balance of accumulated deficit upon adoption related to an increase in the allowance for credit losses on accounts receivable.
The following table presents the activity in the allowance for credit losses for the three and nine months ended September 30, 2020, comprised primarily of our direct consumer receivable portfolio. The allowance for credit losses of other portfolios is insignificant.
(in millions)Three Months Ended September 30, 2020Nine Months Ended September 30, 2020
Credit losses at the beginning of the period$4.6 $3.8 
Effect of adoption 1.1 
Credit losses at the beginning of the period after adoption4.6 4.9 
Provision for expected credit losses0.5 3.1 
Write-offs charged against allowance(1.6)(4.7)
Recoveries of amounts previously written-off0.1 0.3 
Credit losses at the end of the period$3.6 $3.6 
Effective January 1, 2020, the Company adopted ASU 2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 requires an entity to measure the impairment of goodwill assigned to a reporting unit as the amount by which the carrying value of the assets and liabilities of the reporting unit, including goodwill, exceeds the reporting units’ fair value. The adoption of this guidance had no impact on the consolidated financial statements.
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Note 2. Revenue and Contract Acquisition Costs
The following table summarizes the Company’s disaggregated revenues:
Three Months Ended September 30,Nine Months Ended September 30,
(in millions)2020201920202019
U.S. Omnipod$132.3 $109.4 $377.7 $293.6 
International Omnipod79.8 67.8 226.1 187.4 
Total Omnipod212.1 177.2 603.8 481.0 
Drug Delivery21.9 14.9 54.5 47.8 
Total$234.0 $192.1 $658.3 $528.8 
During the three and nine months ended September 30, 2020, the Company had one customer that represented 11% and two customers that in aggregate represented 21% of total revenue, respectively. During both the three and nine months ended September 30, 2019, the Company had one customer that represented 11% of total revenue. At September 30, 2020, the company had one customer that accounted for 12% of consolidated net accounts receivable. No customer accounted for more than 10% of consolidated net accounts receivable balance at December 31, 2019.
Deferred revenue related to unsatisfied performance obligations was included in the following consolidated balance sheet accounts in the amounts shown:
(in millions)
September 30, 2020December 31, 2019
Accrued expenses and other current liabilities$4.3 $3.2 
Other liabilities0.9 1.0 
Total deferred revenue$5.2 $4.2 
During both the three months ended September 30, 2020 and 2019, the Company recognized insignificant revenue included in deferred revenue at the beginning of 2020 and 2019, respectively. During the nine months ended September 30, 2020 and 2019, the Company recognized $1.7 million and $1.1 million of revenue included in deferred revenue at the beginning of 2020 and 2019, respectively.
Contract acquisition costs, representing capitalized commission costs related to new customers, net of amortization, were included in the following consolidated balance sheet captions in the amounts shown:
(in millions)September 30, 2020December 31, 2019
Prepaid expenses and other current assets$10.4 $9.5 
Other assets20.7 19.9 
Total capitalized contract acquisition costs, net$31.1 $29.4 
The Company recognized $2.7 million and $2.3 million of amortization of capitalized contract acquisition costs during the three months ended September 30, 2020 and 2019, respectively. The Company recognized $7.8 million and $6.4 million of amortization of capitalized contract acquisition costs during the nine months ended September 30, 2020 and 2019, respectively.
The Company had unbilled receivables of $15.2 million and $13.5 million at September 30, 2020 and December 31, 2019, respectively.
Note 3. Cash and Cash Equivalents
The following table provides a summary of cash and cash equivalents and the level in the fair value hierarchy in which those measurements fall:
September 30, 2020December 31, 2019
(in millions)TotalLevel 1Level 2TotalLevel 1
Level 2 (1)
Cash$298.4 $298.4 $ $85.3 $85.3 $ 
Money market mutual funds535.9 535.9  115.5 115.5  
Commercial paper   10.0  10.0 
Restricted cash3.8 3.8  2.9 2.9  
Total cash and cash equivalents$838.1 $838.1 $ $213.7 $203.7 $10.0 
(1) Fair value was determined using market prices obtained from third-party pricing sources.
