Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 28, 2019 | Feb. 03, 2020 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 28, 2019 | |
Document Fiscal Period Focus | Q1 | |
Document Transition Report | false | |
Entity File Number | 001-33962 | |
Entity Registrant Name | COHERENT, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 94-1622541 | |
Entity Address, Address Line One | 5100 Patrick Henry Drive | |
Entity Address, City or Town | Santa Clara | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95054 | |
City Area Code | 408 | |
Local Phone Number | 764-4000 | |
Title of each class | Common Stock, $0.01 par value | |
Trading Symbol | COHR | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 24,153,987 | |
Entity Central Index Key | 0000021510 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --10-03 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 28, 2019 | Dec. 29, 2018 | |
Income Statement [Abstract] | ||
Net sales | $ 320,771 | $ 383,146 |
Cost of sales | 211,518 | 233,796 |
Gross profit | 109,253 | 149,350 |
Operating expenses: | ||
Research and development | 28,680 | 28,942 |
Selling, general and administrative | 68,551 | 64,557 |
Amortization of intangible assets | 1,432 | 3,040 |
Total operating expenses | 98,663 | 96,539 |
Income from operations | 10,590 | 52,811 |
Other income (expense): | ||
Interest income | 267 | 228 |
Interest expense | (4,094) | (4,901) |
Other—net | 793 | (4,478) |
Total other expense, net | (3,034) | (9,151) |
Income before income taxes | 7,556 | 43,660 |
Provision for income taxes | 1,763 | 8,110 |
Net income | $ 5,793 | $ 35,550 |
Net income per share: | ||
Basic (in USD per share) | $ 0.24 | $ 1.46 |
Diluted (in USD per share) | $ 0.24 | $ 1.45 |
Shares used in computation: | ||
Basic (shares) | 23,971 | 24,268 |
Diluted (shares) | 24,160 | 24,472 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | ||
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 5,793 | $ 35,550 | |
Other comprehensive income (loss): | |||
Translation adjustment, net of taxes | [1],[2] | 15,168 | (5,690) |
Defined benefit pension plans, net of taxes | [1],[3] | 132 | 8 |
Other comprehensive income (loss), net of tax | [1] | 15,300 | (5,682) |
Comprehensive income | 21,093 | 29,868 | |
Translation adjustment, net of taxes | 1,235 | (2,755) | |
Defined benefit plans, tax benefits | $ 33 | $ (6) | |
[1] | Reclassification adjustments were not significant during the three months ended December 28, 2019 and December 29, 2018 . | ||
[2] | Tax expenses (benefits) of $1,235 and $(2,755) were provided on translation adjustments during the three months ended December 28, 2019 and December 29, 2018 , respectively. | ||
[3] | Tax expenses (benefits) of $33 and $(6) were provided on changes in defined benefit pension plans for the three months ended December 28, 2019 and December 29, 2018 , respectively. |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 28, 2019 | Sep. 28, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 349,592 | $ 305,833 |
Restricted cash | 728 | 792 |
Short-term investments | 0 | 120 |
Accounts receivable—net of allowances of $9,309 and $8,690, respectively | 235,933 | 267,553 |
Inventories | 449,571 | 442,530 |
Prepaid expenses and other assets | 86,997 | 77,993 |
Total current assets | 1,122,821 | 1,094,821 |
Property and equipment, net | 327,673 | 323,434 |
Goodwill | 433,643 | 427,101 |
Intangible assets, net | 73,831 | 84,813 |
Non-current restricted cash | 12,258 | 12,036 |
Other assets | 233,832 | 140,964 |
Total assets | 2,204,058 | 2,083,169 |
Current liabilities: | ||
Short-term borrowings and current-portion of long-term obligations | 16,809 | 14,863 |
Accounts payable | 55,851 | 51,531 |
Income taxes payable | 8,365 | 6,185 |
Other current liabilities | 175,398 | 167,735 |
Total current liabilities | 256,423 | 240,314 |
Long-term obligations | 396,153 | 392,238 |
Other long-term liabilities | 245,507 | 165,881 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity: | ||
Common stock, value | 240 | 238 |
Additional paid-in capital | 34,464 | 34,320 |
Accumulated other comprehensive loss | (21,036) | (36,336) |
Retained earnings | 1,292,307 | 1,286,514 |
Total stockholders’ equity | 1,305,975 | 1,284,736 |
Total liabilities and stockholders’ equity | $ 2,204,058 | $ 2,083,169 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 28, 2019 | Sep. 28, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts Receivable, Allowance for Credit Loss | $ 9,309 | $ 8,690 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares, Outstanding | 24,153,000 | 23,982,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Add. Paid-in Capital | Accum. Other Comp. Income (Loss) | Retained Earnings | |
Beginning balance at Sep. 29, 2018 | $ 1,314,464 | $ 242 | $ 78,700 | $ 2,833 | $ 1,232,689 | |
Shares, beginning balance (in shares) at Sep. 29, 2018 | 24,299 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issued under stock plans, net of shares withheld for employee taxes | (9,139) | $ 2 | (9,141) | |||
Common stock issued under stock plans, net of shares withheld for employee taxes (in shares) | 223 | |||||
Cumulative effect of change in accounting principle | (25,501) | 0 | ||||
Repurchase of common stock | $ (2) | (25,499) | ||||
Repurchase of common stock (in shares) | (195) | |||||
Stock-based compensation | 7,791 | 7,791 | ||||
Net income (loss) | 35,550 | 35,550 | ||||
Other comprehensive income (loss), net of tax | (5,682) | [1] | (5,682) | |||
Ending balance at Dec. 29, 2018 | 1,317,483 | $ 242 | 51,851 | (2,849) | 1,268,239 | |
Shares, ending balance (in shares) at Dec. 29, 2018 | 24,327 | |||||
Beginning balance at Sep. 28, 2019 | $ 1,284,736 | $ 238 | 34,320 | (36,336) | 1,286,514 | |
Shares, beginning balance (in shares) at Sep. 28, 2019 | 23,982 | 23,982 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issued under stock plans, net of shares withheld for employee taxes | $ (7,428) | $ 2 | (7,430) | |||
Common stock issued under stock plans, net of shares withheld for employee taxes (in shares) | 171 | |||||
Stock-based compensation | 7,574 | 7,574 | ||||
Net income (loss) | 5,793 | 5,793 | ||||
Other comprehensive income (loss), net of tax | 15,300 | [1] | 15,300 | |||
Ending balance at Dec. 28, 2019 | $ 1,305,975 | $ 240 | $ 34,464 | $ (21,036) | $ 1,292,307 | |
Shares, ending balance (in shares) at Dec. 28, 2019 | 24,153 | 24,153 | ||||
[1] | Reclassification adjustments were not significant during the three months ended December 28, 2019 and December 29, 2018 . |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 28, 2019 | Dec. 29, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 5,793 | $ 35,550 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 13,156 | 13,916 |
Amortization of intangible assets | 12,312 | 15,067 |
Deferred income taxes | (1,911) | (1,505) |
Amortization of debt issuance cost | 826 | 1,288 |
Stock-based compensation | 7,792 | 7,876 |
Non-cash restructuring charges | 599 | 76 |
Operating Lease, Right-of-Use Asset, Amortization | 4,104 | 0 |
Other non-cash expense | 229 | 1 |
Changes in assets and liabilities, net of effect of acquisitions: | ||
Accounts receivable | 34,320 | 23,635 |
Inventories | (867) | (9,501) |
Prepaid expenses and other assets | (3,418) | 1,199 |
Other long-term assets | (3,471) | 2,332 |
Accounts payable | 789 | 4,736 |
Income taxes payable/receivable | (2,447) | (21,842) |
Increase (Decrease) in Operating Liabilities | (3,877) | 0 |
Other current liabilities | (7,856) | (20,685) |
Other long-term liabilities | 3,968 | (832) |
Net cash provided by operating activities | 60,041 | 51,311 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (11,496) | (23,137) |
Proceeds from dispositions of property and equipment | 695 | 0 |
Purchases of available-for-sale securities | 0 | (5,000) |
Proceeds from sales and maturities of available-for-sale securities | 120 | 121 |
Acquisition of businesses, net of cash acquired | 0 | (18,881) |
Investment at cost | 0 | (3,423) |
Net cash used in investing activities | (10,681) | (50,320) |
Cash flows from financing activities: | ||
Short-term borrowings | 12,144 | 68,124 |
Repayments of short-term borrowings | (12,238) | (26,476) |
Repayments of long-term borrowings | (1,956) | (1,907) |
Issuance of common stock under employee stock option and purchase plans | 5,747 | 5,704 |
Net settlement of restricted common stock | (13,175) | (14,843) |
Repurchase of common stock | 0 | (25,501) |
Net cash provided by (used in) financing activities | (9,478) | 5,101 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 4,035 | (1,799) |
Net increase in cash, cash equivalents and restricted cash | 43,917 | 4,293 |
Cash, cash equivalents and restricted cash, beginning of period | 318,661 | 324,045 |
Cash, cash equivalents and restricted cash, end of period | 362,578 | 328,338 |
Non-cash investing and financing activities: | ||
Unpaid property and equipment purchases | $ 7,770 | $ 6,082 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - Reconciliation - USD ($) $ in Thousands | Dec. 28, 2019 | Sep. 28, 2019 | Dec. 29, 2018 | Sep. 29, 2018 |
Statement of Cash Flows [Abstract] | ||||
Cash and cash equivalents | $ 349,592 | $ 305,833 | $ 314,997 | |
Restricted cash | 728 | 792 | 827 | |
Non-current restricted cash | 12,258 | 12,036 | 12,514 | |
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statement of cash flows | $ 362,578 | $ 318,661 | $ 328,338 | $ 324,045 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Dec. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to such rules and regulations. These interim condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes thereto filed by Coherent, Inc. on Form 10-K for the fiscal year ended September 28, 2019 . In the opinion of management, all adjustments necessary for a fair presentation of financial condition and results of operation as of and for the periods presented have been made and include only normal recurring adjustments. Interim results of operations are not necessarily indicative of results to be expected for the year or any other interim periods. Our fiscal year ends on the Saturday closest to September 30 and our first fiscal quarter includes 13 weeks of operations in each fiscal year presented. Fiscal 2020 includes 53 weeks and fiscal 2019 includes 52 weeks. The consolidated financial statements include the accounts of Coherent, Inc. and its direct and indirect subsidiaries (collectively, the "Company", "we", "our", "us" or "Coherent"). Intercompany balances and transactions have been eliminated. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Change in Accounting Policies - Leasing Except for the adoption of Accounting Standards Update ("ASU") 2016-02, Leases ("ASC 842") on September 29, 2019 and the resulting changes in our accounting policies and disclosures for lease accounting, there have been no significant changes to our significant accounting policies as of and for the three months ended December 28, 2019, as compared to the significant accounting policies described in our Annual Report on Form 10-K for our fiscal year ended September 28, 2019 . Effective September 29, 2019, we adopted ASC 842, using the optional transition method, by which companies may elect not to recast the comparative periods presented in financial statements in the period of adoption and recognize a cumulative effect adjustment in the period of adoption. See Note 2, "Recent Accounting Standards" to the Notes to Condensed Consolidated Financial Statements regarding the impact of adoption. We determine if an arrangement is a lease at inception for arrangements with an initial term of more than 12 months, and classify it as either finance or operating. Finance leases are generally those that allow us to substantially utilize or pay for the entire asset over its estimated useful life. Finance leases are recorded in other assets and finance lease liabilities within other current and other long-term liabilities on our condensed consolidated balance sheets. Finance lease assets are amortized in operating expenses on a straight-line basis over the shorter of the estimated useful lives of the assets or the lease term, with the interest component included in interest expense and recognized using the effective interest method over the lease term. Operating leases are recorded in other assets and operating lease liabilities within other current and other long-term liabilities on our condensed consolidated balance sheets. For operating leases of buildings, we account for non-lease components, such as common area maintenance, as a component of the lease, and include it in the initial measurement of our operating lease assets and corresponding liabilities. Operating lease assets are amortized on a straight-line basis in operating expenses over the lease term. Our lease liabilities are recognized based on the present value of the remaining fixed lease payments, over the lease term, using a discount rate of similarly secured borrowings available to us. Most of our leases do not provide an implicit rate. We use our incremental borrowing rate for the same jurisdiction and term as the associated lease based on the information available at the lease commencement date to determine the present value of the lease payments. We used the incremental borrowing rate as of September 28, 2019 for operating leases that commenced prior to that date. For the purpose of lease liability measurement, we consider only payments that are fixed and determinable at the time of commencement. Any variable payments that depend on an index or rate are expensed as incurred. Our lease terms may include options to extend when it is reasonably certain that we will exercise that option. Our lease assets also include any lease payments made and exclude any lease incentives received prior to commencement. Our lease assets are tested for impairment in the same manner as long-lived assets used in operations. We generally recognize sublease income on a straight-line basis over the sublease term. |
Recent Accounting Standards
Recent Accounting Standards | 3 Months Ended |
Dec. 28, 2019 | |
Accounting Policies [Abstract] | |
Recent Accounting Standards | RECENT ACCOUNTING STANDARDS Adoption of New Accounting Pronouncement In February 2018, the Financial Accounting Standards Board ("FASB") issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows companies to reclassify stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act of 2017 (the “Tax Act”), from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. The amendments in ASU 2018-02 are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. We adopted ASU 2018-02 in the first quarter of fiscal 2020 with no material impact to our condensed consolidated financial statements. In February 2016, the FASB issued accounting guidance (ASC 842) that modifies lease accounting for lessees to increase transparency and comparability by recording lease assets and liabilities for operating leases and disclosing key information about leasing arrangements. We adopted ASC 842 in the first quarter of fiscal 2020 utilizing the optional transition method by applying the new standard to leases existing at the date of initial application and not restating comparative periods. We determine if an arrangement contains a lease at inception for arrangements with an initial term of more than 12 months, and classify it as either finance or operating. We have elected the package of practical expedients which allows us to not reassess 1) whether any expired or existing contracts are or contain leases; 2) the lease classification for any expired or existing leases; and 3) initial direct costs for any existing leases. In addition, we also elected to use the practical expedient allowed in the standard to not separate lease and non-lease components and apply the short-term lease measurement and recognition exemption to all leases shorter than 12 months when calculating the lease liability under ASC 842. The adoption of the standard resulted in the recognition of operating lease assets of $90.4 million , with corresponding operating lease liabilities of $93.5 million on our condensed consolidated balance sheet, primarily related to real estate leases. The difference between the operating lease right-of-use assets and operating lease liabilities primarily represents our deferred rent as of adoption. As of the date of adoption, we recognized finance lease assets of $1.0 million , with corresponding finance lease liabilities of $0.9 million on our condensed consolidated balance sheet, primarily related to equipment leases. See Note 11, "Leases" for more information. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. We are currently evaluating the impacts of the provisions of ASU 2019-12 on our financial condition, results of operations, and cash flows. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and a subsequent amendment, ASU 2018-19 (collectively, Topic 326). Topic 326 requires measurement and recognition of expected credit losses for financial assets held. The new standard will become effective for our fiscal year 2021, which begins on October 4, 2020. We are currently evaluating the impact of our pending adoption of Topic 326 on our consolidated financial statements. We currently expect that the standard will not have a material impact on our consolidated statements of operations. |
