Cover Page
Cover Page - shares | 9 Months Ended | |
Jul. 03, 2021 | Aug. 06, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jul. 3, 2021 | |
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, $0.01 par value | |
Trading Symbol | COHR | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 24,535,214 | |
Entity Central Index Key | 0000021510 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --10-02 | |
Amendment flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2021 | Jul. 04, 2020 | Jul. 03, 2021 | Jul. 04, 2020 | |
Income Statement [Abstract] | ||||
Net sales | $ 395,759 | $ 298,330 | $ 1,095,794 | $ 912,248 |
Cost of sales | 239,776 | 203,053 | 678,790 | 613,607 |
Gross profit | 155,983 | 95,277 | 417,004 | 298,641 |
Operating expenses: | ||||
Research and development | 31,982 | 28,283 | 92,210 | 86,757 |
Selling, general and administrative | 78,219 | 67,525 | 225,109 | 197,383 |
Merger and acquisition costs | 2,578 | 0 | 234,574 | 0 |
Goodwill and other impairment charges | 0 | 0 | 0 | 451,025 |
Amortization of intangible assets | 1,100 | 643 | 2,293 | 3,371 |
Total operating expenses | 113,879 | 96,451 | 554,186 | 738,536 |
Income (loss) from operations | 42,104 | (1,174) | (137,182) | (439,895) |
Other income (expense): | ||||
Interest income | 90 | 269 | 361 | 906 |
Interest expense | (4,552) | (4,046) | (13,541) | (12,563) |
Other—net | 1,185 | (505) | 5,088 | (1,322) |
Total other expense, net | (3,277) | (4,282) | (8,092) | (12,979) |
Income (loss) before income taxes | 38,827 | (5,456) | (145,274) | (452,874) |
Provision for (benefit from) income taxes | 8,565 | 3,252 | (17,465) | (31,046) |
Net income (loss) | $ 30,262 | $ (8,708) | $ (127,809) | $ (421,828) |
Net income (loss) per share: | ||||
Basic (in USD per share) | $ 1.24 | $ (0.36) | $ (5.25) | $ (17.52) |
Diluted (in USD per share) | $ 1.22 | $ (0.36) | $ (5.25) | $ (17.52) |
Shares used in computation: | ||||
Basic (shares) | 24,435 | 24,159 | 24,362 | 24,075 |
Diluted (shares) | 24,842 | 24,159 | 24,362 | 24,075 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jul. 03, 2021 | Jul. 04, 2020 | Jul. 03, 2021 | Jul. 04, 2020 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income (loss) | $ 30,262 | $ (8,708) | $ (127,809) | $ (421,828) | |
Other comprehensive income (loss): | |||||
Translation adjustment, net of taxes | [1],[2] | (1,853) | 8,183 | 6,823 | (1,916) |
Changes in unrealized gains on available-for-sale securities, net of taxes | [1],[3] | (3) | 0 | (1) | 0 |
Defined benefit pension plans, net of taxes | [1],[4] | 192 | (920) | 97 | 690 |
Other comprehensive income (loss), net of tax | [1] | (1,664) | 7,263 | 6,919 | (1,226) |
Comprehensive income (loss) | $ 28,598 | $ (1,445) | $ (120,890) | $ (423,054) | |
[1] | Reclassification adjustments were not significant during the three and nine months ended July 3, 2021 and July 4, 2020. | ||||
[2] | Tax expenses of $404 and $1,260 were provided on translation adjustments during the three and nine months ended July 3, 2021, respectively. Tax expenses of $2,268 and $1,459 were provided on translation adjustments during the three and nine months ended July 4, 2020, respectively. | ||||
[3] | Tax benefits of $1 and $0 were provided on changes in unrealized gains on available-for-sale securities during the three and nine months ended July 3, 2021, respectively. Tax expenses (benefits) were not provided on changes in unrealized gains on available-for-sale securities during the three and nine months ended July 4, 2020. | ||||
[4] | Tax expenses of $144 and $176 were provided on changes in defined benefit pension plans for the three and nine months ended July 3, 2021, respectively. Tax expenses (benefits) of $(445) and $230 were provided on changes in defined benefit pension plans for the three and nine months ended July 4, 2020, respectively. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2021 | Jul. 04, 2020 | Jul. 03, 2021 | Jul. 04, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax | $ 404 | $ 2,268 | $ 1,260 | $ 1,459 |
OCI, Debt Securities, Available-for-Sale, Gain (Loss), after Adjustment, Tax | 1 | 0 | ||
Defined benefit plans, tax benefits | $ 144 | $ (445) | $ 176 | $ 230 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 03, 2021 | Oct. 03, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 394,098 | $ 440,258 |
Restricted cash | 1,559 | 765 |
Short-term investments | 15,129 | 35,346 |
Accounts receivable | 256,197 | 220,289 |
Inventories | 400,547 | 426,756 |
Prepaid expenses and other assets | 87,744 | 88,250 |
Total current assets | 1,155,274 | 1,211,664 |
Property and equipment, net | 295,481 | 245,678 |
Goodwill | 106,654 | 101,317 |
Intangible assets, net | 17,496 | 21,765 |
Non-current restricted cash | 14,587 | 4,497 |
Other assets | 272,695 | 242,575 |
Total assets | 1,862,187 | 1,827,496 |
Current liabilities: | ||
Short-term borrowings and current-portion of long-term obligations | 17,730 | 16,817 |
Accounts payable | 108,831 | 60,225 |
Income taxes payable | 12,784 | 6,861 |
Other current liabilities | 231,922 | 184,155 |
Total current liabilities | 371,267 | 268,058 |
Long-term obligations | 437,269 | 411,140 |
Other long-term liabilities | 214,195 | 221,074 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity: | ||
Common stock, value | 244 | 241 |
Additional paid-in capital | 113,394 | 80,275 |
Accumulated other comprehensive loss | (18,748) | (25,667) |
Retained earnings | 744,566 | 872,375 |
Total stockholders' equity | 839,456 | 927,224 |
Total liabilities and stockholders' equity | $ 1,862,187 | $ 1,827,496 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jul. 03, 2021 | Oct. 03, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts Receivable, Allowance for Credit Loss | $ 6,715 | $ 7,630 |
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 | 24,535,000 | 24,257,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Add. Paid-in Capital | Accum. Other Comp. Income (Loss) | Retained Earnings | ||
Beginning balance at Sep. 28, 2019 | $ 1,284,736 | $ 238 | $ 34,320 | $ (36,336) | $ 1,286,514 | ||
Beginning balance (in shares) at Sep. 28, 2019 | 23,982,000 | ||||||
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) | 171,000 | ||||||
Stock-based compensation | 7,574 | 7,574 | |||||
