Cover
Cover - shares | 3 Months Ended | |
Apr. 02, 2021 | Apr. 23, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 2, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-16137 | |
Entity Registrant Name | INTEGER HOLDINGS CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 16-1531026 | |
Entity Address, Address Line One | 5830 Granite Parkway, | |
Entity Address, Address Line Two | Suite 1150 | |
Entity Address, City or Town | Plano, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75024 | |
City Area Code | 214 | |
Local Phone Number | 618-5243 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | ITGR | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 32,975,085 | |
Entity Central Index Key | 0001114483 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - Unaudited - USD ($) $ in Thousands | Apr. 02, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 28,402 | $ 49,206 |
Accounts receivable, net of provision for credit losses of $0.2 million, respectively | 165,826 | 156,207 |
Inventories | 153,815 | 149,323 |
Refundable income taxes | 2,461 | 2,087 |
Contract assets | 44,686 | 40,218 |
Prepaid expenses and other current assets | 14,047 | 15,896 |
Total current assets | 409,237 | 412,937 |
Property, plant and equipment, net | 248,993 | 253,964 |
Goodwill | 852,243 | 859,442 |
Other intangible assets, net | 739,334 | 757,224 |
Deferred income taxes | 4,381 | 4,398 |
Operating lease assets | 50,433 | 45,153 |
Other long-term assets | 38,731 | 38,739 |
Total assets | 2,343,352 | 2,371,857 |
Current liabilities: | ||
Current portion of long-term debt | 37,500 | 37,500 |
Accounts payable | 62,395 | 51,570 |
Income taxes payable | 3,610 | 1,847 |
Operating lease liabilities | 7,904 | 8,431 |
Accrued expenses and other current liabilities | 50,142 | 56,843 |
Total current liabilities | 161,551 | 156,191 |
Long-term debt | 649,630 | 693,758 |
Deferred income taxes | 180,779 | 182,304 |
Operating lease liabilities | 45,150 | 37,861 |
Other long-term liabilities | 28,518 | 30,688 |
Total liabilities | 1,065,628 | 1,100,802 |
Commitments and contingencies (Note 10) | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value; 100,000,000 shares authorized; 32,974,702 and 32,908,178 shares issued and outstanding, respectively | 33 | 33 |
Additional paid-in capital | 703,033 | 700,814 |
Retained earnings | 539,036 | 517,516 |
Accumulated other comprehensive income | 35,622 | 52,692 |
Total stockholders’ equity | 1,277,724 | 1,271,055 |
Total liabilities and stockholders’ equity | $ 2,343,352 | $ 2,371,857 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets - Unaudited (Parenthetical) - USD ($) $ in Millions | Apr. 02, 2021 | Dec. 31, 2020 |
Current assets: | ||
Allowance for doubtful accounts | $ 0.2 | $ 0.2 |
Stockholders’ equity: | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 32,974,702 | 32,908,178 |
Common stock, shares outstanding (in shares) | 32,974,702 | 32,908,178 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Income Statement [Abstract] | ||
Sales | $ 290,467 | $ 328,426 |
Cost of sales | 205,981 | 231,724 |
Gross profit | 84,486 | 96,702 |
Operating expenses: | ||
Selling, general and administrative | 35,502 | 36,457 |
Research, development and engineering | 13,461 | 13,241 |
Other operating expenses | 915 | 2,928 |
Total operating expenses | 49,878 | 52,626 |
Operating income | 34,608 | 44,076 |
Interest expense | 8,532 | 10,361 |
(Gain) loss on equity investments | 1,335 | (1,925) |
Other income, net | (237) | (999) |
Income before taxes | 24,978 | 36,639 |
Provision for income taxes | 3,458 | 5,539 |
Net income | $ 21,520 | $ 31,100 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.65 | $ 0.95 |
Diluted (in dollars per share) | $ 0.65 | $ 0.94 |
Weighted average shares outstanding: | ||
Basic (in shares) | 32,957 | 32,807 |
Diluted (in shares) | 33,188 | 33,117 |
Comprehensive Income | ||
Net income | $ 21,520 | $ 31,100 |
Other comprehensive loss: | ||
Foreign currency translation loss | (16,364) | (12,032) |
Change in fair value of cash flow hedges, net of tax | (706) | (8,629) |
Other comprehensive loss, net of tax | (17,070) | (20,661) |
Comprehensive income, net of tax | $ 4,450 | $ 10,439 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - Unaudited - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 21,520 | $ 31,100 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 20,294 | 19,494 |
Debt related charges included in interest expense | 1,372 | 1,023 |
Stock-based compensation | 4,704 | 1,738 |
Non-cash (gains) charges related to customer bankruptcy | (24) | 628 |
Non-cash lease expense | 2,004 | 1,930 |
Non-cash (gain) loss on equity investments | 1,335 | (1,925) |
Contingent consideration fair value adjustment | 0 | (500) |
Other non-cash (gains) losses | 69 | (585) |
Deferred income taxes | (242) | 61 |
Changes in operating assets and liabilities, net of acquisition: | ||
Accounts receivable | (9,373) | (8,165) |
Inventories | (5,157) | (4,365) |
Prepaid expenses and other assets | (189) | 929 |
Contract assets | (4,677) | (14,279) |
Accounts payable | 11,434 | 18,458 |
Accrued expenses and other liabilities | (7,887) | (18,108) |
Income taxes | 1,246 | 4,963 |
Net cash provided by operating activities | 36,429 | 32,397 |
Cash flows from investing activities: | ||
Acquisition of property, plant and equipment | (7,660) | (14,925) |
Purchase of intangible asset | 0 | (3,500) |
Proceeds from sale of property, plant and equipment | 15 | 52 |
Acquisitions, net | 0 | (5,219) |
Net cash used in investing activities | (7,645) | (23,592) |
Cash flows from financing activities: | ||
Principal payments of long-term debt | (45,375) | (9,375) |
Proceeds from senior secured revolving line of credit | 0 | 25,000 |
Proceeds from the exercise of stock options | 116 | 2,201 |
Payment of debt issuance costs | (72) | 0 |
Tax withholdings related to net share settlements of restricted stock unit awards | (2,601) | (2,664) |
Contingent consideration payments | (1,621) | 0 |
Principal payments on finance leases | (9) | 0 |
Net cash provided by (used in) financing activities | (49,562) | 15,162 |
Effect of foreign currency exchange rates on cash and cash equivalents | (26) | (243) |
Net increase (decrease) in cash and cash equivalents | (20,804) | 23,724 |
Cash and cash equivalents, beginning of period | 49,206 | 13,535 |
Cash and cash equivalents, end of period | $ 28,402 | $ 37,259 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - Unaudited - USD ($) $ in Thousands | Total | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Balance, beginning of period at Dec. 31, 2019 | $ 1,152,488 | $ 701,051 | $ (8,809) | $ 440,258 | $ 19,988 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock awards exercised or vested | (8,010) | ||||
Stock-based compensation | 1,738 | ||||
Treasury shares reissued | 7,546 | ||||
Net income | 31,100 | 31,100 | |||
Other comprehensive loss | (20,661) | (20,661) | |||
Balance, ending balance at Apr. 03, 2020 | 1,164,201 | 694,779 | (1,263) | 471,358 | (673) |
Balance, beginning of period at Dec. 31, 2020 | 1,271,055 | 700,847 | 0 | 517,516 | 52,692 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock awards exercised or vested | (2,485) | ||||
Stock-based compensation | 4,704 | ||||
Treasury shares reissued | 0 | ||||
Net income | 21,520 | 21,520 | |||
Other comprehensive loss | (17,070) | ||||
Balance, ending balance at Apr. 02, 2021 | $ 1,277,724 | $ 703,066 | $ 0 | $ 539,036 | $ 35,622 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Apr. 02, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Integer Holdings Corporation (together with its consolidated subsidiaries, “Integer” or the “Company”) is a publicly-traded corporation listed on the New York Stock Exchange under the symbol “ITGR.” Integer is one of the largest medical device outsource manufacturers in the world serving the cardiac, neuromodulation, vascular, orthopedics, advanced surgical and portable medical markets. The Company provides innovative, high-quality medical technologies that enhance the lives of patients worldwide. In addition, it develops batteries for high-end niche applications in the energy, military, and environmental markets. The Company’s reportable segments are: (1) Medical and (2) Non-Medical. The Company’s customers include large multi-national original equipment manufacturers (“OEMs”) and their affiliated subsidiaries. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information (Accounting Standards Codification (“ASC”) 270, Interim Reporting ) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all of the information necessary for a full presentation of financial position, results of operations, and cash flows in conformity with GAAP. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of the Company for the periods presented. Intercompany transactions and balances have been fully eliminated in consolidation. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, certain components of equity, sales, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ materially from these estimates. For further information, refer to the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The first quarter of 2021 ended on April 2 and consisted of 92 days, and the first quarter of 2020 ended on April 3 and consisted of 94 days. Risks and Uncertainties Beginning in early March 2020, the global spread of the novel coronavirus (“COVID-19”) created significant uncertainty and worldwide economic disruption. Specific impacts to the Company’s business include delayed or reduced customer orders and sales, restrictions on its associates’ ability to travel or work, delays in shipments to and from certain countries, and disruptions in its supply chain. The extent to which COVID-19 impacts the Company’s operations will depend on future developments, which are highly uncertain and difficult to predict, including, among others, the duration of the outbreak, the effectiveness and utilization of vaccines for COVID-19 and its variants, new information that may emerge concerning the severity of COVID-19 and the actions, especially those taken by governmental authorities to contain the pandemic or treat its impact. As pandemic-related events continue to evolve, additional impacts may arise that the Company is not aware of currently. Any prolonged material disruption of the Company’s associates, suppliers, manufacturing, or customers could materially impact its consolidated financial position, results of operations or cash flows. Recent Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standard Updates (“ASU”) issued by the Financial Accounting Standards Board ("FASB"). The Company evaluated all recent accounting pronouncements issued, including those that are currently effective, and determined that the adoption of these pronouncements would not have a material effect on the financial position, results of operations or cash flows of the Company. There have been no new or material changes to the significant accounting policies discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, that are of significance, or potential significance, to the Company. |
Business Acquisition
Business Acquisition | 3 Months Ended |
Apr. 02, 2021 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITION | BUSINESS ACQUISITION On February 19, 2020, the Company acquired certain assets and liabilities of InoMec Ltd. (“InoMec”), a privately-held company based in Israel that specializes in the research, development and manufacturing of medical devices, including minimally invasive tools, delivery systems, tubing and catheters, surgery tools, drug-device combination, laser combined devices, and tooling and production. The acquisition enables the Company to create a research and development center in Israel, closer to the customer base in the region. The fair value of the consideration transferred was $7.0 million, which included an initial cash payment of $5.3 million and $1.7 million in estimated fair value of contingent consideration. The contingent consideration represents the estimated fair value of the Company’s obligation, under the asset purchase agreement, to make additional payments of up to $3.5 million over the four years following the acquisition based on specified conditions being met. Based on the final purchase price allocation, the assets acquired principally comprise $2.0 million of intangible assets, $4.8 million of goodwill, $0.3 million of acquired property, plant and equipment, and a net liability for other working capital items of $0.1 million. Intangible assets included developed technology, customer relationships and non-compete provisions, which are being amortized over a weighted average period of 5.9 years from the date of acquisition. The amount allocated to goodwill for this acquisition is deductible for income tax purposes. The fair value of the contingent consideration was estimated using the Monte Carlo valuation approach. See Note 13 “Financial Instruments and Fair Value Measurements” for additional information related to the fair value measurement of the contingent consideration. For segment reporting purposes, the results of operations and assets from this acquisition have been included in the Company’s Medical segment since the acquisition date. Sales related to InoMec were $0.8 million and $0.4 million, respectively, for the three months ended April 2, 2021 and April 3, 2020. Earnings related to the operations consisting of the assets and liabilities acquired from InoMec for the three months ended April 2, 2021 and April 3, 2020 were not material. During the three months ended on April 3, 2020, direct costs of this acquisition of $0.7 million were expensed as incurred and included in Other operating expenses in the Condensed Consolidated Statements of Operations and Comprehensive Income. Pro forma financial information has not been presented for this acquisition as the net effects were not significant or material to the Company’s results of operations or financial position. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Apr. 02, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION The following is supplemental information relating to the Condensed Consolidated Statements of Cash Flows (in thousands): Three Months Ended April 2, April 3, Noncash investing and financing activities: Property, plant and equipment purchases included in accounts payable $ 2,981 $ 4,481 Purchase of intangible asset included in accrued expenses — 1,000 Supplemental lease disclosures: Operating lease assets obtained in exchange for new or remeasured operating 7,414 7,427 |
