(Mark One) | ||
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | |||
Smaller reporting company | Emerging growth company |
Page | ||
ITEM 1. | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
ITEM 1. | ||
ITEM 1A. | ||
ITEM 6. | ||
(in thousands except share and per share data) | June 28, 2019 | December 28, 2018 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Accounts receivable, net of allowance for doubtful accounts of $0.6 million, respectively | |||||||
Inventories | |||||||
Prepaid expenses and other current assets | |||||||
Total current assets | |||||||
Property, plant and equipment, net | |||||||
Goodwill | |||||||
Other intangible assets, net | |||||||
Deferred income taxes | |||||||
Operating lease assets | |||||||
Other long-term assets | |||||||
Total assets | $ | $ | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | $ | |||||
Accounts payable | |||||||
Income taxes payable | |||||||
Accrued expenses and other current liabilities | |||||||
Total current liabilities | |||||||
Long-term debt | |||||||
Deferred income taxes | |||||||
Operating lease liabilities | |||||||
Other long-term liabilities | |||||||
Total liabilities | |||||||
Stockholders’ equity: | |||||||
Common stock, $0.001 par value; 100,000,000 shares authorized; 32,816,622 and 32,624,494 shares issued, respectively; 32,640,614 and 32,473,167 shares outstanding, respectively | |||||||
Additional paid-in capital | |||||||
Treasury stock, at cost, 176,008 and 151,327 shares, respectively | ( | ) | ( | ) | |||
Retained earnings | |||||||
Accumulated other comprehensive income | |||||||
Total stockholders’ equity | |||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||
(in thousands except per share data) | June 28, 2019 | June 29, 2018 | June 28, 2019 | June 29, 2018 | |||||||||||
Sales | $ | $ | $ | $ | |||||||||||
Cost of sales | |||||||||||||||
Gross profit | |||||||||||||||
Operating expenses: | |||||||||||||||
Selling, general and administrative expenses | |||||||||||||||
Research, development and engineering costs | |||||||||||||||
Other operating expenses | |||||||||||||||
Total operating expenses | |||||||||||||||
Operating income | |||||||||||||||
Interest expense | |||||||||||||||
(Gain) loss on equity investments, net | ( | ) | ( | ) | |||||||||||
Other income, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Income from continuing operations before taxes | |||||||||||||||
Provision for income taxes | |||||||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||
Discontinued operations: | |||||||||||||||
Income (loss) from discontinued operations before taxes | ( | ) | ( | ) | |||||||||||
Provision for income taxes | |||||||||||||||
Income (loss) from discontinued operations | $ | $ | ( | ) | $ | $ | ( | ) | |||||||
Net income | $ | $ | $ | $ | |||||||||||
Basic earnings (loss) per share: | |||||||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||
Income (loss) from discontinued operations | ( | ) | ( | ) | |||||||||||
Basic earnings per share | |||||||||||||||
Diluted earnings (loss) per share: | |||||||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||
Income (loss) from discontinued operations | ( | ) | ( | ) | |||||||||||
Diluted earnings per share | |||||||||||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | |||||||||||||||
Diluted |
Three Months Ended | Six Months Ended | ||||||||||||||
(in thousands) | June 28, 2019 | June 29, 2018 | June 28, 2019 | June 29, 2018 | |||||||||||
Comprehensive Income (Loss) | |||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Other comprehensive income (loss): | |||||||||||||||
Foreign currency translation gain (loss) | ( | ) | ( | ) | ( | ) | |||||||||
Change in fair value of cash flow hedges, net of tax | ( | ) | ( | ) | ( | ) | |||||||||
Other comprehensive income (loss) | ( | ) | ( | ) | ( | ) | |||||||||
Comprehensive income (loss) | $ | $ | ( | ) | $ | $ |
Six Months Ended | |||||||
(in thousands) | June 28, 2019 | June 29, 2018 | |||||
Cash flows from operating activities: | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | |||||||
Debt related charges included in interest expense | |||||||
Stock-based compensation | |||||||
Non-cash (gain) loss on equity investments | ( | ) | |||||
Other non-cash gains | ( | ) | ( | ) | |||
Deferred income taxes | ( | ) | |||||
Gain on sale of discontinued operations | ( | ) | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | ( | ) | ( | ) | |||
Inventories | ( | ) | |||||
Prepaid expenses and other assets | ( | ) | |||||
Accounts payable | |||||||
Accrued expenses and other liabilities | ( | ) | ( | ) | |||
Income taxes payable | ( | ) | |||||
Net cash provided by operating activities | |||||||
Cash flows from investing activities: | |||||||
Acquisition of property, plant and equipment | ( | ) | ( | ) | |||
Proceeds from sale of property, plant and equipment | |||||||
Purchase of equity investments | ( | ) | ( | ) | |||
Proceeds from sale of discontinued operations | |||||||
Net cash used in investing activities | ( | ) | ( | ) | |||
Cash flows from financing activities: | |||||||
Principal payments of long-term debt | ( | ) | ( | ) | |||
Proceeds from issuance of long-term debt | |||||||
Proceeds from the exercise of stock options | |||||||
Payment of debt issuance and redemption costs | ( | ) | |||||
Tax withholdings related to net share settlements of restricted stock unit awards | ( | ) | ( | ) | |||
Other financing activities | ( | ) | |||||
Net cash used in financing activities | ( | ) | ( | ) | |||
Effect of foreign currency exchange rates on cash and cash equivalents | |||||||
Net decrease in cash and cash equivalents | ( | ) | ( | ) | |||
Cash and cash equivalents, beginning of period | |||||||
Cash and cash equivalents, end of period | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||
(in thousands) | June 28, 2019 | June 29, 2018 | June 28, 2019 | June 29, 2018 | |||||||||||
Total equity, beginning balance | $ | $ | $ | $ | |||||||||||
Common stock and additional paid-in capital | |||||||||||||||
Balance, beginning of period | |||||||||||||||
Stock awards exercised or vested | |||||||||||||||
Stock-based compensation | |||||||||||||||
Balance, end of period | |||||||||||||||
Treasury stock | |||||||||||||||
Balance, beginning of period | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Treasury shares purchased | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Treasury shares reissued | |||||||||||||||
Balance, end of period | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Retained earnings | |||||||||||||||
Balance, beginning of period | |||||||||||||||
Adoption of ASC 842 (Note 1) | — | — | ( | ) | — | ||||||||||
Net income | |||||||||||||||
Balance, end of period | |||||||||||||||
Accumulated other comprehensive income | |||||||||||||||
Balance, beginning of period | |||||||||||||||
Other comprehensive income (loss) | ( | ) | ( | ) | ( | ) | |||||||||
Balance, end of period | |||||||||||||||
Total equity, ending balance | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||
June 28, 2019 | June 29, 2018 | June 28, 2019 | June 29, 2018 | ||||||||||||
Sales | $ | $ | $ | $ | |||||||||||
Cost of sales | |||||||||||||||
Gross profit | |||||||||||||||
Selling, general and administrative expenses | |||||||||||||||
Research, development and engineering costs | |||||||||||||||
Other operating expenses | |||||||||||||||
Interest expense | |||||||||||||||
Gain on sale of discontinued operations | ( | ) | ( | ) | |||||||||||
Other (income) loss, net | ( | ) | |||||||||||||
Income (loss) from discontinued operations before taxes | ( | ) | ( | ) | |||||||||||
Provision for income taxes | |||||||||||||||
Income (loss) from discontinued operations | $ | $ | ( | ) | $ | $ | ( | ) |
Six Months Ended | |||||||
June 28, 2019 | June 29, 2018 | ||||||
Cash used in operating activities | $ | ( | ) | $ | ( | ) | |
Cash provided by (used in) investing activities | ( | ) | |||||
Depreciation and amortization | $ | $ | |||||
Capital expenditures |
(3.) | SUPPLEMENTAL CASH FLOW INFORMATION |
Six Months Ended | |||||||
(in thousands) | June 28, 2019 | June 29, 2018 | |||||
Noncash investing and financing activities: | |||||||
Property, plant and equipment purchases included in accounts payable | $ | $ |
June 28, 2019 | December 28, 2018 | ||||||
Raw materials | $ | $ | |||||
Work-in-process | |||||||
Finished goods | |||||||
Total | $ | $ |
Medical | Non- Medical | Total | |||||||||
December 28, 2018 | $ | $ | $ | ||||||||
Foreign currency translation | ( | ) | ( | ) | |||||||
June 28, 2019 | $ | $ | $ |
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||
June 28, 2019 | |||||||||||
Definite-lived: | |||||||||||
Purchased technology and patents | $ | $ | ( | ) | $ | ||||||
Customer lists | ( | ) | |||||||||
Other | ( | ) | |||||||||
Total | $ | $ | ( | ) | $ | ||||||
Indefinite-lived: | |||||||||||
Trademarks and tradenames | $ | ||||||||||
December 28, 2018 | |||||||||||
Definite-lived: | |||||||||||
Purchased technology and patents | $ | $ | ( | ) | $ | ||||||
Customer lists | ( | ) | |||||||||
Other | ( | ) | |||||||||
Total | $ | $ | ( | ) | $ | ||||||
Indefinite-lived: | |||||||||||
Trademarks and tradenames | $ |
Three Months Ended | Six Months Ended | ||||||||||||||
June 28, 2019 | June 29, 2018 | June 28, 2019 | June 29, 2018 | ||||||||||||
Cost of sales | $ | $ | $ | $ | |||||||||||
Selling, general and administrative expenses | |||||||||||||||
Research, development and engineering costs | |||||||||||||||
Discontinued operations | |||||||||||||||
Total intangible asset amortization expense | $ | $ | $ | $ |
2019 | 2020 | 2021 | 2022 | 2023 | After 2023 | |||||||||||||
Amortization Expense | $ |
June 28, 2019 | December 28, 2018 | ||||||
Senior secured term loan A | $ | $ | |||||
Senior secured term loan B | |||||||
Revolving line of credit | |||||||
Unamortized discount on term loan B and debt issuance costs | ( | ) | ( | ) | |||
Total debt | |||||||
Current portion of long-term debt | ( | ) | ( | ) | |||
Total long-term debt | $ | $ |
2019 | 2020 | 2021 | 2022 | ||||||||||
Future minimum principal payments | $ |
Three Months Ended | Six Months Ended | ||||||||||||||
June 28, 2019 | June 29, 2018 | June 28, 2019 | June 29, 2018 | ||||||||||||
Stock options | $ | $ | $ | $ | |||||||||||
RSAs and RSUs (time-based) | |||||||||||||||
Performance-based RSUs (“PRSUs”) | |||||||||||||||
Stock-based compensation expense - continuing operations | |||||||||||||||
Discontinued operations | |||||||||||||||
Total stock-based compensation expense | $ | $ | $ | $ | |||||||||||
Cost of sales | $ | $ | $ | $ | |||||||||||
Selling, general and administrative expenses | |||||||||||||||
Research, development and engineering costs | |||||||||||||||
Other operating expenses | |||||||||||||||
Discontinued operations | |||||||||||||||
Total stock-based compensation expense | $ | $ | $ | $ |
Weighted average fair value | $ | |||
Risk-free interest rate | % | |||
Expected volatility | % | |||
Expected life (in years) | ||||
Expected dividend yield | % |
Number of Stock Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (In Years) | Aggregate Intrinsic Value (In Millions) | |||||||||
Outstanding at December 28, 2018 | $ | |||||||||||
Exercised | ( | ) | ||||||||||
Outstanding at June 28, 2019 | $ | $ | ||||||||||
Exercisable at June 28, 2019 | $ | $ |
Six Months Ended | |||||||
June 28, 2019 | June 29, 2018 | ||||||
Weighted average fair value | $ | $ | |||||
Risk-free interest rate | % | % | |||||
Expected volatility | % | % | |||||
Expected life (in years) | |||||||
Expected dividend yield | % | % |
Time-Vested Activity | Weighted Average Fair Value | |||||
Nonvested at December 28, 2018 | $ | |||||
Granted | ||||||
Vested | ( | ) | ||||
Forfeited | ( | ) | ||||
Nonvested at June 28, 2019 | $ |
Performance- Vested Activity | Weighted Average Fair Value | |||||
Nonvested at December 28, 2018 | $ | |||||
Granted | ||||||
Vested | ( | ) | ||||
Forfeited | ( | ) | ||||
Nonvested at June 28, 2019 | $ |
Three Months Ended | Six Months Ended | ||||||||||||||
June 28, 2019 | June 29, 2018 | June 28, 2019 | June 29, 2018 | ||||||||||||
Strategic reorganization and alignment | $ | $ | $ | $ | |||||||||||
Manufacturing alignment to support growth | |||||||||||||||
Consolidation and optimization initiatives | ( | ) | |||||||||||||
Asset dispositions, severance and other | ( | ) | |||||||||||||
Other operating expenses - continuing operations | |||||||||||||||
Discontinued operations | |||||||||||||||
Total other operating expenses | $ | $ | $ | $ |
Severance and Retention | Other | Total | |||||||||
December 28, 2018 | $ | $ | $ | ||||||||
Restructuring charges | |||||||||||
Cash payments | ( | ) | ( | ) | ( | ) | |||||
June 28, 2019 | $ | $ | $ |
December 28, 2018 | $ | ||
Additions to warranty reserve | |||
Adjustments to pre-existing warranties | ( | ) | |
Warranty claims settled | ( | ) | |
June 28, 2019 | $ |
June 28, 2019 | ||
Weighted-average remaining lease term of operating leases (in years) | ||
Weighted-average discount rate of operating leases | % |
Three Months Ended June 28, 2019 | Six Months Ended June 28, 2019 | ||||||
Operating lease cost | $ | $ | |||||
Short-term lease cost (leases with initial term of 12 months or less) | |||||||
Variable lease cost | |||||||
Sublease income | ( | ) | ( | ) | |||
Total lease cost | $ | $ | |||||
Cost of sales | $ | $ | |||||
Selling, general and administrative expenses | |||||||
Research, development and engineering costs | |||||||