Net income (loss) | 5,793 | 5,793 | |||||
Other comprehensive income (loss), net of tax | 15,300 | 15,300 | |||||
Ending balance at Dec. 28, 2019 | 1,305,975 | $ 240 | 34,464 | (21,036) | 1,292,307 | ||
Ending balance (in shares) at Dec. 28, 2019 | 24,153,000 | ||||||
Beginning balance at Sep. 28, 2019 | 1,284,736 | $ 238 | 34,320 | (36,336) | 1,286,514 | ||
Beginning balance (in shares) at Sep. 28, 2019 | 23,982,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (421,828) | ||||||
Other comprehensive income (loss), net of tax | [1] | (1,226) | |||||
Ending balance at Jul. 04, 2020 | 893,506 | $ 241 | 66,141 | (37,562) | 864,686 | ||
Ending balance (in shares) at Jul. 04, 2020 | 24,256,000 | ||||||
Beginning balance at Dec. 28, 2019 | 1,305,975 | $ 240 | 34,464 | (21,036) | 1,292,307 | ||
Beginning balance (in shares) at Dec. 28, 2019 | 24,153,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock issued under stock plans, net of shares withheld for employee taxes | 950 | 950 | |||||
Common stock issued under stock plans, net of shares withheld for employee taxes (in shares) | 39,000 | ||||||
Stock-based compensation | 9,207 | 9,207 | |||||
Net income (loss) | (418,913) | (418,913) | |||||
Other comprehensive income (loss), net of tax | (23,789) | (23,789) | |||||
Ending balance at Apr. 04, 2020 | 873,430 | $ 240 | 44,621 | (44,825) | 873,394 | ||
Ending balance (in shares) at Apr. 04, 2020 | 24,192,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock issued under stock plans, net of shares withheld for employee taxes | 6,320 | $ 1 | 6,319 | ||||
Common stock issued under stock plans, net of shares withheld for employee taxes (in shares) | 64,000 | ||||||
Stock-based compensation | 15,201 | 15,201 | |||||
Net income (loss) | (8,708) | (8,708) | |||||
Other comprehensive income (loss), net of tax | 7,263 | [1] | 7,263 | ||||
Ending balance at Jul. 04, 2020 | 893,506 | $ 241 | 66,141 | (37,562) | 864,686 | ||
Ending balance (in shares) at Jul. 04, 2020 | 24,256,000 | ||||||
Beginning balance at Oct. 03, 2020 | $ 927,224 | $ 241 | 80,275 | (25,667) | 872,375 | ||
Beginning balance (in shares) at Oct. 03, 2020 | 24,257,000 | 24,257,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock issued under stock plans, net of shares withheld for employee taxes | $ (3,007) | $ 2 | (3,009) | ||||
Common stock issued under stock plans, net of shares withheld for employee taxes (in shares) | 190,000 | ||||||
Stock-based compensation | 11,798 | 11,798 | |||||
Net income (loss) | 144 | 144 | |||||
Other comprehensive income (loss), net of tax | 15,719 | 15,719 | |||||
Ending balance at Jan. 02, 2021 | 951,878 | $ 243 | 89,064 | (9,948) | 872,519 | ||
Ending balance (in shares) at Jan. 02, 2021 | 24,447,000 | ||||||
Beginning balance at Oct. 03, 2020 | $ 927,224 | $ 241 | 80,275 | (25,667) | 872,375 | ||
Beginning balance (in shares) at Oct. 03, 2020 | 24,257,000 | 24,257,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | $ (127,809) | ||||||
Other comprehensive income (loss), net of tax | [1] | 6,919 | |||||
Ending balance at Jul. 03, 2021 | $ 839,456 | $ 244 | 113,394 | (18,748) | 744,566 | ||
Ending balance (in shares) at Jul. 03, 2021 | 24,535,000 | 24,535,000 | |||||
Beginning balance at Jan. 02, 2021 | $ 951,878 | $ 243 | 89,064 | (9,948) | 872,519 | ||
Beginning balance (in shares) at Jan. 02, 2021 | 24,447,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock issued under stock plans, net of shares withheld for employee taxes | (348) | (348) | |||||
Common stock issued under stock plans, net of shares withheld for employee taxes (in shares) | 17,000 | ||||||
Stock-based compensation | 8,774 | 8,774 | |||||
Net income (loss) | (158,215) | (158,215) | |||||
Other comprehensive income (loss), net of tax | (7,136) | (7,136) | |||||
Ending balance at Apr. 03, 2021 | 794,953 | $ 243 | 97,490 | (17,084) | 714,304 | ||
Ending balance (in shares) at Apr. 03, 2021 | 24,464,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock issued under stock plans, net of shares withheld for employee taxes | 5,757 | $ 1 | 5,756 | ||||
Common stock issued under stock plans, net of shares withheld for employee taxes (in shares) | 71,000 | ||||||
Stock-based compensation | 10,148 | 10,148 | |||||
Net income (loss) | 30,262 | 30,262 | |||||
Other comprehensive income (loss), net of tax | (1,664) | [1] | (1,664) | ||||
Ending balance at Jul. 03, 2021 | $ 839,456 | $ 244 | $ 113,394 | $ (18,748) | $ 744,566 | ||
Ending balance (in shares) at Jul. 03, 2021 | 24,535,000 | 24,535,000 | |||||
[1] | Reclassification adjustments were not significant during the three and nine months ended July 3, 2021 and July 4, 2020. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 03, 2021 | Jul. 04, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (127,809) | $ (421,828) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 32,814 | 36,257 |
Amortization of intangible assets | 8,174 | 27,166 |
Impairment of goodwill | 0 | 327,203 |
Impairment of long-lived assets | 0 | 121,350 |
Impairment of investment | 0 | 2,472 |
Deferred income taxes | (45,326) | (21,797) |
Amortization of debt issuance cost | 2,611 | 2,451 |
Stock-based compensation | 31,425 | 31,076 |
Non-cash restructuring charges | 4,385 | 2,068 |
Amortization of right of use assets | 13,446 | 12,146 |
Other non-cash expense | 1,489 | 1,647 |
Changes in assets and liabilities, net of effect of acquisitions: | ||
Accounts receivable | (33,189) | 71,723 |
Inventories | 28,015 | (164) |
Prepaid expenses and other assets | (11,592) | (626) |
Other long-term assets | 4,482 | 1,391 |
Accounts payable | 44,446 | 14,716 |
Income taxes payable/receivable | 21,815 | (33,642) |
Operating lease liabilities | (12,823) | (12,342) |
Other current liabilities | 46,426 | (5,194) |
Other long-term liabilities | (5,704) | 3,991 |
Net cash provided by operating activities | 3,085 | 160,064 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (60,496) | (48,436) |
Proceeds from dispositions of property and equipment | 2,770 | 668 |
Purchases of available-for-sale securities | 0 | (42,018) |
Proceeds from sales and maturities of available-for-sale securities | 20,281 | 240 |
Acquisition of businesses, net of cash acquired | (28,810) | 0 |