Inventories
Inventories | 3 Months Ended |
Apr. 02, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories comprise the following (in thousands): April 2, December 31, Raw materials $ 70,552 $ 72,477 Work-in-process 64,320 58,806 Finished goods 18,943 18,040 Total $ 153,815 $ 149,323 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 3 Months Ended |
Apr. 02, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | GOODWILL AND OTHER INTANGIBLE ASSETS, NET Goodwill The changes in the carrying amount of goodwill by reportable segment for the three months ended April 2, 2021 were as follows (in thousands): Medical Non- Medical Total December 31, 2020 $ 842,442 $ 17,000 $ 859,442 Foreign currency translation (7,199) — (7,199) April 2, 2021 $ 835,243 $ 17,000 $ 852,243 Intangible Assets Intangible assets comprise the following (in thousands): Gross Accumulated Net April 2, 2021 Definite-lived: Purchased technology and patents $ 255,606 $ (155,278) $ 100,328 Customer lists 716,081 (167,620) 548,461 Other 4,120 (3,863) 257 Total amortizing intangible assets $ 975,807 $ (326,761) $ 649,046 Indefinite-lived: Trademarks and tradenames $ 90,288 December 31, 2020 Definite-lived: Purchased technology and patents $ 257,453 $ (152,798) $ 104,655 Customer lists 723,791 (161,856) 561,935 Other 4,142 (3,796) 346 Total amortizing intangible assets $ 985,386 $ (318,450) $ 666,936 Indefinite-lived: Trademarks and tradenames $ 90,288 Aggregate intangible asset amortization expense comprises the following (in thousands): Three Months Ended April 2, April 3, Cost of sales $ 3,268 $ 3,269 Selling, general and administrative expenses 7,182 7,175 Total intangible asset amortization expense $ 10,450 $ 10,444 Estimated future intangible asset amortization expense based on the carrying value as of April 2, 2021 is as follows (in thousands): Remainder of 2021 2022 2023 2024 2025 After 2025 Amortization Expense $ 30,835 40,170 38,751 37,798 36,483 465,009 |
Debt
Debt | 3 Months Ended |
Apr. 02, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Long-term debt comprises the following (in thousands): April 2, December 31, Senior secured term loan A $ 220,312 $ 229,687 Senior secured term loan B 472,286 508,286 Unamortized discount on term loan B and debt issuance costs (5,468) (6,715) Total debt 687,130 731,258 Current portion of long-term debt (37,500) (37,500) Total long-term debt $ 649,630 $ 693,758 The Company has senior secured credit facilities (the “Senior Secured Credit Facilities”) as of April 2, 2021, consisting of (i) a $200 million revolving credit facility (the “Revolving Credit Facility”), (ii) a term loan A facility (the “TLA Facility”), and (iii) a term loan B facility (the “TLB Facility”). The TLA Facility and TLB Facility are collectively referred to as the “Term Loan Facilities.” The TLB Facility was issued at a 1% discount. Revolving Credit Facility The Revolving Credit Facility matures on October 27, 2022. The Revolving Credit Facility includes a $15 million sublimit for swingline loans and a $25 million sublimit for standby letters of credit. The Company is required to pay a commitment fee on the unused portion of the Revolving Credit Facility, which will range between 0.175% and 0.25%, depending on the Company’s Total Net Leverage Ratio (as defined in the Senior Secured Credit Facilities agreement). As of April 2, 2021, the commitment fee on the unused portion of the Revolving Credit Facility was 0.25%. Interest rates on the Revolving Credit Facility, as well as the TLA Facility, are at the Company’s option, either at: (i) the prime rate plus the applicable margin, which will range between 0.50% and 2.00%, based on the Company’s Total Net Leverage Ratio, or (ii) the applicable London Interbank Offered Rate (“LIBOR”) plus the applicable margin, which will range between 1.50% and 3.00%, based on the Company’s Total Net Leverage Ratio. The Company also pays certain of its lenders a deferred amendment fee, payable in installments of 0.03125% of the outstanding Revolving Credit Facility and TLA Facility each quarter through maturity when the Company’s total net leverage ratio equals or exceeds 3.00 to 1.00. As of April 2, 2021, the Company had no outstanding borrowings on the Revolving Credit Facility and an available borrowing capacity of $193.3 million after giving effect to $6.7 million of outstanding standby letters of credit. Term Loan Facilities The TLA Facility and TLB Facility mature on October 27, 2022. Interest rates on the TLB Facility are, at the Company’s option, either at: (i) the prime rate plus 1.50% or (ii) the applicable LIBOR rate plus 2.50%, with LIBOR subject to a 1.00% floor. As of April 2, 2021, the interest rates on the TLA Facility and TLB Facility were 2.36% and 3.50%, respectively. Covenants The Revolving Credit Facility and TLA Facility contain covenants requiring (A) a maximum Total Net Leverage Ratio of 4.75:1.00, subject to a step down to 4.50 to 1.00 for the third fiscal quarter of 2021, and reverting to and remaining at 4.00 to 1.00 beginning with the fourth quarter of 2021 through maturity, and (B) a minimum interest coverage ratio of adjusted EBITDA (as defined in the Senior Secured Credit Facilities) to interest expense of not less than 3.00:1.00. The TLB Facility does not contain any financial maintenance covenants. As of April 2, 2021, the Company was in compliance with these financial covenants. Contractual maturities under the Senior Secured Credit Facilities for the remainder of 2021 and through maturity, excluding any discounts or premiums, as of April 2, 2021 are as follows (in thousands): 2021 2022 Future minimum principal payments $ 28,125 664,473 During the three months ended April 2, 2021, the Company prepaid $36.0 million of its TLB Facility and recognized a loss from extinguishment of debt of $0.3 million. The loss from extinguishment of debt represents the portion of the unamortized discount and debt issuance costs related to the portion of the TLB Facility that was prepaid and is included in Interest expense in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Apr. 02, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company maintains certain stock-based compensation plans that were approved by the Company’s stockholders and are administered by the Board of Directors or the Compensation and Organization Committee of the Board. The stock-based compensation plans provide for the granting of stock options, restricted stock awards, restricted stock units (“RSUs”), stock appreciation rights and stock bonuses to employees, non-employee directors, consultants, and service providers. The components and classification of stock-based compensation expense were as follows (in thousands): Three Months Ended April 2, April 3, Stock options $ — $ 13 RSUs 4,704 1,725 Total stock-based compensation expense $ 4,704 $ 1,738 Cost of sales $ 1,114 $ 454 Selling, general and administrative 3,355 1,136 Research, development and engineering 235 148 Total stock-based compensation expense $ 4,704 $ 1,738 Stock Options The following table summarizes the Company’s stock option activity for the three month period ended April 2, 2021: Number of Weighted Weighted Aggregate Outstanding at December 31, 2020 281,873 $ 36.05 Exercised (4,229) 27.32 Outstanding and exercisable at April 2, 2021 277,644 $ 36.18 4.5 $ 15.4 Restricted Stock Units During the three months ended April 2, 2021, the Company awarded grants of either time-based RSUs or a mix of time-based RSUs and performance-based RSUs (“PRSUs”) to certain members of its Board of Directors and management. Newly appointed members to the Board of Directors received a pro-rated portion of the their annual equity retainer in the form of time-based RSUs that vest in accordance with the regularly scheduled vesting schedule applicable to existing members of the Board of Directors. All other time-based RSUs granted during three months ended April 2, 2021 vest ratably, subject to the recipient’s continuous service to the Company over a period of three years from the grant date. For the Company’s PRSUs, in addition to service conditions, the ultimate number of shares to be earned depends on the achievement of market-based conditions. The market-based conditions are based on the Company’s achievement of a relative total shareholder return (“TSR”) performance requirement, on a percentile basis, compared to a defined group of peer companies over three year performance periods. The Company uses a Monte Carlo simulation model to determine the grant-date fair value of awards with TSR-based performance conditions. The grant-date fair value of all other RSUs is equal to the closing market price of Integer common stock on the date of grant. (7.) STOCK-BASED COMPENSATION (Continued) The weighted average fair value and assumptions used to value the TSR portion of the PRSUs granted are as follows: Three Months Ended April 2, April 3, Weighted average fair value $ 85.16 $ 107.42 Risk-free interest rate 0.19 % 1.53 % Expected volatility 41 % 30 % Expected life (in years) 3.0 2.9 Expected dividend yield — % — % The valuation of the TSR portion of the PRSUs granted during 2021 and 2020 also reflects a weighted average illiquidity discount of 8.19% and 8.00%, respectively, related to the six-month period that recipients are restricted from selling, transferring, pledging or assigning the underlying shares, in the event of vesting. The following table summarizes time-vested RSU activity for the three month period ended April 2, 2021: Time-Vested Weighted Nonvested at December 31, 2020 207,923 $ 75.38 Granted 146,247 79.09 Vested (59,143) 63.94 Forfeited (2,327) 80.24 Nonvested at April 2, 2021 292,700 $ 79.51 The following table summarizes PRSU activity for the three month period ended April 2, 2021: Performance- Weighted Nonvested at December 31, 2020 219,391 $ 72.33 Granted 92,345 85.16 Vested (38,882) 37.75 Forfeited (65,941) 49.00 Nonvested at April 2, 2021 206,913 $ 91.98 |
Other Operating Expenses
Other Operating Expenses | 3 Months Ended |
Apr. 02, 2021 | |
Other Income and Expenses [Abstract] | |
