Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 01, 2022 | Oct. 28, 2022 | |
Cover [Abstract] | ||
Entity Registrant Name | HELIOS TECHNOLOGIES, INC. | |
Entity Central Index Key | 0001024795 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Type | 10-Q | |
Document Period End Date | Oct. 01, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | HLIO | |
Amendment Flag | false | |
Title of 12(b) Security | Common Stock $.001 Par Value | |
Security Exchange Name | NYSE | |
Entity File Number | 0-21835 | |
Entity Incorporation, State or Country Code | FL | |
Entity Tax Identification Number | 59-2754337 | |
Entity Address, Address Line One | 7456 16th St E | |
Entity Address, City or Town | SARASOTA | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 34243 | |
City Area Code | 941 | |
Local Phone Number | 362-1200 | |
Entity Common Stock, Shares Outstanding | 32,556,476 | |
Document Quarterly Report | true | |
Document Transition Report | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 01, 2022 | Jan. 01, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 36,813 | $ 28,540 |
Restricted cash | 33 | 41 |
Accounts receivable, net of allowance for credit losses of $1,122 and $1,212 | 131,649 | 134,561 |
Inventories, net | 179,718 | 165,629 |
Income taxes receivable | 6,517 | 2,762 |
Other current assets | 19,543 | 20,101 |
Total current assets | 374,273 | 351,634 |
Property, plant and equipment, net | 171,323 | 174,210 |
Deferred income taxes | 6,008 | 2,934 |
Goodwill | 447,140 | 459,936 |
Other intangible assets, net | 396,528 | 412,759 |
Other assets | 24,295 | 13,873 |
Total assets | 1,419,567 | 1,415,346 |
Current liabilities: | ||
Accounts payable | 64,921 | 85,301 |
Accrued compensation and benefits | 19,004 | 28,595 |
Other accrued expenses and current liabilities | 30,890 | 28,254 |
Current portion of long-term non-revolving debt, net | 18,897 | 18,125 |
Dividends payable | 2,930 | 2,917 |
Income taxes payable | 7,489 | 6,328 |
Total current liabilities | 144,131 | 169,520 |
Revolving line of credit | 267,693 | 242,312 |
Long-term non-revolving debt, net | 169,332 | 183,897 |
Deferred income taxes | 57,042 | 71,836 |
Other noncurrent liabilities | 29,932 | 38,818 |
Total liabilities | 668,130 | 706,383 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Preferred stock, par value $0.001, 2,000 shares authorized, no shares issued or outstanding | 0 | 0 |
Common stock, par value $0.001, 100,000 shares authorized, 32,544 and 32,407 shares issued and outstanding | 33 | 32 |
Capital in excess of par value | 401,549 | 394,641 |
Retained earnings | 435,392 | 363,279 |
Accumulated other comprehensive loss | (85,537) | (48,989) |
Total shareholders' equity | 751,437 | 708,963 |
Total liabilities and shareholders' equity | $ 1,419,567 | $ 1,415,346 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Oct. 01, 2022 | Jan. 01, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for credit losses, accounts receivable | $ 1,122 | $ 1,212 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 32,544,000 | 32,407,000 |
Common stock, shares outstanding | 32,544,000 | 32,407,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2022 | Oct. 02, 2021 | Oct. 01, 2022 | Oct. 02, 2021 | |
Income Statement [Abstract] | ||||
Net Sales | $ 207,205 | $ 223,241 | $ 689,420 | $ 651,499 |
Cost of sales | 137,939 | 142,299 | 454,202 | 413,036 |
Gross profit | 69,266 | 80,942 | 235,218 | 238,463 |
Selling, engineering and administrative expenses | 31,749 | 32,786 | 98,059 | 95,757 |
Amortization of intangible assets | 6,774 | 7,407 | 20,554 | 25,285 |
Operating income | 30,743 | 40,749 | 116,605 | 117,421 |
Interest expense, net | 4,098 | 3,813 | 11,719 | 12,965 |
Foreign currency transaction (gain) loss, net | (199) | 304 | (1,296) | 1,271 |
Other non-operating expense (income), net | 177 | (616) | 1,508 | (727) |
Income before income taxes | 26,667 | 37,248 | 104,674 | 103,912 |
Income tax provision | 6,289 | 9,488 | 23,782 | 22,870 |
Net income | $ 20,378 | $ 27,760 | $ 80,892 | $ 81,042 |
Net income per share: | ||||
Basic | $ 0.63 | $ 0.86 | $ 2.49 | $ 2.51 |
Diluted | $ 0.63 | $ 0.85 | $ 2.48 | $ 2.50 |
Weighted average shares outstanding: | ||||
Basic | 32,541 | 32,385 | 32,493 | 32,272 |
Diluted | 32,585 | 32,539 | 32,597 | 32,437 |
Dividends declared per share | $ 0.09 | $ 0.09 | $ 0.27 | $ 0.27 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2022 | Oct. 02, 2021 | Oct. 01, 2022 | Oct. 02, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 20,378 | $ 27,760 | $ 80,892 | $ 81,042 |
Other comprehensive loss | ||||
Foreign currency translation adjustments, net of tax | (20,181) | (7,528) | (47,053) | (14,215) |
Unrealized gain on interest rate swap, net of tax | 3,240 | 623 | 10,505 | 2,865 |
Total other comprehensive loss | (16,941) | (6,905) | (36,548) | (11,350) |
Comprehensive income | $ 3,437 | $ 20,855 | $ 44,344 | $ 69,692 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Preferred stock [Member] | Common stock [Member] | Capital in excess of par value [Member] | Retained earnings [Member] | Accumulated other comprehensive loss [Member] |
Beginning Balance at Jan. 02, 2021 | $ 607,790 | $ 0 | $ 32 | $ 371,778 | $ 270,320 | $ (34,340) |
Beginning Balance, Shares at Jan. 02, 2021 | 0 | 32,120 | ||||
Shares issued, restricted stock | 36 | 36 | ||||
Shares issued, restricted stock, Shares | 43 | |||||
Shares issued, other compensation, Shares | 19 | |||||
Shares issued, ESPP | 1,318 | 1,318 | ||||
Shares issued, ESPP, Shares | 32 | |||||
Shares issued, acquisition | 14,014 | 14,014 | ||||
Shares issued, acquisition, Shares | 197 | |||||
Stock-based compensation | 6,233 | 6,233 | ||||
Cancellation of shares for payment of employee tax withholding | (1,335) | (1,335) | ||||
Cancellation of shares for payment of employee tax withholding, Shares | (4) | |||||
Shares repurchased, shares | (7) | |||||
Shares repurchased | (583) | (583) | ||||
Dividends declared | (8,719) | (8,719) | ||||
Net income | 81,042 | 81,042 | ||||
Other comprehensive loss | (11,350) | (11,350) | ||||
Ending Balance at Oct. 02, 2021 | 688,446 | $ 0 | $ 32 | 391,461 | 342,643 | (45,690) |
Ending Balance, Shares at Oct. 02, 2021 | 0 | 32,400 | ||||
Beginning Balance at Jul. 03, 2021 | 658,345 | $ 0 | $ 32 | 379,299 | 317,799 | (38,785) |
Beginning Balance, Shares at Jul. 03, 2021 | 0 | 32,249 | ||||
Shares issued, restricted stock | 18 | 18 | ||||
Shares issued, restricted stock, Shares | 12 | |||||
Shares issued, other compensation, Shares | 5 | |||||
Shares issued, other compensation | 0 | |||||
Shares issued, ESPP | 522 | 522 | ||||
Shares issued, ESPP, Shares | 7 | |||||
Shares issued, acquisition | 10,390 | 10,390 | ||||
Shares issued, acquisition, Shares | 134 | |||||
Stock-based compensation | 2,050 | 2,050 | ||||
Cancellation of shares for payment of employee tax withholding | (235) | (235) | ||||
Shares repurchased, shares | (7) | |||||
Shares repurchased | (583) | (583) | ||||
Dividends declared | (2,916) | (2,916) | ||||
Net income | 27,760 | 27,760 | ||||
Other comprehensive loss | (6,905) | (6,905) | ||||
Ending Balance at Oct. 02, 2021 | 688,446 | $ 0 | $ 32 | 391,461 | 342,643 | (45,690) |
Ending Balance, Shares at Oct. 02, 2021 | 0 | 32,400 | ||||
Beginning Balance at Jan. 01, 2022 | 708,963 | $ 0 | $ 32 | 394,641 | 363,279 | (48,989) |
Beginning Balance, Shares at Jan. 01, 2022 | 0 | 32,407 | ||||
Shares issued, restricted stock | 112 | $ 1 | 111 | |||
Shares issued, restricted stock, Shares | 88 | |||||
Shares issued, ESPP | 1,571 | 1,571 | ||||
Shares issued, ESPP, Shares | 24 | |||||
Shares issued, acquisition | 1,573 | 1,573 | ||||
Shares issued, acquisition, Shares | 25 | |||||
Stock-based compensation | 6,212 | 6,212 | ||||
Cancellation of shares for payment of employee tax withholding | (2,559) | (2,559) | ||||
Dividends declared | (8,779) | (8,779) | ||||
Net income | 80,892 | 80,892 | ||||
Other comprehensive loss | (36,548) | (36,548) | ||||
Ending Balance at Oct. 01, 2022 | 751,437 | $ 0 | $ 33 | 401,549 | 435,392 | (85,537) |
Ending Balance, Shares at Oct. 01, 2022 | 0 | 32,544 | ||||
Beginning Balance at Jul. 02, 2022 | 747,024 | $ 0 | $ 33 | 397,643 | 417,944 | (68,596) |
Beginning Balance, Shares at Jul. 02, 2022 | 0 | 32,504 | ||||
Shares issued, restricted stock | 0 | |||||
Shares issued, restricted stock, Shares | 5 | |||||
Shares issued, ESPP | 511 | 511 | ||||
Shares issued, ESPP, Shares | 10 | |||||
Shares issued, acquisition | 1,573 | 1,573 | ||||
Shares issued, acquisition, Shares | 25 | |||||
Stock-based compensation | 1,840 | 1,840 | ||||
Cancellation of shares for payment of employee tax withholding | (18) | (18) | ||||
Dividends declared | (2,930) | (2,930) | ||||
Net income | 20,378 | 20,378 | ||||
Other comprehensive loss | (16,941) | (16,941) | ||||
Ending Balance at Oct. 01, 2022 | $ 751,437 | $ 0 | $ 33 | $ 401,549 | $ 435,392 | $ (85,537) |
Ending Balance, Shares at Oct. 01, 2022 | 0 | 32,544 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 01, 2022 | Oct. 02, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 80,892 | $ 81,042 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 37,360 | 41,131 |
Stock-based compensation expense | 6,212 | 6,233 |
Amortization of debt issuance costs | 374 | 374 |
(Benefit) provision for deferred income taxes | (2,055) | 2,230 |
Forward contract gains, net | (6,433) | (3,401) |
Other, net | 1,039 | (135) |
(Increase) decrease in: | ||
Accounts receivable | (2,861) | (36,634) |
Inventories | (19,666) | (35,759) |
Income taxes receivable | (1,775) | (1,893) |
Other current assets | 633 | (288) |
Other assets | 6,240 | 3,989 |
Increase (decrease) in: | ||
Accounts payable | (17,230) | 11,945 |
Accrued expenses and other liabilities | (5,658) | 8,079 |
Income taxes payable | 2,485 | 9,599 |
Other noncurrent liabilities | (5,364) | (4,527) |
Net cash provided by operating activities | 74,193 | 81,985 |
Cash flows from investing activities: | ||
Business acquisitions, net of cash acquired | (67,252) | (48,481) |
Amounts paid for net assets acquired | 0 | (2,400) |
Capital expenditures | (21,916) | (17,054) |
Proceeds from dispositions of property, plant and equipment | 1,903 | 82 |
Cash settlement of forward contracts | 4,448 | 1,433 |
Software development costs | (2,345) | (1,785) |
Net cash used in investing activities | (85,162) | (68,205) |
Cash flows from financing activities: | ||
Borrowings on revolving credit facilities | 112,720 | 71,198 |
Repayment of borrowings on revolving credit facilities | (72,167) | (44,500) |