Revenue Recognition (Notes)
Revenue Recognition (Notes) | 3 Months Ended |
Dec. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | REVENUE RECOGNITION Disaggregation of Revenue Based on the information that our chief operating decision maker ("CODM") uses to manage the business, we disaggregate revenue by type and market application within each segment. No other level of disaggregation is required considering the type of products, customers, markets, contracts, duration of contracts, timing of transfer of control and sales channels. The following tables summarize revenue from contracts with customers (in thousands): Sales by revenue type and segment Three Months Ended December 28, 2019 December 29, 2018 OEM Laser Sources Industrial Lasers & Systems OEM Laser Sources Industrial Lasers & Systems Net sales: Products (1) $ 109,836 $ 93,903 $ 152,742 $ 111,975 Other product and service revenues (2) 91,112 25,920 89,606 28,823 Total net sales $ 200,948 $ 119,823 $ 242,348 $ 140,798 (1) Net sales primarily recognized at a point in time. (2) Includes sales of spare parts, related accessories and other consumable parts as well as revenues from service agreements, of which $14.4 million and $12.6 million for the three months ended December 28, 2019 and December 29, 2018 , respectively, were recognized over time. Sales by market application and segment Three Months Ended December 28, 2019 December 29, 2018 OEM Laser Sources Industrial Lasers & Systems OEM Laser Sources Industrial Lasers & Systems Net sales: Microelectronics $ 114,893 $ 15,653 $ 162,203 $ 16,206 Materials processing 10,395 77,977 8,802 95,841 OEM components and instrumentation 46,230 23,121 39,219 27,134 Scientific and government programs 29,430 3,072 32,124 1,617 Total net sales $ 200,948 $ 119,823 $ 242,348 $ 140,798 See Note 19, "Segment and Geographic Information" for revenue disaggregation by reportable segment and geographic region. Contract Balances We record accounts receivable when we have an unconditional right to the consideration. Contract liabilities are recorded when cash payments are received or due in advance of performance. Contract liabilities consist of customer deposits and deferred revenue, where we have unsatisfied or partly satisfied performance obligations. Contract liabilities classified as customer deposits are included in other current liabilities and contract liabilities classified as deferred revenue are included in other current liabilities or other long-term liabilities on our condensed consolidated balance sheets. Payment terms vary by customer. A rollforward of our customer deposits and deferred revenue is as follows (in thousands): Beginning balance, September 28, 2019 (1) $ 42,550 Additions to customer deposits and deferred revenue 42,633 Amount of customer deposits and deferred revenue recognized in income (40,360 ) Translation adjustments 652 Ending balance, December 28, 2019 (2) $ 45,475 (1) Beginning customer deposits and deferred revenue as of September 28, 2019 include $34,538 of current portion and $8,012 of long-term portion. (2) Ending customer deposits and deferred revenue as of December 28, 2019 include $35,894 of current portion and $9,581 of long-term portion. Remaining performance obligations represent the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. The following table includes estimated revenue expected to be recognized in the future related to performance obligations for sales of maintenance agreements, extended warranties, installation, and contracts with customer acceptance provisions included in customer deposits and deferred revenue as of December 28, 2019 (in thousands): Remainder of fiscal 2020 Thereafter Total Performance obligations as of December 28, 2019 $ 34,334 $ 11,141 $ 45,475 |
Business Combinations
Business Combinations | 3 Months Ended |
Dec. 28, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | BUSINESS COMBINATIONS Fiscal 2019 Acquisitions Ondax On October 5, 2018, we acquired privately held Ondax for approximately $12.0 million , excluding transaction costs. Ondax developed and produced photonic components which are used on an OEM basis by the laser industry as well as incorporated into its own stabilized lasers and Raman Spectroscopy systems. Ondax’s operating results have been included in our Industrial Lasers & Systems segment. See Note 19, "Segment and Geographic Information." Our allocation of the purchase price is as follows (in thousands): Tangible assets: Cash $ 103 Accounts receivable 534 Inventories 1,793 Prepaid expenses and other assets 17 Deferred tax assets 681 Property and equipment 122 Liabilities assumed (499 ) Intangible assets: Existing technology 5,600 Customer relationships 300 Goodwill 3,333 Total $ 11,984 Results of operations for the business have been included in our condensed consolidated financial statements subsequent to the date of acquisition and pro forma results of operations in accordance with authoritative guidance for prior periods have not been presented because the effect of the acquisition was not material to our prior period consolidated financial results. The identifiable intangible assets are being amortized over their respective useful lives of 1 to 8 years . The fair values of the acquired intangibles were determined using the income approach. In performing these valuations, the key underlying probability-adjusted assumptions of the discounted cash flows were projected revenues, gross margin expectations and operating cost estimates. The valuations were based on the information that was available as of the acquisition date and the expectations and assumptions that have been deemed reasonable by our management. There are inherent uncertainties and management judgment required in these determinations. This acquisition resulted in a purchase price that exceeded the estimated fair value of tangible and intangible assets, which was allocated to goodwill. We believe the amount of goodwill relative to identifiable intangible assets relates to several factors including: (1) potential buyer-specific synergies related to the development of new technologies; and (2) the potential to leverage our sales force to attract new customers. None of the goodwill from this purchase is deductible for tax purposes. Quantum On October 5, 2018, we acquired certain assets of Quantum Coating, Inc. ("Quantum") for approximately $7.0 million , excluding transaction costs, and accounted for the transaction as an asset purchase. Our allocation of the purchase price is as follows (in thousands): Tangible assets: Property and equipment $ 2,770 Intangible assets: Existing technology 1,600 Customer relationships 230 Production know-how 2,300 Backlog 100 Total $ 7,000 The identifiable intangible assets are being amortized over their respective useful lives of 1 to 5 years |
Fair Values
Fair Values | 3 Months Ended |
Dec. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Values | FAIR VALUES We have not changed our valuation techniques in measuring the fair value of any financial assets and liabilities during the period. We recognize transfers between levels within the fair value hierarchy, if any, at the end of each quarter. There were no transfers between levels during the periods presented. As of December 28, 2019 and September 28, 2019 , we had one investment carried on a cost basis. See Note 9, "Balance Sheet Details." If we were to fair value this investment, it would be based upon Level 3 inputs. This investment is not considered material to our condensed consolidated financial statements. We measure the fair value of outstanding debt obligations for disclosure purposes on a recurring basis. As of December 28, 2019 , the current and long-term portion of long-term obligations of $6.8 million and $396.2 million , respectively, are reported at amortized cost. As of September 28, 2019 , the current and long-term portion of long-term obligations of $4.9 million and $392.2 million , respectively, are reported at amortized cost. These outstanding obligations are classified as Level 2 as they are not actively traded and are valued using a discounted cash flow model that uses observable market inputs. Based on the discounted cash flow model, the fair value of the outstanding debt approximates amortized cost. Financial assets and liabilities measured at fair value as of December 28, 2019 and September 28, 2019 are summarized below (in thousands): Aggregate Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Aggregate Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs December 28, 2019 September 28, 2019 (Level 1) (Level 2) (Level 1) (Level 2) Assets: Cash equivalents: Money market fund deposits $ 9,474 $ 9,474 $ — $ 21,422 $ 21,422 $ — U.S. Treasury and agency obligations (1) 120 — 120 — — — Short-term investments: U.S. Treasury and agency obligations (1) — — — 120 — 120 Prepaid and other assets: Foreign currency contracts (2) 689 — 689 370 — 370 Money market fund deposits — Deferred comp and supplemental plan (3) 615 615 — 433 433 — Mutual funds — Deferred comp and supplemental plan (3) 23,817 23,817 — 22,419 22,419 — Total $ 34,715 $ 33,906 $ 809 $ 44,764 $ 44,274 $ 490 Liabilities: Other current liabilities: Foreign currency contracts (2) (802 ) — (802 ) (960 ) — (960 ) Total $ 33,913 $ 33,906 $ 7 $ 43,804 $ 44,274 $ (470 ) ___________________________________________________ (1) Valuations are based upon quoted market prices in active markets involving similar assets. The market inputs used to value these instruments generally consist of market yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. Pricing sources include industry standard data providers, security master files from large financial institutions, and other third party sources which are input into a distribution-curve-based algorithm to determine a daily market value. This creates a "consensus price" or a weighted average price for each security. (2) The principal market in which we execute our foreign currency contracts is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants usually are large commercial banks. Our foreign currency contracts’ valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. See Note 7, "Derivative Instruments and Hedging Activities." (3) |
Short-Term Investments
Short-Term Investments | 3 Months Ended |
Dec. 28, 2019 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Short-Term Investments | SHORT-TERM INVESTMENTS We consider all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. Investments classified as available-for-sale are reported at fair value with unrealized gains and losses, net of related income taxes, recorded as a separate component of other comprehensive income ("OCI") in stockholders’ equity until realized. Interest and amortization of premiums and discounts for debt securities are included in interest income. Gains and losses on securities sold are determined based on the specific identification method and are included in other income (expense). Cash, cash equivalents and short-term investments consist of the following (in thousands): December 28, 2019 Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents $ 349,592 $ — $ — $ 349,592 September 28, 2019 Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents $ 305,833 $ — $ — $ 305,833 Short-term investments: Available-for-sale securities: U.S. Treasury and agency obligations $ 120 $ — $ — $ 120 Total short-term investments $ 120 $ — $ — $ 120 There were no unrealized gains or losses at December 28, 2019 or September 28, 2019 . |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Dec. 28, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES We maintain operations in various countries outside of the United States and have foreign subsidiaries that manufacture and sell our products in various global markets. The majority of our sales are transacted in U.S. dollars. However, we do generate revenues in other currencies, primarily the Euro, Japanese Yen, South Korean Won, Singapore Dollar and Chinese Renminbi (RMB). As a result, our earnings, cash flows and cash balances are exposed to fluctuations in foreign currency exchange rates. We attempt to limit these exposures through financial market instruments. We utilize derivative instruments, primarily forward contracts with maturities of two months or less, to manage our exposure associated with anticipated cash flows and net asset and liability positions denominated in foreign currencies. Gains and losses on the forward contracts are mitigated by gains and losses on the underlying instruments. We do not use derivative financial instruments for speculative or trading purposes. The credit risk amounts represent our gross exposure to potential accounting loss on derivative instruments that are outstanding or unsettled if all counterparties failed to perform according to the terms of the contract, based on then-current currency rates at each respective date. Non-Designated Derivatives The total outstanding notional contract and fair value asset (liability) amounts of non-designated hedge contracts, with maximum maturity of two months, are as follows (in thousands): U.S. Notional Contract Value U.S. Fair Value December 28, 2019 September 28, 2019 December 28, 2019 September 28, 2019 Foreign currency hedge contracts Purchase $ 45,535 $ 53,920 $ 597 $ (117 ) Sell $ (79,072 ) $ (86,984 ) $ (710 ) $ (473 ) The fair value of our derivative instruments is included in prepaid expenses and other assets and in other current liabilities in our Condensed Consolidated Balance Sheets. See Note 5, "Fair Values." During the three months ended December 28, 2019 and December 29, 2018 , we recognized losses of $0.5 million and $3.7 million , respectively, in other income (expense) for derivative instruments not designated as hedging instruments. Master Netting Arrangements To mitigate credit risk in derivative transactions, we enter into master netting arrangements that allow each counterparty in the arrangements to net settle amounts of multiple and separate derivative transactions under certain conditions. We present the fair value of derivative assets and liabilities within our condensed consolidated balance sheet on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. The impact of netting derivative assets and liabilities is not material to our financial position for any of the periods presented. Our derivative contracts do not contain any credit risk related contingent features and do not require collateral or other security to be furnished by us or the counterparties. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Dec. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS During the three months ended December 28, 2019 , we noted no indications of impairment or triggering events to cause us to review goodwill for potential impairment. We will conduct our annual goodwill testing during the fourth fiscal quarter. The changes in the carrying amount of goodwill by segment for the period from September 28, 2019 to December 28, 2019 are as follows (in thousands): OEM Laser Sources Industrial Lasers & Systems Total Balance as of September 28, 2019 $ 96,820 330,281 $ 427,101 Translation adjustments 1,595 4,947 6,542 Balance as of December 28, 2019 $ 98,415 $ 335,228 $ 433,643 Components of our amortizable intangible assets are as follows (in thousands): December 28, 2019 September 28, 2019 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Existing technology $ 182,626 $ (130,264 ) $ 52,362 $ 193,704 $ (131,429 ) $ 62,275 Customer relationships 40,861 (21,121 ) 19,740 42,083 (21,512 ) 20,571 Trade name — — — 5,261 (5,138 ) 123 Production know-how 2,300 (571 ) 1,729 2,300 (456 ) 1,844 Total $ 225,787 $ (151,956 ) $ 73,831 $ 243,348 $ (158,535 ) $ 84,813 For accounting purposes, when an intangible asset is fully amortized, it is removed from the disclosure schedule. Amortization expense for intangible assets for the three months ended December 28, 2019 and December 29, 2018 was $12.3 million and $15.1 million , respectively. The change in the accumulated amortization also includes $2.8 million (increase) and $2.4 million (decrease) of foreign exchange impact for the three months ended December 28, 2019 and December 29, 2018 , respectively. At December 28, 2019 , estimated amortization expense for the remainder of fiscal 2020 , the next five succeeding fiscal years and all fiscal years thereafter are as follows (in thousands): Estimated Amortization Expense 2020 (remainder) $ 35,901 2021 17,852 2022 6,715 2023 4,436 2024 3,092 2025 2,981 Thereafter 2,854 Total $ 73,831 |