Net cash used in investing activities | (66,255) | (89,546) |
Cash flows from financing activities: | ||
Short-term borrowings | 0 | 12,695 |
Long-term borrowings | 28,885 | 0 |
Repayments of short-term borrowings | (1,411) | (14,010) |
Repayments of long-term borrowings | (6,525) | (5,865) |
Issuance of common stock under employee stock option and purchase plans | 12,483 | 13,361 |
Net settlement of restricted common stock | (10,081) | (13,519) |
Net cash provided by (used in) financing activities | 23,351 | (7,338) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 4,543 | 2,373 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (35,276) | 65,553 |
Cash, cash equivalents and restricted cash, beginning of period | 445,520 | 318,661 |
Cash, cash equivalents and restricted cash, end of period | 410,244 | 384,214 |
Non-cash investing and financing activities: | ||
Unpaid property and equipment purchases | $ 5,706 | $ 5,826 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - Reconciliation - USD ($) $ in Thousands | Jul. 03, 2021 | Oct. 03, 2020 | Jul. 04, 2020 | Sep. 28, 2019 |
Statement of Cash Flows [Abstract] | ||||
Cash and cash equivalents | $ 394,098 | $ 440,258 | $ 378,992 | |
Restricted cash, current | 1,559 | 765 | 736 | |
Restricted cash, non-current | 14,587 | 4,497 | 4,486 | |
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statement of cash flows | $ 410,244 | $ 445,520 | $ 384,214 | $ 318,661 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Jul. 03, 2021 | |
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 October 3, 2020. 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 third fiscal quarter includes 13 weeks of operations in both fiscal 2021 and fiscal 2020. Fiscal 2021 includes 52 weeks and fiscal 2020 includes 53 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. The COVID-19 pandemic has significantly increased economic uncertainty and decreased demand for our products in some markets we serve, which could continue for an unknown period of time. In these circumstances, there may be developments outside of our control, including the length and extent of the COVID-19 outbreak, government-imposed measures and our ability to ship products and/or service installed products that may require us to adjust our operating plans. As such, given the dynamic nature of this situation, we cannot predict the future impacts of COVID-19 on our financial condition, results of operations or cash flows. However, it could have an adverse impact on our revenue as well as our overall profitability and may lead to an increase in inventory provisions, allowances for credit losses, and a volatile effective tax rate driven by changes in the mix of earnings across our markets. |
Recent Accounting Standards
Recent Accounting Standards | 9 Months Ended |
Jul. 03, 2021 | |
Accounting Policies [Abstract] | |
Recent Accounting Standards | RECENT ACCOUNTING STANDARDS Adoption of New Accounting Pronouncement In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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. We adopted ASU 2016-13 in the first quarter of fiscal 2021 with no material impact to our condensed consolidated financial statements. With the adoption of Topic 326, we are now assessing whether unrealized losses have resulted from a credit loss or other factors. We believe none of our unrealized losses on available-for-sale investments were other-than temporary or were attributable to credit losses as of July 3, 2021 and October 3, 2020 . We review our available-for-sale investments on a quarterly basis to identify a potential other-than-temporary impairment. We also do not have an intent to sell our investments and would not be required to sell them before they recover. The adoption of Topic 326 did not significantly change our approach to the valuation of trade receivables. We determine whether there is an expected loss on our accounts receivable by reviewing all available data, including our customers' latest available financial statements, their credit standing and our historical collection experience, as well as current and future market and economic conditions. As of July 3, 2021 and October 3, 2020, the allowance for credit losses on our trade receivables was $4.9 million and $5.4 million, respectively. Recently Issued Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform ("Topic 848"). Topic 848 provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate ("LIBOR") or by another reference rate expected to be discontinued. The guidance was effective beginning March 12, 2020 and can be applied prospectively through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform - Scope," which clarified the scope and application of the original guidance. We will adopt these standards when LIBOR is discontinued and do not expect them to have a material impact on our consolidated financial statements or related disclosures. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Jul. 03, 2021 | |
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 July 3, 2021 July 4, 2020 OEM Laser Sources Industrial Lasers & Systems OEM Laser Sources Industrial Lasers & Systems Net sales: Products (1) $ 145,219 $ 132,461 $ 109,995 $ 91,114 Other product and service revenues (2) 90,555 27,524 74,699 22,522 Total net sales $ 235,774 $ 159,985 $ 184,694 $ 113,636 (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 $16.5 million and $15.4 million for the three months ended July 3, 2021 and July 4, 2020, respectively, were recognized over time. Nine Months Ended July 3, 2021 July 4, 2020 OEM Laser Sources Industrial Lasers & Systems OEM Laser Sources Industrial Lasers & Systems Net sales: Products (1) $ 401,254 $ 343,383 $ 321,691 $ 277,710 Other product and service revenues (2) 268,930 82,227 237,673 75,174 Total net sales $ 670,184 $ 425,610 $ 559,364 $ 352,884 (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 $49.0 million and $46.3 million for the nine months ended July 3, 2021 and July 4, 2020, respectively, were recognized over time. Sales by market application and segment Three Months Ended July 3, 2021 July 4, 2020 OEM Laser Sources Industrial Lasers & Systems OEM Laser Sources Industrial Lasers & Systems Net sales: Microelectronics $ 142,012 $ 34,420 $ 123,635 $ 