Repayment of borrowings on long-term non-revolving debt | (12,616) | (12,178) |
Proceeds from stock issued | 1,682 | 1,353 |
Dividends to shareholders | (8,766) | (8,694) |
Other financing activities | (5,306) | (2,851) |
Net cash provided by financing activities | 15,547 | 4,328 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 3,687 | 4,363 |
Net increase in cash, cash equivalents and restricted cash | 8,265 | 22,471 |
Cash, cash equivalents and restricted cash, beginning of period | 28,581 | 25,257 |
Cash, cash equivalents and restricted cash, end of period | $ 36,846 | $ 47,728 |
Company Background
Company Background | 9 Months Ended |
Oct. 01, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
COMPANY BACKGROUND | 1. COMPANY BACKGROUND Helios Technologies, Inc. (“Helios,” or the “Company”) together with its wholly owned subsidiaries, is a global leader in highly engineered motion control and electronic controls technology for diverse end markets, including construction, material handling, agriculture, energy, recreational vehicles, marine and health and wellness. Helios sells its products to customers in over 90 countries around the world. The Company’s strategy for growth is to be the leading provider in niche markets, with premier products and solutions through innovative product development and acquisitions. The Company operates in two business segments: Hydraulics and Electronics. There are three key technologies within the Hydraulics segment: cartridge valve technology (“CVT”), quick-release hydraulic coupling solutions (“QRC”) and hydraulic system design (“Systems”). CVT products provide functions important to a hydraulic system: to control rates and direction of fluid flow and to regulate and control pressures. QRC products allow users to connect and disconnect quickly from any hydraulic circuit without leakage and ensure high-performance under high temperature and pressure using one or multiple couplers. Systems provide engineered solutions for machine users, manufacturers or designers to fulfill complete system design requirements including electro-hydraulic, remote control, electronic control and programmable logic controller systems, as well as automation of existing equipment. The Electronics segment provides complete, fully-tailored display and control solutions for engines, engine-driven equipment, specialty vehicles, therapy baths and traditional and swim spas. This broad range of products is complemented by extensive application expertise and unparalleled depth of software, embedded programming, hardware and sustaining engineering teams. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Oct. 01, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for reporting on Form 10-Q. Accordingly, certain information and footnotes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements are not included herein. The financial statements are prepared on a consistent basis (including normal recurring adjustments) and should be read in conjunction with the consolidated financial statements and related notes contained in the Annual Report on Form 10-K for the fiscal year ended January 1, 2022 (“Form 10-K”), filed by Helios with the Securities and Exchange Commission on March 1, 2022. In management’s opinion, all adjustments necessary for a fair presentation of the Company’s financial statements are reflected in the interim periods presented. Operating results for the nine months ended October 1, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ended December 31, 2022 . Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Earnings Per Share The following table presents the computation of basic and diluted earnings per common share (in thousands, except per share data): Three Months Ended Nine Months Ended October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021 Net income $ 20,378 $ 27,760 $ 80,892 $ 81,042 Weighted average shares outstanding - Basic 32,541 32,385 32,493 32,272 Net effect of dilutive securities - Stock based compensation 44 154 104 165 Weighted average shares outstanding - Diluted 32,585 32,539 32,597 32,437 Net income per share: Basic $ 0.63 $ 0.86 $ 2.49 $ 2.51 Diluted $ 0.63 $ 0.85 $ 2.48 $ 2.50 |
Business Acquisition
Business Acquisition | 9 Months Ended |
Oct. 01, 2022 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITION | 3. BUSINESS ACQUISITION Acquisition of Daman On September 16, 2022 , the Company completed the acquisition of Daman Products Company, Inc. ("Daman"), an Indiana corporation. The acquisition was completed pursuant to a Membership Interest Purchase Agreement ("Agreement") among the Company and the owners of Daman. Daman is a leading designer and manufacturer of standard and custom precision hydraulic manifolds and other fluid conveyance products for its customer base, predominantly in North America. The acquisition of Daman expands the Company's technologies and markets and provides an opportunity to produce integrated package offerings with multiple Helios brands. The results of Daman’s operations are reported in the Company’s Hydraulics segment and have been included in the Consolidated, Unaudited Financial Statements since the date of acquisition. Initial cash consideration paid at closing, net of cash acquired, totaled $ 64,331 . Total consideration for the acquisition is subject to a post-closing adjustment in accordance with the terms of the Agreement. The consideration was funded with borrowings on the Company’s credit facility. The Company recorded $ 24,891 of goodwill and $ 29,720 of other identifiable intangible assets in connection with the acquisition. The purchase price was allocated to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The fair value of identified intangibles assets acquired was based on estimates and assumptions made by management at the time of acquisition. As additional information becomes available, as of the acquisition date, management will finalize its analysis of the estimated fair value. T he purchase price allocation is preliminary, pending post-closing adjustments, final intangibles valuation and tax related adjustments, and may be revised during the remainder of the measurement period (which will not exceed 12 months from the acquisition date). Any such revisions or changes to the fair values of the tangible and intangible assets acquired and liabilities assumed could be material. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Oct. 01, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 4. FAIR VALUE OF FINANCIAL INSTRUMENTS The following tables provide information regarding the Company’s assets and liabilities measured at f air value on a recurring basis at October 1, 2022 and January 1, 2022. October 1, 2022 Quoted Market Significant Other Observable Significant Unobservable Total Prices (Level 1) Inputs (Level 2) Inputs (Level 3) Assets Interest rate swap contracts $ 11,997 $ — $ 11,997 $ — Forward foreign exchange contracts 3,048 — 3,048 — Total $ 15,045 $ — $ 15,045 $ — Liabilities Forward foreign exchange contracts $ 73 $ — $ 73 $ — Contingent consideration 6,305 — — 6,305 Total $ 6,378 $ — $ 73 $ 6,305 January 1, 2022 Quoted Market Significant Other Observable Significant Unobservable Total Prices (Level 1) Inputs (Level 2) Inputs (Level 3) Assets Interest rate swap contract $ 1,521 $ — $ 1,521 $ — Forward foreign exchange contracts 1,040 — 1,040 — Total $ 2,561 $ — $ 2,561 $ — Liabilities Interest rate swap contract $ 3,248 $ — $ 3,248 $ — Forward foreign exchange contracts 51 — 51 — Contingent consideration 6,400 — — 6,400 Total $ 9,699 $ — $ 3,299 $ 6,400 A summary of the changes in the estimated fair value of contingent consideration at October 1, 2022 is as follows: Balance at January 1, 2022 $ 6,400 Change in estimated fair value 1,244 Payment on liability ( 1,082 ) Accretion in value 249 Currency remeasurement ( 506 ) Balance at October 1, 2022 $ 6,305 |
Inventories, Net
Inventories, Net | 9 Months Ended |
Oct. 01, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | 5. INVENTORIES, NET At October 1, 2022 and January 1, 2022, inventory consisted of the following: October 1, 2022 January 1, 2022 Raw materials $ 105,018 $ 90,487 Work in process 46,275 34,713 Finished goods 38,038 50,638 Provision for obsolete and slow-moving inventory ( 9,613 ) ( 10,209 ) Total $ 179,718 $ 165,629 |
Operating Leases
Operating Leases | 9 Months Ended |
Oct. 01, 2022 | |
Leases [Abstract] | |
OPERATING LEASES | 6. OPERATING LEASES The Company leases machinery, equipment, vehicles, buildings and office space, throughout its locations, which are classified as operating leases. Remaining terms on these leases range from less than one year to nine year s . For the nine months ended October 1, 2022 and October 2, 2021, operating lease costs tot aled $ 5,105 and $ 4,316 , respectively. Supplemental balance sheet information related to operating leases is as follows: October 1, 2022 January 1, 2022 Right-of-use assets $ 18,426 $ 22,776 Lease liabilities: Current lease liabilities $ 4,599 $ 5,823 Non-current lease liabilities 14,883 17,940 Total lease liabilities $ 19,482 $ 23,763 Weighted average remaining lease term (in years): 5.0 Weighted average discount rate: 4.5 % Supplemental cash flow information related to leases is as follows: Nine Months Ended October 1, 2022 October 2, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,205 $ 4,357 Non-cash impact of new leases and lease modifications $ 977 $ 5,209 Maturities of lease liabilities are as follows: 2022 Remaining $ 1,658 2023 4,897 2024 4,247 2025 3,933 2026 3,271 2027 1,341 Thereafter 2,753 Total lease payments 22,100 Less: Imputed interest 2,618 Total lease obligations 19,482 Less: Current lease liabilities 4,599 Non-current lease liabilities $ 14,883 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Oct. 01, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 7. GOODWILL AND INTANGIBLE ASSETS Goodwill A summary of changes in goodwill by segment for the nine months ended October 1, 2022, is as follows: Hydraulics Electronics Total Balance at January 1, 2022 $ 273,665 $ 186,271 $ 459,936 Measurement period adjustment, Joyonway acquisition — 66 66 Measurement period adjustment, NEM acquisition ( 37 ) — ( 37 ) Acquisition of Taimi 260 — 260 Acquisition of Daman 24,891 — 24,891 Currency translation ( 37,611 ) ( 365 ) ( 37,976 ) Balance at October 1, 2022 $ 261,168 $ 185,972 $ 447,140 Acquired Intangible Assets At October 1, 2022 and January 1, 2022, intangible assets consisted of the following: October 1, 2022 January 1, 2022 Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Definite-lived intangibles: Trade names and brands $ 85,184 $ ( 16,859 ) $ 68,325 $ 83,443 $ ( 15,216 ) $ 68,227 Non-compete agreements 2,025 ( 506 ) 1,519 3,218 ( 1,092 ) 2,126 Technology 49,292 ( 19,563 ) 29,729 50,425 ( 16,729 ) 33,696 Supply agreement 21,000 ( 12,250 ) 8,750 21,000 ( 10,675 ) 10,325 Customer relationships 332,808 ( 49,476 ) 283,332 336,809 ( 43,488 ) 293,321 Sales order backlog 720 — 720 1,023 ( 1,023 ) — Workforce 6,077 ( 1,924 ) 4,153 6,077 ( 1,013 ) 5,064 $ 497,106 $ ( 100,578 ) $ 396,528 $ 501,995 $ ( 89,236 ) $ 412,759 Amortization expense on acquired intangible assets for the nine months ended October 1, 2022 and October 2, 2021, w as $ 20,554 and $ 25,285 , respectively. Future estimated amortization expense is presente d below. Year: 2022 Remaining $ 7,443 2023 28,655 2024 27,640 2025 27,456 2026 25,704 2027 22,431 Thereafter 257,199 Total $ 396,528 |