Balance Sheet Details
Balance Sheet Details | 3 Months Ended |
Dec. 28, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Details | BALANCE SHEET DETAILS Inventories consist of the following (in thousands): December 28, September 28, Purchased parts and assemblies $ 135,405 $ 134,298 Work-in-process 179,023 174,550 Finished goods 135,143 133,682 Total inventories $ 449,571 $ 442,530 Prepaid expenses and other assets consist of the following (in thousands): December 28, September 28, Prepaid and refundable income taxes $ 48,468 $ 44,096 Other taxes receivable 10,840 11,208 Prepaid expenses and other assets 27,689 22,689 Total prepaid expenses and other assets $ 86,997 $ 77,993 Other assets consist of the following (in thousands): December 28, September 28, Assets related to deferred compensation arrangements $ 37,616 $ 35,842 Deferred tax assets 86,359 87,011 Right of use assets, net - operating leases (See Note 11) 89,295 — Right of use assets, net - finance leases (See Note 11) 895 — Other assets (1) 19,667 18,111 Total other assets $ 233,832 $ 140,964 (1) In the first quarter of fiscal 2019, we invested 3.0 million Euro ( $3.4 million ) in 3D-Micromac AG, a private company in Germany. The investment is included in other assets and is being carried on a cost basis and will be adjusted for impairment if we determine that indicators of impairment exist at any point in time. Other current liabilities consist of the following (in thousands): December 28, September 28, Accrued payroll and benefits $ 52,199 $ 55,698 Operating lease liability, current (See Note 11) 15,182 — Finance lease liability, current (See Note 11) 379 — Deferred revenue 23,352 23,695 Warranty reserve 35,924 36,460 Accrued expenses and other 35,820 41,039 Customer deposits 12,542 10,843 Total other current liabilities $ 175,398 $ 167,735 Components of the reserve for warranty costs during the first three months of fiscal 2020 and 2019 were as follows (in thousands): Three Months Ended December 28, December 29, Beginning balance $ 36,460 $ 40,220 Additions related to current period sales 10,310 17,081 Warranty costs incurred in the current period (10,972 ) (16,376 ) Accruals resulting from acquisitions — 21 Adjustments to accruals related to foreign exchange and other 126 (457 ) Ending balance $ 35,924 $ 40,489 Other long-term liabilities consist of the following (in thousands): December 28, September 28, Long-term taxes payable $ 37,040 $ 37,385 Operating lease liability, long-term (See Note 11) 77,408 — Finance lease liability, long-term (See Note 11) 452 — Deferred compensation 41,412 39,715 Defined benefit plan liabilities 46,625 45,862 Deferred tax liabilities 25,497 27,785 Deferred revenue 9,581 8,012 Asset retirement obligations liability 5,290 4,934 Other long-term liabilities 2,202 2,188 Total other long-term liabilities $ 245,507 $ 165,881 |
Borrowings
Borrowings | 3 Months Ended |
Dec. 28, 2019 | |
Debt Disclosure [Abstract] | |
Borrowings | BORROWINGS On November 7, 2016 (the "Closing Date"), we entered into a Credit Agreement by and among us, Coherent Holding BV & Co. K.G. (formerly Coherent Holding GmbH), as borrower (the "Borrower"), and certain of our direct and indirect subsidiaries from time to time party thereto, as guarantors, the lenders from time to time party thereto, Barclays Bank PLC, as administrative agent and an L/C Issuer, Bank of America, N.A., as an L/C Issuer, and MUFG Union Bank, N.A., as an L/C Issuer (the "Initial Credit Agreement" and, as amended by the Amendments (defined below), the "Credit Agreement"). The Initial Credit Agreement provided for a 670.0 million Euro senior secured term loan facility (the "Euro Term Loan") and a $100.0 million senior secured revolving credit facility (the "Revolving Credit Facility") with a $30.0 million letter of credit sublimit and a $10.0 million swing line sublimit, in each case, which may be increased from time to time pursuant to an incremental feature set forth in the Credit Agreement. On November 7, 2016, the Borrower borrowed the full 670.0 million Euros under the Euro Term Loan and its proceeds were used to finance the acquisition of Rofin and pay related fees and expenses. On November 7, 2016, we also used 10.0 million Euros of the capacity under the Revolving Credit Facility for the issuance of a letter of credit. On November 20, 2018, we borrowed an additional $40.0 million under the Revolving Credit Facility and on July 29, 2019, we repaid $30.0 million of the amount borrowed. The Initial Credit Agreement was amended on May 8, 2017 (the "First Amendment") to reduce the interest rate margins applicable to the Euro Term Loan and was amended again on July 5, 2017 (the "Second Amendment" and, together with the First Amendment, the "Amendments") to make certain technical changes in connection with the conversion of the Borrower from a German company with limited liability to a German limited partnership. The Credit Agreement contains customary mandatory prepayment provisions. The Borrower has the right to prepay loans under the Credit Agreement in whole or in part at any time without premium or penalty, subject to customary breakage costs. Revolving loans may be borrowed, repaid and reborrowed until the fifth anniversary of the Closing Date, at which time all outstanding revolving loans must be repaid. The Euro Term Loan matures on the seventh anniversary of the Closing Date, at which time all outstanding principal and accrued and unpaid interest on the Euro Term Loan must be repaid. As of December 28, 2019 , the outstanding principal amount of the Euro Term Loan was 363.2 million Euros. As of December 28, 2019 , the outstanding amount of the Revolving Credit Facility was $10.0 million plus a 10.0 million Euro letter of credit. Loans under the Credit Agreement bear interest, at the Borrower’s option, at a rate equal to either (i)(x) in the case of calculations with respect to U.S. Dollars or certain other alternative currencies, the London interbank offered rate (the "LIBOR") or (y) in the case of calculations with respect to the Euro, the euro interbank offered rate ("EURIBOR" and, together with LIBOR), the "Eurocurrency Rate") or (ii) a base rate (the "Base Rate") equal to the highest of (x) the federal funds rate, plus 0.50% , (y) the prime rate then in effect and (z) the Eurocurrency Rate for loans denominated in U.S. dollars applicable to a one-month interest period, plus 1.0% , in each case, plus an applicable margin that is subject to adjustment pursuant to a pricing grid based on consolidated total gross leverage ratio. At December 28, 2019 , the applicable margin for Euro Term Loans borrowed as Eurocurrency Rate loans was 2.25% per annum and as Base Rate loans was 1.25% and the applicable margin for revolving loans borrowed as Eurocurrency Rate loans was 4.00% per annum and as Base Rate loans was 3.00% per annum. Interest on Base Rate Loans is payable quarterly in arrears. Interest on Eurocurrency Rate loans is payable at the end of the applicable interest period (or at three month intervals if the interest period exceeds three months). The Credit Agreement requires the Borrower to make scheduled quarterly payments on the Euro Term Loan of 0.25% of the original principal amount of the Euro Term Loan, with any remaining principal payable at maturity. A commitment fee accrues on any unused portion of the revolving loan commitments under the Credit Agreement at a rate of 0.375% or 0.5% depending on the consolidated total gross leverage ratio at any time of determination. The Borrower is also obligated to pay other customary fees for a credit facility of this size and type. On the Closing Date, we and certain of our direct and indirect subsidiaries, as guarantors, provided an unconditional guaranty of all obligations of the Borrower and the other loan parties arising under the Credit Agreement, the other loan documents and under swap contracts and treasury management agreements with the lenders or their affiliates (with certain limited exceptions). The Borrower and the guarantors have also granted security interests in substantially all of their assets to secure such obligations. The Credit Agreement contains customary affirmative and negative covenants, including covenants limiting the ability of us and our subsidiaries to, among other things, incur debt, grant liens, make investments, make certain restricted payments, transact with affiliates, and sell assets. The Credit Agreement also requires us and our subsidiaries to maintain a senior secured net leverage ratio as of the last day of each fiscal quarter of less of than or equal to 3.50 to 1.00. We were in compliance with all covenants at December 28, 2019 . We incurred $28.5 million of debt issuance costs related to the Euro Term Loan and $0.5 million of debt issuance costs to the original lenders related to the First Amendment, which are included in short-term borrowings and current portion of long-term obligations and long-term obligations in the condensed consolidated balance sheets and will be amortized to interest expense over the seven year life of the Euro Term Loan using the effective interest method, adjusted to accelerate amortization related to voluntary repayments. We incurred $2.3 million of debt issuance costs in connection with the Revolving Credit Facility which were capitalized and included in prepaid expenses and other assets in the condensed consolidated balance sheets and will be amortized to interest expense using the straight-line method over the contractual term of five years of the Revolving Credit Facility. Additional sources of cash available to us were international currency lines of credit and bank credit facilities totaling $24.0 million as of December 28, 2019 , of which $20.7 million was unused and available. These unsecured international credit facilities were used in Europe and Japan during the first three months of fiscal 2020 . As of December 28, 2019 , we had utilized $3.3 million of the international credit facilities as guarantees in Europe. Short-term borrowings and current portion of long-term obligations consist of the following (in thousands): December 28, September 28, Current portion of Euro Term Loan (1) $ 4,687 $ 2,748 1.3% Term loan due 2024 1,743 1,367 1.0% State of Connecticut term loan due 2023 379 378 Capital lease obligations — 370 Line of credit borrowings 10,000 10,000 Total short-term borrowings and current portion of long-term obligations $ 16,809 $ 14,863 (1) Net of debt issuance costs of $2.8 million and $4.6 million at December 28, 2019 and September 28, 2019 , respectively. Long-term obligations consist of the following (in thousands): December 28, September 28, Euro Term Loan due 2024 (1) $ 389,992 $ 385,208 1.3% Term loan due 2024 5,228 5,466 1.0% State of Connecticut term loan due 2023 933 1,028 Capital lease obligations — 536 Total long-term obligations $ 396,153 $ 392,238 (1) Net of debt issuance costs of $7.7 million and $6.4 million at December 28, 2019 and September 28, 2019 , respectively. Contractual maturities of our debt obligations, excluding line of credit borrowings, as of December 28, 2019 are as follows (in thousands): Amount 2020 (remainder) $ 7,279 2021 9,239 2022 9,239 2023 9,156 2024 378,511 Total $ 413,424 |
Leases (Notes)
Leases (Notes) | 3 Months Ended |
Dec. 28, 2019 | |
Leases [Abstract] | |
LEASES | LEASES We determine if an arrangement contains a lease at inception for arrangements with an initial term of more than 12 months, and classify it as either a finance or operating lease. We lease certain real and personal property from unrelated third parties under non-cancellable operating leases that expire at various dates through fiscal 2032. These operating leases are mainly for administrative offices, research-and-development and manufacturing facilities, as well as sales offices in various countries around the world. Certain leases require us to pay property taxes, insurance and routine maintenance, and include escalation clauses. Many leases include one or more options to renew. We assume renewals in our determination of the lease term when the renewals are deemed to be reasonably assured at lease commencement. We have also entered into various finance leases to obtain servers and certain other equipment for our operations. These arrangements are typically for three to six years. Our assets, liabilities and lease costs related to finance leases are immaterial. As the rates implicit in our leases are not readily determinable, we use incremental borrowing rates based on the information available at the commencement date in determining the present value of future lease payments. We consider both the credit rating and the length of the lease when calculating the incremental borrowing rate. We combine lease and non-lease components into a single lease component for both our operating and finance leases. For the purpose of lease liability measurement, we consider only payments that are fixed and determinable at the time of commencement. Any variable payments that depend on an index or rate are expensed as incurred. We generally recognize sublease income on a straight-line basis over the sublease term. The components of operating lease costs (in thousands), lease term (in years) and discount rate are as follows: Three Months Ended December 28, 2019 Operating lease cost $ 5,023 Variable lease cost 376 Short-term lease cost 130 Sublease income (32 ) Total lease cost $ 5,497 Weighted average remaining lease term 8.3 Weighted average discount rate 4.8 % Supplemental cash flow information related to leases are as follows (in thousands): Three Months Ended December 28, 2019 Operating cash outflows from operating leases $ 4,887 ROU assets obtained in exchange for new operating lease liabilities 1,996 See Note 9, "Balance Sheet Details" for supplemental balance sheet information related to leases. As of December 28, 2019 , maturities of our operating lease liabilities, which do not include short-term leases and variable lease payments, are as follows (in thousands): Operating Leases 2020 (remainder) $ 14,591 2021 17,514 2022 15,684 2023 12,351 2024 9,956 2025 and thereafter 46,109 Total minimum lease payments 116,205 Amounts representing interest (23,615 ) Present value of total lease liabilities $ 92,590 As of September 28, 2019 , future minimum lease payments as defined under the previous lease accounting guidance of ASC 840 under noncancellable operating leases were as follows (in thousands): Operating Leases 2020 $ 19,578 2021 14,579 2022 10,405 2023 6,817 2024 4,156 2025 and thereafter 10,755 Total minimum lease payments $ 66,290 |