Other operating expenses | |||||||
Total lease cost | $ | $ |
Remainder of 2019 | $ | ||
2020 | |||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
Thereafter | |||
Total lease payments | |||
Less imputed interest | ( | ) | |
Total | $ |
Cash paid for amounts included in the measurement of operating lease liabilities | $ | ||
ROU assets obtained in exchange for new operating lease liabilities |
2019 | 2020 | 2021 | 2022 | 2023 | After 2023 | |||||||||||||
Future minimum lease payments | $ |
Three Months Ended | Six Months Ended | ||||||||||||||
June 28, 2019 | June 29, 2018 | June 28, 2019 | June 29, 2018 | ||||||||||||
Numerator for basic and diluted EPS: | |||||||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||
Income (loss) from discontinued operations | ( | ) | ( | ) | |||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Denominator for basic and diluted EPS: | |||||||||||||||
Weighted average shares outstanding - Basic | |||||||||||||||
Dilutive effect of assumed exercise of stock options, restricted stock and RSUs | |||||||||||||||
Weighted average shares outstanding - Diluted | |||||||||||||||
Basic earnings (loss) per share: | |||||||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||
Income (loss) from discontinued operations | ( | ) | ( | ) | |||||||||||
Basic earnings per share | |||||||||||||||
Diluted earnings (loss) per share: | |||||||||||||||
Income from continuing operations | $ | $ | $ | $ | |||||||||||
Income (loss) from discontinued operations | ( | ) | ( | ) | |||||||||||
Diluted earnings per share |
Three Months Ended | Six Months Ended | ||||||||||
June 28, 2019 | June 29, 2018 | June 28, 2019 | June 29, 2018 | ||||||||
Time-vested stock options, restricted stock and RSUs | |||||||||||
Performance-vested restricted stock and PRSUs |
Six months ended June 28, 2019 | Six months ended June 29, 2018 | ||||||||||||||||
Issued | Treasury Stock | Outstanding | Issued | Treasury Stock | Outstanding | ||||||||||||
Balance, beginning of period | ( | ) | ( | ) | |||||||||||||
Stock options exercised | |||||||||||||||||
RSAs issued, net of forfeitures | ( | ) | ( | ) | ( | ) | |||||||||||
Vesting of RSUs | ( | ) | |||||||||||||||
Vesting of PSUs | ( | ) | ( | ) | |||||||||||||
Balance, end of period | ( | ) | ( | ) |
Defined Benefit Plan Liability | Cash Flow Hedges | Foreign Currency Translation Adjustment | Total Pre-Tax Amount | Tax | Net-of-Tax Amount | ||||||||||||||||||
March 29, 2019 | $ | ( | ) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Unrealized loss on cash flow hedges | — | ( | ) | — | ( | ) | ( | ) | |||||||||||||||
Realized loss on foreign currency hedges | — | — | ( | ) | |||||||||||||||||||
Realized gain on interest rate swap hedge | — | ( | ) | — | ( | ) | ( | ) | |||||||||||||||
Foreign currency translation gain | — | — | |||||||||||||||||||||
June 28, 2019 | $ | ( | ) | $ | ( | ) | $ | $ | $ | $ | |||||||||||||
December 28, 2018 | $ | ( | ) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Unrealized loss on cash flow hedges | — | ( | ) | — | ( | ) | ( | ) | |||||||||||||||
Realized gain on foreign currency hedges | — | ( | ) | — | ( | ) | ( | ) | |||||||||||||||
Realized gain on interest rate swap hedges | — | ( | ) | — | ( | ) | ( | ) | |||||||||||||||
Foreign currency translation loss | — | — | ( | ) | ( | ) | ( | ) | |||||||||||||||
June 28, 2019 | $ | ( | ) | $ | ( | ) | $ | $ | $ | $ |
March 30, 2018 | $ | ( | ) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Unrealized loss on cash flow hedges | — | ( | ) | — | ( | ) | ( | ) | |||||||||||||||
Realized gain on foreign currency hedges | — | ( | ) | — | ( | ) | ( | ) | |||||||||||||||
Realized gain on interest rate swap hedges | — | ( | ) | — | ( | ) | ( | ) | |||||||||||||||
Foreign currency translation loss | — | — | ( | ) | ( | ) | ( | ) | |||||||||||||||
June 29, 2018 | $ | ( | ) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
December 29, 2017 | $ | ( | ) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Unrealized gain on cash flow hedges | — | — | ( | ) | |||||||||||||||||||
Realized gain on foreign currency hedges | — | ( | ) | — | ( | ) | ( | ) | |||||||||||||||
Realized gain on interest rate swap hedge | — | ( | ) | — | ( | ) | ( | ) | |||||||||||||||
Foreign currency translation loss | — | — | ( | ) | ( | ) | ( | ) | |||||||||||||||
June 29, 2018 | $ | ( | ) | $ | $ | $ | $ | ( | ) | $ |
Notional Amount | Start Date | End Date | Pay Fixed Rate | Receive Current Floating Rate | Fair Value | Balance Sheet Location | ||||||||||||
$ | Jun 2017 | Jun 2020 | % | % | $ | Accrued expenses and other current liabilities | ||||||||||||
Jun 2020 | Jun 2023 | (a) | ( | ) | Other long-term liabilities | |||||||||||||
Apr 2019 | Apr 2020 | ( | ) | Accrued expenses and other current liabilities |
Notional Amount | Start Date | End Date | $/Foreign Currency | Fair Value | Balance Sheet Location | |||||||||||
$ | Jul 2019 | Sep 2019 | Euro | $ | ( | ) | Prepaid expenses and other current assets | |||||||||
Jul 2019 | Dec 2019 | Peso | Prepaid expenses and other current assets | |||||||||||||
Jul 2019 | Dec 2019 | Peso | Prepaid expenses and other current assets |
Fair Value | ||||||||||
Fair Value Hierarchy | Assets | Liabilities | ||||||||
June 28, 2019 | ||||||||||
Interest rate swaps | Level 2 | $ | $ | |||||||
Foreign currency contracts | Level 2 | |||||||||
December 28, 2018 | ||||||||||
Interest rate swaps | Level 2 | $ | $ | |||||||
Foreign currency contracts | Level 2 |
Three Months Ended | ||||||||||||||||
June 28, 2019 | June 29, 2018 | |||||||||||||||
Total | Amount of Gain (Loss) on Cash Flow Hedge Activity | Total | Amount of Gain (Loss) on Cash Flow Hedge Activity | |||||||||||||
Sales | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
Cost of sales | ||||||||||||||||
Interest expense |
Six Months Ended | ||||||||||||||||
June 28, 2019 | June 29, 2018 | |||||||||||||||
Total | Amount of Gain (Loss) on Cash Flow Hedge Activity | Total | Amount of Gain (Loss) on Cash Flow Hedge Activity | |||||||||||||
Sales | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
Cost of sales | ||||||||||||||||
Interest expense |
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives | Amount of Gain (Loss) Reclassified from AOCI into Earnings | |||||||||||||||||
Three months ended, | Location of Gain (Loss) Reclassified from AOCI into Earnings | Three months ended, | ||||||||||||||||
June 28, 2019 | June 29, 2018 | June 28, 2019 | June 29, 2018 | |||||||||||||||
Interest rate swap | $ | ( | ) | $ | Interest expense | $ | $ | |||||||||||
Foreign exchange forwards | ( | ) | Sales | ( | ) | ( | ) | |||||||||||
Foreign exchange forwards | ( | ) | Cost of sales | |||||||||||||||
Six months ended, | Location of Gain (Loss) Reclassified from AOCI into Earnings | Six months ended, | ||||||||||||||||
June 28, 2019 | June 29, 2018 | June 28, 2019 | June 29, 2018 | |||||||||||||||
Interest rate swap | $ | ( | ) | $ | Interest expense | $ | $ | |||||||||||
Foreign exchange forwards | ( | ) | ( | ) | Sales | ( | ) | ( | ) | |||||||||
Foreign exchange forwards | Cost of sales |
June 28, 2019 | December 28, 2018 | ||||||||||
Equity method investment | $ | $ | |||||||||
Non-marketable equity securities | |||||||||||
Total equity investments | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||
June 28, 2019 | June 29, 2018 | June 28, 2019 | June 29, 2018 | ||||||||||||
Equity method investment (income) loss | $ | $ | ( | ) | ( | ) | |||||||||
Impairment charges | |||||||||||||||
Observable price adjustments on non-marketable equity securities | |||||||||||||||
Total (gain) loss on equity investments, net | $ | $ | ( | ) | $ | $ | ( | ) |
Three Months Ended | Six Months Ended | ||||||||||||||
June 28, 2019 | June 29, 2018 | June 28, 2019 | June 29, 2018 | ||||||||||||
Segment sales from continuing operations by product line: | |||||||||||||||
Medical | |||||||||||||||
Cardio & Vascular | $ | $ | $ | $ | |||||||||||
Cardiac & Neuromodulation | |||||||||||||||
Advanced Surgical, Orthopedics & Portable Medical | |||||||||||||||
Total Medical | |||||||||||||||
Non-Medical | |||||||||||||||
Total sales from continuing operations | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||
June 28, 2019 | June 29, 2018 | June 28, 2019 | June 29, 2018 | ||||||||||||
Segment income from continuing operations: | |||||||||||||||
Medical | $ | $ | $ | $ | |||||||||||
Non-Medical | |||||||||||||||
Total segment income from continuing operations | |||||||||||||||
Unallocated operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Operating income from continuing operations | |||||||||||||||
Unallocated expenses, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Income before taxes from continuing operations | $ | $ | $ | $ |
(16.) | REVENUE FROM CONTRACTS WITH CUSTOMERS |
Three Months Ended | Six Months Ended | |||||||||||
June 28, 2019 | June 28, 2019 | |||||||||||
Customer | Medical | Non-Medical | Medical | Non-Medical | ||||||||
Customer A | % | % | ||||||||||
Customer B | % | % | ||||||||||
Customer C | % | % | ||||||||||
Customer D | % | % | ||||||||||
All other customers | % | % | % | % |
Three Months Ended | Six Months Ended | |||||||||||
June 29, 2018 | June 29, 2018 | |||||||||||
Customer | Medical | Non-Medical | Medical | Non-Medical | ||||||||
Customer A | % | % | ||||||||||
Customer B | % | % | ||||||||||
Customer C | % | % | ||||||||||
Customer D | % | % | ||||||||||
All other customers | % | % | % | % |
Three Months Ended | Six Months Ended | |||||||
June 28, 2019 | June 28, 2019 | |||||||
Ship to Location | Medical | Non-Medical | Medical | Non-Medical | ||||
United States | ||||||||
Puerto Rico | ||||||||
Canada | ||||||||
Singapore | ||||||||
All other countries |
Three Months Ended | Six Months Ended | |||||||
June 29, 2018 | June 29, 2018 | |||||||
Ship to Location | Medical | Non-Medical | Medical | Non-Medical | ||||
United States | ||||||||
Puerto Rico | ||||||||
Canada | ||||||||
All other countries |
June 28, 2019 | December 28, 2018 | ||||||
Contract assets included in prepaid expenses and other current assets | $ | $ | |||||
Contract liabilities included in accrued expenses and other current liabilities |
• | future sales, expenses, and profitability; |
• | future development and expected growth of our business and industry; |
• | our ability to execute our business model and our business strategy; |
• | our ability to identify trends within our industries and to offer products and services that meet the changing needs of those markets; |
• | our ability to remain in compliance with the financial covenants contained in the agreement governing our Senior Secured Credit Facilities; and |
• | projected capital expenditures. |
• | Sales Force Excellence: We are changing the organization structure to match product line growth strategies and customer needs. This change is about getting more out of the capability we already have, and will increase individual accountability and clarity of ownership. |
• | Market Focused Innovation: We are ensuring we get the most return on our research & development investments. Integer is currently focusing on getting a clearer picture of how we spend our money and ensuring we are spending it in the right places so we can increase investments to drive future growth. |
• | Manufacturing Process Excellence: The goal is to deliver world-class operational performance in the areas of safety, quality, delivery and overall efficiency. We want to transition our manufacturing into a competitive advantage through a single, enterprise-wide manufacturing structure known as the Integer Production System. This system will provide standardized systems and processes by leveraging best practices and applying them across all of our global sites. |
• | Business Process Excellence: Integer is taking a systematic approach to driving excellence in everything we do by standardizing, optimizing and ultimately sustaining all of our processes. |
• | Performance Excellence: We are raising the bar on associate performance to maximize our impact. This includes aligning key roles with critical capabilities, positioning the best talent against the biggest work, and putting tools and processes in place to provide higher financial rewards for top performers, so our top performers can see increased results in pay for increased results in their performance. |
• | Leadership Capability: We have a robust plan to make leadership a competitive advantage for Integer, and since the success rate is higher with internal hires, we are focusing on finding and developing leaders from within the Company to build critical capabilities for future success. |
GAAP | Non-GAAP(b) | |||||||
Continuing Operations: | As Reported | Growth | Adjusted | Growth | ||||
Sales | $1,265 to $1,280 | 4% to 5% | $1,265 to $1,280 | 4% to 6% | ||||
Income | $95 to $102 | 102% to 117% | $140 to $147 | 13% to 18% | ||||
EBITDA | N/A | N/A | $277 to $285 | 7% to 10% | ||||
Earnings per Diluted Share | $2.89 to $3.09 | 101% to 115% | $4.25 to $4.45 | 12% to 17% |
(a) | Except as described below, further reconciliations by line item to the closest corresponding financial measure prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for Adjusted Sales, Adjusted Income, earnings before interest, taxes, depreciation, and amortization (“EBITDA”), and Adjusted EBITDA and Adjusted Earnings per diluted share (“EPS”), all from continuing operations, included in our “2019 Outlook” above, are not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and visibility of the charges excluded from these non-GAAP financial measures. |