OTHER OPERATING EXPENSES | OTHER OPERATING EXPENSES Other operating expenses comprise the following (in thousands): Three Months Ended April 2, April 3, Operational excellence initiatives $ 654 $ 974 Strategic reorganization and alignment — 548 Manufacturing alignment to support growth — 128 Acquisition and integration 84 356 Other general expenses 177 922 Total other operating expenses $ 915 $ 2,928 Operational excellence initiatives The Company’s operational excellence initiatives mainly consist of costs associated with executing on its sales force, manufacturing, business process and performance excellence operational strategic imperatives. These projects focus on changing the Company’s organizational structure to match product line growth strategies and customer needs, transitioning its manufacturing process into a competitive advantage and standardizing and optimizing its business processes. 2021 Initiatives - Costs related to the Company’s 2021 initiatives are primarily recorded within the Medical segment and mainly include termination benefits. The Company estimates that it will incur aggregate pre-tax charges in connection with the 2021 realignment plan of between approximately $1 million to $2 million, the majority of which are expected to be cash expenditures. As of April 2, 2021, total restructuring and related charges incurred since inception was $0.4 million. These actions are expected to be substantially completed by the end of 2021. 2020 Initiatives - Costs related to the Company’s 2020 initiatives are primarily recorded within the Medical segment and mainly include termination benefits. As of April 2, 2021, total restructuring and related charges incurred since inception was $3.0 million. These actions were substantially complete at the end of 2020. Strategic reorganization and alignment These initiatives primarily included aligning resources with the Company’s strategic direction, improving profitability to invest in accelerated growth and the expansion of a facility. These actions began in 2017 and were completed during the second quarter of 2020. The Company recorded, primarily within the Medical segment, $23.0 million of restructuring and related charges since inception. Manufacturing alignment to support growth These initiatives were designed to reduce costs, increase manufacturing capacity to accommodate growth and improve operating efficiencies by relocating certain manufacturing operations and expanding certain facilities. These actions began in 2017 and were completed during the fourth quarter of 2020. The Company recorded, primarily within the Medical segment, $5.8 million of restructuring and related charges since inception. The following table summarizes the change in accrued liabilities, presented within Accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets, related to the initiatives described above (in thousands): Operational December 31, 2020 $ 291 Charges incurred, net of reversals 654 Cash payments (306) April 2, 2021 $ 639 (8.) OTHER OPERATING EXPENSES (Continued) Acquisition and integration Acquisition and integration costs primarily consist of professional fees and other costs related to business acquisitions. During the three months ended April 2, 2021 and April 3, 2020, acquisition and integration costs included $0.1 million and $0.9 million, respectively, of expenses related to the acquisition of certain assets and liabilities of InoMec and US BioDesign, LLC (“USB”), which was acquired in October 2019. Acquisition and integration costs for the three months ended April 3, 2020, also includes a $0.5 million adjustment to reduce the fair value of acquisition-related contingent consideration liability associated with the Company’s acquisition of USB. See Note 13 “Financial Instruments and Fair Value Measurements” for additional information related to the fair value measurement of the contingent consideration. Other general expenses During the three months ended April 2, 2021 and April 3, 2020, the Company recorded expenses related to other initiatives not described above, which relate primarily to integration and operational initiatives to reduce future costs and improve efficiencies. The 2021 and 2020 amounts primarily include data archiving expenses, information technology systems conversion expenses, and expenses related to the restructuring of certain legal entities of the Company. |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 02, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to several factors, including discrete items, changes in the mix and amount of pre-tax income and the jurisdictions to which it relates, changes in tax laws and foreign tax holidays, business reorganizations, settlements with taxing authorities and foreign currency fluctuations. In addition, the Company continues to explore tax planning opportunities that may have a material impact on its effective tax rate. The Company’s effective tax rate for the first quarter of 2021 was 13.8% on $25.0 million of income before taxes compared to 15.1% on $36.6 million of income before taxes for the same period in 2020. The difference between the Company’s effective tax rates and the U.S. federal statutory income tax rate of 21% for the first quarter of 2021 and 2020 is due principally to the net impact of the Company’s earnings outside the U.S., which are generally taxed at rates that differ from the U.S federal rate, the Global Intangible Low-Taxed Income (“GILTI”) tax, the availability of tax credits, and certain discrete tax benefits. For the first quarter of 2021 and 2020, the Company recorded discrete tax benefits of $0.6 million and $1.0 million, respectively. The discrete tax benefits for both periods are predominately related to excess tax benefits recognized upon vesting of RSUs or exercise of stock options during those quarters. As of April 2, 2021 and December 31, 2020, the Company had unrecognized tax benefits of approximately $5.5 million. It is reasonably possible that a reduction of up to $3.4 million of the balance of unrecognized tax benefits may occur within the next twelve months as a result of potential audit settlements. As of April 2, 2021 and December 31, 2020, approximately $5.5 million of the unrecognized tax benefits would favorably impact the effective tax rate, net of federal benefit on state issues, if recognized. In response to the COVID-19 pandemic, many governments have enacted or are contemplating measures to provide aid and economic stimulus. These measures may include deferring the due dates of tax payments or other changes to their income and non-income-based tax laws. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020 in the U.S., includes measures to assist companies, including temporary changes to income and non-income- based tax laws. The CARES Act provides for deferred payment of the employer portion of social security taxes through the end of 2020, with 50% of the deferred amount due January 3, 2022 and the remaining 50% due January 3, 2023. As of April 2, 2021 and December 31, 2020, the Company had deferred a total of $9.7 million of payroll taxes. The deferred payroll taxes are included within Accrued expenses and other current liabilities and Other long-term liabilities on the Condensed Consolidated Balance Sheets. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Apr. 02, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Contingent Consideration Arrangements The Company records contingent consideration liabilities related to the earn-out provisions for certain acquisitions. See Note 13 “Financial Instruments and Fair Value Measurements” for additional information. Litigation The Company is subject to litigation arising from time to time in the ordinary course of its business. The Company does not expect that the ultimate resolution of any pending legal actions will have a material effect on its consolidated results of operations, financial position, or cash flows. However, litigation is subject to inherent uncertainties. As such, there can be no assurance that any pending legal action, which the Company currently believes to be immaterial, will not become material in the future. Product Warranties The Company generally warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. The product warranty liability is presented within Accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets. The change in product warranty liability comprised the following (in thousands): December 31, 2020 $ 163 Additions to warranty reserve, net of reversals 15 Adjustments to pre-existing warranties (63) April 2, 2021 $ 115 |
Earnings Per Share (EPS)
Earnings Per Share (EPS) | 3 Months Ended |
Apr. 02, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE (EPS) | EARNINGS PER SHARE (“EPS”) The following table sets forth a reconciliation of the information used in computing basic and diluted EPS (in thousands, except per share amounts): Three Months Ended April 2, April 3, Numerator for basic and diluted EPS: Net income $ 21,520 $ 31,100 Denominator for basic and diluted EPS: Weighted average shares outstanding - Basic 32,957 32,807 Dilutive effect of share-based awards 231 310 Weighted average shares outstanding - Diluted 33,188 33,117 Basic EPS $ 0.65 $ 0.95 Diluted EPS $ 0.65 $ 0.94 The diluted weighted average share calculations do not include the following securities, which are not dilutive to the EPS calculations or the performance criteria have not been met (in thousands): Three Months Ended April 2, April 3, Time-vested RSUs 10 101 PRSUs 64 24 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Apr. 02, 2021 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY The following is a summary of the number of shares of common stock issued, treasury stock and common stock outstanding for the three month periods ended April 2, 2021 and April 3, 2020: Issued Treasury Stock Outstanding Shares outstanding at December 31, 2020 32,908,178 — 32,908,178 Stock options exercised 4,229 — 4,229 Vesting of RSUs, net of shares withheld to cover taxes 62,295 — 62,295 Shares outstanding at April 2, 2021 32,974,702 — 32,974,702 Shares outstanding at December 31, 2019 32,847,017 (146,546) 32,700,471 Stock options exercised — 58,658 58,658 Vesting of RSUs, net of shares withheld to cover taxes — 66,876 66,876 Shares outstanding at April 3, 2020 32,847,017 (21,012) 32,826,005 Accumulated Other Comprehensive Income (Loss) (“AOCI”) comprises the following (in thousands): Defined Cash Foreign Total Tax Net-of-Tax December 31, 2020 $ (1,095) $ (4,956) $ 57,546 $ 51,495 $ 1,197 $ 52,692 Unrealized loss on cash flow hedges — (1,269) — (1,269) 266 (1,003) Realized gain on foreign currency hedges — (659) — (659) 139 (520) Realized loss on interest rate swap hedges — 1,034 — 1,034 (217) 817 Foreign currency translation loss — — (16,364) (16,364) — (16,364) April 2, 2021 $ (1,095) $ (5,850) $ 41,182 $ 34,237 $ 1,385 $ 35,622 December 31, 2019 $ (912) $ (2,358) $ 22,639 $ 19,369 $ 619 $ 19,988 Unrealized loss on cash flow hedges — (11,474) — (11,474) 2,410 (9,064) Realized gain on foreign currency hedges — (197) — (197) 41 (156) Realized loss on interest rate swap hedges — 748 — 748 (157) 591 Foreign currency translation loss — — (12,032) (12,032) — (12,032) April 3, 2020 $ (912) $ (13,281) $ 10,607 $ (3,586) $ 2,913 $ (673) |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 3 Months Ended |
Apr. 02, 2021 | |
Fair Value Disclosures [Abstract] | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Assets and Liabilities Measured at Fair Value on a Recurring Basis Fair value measurement standards apply to certain financial assets and liabilities that are measured at fair value on a recurring basis (each reporting period). For the Company, these financial assets and liabilities include its derivative instruments and contingent consideration. The Company does not have any nonfinancial assets or liabilities that are measured at fair value on a recurring basis. The Company is exposed to global market risks, including the effect of changes in interest rates and foreign currency exchange rates, and uses derivatives to manage these exposures that occur in the normal course of business. The Company does not hold or issue derivatives for trading or speculative purposes. All derivatives are recorded at fair value on the Condensed Consolidated Balance Sheets. The following tables provide information regarding assets and liabilities recorded at fair value on a recurring basis (in thousands): Fair Value Quoted Significant Significant April 2, 2021 Assets: Foreign currency contracts $ 28 $ — $ 28 $ — Liabilities: Foreign currency contracts 152 — 152 — Liabilities: Interest rate swap 5,726 — 5,726 — Liabilities: Contingent consideration 2,281 — — 2,281 December 31, 2020 Assets: Foreign currency contracts $ 2,070 $ — $ 2,070 $ — Liabilities: Interest rate swap 7,026 — 7,026 — Liabilities: Contingent consideration 3,900 — — 3,900 Interest Rate Swaps The Company periodically enters into interest rate swap agreements in order to reduce the cash flow risk caused by interest rate changes on its outstanding floating rate borrowings. Under these swap agreements, the Company pays a fixed rate of interest and receives a floating rate equal to one-month LIBOR. The variable rate received from the swap agreements and the variable rate paid on the outstanding debt will have the same rate of interest, excluding the credit spread, and will reset and pay interest on the same date. The Company has designated these swap agreements as cash flow hedges based on concluding the hedged forecasted transaction is probable of occurring within the period the cash flow hedge is anticipated to affect earnings. Information regarding the Company’s outstanding interest rate swap designated as cash flow hedges as of April 2, 2021 is as follows (dollars in thousands): Notional Amount Start Date End Pay Fixed Rate Receive Current Floating Rate Fair Value Balance Sheet Location $ 150,000 Jun 2020 Jun 2023 2.1785 % 0.1091 % $ (5,726) Other long-term liabilities Information regarding the Company’s outstanding interest rate swap designated as cash flow hedges as of December 31, 2020 is as follows (dollars in thousands): Notional Amount Start Date End Pay Fixed Rate Receive Current Floating Rate Fair Value Balance Sheet Location $ 200,000 Jun 2020 Jun 2023 2.1785 % 0.1480 % $ (7,026) Other long-term liabilities (13.) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued) Foreign Currency Contracts The Company periodically enters into foreign currency forward contracts to hedge its exposure to foreign currency exchange rate fluctuations in its international operations. The Company has designated these foreign currency forward contracts as cash flow hedges. Information regarding outstanding foreign currency forward contracts designated as cash flow hedges as of April 2, 2021 is as follows (dollars in thousands): Notional Amount Start End $/Foreign Currency Fair Value Balance Sheet Location $ 1,553 Apr 2021 Aug 2021 0.0232 UYU Peso $ 30 Prepaid expenses and other current assets 3,270 Apr 2021 Nov 2021 0.0227 UYU Peso 10 Prepaid expenses and other current assets 2,048 Jul 2021 Dec 2021 0.0228 UYU Peso (12) Prepaid expenses and other current assets 8,973 Apr 2021 Sep 2021 1.1949 Euro (133) Accrued expenses and other current liabilities 6,101 Apr 2021 Sep 2021 0.0454 MXN Peso 480 Accrued expenses and other current liabilities 7,269 Apr 2021 Dec 2021 0.0485 MXN Peso (1) Accrued expenses and other current liabilities 10,985 Apr 2021 Dec 2021 1.2206 Euro (362) Accrued expenses and other current liabilities 9,069 Apr 2021 Dec 2021 0.0490 MXN Peso (136) Accrued expenses and other current liabilities Information regarding outstanding foreign currency forward contracts designated as cash flow hedges as of December 31, 2020 is as follows (dollars in thousands): Notional Amount Start End $/Foreign Currency Fair Value Balance Sheet Location $ 16,132 Nov 2020 Sep 2021 1.1949 Euro $ 399 Prepaid expenses and other current assets 10,224 Jan 2021 Sep 2021 0.0454 MXN Peso 922 Prepaid expenses and other current assets 2,656 Jan 2021 Mar 2021 0.0443 MXN Peso 341 Prepaid expenses and other current assets 7,269 Apr 2021 Dec 2021 0.0485 MXN Peso 77 Prepaid expenses and other current assets 3,252 Jan 2021 Aug 2021 0.0232 UYU Peso 165 Prepaid expenses and other current assets 3,966 Jan 2021 Nov 2021 0.0227 UYU Peso 166 Prepaid expenses and other current assets Derivative Instruments with Hedge Accounting Designation The following tables present the effect of cash flow hedge derivative instruments on other comprehensive income (loss) (“OCI”), AOCI and the Company’s Condensed Consolidated Statements of Operations for the three months ended April 2, 2021 and April 3, 2020 (in thousands): Three Months Ended April 2, 2021 April 3, 2020 Total Amount of Gain (Loss) on Cash Flow Hedge Activity Total Amount of Gain (Loss) on Cash Flow Hedge Activity Sales $ 290,467 $ 8 $ 328,426 $ (128) Cost of sales 205,981 624 231,724 325 Operating expenses 49,878 27 52,626 — Interest expense 8,532 (1,034) 10,361 (748) (13.) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued) Unrealized Gain (Loss) Recognized in OCI Realized Gain (Loss) Reclassified from AOCI Three months ended, Location in Statements of Operations and Comprehensive Income Three months ended, April 2, April 3, April 2, April 3, Interest rate swap $ 266 $ (6,387) Interest expense $ (1,034) $ (748) Foreign exchange forwards (886) (274) Sales 8 (128) Foreign exchange forwards (559) (4,813) Cost of sales 624 325 Foreign exchange forwards (90) — Operating expenses 27 — The Company expects to reclassify net losses totaling $3.2 million related to its cash flow hedges from AOCI into earnings during the next twelve months. Contingent Consideration The following table presents the changes in the estimated fair values of the Company’s liabilities for contingent consideration measured using significant unobservable inputs (Level 3) for the three months ended April 2, 2021 and April 3, 2020 (in thousands): Three Months Ended April 2, April 3, Fair value measurement at beginning of period $ 3,900 $ 4,200 Amount recorded for acquisitions — 2,700 Fair value measurement adjustment — (500) Payments (1) (1,621) — Foreign currency translation 2 — Fair value measurement at end of period $ 2,281 $ 6,400 __________ (1) Consists of payments associated with the Company’s acquisitions of InoMec and USB, resulting from achievement of revenue-based goals for the period from March 1, 2020 to February 28, 2021 for InoMec and January 1, 2020 to December 31, 2020 for USB. On February 19, 2020, the Company acquired certain assets and liabilities of InoMec. See Note 2 “Business Acquisition” for additional information about the InoMec acquisition. On October 7, 2019, the Company acquired certain assets and liabilities of USB, a privately-held developer and manufacturer of complex braided biomedical structures for disposable and implantable medical devices. The contingent consideration at April 2, 2021 is the estimated fair value of the Company’s obligations, under the asset purchase agreements for InoMec and USB, to make additional payments if certain revenue goals are met. As of April 2, 2021, the current portion of contingent consideration liabilities is $1.0 million and included in Accrued expenses and other current liabilities, and the non-current portion is $1.3 million and included in Other long-term liabilities on the Condensed Consolidated Balance Sheets. As of December 31, 2020, the current portion of contingent consideration liabilities was $1.7 million and included in Accrued expenses and other current liabilities, and the non-current portion was $2.2 million and included in Other long-term liabilities on the Condensed Consolidated Balance Sheets. (13.) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued) The following table provides quantitative information associated with the fair value measurement of the Company’s liabilities for contingent consideration: April 2, 2021 Contingency Type Maximum Payout (undiscounted) Fair Value Valuation Technique Unobservable Inputs Weighted Average or Range Revenue-based payments $ 6,750 $ 2,281 Monte Carlo Revenue volatility 35.0 % Discount rate 4.0 % Projected year(s) of payment 2022-2024 December 31, 2020 Contingency Type Maximum Payout (undiscounted) Fair Value Valuation Technique Unobservable Inputs Weighted Average or Range Revenue-based payments $ 9,000 $ 3,900 Monte Carlo Revenue volatility 35.0 % Discount rate 4.0 % Projected year(s) of payment 2021-2024 During the first quarter of 2020, the Company acquired a set of similar identifiable intangible assets relating to a license to use technology within its Non-Medical segment. At the date of acquisition, the Company estimated the original fair value of the contingent consideration to be $1.0 million, which was paid during 2020 upon achievement of the applicable milestones. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Fair value standards also apply to certain assets and liabilities that are measured at fair value on a nonrecurring basis. The carrying amounts of cash, accounts receivable, accounts payable, and accrued expenses approximate fair value because of the short-term nature of these items. Borrowings under the Company’s Revolving Credit Facility, TLA Facility and TLB Facility accrue interest at a floating rate tied to a standard short-term borrowing index, selected at the Company’s option, plus an applicable margin. The carrying amount of this floating rate debt approximates fair value based upon the respective interest rates adjusting with market rate adjustments. Equity Investments The Company holds long-term, strategic investments in companies to promote business and strategic objectives. These investments are included in Other long-term assets on the Condensed Consolidated Balance Sheets. Non-marketable equity securities are equity securities without readily determinable fair value. The Company has elected the practicability exception to use an alternative approach that measures the securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. If an impairment is recognized on the Company’s non-marketable equity securities during the period, these assets are classified as Level 3 within the fair value hierarchy based on the nature of the fair value inputs. Equity investments comprise the following (in thousands): April 2, December 31, Equity method investment $ 20,135 $ 21,470 Non-marketable equity securities 5,723 5,723 Total equity investments $ 25,858 $ 27,193 (13.) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued) The components of (Gain) loss on equity investments for each period were as follows (in thousands): Three Months Ended April 2, April 3, Equity method investment (gain) loss $ 1,335 $ (1,925) The Company’s equity method investment is in a venture capital fund focused on investing in life sciences companies. As of April 2, 2021, the Company owned 6.6% of this fund. |
Segment Information
Segment Information | 3 Months Ended |
Apr. 02, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company organizes its business into two reportable segments: (1) Medical and (2) Non-Medical. This segment structure reflects the financial information and reports used by the Company’s management, specifically its Chief Operating Decision Maker, to make decisions regarding the Company’s business, including resource allocations and performance assessments. This segment structure reflects the Company’s current operating focus in compliance with ASC 280, Segment Reporting . For purposes of segment reporting, intercompany sales between segments are not material. The following table presents sales by product line (in thousands). Three Months Ended April 2, April 3, Segment sales by product line: Medical Cardio & Vascular $ 149,165 $ 179,205 Cardiac & Neuromodulation 108,408 107,820 Advanced Surgical, Orthopedics & Portable Medical 25,392 31,237 Total Medical 282,965 318,262 Non-Medical 7,502 10,164 Total sales $ 290,467 $ 328,426 The following table presents income for the Company’s reportable segments (in thousands). Three Months Ended April 2, April 3, Segment income: Medical $ 55,525 $ 65,216 Non-Medical 2 1,213 Total segment income 55,527 66,429 Unallocated operating expenses (20,919) (22,353) Operating income 34,608 44,076 Unallocated expenses, net (9,630) (7,437) Income before taxes $ 24,978 $ 36,639 |
Revenue From Contracts With Cus
Revenue From Contracts With Customers | 3 Months Ended |
Apr. 02, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERS Disaggregated Revenue In general, the Company’s business segmentation is aligned according to the nature and economic characteristics of its products and customer relationships and provides meaningful disaggregation of each business segment’s results of operations. For a summary by disaggregated product line sales for each segment, refer to Note 14, “Segment Information.” Revenue recognized from products and services transferred to customers over time represented 35% and 30%, respectively, of total revenue for the three months ended April 2, 2021 and April 3, 2020. All revenue recognized from products and services transferred to customers over time during the periods presented was within the Medical segment. The following table presents revenues by significant customers, which are defined as any customer who individually represents 10% or more of a segment’s total revenues. Three Months Ended April 2, 2021 April 3, 2020 Customer Medical Non-Medical Medical Non-Medical Customer A 22% * 20% * Customer B 13% * 18% * Customer C 17% * 16% * Customer D * 26% * 19% All other customers 48% 74% 46% 81% __________ * Less than 10% of segment’s total revenues for the period. The following tables present revenues by significant ship to location, which is defined as any country where 10% or more of a segment’s total revenues are shipped. Three Months Ended April 2, 2021 April 3, 2020 Ship to Location Medical Non-Medical Medical Non-Medical United States 53% 69% 55% 44% Puerto Rico * * 12% * United Kingdom * 10% * 15% Singapore * * * 14% Canada * 11% * 12% All other countries 47% 10% 33% 15% __________ * Less than 10% of segment’s total revenues for the period. Contract Balances The opening and closing balances of the Company’s contract assets and contract liabilities are as follows (in thousands): April 2, December 31, Contract assets $ 44,686 $ 40,218 Contract liabilities 2,379 2,498 Contract assets at April 2, 2021, increased $4.5 million from December 31, 2020, due to a contract modification to add existing products and extend the contractual term. During the three months ended April 2, 2021, the Company recognized $0.9 million of revenue that was included in the contract liability balance as of December 31, 2020. During the three months ended April 3, 2020, the Company recognized $0.1 million of revenue that was included in the contract liability balance as of December 31, 2019. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Apr. 02, 2021 | |
Accounting Policies [Abstract] | |
Interim Basis of Accounting | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information (Accounting Standards Codification (“ASC”) 270, Interim Reporting ) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all of the information necessary for a full presentation of financial position, results of operations, and cash flows in conformity with GAAP. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of the Company for the periods presented. Intercompany transactions and balances have been fully eliminated in consolidation. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, certain components of equity, sales, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ materially from these estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standard Updates (“ASU”) issued by the Financial Accounting Standards Board ("FASB"). The Company evaluated all recent accounting pronouncements issued, including those that are currently effective, and determined that the adoption of these pronouncements would not have a material effect on the financial position, results of operations or cash flows of the Company. There have been no new or material changes to the significant accounting policies discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, that are of significance, or potential significance, to the Company. |