Derivative Instruments & Hedgin
Derivative Instruments & Hedging Activities | 9 Months Ended |
Oct. 01, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS & HEDGING ACTIVITIES | 8. DERIVATIVE INSTRUMENTS & HEDGING ACTIVITIES The Company addresses certain financial exposures through a controlled program of risk management that includes the use of derivative financial instruments and hedging activities. The fair value of the Company’s derivative financial instruments included in the Consolidated Balance Sheets is presented as follows: Asset Derivatives Liability Derivatives Balance Sheet Fair Value (1) Fair Value (1) Balance Sheet Fair Value (1) Fair Value (1) Location October 1, 2022 January 1, 2022 Location October 1, 2022 January 1, 2022 Derivatives designated as hedging instruments: Interest rate swap contracts Other assets $ 11,997 $ 1,521 Other non-current liabilities $ — $ 3,248 Derivatives not designated as hedging instruments: Forward foreign exchange contracts Other current assets 2,625 866 Other current liabilities 73 51 Forward foreign exchange contracts Other assets 423 174 Other non-current liabilities — — Total derivatives $ 15,045 $ 2,561 $ 73 $ 3,299 (1) See Note 4 for information regarding the inputs used in determining the fair value of derivative assets and liabilities. The amount of gains and losses related to the Company’s derivative financial instruments for the nine months ended October 1, 2022 and October 2, 2021, are presented as follows: Amount of Gain or (Loss) Recognized in Location of Gain or (Loss) Reclassified Amount of Gain or (Loss) Reclassified from Accumulated October 1, 2022 October 2, 2021 into Earnings (Effective Portion) October 1, 2022 October 2, 2021 Derivatives in cash flow hedging relationships: Interest rate swap contracts $ 13,726 $ 3,718 Interest expense, net $ ( 1,447 ) $ ( 3,137 ) Interest expense presented in the Consolidated Statements of Operations, in which the effects of cash flow hedges are recorded , totaled $ 11,719 an d $ 12,965 for the nine months ended October 1, 2022 and October 2, 2021, respectively. Amount of Gain or (Loss) Recognized Location of Gain or (Loss) Recognized October 1, 2022 October 2, 2021 in Earnings on Derivatives Derivatives not designated as hedging instruments: Forward foreign exchange contracts $ 6,433 $ 3,401 Foreign currency transaction gain / loss, net Interest Rate Swap Contracts The Company has entered into interest rate swap transactions to hedge the variable interest rate payments on its credit facilities. In connection with the transactions, the Company pays interest based upon a fixed rate as agreed upon with the respective counterparties and receives variable rate interest payments based on the one-month LIBOR. The interest rate swaps are designated as hedging instruments and are accounted for as cash flow h e dges. The aggregate notional amount of the swaps was $ 245,000 as of October 1, 2022 . The notional amount decreases periodically through the dates of expiration in April 2023 and October 2025 . The contracts are settled with the respective counterparties on a net basis at each settlement date. Forward Foreign Exchange Contracts The Company has entered into forward contracts to economically hedge translational and transactional exposure associated with various business units whose local currency differs from the Company’s reporting currency. The Company’s forward contracts are not designated as hedging instruments for accounting purposes. At October 1, 2022 , the Company had seven forward foreign exchange contracts with an aggregate notional value of € 27,500 , maturing at various dates through March 2024 . Net Investment Hedge The Company utilizes foreign currency denominated debt to hedge currency exposure in foreign operations. The Company has designated € 90,000 of borrowings on the revolving credit facility as a net investment hedge of a portion of the Company’s European operations. The carrying value of the euro denominated debt totaled $ 88,193 as of October 1, 2022 and is included in the Revolving line of credit line item in the Consolidated Balance Sheets. The gain on the net investment hedge recorded in accumulated other comprehensive income as part of the currency translation adjustment was $ 10,868 , net of tax, for th e nine months ended October 1, 2022 . |
Credit Facilities
Credit Facilities | 9 Months Ended |
Oct. 01, 2022 | |
Debt Disclosure [Abstract] | |
CREDIT FACILITIES | 9. CREDIT FACILITIES Total long-term non-revolving debt consists of the following: Maturity Date October 1, 2022 January 1, 2022 Long-term non-revolving debt: Term loan with PNC Bank Oct 2025 $ 178,750 $ 190,000 Term loans with Citibank Various 9,859 12,416 Other long-term debt Various 9 90 Total long-term non-revolving debt 188,618 202,506 Less: current portion of long-term non-revolving debt 18,897 18,125 Less: unamortized debt issuance costs 389 484 Total long-term non-revolving debt, net $ 169,332 $ 183,897 Information on the Company’s revolving credit facilities is as follows: Balance Available Credit Maturity Date October 1, 2022 January 1, 2022 October 1, 2022 January 1, 2022 Revolving line of credit with PNC Bank Oct 2025 $ 267,693 $ 242,312 $ 130,788 $ 157,487 Revolving line of credit with Citibank May 2023 1,593 711 658 548 Future maturities of total debt are as follows: Year: 2022 Remaining $ 5,395 2023 20,531 2024 24,285 2025 407,693 Total $ 457,904 Term Loan and Line of Credit with PNC Bank The Company has a credit agreement that includes a revolving line of credit and term loan credit facility with PNC Bank, National Association, as administrative agent, and the lenders party thereto. The revolving line of credit allows for borrowings up to an aggregate maximum principal amount of $ 400,000 . To hedge currency exposure in foreign operations, € 90,000 of the borrowings on the line of credit are denominated in euros. The borrowings have been designated as a net investment hedge, see additional information in Note 8. The effective interest rate on the credit agreement at October 1, 2022 was 4.6 %. Interest expense recognized on the credit agreement during the nine months ended October 1, 2022 and October 2, 2021 , totaled $ 9,818 and $ 9,631 , respectively. As of the date of this filing, the Company was in compliance with all debt covenants related to the credit agreem ent. Term Loans and Line of Credit with Citibank The Company has an uncommitted fixed asset facility agreement (the “Fixed Asset Facility”), short-term revolving facility agreement (the “Working Capital Facility”) and term loan facility agreement (the "Shanghai Branch Term Loan Facility") with Citibank (China) Co., Ltd. Shanghai Branch, as lender. Under the Fixed Asset Facility, the Company borrowed on a secured basis RMB 2,614 . The proceeds of the loan were used for purchases of certain equipment. Outstanding borrowings under the Fixed Asset Facility accrue interest at a rate equal to the National Interbank Funding Center 1-year loan prime rate plus 1.5% , to be repaid on a specified schedule. Currently drawn funds have a final payment due in May 2023 . Under the Working Capital Facility, the Company may, from time-to-time, borrow amounts on an unsecured revolving facility up to a total of RMB 16,000 . Proceeds may only be used for expenditures related to production at the Company’s facility located in Kunshan City, China. Outstanding borrowings under the Working Capital Facility accrue interest at a rate equal to the National Interbank Funding Center 1-year loan prime rate plus 0.5% . All outstanding balances will be due in May 2023 . Under the Shanghai Branch Term Loan Facility, the Company borrowed on a secured basis RMB 42,653 . Outstanding borrowings under the Shanghai Branch Term Loan Facility accrue interest at a rate equal to the National Interbank Funding Center 1-year loan prime rate plus 1.5 %, to be repaid on a specified schedule with the final payment due in October 2024 . The Company has a term loan facility agreement (the “Sydney Branch Term Loan Facility”) with Citibank, N.A., Sydney Branch, as lender. Under the Sydney Branch Term Loan Facility, the Company borrowed on a secured basis AUD 7,500 . Outstanding borrowings under the Sydney Branch Term Loan Facility accrue interest at a rate equal to the Australian Bank Bill Swap Reference Rate plus 2.0% , to be repaid throughout the term of the loan with a final payment due date of December 2024 . As of the date of this filing, the Company was in compliance with all debt covenants related to the Fixed Asset Facility, Working Capital Facility and Term Loan Facilities. |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 01, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 10. INCOME TAXES The provision for income taxes for the three months ended October 1, 2022 and October 2, 2021 was 23.6 % and 25.5 % of pretax income, respectively. The provision for income taxes for the nine months ended October 1, 2022 and October 2, 2021 was 22.7 % and 22.0 % of pretax income, respectively. These effective rates fluctuate relative to the levels of income and different tax rates in effect among the countries in which the Company sells products. At October 1, 2022, the Company had an unrecognized tax benefit of $ 8,352 including accrued interest. If recognized, $ 2,110 of unrecognized tax benefit would reduce the effective tax rate in future periods. The Company recognizes interest and penalties related to income tax matters in incom e tax expense. Interest accrued as of October 1, 2022 is not considered material to the Company’s Consolidated, Unaudited Financial Statements. The C ompany remains subject to income tax examinations in the U.S. and various state and foreign jurisdictions for tax years 2009-2021. Although the Company is not currently under examination in most jurisdictions, limited transfer pricing disputes exist for years dating back to 2008. The Company does not expect to recognize any benefit wit hin the next 12 months due to the expiration of statutes of limitation. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Oct. 01, 2022 | |