18,207 Precision manufacturing 12,805 90,657 7,581 74,156 Instrumentation 77,859 22,408 49,280 12,250 Aerospace and defense 3,098 12,500 4,198 9,023 Total net sales $ 235,774 $ 159,985 $ 184,694 $ 113,636 Nine Months Ended July 3, 2021 July 4, 2020 OEM Laser Sources Industrial Lasers & Systems OEM Laser Sources Industrial Lasers & Systems Net sales: Microelectronics $ 408,366 $ 85,191 $ 343,429 $ 50,726 Precision manufacturing 40,435 251,875 26,373 230,043 Instrumentation 212,213 61,614 174,304 47,814 Aerospace and defense 9,170 26,930 15,258 24,301 Total net sales $ 670,184 $ 425,610 $ 559,364 $ 352,884 See Note 18, "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 roll forward of our customer deposits and deferred revenue is as follows (in thousands): Nine Months Ended July 3, 2021 July 4, 2020 Beginning balance (1) $ 56,339 $ 42,550 Additions to customer deposits and deferred revenue 164,357 137,747 Amount of customer deposits and deferred revenue recognized in income (2) (156,757) (126,501) Translation adjustments 70 260 Ending balance (3) $ 64,009 $ 54,056 (1) Beginning customer deposits and deferred revenue as of October 3, 2020 include $42,715 of current portion and $13,624 of long-term portion. 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) Amount of customer deposits and deferred revenue recognized in the three months ended July 3, 2021 and July 4, 2020 was $65,509 and $48,674, respectively. (3) Ending customer deposits and deferred revenue as of July 3, 2021 include $49,203 of current portion and $14,806 of long-term portion. Ending customer deposits and deferred revenue as of July 4, 2020 include $41,329 of current portion and $12,727 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 July 3, 2021 (in thousands): Remainder of fiscal 2021 Thereafter Total Performance obligations as of July 3, 2021 $ 33,813 $ 30,196 $ 64,009 |
Business Combinations
Business Combinations | 9 Months Ended |
Jul. 03, 2021 | |
Business Combinations [Abstract] | |
Business Combinations | BUSINESS COMBINATIONS Merger Agreement On January 18, 2021, we entered into an Agreement and Plan of Merger with Lumentum Holdings Inc. ("Lumentum"), Cheetah Acquisition Sub, Inc. ("Lumentum Merger Sub I") and Cheetah Acquisition Sub LLC ("Lumentum Merger Sub II") (the "Original Lumentum Merger Agreement"), pursuant to which we agreed to be acquired for $100.00 in cash per Coherent share and 1.1851 shares of Lumentum common stock per Coherent share. In light of unsolicited proposals received from each of MKS Instruments, Inc. and II-VI Incorporated ("II-VI"), on March 9, 2021, we entered into an Amended and Restated Agreement and Plan of Merger with Lumentum, Lumentum Merger Sub I and Lumentum Merger Sub II (the "Amended Lumentum Agreement"), pursuant to which we agreed to be acquired for $175.00 in cash per Coherent share and 1.0109 shares of Lumentum common stock per Coherent share. On March 25, 2021, we terminated the Amended Lumentum Agreement and entered into an Agreement and Plan of Merger with II-VI and Watson Merger Sub Inc. ("II-VI Merger Sub") (the "II-VI Merger Agreement"), pursuant to which we agreed to be acquired for $220.00 in cash per Coherent share and 0.91 of a share of II-VI common stock per Coherent share. In connection with terminating the Amended Lumentum Agreement, we paid a termination fee of $217.6 million to Lumentum during our second quarter of fiscal 2021. The termination fee, in addition to other costs related to the merger agreements with Lumentum and II-VI, is included in merger and acquisition costs in our condensed consolidated statements of operations. Pursuant to the terms of the II-VI Merger Agreement, the acquisition of Coherent will be accomplished through a merger of II-VI Merger Sub with and into Coherent (the "Merger"), with Coherent surviving the Merger as a wholly owned subsidiary of II-VI. Pursuant to the terms of the II-VI Merger Agreement, and subject to the terms and conditions set forth therein, at the effective time of the Merger (the "Effective Time"), each share of the common stock of Coherent (the "Coherent Common Stock") issued and outstanding immediately prior to the Effective Time (other than (x) shares of Coherent Common Stock owned by II-VI, Coherent, or any direct or indirect wholly owned subsidiary of II-VI or Coherent or (y) shares of Coherent Common Stock owned by stockholders who have properly exercised and perfected appraisal rights under Delaware law, in each case, immediately prior to the Effective Time), will be cancelled and extinguished and automatically converted into the right to receive the following consideration: (A) $220.00 in cash, without interest, plus (B) 0.91 of a validly issued, fully paid and non-assessable share of the common stock of II-VI. The completion of Coherent's acquisition by II-VI is subject to customary closing conditions, including, among others, regulatory approvals in applicable jurisdictions outside the United States, including China, South Korea and Germany. Electro-Optics Technology On April 19, 2021, we acquired Electro-Optics Technology, Inc. ("EOT") for approximately $29.3 million, excluding transaction costs. EOT is a specialized U.S.-based components company, which we expect will enable us to vertically integrate and improve the performance of our directed energy amplifier technology. EOT has additional operations through a subsidiary in Germany. EOT will be included in our OEM Laser Sources segment. Our preliminary allocation of the purchase price is as follows (in thousands): Tangible assets: Cash $ 537 Accounts receivable 1,763 Inventories 5,269 Prepaid expenses and other assets 823 Property and equipment 18,713 Liabilities assumed (1,856) Deferred tax liabilities (4,009) Intangible assets: Existing technology 2,800 In-process research and development 300 Customer relationships 300 Trademarks 100 Backlog 100 Goodwill 4,507 Total $ 29,347 Results of operations for the business have been included in our condensed consolidated financial statements subsequent to the date of acquisition. 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 preliminary useful lives of 1 to 5 years. The fair value of the acquired intangibles was 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 relates to several factors including: (1) potential buyer-specific synergies in connection with the development of new technologies primarily for the defense business; and (2) the potential to leverage our sales force to attract new customers and revenue and cross-sell to existing customers. None of the goodwill from this purchase is deductible for tax purposes. We expensed $0.2 million and $0.3 million, respectively, of acquisition-related costs as merger and acquisition costs in our condensed consolidated statements of operations in the three and nine months ended July 3, 2021. |