Income Taxes | The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to several factors, including discrete items, changes in the mix and amount of pre-tax income and the jurisdictions to which it relates, changes in tax laws and foreign tax holidays, business reorganizations, settlements with taxing authorities and foreign currency fluctuations. In addition, the Company continues to explore tax planning opportunities that may have a material impact on its effective tax rate. |
Cost And Equity Method Investments | The Company holds long-term, strategic investments in companies to promote business and strategic objectives. These investments are included in Other long-term assets on the Condensed Consolidated Balance Sheets. Non-marketable equity securities |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | The following is supplemental information relating to the Condensed Consolidated Statements of Cash Flows (in thousands): Three Months Ended April 2, April 3, Noncash investing and financing activities: Property, plant and equipment purchases included in accounts payable $ 2,981 $ 4,481 Purchase of intangible asset included in accrued expenses — 1,000 Supplemental lease disclosures: Operating lease assets obtained in exchange for new or remeasured operating 7,414 7,427 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories comprise the following (in thousands): April 2, December 31, Raw materials $ 70,552 $ 72,477 Work-in-process 64,320 58,806 Finished goods 18,943 18,040 Total $ 153,815 $ 149,323 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, Net (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill by reportable segment for the three months ended April 2, 2021 were as follows (in thousands): Medical Non- Medical Total December 31, 2020 $ 842,442 $ 17,000 $ 859,442 Foreign currency translation (7,199) — (7,199) April 2, 2021 $ 835,243 $ 17,000 $ 852,243 |
Schedule of Finite-Lived Intangible Assets, Major Class | Intangible assets comprise the following (in thousands): Gross Accumulated Net April 2, 2021 Definite-lived: Purchased technology and patents $ 255,606 $ (155,278) $ 100,328 Customer lists 716,081 (167,620) 548,461 Other 4,120 (3,863) 257 Total amortizing intangible assets $ 975,807 $ (326,761) $ 649,046 Indefinite-lived: Trademarks and tradenames $ 90,288 December 31, 2020 Definite-lived: Purchased technology and patents $ 257,453 $ (152,798) $ 104,655 Customer lists 723,791 (161,856) 561,935 Other 4,142 (3,796) 346 Total amortizing intangible assets $ 985,386 $ (318,450) $ 666,936 Indefinite-lived: Trademarks and tradenames $ 90,288 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets comprise the following (in thousands): Gross Accumulated Net April 2, 2021 Definite-lived: Purchased technology and patents $ 255,606 $ (155,278) $ 100,328 Customer lists 716,081 (167,620) 548,461 Other 4,120 (3,863) 257 Total amortizing intangible assets $ 975,807 $ (326,761) $ 649,046 Indefinite-lived: Trademarks and tradenames $ 90,288 December 31, 2020 Definite-lived: Purchased technology and patents $ 257,453 $ (152,798) $ 104,655 Customer lists 723,791 (161,856) 561,935 Other 4,142 (3,796) 346 Total amortizing intangible assets $ 985,386 $ (318,450) $ 666,936 Indefinite-lived: Trademarks and tradenames $ 90,288 |
Schedule of Finite-Lived Intangible Assets, Amortization Expense | Aggregate intangible asset amortization expense comprises the following (in thousands): Three Months Ended April 2, April 3, Cost of sales $ 3,268 $ 3,269 Selling, general and administrative expenses 7,182 7,175 Total intangible asset amortization expense $ 10,450 $ 10,444 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future intangible asset amortization expense based on the carrying value as of April 2, 2021 is as follows (in thousands): Remainder of 2021 2022 2023 2024 2025 After 2025 Amortization Expense $ 30,835 40,170 38,751 37,798 36,483 465,009 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt comprises the following (in thousands): April 2, December 31, Senior secured term loan A $ 220,312 $ 229,687 Senior secured term loan B 472,286 508,286 Unamortized discount on term loan B and debt issuance costs (5,468) (6,715) Total debt 687,130 731,258 Current portion of long-term debt (37,500) (37,500) Total long-term debt $ 649,630 $ 693,758 |
Schedule of Maturities of Long-term Debt | Contractual maturities under the Senior Secured Credit Facilities for the remainder of 2021 and through maturity, excluding any discounts or premiums, as of April 2, 2021 are as follows (in thousands): 2021 2022 Future minimum principal payments $ 28,125 664,473 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The components and classification of stock-based compensation expense were as follows (in thousands): Three Months Ended April 2, April 3, Stock options $ — $ 13 RSUs 4,704 1,725 Total stock-based compensation expense $ 4,704 $ 1,738 Cost of sales $ 1,114 $ 454 Selling, general and administrative 3,355 1,136 Research, development and engineering 235 148 Total stock-based compensation expense $ 4,704 $ 1,738 |
Schedule of Share-based Compensation, Stock Options Activity | The following table summarizes the Company’s stock option activity for the three month period ended April 2, 2021: Number of Weighted Weighted Aggregate Outstanding at December 31, 2020 281,873 $ 36.05 Exercised (4,229) 27.32 Outstanding and exercisable at April 2, 2021 277,644 $ 36.18 4.5 $ 15.4 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The weighted average fair value and assumptions used to value the TSR portion of the PRSUs granted are as follows: Three Months Ended April 2, April 3, Weighted average fair value $ 85.16 $ 107.42 Risk-free interest rate 0.19 % 1.53 % Expected volatility 41 % 30 % Expected life (in years) 3.0 2.9 Expected dividend yield — % — % |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | The following table summarizes time-vested RSU activity for the three month period ended April 2, 2021: Time-Vested Weighted Nonvested at December 31, 2020 207,923 $ 75.38 Granted 146,247 79.09 Vested (59,143) 63.94 Forfeited (2,327) 80.24 Nonvested at April 2, 2021 292,700 $ 79.51 The following table summarizes PRSU activity for the three month period ended April 2, 2021: Performance- Weighted Nonvested at December 31, 2020 219,391 $ 72.33 Granted 92,345 85.16 Vested (38,882) 37.75 Forfeited (65,941) 49.00 Nonvested at April 2, 2021 206,913 $ 91.98 |
Other Operating Expenses (Table
Other Operating Expenses (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Operating Cost and Expense By Component | Other operating expenses comprise the following (in thousands): Three Months Ended April 2, April 3, Operational excellence initiatives $ 654 $ 974 Strategic reorganization and alignment — 548 Manufacturing alignment to support growth — 128 Acquisition and integration 84 356 Other general expenses 177 922 Total other operating expenses $ 915 $ 2,928 |
Schedule of Changes in Accrued Liabilities | The following table summarizes the change in accrued liabilities, presented within Accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets, related to the initiatives described above (in thousands): Operational December 31, 2020 $ 291 Charges incurred, net of reversals 654 Cash payments (306) April 2, 2021 $ 639 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Product Warranty Liability | The change in product warranty liability comprised the following (in thousands): December 31, 2020 $ 163 Additions to warranty reserve, net of reversals 15 Adjustments to pre-existing warranties (63) April 2, 2021 $ 115 |
Earnings Per Share (EPS) (Table
Earnings Per Share (EPS) (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | The following table sets forth a reconciliation of the information used in computing basic and diluted EPS (in thousands, except per share amounts): Three Months Ended April 2, April 3, Numerator for basic and diluted EPS: Net income $ 21,520 $ 31,100 Denominator for basic and diluted EPS: Weighted average shares outstanding - Basic 32,957 32,807 Dilutive effect of share-based awards 231 310 Weighted average shares outstanding - Diluted 33,188 33,117 Basic EPS $ 0.65 $ 0.95 Diluted EPS $ 0.65 $ 0.94 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The diluted weighted average share calculations do not include the following securities, which are not dilutive to the EPS calculations or the performance criteria have not been met (in thousands): Three Months Ended April 2, April 3, Time-vested RSUs 10 101 PRSUs 64 24 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Common Stock Outstanding Roll Forward | The following is a summary of the number of shares of common stock issued, treasury stock and common stock outstanding for the three month periods ended April 2, 2021 and April 3, 2020: Issued Treasury Stock Outstanding Shares outstanding at December 31, 2020 32,908,178 — 32,908,178 Stock options exercised 4,229 — 4,229 Vesting of RSUs, net of shares withheld to cover taxes 62,295 — 62,295 Shares outstanding at April 2, 2021 32,974,702 — 32,974,702 Shares outstanding at December 31, 2019 32,847,017 (146,546) 32,700,471 Stock options exercised — 58,658 58,658 Vesting of RSUs, net of shares withheld to cover taxes — 66,876 66,876 Shares outstanding at April 3, 2020 32,847,017 (21,012) 32,826,005 |
Schedule of Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) (“AOCI”) comprises the following (in thousands): Defined Cash Foreign Total Tax Net-of-Tax December 31, 2020 $ (1,095) $ (4,956) $ 57,546 $ 51,495 $ 1,197 $ 52,692 Unrealized loss on cash flow hedges — (1,269) — (1,269) 266 (1,003) Realized gain on foreign currency hedges — (659) — (659) 139 (520) Realized loss on interest rate swap hedges — 1,034 — 1,034 (217) 817 Foreign currency translation loss — — (16,364) (16,364) — (16,364) April 2, 2021 $ (1,095) $ (5,850) $ 41,182 $ 34,237 $ 1,385 $ 35,622 December 31, 2019 $ (912) $ (2,358) $ 22,639 $ 19,369 $ 619 $ 19,988 Unrealized loss on cash flow hedges — (11,474) — (11,474) 2,410 (9,064) Realized gain on foreign currency hedges — (197) — (197) 41 (156) Realized loss on interest rate swap hedges — 748 — 748 (157) 591 Foreign currency translation loss — — (12,032) (12,032) — (12,032) April 3, 2020 $ (912) $ (13,281) $ 10,607 $ (3,586) $ 2,913 $ (673) |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables provide information regarding assets and liabilities recorded at fair value on a recurring basis (in thousands): Fair Value Quoted Significant Significant April 2, 2021 Assets: Foreign currency contracts $ 28 $ — $ 28 $ — Liabilities: Foreign currency contracts 152 — 152 — Liabilities: Interest rate swap 5,726 — 5,726 — Liabilities: Contingent consideration 2,281 — — 2,281 December 31, 2020 Assets: Foreign currency contracts $ 2,070 $ — $ 2,070 $ — Liabilities: Interest rate swap 7,026 — 7,026 — Liabilities: Contingent consideration 3,900 — — 3,900 Information regarding the Company’s outstanding interest rate swap designated as cash flow hedges as of April 2, 2021 is as follows (dollars in thousands): Notional Amount Start Date End Pay Fixed Rate Receive Current Floating Rate Fair Value Balance Sheet Location $ 150,000 Jun 2020 Jun 2023 2.1785 % 0.1091 % $ (5,726) Other long-term liabilities Information regarding the Company’s outstanding interest rate swap designated as cash flow hedges as of December 31, 2020 is as follows (dollars in thousands): Notional Amount Start Date End Pay Fixed Rate Receive Current Floating Rate Fair Value Balance Sheet Location $ 200,000 Jun 2020 Jun 2023 2.1785 % 0.1480 % $ (7,026) Other long-term liabilities Notional Amount Start End $/Foreign Currency Fair Value Balance Sheet Location $ 1,553 Apr 2021 Aug 2021 0.0232 UYU Peso $ 30 Prepaid expenses and other current assets 3,270 Apr 2021 Nov 2021 0.0227 UYU Peso 10 Prepaid expenses and other current assets 2,048 Jul 2021 Dec 2021 0.0228 UYU Peso (12) Prepaid expenses and other current assets 8,973 Apr 2021 Sep 2021 1.1949 Euro (133) Accrued expenses and other current liabilities 6,101 Apr 2021 Sep 2021 0.0454 MXN Peso 480 Accrued expenses and other current liabilities 7,269 Apr 2021 Dec 2021 0.0485 MXN Peso (1) Accrued expenses and other current liabilities 10,985 Apr 2021 Dec 2021 1.2206 Euro (362) Accrued expenses and other current liabilities 9,069 Apr 2021 Dec 2021 0.0490 MXN Peso (136) Accrued expenses and other current liabilities Information regarding outstanding foreign currency forward contracts designated as cash flow hedges as of December 31, 2020 is as follows (dollars in thousands): Notional Amount Start End $/Foreign Currency Fair Value Balance Sheet Location $ 16,132 Nov 2020 Sep 2021 1.1949 Euro $ 399 Prepaid expenses and other current assets 10,224 Jan 2021 Sep 2021 0.0454 MXN Peso 922 Prepaid expenses and other current assets 2,656 Jan 2021 Mar 2021 0.0443 MXN Peso 341 Prepaid expenses and other current assets 7,269 Apr 2021 Dec 2021 0.0485 MXN Peso 77 Prepaid expenses and other current assets 3,252 Jan 2021 Aug 2021 0.0232 UYU Peso 165 Prepaid expenses and other current assets 3,966 Jan 2021 Nov 2021 0.0227 UYU Peso 166 Prepaid expenses and other current assets |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The following tables present the effect of cash flow hedge derivative instruments on other comprehensive income (loss) (“OCI”), AOCI and the Company’s Condensed Consolidated Statements of Operations for the three months ended April 2, 2021 and April 3, 2020 (in thousands): Three Months Ended April 2, 2021 April 3, 2020 Total Amount of Gain (Loss) on Cash Flow Hedge Activity Total Amount of Gain (Loss) on Cash Flow Hedge Activity Sales $ 290,467 $ 8 $ 328,426 $ (128) Cost of sales 205,981 624 231,724 325 Operating expenses 49,878 27 52,626 — Interest expense 8,532 (1,034) 10,361 (748) (13.) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued) Unrealized Gain (Loss) Recognized in OCI Realized Gain (Loss) Reclassified from AOCI Three months ended, Location in Statements of Operations and Comprehensive Income Three months ended, April 2, April 3, April 2, April 3, Interest rate swap $ 266 $ (6,387) Interest expense $ (1,034) $ (748) Foreign exchange forwards (886) (274) Sales 8 (128) Foreign exchange forwards (559) (4,813) Cost of sales 624 325 Foreign exchange forwards (90) — Operating expenses 27 — |