Share-Based Payment Arrangement, Noncash Expense [Abstract] | |
STOCK-BASED COMPENSATION | 11. STOCK-BASED COMPENSATION Equity Incentive Plan The Company’s 2019 Equity Incentive Plan ("2019 Plan") and its predecessor equity plan provide for the grant of shares of restricted stock, restricted stock units, stock options, stock appreciation rights, dividend or dividend equivalent rights, stock awards and other awards valued in whole or in part by reference to or otherwise based on the Company’s common stock, to officers, employees and directors of the Company. Restricted Stock Units The Company grants restricted stock units (“RSUs”) to employees in connection with a long-term incentive plan. Awards with time-based vesting requirements primarily vest ratably over a three-year period. Awards with performance-based vesting requirements cliff vest after a three-year performance cycle and only after the achievement of certain performance criteria over that cycle. The number of shares ultimately issued for the performance-based units may vary from 0 % to 200 % of their target amount based on the achievement of defined performance targets. Compensation expense recognized for RSUs granted to employees totaled $ 5,566 an d $ 4,168 , respectively, for the nine months ended October 1, 2022 and October 2, 2021. Effective January 1, 2022, the board terminated the 2012 Non-Employee Director Fees Plan (the “2012 Directors Plan”) and approved a new Helios Technologies, Inc. Non-Employee Director Compensation Policy (the “Director Compensation Policy”), which revised the compensation for Non-Employee Directors. The Director Compensation Policy compensates Non-Employee Directors for their board service with cash awards and equity-based compensation through grants of RSUs, issued pursuant to the 2019 Plan, which vest over a one-year period. Directors were grant ed 13,137 RSUs durin g the nine months ended October 1, 2022 . The Company recognized director stock compensation expense on the RSUs of $ 266 fo r the nine months ended October 1, 2022 . Directors were granted 20,375 shares of stock and the Company recognized director stock compensation expens e of $ 1,586 for the nine months ended October 2, 2021, under the 2012 Directors Plan. The following table summarizes RSU activity for the nine months ended October 1, 2022: Weighted Average Number of Units Grant-Date (in thousands) Fair Value per Share Nonvested balance at January 1, 2022 237 $ 45.58 Granted 102 92.41 Vested ( 109 ) 43.79 Forfeited ( 14 ) 66.84 Nonvested balance at October 1, 2022 (1) 216 $ 67.26 (1) Inclu des 106,221 nonvested performance-based RSUs. The Company had $ 9,656 of total un recognized compensation cost related to the RSU awards as of October 1, 2022 . That cost is expected to be recognized over a weighted average period of 1.8 years. Stock Options In 2022, the Company granted stock options with market-based vesting conditions to its officers. As of October 1, 2022 , there were 82,500 unvested options and no vested unexercised options. The exercise price per share is $ 50.60 , which is equal to the market price of Helios stock on the grant date. The options vest after achievement of defined stock prices and after the required service periods, which range from one to three years. These options have a 10 -year expiration. The grant date fair value of the options totaled $ 2,334 and was estimated using a Monte Carlo simulation. The Company has also granted stock options with only time-based vesting conditions to its officers. As of October 1, 2022 , there were 13,222 unvested options and 11,011 vested unexercised options. The exercise prices per share, which range from $ 35.04 to $ 55.03 , are equal to the market price of Helios stock on the respective grant dates. The options vest ratably over a three-year period and have a 10 -year expiration. The grant date fair value of the options was estimated using a Black Scholes valuation model. At October 1, 2022 , the Company had $ 2,495 of unrecognized compensation cost related to the options, which is expected to be recognized over a weighted average period of 1.1 years. Employee Stock Purchase Plans The Company maintains an Employee Stock Purchase Plan (“ESPP”) in which U.S. employees are eligible to participate. Employees who choose to participate are granted an opportunity to purchase common stock at 85 percent of market value on the first or last day of the quarterly purchase period, whichever is lower. Employees in the United Kingdom (“UK”), under a separate plan, are granted an opportunity to purchase the Company’s common stock at market value, on the first or last day of the quarterly purchase period, whichever is lower, with the Company issuing one additional free sh are of common stock for each six shares purchased by the employee under the plan. Employees purchased 28,960 shares at a weighted average price of $ 54.29 , and 22,747 shares at a weighted average price of $ 57.93 , under the ESPP and UK plans during the nine months ended October 1, 2022 and October 2, 2021 , respectively. The Company recognized $ 272 and $ 431 of compensation expense during the nine months ended October 1, 2022 and October 2, 2021 , respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Oct. 01, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | 12. ACCUMULATED OTHER COMPREHENSIVE LOSS The following tables present changes in accumulated other comprehensive loss b y component: Unrealized Foreign Total Balance at January 1, 2022 $ ( 1,334 ) $ ( 47,655 ) $ ( 48,989 ) Other comprehensive income (loss) before reclassifications 14,841 ( 59,695 ) ( 44,854 ) Amounts reclassified from accumulated other comprehensive loss, net of tax ( 1,115 ) — ( 1,115 ) Tax effect ( 3,221 ) 12,642 9,421 Net current period other comprehensive income (loss) 10,505 ( 47,053 ) ( 36,548 ) Balance at October 1, 2022 $ 9,171 $ ( 94,708 ) $ ( 85,537 ) Unrealized Foreign Total Balance at January 2, 2021 $ ( 5,922 ) $ ( 28,418 ) $ ( 34,340 ) Other comprehensive income (loss) before reclassifications 6,071 ( 17,944 ) ( 11,873 ) Amounts reclassified from accumulated other comprehensive loss, net of tax ( 2,353 ) — ( 2,353 ) Tax effect ( 853 ) 3,729 2,876 Net current period other comprehensive income (loss) 2,865 ( 14,215 ) ( 11,350 ) Balance at October 2, 2021 $ ( 3,057 ) $ ( 42,633 ) $ ( 45,690 ) |
Segment Reporting
Segment Reporting | 9 Months Ended |
Oct. 01, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | 13. SEGMENT REPORTING The Company has two reportable segments: Hydraulics and Electronics. These segments are organized primarily based on the similar nature of products offered for sale, the types of customers served and the methods of distribution and are consistent with how the segments are managed, how resources are allocated and how information is used by the chief operating decision makers. The Company evaluates performance and allocates resources based primarily on segment operating income. Certain costs were not allocated to the business segments as they are not used in evaluating the results of, or in allocating resources to the Company’s segments. These costs are presented in the Corporate and other line item. For the nine months ended October 1, 2022 , the unallocated costs totaled $ 27,270 and included certain corporate costs not deemed to be allocable to either business segment of $ 348 , amortization of acquisition-related intangible assets of $ 20,554 and other acquisition and integration-related costs of $ 6,368 . The accounting policies of the Company’s operating segments are the same as those used to prepare the accompanying Consolidated, Unaudited Financial Statements. The following table presents financial information by reportable segment: Three Months Ended Nine Months Ended October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021 Net sales Hydraulics $ 131,204 $ 133,404 $ 411,118 $ 385,549 Electronics 76,001 89,837 278,302 265,950 Total $ 207,205 $ 223,241 $ 689,420 $ 651,499 Operating income Hydraulics $ 29,411 $ 31,799 $ 92,097 $ 92,200 Electronics 10,964 18,445 51,778 56,324 Corporate and other ( 9,632 ) ( 9,495 ) ( 27,270 ) ( 31,103 ) Total $ 30,743 $ 40,749 $ 116,605 $ 117,421 Capital expenditures Hydraulics $ 5,584 $ 4,187 $ 13,899 $ 10,205 Electronics 2,865 2,562 8,017 6,849 Total $ 8,449 $ 6,749 $ 21,916 $ 17,054 October 1, 2022 January 1, 2022 Total assets Hydraulics $ 822,548 $ 821,836 Electronics 574,606 585,739 Corporate 22,413 7,771 Total $ 1,419,567 $ 1,415,346 Geographic Region Information Net sales are measured based on the geographic destination of sales. Tangible long-lived assets are shown based on the physical location of the assets and primarily include net property, plant and equipment and exclude right-of-use assets. Three Months Ended Nine Months Ended October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021 Net sales Americas $ 114,659 $ 109,365 $ 365,610 $ 314,469 EMEA 49,012 55,952 175,039 166,183 APAC 43,534 57,924 148,771 170,847 Total $ 207,205 $ 223,241 $ 689,420 $ 651,499 October 1, 2022 January 1, 2022 Tangible long-lived assets Americas $ 105,571 $ 97,649 EMEA 30,632 35,829 APAC 16,694 17,956 Total $ 152,897 $ 151,434 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Oct. 01, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 14. RELATED PARTY TRANSACTIONS The Company purchases from, and sells inventory to, entities partially owned or managed by directors of Helios. For the nine months ended October 1, 2022 and October 2, 2021 , inventory sales to the entities totaled $ 2,146 and $ 2,516 , respectively, and inventory purchases from the entities totaled $ 0 and $ 3,221 , respectively. At October 1, 2022 and January 1, 2022 , amounts due from the entities totaled $ 307 and $ 344 , respectively. In March 2022, the Company completed a sale of real estate to one of its executive officers for $ 1,850 , which sale price was based on the valuation from an independent third-party appraisal. Concurrent with the sale, the Company also purchased real estate from the executive officer for $ 970 , which purchase price reflected a below market valuation based on the original cost of the property to the executive officer, plus the cost of improvements funded by the executive officer. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 01, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 15. COMMITMENTS AND CONTINGENCIES Legal Proceedings The Company is not a party to any legal proceedings other than routine litigation incidental to its business. In the opinion of management, the amount of ultimate liability with respect to these actions will not materially affect the results of operations, financial position or cash flows of the Company. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 01, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for reporting on Form 10-Q. Accordingly, certain information and footnotes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements are not included herein. The financial statements are prepared on a consistent basis (including normal recurring adjustments) and should be read in conjunction with the consolidated financial statements and related notes contained in the Annual Report on Form 10-K for the fiscal year ended January 1, 2022 (“Form 10-K”), filed by Helios with the Securities and Exchange Commission on March 1, 2022. In management’s opinion, all adjustments necessary for a fair presentation of the Company’s financial statements are reflected in the interim periods presented. Operating results for the nine months ended October 1, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ended December 31, 2022 . |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Earnings Per Share | Earnings Per Share The following table presents the computation of basic and diluted earnings per common share (in thousands, except per share data): Three Months Ended Nine Months Ended October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021 Net income $ 20,378 $ 27,760 $ 80,892 $ 81,042 Weighted average shares outstanding - Basic 32,541 32,385 32,493 32,272 Net effect of dilutive securities - Stock based compensation 44 154 104 165 Weighted average shares outstanding - Diluted 32,585 32,539 32,597 32,437 Net income per share: Basic $ 0.63 $ 0.86 $ 2.49 $ 2.51 Diluted $ 0.63 $ 0.85 $ 2.48 $ 2.50 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Oct. 01, 2022 | |
Accounting Policies [Abstract] | |
Computation of basic and diluted earnings per common share | The following table presents the computation of basic and diluted earnings per common share (in thousands, except per share data): Three Months Ended Nine Months Ended October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021 Net income $ 20,378 $ 27,760 $ 80,892 $ 81,042 Weighted average shares outstanding - Basic 32,541 32,385 32,493 32,272 Net effect of dilutive securities - Stock based compensation 44 154 104 165 Weighted average shares outstanding - Diluted 32,585 32,539 32,597 32,437 Net income per share: Basic $ 0.63 $ 0.86 $ 2.49 $ 2.51 Diluted $ 0.63 $ 0.85 $ 2.48 $ 2.50 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Oct. 01, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on a recurring basis | The following tables provide information regarding the Company’s assets and liabilities measured at f air value on a recurring basis at October 1, 2022 and January 1, 2022. October 1, 2022 Quoted Market Significant Other Observable Significant Unobservable Total Prices (Level 1) Inputs (Level 2) Inputs (Level 3) Assets Interest rate swap contracts $ 11,997 $ — $ 11,997 $ — Forward foreign exchange contracts 3,048 — 3,048 — Total $ 15,045 $ — $ 15,045 $ — Liabilities Forward foreign exchange contracts $ 73 $ — $ 73 $ — Contingent consideration 6,305 — — 6,305 Total $ 6,378 $ — $ 73 $ 6,305 January 1, 2022 Quoted Market Significant Other Observable Significant Unobservable Total Prices (Level 1) Inputs (Level 2) Inputs (Level 3) Assets Interest rate swap contract $ 1,521 $ — $ 1,521 $ — Forward foreign exchange contracts 1,040 — 1,040 — Total $ 2,561 $ — $ 2,561 $ — Liabilities Interest rate swap contract $ 3,248 $ — $ 3,248 $ — Forward foreign exchange contracts 51 — 51 — Contingent consideration 6,400 — — 6,400 Total $ 9,699 $ — $ 3,299 $ 6,400 |
Summary of changes in estimated fair value of contingent consideration | A summary of the changes in the estimated fair value of contingent consideration at October 1, 2022 is as follows: Balance at January 1, 2022 $ 6,400 Change in estimated fair value 1,244 Payment on liability ( 1,082 ) Accretion in value 249 Currency remeasurement ( 506 ) Balance at October 1, 2022 $ 6,305 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 9 Months Ended |
Oct. 01, 2022 | |
Inventory Disclosure [Abstract] | |
Summary of inventories | At October 1, 2022 and January 1, 2022, inventory consisted of the following: October 1, 2022 January 1, 2022 Raw materials $ 105,018 $ 90,487 Work in process 46,275 34,713 Finished goods 38,038 50,638 Provision for obsolete and slow-moving inventory ( 9,613 ) ( 10,209 ) Total $ 179,718 $ 165,629 |
Operating Leases (Tables)
Operating Leases (Tables) | 9 Months Ended |
Oct. 01, 2022 | |
Leases [Abstract] | |
Supplemental Balance Sheet Information Related to Operating Leases | Supplemental balance sheet information related to operating leases is as follows: October 1, 2022 January 1, 2022 Right-of-use assets $ 18,426 $ 22,776 Lease liabilities: Current lease liabilities $ 4,599 $ 5,823 Non-current lease liabilities 14,883 17,940 Total lease liabilities $ 19,482 $ 23,763 Weighted average remaining lease term (in years): 5.0 Weighted average discount rate: 4.5 % |
Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases is as follows: Nine Months Ended October 1, 2022 October 2, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,205 $ 4,357 Non-cash impact of new leases and lease modifications $ 977 $ 5,209 |
Maturities of Lease Liabilities | Maturities of lease liabilities are as follows: 2022 Remaining $ 1,658 2023 4,897 2024 4,247 2025 3,933 2026 3,271 2027 1,341 Thereafter 2,753 Total lease payments 22,100 Less: Imputed interest 2,618 Total lease obligations 19,482 Less: Current lease liabilities 4,599 Non-current lease liabilities $ 14,883 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Oct. 01, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of changes in goodwill | A summary of changes in goodwill by segment for the nine months ended October 1, 2022, is as follows: Hydraulics Electronics Total Balance at January 1, 2022 $ 273,665 $ 186,271 $ 459,936 Measurement period adjustment, Joyonway acquisition — 66 66 Measurement period adjustment, NEM acquisition ( 37 ) — ( 37 ) Acquisition of Taimi 260 — 260 Acquisition of Daman 24,891 — 24,891 Currency translation ( 37,611 ) ( 365 ) ( 37,976 ) Balance at October 1, 2022 $ 261,168 $ 185,972 $ 447,140 |
Schedule of intangible assets | At October 1, 2022 and January 1, 2022, intangible assets consisted of the following: October 1, 2022 January 1, 2022 Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Definite-lived intangibles: Trade names and brands $ 85,184 $ ( 16,859 ) $ 68,325 $ 83,443 $ ( 15,216 ) $ 68,227 Non-compete agreements 2,025 ( 506 ) 1,519 3,218 ( 1,092 ) 2,126 Technology 49,292 ( 19,563 ) 29,729 50,425 ( 16,729 ) 33,696 Supply agreement 21,000 ( 12,250 ) 8,750 21,000 ( 10,675 ) 10,325 Customer relationships 332,808 ( 49,476 ) 283,332 336,809 ( 43,488 ) 293,321 Sales order backlog 720 — 720 1,023 ( 1,023 ) — Workforce 6,077 ( 1,924 ) 4,153 6,077 ( 1,013 ) 5,064 $ 497,106 $ ( 100,578 ) $ 396,528 $ 501,995 $ ( 89,236 ) $ 412,759 |
Schedule of estimated amortization expense of intangible assets | Amortization expense on acquired intangible assets for the nine months ended October 1, 2022 and October 2, 2021, w as $ 20,554 and $ 25,285 , respectively. Future estimated amortization expense is presente d below. Year: 2022 Remaining $ 7,443 2023 28,655 2024 27,640 2025 27,456 2026 25,704 2027 22,431 Thereafter 257,199 Total $ 396,528 |
Derivative Instruments & Hedg_2
Derivative Instruments & Hedging Activities (Tables) | 9 Months Ended |
Oct. 01, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value of Derivative Financial Instruments Included in Consolidated Balance Sheets | The fair value of the Company’s derivative financial instruments included in the Consolidated Balance Sheets is presented as follows: Asset Derivatives Liability Derivatives Balance Sheet Fair Value (1) Fair Value (1) Balance Sheet Fair Value (1) Fair Value (1) Location October 1, 2022 January 1, 2022 Location October 1, 2022 January 1, 2022 Derivatives designated as hedging instruments: Interest rate swap contracts Other assets $ 11,997 $ 1,521 Other non-current liabilities $ — $ 3,248 Derivatives not designated as hedging instruments: Forward foreign exchange contracts Other current assets 2,625 866 Other current liabilities 73 51 Forward foreign exchange contracts Other assets 423 174 Other non-current liabilities — — Total derivatives $ 15,045 $ 2,561 $ 73 $ 3,299 (1) See Note 4 for information regarding the inputs used in determining the fair value of derivative assets and liabilities. |
Schedule of Gains and Losses Related to Derivative Financial Instruments | The amount of gains and losses related to the Company’s derivative financial instruments for the nine months ended October 1, 2022 and October 2, 2021, are presented as follows: Amount of Gain or (Loss) Recognized in Location of Gain or (Loss) Reclassified Amount of Gain or (Loss) Reclassified from Accumulated October 1, 2022 October 2, 2021 into Earnings (Effective Portion) October 1, 2022 October 2, 2021 Derivatives in cash flow hedging relationships: Interest rate swap contracts $ 13,726 $ 3,718 Interest expense, net $ ( 1,447 ) $ ( 3,137 ) Interest expense presented in the Consolidated Statements of Operations, in which the effects of cash flow hedges are recorded , totaled $ 11,719 an d $ 12,965 for the nine months ended October 1, 2022 and October 2, 2021, respectively. Amount of Gain or (Loss) Recognized Location of Gain or (Loss) Recognized October 1, 2022 October 2, 2021 in Earnings on Derivatives Derivatives not designated as hedging instruments: Forward foreign exchange contracts $ 6,433 $ 3,401 Foreign currency transaction gain / loss, net |
Credit Facilities (Tables)
Credit Facilities (Tables) | 9 Months Ended |