LEASES | LEASES We determine if an arrangement contains a lease at inception for arrangements with an initial term of more than 12 months, and classify it as either a finance or operating lease. We lease certain real and personal property from unrelated third parties under non-cancellable operating leases that expire at various dates through fiscal 2032. These operating leases are mainly for administrative offices, research-and-development and manufacturing facilities, as well as sales offices in various countries around the world. Certain leases require us to pay property taxes, insurance and routine maintenance, and include escalation clauses. Many leases include one or more options to renew. We assume renewals in our determination of the lease term when the renewals are deemed to be reasonably assured at lease commencement. We have also entered into various finance leases to obtain servers and certain other equipment for our operations. These arrangements are typically for three to six years. Our assets, liabilities and lease costs related to finance leases are immaterial. As the rates implicit in our leases are not readily determinable, we use incremental borrowing rates based on the information available at the commencement date in determining the present value of future lease payments. We consider both the credit rating and the length of the lease when calculating the incremental borrowing rate. We combine lease and non-lease components into a single lease component for both our operating and finance leases. For the purpose of lease liability measurement, we consider only payments that are fixed and determinable at the time of commencement. Any variable payments that depend on an index or rate are expensed as incurred. We generally recognize sublease income on a straight-line basis over the sublease term. The components of operating lease costs (in thousands), lease term (in years) and discount rate are as follows: Three Months Ended December 28, 2019 Operating lease cost $ 5,023 Variable lease cost 376 Short-term lease cost 130 Sublease income (32 ) Total lease cost $ 5,497 Weighted average remaining lease term 8.3 Weighted average discount rate 4.8 % Supplemental cash flow information related to leases are as follows (in thousands): Three Months Ended December 28, 2019 Operating cash outflows from operating leases $ 4,887 ROU assets obtained in exchange for new operating lease liabilities 1,996 See Note 9, "Balance Sheet Details" for supplemental balance sheet information related to leases. As of December 28, 2019 , maturities of our operating lease liabilities, which do not include short-term leases and variable lease payments, are as follows (in thousands): Operating Leases 2020 (remainder) $ 14,591 2021 17,514 2022 15,684 2023 12,351 2024 9,956 2025 and thereafter 46,109 Total minimum lease payments 116,205 Amounts representing interest (23,615 ) Present value of total lease liabilities $ 92,590 As of September 28, 2019 , future minimum lease payments as defined under the previous lease accounting guidance of ASC 840 under noncancellable operating leases were as follows (in thousands): Operating Leases 2020 $ 19,578 2021 14,579 2022 10,405 2023 6,817 2024 4,156 2025 and thereafter 10,755 Total minimum lease payments $ 66,290 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Dec. 28, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION Fair Value of Stock Compensation We recognize compensation expense for all share based payment awards based on the fair value of such awards. The expense is recognized on a straight-line basis per tranche over the respective requisite service period of the awards. Determining Fair Value The fair values of shares purchased under the Employee Stock Purchase Plan ("ESPP") for the three months ended December 28, 2019 and December 29, 2018 , respectively, were estimated using the following weighted-average assumptions: Employee Stock Purchase Plan Three Months Ended December 28, 2019 December 29, 2018 Expected life in years 0.5 0.5 Volatility 47.1 % 48.3 % Risk-free interest rate 1.84 % 2.35 % Expected dividend yield — % — % Weighted average fair value per share $ 43.54 $ 42.80 We grant performance restricted stock units to officers and certain employees. The performance restricted stock unit agreements provide for the award of performance stock units with each unit representing the right to receive one share of our common stock to be issued after the applicable award vesting period. The final number of units awarded, if any, for these performance grants will be determined as of the vesting dates, based upon our total shareholder return over the performance period compared to the applicable Russell Index and could range from no units to a maximum of twice the initial award units. The weighted average fair value for these performance units was determined using a Monte Carlo simulation model incorporating the following weighted average assumptions: Three Months Ended December 28, 2019 December 29, 2018 Risk-free interest rate 1.6 % 2.9 % Volatility 47.2 % 43.7 % Weighted average fair value per share $ 190.86 $ 117.43 We recognize the estimated cost of these awards, as determined under the simulation model, over the related service period of approximately 3 years, with no adjustment in future periods based upon the actual shareholder return over the performance period. Stock Compensation Expense The following table shows total stock-based compensation expense and related tax benefits included in the condensed consolidated statements of operations for the three months ended December 28, 2019 and December 29, 2018 (in thousands): Three Months Ended December 28, 2019 December 29, 2018 Cost of sales $ 1,182 $ 1,237 Research and development 561 650 Selling, general and administrative 6,049 5,989 Income tax benefit (856 ) (1,233 ) $ 6,936 $ 6,643 During the three months ended December 28, 2019 , $1.0 million of stock-based compensation cost was capitalized as part of inventory for all stock plans, $1.2 million was amortized into cost of sales and $1.2 million remained in inventory at December 28, 2019 . During the three months ended December 29, 2018 , $1.2 million of stock-based compensation was capitalized as part of inventory for all stock plans, $1.2 million was amortized into cost of sales and $1.4 million remained in inventory at December 29, 2018 . At December 28, 2019 , the total compensation cost related to unvested stock-based awards granted to employees under our stock plans but not yet recognized was approximately $55.1 million . We do not estimate forfeitures. This cost will be amortized on a straight-line basis over a weighted-average period of approximately 1.7 years. Stock Awards Activity The following table summarizes the activity of our time-based and performance-based restricted stock units for the first three months of fiscal 2020 (in thousands, except per share amounts): Time-based Restricted Stock Units Performance-based Restricted Stock Units Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Nonvested stock at September 28, 2019 295 $ 152.47 133 $ 184.26 Granted 170 155.84 37 190.86 Vested (1) (128 ) 153.51 (81 ) 163.17 Forfeited (3 ) 208.78 — — Nonvested stock at December 28, 2019 334 $ 153.21 89 $ 200.63 (1) Service-based restricted stock units vested during the fiscal year. Performance-based restricted stock units included at 100% of target goal; under the terms of the awards, the recipient may earn between 0% and 200% of the award. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Indemnifications In the normal course of business, we enter into agreements that contain a variety of representations and warranties and provide for general indemnification. Exposure under these agreements is unknown because claims may be made against us in the future and we may record charges in the future as a result of these indemnification obligations. As of December 28, 2019 , we did not have any material indemnification claims that were probable or reasonably possible. Legal Proceedings We are subject to legal claims and litigation arising in the ordinary course of business, such as product liability, employment or intellectual property claims. Although we do not expect that such legal claims and litigation will ultimately have a material adverse effect on our consolidated financial position, results of operations or cash flows, an adverse result in one or more matters could negatively affect our results in the period in which they occur. The United States and many foreign governments impose tariffs and duties on the import and export of certain products we sell. From time to time our customs compliance, product classifications, duty calculations and payments are reviewed or audited by government agencies. Any adverse result in such a review or audit could negatively affect our results in the period in which they occur. We are currently in discussions with the German government regarding an export compliance matter involving one of our German subsidiaries. We believe that this involves less than approximately 1.5 million Euros in transactions over the past three years and do not believe that the final resolution of this matter will be material to our consolidated financial position, results of operations or cash flows. However, the German government investigation is ongoing and it is possible that substantial payments, fines, penalties or damages could result. Even though we do not currently expect this matter to be material to our consolidated financial position, results of operations or cash flows, circumstances could change as the investigation progresses. |
Stock Repurchases
Stock Repurchases | 3 Months Ended |
Dec. 28, 2019 | |
Stock Repurchase [Abstract] | |
Stock Repurchases | STOCK REPURCHASES On October 28, 2018, our board of directors authorized a stock repurchase program authorizing the Company to repurchase up to $250.0 million of our common stock through December 31, 2019, with a limit of no more than $75.0 million per quarter. During fiscal 2019, we repurchased and retired 603,828 shares of outstanding common stock under this program at an average price of $128.20 per share for a total of $77.4 million . We made no repurchases under the program during the first three months of fiscal 2020 and the program expired on December 31, 2019. On February 5, 2020, our board of directors authorized a stock repurchase program authorizing the Company to repurchase up to $100.0 million of our common stock through January 31, 2021. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Dec. 28, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Basic earnings per share is computed based on the weighted average number of shares outstanding during the period, excluding unvested restricted stock. Diluted earnings per share is computed based on the weighted average number of shares outstanding during the period increased by the effect of dilutive employee stock awards, including stock options, restricted stock awards and stock purchase plan contracts, using the treasury stock method. The following table presents information necessary to calculate basic and diluted earnings per share (in thousands, except per share data): Three Months Ended December 28, December 29, Weighted average shares outstanding—basic 23,971 24,268 Dilutive effect of employee stock awards 189 204 Weighted average shares outstanding—diluted 24,160 24,472 Net income $ 5,793 $ 35,550 A total of 9,876 and 100,520 potentially dilutive securities have been excluded from the diluted share calculation for the three months ended December 28, 2019 and December 29, 2018 |
Other Income (Expense)
Other Income (Expense) | 3 Months Ended |
Dec. 28, 2019 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense) | OTHER INCOME (EXPENSE) Other income (expense) is as follows (in thousands): Three Months Ended December 28, December 29, Foreign exchange loss $ (1,034 ) $ (2,177 ) Gain (loss) on deferred compensation investments, net 2,232 (2,125 ) Other (405 ) (176 ) Other—net $ 793 $ (4,478 ) |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Income tax expense includes a provision for federal, state and foreign taxes based on the annual estimated effective tax rate applicable to us and our subsidiaries, adjusted for items which are considered discrete to the period. On December 22, 2017, the Tax Act was enacted. The Tax Act contains significant changes to U.S. tax law, including lowering the U.S. corporate income tax rate to 21.0% , implementing a territorial tax system with a one-time transition tax assessment on previously tax-deferred foreign earnings and imposing new taxes on certain foreign-sourced income. We elected to pay the one-time transition tax over a period of up to eight years. Our effective tax rate on income before income taxes for the three months ended December 28, 2019 was 23.3% . Our effective tax rate for the three months ended December 28, 2019 was higher than the U.S. federal tax rate of 21.0% primarily due to the impact of income subject to foreign tax rates that are higher than the U.S. tax rates, an accrual for foreign withholding taxes on certain current year foreign earnings not considered permanently reinvested, stock-based compensation not deductible for tax purposes and limitations on the deductibility of compensation under Internal Revenue Code Section 162(m). These amounts are partially offset by the net excess tax benefits from restricted stock unit vesting, the benefit of federal research and development tax credits, the benefit of certain tax audit settlements and our Singapore tax exemption. Our effective tax rate on income before income taxes for the three months ended December 29, 2018 was 18.6% . Our effective tax rate for the three months ended December 29, 2018 was lower than the U.S. federal tax rate of 21.0% primarily due to the excess tax benefits from restricted stock unit vesting, the benefit of federal research and development tax credits and our Singapore tax exemption. This amount is partially offset by the impact of income subject to foreign tax rates that are higher than the U.S. tax rates, stock-based compensation not deductible for tax purposes and limitations on the deductibility of compensation under Internal Revenue Code Section 162(m). |
Defined Benefit Plans
Defined Benefit Plans | 3 Months Ended |
Dec. 28, 2019 | |
Postemployment Benefits [Abstract] | |
Defined Benefits Plans | DEFINED BENEFIT PLANS For the three months ended December 28, 2019 and December 29, 2018 , net periodic cost (benefit) under our defined benefit plans was a cost of $0.8 million and $0.6 million |
Segment and Geographic Informat
Segment and Geographic Information | 3 Months Ended |
Dec. 28, 2019 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | SEGMENT AND GEOGRAPHIC INFORMATION At December 28, 2019 , we were organized into two reporting segments, OEM Laser Sources ("OLS") and Industrial Lasers & Systems ("ILS"), based upon our organizational structure and how the CODM receives and utilizes information provided to allocate resources and make decisions. This segmentation reflects the go-to-market strategies and synergies for our broad portfolio of laser technologies and products. While both segments deliver cost-effective, highly reliable photonics solutions, the OLS business segment is focused on high performance laser sources and complex optical sub-systems, typically used in microelectronics manufacturing, medical diagnostics and therapeutic applications, as well as in scientific research. Our ILS business segment delivers high performance laser sources, sub-systems and tools primarily used for industrial laser materials processing, serving important end markets like automotive, machine tool, consumer goods and medical device manufacturing. Ondax’s operating results have been included in our ILS segment. We have identified OLS and ILS as operating segments for which discrete financial information is available. Both units have dedicated engineering, manufacturing, product business management and product line management functions. A small portion of our outside revenue is attributable to projects and recently developed products for which a segment has not yet been determined. The associated direct and indirect costs are presented in the category of Corporate and other, along with other corporate costs as described below. Our Chief Executive Officer has been identified as the CODM, as he assesses the performance of the segments and decides how to allocate resources to the segments. Income from operations is the measure of profit and loss that our CODM uses to assess performance and make decisions. As assets are not a measure used to assess the performance of the company by the CODM, asset information is not tracked or compiled by segment and is not available to be reported in our disclosures. Income from operations represents the net sales less the cost of sales and direct operating expenses incurred within the operating segments as well as allocated expenses such as shared sales and manufacturing costs. We do not allocate certain operating expenses to our operating segments and we manage them at the corporate level. These unallocated costs include stock-based compensation and corporate functions (certain research and development, management, finance, legal and human resources) and are included in the results below under Corporate and other in the reconciliation of operating results. Management does not consider unallocated Corporate and other costs in its measurement of segment performance. The following table provides net sales and income from operations for our operating segments and a reconciliation of our total income from operations to income before income taxes (in thousands): Three Months Ended December 28, December 29, Net sales: OEM Laser Sources $ 200,948 $ 242,348 Industrial Lasers & Systems 119,823 140,798 Total net sales $ 320,771 $ 383,146 Income (loss) from operations: OEM Laser Sources $ 47,708 $ 78,858 Industrial Lasers & Systems (20,300 ) (13,704 ) Corporate and other (16,818 ) (12,343 ) Total income from operations 10,590 52,811 Total other expense, net (3,034 ) (9,151 ) Income before income taxes $ 7,556 $ 43,660 Geographic Information Our foreign operations consist primarily of manufacturing facilities and sales offices in Europe and Asia-Pacific. Sales, marketing and customer service activities are conducted through sales subsidiaries throughout the world. Geographic sales information for the three months ended December 28, 2019 and December 29, 2018 is based on the location of the end customer. Sales to unaffiliated customers are as follows (in thousands): Three Months ended SALES December 28, December 29, United States $ 77,885 $ 84,030 Foreign countries: South Korea 60,056 106,526 China 58,588 47,544 Japan 22,351 29,837 Asia-Pacific, other 22,162 27,228 Germany 30,445 37,885 Europe, other 34,513 36,289 Rest of World 14,771 13,807 Total foreign countries sales 242,886 299,116 Total sales $ 320,771 $ 383,146 Major Customers We had one customer during the three months ended December 28, 2019 and December 29, 2018 that accounted for 17.6% and 18.5% of net sales, respectively. This customer purchased primarily from our OLS segment. We had one customer that accounted for 25.2% and 28.6% of accounts receivable at December 28, 2019 and September 28, 2019 |