Fair Values
Fair Values | 9 Months Ended |
Jul. 03, 2021 | |
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 July 3, 2021 and October 3, 2020, we had one investment carried on a cost basis. 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 July 3, 2021, the current and long-term portion of long-term obligations of $7.7 million and $437.3 million, respectively, are reported at amortized cost. As of October 3, 2020, the current and long-term portion of long-term obligations of $6.8 million and $411.1 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 July 3, 2021 and October 3, 2020 are summarized below (in thousands): Aggregate Fair Value Quoted Prices Significant Aggregate Fair Value Quoted Prices Significant July 3, 2021 October 3, 2020 (Level 1) (Level 2) (Level 1) (Level 2) Assets: Cash equivalents: Money market fund deposits $ 45,355 $ 45,355 $ — $ 36,646 $ 36,646 $ — Certificates of deposit 44,446 44,446 — 56,191 56,191 — Short-term investments: U.S. Treasury and agency obligations (1) 15,129 — 15,129 35,346 — 35,346 Prepaid and other assets: Foreign currency contracts (2) 940 — 940 812 — 812 Money market fund deposits — Deferred comp and supplemental plan (3) 492 492 — 203 203 — Mutual funds — Deferred comp and supplemental plan (3) 14,233 14,233 — 22,778 22,778 — Total $ 120,595 $ 104,526 $ 16,069 $ 151,976 $ 115,818 $ 36,158 Liabilities: Other current liabilities: Foreign currency contracts (2) (5,560) — (5,560) (2,811) — (2,811) Total $ 115,035 $ 104,526 $ 10,509 $ 149,165 $ 115,818 $ 33,347 ___________________________________________________ (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) 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 . |
Short-Term Investments
Short-Term Investments | 9 Months Ended |
Jul. 03, 2021 | |
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): July 3, 2021 Cost Basis Unrealized Unrealized Fair Value Cash and cash equivalents $ 394,098 $ — $ — $ 394,098 Short-term investments: Available-for-sale securities: U.S. Treasury and agency obligations $ 15,030 $ 99 $ — $ 15,129 Total short-term investments $ 15,030 $ 99 $ — $ 15,129 October 3, 2020 Cost Basis Unrealized Unrealized Fair Value Cash and cash equivalents $ 440,258 $ — $ — $ 440,258 Short-term investments: Available-for-sale securities: U.S. Treasury and agency obligations $ 35,311 $ 36 $ (1) $ 35,346 Total short-term investments $ 35,311 $ 36 $ (1) $ 35,346 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Jul. 03, 2021 | |
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. 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 July 3, 2021 October 3, 2020 July 3, 2021 October 3, 2020 Foreign currency hedge contracts Purchase $ 217,945 $ 169,206 $ (5,554) $ (1,802) Sell $ (58,983) $ (166,813) $ 934 $ (197) 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 and nine months ended July 3, 2021, we recognized losses of $0.5 million and $2.1 million, respectively, in other income (expense) for derivative instruments not designated as hedging instruments. During the three and nine months ended July 4, 2020, we recognized gains of $1.1 million and $1.2 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 | 9 Months Ended |
Jul. 03, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS During the quarter ended July 3, 2021, 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. See Note 8, "Goodwill and Intangible Assets" to our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended October 3, 2020 for discussion of the non-cash pre-tax charges we recorded in the quarter ended April 4, 2020 related to the goodwill, intangible assets, property, plant and equipment and ROU assets of the ILS reporting unit of $327.2 million, $33.9 million, $85.6 million and $1.8 million, respectively. The changes in the carrying amount of goodwill, all of which is in the OLS segment, for the period from October 3, 2020 to July 3, 2021 are as follows (in thousands): OEM Laser Sources Balance as of October 3, 2020 $ 101,317 Additions (see Note 4) 4,507 Translation adjustments 830 Balance as of July 3, 2021 $ 106,654 Components of our amortizable intangible assets are as follows (in thousands): July 3, 2021 October 3, 2020 Gross Accumulated Net Gross Accumulated Net Existing technology $ 40,232 $ (34,233) $ 5,999 $ 46,547 $ (37,630) $ 8,917 Customer relationships 22,498 (12,339) 10,159 24,388 (12,923) 11,465 Production know-how 2,300 (1,262) 1,038 2,300 (917) 1,383 In-process research & development 300 — 300 — — — Total $ 65,330 $ (47,834) $ 17,496 $ 73,235 $ (51,470) $ 21,765 For accounting purposes, when an intangible asset is fully amortized, it is removed from the disclosure schedule. Amortization expense for intangible assets for the nine months ended July 3, 2021 and July 4, 2020 was $8.2 million and $27.2 million, respectively. The change in the accumulated amortization also includes a $0.3 million increase and $1.8 million decrease of foreign exchange impact for the nine months ended July 3, 2021 and July 4, 2020, respectively. At July 3, 2021, estimated amortization expense for the remainder of fiscal 2021, the next five succeeding fiscal years and all fiscal years thereafter are as follows (in thousands): Estimated Amortization 2021 (remainder) $ 2,588 2022 4,013 2023 3,441 2024 2,658 2025 2,341 2026 2,001 Thereafter 154 Total (1) $ 17,196 (1) Excluding in-process research & development |
Balance Sheet Details
Balance Sheet Details | 9 Months Ended |