Schedule of Estimated Fair Values for Contingent Consideration | The following table presents the changes in the estimated fair values of the Company’s liabilities for contingent consideration measured using significant unobservable inputs (Level 3) for the three months ended April 2, 2021 and April 3, 2020 (in thousands): Three Months Ended April 2, April 3, Fair value measurement at beginning of period $ 3,900 $ 4,200 Amount recorded for acquisitions — 2,700 Fair value measurement adjustment — (500) Payments (1) (1,621) — Foreign currency translation 2 — Fair value measurement at end of period $ 2,281 $ 6,400 __________ (1) Consists of payments associated with the Company’s acquisitions of InoMec and USB, resulting from achievement of revenue-based goals for the period from March 1, 2020 to February 28, 2021 for InoMec and January 1, 2020 to December 31, 2020 for USB. |
Schedule of Contingent Consideration Measurement Inputs | The following table provides quantitative information associated with the fair value measurement of the Company’s liabilities for contingent consideration: April 2, 2021 Contingency Type Maximum Payout (undiscounted) Fair Value Valuation Technique Unobservable Inputs Weighted Average or Range Revenue-based payments $ 6,750 $ 2,281 Monte Carlo Revenue volatility 35.0 % Discount rate 4.0 % Projected year(s) of payment 2022-2024 December 31, 2020 Contingency Type Maximum Payout (undiscounted) Fair Value Valuation Technique Unobservable Inputs Weighted Average or Range Revenue-based payments $ 9,000 $ 3,900 Monte Carlo Revenue volatility 35.0 % Discount rate 4.0 % Projected year(s) of payment 2021-2024 |
Schedule of Equity Method Investments | Equity investments comprise the following (in thousands): April 2, December 31, Equity method investment $ 20,135 $ 21,470 Non-marketable equity securities 5,723 5,723 Total equity investments $ 25,858 $ 27,193 (13.) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued) The components of (Gain) loss on equity investments for each period were as follows (in thousands): Three Months Ended April 2, April 3, Equity method investment (gain) loss $ 1,335 $ (1,925) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Segment Reconciliation [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | The following table presents sales by product line (in thousands). Three Months Ended April 2, April 3, Segment sales by product line: Medical Cardio & Vascular $ 149,165 $ 179,205 Cardiac & Neuromodulation 108,408 107,820 Advanced Surgical, Orthopedics & Portable Medical 25,392 31,237 Total Medical 282,965 318,262 Non-Medical 7,502 10,164 Total sales $ 290,467 $ 328,426 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | The following table presents income for the Company’s reportable segments (in thousands). Three Months Ended April 2, April 3, Segment income: Medical $ 55,525 $ 65,216 Non-Medical 2 1,213 Total segment income 55,527 66,429 Unallocated operating expenses (20,919) (22,353) Operating income 34,608 44,076 Unallocated expenses, net (9,630) (7,437) Income before taxes $ 24,978 $ 36,639 |
Revenue From Contracts With C_2
Revenue From Contracts With Customers (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue by Major Customers by Reporting Segments | The following table presents revenues by significant customers, which are defined as any customer who individually represents 10% or more of a segment’s total revenues. Three Months Ended April 2, 2021 April 3, 2020 Customer Medical Non-Medical Medical Non-Medical Customer A 22% * 20% * Customer B 13% * 18% * Customer C 17% * 16% * Customer D * 26% * 19% All other customers 48% 74% 46% 81% __________ * Less than 10% of segment’s total revenues for the period. |
Schedule of Revenue by Ship To Location | The following tables present revenues by significant ship to location, which is defined as any country where 10% or more of a segment’s total revenues are shipped. Three Months Ended April 2, 2021 April 3, 2020 Ship to Location Medical Non-Medical Medical Non-Medical United States 53% 69% 55% 44% Puerto Rico * * 12% * United Kingdom * 10% * 15% Singapore * * * 14% Canada * 11% * 12% All other countries 47% 10% 33% 15% __________ * Less than 10% of segment’s total revenues for the period. |
Schedule of Contract with Customer, Asset and Liability | The opening and closing balances of the Company’s contract assets and contract liabilities are as follows (in thousands): April 2, December 31, Contract assets $ 44,686 $ 40,218 Contract liabilities 2,379 2,498 |
Business Acquisition (Acquisiti
Business Acquisition (Acquisition of Assets from InoMec Narrative) (Details) - USD ($) $ in Thousands | Feb. 19, 2020 | Apr. 02, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||
Contingent consideration, range of outcomes, value, high | $ 6,750 | $ 9,000 | |
Goodwill | $ 852,243 | $ 859,442 | |
InoMec Ltd | |||
Business Acquisition [Line Items] | |||
Consideration transferred | $ 7,000 | ||
Payments to acquire business | 5,300 | ||
Fair value of contingent consideration recognized | 1,700 | ||
Contingent consideration, range of outcomes, value, high | $ 3,500 | ||
Contingent consideration payment period | 4 years | ||
Intangible assets acquired | $ 2,000 | ||
Goodwill | 4,800 | ||
Property, plant and equipment acquired | 300 | ||
Other working capital items acquired | $ 100 | ||
Acquired finite-lived intangible assets, weighted average useful life | 5 years 10 months 24 days |
Business Acquisition (Narrative
Business Acquisition (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Business Acquisition [Line Items] | ||
Sales | $ 290,467 | $ 328,426 |
InoMec Ltd | ||
Business Acquisition [Line Items] | ||
Sales | $ 800 | 400 |
InoMec Ltd | Other operating expenses | ||
Business Acquisition [Line Items] | ||
Acquisition related costs | $ 700 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Noncash investing and financing activities: | ||
Property, plant and equipment purchases included in accounts payable | $ 2,981 | $ 4,481 |
Purchase of intangible asset included in accrued expenses | 0 | 1,000 |
Supplemental lease disclosures: | ||
ROU assets obtained in exchange for new operating lease liabilities | $ 7,414 | $ 7,427 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Apr. 02, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 70,552 | $ 72,477 |
Work-in-process | 64,320 | 58,806 |
Finished goods | 18,943 | 18,040 |
Total | $ 153,815 | $ 149,323 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, Net (Schedule of Goodwill) (Details) $ in Thousands | 3 Months Ended |
Apr. 02, 2021USD ($) | |
Goodwill [Roll Forward] | |
Opening goodwill | $ 859,442 |
Foreign currency translation | (7,199) |
Closing goodwill | 852,243 |
Medical | |
Goodwill [Roll Forward] | |
Opening goodwill | 842,442 |
Foreign currency translation | (7,199) |
Closing goodwill | 835,243 |
Non-Medical | |
Goodwill [Roll Forward] | |
Opening goodwill | 17,000 |
Foreign currency translation | 0 |
Closing goodwill | $ 17,000 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, Net (Schedule of Definite-Lived and Indefinite-Lived Intangible Assets, Major Class) (Details) - USD ($) $ in Thousands | Apr. 02, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 975,807 | $ 985,386 |
Accumulated amortization | (326,761) | (318,450) |
Total estimated amortization expense | 649,046 | 666,936 |
Trademarks And Tradenames | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets (excluding goodwill) | 90,288 | 90,288 |
Purchased technology and patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 255,606 | 257,453 |
Accumulated amortization | (155,278) | (152,798) |
Total estimated amortization expense | 100,328 | 104,655 |
Customer lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 716,081 | 723,791 |
Accumulated amortization | (167,620) | (161,856) |
Total estimated amortization expense | 548,461 | 561,935 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 4,120 | 4,142 |
Accumulated amortization | (3,863) | (3,796) |
Total estimated amortization expense | $ 257 | $ 346 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets, Net (Schedule of Finite-Lived Intangible Assets, Amortization Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible asset amortization expense | $ 10,450 | $ 10,444 |
Cost of sales | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible asset amortization expense | 3,268 | 3,269 |
Selling, general and administrative expenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible asset amortization expense | $ 7,182 | $ 7,175 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets, Net (Schedule of Finite-Lived Intangible Assets, Future Amortization Expense) (Details) $ in Thousands | Apr. 02, 2021USD ($) |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
Remainder of 2021 | $ 30,835 |
2022 | 40,170 |
2023 | 38,751 |
2024 | 37,798 |
2025 | 36,483 |
After 2025 | $ 465,009 |
Debt (Schedule of Long-Term Deb
Debt (Schedule of Long-Term Debt) (Details) - USD ($) $ in Thousands | Apr. 02, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Unamortized discount on term loan B and debt issuance costs | $ (5,468) | $ (6,715) |
Total debt | 687,130 | 731,258 |
Current portion of long-term debt | (37,500) | (37,500) |
Total long-term debt | 649,630 | 693,758 |
Secured Debt | Loans Payable | Senior secured term loan A | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 220,312 | 229,687 |
Secured Debt | Loans Payable | Senior secured term loan B | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 472,286 | $ 508,286 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | 3 Months Ended | 13 Months Ended | |||
Oct. 01, 2021 | Apr. 02, 2021USD ($) | Apr. 03, 2020USD ($) | Oct. 27, 2022 | Dec. 31, 2020USD ($) | |
Loans Payable | Senior secured term loan A | |||||
Debt Instrument [Line Items] | |||||
Loss on extinguishment of debt | $ 300,000 | ||||
Secured Debt | Revolving Credit Facility | Revolving line of credit | |||||
Debt Instrument [Line Items] | |||||
Credit facility maximum borrowing capacity | $ 200,000,000 | ||||
Outstanding borrowings | 0 | ||||
Line of credit facility, remaining borrowing capacity | $ 193,300,000 | ||||
Secured Debt | Loans Payable | Senior secured term loan B | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, discount, percentage | 1.00% | ||||
Outstanding borrowings | $ 472,286,000 | $ 508,286,000 | |||
Debt weighted average interest rate | 3.50% | ||||
Debt prepayment | $ 36,000,000 | ||||
Secured Debt | Loans Payable | Senior secured term loan B | Prime Rate | |||||
Debt Instrument [Line Items] | |||||
Variable rate basis spread | 1.50% | ||||
Secured Debt | Loans Payable | Senior secured term loan B | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Variable rate basis spread | 2.50% | ||||
Debt instrument, interest rate, floor | 1.00% | ||||
Secured Debt | Loans Payable | Senior secured term loan A | |||||
Debt Instrument [Line Items] | |||||
Deferred amendment fee percentage | 0.03125% | ||||
Total net leverage ratio | 3 | ||||
Outstanding borrowings | $ 220,312,000 | $ 229,687,000 | |||
Debt weighted average interest rate | 2.36% | ||||
Net leverage ratio incremental increase option | 4.75 | ||||
Debt instrument, covenant compliance, adjusted EBITDA to interest expense ratio | 3 | ||||
Secured Debt | Loans Payable | Senior secured term loan A | Forecast | |||||
Debt Instrument [Line Items] | |||||
Net leverage ratio incremental increase option | 4.50 | 4 | |||
Secured Debt | Swingline Loans | Revolving line of credit | |||||
Debt Instrument [Line Items] | |||||
Credit facility maximum borrowing capacity | $ 15,000,000 | ||||
