Abiomed Inc. (NASDAQ:ABMD)

The analysis of the property, plant, and equipment data over the six-year period reveals several notable trends and developments in the asset base and its depreciation.

Land

The value of land experienced growth from 2017 through 2018, nearly doubling from approximately $4.0 million to $7.7 million. After a slight decline in 2019 and 2020, the land value increased substantially again in 2021, reaching a peak near $10.9 million before a minor decrease in 2022. This indicates occasional acquisition or revaluation activities related to land assets.

Building and building improvements

This category displayed a strong upward trend with consistent increases each year, growing from $10.9 million in 2017 to $152.4 million in 2022. The most significant increases occurred between 2017 and 2018 and between 2020 and 2021, pointing to substantial investments or expansions in building infrastructure during these periods.

Capital lease asset

This line item appears only in 2017 at $16.8 million and is absent in subsequent years, suggesting either disposal, reclassification, or that the lease ended, and the asset is no longer recognized on the balance sheet.

Leasehold improvements

Leasehold improvements showed significant variability. Starting at $34.9 million in 2017, there was a steep decline in 2018 and 2019, dropping below $3 million. Following this, values fluctuated moderately, peaking again in 2020 at $14.5 million but falling to under $2 million in 2022. This volatility may reflect substantial impairment, disposals, or changes in leased property usage throughout the period.

Machinery, equipment, and computer software

This asset class consistently grew year-over-year, from roughly $28.0 million in 2017 to over $104.4 million in 2022. The steady increase indicates ongoing acquisition or capital improvements related to machinery and technology assets supporting operations.

Furniture and fixtures

Values in this category increased from $3.9 million in 2017 up to $15.6 million in 2021, followed by a slight decrease to $15.4 million in 2022, showing moderate growth over the years potentially aligned with expansion or refurbishment of office and facility furnishings.

Construction in progress

Construction in progress showed fluctuations but remained at elevated levels, starting at $9.3 million in 2017, peaking at $19.9 million in 2018, dipping to about $10.9 million in 2021, and then rising again to $19.9 million in 2022. This suggests ongoing projects with periods of intensified activity and slowdowns, reflecting the dynamic state of capital projects under development.

Property and equipment, cost

The total cost of property and equipment displayed continuous growth over the six-year period, rising from $107.7 million in 2017 to $304.6 million in 2022. This nearly threefold increase highlights substantial investment in fixed assets, notably driven by the building improvements and machinery investment trends.

Accumulated depreciation

Accumulated depreciation increased steadily in absolute terms, moving from negative $19.9 million in 2017 to negative $102.1 million in 2022. This reflects ongoing depreciation expense recognition corresponding with the growth and aging of fixed assets, consistent with the asset acquisitions and capital expenditures observed.

Property and equipment, net

The net book value of property and equipment rose every year, from $87.8 million in 2017 to $202.5 million in 2022. Despite the increasing accumulated depreciation, the asset base grew substantially in net terms, indicating that investment in new assets has outpaced the depreciation charges, showing expansion in the company's productive capacity.

In summary, the data depicts a company actively investing in its fixed asset base, particularly in buildings and machinery, supporting operational growth. Periods of volatility in leasehold improvements and the disappearance of capital lease assets suggest strategic shifts in property leasing or asset utilization. Accumulated depreciation trends and net asset increases together confirm a pattern of asset aging balanced by continuous capital expenditure.

Average Age Ratio

The average age ratio shows a consistent upward trend over the six-year period, increasing from 19.24% in 2017 to 34.73% in 2022. This indicates that the property, plant, and equipment assets are progressively aging, with a notably accelerated increase observed after 2019.

Estimated Total Useful Life

The estimated total useful life of the assets exhibits variability throughout the period. It started at 17 years in 2017, then declined sharply to 12 years in 2018, fluctuated slightly between 11 and 13 years from 2019 to 2022, and ended at 11 years in 2022. This suggests periodic reassessment of asset longevity, generally reflecting a downward adjustment in estimated useful life over time compared to the initial estimate.

Estimated Age, Time Elapsed Since Purchase

The estimated age of the assets remained stable at 3 years from 2017 to 2020, then increased to 4 years in 2021 and 2022. This steady increase is consistent with the passage of time and suggests no significant asset replacement or substantial additions that would affect this estimate during the later years.

Estimated Remaining Life

The estimated remaining life of the assets has decreased steadily, moving from 14 years in 2017 down to 7 years in 2022. This decline aligns with the increase in asset age and the shortening of total useful life estimates, reflecting a reduced horizon over which the assets are expected to provide value.

Property and equipment, cost

The cost of property and equipment has exhibited a steady upward trend throughout the analyzed periods. Beginning at approximately $107.7 million in March 2017, it increased consistently each year, reaching about $304.6 million by March 2022. This progression reflects significant capital investment and asset acquisition over the six-year span.