Jul. 03, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Details | BALANCE SHEET DETAILS Inventories consist of the following (in thousands): July 3, 2021 October 3, 2020 Purchased parts and assemblies $ 111,907 $ 116,957 Work-in-process 173,029 173,871 Finished goods 115,611 135,928 Total inventories $ 400,547 $ 426,756 Prepaid expenses and other assets consist of the following (in thousands): July 3, 2021 October 3, 2020 Prepaid and refundable income taxes $ 38,552 $ 50,548 Other taxes receivable 13,180 13,006 Prepaid expenses and other assets 36,012 24,696 Total prepaid expenses and other assets $ 87,744 $ 88,250 Other assets consist of the following (in thousands): July 3, 2021 October 3, 2020 Assets related to deferred compensation arrangements $ 35,050 $ 39,720 Deferred tax assets 146,316 102,028 Right of use assets, net - operating leases (See Note 11) 75,929 85,905 Right of use assets, net - finance leases (See Note 11) 101 656 Other assets 15,299 14,266 Total other assets $ 272,695 $ 242,575 Other current liabilities consist of the following (in thousands): July 3, 2021 October 3, 2020 Accrued payroll and benefits $ 95,265 $ 54,211 Operating lease liability, current (See Note 11) 15,721 15,366 Finance lease liability, current (See Note 11) 94 399 Deferred revenue 29,586 32,998 Warranty reserve 31,968 35,032 Accrued expenses and other 39,671 36,432 Customer deposits 19,617 9,717 Total other current liabilities $ 231,922 $ 184,155 Components of the reserve for warranty costs during the first nine months of fiscal 2021 and 2020 were as follows (in thousands): Nine Months Ended July 3, 2021 July 4, 2020 Beginning balance $ 35,032 $ 36,460 Additions related to current period sales 23,473 28,669 Warranty costs incurred in the current period (27,059) (30,773) Accruals resulting from acquisitions 170 — Adjustments to accruals related to foreign exchange and other 352 615 Ending balance $ 31,968 $ 34,971 Other long-term liabilities consist of the following (in thousands): July 3, 2021 October 3, 2020 Long-term taxes payable $ 18,779 $ 15,374 Operating lease liability, long-term (See Note 11) 65,195 75,264 Finance lease liability, long-term (See Note 11) — 178 Deferred compensation 37,398 42,854 Defined benefit plan liabilities 46,619 45,810 Deferred tax liabilities 20,644 15,721 Deferred revenue 14,806 13,624 Asset retirement obligations liability 6,162 5,892 Other long-term liabilities 4,592 6,357 Total other long-term liabilities $ 214,195 $ 221,074 |
Borrowings
Borrowings | 9 Months Ended |
Jul. 03, 2021 | |
Debt Disclosure [Abstract] | |
Borrowings | BORROWINGS On December 21, 2020, Coherent LaserSystems GmbH & Co. KG entered into a loan agreement with Commerzbank for borrowings of up to 24.0 million Euros, to be drawn down by October 29, 2021, to finance a portion of the construction of a new facility in Germany. The term of the loan is 10 years and borrowings bear interest at 1.55% per annum. As of July 3, 2021, 24.0 million Euros have been withdrawn under this loan facility. The loan agreement contains customary affirmative loan covenants. We were in compliance with all covenants at July 3, 2021. 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. 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 (in the first quarter of fiscal 2024), at which time all outstanding principal and accrued and unpaid interest on the Euro Term Loan must be repaid. As of July 3, 2021, the outstanding principal amount of the Euro Term Loan was 353.2 million Euros. As of July 3, 2021, 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 ("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 July 3, 2021, 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%. The applicable margin for revolving loans borrowed as Eurocurrency Rate loans was 4.00% per annum and as Base Rate loans was 3.25% 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 than or equal to 3.50 to 1.00. We were in compliance with all covenants at July 3, 2021. 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 $15.1 million as of July 3, 2021, of which $13.2 million was unused and available. These unsecured international credit facilities were used in Europe during the first nine months of fiscal 2021. As of July 3, 2021, we had utilized $1.9 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): July 3, 2021 October 3, 2020 Current portion of Euro Term Loan (1) $ 5,055 $ 4,970 1.3% Term loan due 2024 1,479 1,465 1.0% State of Connecticut term loan due 2023 385 382 Facility construction loan in Germany due 2030 811 — Line of credit borrowings 10,000 10,000 Total short-term borrowings and current portion of long-term obligations $ 17,730 $ 16,817 (1) Net of debt issuance costs of $2.9 million and $2.9 million at July 3, 2021 and October 3, 2020, respectively. Long-term obligations consist of the following (in thousands): July 3, 2021 October 3, 2020 Euro Term Loan due 2024 (1) $ 406,009 $ 406,099 1.3% Term loan due 2024 3,327 4,395 1.0% State of Connecticut term loan due 2023 357 646 Facility construction loan in Germany due 2030 27,576 — Total long-term obligations $ 437,269 $ 411,140 (1) Net of debt issuance costs of $3.8 million and $5.9 million at July 3, 2021 and October 3, 2020, respectively. Contractual maturities of our debt obligations, excluding line of credit borrowings, as of July 3, 2021 are as follows (in thousands): Amount 2021 (remainder) $ 2,447 2022 11,409 2023 12,909 2024 404,627 2025 3,244 Thereafter 17,033 Total $ 451,669 |
Leases
Leases | 9 Months Ended |
Jul. 03, 2021 | |
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 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 Nine Months Ended July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020 Operating lease cost $ 5,165 $ 4,907 $ 15,941 $ 14,875 Variable lease cost 342 348 1,013 1,036 Short-term lease cost 15 123 38 383 Sublease income (2) (32) (7) (96) Total lease cost $ 5,520 $ 5,346 $ 16,985 $ 16,198 July 3, 2021 July 4, 2020 Weighted average remaining lease term 7.4 8.1 Weighted average discount rate 5.0 % 4.9 % Supplemental cash flow information related to leases are as follows (in thousands): Nine Months Ended July 3, 2021 July 4, 2020 Operating cash outflows from operating leases $ 15,453 $ 14,672 ROU assets obtained in exchange for new operating lease liabilities 3,237 2,746 See Note 9, "Balance Sheet Details" for supplemental balance sheet information related to leases. As of July 3, 2021, maturities of our operating lease liabilities, which do not include short-term leases and variable lease payments, are as follows (in thousands): Operating Leases 2021 (remainder) $ 4,305 2022 18,650 2023 15,953 2024 12,480 2025 11,136 Thereafter 37,289 Total minimum lease payments 99,813 Amounts representing interest (18,897) Present value of total lease liabilities $ 80,916 |