(b) | Adjusted income and diluted EPS, both from continuing operations, for 2019 are expected to consist of GAAP income from continuing operations and diluted EPS from continuing operations, excluding items such as intangible amortization, IP-related litigation costs, consolidation and realignment costs, asset dispositions, severance and loss on extinguishment of debt totaling approximately $57 million, pre-tax. The after-tax impact of these items is estimated to be approximately $45 million, or approximately $1.36 per diluted share. |
• | Sales from continuing operations for the second quarter of 2019 decreased $0.3 million and increased $22.0 million for the first six months of 2019 when compared to the same periods in 2018. The increase for the first six months of 2019 was due to growth in Cardio & Vascular, Cardiac & Neuromodulation and Electrochem sales, partially offset by lower Advanced Surgical, Orthopedic & Portable Medical in comparison to the first six months of 2018. During the second quarter and first six months of 2019, price reductions given to our larger OEM customers in return for long-term volume commitments lowered sales by $3.7 million and $6.4 million, respectively, in comparison to the same periods in 2018. In comparison to the prior year periods, foreign currency exchange rates decreased sales from continuing operations by approximately $0.7 million and $1.6 million for the second quarter and first six months of 2019, respectively. |
• | Gross profit from continuing operations for the second quarter of 2019 decreased $1.8 million, compared to the same period in 2018, primarily due to price reductions and inflation, partially mitigated by production efficiencies. Gross profit from continuing operations for the first six months of 2019 increased $3.3 million, compared to the same period in 2018, primarily due to the increase in sales from continuing operations and benefits of production efficiencies achieved, partially offset by price reductions given to our customers and inflation. |
• | Operating expenses for the second quarter and first six months of 2019 were lower by $6.8 million and $10.8 million, respectively, compared to the same periods in 2018, due to decreases in all categories of operating expenses. |
• | Interest expense for the second quarter and first six months of 2019 decreased by $1.6 million and $3.4 million, respectively, compared to the same periods in 2018, primarily due to lower outstanding debt balances due to the repayment of debt over the last year. |
• | During the second quarter and first six months of 2019, we recognized net losses on equity investments of $1.6 million and $1.7 million, respectively, and net gains for the second quarter and first six months of 2018 of $0.3 million and $5.3 million, respectively. Gains and losses on equity investments are generally unpredictable in nature. |
• | Other income, net for the second quarter and first six months of 2019 was $0.7 million and $0.6 million, respectively, compared to $2.4 million and $1.4 million during the same periods in 2018, primarily due to lower foreign currency gains in the 2019 periods compared to the same periods in 2018. |
• | We recorded provisions for income taxes for the second quarter and first six months of 2019 of $6.6 million and $10.4 million, respectively, compared with $8.7 million and $14.1 million during the same periods in 2018. Refer to Note 9 “Income Taxes” of the Notes to Condensed Consolidated Financial Statements contained in Item 1 of this report and the “Provision for Income Taxes” section of this Item for additional information. |
Three Months Ended | ||||||||||||||
June 28, | June 29, | Change | ||||||||||||
2019 | 2018 | $ | % | |||||||||||
Medical Sales: | ||||||||||||||
Cardio & Vascular | $ | 150,397 | $ | 148,766 | $ | 1,631 | 1.1 | % | ||||||
Cardiac & Neuromodulation | 114,488 | 115,941 | (1,453 | ) | (1.3 | )% | ||||||||
Advanced Surgical, Orthopedics & Portable Medical | 32,646 | 34,751 | (2,105 | ) | (6.1 | )% | ||||||||
Total Medical Sales | 297,531 | 299,458 | (1,927 | ) | (0.6 | )% | ||||||||
Non-Medical | 16,663 | 15,006 | 1,657 | 11.0 | % | |||||||||
Total Sales | 314,194 | 314,464 | (270 | ) | (0.1 | )% | ||||||||
Cost of sales | 217,210 | 215,699 | 1,511 | 0.7 | % | |||||||||
Gross profit | 96,984 | 98,765 | (1,781 | ) | (1.8 | )% | ||||||||
Gross profit as a % of sales | 30.9 | % | 31.4 | % | ||||||||||
Selling, general and administrative expenses (“SG&A”) | 33,143 | 36,780 | (3,637 | ) | (9.9 | )% | ||||||||
SG&A as a % of sales | 10.5 | % | 11.7 | % | ||||||||||
Research, development and engineering costs (“RD&E”) | 11,396 | 12,935 | (1,539 | ) | (11.9 | )% | ||||||||
RD&E as a % of sales | 3.6 | % | 4.1 | % | ||||||||||
Other operating expenses | 3,108 | 4,692 | (1,584 | ) | (33.8 | )% | ||||||||
Operating income | 49,337 | 44,358 | 4,979 | 11.2 | % | |||||||||
Operating margin | 15.7 | % | 14.1 | % | ||||||||||
Interest expense | 13,612 | 15,234 | (1,622 | ) | (10.6 | )% | ||||||||
(Gain) loss on equity investments, net | 1,611 | (284 | ) | 1,895 | NM | |||||||||
Other income, net | (718 | ) | (2,387 | ) | 1,669 | (69.9 | )% | |||||||
Income from continuing operations before income taxes | 34,832 | 31,795 | 3,037 | 9.6 | % | |||||||||
Provision for income taxes | 6,610 | 8,739 | (2,129 | ) | (24.4 | )% | ||||||||
Effective tax rate | 19.0 | % | 27.5 | % | ||||||||||
Income from continuing operations | $ | 28,222 | $ | 23,056 | $ | 5,166 | 22.4 | % | ||||||
Income from continuing operations as a % of sales | 9.0 | % | 7.3 | % | ||||||||||
Diluted earnings per share from continuing operations | $ | 0.85 | $ | 0.70 | $ | 0.15 | 21.4 | % |
Six Months Ended | ||||||||||||||
June 28, | June 29, | Change | ||||||||||||
2019 | 2018 | $ | % | |||||||||||
Medical Sales: | ||||||||||||||
Cardio & Vascular | $ | 302,971 | $ | 285,629 | $ | 17,342 | 6.1 | % | ||||||
Cardiac & Neuromodulation | 231,399 | 224,851 | 6,548 | 2.9 | % | |||||||||
Advanced Surgical, Orthopedics & Portable Medical | 64,234 | 68,692 | (4,458 | ) | (6.5 | )% | ||||||||
Total Medical Sales | 598,604 | 579,172 | 19,432 | 3.4 | % | |||||||||
Non-Medical | 30,266 | 27,718 | 2,548 | 9.2 | % | |||||||||
Total Sales | 628,870 | 606,890 | 21,980 | 3.6 | % | |||||||||
Cost of sales | 443,276 | 424,593 | 18,683 | 4.4 | % | |||||||||
Gross profit | 185,594 | 182,297 | 3,297 | 1.8 | % | |||||||||
Gross profit as a % of sales | 29.5 | % | 30.0 | % | ||||||||||
SG&A | 68,099 | 73,209 | (5,110 | ) | (7.0 | )% | ||||||||
SG&A as a % of sales | 10.8 | % | 12.1 | % | ||||||||||
RD&E | 22,991 | 26,211 | (3,220 | ) | (12.3 | )% | ||||||||
RD&E, Net as a % of sales | 3.7 | % | 4.3 | % | ||||||||||
Other operating expenses | 5,998 | 8,476 | (2,478 | ) | (29.2 | )% | ||||||||
Operating income | 88,506 | 74,401 | 14,105 | 19.0 | % | |||||||||
Operating margin | 14.1 | % | 12.3 | % | ||||||||||
Interest expense | 27,442 | 30,829 | (3,387 | ) | (11.0 | )% | ||||||||
(Gain) loss on equity investments, net | 1,652 | (5,254 | ) | 6,906 | NM | |||||||||
Other income, net | (552 | ) | (1,427 | ) | 875 | (61.3 | )% | |||||||
Income from continuing operations before income taxes | 59,964 | 50,253 | 9,711 | 19.3 | % | |||||||||
Provision for income taxes | 10,376 | 14,113 | (3,737 | ) | (26.5 | )% | ||||||||
Effective tax rate | 17.3 | % | 28.1 | % | ||||||||||
Income from continuing operations | $ | 49,588 | $ | 36,140 | $ | 13,448 | 37.2 | % | ||||||
Income from continuing operations as a % of sales | 7.9 | % | 6.0 | % | ||||||||||
Diluted earnings per share from continuing operations | $ | 1.50 | $ | 1.11 | $ | 0.39 | 35.1 | % |
Change From Prior Year | |||||
Three Months | Six Months | ||||
Price(a) | (1.2 | )% | (1.0 | )% | |
Mix(b) | 0.1 | 0.2 | |||
Incentive compensation(c) | (0.3 | ) | (0.2 | ) | |
Production efficiencies and volume leverage(d) | 0.9 | 0.5 | |||
Total percentage point change to gross profit as a percentage of sales | (0.5 | )% | (0.5 | )% |
(a) | Our Gross Margin for the second quarter and first six months of 2019 has been negatively impacted by price reductions given to our larger OEM customers in return for long-term volume commitments. |
(b) | Our Gross Margin for the second quarter and first six months of 2019 has been positively impacted by a higher mix of sales of higher margin products. |
(c) | Amounts represent the impact to our Gross Margin attributable to our cash and stock incentive programs, including performance-based compensation, which is accrued based upon actual results achieved. |
(d) | Represents various increases and decreases to our Gross Margin. Overall, our Gross Margin for the second quarter and first six months of 2019 was positively impacted by production efficiencies, lower amortization expense and, on a year-to-date basis, higher sales volume. |
Change From Prior Year | |||||||
Three Months | Six Months | ||||||
Transition services agreement(a) | $ | (1,161 | ) | $ | (2,758 | ) | |
Professional fees(b) | (659 | ) | 173 | ||||
Compensation and benefit costs | (513 | ) | (724 | ) | |||
Intangible asset amortization | (172 | ) | (477 | ) | |||
Other general and administrative expenses | (1,132 | ) | (1,324 | ) | |||
Net decrease in SG&A Expenses | $ | (3,637 | ) | $ | (5,110 | ) |
(a) | Represents the amount included in SG&A Expenses, which was charged to Viant for transition services provided during the second quarter and first six months of 2019. We executed a transition services agreement in conjunction with the sale of the AS&O Product Line, whereby we agreed to provide certain corporate services (including accounting, payroll, and information technology services) to Viant to facilitate an orderly transfer of business operations. This provision of services under the agreement was completed during the second quarter of 2019. |
(b) | Professional fees decreased during the second quarter of 2019 compared to the prior year period, primarily due to lower legal costs, including legal expenses incurred related to our on-going patent infringement case. Refer to Note 10 “Commitments and Contingencies” of the Notes to the Condensed Consolidated Financial Statements contained in Item 1 of this report for information related to this patent infringement litigation. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 28, 2019 | June 29, 2018 | June 28, 2019 | June 29, 2018 | ||||||||||||
Strategic reorganization and alignment(a) | $ | 1,656 | $ | 3,727 | $ | 3,390 | $ | 5,781 | |||||||
Manufacturing alignment to support growth(b) | 561 | 1,103 | 1,146 | 1,616 | |||||||||||
Consolidation and optimization expenses(c) | — | (14 | ) | — | 561 | ||||||||||
Asset dispositions, severance and other(d) | 891 | (124 | ) | 1,462 | 518 | ||||||||||
Total other operating expenses | $ | 3,108 | $ | 4,692 | $ | 5,998 | $ | 8,476 |
(a) | As a result of the strategic review of our customers, competitors and markets, we began taking steps in the fourth quarter of 2017 to better align our resources in order to enhance the profitability of our portfolio of products. These initiatives include improving our business processes and redirecting investments away from projects where the market does not justify the investment, as well as aligning resources with market conditions and our future strategic direction. Expenses for the second quarter and first six months of 2019 and 2018 primarily consist of severance costs and fees for professional services. |
(b) | In 2017, we initiated several initiatives designed to reduce costs, improve operating efficiencies and increase manufacturing capacity to accommodate growth. The plan involves the relocation of certain manufacturing operations and expansion of certain of our facilities. |
(c) | During 2018, we incurred costs primarily related to the closure of our Clarence, NY facility. |
(d) | Amounts include expenses related to other initiatives not described above, which relate primarily to integration and operational initiatives to reduce costs and improve operational efficiencies. Expenses for the second quarter and first six months of 2019 and 2018 primarily include severance costs and fees for professional services. |
(dollars in thousands) | June 28, 2019 | December 28, 2018 | |||||
Cash and cash equivalents | $ | 15,922 | $ | 25,569 | |||
Working capital | 261,844 | 251,680 | |||||
Current ratio | 2.42 | 2.53 |
Six Months Ended | |||||||
(in thousands) | June 28, 2019 | June 29, 2018 | |||||
Cash provided by (used in): | |||||||
Operating activities | $ | 67,550 | $ | 67,219 | |||
Investing activities | (11,094 | ) | (19,095 | ) | |||
Financing activities | (66,273 | ) | (74,523 | ) | |||
Effect of foreign currency exchange rates on cash and cash equivalents | 170 | 2,363 | |||||
Net change in cash and cash equivalents | $ | (9,647 | ) | $ | (24,036 | ) |
Three Months Ended | |||||||||||||||||||||||
June 28, 2019 | June 29, 2018 | ||||||||||||||||||||||
Pre-Tax | Net of Tax | Per Diluted Share | Pre-Tax | Net of Tax | Per Diluted Share | ||||||||||||||||||
As reported income from continuing operations (GAAP) | $ | 34,832 | $ | 28,222 | $ | 0.85 | $ | 31,795 | $ | 23,056 | $ | 0.70 | |||||||||||
Adjustments: | |||||||||||||||||||||||
Amortization of intangibles(a) | 9,831 | 7,778 | 0.24 | 10,519 | 8,296 | 0.25 | |||||||||||||||||
Certain legal expenses (SG&A)(a)(b) | 680 | 537 | 0.02 | 476 | 376 | 0.01 | |||||||||||||||||