Restructuring charges
Restructuring charges | 3 Months Ended |
Dec. 28, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring charges | RESTRUCTURING CHARGES In the first quarter of fiscal 2017, we began the implementation of planned restructuring activities in connection with the acquisition of Rofin. The activities under this plan primarily related to the exiting of our legacy high power fiber laser product line, change of control payments to Rofin officers, the exiting of two product lines acquired in the acquisition of Rofin, realignment of our supply chain due to segment reorganization and consolidation of sales and distribution offices as well as certain manufacturing sites. These activities resulted in charges primarily for employee termination, other exit related costs associated with the write-off of property and equipment and inventory and early lease termination costs. In June 2019, we announced our plans to co-locate the manufacturing and engineering of our HPFL products at our Hamburg, Germany, facility to our Tampere, Finland, location and exit a portion of our HPFL business, expected to be completed during fiscal 2020. In conjunction with this announcement, we recorded charges in the third and fourth quarters of fiscal 2019 totaling $19.7 million primarily related to write-offs of excess inventory, which is recorded in cost of sales, and estimated severance. We recorded charges in the first quarter of fiscal 2020 of $0.7 million primarily related to accelerated depreciation and project management consulting. We have also announced our intent to vacate our leased facility in Santa Clara at the end of the current lease term in calendar 2020 and combine operations at our Santa Clara headquarters. We did not incur material expenses in fiscal 2019 related to this project. We incurred costs in the first quarter of fiscal 2020 of $0.2 million related to this project. The following table presents our current liability as accrued on our balance sheets for restructuring charges. The table sets forth an analysis of the components of the restructuring charges and payments and other deductions made against the accrual for the first three months of fiscal 2020 and 2019 (in thousands): Severance Related Asset Write-Offs Other Total Balances, September 28, 2019 $ 8,279 $ — $ 215 $ 8,494 Provision 54 599 280 933 Payments and other (658 ) (599 ) (275 ) (1,532 ) Balances, December 28, 2019 $ 7,675 $ — $ 220 $ 7,895 Severance Related Asset Write-Offs Other Total Balances, September 29, 2018 $ 836 $ — $ 286 $ 1,122 Provision 212 76 188 476 Payments and other (447 ) (76 ) (244 ) (767 ) Balances, December 29, 2018 $ 601 $ — $ 230 $ 831 At December 28, 2019 , $7.9 million of accrued severance related and other costs were included in other current liabilities. The asset write-offs for accelerated depreciation and other costs in the first quarter of fiscal 2020 primarily related to the exit of a portion of our HPFL business in Hamburg, Germany, and costs to vacate our leased facility in Santa Clara and combine operations at our Santa Clara headquarters. The severance related, asset write-offs of equipment and other costs in the first three months of fiscal 2019 are related to the consolidation of certain manufacturing sites. By segment, $0.7 million of restructuring costs were incurred in the ILS segment and $0.2 million were incurred in the OLS segment in the three months ended December 28, 2019 . $0.5 million of restructuring costs were incurred in the ILS segment and $0.0 million were incurred in the OLS segment in the three months ended December 29, 2018 . Restructuring charges are recorded in cost of sales, research and development and selling, general and administrative expenses in our condensed consolidated statements of operations. |
Recent Accounting Standards (Po
Recent Accounting Standards (Policies) | 3 Months Ended |
Dec. 28, 2019 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | Adoption of New Accounting Pronouncement In February 2018, the Financial Accounting Standards Board ("FASB") issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows companies to reclassify stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act of 2017 (the “Tax Act”), from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. The amendments in ASU 2018-02 are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. We adopted ASU 2018-02 in the first quarter of fiscal 2020 with no material impact to our condensed consolidated financial statements. In February 2016, the FASB issued accounting guidance (ASC 842) that modifies lease accounting for lessees to increase transparency and comparability by recording lease assets and liabilities for operating leases and disclosing key information about leasing arrangements. We adopted ASC 842 in the first quarter of fiscal 2020 utilizing the optional transition method by applying the new standard to leases existing at the date of initial application and not restating comparative periods. We determine if an arrangement contains a lease at inception for arrangements with an initial term of more than 12 months, and classify it as either finance or operating. We have elected the package of practical expedients which allows us to not reassess 1) whether any expired or existing contracts are or contain leases; 2) the lease classification for any expired or existing leases; and 3) initial direct costs for any existing leases. In addition, we also elected to use the practical expedient allowed in the standard to not separate lease and non-lease components and apply the short-term lease measurement and recognition exemption to all leases shorter than 12 months when calculating the lease liability under ASC 842. The adoption of the standard resulted in the recognition of operating lease assets of $90.4 million , with corresponding operating lease liabilities of $93.5 million on our condensed consolidated balance sheet, primarily related to real estate leases. The difference between the operating lease right-of-use assets and operating lease liabilities primarily represents our deferred rent as of adoption. As of the date of adoption, we recognized finance lease assets of $1.0 million , with corresponding finance lease liabilities of $0.9 million on our condensed consolidated balance sheet, primarily related to equipment leases. See Note 11, "Leases" for more information. |
Recent Accounting Standards | Recently Issued Accounting Pronouncements |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Dec. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue from Contracts with Customers | The following tables summarize revenue from contracts with customers (in thousands): Sales by revenue type and segment Three Months Ended December 28, 2019 December 29, 2018 OEM Laser Sources Industrial Lasers & Systems OEM Laser Sources Industrial Lasers & Systems Net sales: Products (1) $ 109,836 $ 93,903 $ 152,742 $ 111,975 Other product and service revenues (2) 91,112 25,920 89,606 28,823 Total net sales $ 200,948 $ 119,823 $ 242,348 $ 140,798 (1) Net sales primarily recognized at a point in time. (2) Includes sales of spare parts, related accessories and other consumable parts as well as revenues from service agreements, of which $14.4 million and $12.6 million for the three months ended December 28, 2019 and December 29, 2018 , respectively, were recognized over time. Sales by market application and segment Three Months Ended December 28, 2019 December 29, 2018 OEM Laser Sources Industrial Lasers & Systems OEM Laser Sources Industrial Lasers & Systems Net sales: Microelectronics $ 114,893 $ 15,653 $ 162,203 $ 16,206 Materials processing 10,395 77,977 8,802 95,841 OEM components and instrumentation 46,230 23,121 39,219 27,134 Scientific and government programs 29,430 3,072 32,124 1,617 Total net sales $ 200,948 $ 119,823 $ 242,348 $ 140,798 |
Summary of Customer Deposits and Deferred Revenue | A rollforward of our customer deposits and deferred revenue is as follows (in thousands): Beginning balance, September 28, 2019 (1) $ 42,550 Additions to customer deposits and deferred revenue 42,633 Amount of customer deposits and deferred revenue recognized in income (40,360 ) Translation adjustments 652 Ending balance, December 28, 2019 (2) $ 45,475 (1) Beginning customer deposits and deferred revenue as of September 28, 2019 include $34,538 of current portion and $8,012 of long-term portion. (2) Ending customer deposits and deferred revenue as of December 28, 2019 include $35,894 of current portion and $9,581 of long-term portion. |
Summary of Estimated Revenue Expected to be Recognized in the Future | The following table includes estimated revenue expected to be recognized in the future related to performance obligations for sales of maintenance agreements, extended warranties, installation, and contracts with customer acceptance provisions included in customer deposits and deferred revenue as of December 28, 2019 (in thousands): Remainder of fiscal 2020 Thereafter Total Performance obligations as of December 28, 2019 $ 34,334 $ 11,141 $ 45,475 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Dec. 28, 2019 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | Our allocation of the purchase price is as follows (in thousands): Tangible assets: Cash $ 103 Accounts receivable 534 Inventories 1,793 Prepaid expenses and other assets 17 Deferred tax assets 681 Property and equipment 122 Liabilities assumed (499 ) Intangible assets: Existing technology 5,600 Customer relationships 300 Goodwill 3,333 Total $ 11,984 Our allocation of the purchase price is as follows (in thousands): Tangible assets: Property and equipment $ 2,770 Intangible assets: Existing technology 1,600 Customer relationships 230 Production know-how 2,300 Backlog 100 Total $ 7,000 |
Fair Values (Tables)
Fair Values (Tables) | 3 Months Ended |
Dec. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities measured at fair value | Financial assets and liabilities measured at fair value as of December 28, 2019 and September 28, 2019 are summarized below (in thousands): Aggregate Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Aggregate Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs December 28, 2019 September 28, 2019 (Level 1) (Level 2) (Level 1) (Level 2) Assets: Cash equivalents: Money market fund deposits $ 9,474 $ 9,474 $ — $ 21,422 $ 21,422 $ — U.S. Treasury and agency obligations (1) 120 — 120 — — — Short-term investments: U.S. Treasury and agency obligations (1) — — — 120 — 120 Prepaid and other assets: Foreign currency contracts (2) 689 — 689 370 — 370 Money market fund deposits — Deferred comp and supplemental plan (3) 615 615 — 433 433 — Mutual funds — Deferred comp and supplemental plan (3) 23,817 23,817 — 22,419 22,419 — Total $ 34,715 $ 33,906 $ 809 $ 44,764 $ 44,274 $ 490 Liabilities: Other current liabilities: Foreign currency contracts (2) (802 ) — (802 ) (960 ) — (960 ) Total $ 33,913 $ 33,906 $ 7 $ 43,804 $ 44,274 $ (470 ) ___________________________________________________ (1) Valuations are based upon quoted market prices in active markets involving similar assets. The market inputs used to value these instruments generally consist of market yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. Pricing sources include industry standard data providers, security master files from large financial institutions, and other third party sources which are input into a distribution-curve-based algorithm to determine a daily market value. This creates a "consensus price" or a weighted average price for each security. (2) The principal market in which we execute our foreign currency contracts is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants usually are large commercial banks. Our foreign currency contracts’ valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. See Note 7, "Derivative Instruments and Hedging Activities." (3) |
Short-Term Investments (Tables)
Short-Term Investments (Tables) | 3 Months Ended |
Dec. 28, 2019 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Schedule of cash, cash equivalents and short-term investments | Cash, cash equivalents and short-term investments consist of the following (in thousands): December 28, 2019 Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents $ 349,592 $ — $ — $ 349,592 September 28, 2019 Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents $ 305,833 $ — $ — $ 305,833 Short-term investments: Available-for-sale securities: U.S. Treasury and agency obligations $ 120 $ — $ — $ 120 Total short-term investments $ 120 $ — $ — $ 120 |
Schedule of amortized cost and estimated fair value of available-for-sale investments in debt securities |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Dec. 28, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | The total outstanding notional contract and fair value asset (liability) amounts of non-designated hedge contracts, with maximum maturity of two months, are as follows (in thousands): U.S. Notional Contract Value U.S. Fair Value December 28, 2019 September 28, 2019 December 28, 2019 September 28, 2019 Foreign currency hedge contracts Purchase $ 45,535 $ 53,920 $ 597 $ (117 ) Sell $ (79,072 ) $ (86,984 ) $ (710 ) $ (473 ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Dec. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in carrying amount of goodwill by segment | The changes in the carrying amount of goodwill by segment for the period from September 28, 2019 to December 28, 2019 are as follows (in thousands): OEM Laser Sources Industrial Lasers & Systems Total Balance as of September 28, 2019 $ 96,820 330,281 $ 427,101 Translation adjustments 1,595 4,947 6,542 Balance as of December 28, 2019 $ 98,415 $ 335,228 $ 433,643 |
Schedule of components of amortizable intangible assets | Components of our amortizable intangible assets are as follows (in thousands): December 28, 2019 September 28, 2019 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Existing technology $ 182,626 $ (130,264 ) $ 52,362 $ 193,704 $ (131,429 ) $ 62,275 Customer relationships 40,861 (21,121 ) 19,740 42,083 (21,512 ) 20,571 Trade name — — — 5,261 (5,138 ) 123 Production know-how 2,300 (571 ) 1,729 2,300 (456 ) 1,844 Total $ 225,787 $ (151,956 ) $ 73,831 $ 243,348 $ (158,535 ) $ 84,813 |
Schedule of estimated amortization expense | At December 28, 2019 , estimated amortization expense for the remainder of fiscal 2020 , the next five succeeding fiscal years and all fiscal years thereafter are as follows (in thousands): Estimated Amortization Expense 2020 (remainder) $ 35,901 2021 17,852 2022 6,715 2023 4,436 2024 3,092 2025 2,981 Thereafter 2,854 Total $ 73,831 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 3 Months Ended |
Dec. 28, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of inventories | Inventories consist of the following (in thousands): December 28, September 28, Purchased parts and assemblies $ 135,405 $ 134,298 Work-in-process 179,023 174,550 Finished goods 135,143 133,682 Total inventories $ 449,571 $ 442,530 |