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Note 4. Investments
The Company’s short-term and long-term investments in debt securities had maturity dates that range from one to two years at September 30, 2020. Realized gains or losses for both the three and nine months ended September 30, 2020 and 2019 were insignificant.
The following table provides amortized costs, gross unrealized gains and losses, fair values and the level in the fair value hierarchy for the Company’s investments at September 30, 2020 and December 31, 2019:
(in millions)Amortized CostGross Unrealized GainsGross Unrealized LossesFair ValueLevel 1
Level 2 (1)
September 30, 2020
U.S. government and agency bonds$52.7 $0.4 $ $53.1 $53.1 $ 
Corporate bonds2.8   2.8  2.8 
Certificates of deposit2.7   2.7  2.7 
Total short-term investments$58.2 $0.4 $ $58.6 $53.1 $5.5 
Certificates of deposit$0.5 $ $ $0.5 $ $0.5 
Total long-term investments$0.5 $ $ $0.5 $ $0.5 
December 31, 2019
U.S. government and agency bonds$94.7 $0.3 $ $95.0 $85.0 $10.0 
Corporate bonds51.0 0.1  51.1  51.1 
Certificates of deposit6.3   6.3  6.3 
Commercial Paper10.0   10.0  10.0 
Total short-term investments$162.0 $0.4 $ $162.4 $85.0 $77.4 
U.S. government and agency bonds$52.9 $0.1 $(0.1)$52.9 $42.9 $10.0 
Corporate bonds2.8   2.8  2.8 
Certificates of deposit2.7   2.7  2.7 
Total long-term investments$58.4 $0.1 $(0.1)$58.4 $42.9 $15.5 
(1) Fair value was determined using market prices obtained from third-party pricing sources.
Note 5. Inventories
At the end of each period, inventories were comprised of the following:
(in millions)September 30, 2020December 31, 2019
Raw materials$27.3 $23.3 
Work-in-process57.2 40.3 
Finished goods40.4 37.4 
    Total inventories$124.9 $101.0 
Note 6. Goodwill and Other Intangible Assets, Net
The change in the carrying amount of goodwill for the nine months ended September 30, 2020 was as follows:
(in millions)
Goodwill at December 31, 2019$39.8 
Foreign currency translation(0.1)
Goodwill at September 30, 2020$39.7 
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The gross carrying amount, accumulated amortization and net book value of intangible assets at the end of each period were as follows:
September 30, 2020December 31, 2019
(in millions)
Gross Carrying AmountAccumulated AmortizationNet Book
Value
Gross Carrying AmountAccumulated AmortizationNet Book
Value
Customer relationships (1)
$9.8 $(3.4)$6.4 $9.9 $(2.8)$7.1 
Internal-use software11.3 (8.2)3.1 12.0 (6.8)5.2 
Intellectual property1.0 (0.1)0.9 1.0 (0.1)0.9 
Total$22.1 $(11.7)$10.4 $22.9 $(9.7)$13.2 
(1) Includes customer relationships acquired from the Company’s former European distributor. See Note 9.
Amortization expense for intangible assets was $0.7 million for both the three months ended September 30, 2020 and 2019. Amortization expense for intangible assets was $2.2 million and $1.9 million for the nine months ended September 30, 2020, and 2019, respectively. Amortization expense associated with intangible assets included on the Company’s consolidated balance sheet as of September 30, 2020 is expected to be as follows:
Years Ending December 31,
(in millions)
2020 (remaining)$0.7 
20212.2 
20221.7 
20231.2 
20241.1 
Thereafter3.5 
     Total$10.4 
Note 7. Accrued Expenses and Other Current Liabilities
The components of accrued expenses and other current liabilities were as follows:
(in millions)September 30, 2020December 31, 2019
Employee compensation and related costs$45.9 $45.8 
Accrued rebates9.8