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 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 Nine Months Ended July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020 Operating lease cost $ 5,165 $ 4,907 $ 15,941 $ 14,875 Variable lease cost 342 348 1,013 1,036 Short-term lease cost 15 123 38 383 Sublease income (2) (32) (7) (96) Total lease cost $ 5,520 $ 5,346 $ 16,985 $ 16,198 July 3, 2021 July 4, 2020 Weighted average remaining lease term 7.4 8.1 Weighted average discount rate 5.0 % 4.9 % Supplemental cash flow information related to leases are as follows (in thousands): Nine Months Ended July 3, 2021 July 4, 2020 Operating cash outflows from operating leases $ 15,453 $ 14,672 ROU assets obtained in exchange for new operating lease liabilities 3,237 2,746 See Note 9, "Balance Sheet Details" for supplemental balance sheet information related to leases. As of July 3, 2021, maturities of our operating lease liabilities, which do not include short-term leases and variable lease payments, are as follows (in thousands): Operating Leases 2021 (remainder) $ 4,305 2022 18,650 2023 15,953 2024 12,480 2025 11,136 Thereafter 37,289 Total minimum lease payments 99,813 Amounts representing interest (18,897) Present value of total lease liabilities $ 80,916 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Jul. 03, 2021 | |
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 and nine months ended July 3, 2021 and July 4, 2020, respectively, were estimated using the following weighted-average assumptions: Employee Stock Purchase Plan Three Months Ended Nine Months Ended July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020 Expected life in years 0.5 0.5 0.5 0.5 Volatility 54.0 % 63.7 % 50.5 % 53.0 % Risk-free interest rate 0.06 % 0.54 % 0.09 % 1.27 % Expected dividend yield — % — % — % — % Weighted average fair value per share $ 66.94 $ 43.35 $ 46.14 $ 43.81 We grant performance restricted stock units to officers and certain employees. The performance restricted stock unit agreements provide for the award of performance 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 the performance units granted for the nine months ended July 3, 2021 and July 4, 2020 was determined using a Monte Carlo simulation model incorporating the following weighted average assumptions: Nine Months Ended July 3, 2021 July 4, 2020 Risk-free interest rate 0.19 % 0.90 % Volatility 51.7 % 50.4 % Weighted average fair value per share $ 119.54 $ 162.14 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. In addition, during fiscal 2020, we granted performance restricted stock unit awards to certain employees with vesting based on goals related to free cash flow target amounts, with the initial fair value determined based on our closing stock price on the date of grant. Such awards were granted to serve as a performance incentive with a pay-for-performance forward-looking free cash flow target for the fiscal year in recognition of the impact of the COVID-19 pandemic. The number of shares issuable under these performance units upon satisfaction of the free cash flow performance criteria was capped at 100% of target. The total stock-based compensation of these awards was adjusted based on the level of achievement of free cash flow. These awards vested, in the three months ended January 2, 2021, at 100% of target. 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 and nine months ended July 3, 2021 and July 4, 2020 (in thousands): Three Months Ended Nine Months Ended July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020 Cost of sales $ 1,720 $ 1,237 $ 5,981 $ 3,430 Research and development 1,100 1,469 3,329 2,924 Selling, general and administrative 7,328 11,680 22,115 24,722 Income tax benefit (1,185) (1,552) (4,103) (3,414) $ 8,963 $ 12,834 $ 27,322 $ 27,662 During the three and nine months ended July 4, 2020, stock-based compensation expense includes $3.5 million related to acceleration of stock-based compensation as a result of our former CEO's transition from CEO to Special Advisor to the company as of April 6, 2020. During the three and nine months ended July 3, 2021, $1.7 million and $5.3 million of stock-based compensation cost, respectively, were capitalized as part of inventory for all stock plans, $1.7 million and $6.0 million, respectively, were amortized into cost of sales and $2.1 million remained in inventory at July 3, 2021. During the three and nine months ended July 4, 2020, $2.1 million and $4.3 million of stock-based compensation cost, respectively, were capitalized as part of inventory for all stock plans, $1.2 million and $3.4 million, respectively, were amortized into cost of sales and $2.4 million remained in inventory at July 4, 2020. At July 3, 2021, the total compensation cost related to unvested stock-based awards granted to employees under our stock plans but not yet recognized was approximately $56.9 million. We do not estimate forfeitures; we account for them as they occur. This cost will be amortized on a straight-line basis over a weighted-average period of approximately 1.5 years. Stock Awards Activity The following table summarizes the activity of our time-based and performance-based restricted stock units for the first nine months of fiscal 2021 (in thousands, except per share amounts): Time Based Restricted Stock Units Performance Based Restricted Stock Units Number of Weighted Number of Weighted Nonvested stock at October 3, 2020 419 $ 144.87 136 $ 177.54 Granted 294 136.46 64 119.43 Vested (1) (224) 144.89 (12) 118.45 Forfeited (9) 136.46 (30) 315.05 Nonvested stock at July 3, 2021 480 $ 139.86 158 $ 131.90 (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 market based awards, the recipient may earn between 0% and 200% of the award. Under the terms of the performance based awards based on free cash flow targets, the recipient may earn between 0% and 100% of the award. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jul. 03, 2021 | |