Schedule of prepaid expenses and other assets | Prepaid expenses and other assets consist of the following (in thousands): December 28, September 28, Prepaid and refundable income taxes $ 48,468 $ 44,096 Other taxes receivable 10,840 11,208 Prepaid expenses and other assets 27,689 22,689 Total prepaid expenses and other assets $ 86,997 $ 77,993 |
Schedule of other assets | Other assets consist of the following (in thousands): December 28, September 28, Assets related to deferred compensation arrangements $ 37,616 $ 35,842 Deferred tax assets 86,359 87,011 Right of use assets, net - operating leases (See Note 11) 89,295 — Right of use assets, net - finance leases (See Note 11) 895 — Other assets (1) 19,667 18,111 Total other assets $ 233,832 $ 140,964 (1) In the first quarter of fiscal 2019, we invested 3.0 million Euro ( $3.4 million ) in 3D-Micromac AG, a private company in Germany. The investment is included in other assets and is being carried on a cost basis and will be adjusted for impairment if we determine that indicators of impairment exist at any point in time. |
Schedule of other current liabilities | Other current liabilities consist of the following (in thousands): December 28, September 28, Accrued payroll and benefits $ 52,199 $ 55,698 Operating lease liability, current (See Note 11) 15,182 — Finance lease liability, current (See Note 11) 379 — Deferred revenue 23,352 23,695 Warranty reserve 35,924 36,460 Accrued expenses and other 35,820 41,039 Customer deposits 12,542 10,843 Total other current liabilities $ 175,398 $ 167,735 |
Schedule of components of reserve for warranty costs | Components of the reserve for warranty costs during the first three months of fiscal 2020 and 2019 were as follows (in thousands): Three Months Ended December 28, December 29, Beginning balance $ 36,460 $ 40,220 Additions related to current period sales 10,310 17,081 Warranty costs incurred in the current period (10,972 ) (16,376 ) Accruals resulting from acquisitions — 21 Adjustments to accruals related to foreign exchange and other 126 (457 ) Ending balance $ 35,924 $ 40,489 |
Schedule of other long-term liabilities | Other long-term liabilities consist of the following (in thousands): December 28, September 28, Long-term taxes payable $ 37,040 $ 37,385 Operating lease liability, long-term (See Note 11) 77,408 — Finance lease liability, long-term (See Note 11) 452 — Deferred compensation 41,412 39,715 Defined benefit plan liabilities 46,625 45,862 Deferred tax liabilities 25,497 27,785 Deferred revenue 9,581 8,012 Asset retirement obligations liability 5,290 4,934 Other long-term liabilities 2,202 2,188 Total other long-term liabilities $ 245,507 $ 165,881 |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Dec. 28, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Debt | Short-term borrowings and current portion of long-term obligations consist of the following (in thousands): December 28, September 28, Current portion of Euro Term Loan (1) $ 4,687 $ 2,748 1.3% Term loan due 2024 1,743 1,367 1.0% State of Connecticut term loan due 2023 379 378 Capital lease obligations — 370 Line of credit borrowings 10,000 10,000 Total short-term borrowings and current portion of long-term obligations $ 16,809 $ 14,863 (1) Net of debt issuance costs of $2.8 million and $4.6 million at December 28, 2019 and September 28, 2019 , respectively. |
Long-term Debt | Long-term obligations consist of the following (in thousands): December 28, September 28, Euro Term Loan due 2024 (1) $ 389,992 $ 385,208 1.3% Term loan due 2024 5,228 5,466 1.0% State of Connecticut term loan due 2023 933 1,028 Capital lease obligations — 536 Total long-term obligations $ 396,153 $ 392,238 (1) Net of debt issuance costs of $7.7 million and $6.4 million at December 28, 2019 and September 28, 2019 , respectively. |
Schedule of Maturities of Long-term Debt | Contractual maturities of our debt obligations, excluding line of credit borrowings, as of December 28, 2019 are as follows (in thousands): Amount 2020 (remainder) $ 7,279 2021 9,239 2022 9,239 2023 9,156 2024 378,511 Total $ 413,424 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Dec. 28, 2019 | |
Leases [Abstract] | |
Components of Lease Cost and Supplemental Cash Flow Information | The components of operating lease costs (in thousands), lease term (in years) and discount rate are as follows: Three Months Ended December 28, 2019 Operating lease cost $ 5,023 Variable lease cost 376 Short-term lease cost 130 Sublease income (32 ) Total lease cost $ 5,497 Weighted average remaining lease term 8.3 Weighted average discount rate 4.8 % Supplemental cash flow information related to leases are as follows (in thousands): Three Months Ended December 28, 2019 Operating cash outflows from operating leases $ 4,887 ROU assets obtained in exchange for new operating lease liabilities 1,996 |
Operating Lease maturity | As of December 28, 2019 , maturities of our operating lease liabilities, which do not include short-term leases and variable lease payments, are as follows (in thousands): Operating Leases 2020 (remainder) $ 14,591 2021 17,514 2022 15,684 2023 12,351 2024 9,956 2025 and thereafter 46,109 Total minimum lease payments 116,205 Amounts representing interest (23,615 ) Present value of total lease liabilities $ 92,590 |
Schedule of Maturities Prior to Adoption of ASC 842 | As of September 28, 2019 , future minimum lease payments as defined under the previous lease accounting guidance of ASC 840 under noncancellable operating leases were as follows (in thousands): Operating Leases 2020 $ 19,578 2021 14,579 2022 10,405 2023 6,817 2024 4,156 2025 and thereafter 10,755 Total minimum lease payments $ 66,290 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Dec. 28, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of weighted-average assumptions used to estimate fair value of stock options granted and shares purchased | The fair values of shares purchased under the Employee Stock Purchase Plan ("ESPP") for the three months ended December 28, 2019 and December 29, 2018 , respectively, were estimated using the following weighted-average assumptions: Employee Stock Purchase Plan Three Months Ended December 28, 2019 December 29, 2018 Expected life in years 0.5 0.5 Volatility 47.1 % 48.3 % Risk-free interest rate 1.84 % 2.35 % Expected dividend yield — % — % Weighted average fair value per share $ 43.54 $ 42.80 |
Schedule of weighted average assumptions of performance units | The weighted average fair value for these performance units was determined using a Monte Carlo simulation model incorporating the following weighted average assumptions: Three Months Ended December 28, 2019 December 29, 2018 Risk-free interest rate 1.6 % 2.9 % Volatility 47.2 % 43.7 % Weighted average fair value per share $ 190.86 $ 117.43 |
Schedule of stock-based compensation expense | The following table shows total stock-based compensation expense and related tax benefits included in the condensed consolidated statements of operations for the three months ended December 28, 2019 and December 29, 2018 (in thousands): Three Months Ended December 28, 2019 December 29, 2018 Cost of sales $ 1,182 $ 1,237 Research and development 561 650 Selling, general and administrative 6,049 5,989 Income tax benefit (856 ) (1,233 ) $ 6,936 $ 6,643 |
Schedule of restricted stock award and restricted stock unit activity | The following table summarizes the activity of our time-based and performance-based restricted stock units for the first three months of fiscal 2020 (in thousands, except per share amounts): Time-based Restricted Stock Units Performance-based Restricted Stock Units Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Nonvested stock at September 28, 2019 295 $ 152.47 133 $ 184.26 Granted 170 155.84 37 190.86 Vested (1) (128 ) 153.51 (81 ) 163.17 Forfeited (3 ) 208.78 — — Nonvested stock at December 28, 2019 334 $ 153.21 89 $ 200.63 (1) Service-based restricted stock units vested during the fiscal year. Performance-based restricted stock units included at 100% of target goal; under the terms of the awards, the recipient may earn between 0% and 200% of the award. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Dec. 28, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of information necessary to calculate basic and diluted earnings (loss) per share | The following table presents information necessary to calculate basic and diluted earnings per share (in thousands, except per share data): Three Months Ended December 28, December 29, Weighted average shares outstanding—basic 23,971 24,268 Dilutive effect of employee stock awards 189 204 Weighted average shares outstanding—diluted 24,160 24,472 Net income $ 5,793 $ 35,550 |
Other Income (Expense) (Tables)
Other Income (Expense) (Tables) | 3 Months Ended |
Dec. 28, 2019 | |
Other Income and Expenses [Abstract] | |
Schedule of other nonoperating income (expense) | Other income (expense) is as follows (in thousands): Three Months Ended December 28, December 29, Foreign exchange loss $ (1,034 ) $ (2,177 ) Gain (loss) on deferred compensation investments, net 2,232 (2,125 ) Other (405 ) (176 ) Other—net $ 793 $ (4,478 ) |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 3 Months Ended |
Dec. 28, 2019 | |
Segment Reporting [Abstract] | |
Schedule of sales and income (loss) from operations | Sales to unaffiliated customers are as follows (in thousands): Three Months ended SALES December 28, December 29, United States $ 77,885 $ 84,030 Foreign countries: South Korea 60,056 106,526 China 58,588 47,544 Japan 22,351 29,837 Asia-Pacific, other 22,162 27,228 Germany 30,445 37,885 Europe, other 34,513 36,289 Rest of World 14,771 13,807 Total foreign countries sales 242,886 299,116 Total sales $ 320,771 $ 383,146 The following table provides net sales and income from operations for our operating segments and a reconciliation of our total income from operations to income before income taxes (in thousands): Three Months Ended December 28, December 29, Net sales: OEM Laser Sources $ 200,948 $ 242,348 Industrial Lasers & Systems 119,823 140,798 Total net sales $ 320,771 $ 383,146 Income (loss) from operations: OEM Laser Sources $ 47,708 $ 78,858 Industrial Lasers & Systems (20,300 ) (13,704 ) Corporate and other (16,818 ) (12,343 ) Total income from operations 10,590 52,811 Total other expense, net (3,034 ) (9,151 ) Income before income taxes $ 7,556 $ 43,660 |
Restructuring charges (Tables)
Restructuring charges (Tables) | 3 Months Ended |
Dec. 28, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The table sets forth an analysis of the components of the restructuring charges and payments and other deductions made against the accrual for the first three months of fiscal 2020 and 2019 (in thousands): Severance Related Asset Write-Offs Other Total Balances, September 28, 2019 $ 8,279 $ — $ 215 $ 8,494 Provision 54 599 280 933 Payments and other (658 ) (599 ) (275 ) (1,532 ) Balances, December 28, 2019 $ 7,675 $ — $ 220 $ 7,895 Severance Related Asset Write-Offs Other Total Balances, September 29, 2018 $ 836 $ — $ 286 $ 1,122 Provision 212 76 188 476 Payments and other (447 ) (76 ) (244 ) (767 ) Balances, December 29, 2018 $ 601 $ — $ 230 $ 831 |
Recent Accounting Standards (De
Recent Accounting Standards (Details) - USD ($) | Dec. 28, 2019 | Sep. 29, 2019 | Sep. 28, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Right-of-use asset | $ 89,295,000 | $ 0 | |
Present value of total lease liabilities | 92,590,000 | ||
Finance Lease, Right-of-Use Asset | $ 895,000 | $ 0 | |
Accounting Standards Update 2016-02 | Minimum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Right-of-use asset | $ 90,400,000 | ||
Finance Lease, Right-of-Use Asset | 1,000,000 | ||
Present value of total lease liabilities | 900,000 | ||
Accounting Standards Update 2016-02 | Maximum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Present value of total lease liabilities | $ 93,500,000 |
Revenue Recognition Disaggregat
Revenue Recognition Disaggregation of revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | ||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 320,771 | $ 383,146 | |
OEM Laser Sources | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 200,948 | 242,348 | |
Industrial Lasers & Systems | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 119,823 | 140,798 | |
Products | OEM Laser Sources | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | [1] | 109,836 | 152,742 |
Products | Industrial Lasers & Systems | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | [1] | 93,903 | 111,975 |
Other products and services revenues | OEM Laser Sources | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | [2] | 91,112 | 89,606 |
Other products and services revenues | Industrial Lasers & Systems | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | [2] | 25,920 | 28,823 |
Sales of spare parts | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 14,400 | 12,600 | |
Microelectronics | OEM Laser Sources | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 114,893 | 162,203 | |
Microelectronics | Industrial Lasers & Systems | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 15,653 | 16,206 | |
Materials processing | OEM Laser Sources | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 10,395 | 8,802 | |
Materials processing | Industrial Lasers & Systems | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 77,977 | 95,841 | |
OEM components and instrumentation | OEM Laser Sources | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 46,230 | 39,219 | |
OEM components and instrumentation | Industrial Lasers & Systems | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 23,121 | 27,134 | |
Scientific and government programs | OEM Laser Sources | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 29,430 | 32,124 | |
Scientific and government programs | Industrial Lasers & Systems | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 3,072 | $ 1,617 | |
[1] | Net sales primarily recognized at a point in time. | ||
[2] | Includes sales of spare parts, related accessories and other consumable parts as well as revenues from service agreements, of which $14.4 million and $12.6 million for the three months ended December 28, 2019 and December 29, 2018 |
Revenue Recognition Contract ba
Revenue Recognition Contract balances (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 28, 2019 | Sep. 28, 2019 | |
Change in Contract with Customer, Liability [Abstract] | ||
Contract with customer, beginning balance | $ 42,550 | |
Amount of customer deposits and deferred revenue recognized in income | (40,360) | |
Additions to customer deposits and deferred revenue | 42,633 | |
Translation adjustments | 652 | |
Contract with customer, ending balance | 45,475 | |
Contract with Customer, Liability, Current | 35,894 | $ 34,538 |
Customer deposits and deferred revenue, noncurrent | $ 9,581 | $ 8,012 |
Revenue Recognition Performance
Revenue Recognition Performance Obligations (Details) $ in Thousands | Dec. 28, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Performance Obligations | $ 45,475 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-12-29 | |
Revenue from Contract with Customer [Abstract] | |
Performance Obligations | $ 34,334 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-03 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-09-28 | |
Revenue from Contract with Customer [Abstract] | |
Performance Obligations | $ 11,141 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-02 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation period | 1 year |
Business Combinations - Narrati
Business Combinations - Narrative (Details) $ in Millions | Oct. 05, 2018USD ($) |
Ondax Inc. | |
Business Acquisition [Line Items] | |
Cost investment | $ 12 |
Ondax Inc. | Minimum | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 1 year |
Ondax Inc. | Maximum | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 8 years |
Quantum Coating, Inc. | |
Business Acquisition [Line Items] | |
Cost investment | $ 7 |
Quantum Coating, Inc. | Minimum | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 1 year |
Quantum Coating, Inc. | Maximum | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Business Combinations - Schedul
Business Combinations - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Sep. 28, 2019 | Oct. 05, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 433,643 | $ 427,101 | |