Oct. 01, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Total Long-Term Non-Revolving Debt | Total long-term non-revolving debt consists of the following: Maturity Date October 1, 2022 January 1, 2022 Long-term non-revolving debt: Term loan with PNC Bank Oct 2025 $ 178,750 $ 190,000 Term loans with Citibank Various 9,859 12,416 Other long-term debt Various 9 90 Total long-term non-revolving debt 188,618 202,506 Less: current portion of long-term non-revolving debt 18,897 18,125 Less: unamortized debt issuance costs 389 484 Total long-term non-revolving debt, net $ 169,332 $ 183,897 |
Summary of Information on Revolving Credit Facility | Information on the Company’s revolving credit facilities is as follows: Balance Available Credit Maturity Date October 1, 2022 January 1, 2022 October 1, 2022 January 1, 2022 Revolving line of credit with PNC Bank Oct 2025 $ 267,693 $ 242,312 $ 130,788 $ 157,487 Revolving line of credit with Citibank May 2023 1,593 711 658 548 |
Summary of Future Maturities of Total Debt | Future maturities of total debt are as follows: Year: 2022 Remaining $ 5,395 2023 20,531 2024 24,285 2025 407,693 Total $ 457,904 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Oct. 01, 2022 | |
Share-Based Payment Arrangement, Noncash Expense [Abstract] | |
Summary of Restricted Stock and RSU Activity | The following table summarizes RSU activity for the nine months ended October 1, 2022: Weighted Average Number of Units Grant-Date (in thousands) Fair Value per Share Nonvested balance at January 1, 2022 237 $ 45.58 Granted 102 92.41 Vested ( 109 ) 43.79 Forfeited ( 14 ) 66.84 Nonvested balance at October 1, 2022 (1) 216 $ 67.26 (1) Inclu des 106,221 nonvested performance-based RSUs. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Oct. 01, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Changes in Accumulated Other Comprehensive Loss by Component | The following tables present changes in accumulated other comprehensive loss b y component: Unrealized Foreign Total Balance at January 1, 2022 $ ( 1,334 ) $ ( 47,655 ) $ ( 48,989 ) Other comprehensive income (loss) before reclassifications 14,841 ( 59,695 ) ( 44,854 ) Amounts reclassified from accumulated other comprehensive loss, net of tax ( 1,115 ) — ( 1,115 ) Tax effect ( 3,221 ) 12,642 9,421 Net current period other comprehensive income (loss) 10,505 ( 47,053 ) ( 36,548 ) Balance at October 1, 2022 $ 9,171 $ ( 94,708 ) $ ( 85,537 ) Unrealized Foreign Total Balance at January 2, 2021 $ ( 5,922 ) $ ( 28,418 ) $ ( 34,340 ) Other comprehensive income (loss) before reclassifications 6,071 ( 17,944 ) ( 11,873 ) Amounts reclassified from accumulated other comprehensive loss, net of tax ( 2,353 ) — ( 2,353 ) Tax effect ( 853 ) 3,729 2,876 Net current period other comprehensive income (loss) 2,865 ( 14,215 ) ( 11,350 ) Balance at October 2, 2021 $ ( 3,057 ) $ ( 42,633 ) $ ( 45,690 ) |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Oct. 01, 2022 | |
Segment Reporting [Abstract] | |
Schedule of financial information by reportable segment | The following table presents financial information by reportable segment: Three Months Ended Nine Months Ended October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021 Net sales Hydraulics $ 131,204 $ 133,404 $ 411,118 $ 385,549 Electronics 76,001 89,837 278,302 265,950 Total $ 207,205 $ 223,241 $ 689,420 $ 651,499 Operating income Hydraulics $ 29,411 $ 31,799 $ 92,097 $ 92,200 Electronics 10,964 18,445 51,778 56,324 Corporate and other ( 9,632 ) ( 9,495 ) ( 27,270 ) ( 31,103 ) Total $ 30,743 $ 40,749 $ 116,605 $ 117,421 Capital expenditures Hydraulics $ 5,584 $ 4,187 $ 13,899 $ 10,205 Electronics 2,865 2,562 8,017 6,849 Total $ 8,449 $ 6,749 $ 21,916 $ 17,054 October 1, 2022 January 1, 2022 Total assets Hydraulics $ 822,548 $ 821,836 Electronics 574,606 585,739 Corporate 22,413 7,771 Total $ 1,419,567 $ 1,415,346 |
Schedule of geographic region information | Net sales are measured based on the geographic destination of sales. Tangible long-lived assets are shown based on the physical location of the assets and primarily include net property, plant and equipment and exclude right-of-use assets. Three Months Ended Nine Months Ended October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021 Net sales Americas $ 114,659 $ 109,365 $ 365,610 $ 314,469 EMEA 49,012 55,952 175,039 166,183 APAC 43,534 57,924 148,771 170,847 Total $ 207,205 $ 223,241 $ 689,420 $ 651,499 October 1, 2022 January 1, 2022 Tangible long-lived assets Americas $ 105,571 $ 97,649 EMEA 30,632 35,829 APAC 16,694 17,956 Total $ 152,897 $ 151,434 |
Company Background (Details Tex
Company Background (Details Textual) | 9 Months Ended |
Oct. 01, 2022 Segment Country | |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | |
Number of operating segments | Country | 90 |
Number of operating segments | Segment | 2 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2022 | Oct. 02, 2021 | Oct. 01, 2022 | Oct. 02, 2021 | |
Accounting Policies [Abstract] | ||||
Net income | $ 20,378 | $ 27,760 | $ 80,892 | $ 81,042 |
Weighted average shares outstanding - Basic | 32,541 | 32,385 | 32,493 | 32,272 |
Net effect of dilutive securities - Stock based compensation | $ 44 | $ 154 | $ 104 | $ 165 |
Weighted average shares outstanding - Diluted | 32,585 | 32,539 | 32,597 | 32,437 |
Net income per share: | ||||
Basic | $ 0.63 | $ 0.86 | $ 2.49 | $ 2.51 |
Diluted | $ 0.63 | $ 0.85 | $ 2.48 | $ 2.50 |
Business Acquisition (Details T
Business Acquisition (Details Textual) - USD ($) $ in Thousands | 9 Months Ended | ||
Oct. 01, 2022 | Oct. 02, 2021 | Jan. 01, 2022 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 447,140 | $ 459,936 | |
Initial consideration paid, net of cash acquired | $ 67,252 | $ 48,481 | |
Daman Products Company, Inc. | |||
Business Acquisition [Line Items] | |||
Business Acquisition, Effective Date of Acquisition | Sep. 16, 2022 | ||
Goodwill acquired | $ 24,891 | ||
Intangible assets acquired | 29,720 | ||
Initial consideration paid, net of cash acquired | $ 64,331 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - Recurring [Member] - USD ($) $ in Thousands | Oct. 01, 2022 | Jan. 01, 2022 |
Assets | ||
Assets Measured at fair value | $ 15,045 | $ 2,561 |
Liabilities | ||
Liabilities measured at fair value | 6,378 | 9,699 |
Interest Rate Swap Contract [Member] | ||
Assets | ||
Assets Measured at fair value | 11,997 | 1,521 |
Liabilities | ||
Liabilities measured at fair value | 3,248 | |
Forward Foreign Exchange Contracts [Member] | ||
Assets | ||
Assets Measured at fair value | 3,048 | 1,040 |
Liabilities | ||
Liabilities measured at fair value | 73 | 51 |
Contingent Consideration [Member] | ||
Liabilities | ||
Liabilities measured at fair value | 6,305 | 6,400 |
Level 2 [Member] | ||
Assets | ||
Assets Measured at fair value | 15,045 | 2,561 |
Liabilities | ||
Liabilities measured at fair value | 73 | 3,299 |
Level 2 [Member] | Interest Rate Swap Contract [Member] | ||
Assets | ||
Assets Measured at fair value | 11,997 | 1,521 |
Liabilities | ||
Liabilities measured at fair value | 3,248 | |
Level 2 [Member] | Forward Foreign Exchange Contracts [Member] | ||
Assets | ||
Assets Measured at fair value | 3,048 | 1,040 |
Liabilities | ||
Liabilities measured at fair value | 73 | 51 |
Level 3 [Member] | ||
Liabilities | ||
Liabilities measured at fair value | 6,305 | 6,400 |
Level 3 [Member] | Contingent Consideration [Member] | ||
Liabilities | ||
Liabilities measured at fair value | $ 6,305 | $ 6,400 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments (Details 1) $ in Thousands | 9 Months Ended |
Oct. 01, 2022 USD ($) | |
Business Acquisition [Line Items] | |
Beginning Balance | $ 6,400 |
Change in estimated fair value | 1,244 |
Payment on liability | (1,082) |
Accretion in value | 249 |
Currency remeasurement | (506) |
Ending Balance | $ 6,305 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Thousands | Oct. 01, 2022 | Jan. 01, 2022 |
Summary of inventories | ||
Raw materials | $ 105,018 | $ 90,487 |
Work in process | 46,275 | 34,713 |
Finished goods | 38,038 | 50,638 |
Provision for obsolete and slow moving inventory | (9,613) | (10,209) |
Total | $ 179,718 | $ 165,629 |
Operating Leases (Details Textu
Operating Leases (Details Textual) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 01, 2022 | Oct. 02, 2021 | |
Leases [Line Items] | ||
Operating lease cost | $ 5,105 | $ 4,316 |
Minimum [Member] | ||
Leases [Line Items] | ||
Operating leases, remaining lease term | 1 year | |
Maximum [Member] | ||
Leases [Line Items] | ||
Operating leases, remaining lease term | 9 years |
Operating Leases (Details)
Operating Leases (Details) - USD ($) $ in Thousands | Oct. 01, 2022 | Jan. 01, 2022 |
Operating Lease, Right-of-Use Asset | $ 18,426 | $ 22,776 |
Current lease liabilities | $ 4,599 | $ 5,823 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other Accrued Expenses And Current Liabilities | Other Accrued Expenses And Current Liabilities |
Non-current lease liabilities | $ 14,883 | $ 17,940 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent |
Total lease liabilities | $ 19,482 | $ 23,763 |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Liabilities | Liabilities |
Weighted average remaining lease term (in years): | 5 years | |
Weighted average discount rate: | 4.50% |
Operating Leases (Details 1)
Operating Leases (Details 1) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 01, 2022 | Oct. 02, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 5,205 | $ 4,357 |
Non-cash impact of new leases and lease modifications | $ 977 | $ 5,209 |
Operating Leases (Details 2)
Operating Leases (Details 2) - USD ($) $ in Thousands | Oct. 01, 2022 | Jan. 01, 2022 |
2022 Remaining | $ 1,658 | |
2023 | 4,897 | |
2024 | 4,247 | |
2025 | 3,933 | |
2026 | 3,271 | |
2027 | 1,341 | |
Thereafter | 2,753 | |
Total lease payments | 22,100 | |
Less: Imputed interest | (2,618) | |
Total lease liabilities | 19,482 | $ 23,763 |
Less: Current lease liabilities | (4,599) | (5,823) |
Non-current lease liabilities | $ 14,883 | $ 17,940 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) $ in Thousands | 9 Months Ended |
Oct. 01, 2022 USD ($) | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | $ 459,936 |
Currency translation | (37,976) |
Goodwill, Ending Balance | 447,140 |
Joyonway [Member] | |
Goodwill [Line Items] | |
Measurement period adjustment | 66 |
NEM [Member] | |
Goodwill [Line Items] | |
Measurement period adjustment | (37) |
Taimi | |
Goodwill [Line Items] | |
Goodwill acquired | 260 |
Daman | |
Goodwill [Line Items] | |
Goodwill acquired | 24,891 |
Hydraulics [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 273,665 |