Strategic reorganization and alignment (OOE)(a)(c) | 1,656 | 1,287 | 0.04 | 3,727 | 2,950 | 0.09 | |||||||||||||||||
Manufacturing alignment to support growth (OOE)(a)(d) | 561 | 393 | 0.01 | 1,103 | 815 | 0.02 | |||||||||||||||||
Consolidation and optimization expenses (OOE)(a)(e) | — | — | — | (14 | ) | (10 | ) | — | |||||||||||||||
Asset dispositions, severance and other (OOE)(a)(f) | 891 | 699 | 0.02 | (124 | ) | (106 | ) | — | |||||||||||||||
(Gain) loss equity investments, net(a) | 1,611 | 1,273 | 0.04 | (284 | ) | (225 | ) | (0.01 | ) | ||||||||||||||
Loss on extinguishment of debt(a)(g) | 562 | 443 | 0.01 | 417 | 329 | 0.01 | |||||||||||||||||
LSA adjustments(a)(h) | — | — | — | (3,283 | ) | (2,594 | ) | (0.08 | ) | ||||||||||||||
Tax adjustments(i) | — | — | — | — | 1,857 | 0.06 | |||||||||||||||||
Adjusted income from continuing operations (Non-GAAP) | $ | 50,624 | $ | 40,632 | $ | 1.23 | $ | 44,332 | $ | 34,744 | $ | 1.06 | |||||||||||
Diluted weighted average shares for adjusted EPS | 33,009 | 32,720 | |||||||||||||||||||||
Six Months Ended | |||||||||||||||||||||||
June 28, 2019 | June 29, 2018 | ||||||||||||||||||||||
Pre-Tax | Net of Tax | Per Diluted Share | Pre-Tax | Net of Tax | Per Diluted Share | ||||||||||||||||||
As reported income from continuing operations (GAAP) | $ | 59,964 | $ | 49,588 | $ | 1.50 | $ | 50,253 | $ | 36,140 | $ | 1.11 | |||||||||||
Adjustments: | |||||||||||||||||||||||
Amortization of intangibles(a) | 19,685 | 15,574 | 0.47 | 21,172 | 16,693 | 0.51 | |||||||||||||||||
Certain legal expenses (SG&A)(a)(b) | 2,076 | 1,640 | 0.05 | 797 | 630 | 0.02 | |||||||||||||||||
Strategic reorganization and alignment (OOE)(a)(c) | 3,390 | 2,637 | 0.08 | 5,781 | 4,577 | 0.14 | |||||||||||||||||
Manufacturing alignment to support growth (OOE)(a)(d) | 1,146 | 807 | 0.02 | 1,616 | 1,184 | 0.04 | |||||||||||||||||
Consolidation and optimization expenses (OOE)(a)(e) | — | — | — | 561 | 445 | 0.01 | |||||||||||||||||
Asset dispositions, severance and other (OOE)(a)(f) | 1,462 | 1,152 | 0.03 | 518 | 364 | 0.01 | |||||||||||||||||
(Gain) loss equity investments, net(a) | 1,652 | 1,305 | 0.04 | (5,254 | ) | (4,151 | ) | (0.13 | ) | ||||||||||||||
Loss on extinguishment of debt(a)(g) | 974 | 769 | 0.02 | 1,474 | 1,164 | 0.04 | |||||||||||||||||
LSA adjustments(a)(h) | — | — | — | (6,119 | ) | (4,834 | ) | (0.15 | ) | ||||||||||||||
Tax adjustments(i) | — | — | — | — | 2,951 | 0.09 | |||||||||||||||||
Adjusted income from continuing operations (Non-GAAP) | $ | 90,349 | $ | 73,472 | $ | 2.23 | $ | 70,799 | $ | 55,163 | $ | 1.69 | |||||||||||
Diluted weighted average shares for adjusted EPS | 32,995 | 32,572 |
(a) | The difference between pre-tax and net of tax amounts is the estimated tax impact related to the respective adjustment. Net of tax amounts are computed using a 21% U.S. tax rate, and the statutory tax rates in Mexico, Netherlands, Uruguay, Ireland and Switzerland, as adjusted for the existence of net operating losses (“NOLs”). Amortization of intangibles and other operating expense for 2018 have also been adjusted to reflect the estimated impact relating to our disallowed deduction of the GILTI tax, as described in footnote (i) below. Expenses that are not deductible for tax purposes (i.e. permanent tax differences) are added back at 100%. |
(b) | In 2013, we filed suit against AVX Corporation alleging they were infringing our intellectual property. Given the complexity and significant costs incurred pursuing this litigation, we are excluding these litigation expenses from adjusted amounts. This matter proceeded to trial during the first quarter of 2016 and again in the third quarter of 2017 that resulted in a jury awarding damages in the amount of $37.5 million. In March 2018, the court vacated that damage award and ordered a new trial on damages. In the January 2019 retrial on damages, the jury awarded damages in the amount of $22.2 million. This award is subject to post-trial proceedings. On July 31, 2019, the U. S. District Court for the District of Delaware entered an order in the AVX litigation denying AVX’s post-trial motion to overturn the jury verdict in our favor. To date, no gains have been recognized in connection with this litigation. The second quarter 2019 also includes costs associated with responding to a subpoena in connection with a legal matter to which we are a non-party witness. |
(c) | Amounts include expenses related to implementing our strategy that is designed to better align our resources in order to invest to grow, protect, preserve and to enhance the profitability of our portfolio of products, including focusing our investment in RD&E and manufacturing, improving our business processes and redirecting investments away from projects where the market does not justify the investment. During 2019 and 2018, we incurred charges related to this strategy, which primarily consisted of severance costs and fees for professional services. |
(d) | Includes expenses related to several initiatives designed to reduce costs, improve operating efficiencies and increase manufacturing capacity to accommodate growth. The plan involves the relocation of certain manufacturing operations and expansion of certain of our facilities. |
(e) | During 2018, we incurred costs primarily related to the closure of our Clarence, NY facility. |
(f) | Amounts include expenses related to other initiatives not described above, which relate primarily to integration and operational initiatives to reduce costs and improve operational efficiencies. |
(g) | Represents debt extinguishment charges in connection with pre-payments made on our Term Loan B Facility, which are included in interest expense. |
(h) | Reflects the net impact of the LSAs entered into as of the closing of the divestiture of the AS&O Product Line. These LSAs govern the sale of products supplied by Viant to the Company for further resale to customers and by the Company to Viant for further resale to customers. |
(i) | The tax adjustment for 2018 represents the estimated impact relating to our disallowed deduction of the GILTI tax, as mandated by the Tax Reform Act. This disallowed deduction of the GILTI tax (approximately 50% of the total GILTI tax) is due to the Company making use of its U.S. NOLs during 2018. This adjustment makes our Adjusted Diluted EPS from continuing operations more comparable with other global companies that are not subject to this disallowed GILTI tax deduction and more comparable to the Company’s results following the full utilization of its U.S. NOLs. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 28, 2019 | June 29, 2018 | June 28, 2019 | June 29, 2018 | ||||||||||||
Income from continuing operations (GAAP) | $ | 28,222 | $ | 23,056 | $ | 49,588 | $ | 36,140 | |||||||
Interest expense | 13,612 | 15,234 | 27,442 | 30,829 | |||||||||||
Provision for income taxes | 6,610 | 8,739 | 10,376 | 14,113 | |||||||||||
Depreciation | 9,046 | 10,006 | 18,850 | 19,969 | |||||||||||
Amortization | 9,831 | 10,519 | 19,685 | 21,172 | |||||||||||
EBITDA from continuing operations (Non-GAAP) | 67,321 | 67,554 | 125,941 | 122,223 | |||||||||||
Certain legal expenses | 680 | 476 | 2,076 | 797 | |||||||||||
Stock-based compensation (excluding OOE) | 2,673 | 2,199 | 5,386 | 5,178 | |||||||||||
Strategic reorganization and alignment | 1,656 | 3,727 | 3,390 | 5,781 | |||||||||||
Manufacturing alignment to support growth | 561 | 1,103 | 1,146 | 1,616 | |||||||||||
Consolidation and optimization expenses | — | (14 | ) | — | 561 | ||||||||||
Asset dispositions, severance and other | 891 | (124 | ) | 1,462 | 518 | ||||||||||
(Gain) loss on equity investments, net | 1,611 | (284 | ) | 1,652 | (5,254 | ) | |||||||||
LSA adjustments | — | (3,283 | ) | $ | — | $ | (6,119 | ) | |||||||
Adjusted EBITDA from continuing operations (Non-GAAP) | $ | 75,393 | $ | 71,354 | $ | 141,053 | $ | 125,301 |
a. | Evaluation of Disclosure Controls and Procedures |
b. | Changes in Internal Control Over Financial Reporting |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 6. | EXHIBITS |
Exhibit Number | Description | |
10.1#* | ||
31.1* | ||
31.2* | ||
32.1** | ||
101.INS* | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
101.SCH* | XBRL Extension Schema Document | |
101.CAL* | XBRL Extension Calculation Linkbase Document | |
101.LAB* | XBRL Extension Label Linkbase Document | |
101.PRE* | XBRL Extension Presentation Linkbase Document | |
101.DEF* | XBRL Extension Definition Linkbase Document |
* | Filed herewith. |
** | Furnished herewith. |
# | Indicates exhibits that are management contracts or compensation plans or arrangements. |
Dated: | August 1, 2019 | INTEGER HOLDINGS CORPORATION | |||
By: | /s/ Joseph W. Dziedzic | ||||
Joseph W. Dziedzic | |||||
President and Chief Executive Officer | |||||
(Principal Executive Officer) | |||||
By: | /s/ Jason K. Garland | ||||
Jason K. Garland | |||||
Executive Vice President and Chief Financial Officer | |||||
(Principal Financial Officer) | |||||
By: | /s/ Tom P. Thomas | ||||
Tom P. Thomas | |||||
Vice President, Corporate Controller | |||||
(Principal Accounting Officer) |
/s/ Joseph W. Dziedzic | |||
Joseph W. Dziedzic | |||
President & Chief Executive Officer |
/s/ Kirk Thor | November 30, 2017 | ||
Kirk Thor | Date |
• | Change of Control Agreement |
• | Officer Indemnification Agreement |
• | Inventions, Non-Disclosure and Non-Solicitation Agreement |
1. | I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended June 28, 2019 of Integer Holdings Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditor and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: | August 1, 2019 | /s/ Joseph W. Dziedzic | |
Joseph W. Dziedzic | |||
President and Chief Executive Officer | |||
(Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended June 28, 2019 of Integer Holdings Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditor and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: | August 1, 2019 | /s/ Jason K. Garland | |
Jason K. Garland | |||
Executive Vice President and Chief Financial Officer | |||
(Principal Financial Officer) |
Dated: | August 1, 2019 | /s/ Joseph W. Dziedzic | |
Joseph W. Dziedzic | |||
President and Chief Executive Officer | |||
(Principal Executive Officer) | |||
Dated: | August 1, 2019 | /s/ Jason K. Garland | |
Jason K. Garland | |||
Executive Vice President and Chief Financial Officer | |||
(Principal Financial Officer) |
Condensed Consolidated Balance Sheets - Unaudited (Parenthetical) - USD ($) $ in Millions |
Jun. 28, 2019 |
Dec. 28, 2018 |
---|---|---|
Current assets: | ||
Allowance for doubtful accounts | $ 0.6 | $ 0.6 |
Stockholders’ equity: | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 32,816,622 | 32,624,494 |
Common stock, shares outstanding (in shares) | 32,640,614 | 32,473,167 |
Treasury stock, shares (in shares) | 176,008 | 151,327 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 28, 2019 |
Jun. 29, 2018 |
Jun. 28, 2019 |
Jun. 29, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 33,057 | $ 20,022 | $ 54,726 | $ 28,140 |
Other comprehensive income (loss): | ||||
Foreign currency translation gain | 4,510 | (25,885) | (2,328) | (12,444) |
Net change in cash flow hedges, net of tax | (4,043) | (2,086) | (4,745) | 1,323 |
Other comprehensive income | 467 | (27,971) | (7,073) | (11,121) |
Comprehensive income | $ 33,524 | $ (7,949) | $ 47,653 | $ 17,019 |
Basis of Presentation |
6 Months Ended |
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Jun. 28, 2019 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Integer Holdings Corporation (together with its consolidated subsidiaries, “Integer” or the “Company”) is a publicly traded corporation listed on the New York Stock Exchange under the symbol “ITGR.” Integer is one of the largest medical device outsource manufacturers in the world serving the cardiac, neuromodulation, vascular, orthopedics, advanced surgical and portable medical markets. The Company provides innovative, high-quality medical technologies that enhance the lives of patients worldwide. In addition, it develops batteries for high-end niche applications in the energy, military, and environmental markets. The Company’s reportable segments are: (1) Medical and (2) Non-Medical. The Company’s customers include large multi-national original equipment manufacturers (“OEMs”) and their affiliated subsidiaries. On May 3, 2018, the Company entered into a definitive agreement to sell the Advanced Surgical and Orthopedic product lines (the “AS&O Product Line”) within its Medical segment to Viant (formerly MedPlast, LLC), and on July 2, 2018 completed the sale. The results of operations of the AS&O Product Line are reported as discontinued operations in the Condensed Consolidated Statements of Operations for all periods presented. The Condensed Consolidated Statements of Cash Flows includes cash flows related to the discontinued operations due to Integer’s centralized treasury and cash management processes, and, accordingly, cash flow amounts for discontinued operations are disclosed in Note 2 “Discontinued Operations and Divestiture.” All results and information in the condensed consolidated financial statements are presented as continuing operations and exclude the AS&O Product Line unless otherwise noted specifically as discontinued operations. Refer to Note 2 “Discontinued Operations and Divestiture” for additional information. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information (Accounting Standards Codification (“ASC”) 270, Interim Reporting) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all of the information necessary for a full presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of the Company for the periods presented. Intercompany transactions and balances have been fully eliminated in consolidation. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, certain components of equity, sales, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ materially from these estimates. For further information, refer to the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 28, 2018. The Company utilizes a fifty-two, fifty-three week fiscal year ending on the Friday nearest December 31. The second quarter of 2019 and 2018 each contained 13 weeks and ended on June 28 and June 29, respectively. The Company’s 2019 fiscal year will end on January 3, 2020 and will be a fifty-three week period. Fiscal year 2018 ended on December 28, 2018 and was a fifty-two week period. Recent Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standard Updates (“ASU”) issued by the Financial Accounting Standards Board ("FASB"). ASUs not yet adopted that are not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated result of operations, financial position and cash flows. With the exception of the accounting pronouncements adopted as discussed below, there have been no new or material changes to the significant accounting policies discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2018, that are of significance, or potential significance, to the Company. (1.) BASIS OF PRESENTATION (Continued) Recently Adopted Accounting Guidance Adoption of ASC Topic 842 Effective December 29, 2018, the Company adopted ASC 842, Leases, which requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The Company elected to transition to ASC 842 using the option to not restate comparative periods and apply the standard as of the date of initial application. In addition, certain practical expedients were elected which permit the Company to not reassess whether existing contracts are or contain leases, to not reassess the lease classification of any existing leases, and to not reassess initial direct costs for any existing leases. The Company also elected the practical expedient to not separate lease and non-lease components for all classes of underlying assets and the practical expedient related to land easements, allowing the Company to carry-forward its accounting treatment for land easements on existing agreements. The Company did not elect the practical expedient pertaining to the use of hindsight. The Company also made an accounting policy election to keep leases with an initial term of 12 months or less and no purchase option the Company is reasonably certain to exercise off the balance sheet for all classes of underlying assets. As a result of the adoption of ASC 842, the Company recognized operating lease right-of-use assets of $40.9 million and lease liabilities of $43.4 million on December 29, 2018. The difference between the lease assets and lease liabilities primarily represents the existing prepaid rent assets, deferred rent liabilities, and tenant improvement allowances, along with a cumulative-effect adjustment to beginning retained earnings. The adoption of ASC 842 did not have a material impact on the Company’s Condensed Consolidated Statement of Operations and Condensed Consolidated Statement of Cash Flows for the periods presented. Refer to Note 11 “Leases” for additional information on the Company’s leases. Adoption of ASU 2017-12 and ASU 2018-16 In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2017-12 amends the designation and measurement guidance for qualifying hedging transactions and the presentation of hedge results in an entity’s financial statements. The new guidance removes the concept of separately measuring and reporting hedge ineffectiveness and requires a company to present the earnings effect of the hedging instrument, including any ineffectiveness, in the same income statement line item in which the earnings effect of the hedged item is reported. ASU 2017-12 continues to allow an entity to exclude the time value of options and forward points from the assessment of hedge effectiveness. For excluded components in cash flow hedges, the base recognition model under this ASU is an amortization approach. An entity still may elect to record changes in the fair value of the excluded component currently in earnings; however, such an election will need to be applied consistently to similar hedges. The Company has elected to continue to record changes in the fair value of the excluded components of its derivative instruments currently in earnings given their highly effective nature. Finally, this ASU continues to require an initial prospective quantitative hedge effectiveness assessment and documentation at hedge inception. However, if certain criteria are met, entities can elect to subsequently perform prospective and retrospective effectiveness assessments qualitatively, unless facts and circumstances change, and the hedge effectiveness assessment generally does not need to be completed until the first quarterly hedge effectiveness assessment date (i.e., up to three months). The Company adopted ASU 2017-12 on December 29, 2018, the first day of the Company’s 2019 fiscal year, which did not materially affect the Company’s results of operations. The Company adopted the guidance on the modified retrospective basis and did not recognize a cumulative effect adjustment upon adoption as the Company had not recognized ineffectiveness on any of the hedging instruments existing as of the date of adoption. Refer to Note 14 “Financial Instruments and Fair Value Measurements” for additional information and disclosures of the Company’s derivatives and hedging activities. In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. The amendments in ASU 2018-16 permit the use of the OIS rate based on SOFR as a benchmark interest rate for hedge accounting purposes under Topic 815. The amendments in this update were effective for fiscal years beginning after December 15, 2018. The Company adopted this guidance prospectively as of December 29, 2018, concurrent with the adoption of ASU 2017-12, to be applied on a prospective basis for qualifying new or redesignated hedging relationships entered into on or after the date of adoption. Adoption of this guidance had no impact on the Condensed Consolidated Financial Statements.
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Discontinued Operations |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS AND DIVESTITURE On May 3, 2018, the Company entered into a definitive agreement to sell its AS&O Product Line to Viant, and on July 2, 2018, completed the sale, collecting cash proceeds of approximately $581 million, which is net of transaction costs and adjustments set forth in the definitive agreement. In connection with the sale, the parties executed a transition services agreement whereby the Company would provide certain corporate services (including accounting, payroll, and information technology services) to Viant for a period of up to one year from the date of the closing to facilitate an orderly transfer of business operations. Viant paid Integer for these services as specified in the transition services agreement, which ended during the second quarter of 2019. For the performance of services during the three and six months ended June 28, 2019, the Company recognized $1.2 million and $2.9 million, respectively, of income under the transition services agreement. For the six months ended June 28, 2019, $0.1 million is recorded as a reduction of Cost of sales and for the three and six months ended June 28, 2019, $1.2 million and $2.8 million, respectively, is recorded as a reduction of Selling, general and administrative expenses. In addition, the parties executed long-term supply agreements under which the Company and Viant have agreed to supply the other with certain products at prices specified in the agreements for a term of three years. In connection with the closing of the transaction but prior to a net working capital adjustment, the Company recognized a pre-tax gain on sale of discontinued operations of $195.0 million during the year ended December 28, 2018. During the quarter ended June 28, 2019, the Company received $4.8 million due to a net working capital adjustment agreed to with Viant. This was recognized as gain on sale from discontinued operations, during the quarter ended June 28, 2019. The operating results of the AS&O Product Line have been classified as discontinued operations in the Condensed Consolidated Statements of Operations for all periods presented. The discontinued operations of the AS&O Product Line are reported in the Medical segment. Income (loss) from discontinued operations net of taxes, were as follows (in thousands):
Cash flow information from discontinued operations was as follows (in thousands):
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | INVENTORIES Inventories are comprised of the following (in thousands):
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Goodwill and Other Intangible Assets, Net |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | GOODWILL AND OTHER INTANGIBLE ASSETS, NET Goodwill The changes in the carrying amount of goodwill by reportable segment for the six months ended June 28, 2019 were as follows (in thousands):
Intangible Assets Intangible assets at June 28, 2019 and December 28, 2018 were as follows (in thousands):
Aggregate intangible asset amortization expense is comprised of the following (in thousands):
Estimated future intangible asset amortization expense based on the carrying value as of June 28, 2019 is as follows (in thousands):
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT Long-term debt is comprised of the following (in thousands):
The Company has senior secured credit facilities (the “Senior Secured Credit Facilities”) consisting of (i) a revolving credit facility (the “Revolving Credit Facility”) with $200 million borrowing capacity as described below, (ii) a $286 million term loan A facility (the “TLA Facility”), and (iii) a $580 million term loan B facility (the “TLB Facility”). The TLA Facility and TLB Facility are collectively referred to as the “Term Loan Facilities.” The TLB Facility was issued at a 1% discount. Revolving Credit Facility The Revolving Credit Facility matures on October 27, 2020. The Revolving Credit Facility includes a $15 million sublimit for swingline loans and a $25 million sublimit for standby letters of credit. The Company is required to pay a commitment fee on the unused portion of the Revolving Credit Facility, which will range between 0.175% and 0.25%, depending on the Company’s Total Net Leverage Ratio (as defined in the Senior Secured Credit Facilities agreement). Interest rates on the Revolving Credit Facility, as well as the TLA Facility, are at the Company’s option, either at: (i) the prime rate plus the applicable margin, which will range between 0.75% and 2.25%, based on the Company’s Total Net Leverage Ratio, or (ii) the applicable LIBOR rate plus the applicable margin, which will range between 1.75% and 3.25%, based on the Company’s Total Net Leverage Ratio. As of June 28, 2019, the Company had $10 million of outstanding borrowings on the Revolving Credit Facility and an available borrowing capacity of $183.2 million after giving effect to $6.8 million of outstanding standby letters of credit. As of June 28, 2019, the weighted average interest rate on outstanding borrowings under the Revolving Credit Facility was 4.91%. Term Loan Facilities The TLA Facility and TLB Facility mature on October 27, 2021 and October 27, 2022, respectively. Interest rates on the TLB Facility are, at the Company’s option, either at: (i) the prime rate plus 2.00% or (ii) the applicable LIBOR rate plus 3.00%, with LIBOR subject to a 1.00% floor. As of June 28, 2019, the interest rates on the TLA Facility and TLB Facility were 4.91% and 5.42%, respectively. Covenants The Revolving Credit Facility and TLA Facility contain covenants requiring (A) a maximum Total Net Leverage Ratio of 5.00:1.00, subject to periodic step downs beginning in the third quarter of 2019 and (B) a minimum interest coverage ratio of adjusted EBITDA (as defined in the Senior Secured Credit Facilities) to interest expense of not less than 3.00:1.00. The TLB Facility does not contain any financial maintenance covenants. As of June 28, 2019, the Company was in compliance with these financial covenants. Contractual maturities under the Senior Secured Credit Facilities for the remainder of 2019 and the next three years (through maturity), excluding any discounts or premiums, as of June 28, 2019 are as follows (in thousands):
The Company prepaid portions of its TLB Facility during 2019 and 2018. The Company recognized losses from extinguishment of debt during the three and six months ended June 28, 2019 of $0.6 million and $1.0 million, respectively, and $0.4 million and $1.5 million, during the three and six months ended June 29, 2018, respectively. The loss from extinguishment of debt represents the portion of the unamortized discount and debt issuance costs related to the portion of the TLB Facility that was prepaid and is included in Interest Expense in the accompanying Condensed Consolidated Statements of Operations.