Accumulated depreciation

Accumulated depreciation has also increased markedly over time. Starting from roughly $19.95 million in March 2017, it rose each year to reach approximately $102.1 million by March 2022. The consistent increase corresponds with the aging asset base and indicates a rising portion of asset costs being expensed over their useful lives.

Land

The value recorded for land showed variability but generally remained stable. It rose from about $4.05 million in March 2017 to $7.68 million in March 2018, followed by a slight decline and some fluctuations, ultimately reaching nearly $10.6 million in March 2022. This pattern suggests selective acquisitions or revaluation without a consistent growth trajectory.

Average age ratio

The average age ratio, expressed as a percentage, has displayed a clear and consistent increase over the years. Beginning at 19.24% in 2017, it climbed each year, reaching 34.73% in 2022. This upward trend denotes an aging asset portfolio, implying that the company's fixed assets are becoming older on average, which may impact maintenance costs and future capital expenditure decisions.

Property and Equipment Cost

The total cost of property and equipment has demonstrated consistent growth over the period. Starting at $107,729 thousand in 2017, the value increased steadily each year, reaching $304,552 thousand by 2022. This reflects a considerable investment in the company's fixed assets, nearly tripling over six years.

Land

The value attributed to land fluctuated during the period. Initially, it rose significantly from $4,046 thousand in 2017 to $7,680 thousand in 2018, followed by a slight decrease to $7,262 thousand in 2019 and a further minimal decline to $7,179 thousand in 2020. Subsequently, the land value increased again to $10,875 thousand in 2021, before slightly falling to $10,643 thousand in 2022. Despite these fluctuations, the overall trend shows an increase in land value since 2017.

Depreciation Expense Related to Property and Equipment

Depreciation expenses have risen sharply over the examined years, beginning at $6,200 thousand in 2017 and escalating to $25,900 thousand by 2022. The increase is consistent year over year, highlighting the accumulating wearing down or obsolescence of the property and equipment assets. This represents more than a fourfold increase in depreciation expense, indicating a scaling asset base and/or potential reductions in useful life estimates affecting depreciation calculations.

Estimated Total Useful Life

The estimated useful life of the property and equipment shows variability with a tendency toward shorter durations in later years. It started at 17 years in 2017, then dropped to 12 years in 2018. Slight fluctuations followed, with 13 years in 2019, 11 years in 2020, increasing slightly to 12 years in 2021, then back to 11 years in 2022. This reduction in estimated useful life suggests a reassessment of asset longevity, which could impact depreciation rates and the company’s asset replacement strategy.

Accumulated depreciation

The accumulated depreciation has consistently increased over the period from March 31, 2017, to March 31, 2022. Starting at $19,952 thousand in 2017, it rose steadily each year to reach $102,062 thousand by 2022. This trend reflects ongoing wear and usage of property, plant, and equipment assets accounted for in the financial statements.

Depreciation expense related to property and equipment

The annual depreciation expense shows a clear upward trend over the six-year period. Beginning at $6,200 thousand in 2017, the expense increased significantly to $25,900 thousand in 2022. The consistent rise in depreciation expense suggests an increase in capital asset additions or changes in depreciation methods or estimates, contributing to higher periodic charges.

Time elapsed since purchase

The data indicates the time elapsed since the purchase of assets has remained relatively stable at around 3 years for the first four years and increased to 4 years in the last two years. This implies that the asset base is relatively recent, with purchases likely made within a short timeframe prior to each reporting date.

Summary of trends

Overall, the data reveals a pattern of increasing investment or capital expenditure in property, plant, and equipment, evidenced by rising depreciation expenses and accumulated depreciation balances. The steady increase in depreciation charges corresponds with the accumulation of asset use over time, while the relatively stable elapsed time since purchase suggests ongoing asset renewals or additions within a consistent asset age range.

Property and Equipment, Net

The net value of property and equipment has shown a consistent upward trend over the six-year period. Starting from approximately $87,777 thousand in 2017, it increased steadily each year, reaching around $202,490 thousand by 2022. This indicates ongoing investment and expansion in fixed assets.

Land

The value of land exhibited variability but generally increased overall. It rose significantly from $4,046 thousand in 2017 to a peak of $10,875 thousand in 2021, before a slight decline to $10,643 thousand in 2022. This suggests acquisition or revaluation activities impacting this asset class during these years.

Depreciation Expense Related to Property and Equipment

Depreciation expense increased sharply throughout the period, nearly quadrupling from $6,200 thousand in 2017 to $25,900 thousand in 2022. This indicates accelerated consumption or aging of assets, or increased capital expenditures leading to a larger depreciable base.

Estimated Remaining Life

The estimated remaining useful life of the property and equipment decreased steadily from 14 years in 2017 to 7 years in 2022. This decline reflects asset aging and possibly changing estimates of asset longevity, which could impact future depreciation charges and capital replacement planning.