Currency translation | (37,611) |
Goodwill, Ending Balance | 261,168 |
Hydraulics [Member] | Joyonway [Member] | |
Goodwill [Line Items] | |
Measurement period adjustment | 0 |
Hydraulics [Member] | NEM [Member] | |
Goodwill [Line Items] | |
Measurement period adjustment | (37) |
Hydraulics [Member] | Taimi | |
Goodwill [Line Items] | |
Goodwill acquired | 260 |
Hydraulics [Member] | Daman | |
Goodwill [Line Items] | |
Goodwill acquired | 24,891 |
Electronics [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 186,271 |
Currency translation | (365) |
Goodwill, Ending Balance | 185,972 |
Electronics [Member] | Joyonway [Member] | |
Goodwill [Line Items] | |
Measurement period adjustment | 66 |
Electronics [Member] | NEM [Member] | |
Goodwill [Line Items] | |
Measurement period adjustment | $ 0 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details 1) - USD ($) $ in Thousands | Oct. 01, 2022 | Jan. 01, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 497,106 | $ 501,995 |
Accumulated Amortization | (100,578) | (89,236) |
Net Carrying Amount | 396,528 | 412,759 |
Trade names and brands [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 85,184 | 83,443 |
Accumulated Amortization | (16,859) | (15,216) |
Net Carrying Amount | 68,325 | 68,227 |
Non-compete agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,025 | 3,218 |
Accumulated Amortization | (506) | (1,092) |
Net Carrying Amount | 1,519 | 2,126 |
Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 49,292 | 50,425 |
Accumulated Amortization | (19,563) | (16,729) |
Net Carrying Amount | 29,729 | 33,696 |
Supply agreement [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 21,000 | 21,000 |
Accumulated Amortization | (12,250) | (10,675) |
Net Carrying Amount | 8,750 | 10,325 |
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 332,808 | 336,809 |
Accumulated Amortization | (49,476) | (43,488) |
Net Carrying Amount | 283,332 | 293,321 |
Sales order backlog [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 720 | 1,023 |
Accumulated Amortization | (1,023) | |
Net Carrying Amount | 720 | |
Workforce [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 6,077 | 6,077 |
Accumulated Amortization | (1,924) | (1,013) |
Net Carrying Amount | $ 4,153 | $ 5,064 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2022 | Oct. 02, 2021 | Oct. 01, 2022 | Oct. 02, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 6,774 | $ 7,407 | $ 20,554 | $ 25,285 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets (Details 2) - USD ($) $ in Thousands | Oct. 01, 2022 | Jan. 01, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 Remaining | $ 7,443 | |
2023 | 28,655 | |
2024 | 27,640 | |
2025 | 27,456 | |
2026 | 25,704 | |
2027 | 22,431 | |
Thereafter | 257,199 | |
Net Carrying Amount | $ 396,528 | $ 412,759 |
Derivative Instruments & Hedg_3
Derivative Instruments & Hedging Activities (Details) - USD ($) $ in Thousands | Oct. 01, 2022 | Jan. 01, 2022 | |
Derivatives Fair Value [Line Items] | |||
Derivative Asset, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | Other Assets, Noncurrent | |
Derivative Asset, Current, Statement of Financial Position [Extensible Enumeration] | Other Assets, Current | Other Assets, Current | |
Total Asset Derivatives, Fair Value | [1] | $ 15,045 | $ 2,561 |
Derivative Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent | |
Derivative Liability, Current, Statement of Financial Position [Extensible Enumeration] | Liabilities, Current | Liabilities, Current | |
Total Liability Derivatives, Fair Value | [1] | $ 73 | $ 3,299 |
Derivatives Designated as Hedging Instruments [Member] | Interest Rate Swap Contract [Member] | |||
Derivatives Fair Value [Line Items] | |||
Asset Derivatives Non-current, Fair Value | [1] | 11,997 | 1,521 |
Liability Derivatives Non-current, Fair Value | [1] | 0 | 3,248 |
Derivatives Not Designated as Hedging Instruments [Member] | Forward Foreign Exchange Contracts [Member] | |||
Derivatives Fair Value [Line Items] | |||
Asset Derivatives Non-current, Fair Value | [1] | 423 | 174 |
Asset Derivatives Current, Fair Value | [1] | 2,625 | 866 |
Liability Derivatives Non-current, Fair Value | [1] | 0 | 0 |
Liability Derivatives Current, Fair Value | [1] | $ 73 | $ 51 |
[1] (1) See Note 4 for information regarding the inputs used in determining the fair value of derivative assets and liabilities. |
Derivative Instruments & Hedg_4
Derivative Instruments & Hedging Activities (Details 1) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 01, 2022 | Oct. 02, 2021 | |
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Foreign Currency Transaction Gain (Loss), before Tax | Foreign Currency Transaction Gain (Loss), before Tax |
Derivatives Designated as Hedging Instruments [Member] | Cash Flow Hedging [Member] | Interest Rate Swap Contract [Member] | ||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives (Effective Portion) | $ 13,726 | $ 3,718 |
Derivatives Designated as Hedging Instruments [Member] | Cash Flow Hedging [Member] | Interest Rate Swap Contract [Member] | Interest Expense, Net [Member] | ||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Earnings (Effective Portion) | (1,447) | (3,137) |
Derivatives Not Designated as Hedging Instruments [Member] | Forward Foreign Exchange Contracts [Member] | ||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | ||
Amount of Gain or (Loss) Recognized in Earnings on Derivatives | $ 6,433 | $ 3,401 |
Derivative Instruments & Hedg_5
Derivative Instruments & Hedging Activities (Details Textual) € in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 21 Months Ended | ||||
Oct. 01, 2022 USD ($) Contract | Oct. 02, 2021 USD ($) | Oct. 01, 2022 USD ($) Contract | Oct. 02, 2021 USD ($) | Oct. 02, 2022 USD ($) | Oct. 01, 2022 EUR (€) Contract | Jan. 01, 2022 USD ($) | |
Derivative Instruments And Hedging Activities Disclosures [Line Items] | |||||||
Interest expense | $ 4,098 | $ 3,813 | $ 11,719 | $ 12,965 | |||
Carrying value of total long term non-revolving debt | 188,618 | 188,618 | $ 202,506 | ||||
Gain loss on derivative hedge recorded in AOCI as a part of currency translation adjustment | 10,868 | ||||||
Europe [Member] | |||||||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | |||||||
Carrying value of total long term non-revolving debt | $ 88,193 | $ 88,193 | |||||
Revolving Credit Facility [Member] | Europe [Member] | |||||||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | |||||||
Net investment hedge | € | € 90,000 | ||||||
Forward Foreign Exchange Contracts [Member] | Derivatives Not Designated as Hedging Instruments [Member] | |||||||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | |||||||
Derivative instrument, notional amount | € | € 27,500 | ||||||
Derivative contract expire date | Mar. 31, 2024 | ||||||
Derivative, number of instruments held | Contract | 7 | 7 | 7 | ||||
Cash Flow Hedging [Member] | |||||||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | |||||||
Interest expense | $ (11,719) | $ (12,965) | |||||
Cash Flow Hedging [Member] | Interest Rate Swap Contract [Member] | Derivatives Designated as Hedging Instruments [Member] | |||||||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | |||||||
Derivative instrument, notional amount | $ 245,000 | $ 245,000 | |||||
Cash Flow Hedging [Member] | Interest Rate Swap Contract [Member] | Minimum [Member] | Derivatives Designated as Hedging Instruments [Member] | |||||||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | |||||||
Derivative contract expire date | Apr. 30, 2023 | ||||||
Cash Flow Hedging [Member] | Interest Rate Swap Contract [Member] | Maximum [Member] | Derivatives Designated as Hedging Instruments [Member] | |||||||
Derivative Instruments And Hedging Activities Disclosures [Line Items] | |||||||
Derivative contract expire date | Oct. 31, 2025 |
Credit Facilities (Details)
Credit Facilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 01, 2022 | Jan. 01, 2022 | |
Debt Instrument [Line Items] | ||
Total long-term non-revolving debt | $ 188,618 | $ 202,506 |
Other long-term debt | 9 | 90 |
Less: current portion of long-term non-revolving debt | 18,897 | 18,125 |
Less: unamortized debt issuance costs | 389 | 484 |
Total long-term non-revolving debt, net | $ 169,332 | 183,897 |
Other long-term debt, Maturity Date | Various | |
PNC Bank [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term non-revolving debt | $ 178,750 | 190,000 |
Term loan, Maturity Date | Oct 2025 | |
Citibank [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term non-revolving debt | $ 9,859 | $ 12,416 |
Other long-term debt, Maturity Date | Various |
Credit Facilities (Details 1)
Credit Facilities (Details 1) - Revolving Credit Facility [Member] - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 01, 2022 | Jan. 01, 2022 | |
PNC Bank [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Date | Oct 2025 | |
Revolving lines of credit | $ 267,693 | $ 242,312 |
Available Credit | $ 130,788 | 157,487 |
Citibank [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Date | May 2023 | |
Revolving lines of credit | $ 1,593 | 711 |
Available Credit | $ 658 | $ 548 |
Credit Facilities (Details 2)
Credit Facilities (Details 2) $ in Thousands | Oct. 01, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2022 Remaining | $ 5,395 |
2023 | 20,531 |
2024 | 24,285 |
2025 | 407,693 |
Total | $ 457,904 |
Credit Facilities (Details Text
Credit Facilities (Details Textual) € in Thousands, ¥ in Thousands, $ in Thousands, $ in Thousands | 9 Months Ended | |||||
Oct. 01, 2022 USD ($) | Oct. 02, 2021 USD ($) | Oct. 01, 2022 EUR (€) | Oct. 01, 2022 USD ($) | Oct. 01, 2022 CNY (¥) | Oct. 01, 2022 AUD ($) | |
PNC Bank, National Association, as Administrative Agent, and Lender Party [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest expense recognized | $ | $ 9,818 | $ 9,631 | ||||
PNC Bank, National Association, as Administrative Agent, and Lender Party [Member] | Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Credit facilities, maximum borrowing capacity | $ | $ 400,000 | |||||
Net investment hedge | € | € 90,000 | |||||
Effective interest rate | 4.60% | 4.60% | 4.60% | 4.60% | ||
Citibank [Member] | Fixed Asset Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Borrows amount | ¥ | ¥ 2,614 | |||||
Interest rate | 1-year loan prime rate plus 1.5% | |||||
Final payment due date | May 31, 2023 | |||||
Citibank [Member] | Working Capital Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 1-year loan prime rate plus 0.5% | |||||