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Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company maintains certain stock-based compensation plans that were approved by the Company’s stockholders and are administered by the Board of Directors, or the Compensation and Organization Committee of the Board. The stock-based compensation plans provide for the granting of stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), stock appreciation rights and stock bonuses to employees, non-employee directors, consultants, and service providers. The components and classification of stock-based compensation expense were as follows (in thousands):
There were no stock options granted during the six months ended June 28, 2019. The weighted average fair value and assumptions used to value options granted during the six months ended June 29, 2018 are as follows:
The following table summarizes the Company’s stock option activity:
(7.) STOCK-BASED COMPENSATION (Continued) During the six months ended June 28, 2019, the Company awarded grants to members of its Board of Directors and certain members of management. The Board of Directors received grants of RSUs that vest in equal quarterly installments of 25% on the first day of each quarter of the Company’s 2019 fiscal year. The members of management received either RSUs or a mix of RSUs and PRSUs. The RSUs vest ratably, subject to the recipient’s continuous service to the Company over a period of generally three to four years from the grant date. For the Company's PRSUs, in addition to service conditions, the ultimate number of shares to be earned depends on the achievement of financial performance or market-based conditions. The financial performance condition is based on the Company's sales targets. The market conditions are based on the Company’s achievement of a relative total shareholder return (“TSR”) performance requirement, on a percentile basis, compared to a defined group of peer companies over three year performance periods. The Company uses a Monte Carlo simulation model to determine the grant-date fair value of TSR awards. The grant-date fair value of all other restricted stock awards is equal to the closing market price of Integer common stock on the date of grant. The weighted average fair value and assumptions used to value the TSR portion of the PRSUs granted are as follows:
The following table summarizes RSA and RSU activity:
The following table summarizes PRSU activity:
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Other Operating Expenses, Net |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER OPERATING EXPENSES, NET | OTHER OPERATING EXPENSES Other Operating Expenses is comprised of the following (in thousands):
Strategic Reorganization and Alignment As a result of the strategic review of its customers, competitors and markets, the Company began taking steps in 2017 to better align its resources in order to enhance the profitability of its portfolio of products. These initiatives include improving its business processes and redirecting investments away from projects where the market does not justify the investment, as well as aligning resources with market conditions and the Company’s future strategic direction. The Company estimates that it will incur aggregate pre-tax charges in connection with the strategic reorganization and alignment plan, including projects reported in discontinued operations, of between approximately $20 million to $22 million, of which an estimated $16 million to $20 million are expected to result in cash outlays. During the six months ended June 28, 2019, the Company incurred charges relating to this initiative, which primarily included severance and fees for professional services recorded within the Medical segment. As of June 28, 2019, total expense incurred for this initiative since inception, including amounts reported in discontinued operations, was $19.9 million. These actions are expected to be substantially completed by the end of 2019. Manufacturing Alignment to Support Growth In 2017, the Company initiated several initiatives designed to reduce costs, increase manufacturing capacity to accommodate growth and improve operating efficiencies. The plan involves the relocation of certain manufacturing operations and expansion of certain of the Company's facilities. The Company estimates that it will incur aggregate pre-tax restructuring related charges in connection with the realignment plan of between approximately $7 million to $9 million, the majority of which are expected to be cash expenditures. Costs related to the Company’s manufacturing alignment to support growth initiative were primarily recorded within the Medical segment. As of June 28, 2019, total expense incurred for this initiative since inception, including amounts reported in discontinued operations, was $4.6 million. These actions are expected to be substantially completed by the end of 2019. Consolidation and Optimization Initiatives Costs related to the Company’s consolidation and optimization initiatives were primarily recorded within the Medical segment. The Company does not expect to incur any material additional costs associated with these activities. The following table summarizes the change in accrued liabilities, presented within Accrued Expense and Other Current Liabilities on the Condensed Consolidated Balance Sheets, related to the initiatives described above (in thousands):
Asset Dispositions, Severance and Other During the six months ended June 28, 2019 and June 29, 2018, the Company recorded expenses related to other initiatives not described above, which relate primarily to integration and operational initiatives to reduce future operating costs and improve operational efficiencies.
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Income Taxes |
6 Months Ended |
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Jun. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to several factors, including discrete items, changes in the mix and amount of pre-tax income and the jurisdictions to which it relates, changes in tax laws and foreign tax holidays, business reorganizations, settlements with taxing authorities and foreign currency fluctuations. In addition, we continue to explore tax planning opportunities that may have a material impact on our effective tax rate. The Company’s effective tax rate for continuing operations for the second quarter of 2019 was 19.0% on $34.8 million of income from continuing operations before taxes compared to 27.5% on $31.8 million of income from continuing operations before taxes for the same period in 2018. The Company’s effective tax rate for continuing operations for the first six months of 2019 was 17.3% on $60.0 million of income from continuing operations before taxes compared to 28.1% on $50.3 million of income from continuing operations before taxes for the same period of 2018. The difference between the Company’s effective tax rates and the U.S. federal statutory income tax rate of 21% for the second quarter and first six months of 2019 is primarily attributable to discrete tax benefits of $0.4 million and $2.1 million, respectively, as well as the estimated net impact of the Global Intangible Low-Taxed Income tax, the Company’s earnings outside the U.S., which are generally taxed at rates that differ from the U.S federal rate, and the availability of certain tax credits. The discrete tax benefits for 2019 are predominately related to excess tax benefits recognized upon vesting of RSUs or exercise of stock options. As of June 28, 2019, the balance of unrecognized tax benefits from continuing operations is approximately $5.4 million. It is reasonably possible that a reduction of up to $0.9 million of the balance of unrecognized tax benefits may occur within the next twelve months as a result of potential audit settlements. Approximately $5.3 million of the balance of unrecognized tax benefits would favorably impact the effective tax rate, net of federal benefit on state issues, if recognized.
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation The Company is subject to litigation arising from time to time in the ordinary course of its business. The Company does not expect that the ultimate resolution of any pending legal actions will have a material effect on its consolidated results of operations, financial position, or cash flows. However, litigation is subject to inherent uncertainties. As such, there can be no assurance that any pending legal action, which the Company currently believes to be immaterial, will not become material in the future. In April 2013, the Company commenced an action against AVX Corporation and AVX Filters Corporation (collectively “AVX”) alleging that AVX had infringed on the Company’s patents by manufacturing and selling filtered feedthrough assemblies used in implantable pacemakers and cardioverter defibrillators that incorporate the Company’s patented technology. Two juries in the U.S. District Court for the District of Delaware have returned verdicts finding that AVX infringed on three of the Company’s patents and awarded the Company $37.5 million in damages. In March 2018, the U.S. District Court for the District of Delaware vacated the original damage award and ordered a retrial on damages. In the January 2019 retrial on damages, the jury awarded the Company $22.2 million in damages. That award is subject to post-trial proceedings. On July 31, 2019, the U. S. District Court for the District of Delaware entered an order in the AVX litigation denying AVX’s post-trial motion to overturn the jury verdict in favor of the Company. To date, the Company has recorded no gains in connection with this litigation. (10.) COMMITMENTS AND CONTINGENCIES (Continued) Product Warranties The Company generally warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. The Company does not expect future product warranty claims will have a material effect on its condensed consolidated results of operations, financial position, or cash flows. However, there can be no assurance that any future customer complaints or negative regulatory actions regarding the Company’s products, which the Company currently believes to be immaterial, does not become material in the future. The product warranty liability is presented within Accrued Expense and Other Current Liabilities on the Condensed Consolidated Balance Sheets. The change in product warranty liability was comprised of the following (in thousands):
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LEASES The Company primarily leases certain office and manufacturing facilities under operating leases, with additional operating leases for machinery, office equipment and vehicles. An arrangement is considered to contain a lease if it conveys the right to use an identified asset for a period of time in exchange for consideration. If it is determined that an arrangement contains a lease, classification of a lease as operating or finance is determined by evaluating the five criteria outlined within ASC 842 at inception. The Company does not currently have any finance leases. The Company’s lease agreements do not contain any residual value guarantees or any material restrictive covenants. Right-of-use (“ROU”) lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make payments in exchange for that right of use. Operating lease ROU assets are presented as Operating Lease Assets, the current portion of operating lease liabilities are presented within Accrued Expense and Other Current Liabilities, and the non-current portion of operating lease liabilities are presented as Operating Lease Liabilities on the Condensed Consolidated Balance Sheets. The current portion of operating lease liabilities was $7.3 million as of June 28, 2019. Leases with a term of 12 months or less are not recorded on the balance sheet. The Company’s real estate leases often contain options to renew, and less frequently, termination options. The exercise of such renewal and termination options are generally at the Company’s sole discretion. The Company evaluates renewal and termination options at lease commencement to determine if such options are reasonably certain to be exercised based on economic factors. For certain leases where rent escalates based upon a change in a financial index, such as the Consumer Price Index, the difference between the rate at lease inception and the subsequent fluctuations in that rate are included in variable lease costs. Additionally, because the Company has elected to not separate lease and non-lease components, variable costs also include payments to the landlord for common area maintenance, real estate taxes, insurance and other operating expenses. Lease expense is recognized on a straight-line basis over the lease term, with variable lease payments recognized in the period those payments are incurred. The discount rate implicit within our leases is not readily determinable, and therefore, the Company uses its estimated incremental borrowing rate in determining the present value of lease payments. The incremental borrowing rate is determined based on the Company’s recent debt issuances, lease term and the currency in which lease payments are made. The following table presents the weighted average remaining lease term and discount rate:
(11.) LEASES (Continued) The components and classification of lease cost are as follows (in thousands):
The Company’s sublease income is derived primarily from certain real estate leases to several non-affiliated tenants under operating sublease arrangements. At June 28, 2019, the maturities of operating lease liabilities were as follows (in thousands):
As of June 28, 2019, the Company did not have any leases that have not yet commenced. Supplemental cash flow information related to leases for the six months ended June 28, 2019 is as follows (in thousands):
During the three months ended June 28, 2019, the Company extended the lease terms of three of its manufacturing facilities. As a result of these lease modifications, the Company re-measured the lease liability and adjusted the ROU asset on the modification dates. The Company’s future minimum lease commitments, net of sublease income, as of December 28, 2018, under ASC 840, the predecessor to ASC 842, are as follows (in thousands):
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Earnings (Loss) Per Share (EPS) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS (LOSS) PER SHARE (EPS) | EARNINGS (LOSS) PER SHARE (“EPS”) The following table sets forth a reconciliation of the information used in computing basic and diluted EPS (in thousands, except per share amounts):
The diluted weighted average share calculations do not include the following securities, which are not dilutive to the EPS calculations or the performance criteria have not been met (in thousands):
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Stockholders' Equity |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 28, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY | The following is a summary of the number of shares of common stock issued, treasury stock and common stock outstanding for the six month periods ended June 28, 2019 and June 29, 2018:
Accumulated Other Comprehensive Income (“AOCI”) is comprised of the following (in thousands):
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Financial Instruments and Fair Value Measurements |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 28, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Assets and Liabilities Measured at Fair Value on a Recurring Basis Fair value measurement standards apply to certain financial assets and liabilities that are measured at fair value on a recurring basis (each reporting period). For the Company, these financial assets and liabilities include its derivative instruments. The Company does not have any nonfinancial assets or liabilities that are measured at fair value on a recurring basis. The Company is exposed to global market risks, including the effect of changes in interest rates and foreign currency exchange rates, and uses derivatives to manage these exposures that occur in the normal course of business. The Company does not hold or issue derivatives for trading or speculative purposes. All derivatives are recorded at fair value on the balance sheet. Interest Rate Swaps The Company periodically enters into interest rate swap agreements in order to reduce the cash flow risk caused by interest rate changes on its outstanding floating rate borrowings. Under these swap agreements, the Company pays a fixed rate of interest and receives a floating rate equal to one-month London Interbank Offered Rate (“LIBOR”). The variable rate received from the swap agreements and the variable rate paid on the outstanding debt will have the same rate of interest, excluding the credit spread, and will reset and pay interest on the same date. The Company has designated these swap agreements as cash flow hedges based on concluding the hedged forecasted transaction is probable of occurring within the period the cash flow hedge is anticipated to affect earnings. The unrealized gains and losses on these contracts are reported in AOCI in the Condensed Consolidated Balance Sheets and are subsequently reclassified into earnings when interest on the related debt is accrued. The fair value of the Company’s swap agreements are determined through the use of a cash flow model that utilizes observable market data inputs. These observable market data inputs include LIBOR, swap rates, and credit spread curves. In addition, the Company receives a fair value estimate from the swap agreement counterparty to verify the reasonableness of the Company’s estimate. The estimated fair value of the swap agreements represents the amount the Company would receive (pay) to terminate the contracts. Information regarding the Company’s outstanding interest rate swaps designated as cash flow hedges as of June 28, 2019 is as follows (dollars in thousands):
__________ (a) The interest rate swap is not in effect until June 2020. Foreign Currency Contracts The Company periodically enters into foreign currency forward contracts to hedge its exposure to foreign currency exchange rate fluctuations in its international operations. The Company has designated these foreign currency forward contracts as cash flow hedges. The unrealized gains and losses on these contracts are reported in AOCI in the Condensed Consolidated Balance Sheets and are reclassified to earnings in the same periods during which the hedged transactions affect earnings. Information regarding outstanding foreign currency forward contracts designated as cash flow hedges as of June 28, 2019 is as follows (dollars in thousands):
(14.) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued) The fair value of foreign currency contracts are determined through the use of cash flow models that utilize observable market data inputs to estimate fair value. These observable market data inputs include foreign exchange rates and credit spread curves. In addition, the Company receives fair value estimates from the foreign currency contract counterparties to verify the reasonableness of the Company’s estimates. Derivative Instruments with Hedge Accounting Designation The following tables present the fair values of derivative instruments formally designated as hedging instruments as of June 28, 2019 and December 28, 2018 (in thousands).
The following tables present the amounts in the Condensed Consolidated Statements of Operations in which the effects of cash flow hedges are recorded and the effects of cash flow hedge activity on these line items for the three and six months ended June 28, 2019 and June 29, 2018 (in thousands):
(14.) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued) The following tables present the amounts affecting the Condensed Consolidated Statements of Operations for the three and six months ended June 28, 2019 and June 29, 2018 (in thousands):
The Company expects to reclassify net gains totaling $0.2 million related to its cash flow hedges from AOCI into earnings during the next twelve months. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Fair value standards also apply to certain assets and liabilities that are measured at fair value on a nonrecurring basis. The carrying amounts of cash, accounts receivable, accounts payable, and accrued expenses approximate fair value because of the short-term nature of these items. Borrowings under the Company’s Revolving Credit Facility, TLA Facility and TLB Facility accrue interest at a floating rate tied to a standard short-term borrowing index, selected at the Company’s option, plus an applicable margin. The carrying amount of this floating rate debt approximates fair value based upon the respective interest rates adjusting with market rate adjustments. Equity Investments The Company holds long-term, strategic investments in companies to promote business and strategic objectives. These investments are included in Other Long-Term Assets on the Condensed Consolidated Balance Sheets. Non-marketable equity securities are equity securities without readily determinable fair value. The Company has elected the practicability exception to use an alternative approach that measures the securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. If an impairment is recognized on the Company’s non-marketable equity securities during the period, these assets are classified as Level 3 within the fair value hierarchy based on the nature of the fair value inputs. Equity investments are comprised of the following (in thousands):
(14.) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued) The components of (Gain) Loss on Equity Investments, Net for each period were as follows (in thousands):
In May 2019, the Company determined that an investment in one of its non-marketable equity securities was impaired and determined the fair value to be zero based upon available market information. An impairment charge of $1.6 million was recognized during the second quarter of 2019. This assessment was based on qualitative indications of impairment. Factors that significantly influenced the determination of the impairment loss included the equity security’s investee’s financial condition, priority claims to the equity security, distributions rights and preferences, and status of the regulatory approval required to bring its product to market. The Company’s equity method investment is in a Chinese venture capital fund focused on investing in life sciences companies. As of June 28, 2019, the Company owned 6.7% of this fund.