Secured Debt | Standby Letters of Credit | Revolving line of credit | |||||
Debt Instrument [Line Items] | |||||
Credit facility maximum borrowing capacity | $ 25,000,000 | ||||
Secured Debt | Minimum | Revolving Credit Facility | Revolving line of credit | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, unused capacity, commitment fee percentage | 0.175% | ||||
Secured Debt | Minimum | Loans Payable | Senior secured term loan A | Prime Rate | |||||
Debt Instrument [Line Items] | |||||
Variable rate basis spread | 0.50% | ||||
Secured Debt | Minimum | Loans Payable | Senior secured term loan A | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Variable rate basis spread | 1.50% | ||||
Secured Debt | Maximum | Revolving Credit Facility | Revolving line of credit | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, unused capacity, commitment fee percentage | 0.25% | ||||
Secured Debt | Maximum | Loans Payable | Senior secured term loan A | Prime Rate | |||||
Debt Instrument [Line Items] | |||||
Variable rate basis spread | 2.00% | ||||
Secured Debt | Maximum | Loans Payable | Senior secured term loan A | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Variable rate basis spread | 3.00% | ||||
Standby Letters of Credit | Revolving Credit Facility | Revolving line of credit | |||||
Debt Instrument [Line Items] | |||||
Letters of credit outstanding, amount | $ 6,700,000 |
Debt (Long-term Debt Maturity S
Debt (Long-term Debt Maturity Schedule) (Details) $ in Thousands | Apr. 02, 2021USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 28,125 |
2022 | $ 664,473 |
Stock-Based Compensation (Alloc
Stock-Based Compensation (Allocation of Recognized Period Costs) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based payment arrangement, expense | $ 4,704 | $ 1,738 |
Cost of sales | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based payment arrangement, expense | 1,114 | 454 |
Selling, general and administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based payment arrangement, expense | 3,355 | 1,136 |
Research, development and engineering | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based payment arrangement, expense | 235 | 148 |
Stock options | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based payment arrangement, expense | 0 | 13 |
RSUs | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based payment arrangement, expense | $ 4,704 | $ 1,725 |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock Options Activity) (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Apr. 02, 2021USD ($)$ / sharesshares | |
Stock Option Activity (in shares) | |
Options outstanding, beginning balance (in shares) | shares | 281,873 |
Exercised (in shares) | shares | (4,229) |
Options outstanding, ending balance (in shares) | shares | 277,644 |
Options exercisable at period end (in shares) | shares | 277,644 |
Weighted Average Exercise Price (in dollars per share) | |
Options outstanding, beginning (in dollars per share) | $ / shares | $ 36.05 |
Exercised (in dollars per share) | $ / shares | 27.32 |
Options outstanding, ending (in dollars per share) | $ / shares | 36.18 |
Options exercisable at period end (in dollars per share) | $ / shares | $ 36.18 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Options outstanding, weighted average remaining contractual term | 4 years 6 months |
Options exercisable, weighted average remaining contractual term | 4 years 6 months |
Options outstanding, intrinsic value | $ | $ 15.4 |
Options exercisable, intrinsic value | $ | $ 15.4 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) | 3 Months Ended |
Apr. 02, 2021 | |
Restricted Stock And Restricted Stock Units Time Based | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Requisite service period | 3 years |
Stock-Based Compensation (Valua
Stock-Based Compensation (Valuation Assumptions) (Details) - Performance-based RSUs (PSUs) - $ / shares | 3 Months Ended | 12 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average fair value (in dollars per share) | $ 85.16 | $ 107.42 | |
Risk-free interest rate | 0.19% | 1.53% | |
Expected volatility | 41.00% | 30.00% | |
Expected life (in years) | 3 years | 2 years 10 months 24 days | |
Expected dividend yield | 0.00% | 0.00% | |
Weighted average illiquidity discount | 8.19% | 8.00% |
Stock-Based Compensation (Restr
Stock-Based Compensation (Restricted Stock and Restricted Stock Units Activity) (Details) | 3 Months Ended |
Apr. 02, 2021$ / sharesshares | |
Restricted Stock And Restricted Stock Units Time Based | |
Restricted Stock and Restricted Stock Unit Activity (in shares) | |
Nonvested, beginning (in shares) | shares | 207,923 |
Granted (in shares) | shares | 146,247 |
Vested (in shares) | shares | (59,143) |
Forfeited (in shares) | shares | (2,327) |
Nonvested, ending (in shares) | shares | 292,700 |
Restricted Stock and Restricted Stock Unit Weighted Average Fair Value (in dollars per share) | |
Nonvested, beginning (in dollars per share) | $ / shares | $ 75.38 |
Granted (in dollars per share) | $ / shares | 79.09 |
Vested (in dollars per share) | $ / shares | 63.94 |
Forfeited (in dollars per share) | $ / shares | 80.24 |
Nonvested, ending (in dollars per share) | $ / shares | $ 79.51 |
Performance-based RSUs (PSUs) | |
Restricted Stock and Restricted Stock Unit Activity (in shares) | |
Nonvested, beginning (in shares) | shares | 219,391 |
Granted (in shares) | shares | 92,345 |
Vested (in shares) | shares | (38,882) |
Forfeited (in shares) | shares | (65,941) |
Nonvested, ending (in shares) | shares | 206,913 |
Restricted Stock and Restricted Stock Unit Weighted Average Fair Value (in dollars per share) | |
Nonvested, beginning (in dollars per share) | $ / shares | $ 72.33 |
Granted (in dollars per share) | $ / shares | 85.16 |
Vested (in dollars per share) | $ / shares | 37.75 |
Forfeited (in dollars per share) | $ / shares | 49 |
Nonvested, ending (in dollars per share) | $ / shares | $ 91.98 |
Other Operating Expenses (Sched
Other Operating Expenses (Schedule of Other Operating Cost and Expense By Component) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Other Operating Income Expense Detail [Line Items] | ||
Total other operating expenses | $ 915 | $ 2,928 |
Operational excellence initiatives | ||
Other Operating Income Expense Detail [Line Items] | ||
Total other operating expenses | 654 | 974 |
Strategic reorganization and alignment | ||
Other Operating Income Expense Detail [Line Items] | ||
Total other operating expenses | 0 | 548 |
Manufacturing alignment to support growth | ||
Other Operating Income Expense Detail [Line Items] | ||
Total other operating expenses | 0 | 128 |
Acquisition and integration | ||
Other Operating Income Expense Detail [Line Items] | ||
Total other operating expenses | 84 | 356 |
Other general expenses | ||
Other Operating Income Expense Detail [Line Items] | ||
Total other operating expenses | $ 177 | $ 922 |
Other Operating Expenses (Narra
Other Operating Expenses (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Minimum | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected costs | $ 1 | |
Maximum | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected costs | 2 | |
InoMec Ltd And US BioDesign LLC | ||
Restructuring Cost and Reserve [Line Items] | ||
Acquisition related costs | 0.1 | $ 0.9 |
US BioDesign LLC | ||
Restructuring Cost and Reserve [Line Items] | ||
Acquisition-related contingent consideration, fair value adjustment | 0.5 | |
Operational Excellence Initiatives, 2021 Initiatives | ||
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred since inception | 0.4 | |
Operational Excellence Initiatives, 2020 Initiatives | ||
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred since inception | 3 | |
Strategic Reorganization And Alignment | ||
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred since inception | 23 | |
Manufacturing Alignment To Support Growth | ||
Restructuring Cost and Reserve [Line Items] | ||
Costs incurred since inception | $ 5.8 |
Other Operating Expenses (Sch_2
Other Operating Expenses (Schedule of Restructuring Reserve By Type of Cost) (Details) - Operational excellence initiatives $ in Thousands | 3 Months Ended |
Apr. 02, 2021USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | $ 291 |
Charges incurred, net of reversals | 654 |
Cash payments | (306) |
Ending balance | $ 639 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 02, 2021 | Apr. 03, 2020 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate | 13.80% | 15.10% | |
Income (loss) before provision for income taxes | $ 24,978 | $ 36,639 | |
Discrete tax benefits | 600 | $ 1,000 | |
Unrecognized tax benefits | 5,500 | ||
Significant change in unrecognized tax benefits is reasonably possible, amount of unrecorded benefit | 3,400 | ||
Unrecognized tax benefits that would impact effective tax rate | 5,500 | ||
Accrued payroll taxes | $ 9,700 | $ 9,700 |
Commitments and Contingencies_2
Commitments and Contingencies (Schedule of Product Warranty Liability) (Details) $ in Thousands | 3 Months Ended |
Apr. 02, 2021USD ($) | |
Movement in Standard Product Warranty Accrual [Roll Forward] | |
Balance at beginning of period | $ 163 |
Additions to warranty reserve, net of reversals | 15 |
Adjustments to pre-existing warranties | (63) |
Balance at end of period | $ 115 |
Earnings Per Share (EPS) (Detai
Earnings Per Share (EPS) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Earnings Per Share [Abstract] | ||
Net income | $ 21,520 | $ 31,100 |
Denominator for basic and diluted EPS: | ||
Weighted average shares outstanding, basic (in shares) | 32,957 | 32,807 |
Dilutive effect of share-based awards (in shares) | 231 | 310 |
Weighted average shares outstanding - Diluted (in shares) | 33,188 | 33,117 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.65 | $ 0.95 |
Diluted (in dollars per share) | $ 0.65 | $ 0.94 |
Anitdilutive Securities Excluded From Earnings Per Share [Abstract] | ||
Time-vested RSUs (in shares) | 10 | 101 |
PRSUs (in shares) | 64 | 24 |
Stockholders' Equity (Shares Is
Stockholders' Equity (Shares Issued and Outstanding) (Details) - shares | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Class Of Stock [Roll Forward] | ||
Balance, beginning of period (in shares) | 32,908,178 | |
Shares outstanding beginning balance (in shares) | 32,908,178 | 32,700,471 |
Stock options exercised (in shares) | 4,229 | 58,658 |
Balance, end of period (in shares) | 32,974,702 | |
Shares outstanding ending balance (in shares) | 32,974,702 | 32,826,005 |
Common Stock | ||
Class Of Stock [Roll Forward] | ||
Balance, beginning of period (in shares) | 32,908,178 | 32,847,017 |
Stock options exercised (in shares) | 4,229 | 0 |
Balance, end of period (in shares) | 32,974,702 | 32,847,017 |
Treasury Stock, Common | ||
Class Of Stock [Roll Forward] | ||
Balance, beginning of period (in shares) | 0 | 146,546 |
Stock options exercised (in shares) | 0 | 58,658 |
Balance, end of period (in shares) | 0 | 21,012 |
Restricted Stock | ||
Class Of Stock [Roll Forward] | ||
RSAs issued, net of forfeitures, and vesting of RSUs (in shares) | 62,295 | 66,876 |
Restricted Stock | Common Stock | ||
Class Of Stock [Roll Forward] | ||
RSAs issued, net of forfeitures, and vesting of RSUs (in shares) | 62,295 | 0 |
Restricted Stock | Treasury Stock, Common | ||
Class Of Stock [Roll Forward] | ||
RSAs issued, net of forfeitures, and vesting of RSUs (in shares) | 0 | 66,876 |
Stockholders' Equity (Accumulat
Stockholders' Equity (Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | $ 1,271,055 | $ 1,152,488 |
Unrealized loss on cash flow hedges, net of tax | (1,003) | (9,064) |
Foreign currency translation loss | (16,364) | (12,032) |
Balance, ending balance | 1,277,724 | 1,164,201 |
Foreign exchange contracts | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Realized gain (loss) hedges, net of tax | (520) | (156) |
Interest rate swap | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Realized gain (loss) hedges, net of tax | 817 | 591 |
Defined Benefit Plan Liability | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | (1,095) | (912) |
Balance, ending balance | (1,095) | (912) |
Cash Flow Hedges | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | (4,956) | (2,358) |
Unrealized loss on cash flow hedges, pretax | (1,269) | (11,474) |
Unrealized loss on cash flow hedges, tax | 266 | 2,410 |
Balance, ending balance | (5,850) | (13,281) |
Cash Flow Hedges | Foreign exchange contracts | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Realized gain (loss) hedges, pretax | (659) | (197) |
Realized gain (loss) hedges, tax | 139 | 41 |
Cash Flow Hedges | Interest rate swap | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Realized gain (loss) hedges, pretax | 1,034 | 748 |
Realized gain (loss) hedges, tax | (217) | (157) |
Foreign Currency Translation Adjustment | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | 57,546 | 22,639 |
Foreign currency translation loss, pretax | (16,364) | (12,032) |
Foreign currency translation loss, tax | 0 | 0 |
Balance, ending balance | 41,182 | 10,607 |
Total Pre-Tax Amount | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | 51,495 | 19,369 |