Final payment due date | May 31, 2023 | |||||
Maximum borrow amounts under agreement | ¥ | 16,000 | |||||
Citibank [Member] | Shanghai Branch Term Loan Facility [Member] | Term Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Borrows amount | ¥ | ¥ 42,653 | |||||
Interest rate | 1-year loan prime rate plus 1.5 | |||||
Final payment due date | Oct. 31, 2024 | |||||
Citibank [Member] | Sydney Branch Term Loan Facility [Member] | Term Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Borrows amount | $ | $ 7,500 | |||||
Interest rate | Australian Bank Bill Swap Reference Rate plus 2.0% | |||||
Final payment due date | Dec. 31, 2024 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2022 | Oct. 02, 2021 | Oct. 01, 2022 | Oct. 02, 2021 | |
Income Tax Contingency [Line Items] | ||||
Provision of Income Tax | 23.60% | 25.50% | 22.70% | 22% |
Unrecognized tax benefit | $ 8,352 | $ 8,352 | ||
Unrecognized tax benefits that would impact effective tax rate | $ 2,110 | $ 2,110 | ||
Federal returns currently under examination | The Company remains subject to income tax examinations in the U.S. and various state and foreign jurisdictions for tax years 2009-2021. Although the Company is not currently under examination in most jurisdictions, limited transfer pricing disputes exist for years dating back to 2008. The Company does not expect to recognize any benefit within the next 12 months due to the expiration of statutes of limitation. |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Oct. 01, 2022 | Oct. 02, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock option granted, shares | 102,000 | |
Stock-based compensation expense | $ 6,212 | $ 6,233 |
2012 Nonemployee Director Fees Plan [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock option granted, shares | 20,375 | |
Stock-based compensation expense | $ 1,586 | |
2019 Equity Incentive Plan [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock option granted, shares | 13,137 | |
Stock-based compensation expense | $ 266 | |
Employee Stock Purchase Plan [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Rate of common stock at market value | 85% | |
Employee Stock Purchase Plan and U.K. Plan [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of shares purchased by employees | 28,960 | 22,747 |
Weighted average price | $ 54.29 | $ 57.93 |
Share-based compensation expenses | $ 272 | $ 431 |
Ratio for additional common stock shares issued, under ESPP | 6 | |
Monte Carlo Valuation Model [Member] | Minimum [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Monte Carlo Valuation Model [Member] | Maximum [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Time Based [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Performance Based [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 3 years | |
RSUs [Member] | Minimum [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Target amount percentage | 0% | |
RSUs [Member] | Maximum [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Target amount percentage | 200% | |
Stock Options [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Recognized weighted average period (in years) | 1 year 1 month 6 days | |
Unrecognized compensation cost related to the stock options | $ 2,495 | |
Stock Options [Member] | Monte Carlo Valuation Model [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Contractual term of stock options | 10 years | |
Unvested options | 82,500 | |
Vested unexercised options | 0 | |
Exercise price per share | $ 50.60 | |
Options grant date fair value | $ 2,334 | |
Stock Options [Member] | Black Scholes Valuation Model [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Contractual term of stock options | 10 years | |
Unvested options | 13,222 | |
Vested unexercised options | 11,011 | |
Exercise prices per share, lower range limit | $ 35.04 | |
Exercise prices per share, upper range limit | $ 55.03 | |
Restricted Stock and Restricted Stock Units [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Compensation expense | $ 5,566 | $ 4,168 |
Total unrecognized compensation | $ 9,656 | |
Recognized weighted average period (in years) | 1 year 9 months 18 days |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details) | 9 Months Ended | |
Oct. 01, 2022 $ / shares shares | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Nonvested Beginning balance Number of shares | shares | 237,000 | |
Granted, Number of shares | shares | 102,000 | |
Vested, Number of shares | shares | (109,000) | |
Forfeited, Number of shares | shares | (14,000) | |
Nonvested Ending balance Number of shares | shares | 216,000 | [1] |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Nonvested Beginning balance, Weighted average grant-date fair value | $ / shares | $ 45.58 | |
Granted, Weighted average grant-date fair value | $ / shares | 92.41 | |
Vested, Weighted average grant-date fair value | $ / shares | 43.79 | |
Forfeited, Weighted average grant-date fair value | $ / shares | 66.84 | |
Nonvested Ending balance, Weighted average grant-date fair value | $ / shares | $ 67.26 | [1] |
[1] (1) Inclu des 106,221 nonvested performance-based RSUs. |
Stock-Based Compensation (Paren
Stock-Based Compensation (Parenthetical) (Details) - shares | Oct. 01, 2022 | Jan. 01, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Unvested Number of shares | 216,000 | [1] | 237,000 |
RSUs [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Unvested Number of shares | 106,221 | ||
[1] (1) Inclu des 106,221 nonvested performance-based RSUs. |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Changes in AOCI (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 01, 2022 | Oct. 02, 2021 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | $ 708,963 | $ 607,790 |
Ending Balance | 751,437 | 688,446 |
Unrealized Gains and (Losses) on Derivative Instruments [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (1,334) | (5,922) |
Other comprehensive income (loss) before reclassifications | 14,841 | 6,071 |
Amounts reclassified from accumulated other comprehensive loss, net of tax | (1,115) | (2,353) |
Tax effect | (3,221) | (853) |
Net current period other comprehensive income (loss) | 10,505 | 2,865 |
Ending Balance | 9,171 | (3,057) |
Foreign Currency Items [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (47,655) | (28,418) |
Other comprehensive income (loss) before reclassifications | (59,695) | (17,944) |
Amounts reclassified from accumulated other comprehensive loss, net of tax | 0 | 0 |
Tax effect | 12,642 | 3,729 |
Net current period other comprehensive income (loss) | (47,053) | (14,215) |
Ending Balance | (94,708) | (42,633) |
Accumulated other comprehensive income (loss) [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (48,989) | (34,340) |
Other comprehensive income (loss) before reclassifications | (44,854) | (11,873) |
Amounts reclassified from accumulated other comprehensive loss, net of tax | (1,115) | (2,353) |
Tax effect | 9,421 | 2,876 |
Net current period other comprehensive income (loss) | (36,548) | (11,350) |
Ending Balance | $ (85,537) | $ (45,690) |
Segment Reporting (Details Text
Segment Reporting (Details Textual) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2022 USD ($) | Oct. 02, 2021 USD ($) | Oct. 01, 2022 USD ($) Segment | Oct. 02, 2021 USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | Segment | 2 | |||
Amortization of intangible assets | $ 6,774 | $ 7,407 | $ 20,554 | $ 25,285 |
Corporate and Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Unallocated costs | 27,270 | |||
Corporate costs not deemed allocable to either business segment | 348 | |||
Amortization of intangible assets | 20,554 | |||
Other acquisition and integration expenses | $ 6,368 |
Segment Reporting (Details 1)
Segment Reporting (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 01, 2022 | Oct. 02, 2021 | Oct. 01, 2022 | Oct. 02, 2021 | Jan. 01, 2022 | |
Segment Reporting Information [Line Items] | |||||
Net Sales | $ 207,205 | $ 223,241 | $ 689,420 | $ 651,499 | |
Operating income | 30,743 | 40,749 | 116,605 | 117,421 | |
Capital expenditures | 8,449 | 6,749 | 21,916 | 17,054 | |
Total assets | 1,419,567 | 1,419,567 | $ 1,415,346 | ||
Operating Segments [Member] | Hydraulics [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 131,204 | 133,404 | 411,118 | 385,549 | |
Operating income | 29,411 | 31,799 | 92,097 | 92,200 | |
Capital expenditures | 5,584 | 4,187 | 13,899 | 10,205 | |
Total assets | 822,548 | 822,548 | 821,836 | ||
Operating Segments [Member] | Electronics [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 76,001 | 89,837 | 278,302 | 265,950 | |
Operating income | 10,964 | 18,445 | 51,778 | 56,324 | |
Capital expenditures | 2,865 | 2,562 | 8,017 | 6,849 | |
Total assets | 574,606 | 574,606 | 585,739 | ||
Corporate and Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating income | (9,632) | $ (9,495) | (27,270) | $ (31,103) | |
Total assets | $ 22,413 | $ 22,413 | $ 7,771 |
Segment Reporting (Details 2)
Segment Reporting (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 01, 2022 | Oct. 02, 2021 | Oct. 01, 2022 | Oct. 02, 2021 | Jan. 01, 2022 | |
Net sales | |||||
Net Sales | $ 207,205 | $ 223,241 | $ 689,420 | $ 651,499 | |
Tangible long-lived assets | |||||
Tangible long-lived assets | 152,897 | 152,897 | $ 151,434 | ||
Americas [Member] | |||||
Net sales | |||||
Net Sales | 114,659 | 109,365 | 365,610 | 314,469 | |
Tangible long-lived assets | |||||
Tangible long-lived assets | 105,571 | 105,571 | 97,649 | ||
EMEA [Member] | |||||
Net sales | |||||
Net Sales | 49,012 | 55,952 | 175,039 | 166,183 | |
Tangible long-lived assets | |||||
Tangible long-lived assets | 30,632 | 30,632 | 35,829 | ||
APAC [Member] | |||||
Net sales | |||||
Net Sales | 43,534 | $ 57,924 | 148,771 | $ 170,847 | |
Tangible long-lived assets | |||||
Tangible long-lived assets | $ 16,694 | $ 16,694 | $ 17,956 |
Related Party Transactions (Det
Related Party Transactions (Details Textual) - USD ($) $ in Thousands | 9 Months Ended | |||
Mar. 17, 2022 | Oct. 01, 2022 | Oct. 02, 2021 | Jan. 01, 2022 | |
Related Party Transaction [Line Items] | ||||
Due from entities | $ 307 | $ 344 | ||
Real Estate [Member] | ||||
Related Party Transaction [Line Items] | ||||
Total sales to entities | $ 1,850 | |||
Total purchases from entities/related party | $ 970 | |||
Inventory Transactions [Member] | ||||
Related Party Transaction [Line Items] | ||||
Total sales to entities | 2,146 | $ 2,516 | ||
Total purchases from entities/related party | $ 0 | $ 3,221 |