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION The Company organizes its business into two reportable segments: (1) Medical and (2) Non-Medical. This segment structure reflects the financial information and reports used by the Company’s management, specifically its Chief Operating Decision Maker, to make decisions regarding the Company’s business, including resource allocations and performance assessments. This segment structure reflects the Company’s current operating focus in compliance with ASC 280, Segment Reporting. There were no sales between segments during the six months ended June 28, 2019 and June 29, 2018. The following table presents sales from continuing operations by product line (in thousands).
(15.) SEGMENT INFORMATION (Continued) The following table presents income from continuing operations for the Company’s reportable segments (in thousands).
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Revenue From Contracts With Customers |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue Recognition The majority of the Company’s revenues consist of sales of various medical devices and products to large, multinational OEMs and their affiliated subsidiaries. Revenue is recognized when performance obligations are satisfied and the customer has obtained control of the products. Under the provisions of the majority of the Company’s contracts with customers, revenue is recognized at the point in time when title and risk of ownership transfers to the customer, which is primarily determined based upon the shipping terms. When contracts with customers for products that do not have an alternative use to the Company contain provisions that provide the Company with an enforceable right to payment for performance completed to date with a recapture of costs incurred plus an applicable margin throughout the duration of the contract, revenue is recognized over time as control is deemed to have transferred to the customer. The Company uses an input measure to determine progress towards completion and total estimated costs at completion. Under this method, sales and gross profit are recognized as work is performed generally based on actual costs incurred. For arrangements recognized over time, the Company records a contract asset for unbilled revenue associated with non-cancellable customer orders. Revenue is recognized net of sales tax, value-added taxes and other taxes. Disaggregated Revenue In general, the Company's business segmentation is aligned according to the nature and economic characteristics of its products and customer relationships and provides meaningful disaggregation of each business segment's results of operations. For a summary by disaggregated product line sales for each segment, refer to Note 15, “Segment Information.” Revenue recognized from products and services transferred to customers over time represented 10% and 12%, respectively, of total revenue for the three and six months ended June 28, 2019, substantially all of which was within the Medical segment. The Company did not have any significant revenue related to contracts recognized over time for the six months ended June 29, 2018. The following table presents revenues by significant customers, which are defined as any customer who individually represents 10% or more of a segment’s total revenues.
(16.) REVENUE FROM CONTRACTS WITH CUSTOMERS (Continued)
The following table presents revenues by significant ship to location, which is defined as any country where 10% or more of a segment’s total revenues are shipped to.
Contract Balances The opening and closing balances of the Company's contract assets and contract liabilities are as follows (in thousands):
During the three and six months ended June 28, 2019, the Company recognized $0.1 million and $0.4 million, respectively, of revenue that was included in the contract liability balance as of December 28, 2018. During the three and six months ended June 29, 2018, the Company recognized $0.9 million and $1.3 million, respectively, of revenue that was included in the contract liability balance as of December 29, 2017.
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Impact of Recently Issued Accounting Standards |
6 Months Ended |
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Jun. 28, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS | <div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The following table provides a brief description of recent Accounting Standard Updates ("ASU") issued by the Financial Accounting Standards Board ("FASB") which are not yet effective for the Company</font><font style="font-family:inherit;font-size:10pt;font-style:italic;">.</font></div><div style="line-height:120%;text-align:left;padding-left:48px;text-indent:-48px;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="7" rowspan="1"></td></tr><tr><td style="width:18%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:35%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:16%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:28%;" rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Standard</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;"> </font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Description</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;"> </font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Effective Date</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;"> </font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Effect on the Financial Statements or Other Significant Matters</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td></tr></table></div></div></div> |
Basis of Presentation (Policies) |
6 Months Ended |
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Jun. 28, 2019 | |
Accounting Policies [Abstract] | |
Interim Basis of Accounting | For further information, refer to the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 28, 2018. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information (Accounting Standards Codification (“ASC”) 270, Interim Reporting) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all of the information necessary for a full presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of the Company for the periods presented. Intercompany transactions and balances have been fully eliminated in consolidation. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole.
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Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, certain components of equity, sales, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ materially from these estimates. |
Fiscal Period | The Company utilizes a fifty-two, fifty-three week fiscal year ending on the Friday nearest December 31. The second quarter of 2019 and 2018 each contained 13 weeks and ended on June 28 and June 29, respectively. |
Income Taxes | The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to several factors, including discrete items, changes in the mix and amount of pre-tax income and the jurisdictions to which it relates, changes in tax laws and foreign tax holidays, business reorganizations, settlements with taxing authorities and foreign currency fluctuations. In addition, we continue to explore tax planning opportunities that may have a material impact on our effective tax rate.
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Cost And Equity Method Investments | The Company holds long-term, strategic investments in companies to promote business and strategic objectives. These investments are included in Other Long-Term Assets on the Condensed Consolidated Balance Sheets. Non-marketable equity securities are equity securities without readily determinable fair value. The Company has elected the practicability exception to use an alternative approach that measures the securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. |
Discontinued Operations (Tables) |
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Jun. 28, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of discontinued operations | Cash flow information from discontinued operations was as follows (in thousands):
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Inventories (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 28, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory, Current | Inventories are comprised of the following (in thousands):
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Goodwill and Other Intangible Assets, Net (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The changes in the carrying amount of goodwill by reportable segment for the six months ended June 28, 2019 were as follows (in thousands):
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Schedule of Finite-Lived Intangible Assets, Major Class | Intangible assets at June 28, 2019 and December 28, 2018 were as follows (in thousands):
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Schedule of Indefinite-Lived Intangible Assets | Intangible assets at June 28, 2019 and December 28, 2018 were as follows (in thousands):
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Schedule of Finite-Lived Intangible Assets, Amortization Expense | Aggregate intangible asset amortization expense is comprised of the following (in thousands):
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future intangible asset amortization expense based on the carrying value as of June 28, 2019 is as follows (in thousands):
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt | Long-term debt is comprised of the following (in thousands):
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Schedule of Maturities of Long-term Debt | Contractual maturities under the Senior Secured Credit Facilities for the remainder of 2019 and the next three years (through maturity), excluding any discounts or premiums, as of June 28, 2019 are as follows (in thousands):
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Schedule of Deferred Financing Fees | The Company prepaid portions of its TLB Facility during 2019 and 2018. The Company recognized losses from extinguishment of debt during the three and six months ended June 28, 2019 of $0.6 million and $1.0 million, respectively, and $0.4 million and $1.5 million, during the three and six months ended June 29, 2018, respectively. The loss from extinguishment of debt represents the portion of the unamortized discount and debt issuance costs related to the portion of the TLB Facility that was prepaid and is included in Interest Expense in the accompanying Condensed Consolidated Statements of Operations.
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Schedule of Interest Rate Derivatives | . |
Stock-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 28, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The components and classification of stock-based compensation expense were as follows (in thousands):
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The weighted average fair value and assumptions used to value options granted during the six months ended June 29, 2018 are as follows:
The weighted average fair value and assumptions used to value the TSR portion of the PRSUs granted are as follows:
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Schedule of Share-based Compensation, Stock Options Activity | The following table summarizes the Company’s stock option activity:
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Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | The following table summarizes RSA and RSU activity:
The following table summarizes PRSU activity:
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Other Operating Expenses, Net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 28, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Operating Cost and Expense By Component | Other Operating Expenses is comprised of the following (in thousands):
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Schedule of Changes in Accrued Liabilities | The following table summarizes the change in accrued liabilities, presented within Accrued Expense and Other Current Liabilities on the Condensed Consolidated Balance Sheets, related to the initiatives described above (in thousands):
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Commitments and Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||
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Jun. 28, 2019 | |||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||
Schedule of Product Warranty Liability | The change in product warranty liability was comprised of the following (in thousands):
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Leases (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 28, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Costs | The following table presents the weighted average remaining lease term and discount rate:
The components and classification of lease cost are as follows (in thousands):
Supplemental cash flow information related to leases for the six months ended June 28, 2019 is as follows (in thousands):
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Schedule of Operating Lease Liability Maturities (Topic 842) | At June 28, 2019, the maturities of operating lease liabilities were as follows (in thousands):
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Schedule of Future Minimum Rental Payments for Operating Leases (Topic 840) |
Earnings (Loss) Per Share (EPS) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 28, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | (in thousands, except per share amounts):
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The diluted weighted average share calculations do not include the following securities, which are not dilutive to the EPS calculations or the performance criteria have not been met (in thousands):
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Stockholders' Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 28, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Common Stock Outstanding Roll Forward | The following is a summary of the number of shares of common stock issued, treasury stock and common stock outstanding for the six month periods ended June 28, 2019 and June 29, 2018:
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Schedule of Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (“AOCI”) is comprised of the following (in thousands):
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Financial Instruments and Fair Value Measurements (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 28, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Information regarding the Company’s outstanding interest rate swaps designated as cash flow hedges as of June 28, 2019 is as follows (dollars in thousands):
__________ (a) The interest rate swap is not in effect until June 2020. Information regarding outstanding foreign currency forward contracts designated as cash flow hedges as of June 28, 2019 is as follows (dollars in thousands):
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Equity Method Investments [Table Text Block] |
(14.) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued) The components of (Gain) Loss on Equity Investments, Net for each period were as follows (in thousands):
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Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The following tables present the amounts in the Condensed Consolidated Statements of Operations in which the effects of cash flow hedges are recorded and the effects of cash flow hedge activity on these line items for the three and six months ended June 28, 2019 and June 29, 2018 (in thousands):
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Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The following tables present the amounts affecting the Condensed Consolidated Statements of Operations for the three and six months ended June 28, 2019 and June 29, 2018 (in thousands):
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Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 28, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reconciliation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Revenue from Segments to Consolidated |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated |
|
Revenue From Contracts With Customers (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 28, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capitalized Contract Cost [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract with Customer, Asset and Liability [Table Text Block] |
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Summary of Disaggregation of Revenue | The following table presents revenues by significant customers, which are defined as any customer who individually represents 10% or more of a segment’s total revenues.
(16.) REVENUE FROM CONTRACTS WITH CUSTOMERS (Continued)
The following table presents revenues by significant ship to location, which is defined as any country where 10% or more of a segment’s total revenues are shipped to.