Ondax Inc. | |||
Business Acquisition [Line Items] | |||
Cash, cash equivalents and short-term investments | $ 103 | ||
Accounts receivable | 534 | ||
Inventory | 1,793 | ||
Prepaid expenses and other assets | 17 | ||
Deferred tax assets | 681 | ||
Property and equipment | 122 | ||
Liabilities assumed | (499) | ||
Goodwill | 3,333 | ||
Total | 11,984 | ||
Ondax Inc. | Existing technology | |||
Business Acquisition [Line Items] | |||
Intangible assets: | 5,600 | ||
Ondax Inc. | Customer relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets: | 300 | ||
Quantum Coating, Inc. | |||
Business Acquisition [Line Items] | |||
Property and equipment | 2,770 | ||
Total | 7,000 | ||
Quantum Coating, Inc. | Existing technology | |||
Business Acquisition [Line Items] | |||
Intangible assets: | 1,600 | ||
Quantum Coating, Inc. | Customer relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets: | 230 | ||
Quantum Coating, Inc. | Production know-how | |||
Business Acquisition [Line Items] | |||
Intangible assets: | 2,300 | ||
Quantum Coating, Inc. | Backlog | |||
Business Acquisition [Line Items] | |||
Intangible assets: | $ 100 |
Fair Values (Details)
Fair Values (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Sep. 28, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Current portion of long term obligation, amortized cost | $ 6,800 | $ 4,900 | |
Long-term obligations | 396,153 | 392,238 | |
Fair Value, Measurements, Recurring | Prepaid and other assets: | Fair Value, Inputs, Level 1 | Mutual funds — Deferred comp and supplemental plan | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mutual funds - Deferred comp and supplemental plan | [1] | 23,817 | 22,419 |
Fair Value, Measurements, Recurring | Prepaid and other assets: | Fair Value, Inputs, Level 2 | Mutual funds — Deferred comp and supplemental plan | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mutual funds - Deferred comp and supplemental plan | [1] | 0 | 0 |
Fair Value, Measurements, Recurring | Prepaid and other assets: | Estimate of Fair Value Measurement | Mutual funds — Deferred comp and supplemental plan | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mutual funds - Deferred comp and supplemental plan | [1] | 23,817 | 22,419 |
Fair Value, Measurements, Recurring | Assets | Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Financial assets and liabilities, fair value disclosure | 33,906 | 44,274 | |
Fair Value, Measurements, Recurring | Assets | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Financial assets and liabilities, fair value disclosure | 809 | 490 | |
Fair Value, Measurements, Recurring | Assets | Estimate of Fair Value Measurement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Financial assets and liabilities, fair value disclosure | 34,715 | 44,764 | |
Fair Value, Measurements, Recurring | Other current liabilities: | Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Financial assets and liabilities, fair value disclosure | 33,906 | 44,274 | |
Fair Value, Measurements, Recurring | Other current liabilities: | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Financial assets and liabilities, fair value disclosure | 7 | (470) | |
Fair Value, Measurements, Recurring | Other current liabilities: | Estimate of Fair Value Measurement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Financial assets and liabilities, fair value disclosure | 33,913 | 43,804 | |
Fair Value, Measurements, Recurring | Money market fund deposits | Cash equivalents: | Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash Equivalents | 9,474 | 21,422 | |
Fair Value, Measurements, Recurring | Money market fund deposits | Cash equivalents: | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash Equivalents | 0 | 0 | |
Fair Value, Measurements, Recurring | Money market fund deposits | Cash equivalents: | Estimate of Fair Value Measurement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash Equivalents | 9,474 | 21,422 | |
Fair Value, Measurements, Recurring | Money market fund deposits | Prepaid and other assets: | Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investments, Fair Value Disclosure | [1] | 615 | 433 |
Fair Value, Measurements, Recurring | Money market fund deposits | Prepaid and other assets: | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investments, Fair Value Disclosure | [1] | 0 | 0 |
Fair Value, Measurements, Recurring | Money market fund deposits | Prepaid and other assets: | Estimate of Fair Value Measurement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investments, Fair Value Disclosure | [1] | 615 | 433 |
Fair Value, Measurements, Recurring | U.S. Treasury and agency obligations | Cash equivalents: | Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash Equivalents | [2] | 0 | 0 |
Fair Value, Measurements, Recurring | U.S. Treasury and agency obligations | Cash equivalents: | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash Equivalents | [2] | 120 | 0 |
Fair Value, Measurements, Recurring | U.S. Treasury and agency obligations | Cash equivalents: | Estimate of Fair Value Measurement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash Equivalents | [2] | 120 | 0 |
Fair Value, Measurements, Recurring | U.S. Treasury and agency obligations | Short-term investments: | Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investments, Fair Value Disclosure | [2] | 0 | 0 |
Fair Value, Measurements, Recurring | U.S. Treasury and agency obligations | Short-term investments: | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investments, Fair Value Disclosure | [2] | 0 | 120 |
Fair Value, Measurements, Recurring | U.S. Treasury and agency obligations | Short-term investments: | Estimate of Fair Value Measurement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investments, Fair Value Disclosure | [2] | 0 | 120 |
Fair Value, Measurements, Recurring | Foreign currency contracts | Prepaid and other assets: | Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreign currency contracts | [3] | 0 | 0 |
Fair Value, Measurements, Recurring | Foreign currency contracts | Prepaid and other assets: | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreign currency contracts | [3] | 689 | 370 |
Fair Value, Measurements, Recurring | Foreign currency contracts | Prepaid and other assets: | Estimate of Fair Value Measurement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreign currency contracts | [3] | 689 | 370 |
Fair Value, Measurements, Recurring | Foreign currency contracts | Other current liabilities: | Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreign currency contracts | [3] | 0 | 0 |
Fair Value, Measurements, Recurring | Foreign currency contracts | Other current liabilities: | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreign currency contracts | [3] | (802) | (960) |
Fair Value, Measurements, Recurring | Foreign currency contracts | Other current liabilities: | Estimate of Fair Value Measurement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreign currency contracts | [3] | $ (802) | $ (960) |
[1] | The fair value of mutual funds is determined based on quoted market prices. Securities traded on a national exchange are stated at the last reported sales price on the day of valuation; other securities traded in over-the-counter markets and listed securities for which no sale was reported on that date are stated as the last quoted bid price. | ||
[2] | Valuations are based upon quoted market prices in active markets involving similar assets. The market inputs used to value these instruments generally consist of market yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. Pricing sources include industry standard data providers, security master files from large financial institutions, and other third party sources which are input into a distribution-curve-based algorithm to determine a daily market value. This creates a "consensus price" or a weighted average price for each security. | ||
[3] | The principal market in which we execute our foreign currency contracts is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants usually are large commercial banks. Our foreign currency contracts’ valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. See Note 7, "Derivative Instruments and Hedging Activities." |
Short-Term Investments (Details
Short-Term Investments (Details) - USD ($) $ in Thousands | Dec. 28, 2019 | Sep. 28, 2019 | Dec. 29, 2018 |
Debt Securities, Available-for-sale [Line Items] | |||
Cash and cash equivalents, Cost Basis | $ 349,592 | $ 305,833 | |
Cash and cash equivalent, Unrealized Gains | 0 | 0 | |
Cash and cash equivalent, Unrealized Losses | 0 | 0 | |
Cash and cash equivalents | $ 349,592 | 305,833 | $ 314,997 |
Short-term investments: | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale securities: Cost Basis | 120 | ||
Available-for-sale securities, Unrealized Gains | 0 | ||
Available-for-sale securities, Unrealized Losses | 0 | ||
Available-for-sale securities: Fair Value | 120 | ||
Short-term investments: | U.S. Treasury and agency obligations | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale securities: Cost Basis | 120 | ||
Available-for-sale securities, Unrealized Gains | 0 | ||
Available-for-sale securities, Unrealized Losses | 0 | ||
Available-for-sale securities: Fair Value | $ 120 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Notional and Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Sep. 28, 2019 | |
Derivatives, Fair Value [Line Items] | |||
Loss on derivatives | $ 500 | $ 3,700 | |
Not Designated as Hedging Instrument | Purchase | Euro Member Countries, Euro | |||
Derivatives, Fair Value [Line Items] | |||
Derivative asset, notional amount | 45,535 | $ 53,920 | |
Derivative asset, Fair Value | 597 | (117) | |
Not Designated as Hedging Instrument | Sell | Euro Member Countries, Euro | |||
Derivatives, Fair Value [Line Items] | |||
Derivative liability, notional amount | (79,072) | (86,984) | |
Derivative liability, Fair Value | $ (710) | $ (473) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands | 3 Months Ended |
Dec. 28, 2019USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | $ 427,101 |
Translation adjustments | 6,542 |
Goodwill, end of period | 433,643 |
OEM Laser Sources | |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | 96,820 |
Translation adjustments | 1,595 |
Goodwill, end of period | 98,415 |
Industrial Lasers & Systems | |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | 330,281 |
Translation adjustments | 4,947 |
Goodwill, end of period | $ 335,228 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 28, 2019 | Dec. 29, 2018 | Sep. 28, 2019 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | $ 225,787 | $ 243,348 | |
Accumulated Amortization | (151,956) | (158,535) | |
Net including IPRD | 73,831 | 84,813 | |
Amortization expense for intangible assets | (12,312) | $ (15,067) | |
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | |||
2020 (remainder) | 35,901 | ||
2021 | 17,852 | ||
2022 | 6,715 | ||
2023 | 4,436 | ||
2024 | 3,092 | ||
2025 | 2,981 | ||
Thereafter | 2,854 | ||
Net excluding IPRD | 73,831 | ||
Existing technology | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 182,626 | 193,704 | |
Accumulated Amortization | (130,264) | (131,429) | |
Net including IPRD | 52,362 | 62,275 | |
Customer relationships | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 40,861 | 42,083 | |
Accumulated Amortization | (21,121) | (21,512) | |
Net including IPRD | 19,740 | 20,571 | |
Trade name | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 0 | 5,261 | |
Accumulated Amortization | 0 | (5,138) | |
Net including IPRD | 0 | 123 | |
Production know-how | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 2,300 | 2,300 | |
Accumulated Amortization | (571) | (456) | |
Net including IPRD | 1,729 | $ 1,844 | |
Foreign Exchange | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Amortization expense for intangible assets | $ 2,800 | $ (2,400) |
Balance Sheet Details (Details)
Balance Sheet Details (Details) $ in Thousands, € in Millions | 3 Months Ended | |||||
Dec. 28, 2019USD ($) | Dec. 29, 2018USD ($) | Sep. 28, 2019USD ($) | Dec. 29, 2018EUR (€) | Dec. 29, 2018USD ($) | ||
Inventory, Net [Abstract] | ||||||
Purchased parts and assemblies | $ 135,405 | $ 134,298 | ||||
Work-in-process | 179,023 | 174,550 | ||||
Finished goods | 135,143 | 133,682 | ||||
Total inventories | 449,571 | 442,530 | ||||
Prepaid Expense and Other Assets, Current [Abstract] | ||||||
Prepaid and refundable income taxes | 48,468 | 44,096 | ||||
Other taxes receivable | 10,840 | 11,208 | ||||
Prepaid expenses and other assets | 27,689 | 22,689 | ||||
Total prepaid expenses and other assets | 86,997 | 77,993 | ||||
Other Assets, Noncurrent Disclosure [Abstract] | ||||||
Assets related to deferred compensation arrangements | 37,616 | 35,842 | ||||
Deferred tax assets | 86,359 | 87,011 | ||||
Operating Lease, Right-of-Use Asset | 89,295 | 0 | ||||
Finance Lease, Right-of-Use Asset | 895 | 0 | ||||
Other assets | [1] | 19,667 | 18,111 | |||
Total other assets | 233,832 | 140,964 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Operating Lease, Liability, Current | 15,182 | 0 | ||||
Finance Lease, Liability, Current | 379 | 0 | ||||
Other Liabilities, Current [Abstract] | ||||||
Accrued payroll and benefits | 52,199 | 55,698 | ||||
Deferred revenue | 23,352 | 23,695 | ||||
Warranty reserve | 35,924 | 36,460 | ||||
Accrued expenses and other | 35,820 | 41,039 | ||||
Customer deposits | 12,542 | 10,843 | ||||
Total other current liabilities | 175,398 | 167,735 | ||||
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||||||
Beginning balance | 36,460 | $ 40,220 | ||||
Additions related to current period sales | 10,310 | 17,081 | ||||
Warranty costs incurred in the current period | (10,972) | (16,376) | ||||
Accruals resulting from acquisitions | 0 | 21 | ||||
Adjustments to accruals related to foreign exchange and other | 126 | (457) | ||||
Ending balance | 35,924 | $ 40,489 | ||||
Other Liabilities, Noncurrent [Abstract] | ||||||
Long-term taxes payable | 37,040 | 37,385 | ||||
Deferred compensation | 41,412 | 39,715 | ||||
Defined benefit plan liabilities | 46,625 | 45,862 | ||||
Deferred tax liabilities | 25,497 | 27,785 | ||||
Operating Lease, Liability, Noncurrent | 77,408 | 0 | ||||
Finance Lease, Liability, Noncurrent | 452 | 0 | ||||
Deferred revenue | 9,581 | 8,012 | ||||
Asset retirement obligations liability | 5,290 | 4,934 | ||||
Other long-term liabilities | 2,202 | 2,188 | ||||
Total other long-term liabilities | $ 245,507 | $ 165,881 | ||||
Euro Member Countries, Euro | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Equity method investments | € | € 3 | |||||
United States of America, Dollars | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Equity method investments | $ 3,400 | |||||
[1] | (1) In the first quarter of fiscal 2019, we invested 3.0 million Euro ( $3.4 million ) in 3D-Micromac AG, a private company in Germany. The investment is included in other assets and is being carried on a cost basis and will be adjusted for impairment if we determine that indicators of impairment exist at any point in time. |
Borrowings (Details)
Borrowings (Details) € in Millions | May 08, 2018 | Dec. 31, 2016USD ($) | Jul. 01, 2017USD ($) | Dec. 28, 2019EUR (€) | Dec. 28, 2019USD ($) | Dec. 29, 2018USD ($) | Nov. 07, 2016EUR (€) | Nov. 07, 2016USD ($) |
Debt [Line Items] | ||||||||
Debt issuance cost related to repricing | $ 500,000 | |||||||
Additional sources of cash available | $ 24,000,000 | |||||||
Debt Instrument, Unused Borrowing Capacity, Amount | 20,700,000 | |||||||
Rofin-Sinar | ||||||||
Debt [Line Items] | ||||||||
Lines of credit, maximum borrowing capacity | $ 30,000,000 | |||||||
Swing line, maximum borrowing capacity | $ 10,000,000 | |||||||
Credit Agreement November 7 2016 | ||||||||
Debt [Line Items] | ||||||||
Senior secured net leverage ratio to maintain compliance on the loan each quarter end | 3.50 | 3.50 | ||||||
Euro Member Countries, Euro | ||||||||
Debt [Line Items] | ||||||||
Domestic line of credit drawn | € | € 10 | |||||||
Euro term loan | ||||||||
Debt [Line Items] | ||||||||
Debt Issuance Costs for revolving credit facility | $ 28,500,000 | |||||||
Amortization period of the debt issuance cost | 7 years | |||||||
Euro term loan | Minimum | Eurodollar | ||||||||
Debt [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stepdown | 1.25% | |||||||
Euro term loan | Euro Member Countries, Euro | ||||||||
Debt [Line Items] | ||||||||
Borrowed under forward contract purchased for the term loan | € | € 670 | |||||||