Balance, ending balance | 34,237 | (3,586) |
Tax | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | 1,197 | 619 |
Balance, ending balance | 1,385 | 2,913 |
Net-of-Tax Amount | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning of period | 52,692 | 19,988 |
Balance, ending balance | $ 35,622 | $ (673) |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurements (Assets and Liabilities Recorded at Fair Value on a Recurring Basis) (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Apr. 02, 2021 | Dec. 31, 2020 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets: Foreign currency contracts | $ 28 | $ 2,070 |
Liabilities: Foreign currency contracts | 152 | |
Liabilities: Interest rate swap | 5,726 | 7,026 |
Liabilities: Contingent consideration | 2,281 | 3,900 |
Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets: Foreign currency contracts | 0 | 0 |
Liabilities: Foreign currency contracts | 0 | |
Liabilities: Interest rate swap | 0 | 0 |
Liabilities: Contingent consideration | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets: Foreign currency contracts | 28 | 2,070 |
Liabilities: Foreign currency contracts | 152 | |
Liabilities: Interest rate swap | 5,726 | 7,026 |
Liabilities: Contingent consideration | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets: Foreign currency contracts | 0 | 0 |
Liabilities: Foreign currency contracts | 0 | |
Liabilities: Interest rate swap | 0 | 0 |
Liabilities: Contingent consideration | $ 2,281 | $ 3,900 |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measurements (Schedule of Interest Rate Swaps) (Details) - Interest Rate Swap Maturing June 2023 - Other long-term liabilities - Designated as Hedging Instrument - USD ($) $ in Thousands | Apr. 02, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 150,000 | $ 200,000 |
Pay Fixed Rate | 2.1785% | 2.1785% |
Receive Current Floating Rate | 0.1091% | 0.148% |
Fair Value | $ (5,726) | $ (7,026) |
Financial Instruments and Fai_5
Financial Instruments and Fair Value Measurements (Schedule of Foreign Currency Contracts) (Details) - Designated as Hedging Instrument $ in Thousands | Apr. 02, 2021USD ($)$ / €$ / $$ / $ | Dec. 31, 2020USD ($)$ / $$ / $$ / € |
Foreign Exchange Contract Maturing August 2021 | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 1,553 | $ 3,252 |
$/Foreign currency (in dollars per foreign currency) | 0.0232 | 0.0232 |
Fair Value | $ 30 | $ 165 |
Foreign Exchange Contract Maturing November 2021 | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 3,270 | $ 3,966 |
$/Foreign currency (in dollars per foreign currency) | $ / $ | 0.0227 | 0.0227 |
Fair Value | $ 10 | $ 166 |
Foreign Exchange Contract Maturing December 2021, Contract Two | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 2,048 | |
$/Foreign currency (in dollars per foreign currency) | $ / $ | 0.0228 | |
Fair Value | $ (12) | |
Foreign Exchange Contract Maturing September 2021, Contract One | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 16,132 | |
$/Foreign currency (in dollars per foreign currency) | $ / € | 1.1949 | |
Fair Value | $ 399 | |
Foreign Exchange Contract Maturing September 2021, Contract One | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 8,973 | |
$/Foreign currency (in dollars per foreign currency) | $ / € | 1.1949 | |
Fair Value | $ (133) | |
Foreign Exchange Contract Maturing September 2021, Contract Two | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 10,224 | |
$/Foreign currency (in dollars per foreign currency) | $ / $ | 0.0454 | |
Fair Value | $ 922 | |
Foreign Exchange Contract Maturing September 2021, Contract Two | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 6,101 | |
$/Foreign currency (in dollars per foreign currency) | $ / $ | 0.0454 | |
Fair Value | $ 480 | |
Foreign Exchange Contract Maturing December 2021, Contract One | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 7,269 | |
$/Foreign currency (in dollars per foreign currency) | $ / $ | 0.0485 | |
Fair Value | $ 77 | |
Foreign Exchange Contract Maturing December 2021, Contract One | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 7,269 | |
$/Foreign currency (in dollars per foreign currency) | $ / € | 0.0485 | |
Fair Value | $ (1) | |
Foreign Exchange Contract Maturing December 2021, Contract Three | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 10,985 | |
$/Foreign currency (in dollars per foreign currency) | $ / $ | 1.2206 | |
Fair Value | $ (362) | |
Foreign Exchange Contract Maturing December 2021, Contract Four | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 9,069 | |
$/Foreign currency (in dollars per foreign currency) | $ / $ | 0.0490 | |
Fair Value | $ (136) | |
Foreign Exchange Contract Maturing March 2021 | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 2,656 | |
$/Foreign currency (in dollars per foreign currency) | $ / $ | 0.0443 | |
Fair Value | $ 341 |
Financial Instruments and Fai_6
Financial Instruments and Fair Value Measurements (Impact of Cash Flow Hedges on Other Comprehensive Income, AOCI and the Condensed Consolidated Statements of Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Total sales | $ 290,467 | $ 328,426 |
Cost of sales | 205,981 | 231,724 |
Operating expenses | 49,878 | 52,626 |
Interest expense | 8,532 | 10,361 |
Sales | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain (loss) reclassified from AOCI | 8 | (128) |
Sales | Foreign exchange forwards | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain (loss) recognized in OCI | (886) | (274) |
Cost of sales | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain (loss) reclassified from AOCI | 624 | 325 |
Cost of sales | Foreign exchange contracts | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain (loss) recognized in OCI | (559) | (4,813) |
Operating expenses | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain (loss) reclassified from AOCI | 27 | 0 |
Operating expenses | Foreign exchange contracts | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain (loss) recognized in OCI | (90) | 0 |
Interest expense | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain (loss) reclassified from AOCI | (1,034) | (748) |
Interest expense | Interest rate swap | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain (loss) recognized in OCI | $ 266 | $ (6,387) |
Financial Instruments and Fai_7
Financial Instruments and Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 02, 2021 | Dec. 31, 2020 | Jul. 03, 2020 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Derivative instruments net loss to be reclassified to net income during next twelve months | $ 3.2 | ||
Asset acquisition contingent consideration recognized | $ 1 | ||
Accrued expenses and other current liabilities | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Contingent consideration liability, current | 1 | $ 1.7 | |
Other long-term liabilities | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Contingent consideration liability, noncurrent | $ 1.3 | $ 2.2 | |
Chinese Venture Capital Fund | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Equity method investment ownership (percent) | 6.60% |
Financial Instruments and Fai_8
Financial Instruments and Fair Value Measurements (Contingent Consideration Measurement Inputs) (Details) $ in Thousands | Apr. 02, 2021USD ($) | Dec. 31, 2020USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 6,750 | $ 9,000 |
Fair Value, Recurring | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Liabilities: Contingent consideration | $ 2,281 | $ 3,900 |
Fair Value, Recurring | Revenue volatility | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Unobservable Inputs | 0.350 | 0.350 |
Fair Value, Recurring | Discount rate | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Unobservable Inputs | 0.040 | 0.040 |
Financial Instruments and Fai_9
Financial Instruments and Fair Value Measurements (Estimated Fair Values for Contingent Consideration) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at beginning of period | $ 3,900 | $ 4,200 |
Amount recorded for acquisitions | 0 | 2,700 |
Fair value measurement adjustment | 0 | (500) |
Payments(1) | (1,621) | 0 |
Foreign currency translation | 2 | 0 |
Balance at end of period | $ 2,281 | $ 6,400 |
Financial Instruments and Fa_10
Financial Instruments and Fair Value Measurements (Equity Method Investments) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 02, 2021 | Apr. 03, 2020 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |||
Equity method investment | $ 20,135 | $ 21,470 | |
Non-marketable equity securities | 5,723 | 5,723 | |
Total equity investments | 25,858 | $ 27,193 | |
Equity method investment (gain) loss | $ 1,335 | $ (1,925) |
Segment Information (Narrative)
Segment Information (Narrative) (Details) | 3 Months Ended |
Apr. 02, 2021segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Information (Reconcilia
Segment Information (Reconciliation of Revenue from Segments to Consolidated) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Total sales | $ 290,467 | $ 328,426 |
Operating Segments | Medical | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Total sales | 282,965 | 318,262 |
Operating Segments | Medical | Cardio & Vascular | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Total sales | 149,165 | 179,205 |
Operating Segments | Medical | Cardiac & Neuromodulation | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Total sales | 108,408 | 107,820 |
Operating Segments | Medical | Advanced Surgical, Orthopedics & Portable Medical | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Total sales | 25,392 | 31,237 |
Operating Segments | Non-Medical | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Total sales | $ 7,502 | $ 10,164 |
Segment Information (Reconcil_2
Segment Information (Reconciliation of Operating Profit (Loss) from Segments to Consolidated) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Segment Reporting Information [Line Items] | ||
Operating income | $ 34,608 | $ 44,076 |
Unallocated expenses, net | (9,630) | (7,437) |
Income before taxes | 24,978 | 36,639 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Operating income | 55,527 | 66,429 |
Operating Segments | Medical | ||
Segment Reporting Information [Line Items] | ||
Operating income | 55,525 | 65,216 |
Operating Segments | Non-Medical | ||
Segment Reporting Information [Line Items] | ||
Operating income | 2 | 1,213 |
Segment Reconciling Items | ||
Segment Reporting Information [Line Items] | ||
Operating income | $ (20,919) | $ (22,353) |
Revenue From Contracts With C_3
Revenue From Contracts With Customers (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
Percent of revenue from contract with customer compared to total revenue | 35.00% | 30.00% |
Contract with customer, asset, cumulative catch-up adjustment to revenue, modification of contract | $ 4.5 | |
Revenue recognized that was included in contract liability balance at beginning of period | $ 0.9 | $ 0.1 |
Revenue From Contracts With C_4
Revenue From Contracts With Customers (Disaggregated Revenue) (Details) - Revenue from contract with customer benchmark - Customer Concentration Risk | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Medical | Customer A | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 22.00% | 20.00% |
Medical | Customer B | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 13.00% | 18.00% |
Medical | Customer C | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 17.00% | 16.00% |
Medical | All other customers | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 48.00% | 46.00% |
Non-Medical | Customer D | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 26.00% | 19.00% |
Non-Medical | All other customers | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 74.00% | 81.00% |
Revenue From Contracts With C_5
Revenue From Contracts With Customers (Schedule of Revenue by Ship To Location) (Details) - Geographic Concentration Risk - Revenue from contract with customer benchmark | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Medical Segment | United States | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 53.00% | 55.00% |
Medical Segment | Puerto Rico | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 12.00% | |
Medical Segment | All other countries | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 47.00% | 33.00% |
Non-Medical Segment | United States | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 69.00% | 44.00% |
Non-Medical Segment | Singapore | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 14.00% | |
Non-Medical Segment | United Kingdom | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 10.00% | 15.00% |
Non-Medical Segment | Canada | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 11.00% | 12.00% |
Non-Medical Segment | All other countries | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 10.00% | 15.00% |
Revenue From Contracts With C_6
Revenue From Contracts With Customers Contract with Customer (Assets and Liability) (Details) - USD ($) $ in Thousands | Apr. 02, 2021 | Dec. 31, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 44,686 | $ 40,218 |
Contract liabilities | $ 2,379 | $ 2,498 |