ACQUISITION OF BONNIE TOGS

12 Months Ended

Jan. 03, 2015

Business Combinations [Abstract]

ACQUISITION OF BONNIE TOGS

ACQUISITION OF BONNIE TOGS

On June 30, 2011, the Company purchased all of the outstanding shares of capital stock of Bonnie Togs for total consideration of up to CAD $95 million, of which USD $61.2 million was paid in cash at closing. In accordance with the agreement, the sellers may be paid additional contingent consideration ranging from zero to CAD $35 million, if certain earnings targets for the period beginning July 1, 2011 and ending on June 27, 2015 are met. Sellers were entitled to receive a portion of the contingent consideration of up to CAD $25 million if interim earnings targets were met through June 2013 and June 2014, respectively. The Company made payments of approximately USD $14.7 million and USD $8.9 million related to the contingent consideration liability based on the achievement of interim earnings targets through June 2013 and 2014, respectively. The Sellers may receive the remaining portion of CAD $10.0 million in 2015 if certain earnings targets are met through June 2015. None of the interim payments are recoverable by the Company in the event of any failure to meet overall targets.

CONTINGENT CONSIDERATION

The Company determines the fair value of contingent consideration based upon a probability-weighted discounted cash flow analysis, reflecting a high probability that the earnings targets will be met. As of January 3, 2015, approximately $7.7 million of the contingent consideration liability is included in other current liabilities on the accompanying audited consolidated balance sheet.

The following table summarizes the changes in the contingent consideration liability (dollars in thousands):

Balance at December 31, 2011	$	25,566
Accretion expense	3,589
Foreign currency translation adjustment	549
Balance at December 29, 2012	29,704
Payments made	(14,721		)
Accretion expense	2,825
Foreign currency translation adjustment	(1,460		)
Balance at December 28, 2013	16,348
Payments made	(8,901		)
Accretion expense	1,348
Foreign currency translation adjustment	(1,084		)
Balance at January 3, 2015	$	7,711