Forward contract purchased for the term loan | € | € 363.2 | |||||||
Additional Euro currency rate | 0.010 | 0.010 | ||||||
Quarter principal payment requirement for Euro term loan | 0.0025 | 0.0025 | ||||||
Euro term loan | Euro Member Countries, Euro | Minimum | ||||||||
Debt [Line Items] | ||||||||
Applicable margin for Eurocurrency rate loan | 0.0400 | 0.0400 | ||||||
Revolving line of credit | ||||||||
Debt [Line Items] | ||||||||
Revolving facility to finance acquisition of Rofin | $ 100,000,000 | |||||||
Revolving facility to finance acquisition of Rofin, outstanding balance | 10,000,000 | $ 40,000,000 | ||||||
Additional base rate | 0.0050 | 0.0050 | ||||||
Debt Issuance Costs for revolving credit facility | $ 2,300,000 | |||||||
debt issuance cost amortization period | 5 years | |||||||
Revolving line of credit | Maximum | ||||||||
Debt [Line Items] | ||||||||
Commitment fee accrues range on unused portion of revolving loan | 0.005 | 0.005 | ||||||
Revolving line of credit | Minimum | ||||||||
Debt [Line Items] | ||||||||
Applicable margin for base rate revolving loan | 0.0300 | 0.0300 | ||||||
Commitment fee accrues range on unused portion of revolving loan | 0.00375 | 0.00375 | ||||||
Line of Credit, Foreign | Europe, other | ||||||||
Debt [Line Items] | ||||||||
Amounts drawn upon line of credit | $ 3,300,000 |
Borrowings - Borrowings obligat
Borrowings - Borrowings obligation table (Details) $ in Thousands | May 08, 2018 | Dec. 28, 2019USD ($) | Sep. 28, 2019USD ($) | Jul. 29, 2019USD ($) | Dec. 29, 2018USD ($) | Nov. 07, 2016 | |
Short-term Debt [Line Items] | |||||||
Total short-term borrowings and current portion of long-term obligations | $ 16,809 | $ 14,863 | |||||
Revolving facility to finance acquisition of Rofin repaid | $ 30,000 | ||||||
Revolving line of credit | |||||||
Short-term Debt [Line Items] | |||||||
Revolving facility to finance acquisition of Rofin, outstanding balance | 10,000 | $ 40,000 | |||||
Euro term loan | |||||||
Short-term Debt [Line Items] | |||||||
Debt issuance cost for long term portion of the Euro term loan | 7,700 | 6,400 | |||||
Euro term loan | |||||||
Short-term Debt [Line Items] | |||||||
Debt issuance cost for short term Euro term loan | 2,800 | 4,600 | |||||
Short-term Debt | |||||||
Short-term Debt [Line Items] | |||||||
Euro Term Loan due 2024 | [1] | 4,687 | 2,748 | ||||
1.3% Term loan due 2024 | 1,743 | 1,367 | |||||
1.0% State of Connecticut term loan due 2023 | 379 | 378 | |||||
Capital lease obligations | 0 | 370 | |||||
Line of credit borrowings | 10,000 | 10,000 | |||||
Total short-term borrowings and current portion of long-term obligations | 16,809 | 14,863 | |||||
Long-term Debt | |||||||
Short-term Debt [Line Items] | |||||||
Euro Term Loan due 2024 | [2] | 389,992 | 385,208 | ||||
1.3% Term loan due 2024 | 5,228 | 5,466 | |||||
1.0% State of Connecticut term loan due 2023 | 933 | 1,028 | |||||
Capital lease obligations | 0 | 536 | |||||
Long-term Debt | $ 396,153 | $ 392,238 | |||||
Minimum | Revolving line of credit | |||||||
Short-term Debt [Line Items] | |||||||
Base rate range after 1st year | 0.0225 | ||||||
Applicable margin for base rate revolving loan | 0.0300 | ||||||
Eurodollar | Minimum | Euro term loan | |||||||
Short-term Debt [Line Items] | |||||||
Debt Instrument, Interest Rate, Stepdown | 1.25% | ||||||
Euro Member Countries, Euro | Minimum | Euro term loan | |||||||
Short-term Debt [Line Items] | |||||||
Applicable margin for Eurocurrency rate loan | 0.0400 | ||||||
[1] | Net of debt issuance costs of $2.8 million and $4.6 million at December 28, 2019 and September 28, 2019 , respectively. | ||||||
[2] | Net of debt issuance costs of $7.7 million and $6.4 million at December 28, 2019 and September 28, 2019 , respectively. |
Borrowings - Debt Maturity Tabl
Borrowings - Debt Maturity Table (Details) $ in Thousands | Dec. 28, 2019USD ($) |
Debt Disclosure [Abstract] | |
2020 (remainder) | $ 7,279 |
2021 | 9,239 |
2022 | 9,239 |
2023 | 9,156 |
2024 | 378,511 |
Total contractual obligation due amount | $ 413,424 |
Leases - Additional Information
Leases - Additional Information (Details) | Dec. 28, 2019 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Finance lease arrangements | 3 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Finance lease arrangements | 6 years |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) $ in Thousands | 3 Months Ended |
Dec. 28, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 5,023 |
Variable lease cost | 376 |
Short-term lease cost | 130 |
Sublease income | (32) |
Total lease cost | $ 5,497 |
Weighted average remaining lease term | 8 years 3 months 18 days |
Weighted average discount rate | 4.80% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Thousands | 3 Months Ended |
Dec. 28, 2019USD ($) | |
Leases [Abstract] | |
Operating cash outflows from operating leases | $ 4,887 |
ROU assets obtained in exchange for new operating lease liabilities | $ 1,996 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities After Adoption of ASC 842 (Details) $ in Thousands | Dec. 28, 2019USD ($) |
Operating Leases | |
2020 (remainder) | $ 14,591 |
2021 | 17,514 |
2022 | 15,684 |
2023 | 12,351 |
2024 | 9,956 |
2025 and thereafter | 46,109 |
Total minimum lease payments | 116,205 |
Amounts representing interest | (23,615) |
Present value of total lease liabilities | $ 92,590 |
Leases - Schedule of Maturiti_2
Leases - Schedule of Maturities before Adoption of ASC 842 (Details) $ in Thousands | Sep. 28, 2019USD ($) |
Operating Leases | |
2020 | $ 19,578 |
2021 | 14,579 |
2022 | 10,405 |
2023 | 6,817 |
2024 | 4,156 |
2025 and thereafter | 10,755 |
Total minimum lease payments | $ 66,290 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value of Stock Compensation (Details) - $ / shares | 3 Months Ended | 9 Months Ended | |
Dec. 28, 2019 | Dec. 29, 2018 | Jun. 29, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Common shares that restricted stock units with each unit representing | 1 | ||
Requisite service period | 3 years | ||
Employee Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Expected life in years | 6 months | 6 months | |
Volatility | 47.10% | 48.30% | |
Risk-free interest rate | 1.84% | 2.35% | |
Expected dividend yield | 0.00% | 0.00% | |
Weighted average fair value per share | $ 43.54 | $ 42.80 | |
Performance Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Volatility | 47.20% | 43.70% | |
Risk-free interest rate | 1.60% | 2.90% | |
Weighted average fair value per share | $ 190.86 | $ 117.43 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 28, 2019 | Dec. 29, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Allocated stock-based compensation expense | $ 6,936 | $ 6,643 |
Capitalized share-based compensation costs | 1,000 | 1,200 |
Amortization of capitalized share-based compensation expenses | 1,200 | 1,200 |
Total compensation cost, unvested stock-based awards granted but not yet recognized | $ 55,100 | |
Total compensation cost, weighted-average period of amortization (in years) | 1 year 8 months 12 days | |
Period End | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Capitalized share-based compensation remaining | $ 1,200 | 1,400 |
Cost of sales | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Allocated stock-based compensation expense | 1,182 | 1,237 |
Research and development | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Allocated stock-based compensation expense | 561 | 650 |
Selling, general and administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Allocated stock-based compensation expense | 6,049 | 5,989 |
Income tax benefit | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Income tax benefit | $ (856) | $ (1,233) |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Options and Awards Activity (Details) shares in Thousands | 3 Months Ended | |
Dec. 28, 2019$ / sharesshares | ||
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | ||
Nonvested stock, beginning of period (in shares) | shares | 295 | |
Granted (in shares) | shares | 170 | |
Vested (in shares) | shares | (128) | [1] |
Forfeited (in shares) | shares | (3) | |
Nonvested stock, end of period (in shares) | shares | 334 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Nonvested stock, beginning of period (in dollars per share) | $ / shares | $ 152.47 | |
Granted (in dollars per share) | $ / shares | 155.84 | |
Vested (in dollars per share) | $ / shares | 153.51 | [1] |
Forfeited (in dollars per share) | $ / shares | 208.78 | |
Nonvested stock, end of period (in dollars per share) | $ / shares | $ 153.21 | |
Performance Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | ||
Nonvested stock, beginning of period (in shares) | shares | 133 | |
Granted (in shares) | shares | 37 | |
Vested (in shares) | shares | (81) | [1] |
Forfeited (in shares) | shares | 0 | |
Nonvested stock, end of period (in shares) | shares | 89 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Nonvested stock, beginning of period (in dollars per share) | $ / shares | $ 184.26 | |
Granted (in dollars per share) | $ / shares | 190.86 | |
Vested (in dollars per share) | $ / shares | 163.17 | [1] |
Forfeited (in dollars per share) | $ / shares | 0 | |
Nonvested stock, end of period (in dollars per share) | $ / shares | $ 200.63 | |
Restricted Stock Units and Awards [Abstract] | ||
Targeted goal of performance based awards and units | 100.00% | |
Performance Restricted Stock Units | Minimum | ||
Restricted Stock Units and Awards [Abstract] | ||
Percentage of performance-based awards earned by recipient | 0.00% | |
Performance Restricted Stock Units | Maximum | ||
Restricted Stock Units and Awards [Abstract] | ||
Percentage of performance-based awards earned by recipient | 200.00% | |
[1] | Service-based restricted stock units vested during the fiscal year. Performance-based restricted stock units included at 100% of target goal; under the terms of the awards, the recipient may earn between 0% and 200% of the award. |
Commitments and Contingencies E
Commitments and Contingencies Export compliance matter (Details) € in Millions | 9 Months Ended |
Jun. 29, 2019EUR (€) | |
Commitments and Contingencies Disclosure [Abstract] | |
Export compliance related transactions | € 1.5 |
Stock Repurchases (Details)
Stock Repurchases (Details) - USD ($) | 12 Months Ended | ||
Sep. 28, 2019 | Feb. 05, 2020 | Oct. 28, 2018 | |
Class of Stock [Line Items] | |||
Stock repurchase program, authorized amount | $ 100,000,000 | $ 250,000,000 | |
Feb 2018 repurchase program | |||
Class of Stock [Line Items] | |||
Stock repurchased and retired during period (in shares) | 603,828 | ||
Stock repurchase, price paid per share (in dollars per share) | $ 128.20 | ||
Total cost of stock repurchased, net | $ 77,400,000 | ||
Oct 2018 repurchase program | |||
Class of Stock [Line Items] | |||
Repurchase limit per quarter | $ 75,000,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 28, 2019 | Dec. 29, 2018 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||
Weighted average shares outstanding—basic (in shares) | 23,971,000 | 24,268,000 |
Dilutive effect of employee stock awards (in shares) | 189,000 | 204,000 |
Weighted average shares outstanding—diluted (in shares) | 24,160,000 | 24,472,000 |
Net income | $ 5,793 | $ 35,550 |
Earnings Per Share, Diluted, Other Disclosures [Abstract] | ||
Dilutive securities excluded from calculation of dilutive shares | 9,876 | 100,520 |
Other Income (Expense) (Details
Other Income (Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 28, 2019 | Dec. 29, 2018 | |
Component of Other Income (Expense), Nonoperating [Line Items] | ||
Other - net | $ 793 | $ (4,478) |
Foreign exchange loss | ||
Component of Other Income (Expense), Nonoperating [Line Items] | ||
Foreign exchange loss | (1,034) | (2,177) |
Gain (loss) on deferred compensation investments, net | ||
Component of Other Income (Expense), Nonoperating [Line Items] | ||
Gain (loss) on deferred compensation investments, net | 2,232 | (2,125) |
Other | ||
Component of Other Income (Expense), Nonoperating [Line Items] | ||
Other | $ (405) | $ (176) |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Dec. 28, 2019 | Dec. 29, 2018 | |
Income Tax Disclosure [Abstract] | ||
U.S. Federal statutory rate | 21.00% | |
Effective income tax rate (percent) | 23.30% | 18.60% |
Defined Benefit Plans (Details)
Defined Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 29, 2019 | Dec. 29, 2018 | |
Postemployment Benefits [Abstract] | ||
Net periodic pension (benefit) cost | $ 0.8 | $ 0.6 |
Segment and Geographic Inform_3
Segment and Geographic Information - Sales and Income (Loss) from Operations (Details) $ in Thousands | 3 Months Ended | |
Dec. 28, 2019USD ($)segments | Dec. 29, 2018USD ($) | |
Segment Reporting [Abstract] | ||
Number of reporting segments | segments | 2 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 320,771 | $ 383,146 |
Income from operations before other income, income taxes and loss from discontinued operations | 10,590 | 52,811 |
Total other expense, net | (3,034) | (9,151) |
Income before income taxes | 7,556 | 43,660 |
OEM Laser Sources | ||
Segment Reporting Information [Line Items] | ||
Net sales | 200,948 | 242,348 |
Income (loss) from operations: | 47,708 | 78,858 |
Industrial Lasers & Systems | ||
Segment Reporting Information [Line Items] | ||
Net sales | 119,823 | 140,798 |
Income (loss) from operations: | (20,300) | (13,704) |
Corporate and other | ||
Segment Reporting Information [Line Items] | ||
Income (loss) from operations: | $ (16,818) | $ (12,343) |
Segment and Geographic Inform_4
Segment and Geographic Information - Schedule of sales by geographic regions (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 28, 2019 | Dec. 29, 2018 | |
Geographic information [Line Items] | ||
Net sales | $ 320,771 | $ 383,146 |
United States | ||
Geographic information [Line Items] | ||
Net sales | 77,885 | 84,030 |
Total foreign countries sales | ||
Geographic information [Line Items] | ||
Net sales | 242,886 | 299,116 |
South Korea | ||
Geographic information [Line Items] | ||
Net sales | 60,056 | 106,526 |
China | ||
Geographic information [Line Items] | ||
Net sales | 58,588 | 47,544 |
Europe, other | ||
Geographic information [Line Items] | ||
Net sales | 34,513 | 36,289 |
Japan | ||
Geographic information [Line Items] | ||
Net sales | 22,351 | 29,837 |
Germany | ||
Geographic information [Line Items] | ||
Net sales | 30,445 | 37,885 |
Europe, other | ||
Geographic information [Line Items] | ||
Net sales | 22,162 | 27,228 |
Rest of World | ||
Geographic information [Line Items] | ||
Net sales | $ 14,771 | $ 13,807 |
Segment and Geographic Inform_5
Segment and Geographic Information - Major Customers (Details) - Customer Concentration Risk - Customer 1 | 3 Months Ended | |
Dec. 28, 2019 | Dec. 29, 2018 | |
Sales | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 17.60% | 18.50% |
Accounts receivable | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 25.20% | 28.60% |
Restructuring charges (Details)
Restructuring charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 28, 2019 | Dec. 29, 2018 | Sep. 28, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring cost relating to HPFL products at Germany facility | $ 19,700 | ||
Restructuring Reserve [Roll Forward] | |||
Starting balance | $ 8,494 | $ 1,122 | 1,122 |
Provision | 933 | 476 | |
Payments and other | (1,532) | (767) | |
Ending balance | 7,895 | 831 | 8,494 |
Restructuring charges relating to accelerated depreciation and consulting | 700 | ||
Santa Clara facility combine project related restructuring charge | 200 | ||
Industrial Lasers & Systems | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring cost incurred | 700 | ||
OEM Laser Sources | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring cost incurred | 200 | ||
Severance Related | |||
Restructuring Reserve [Roll Forward] | |||
Starting balance | 8,279 | 836 | 836 |
Provision | 54 | 212 | |
Payments and other | (658) | (447) | |
Ending balance | 7,675 | 601 | 8,279 |
Severance Related | Other current liabilities: | |||
Restructuring Reserve [Roll Forward] | |||
Ending balance | 7,900 | ||
Asset Write-Offs | |||
Restructuring Reserve [Roll Forward] | |||
Starting balance | 0 | 0 | 0 |
Provision | 599 | 76 | |
Payments and other | (599) | (76) | |
Ending balance | 0 | 0 | 0 |
Other | |||
Restructuring Reserve [Roll Forward] | |||
Starting balance | 215 | 286 | 286 |
Provision | 280 | 188 | |
Payments and other | (275) | (244) | |
Ending balance | $ 220 | $ 230 | $ 215 |