|
Impact of Recently Issued Accounting Standards (Tables) |
6 Months Ended |
---|---|
Jun. 28, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Summary of Recently Issued Accounting Standards | <div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The following table provides a brief description of recent Accounting Standard Updates ("ASU") issued by the Financial Accounting Standards Board ("FASB") which are not yet effective for the Company</font><font style="font-family:inherit;font-size:10pt;font-style:italic;">.</font></div><div style="line-height:120%;text-align:left;padding-left:48px;text-indent:-48px;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="7" rowspan="1"></td></tr><tr><td style="width:18%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:35%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:16%;" rowspan="1" colspan="1"></td><td style="width:1%;" rowspan="1" colspan="1"></td><td style="width:28%;" rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Standard</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;"> </font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Description</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;"> </font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Effective Date</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;"> </font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Effect on the Financial Statements or Other Significant Matters</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td></tr><tr><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;background-color:#cceeff;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;" rowspan="1" colspan="1"><div style="overflow:hidden;height:80px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td></tr></table></div></div></div> |
Basis of Presentation (Narrative) (Details) |
3 Months Ended | |
---|---|---|
Jun. 28, 2019 |
Jun. 29, 2018 |
|
Accounting Policies [Abstract] | ||
Fiscal Period Duration | 91 days | 91 days |
Discontinued Operations (Assets and Liabilities of AS&O Business) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Apr. 14, 2019 |
Jul. 02, 2018 |
Jun. 28, 2019 |
Jun. 28, 2019 |
Jun. 29, 2018 |
Dec. 28, 2018 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Proceeds from Divestiture of Businesses | $ 581,000 | $ 4,734 | $ 0 | |||
Income From Transition Services | $ 1,200 | 2,900 | ||||
Transition Services, Cost of Sales | 100 | |||||
Transition Services, Selling, General and Administrative | $ 1,200 | $ 2,800 | ||||
Long Term Supply Agreement, Term | 3 years | |||||
Pre-tax Income From Discontinued Operations | $ 195,000 | |||||
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | $ 4,800 |
Discontinued Operations Discontinued Operations (Cash Flow Information from Discontinued Operations) (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jul. 02, 2018 |
Jun. 28, 2019 |
Jun. 29, 2018 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Long Term Supply Agreement, Term | 3 years | ||
Proceeds from Divestiture of Businesses | $ 581,000 | $ 4,734 | $ 0 |
AS&O Business [Member] | Discontinued Operations, Held-for-sale [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Cash used in operating activities | (58) | (5,465) | |
Cash provided by (used in) investing activities | 4,734 | (3,596) | |
Depreciation and amortization | 0 | 7,450 | |
Capital expenditures | $ 0 | $ 3,610 |
Inventories (Details) - USD ($) $ in Thousands |
Jun. 28, 2019 |
Dec. 28, 2018 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 81,155 | $ 80,213 |
Work-in-process | 73,999 | 75,711 |
Finished goods | 32,000 | 34,152 |
Total | $ 187,154 | $ 190,076 |
Goodwill and Other Intangible Assets, Net (Schedule of Indefinite-Lived Intangible Assets and Goodwill) (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 28, 2019
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill | $ 832,338 |
Foreign currency translation | (970) |
Goodwill | 831,368 |
Medical Segment [Member] | |
Goodwill [Roll Forward] | |
Goodwill | 815,338 |
Foreign currency translation | (970) |
Goodwill | 814,368 |
Non-Medical Segment [Member] | |
Goodwill [Roll Forward] | |
Goodwill | 17,000 |
Foreign currency translation | 0 |
Goodwill | $ 17,000 |
Goodwill and Other Intangible Assets, Net (Schedule of Finite-Lived Intangible Assets, Amortization Expense) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 28, 2019 |
Jun. 29, 2018 |
Jun. 28, 2019 |
Jun. 29, 2018 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible asset amortization expense | $ 9,831 | $ 10,869 | $ 19,685 | $ 22,582 |
Cost of sales | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible asset amortization expense | 3,195 | 3,673 | 6,457 | 7,389 |
Selling General And Administrative Expense [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible asset amortization expense | 6,636 | 6,808 | 13,228 | 13,706 |
Research, development and engineering costs | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible asset amortization expense | 0 | 38 | 0 | 77 |
Discontinued Operations [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total intangible asset amortization expense | $ 0 | $ 350 | $ 0 | $ 1,410 |
Goodwill and Other Intangible Assets, Net (Schedule of Finite-Lived Intangible Assets, Future Amortization Expense) (Details) $ in Thousands |
Jun. 28, 2019
USD ($)
|
---|---|
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
2019 | $ 20,427 |
2020 | 40,449 |
2021 | 39,597 |
2022 | 38,564 |
2023 | 36,721 |
After 2023 | $ 525,426 |
Debt (Long-term Debt Maturity Schedule) (Details) $ in Thousands |
Jun. 28, 2019
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2019 | $ 18,750 |
2020 | 47,500 |
2021 | 229,687 |
2022 | $ 580,286 |
Debt (Schedule of Deferred Financing Fees) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 28, 2019 |
Jun. 29, 2018 |
Jun. 28, 2019 |
Jun. 29, 2018 |
|
Deferred Finance Costs [Roll Forward] | ||||
Total, Beginning Balance | $ 16,466 | |||
Amortization during the period | (3,676) | $ (5,083) | ||
Total, Ending Balance | $ 13,285 | 13,285 | ||
Loss on extinguishment of debt | $ 600 | $ 400 | $ 1,000 | $ 1,500 |
Debt (Schedule of Interest Rate Swaps and Details) (Details) |
6 Months Ended |
---|---|
Jun. 28, 2019
USD ($)
| |
Interest Rate Swap [Member] | |
Derivative [Line Items] | |
Gain (Loss) Recognized In Income Ineffective Portion | $ 0 |
Stock-Based Compensation (Valuation Assumptions) (Details) - $ / shares |
6 Months Ended | |
---|---|---|
Jun. 28, 2019 |
Jun. 29, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average fair value | $ 14.89 | |
Risk-free interest rate | 2.21% | |
Expected volatility | 39.00% | |
Expected life (in years) | 4 years | |
Expected dividend yield | 0.00% | |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average fair value | $ 117.03 | $ 37.46 |
Risk-free interest rate | 2.46% | 2.28% |
Expected volatility | 40.00% | 40.00% |
Expected life (in years) | 2 years 9 months 18 days | 2 years 10 months 24 days |
Expected dividend yield | 0.00% | 0.00% |
Stock-Based Compensation (Stock Options Activity) (Details) $ / shares in Units, $ in Millions |
6 Months Ended |
---|---|
Jun. 28, 2019
USD ($)
$ / shares
shares
| |
Stock Option Activity (in shares) | |
Options Outstanding, Beginning | shares | 522,783 |
Exercised | shares | (93,472) |
Options Outstanding, Ending | shares | 429,311 |
Options Exercisable | shares | 394,996 |
Weighted Average Exercise Price (in dollars per share) | |
Options Outstanding, Beginning | $ / shares | $ 31.88 |
Exercised | $ / shares | 17.12 |
Options Outstanding, Ending | $ / shares | 35.09 |
Options Exercisable | $ / shares | $ 34.74 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Options Outstanding, Weighted Average Remaining Contractual Term | 5 years 6 months |
Options Exercisable, Weighted Average Remaining Contractual Term | 5 years 3 months 18 days |
Options Outstanding, Intrinsic Value | $ | $ 21.0 |
Options Exercisable, Intrinsic Value | $ | $ 19.4 |
Stock-Based Compensation (Additional Information) (Details) |
6 Months Ended |
---|---|
Jun. 29, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected life (in years) | 4 years |
Risk-free interest rate | 2.21% |
Expected dividend yield | 0.00% |
Expected volatility | 39.00% |
Other Operating Expenses, Net (Schedule of Restructuring Reserve By Type of Cost) (Details) - Consolidation And Optimization Initiatives [Member] $ in Thousands |
6 Months Ended |
---|---|
Jun. 28, 2019
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Restructuring Reserve, Beginning Balance | $ 1,870 |
Restructuring charges | 4,536 |
Cash payments | (4,356) |
Restructuring Reserve, Ending Balance | 2,050 |
Severance And Retention [Member] | |
Restructuring Reserve [Roll Forward] | |
Restructuring Reserve, Beginning Balance | 1,668 |
Restructuring charges | 1,263 |
Cash payments | (887) |
Restructuring Reserve, Ending Balance | 2,044 |
Other Restructuring [Member] | |
Restructuring Reserve [Roll Forward] | |
Restructuring Reserve, Beginning Balance | 202 |
Restructuring charges | 3,273 |
Cash payments | (3,469) |
Restructuring Reserve, Ending Balance | $ 6 |
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 28, 2019 |
Jun. 29, 2018 |
Jun. 28, 2019 |
Jun. 29, 2018 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 19.00% | 27.50% | 17.30% | 28.10% |
Income tax provision | $ 6,610 | $ 8,739 | $ 10,376 | $ 14,113 |
Income (loss) before provision for income taxes | (34,832) | $ (31,795) | (59,964) | $ (50,253) |
Discrete Tax Benefits | 400 | 2,100 | ||
Unrecognized Tax Benefits | 5,400 | 5,400 | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | 900 | 900 | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 5,300 | $ 5,300 |
Commitments and Contingencies (Narrative) (Details) |
6 Months Ended | ||
---|---|---|---|
Jan. 14, 2019
USD ($)
|
Jan. 26, 2016
USD ($)
patent
|
Jun. 28, 2019 |
|
Gain Contingencies [Line Items] | |||
Gain (Loss) Related to Litigation Settlement | $ 0 | ||
Product Warranty Description | The Company generally warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. | ||
Positive Outcome of Litigation [Member] | |||
Gain Contingencies [Line Items] | |||
Gain Contingency, Patents Found Infringed upon, Number | patent | 3 | ||
Amount awarded from other party | $ 22,200,000 | $ 37,500,000 |
Commitments and Contingencies (Schedule of Product Warranty Liability) (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 28, 2019
USD ($)
| |
Movement in Standard Product Warranty Accrual [Roll Forward] | |
December 29, 2017 | $ 2,600 |
Additions to warranty reserve | 195 |
Standard Product Warranty Accrual, Increase (Decrease) for Preexisting Warranties | (635) |
Warranty claims settled | (465) |
September 28, 2018 | $ 1,695 |
Leases - Narrative (Details) $ in Thousands |
Jun. 28, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year | $ 8,562 |
Operating Lease, Liability, Current | 7,300 |
Lessee, Operating Lease, Liability, Payments, Due Year Two | 7,290 |
Lessee, Operating Lease, Liability, Payments, Due Year Three | 7,348 |
Lessee, Operating Lease, Liability, Payments, Due Year Four | 5,269 |
Lessee, Operating Lease, Liability, Payments, Due Year Five | 5,112 |
Lessee, Operating Lease, Liability, Payments, Due after Year Five | $ 14,589 |
Leases - Operating Lease Weighted Average Lease Term and Discount Rate (Details) |
Jun. 28, 2019 |
---|---|
Leases [Abstract] | |
Weighted-average remaining lease term of operating leases (in years) | 7 years 8 months 12 days |
Weighted-average discount rate of operating leases | 5.50% |
Leases - Lease Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 28, 2019 |
Jun. 28, 2019 |
|
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | $ 2,442 | $ 4,891 |
Short-term lease cost | 17 | 34 |
Variable lease cost | 652 | 1,207 |
Sublease income | (478) | (945) |
Total least cost | 2,633 | 5,187 |
Cost of sales | ||
Lessee, Lease, Description [Line Items] | ||
Total least cost | 2,190 | 4,342 |
Selling, general and administrative expenses | ||
Lessee, Lease, Description [Line Items] | ||
Total least cost | 297 | 552 |
Research, development and engineering costs | ||
Lessee, Lease, Description [Line Items] | ||
Total least cost | 139 | 278 |
Other operating expenses | ||
Lessee, Lease, Description [Line Items] | ||
Total least cost | $ 7 | $ 15 |
Leases - Operating Lease Liability Maturity Schedule (Topic 842) (Details) $ in Thousands |
Jun. 28, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
2019 (excluding the first three months of 2019) | $ 5,178 |
2020 | 9,268 |
2021 | 8,964 |
2022 | 6,865 |
2023 | 6,119 |
2024 | 5,600 |
Thereafter | 16,399 |
Total lease payments | 58,393 |
Less imputed interest | (11,273) |
Total | $ 47,120 |
Leases - Supplemental Cash Flow Information (Details) $ in Thousands |
3 Months Ended |
---|---|
Jun. 28, 2019
USD ($)
| |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 5,107 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 7,249 |
Financial Instruments and Fair Value Measurements (Schedule of Interest Rate Swaps) (Details) - Designated as Hedging Instrument [Member] $ in Thousands |
Jun. 28, 2019
USD ($)
|
---|---|
Interest Rate Swap Maturing June 2020 [Member] | Accrued expenses and other current liabilities | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 200,000 |
Pay Fixed Rate | 1.1325% |
Receive Current Floating Rate | 2.4041% |
Fair Value | $ 1,448 |
Interest Rate Swap Maturing June 2023 [Member] | Other long-term liabilities | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 200,000 |
Pay Fixed Rate | 2.1785% |
Fair Value | $ (2,794) |
Interest Rate Swap Maturing April 2020 [Member] | Accrued expenses and other current liabilities | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 400,000 |
Pay Fixed Rate | 2.415% |
Receive Current Floating Rate | 2.4185% |
Fair Value | $ (1,485) |
Financial Instruments and Fair Value Measurements (Schedule of Foreign Currency Contracts) (Details) - Prepaid Expenses and Other Current Assets [Member] - Designated as Hedging Instrument [Member] $ in Thousands |
Jun. 28, 2019
USD ($)
$ / $
$ / €
|
---|---|
Foreign Exchange Contract Maturing September 2019 [Member] | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 11,337 |
$/Foreign Currency | $ / € | 1.1628 |
Fair Value | $ (195) |
Foreign Exchange Contract Maturing December 2019, Contract One [Member] | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 10,499 |
$/Foreign Currency | $ / $ | 0.0500 |
Fair Value | $ 254 |
Foreign Exchange Contract Maturing December 2019, Contract Two [Member] | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 12,085 |
$/Foreign Currency | $ / $ | 0.0504 |
Fair Value | $ 205 |
Financial Instruments and Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 28, 2019 |
Jun. 29, 2018 |
Jun. 28, 2019 |
Jun. 29, 2018 |
Dec. 28, 2018 |
|
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Equity Method Investment, Other than Temporary Impairment | $ 1,575 | $ 0 | $ 1,575 | $ 0 | |
Equity method investment | 14,910 | 14,910 | $ 15,148 | ||
Gain (loss) on equity method investments | 36 | (284) | 77 | (5,254) | |
Cost method investment | $ 0 | $ 0 | 0 | 0 | $ 7,000 |
Impairment on cost method investments | $ 0 | $ 0 | |||
Chinese Venture Capital Fund [Member] | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Equity method investment ownership (percent) | 6.70% | 6.70% |
Segment Information (Narrative) (Details) |
6 Months Ended |
---|---|
Jun. 28, 2019
Segment
| |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 2 |
Revenue From Contracts With Customers Revenue From Contracts With Customers (Narrative) (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 28, 2019 |
Jun. 29, 2018 |
Jun. 28, 2019 |
Jun. 29, 2018 |
Dec. 28, 2018 |
|
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Percent of revenue from contract with customer compared to total revenue | 10.00% | 12.00% | |||
Revenue recognized that was included in contract liability balance at beginning of period | $ 100,000 | $ 900,000 | $ 400,000 | $ 1,300,000 | |
Contract assets | $ 0 |
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