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 July 3, 2021, 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 contract-related, product sales and servicing, real estate, product liability, regulatory matters, employment or intellectual property claims. Although we do not expect that such 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, or in future periods. The United States and many foreign governments impose tariffs and duties on the import and export of certain products we sell and purchase. 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, or in future periods. German authorities are currently investigating an export compliance matter involving one of our German subsidiaries involving four former employees (whose employment was terminated following our discovery of this matter). While under German law the subsidiary can be held liable for certain infringements by its employees of German export control laws, we believe that this matter involves less than approximately 1.5 million Euros in transactions in the period currently under investigation 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. As previously disclosed in the Company's Quarterly Report on Form 10-Q for the quarterly period ended April 3, 2021, filed with the SEC on May 12, 2021, on April 28, 2021, a purported stockholder of the Company filed a complaint in the United States District Court for the Southern District of New York against Coherent and its board of directors alleging violations of the federal securities laws for misleading and incomplete disclosures in the Registration Statement on Form S-4 (the "S-4") filed in connection with the Merger (Stein v. Coherent, Inc., et al., Case No. 1:21-cv-3775). Specifically, the complaint challenges the disclosures relating to management's financial projections and the analyses of the Company's financial advisors, BofA Securities, Inc. ("BofA Securities") and Credit Suisse Securities (USA) LLC ("Credit Suisse"). Among other things, the complaint alleges that the projections should have provided a reconciliation of non-GAAP financial measures to GAAP, and that the S-4 fails to disclose details about the bankers' precedent transactions analyses and DCF analyses. The complaint seeks, among other relief, a preliminary injunction until such time as corrective disclosures are issued. The case was voluntarily dismissed on June 18, 2021. As previously disclosed in the Company's Quarterly Report on Form 10-Q for the quarterly period ended April 3, 2021, filed with the SEC on May 12, 2021, on May 4, 2021, a purported stockholder of the Company filed a complaint in the United States District Court for the District of New Jersey against the Company and its board of directors alleging violations of the federal securities laws for misleading and incomplete disclosures in the S-4 (Shirey v. Coherent, Inc., et al., Civil Action No. 2:21-cv-10698 (District of New Jersey, May 4, 2021)). Specifically, the complaint challenges the disclosures relating to the Company's and II-VI's financial projections, the analyses of the Company's financial advisors, BofA Securities and Credit Suisse, and potential conflicts of interest involving Credit Suisse. Among other things, the complaint alleges that the projections should have provided all line items used to calculate certain metrics and a reconciliation of non-GAAP financial measures to GAAP, that the S-4 fails to disclose details about the bankers' precedent transactions analyses, DCF analyses and price targets analyses and that there was insufficient disclosure regarding the relationships between Credit Suisse and either the Company or II-VI. The complaint seeks, among other relief, a preliminary injunction until such time as corrective disclosures are issued. The case was voluntarily dismissed on August 2, 2021. As previously disclosed in the Company's Quarterly Report on Form 10-Q for the quarterly period ended April 3, 2021, filed with the SEC on May 12, 2021, on May 4, 2021, a purported stockholder of the Company filed a complaint in the Southern District of New York against the Company, members of the Company's board of directors, II-VI and Watson Merger Sub Inc. alleging violations of the federal securities laws for misleading and incomplete disclosures in the S-4 (Diaz v. Coherent, Inc., et al., Case No. 1:21-cv-03990). Specifically, the complaint challenges the disclosures relating to the Company's and II-VI's financial projections, the analyses of the Company's financial advisors, BofA Securities and Credit Suisse, and potential conflicts of interest involving Credit Suisse. Among other things, the complaint alleges that the projections should have provided all line items used to calculate certain metrics and a reconciliation of non-GAAP financial measures to GAAP, that the S-4 fails to disclose details about the bankers' precedent transactions analyses, DCF analyses and price targets analyses and that there was insufficient disclosure regarding the relationships between Credit Suisse and either the Company or II-VI. The complaint seeks, among other relief, a preliminary injunction to prevent further advancement of the transaction and a direction to the director defendants to disseminate a true and non-misleading Registration Statement. The case was voluntarily dismissed on June 24, 2021. As previously disclosed in the Company's Quarterly Report on Form 10-Q for the quarterly period ended April 3, 2021, filed with the SEC on May 12, 2021, on May 4, 2021, a purported stockholder of the Company filed a complaint in the United States District Court for the Southern District of New York against the Company and members of its board of directors in the Southern District of New York alleging violations of the federal securities laws for misleading and incomplete disclosures in the Registration Statement on Form S-4/A (the “S-4/A”) filed in connection with the Merger (Costa v. Coherent, Inc., et al., Case No. 1:21-cv-04108). Specifically, the complaint challenges the disclosures relating to Coherent's and II-VI's financial projections and the analyses of the Company's financial advisors, BofA Securities and Credit Suisse. Among other things, the complaint alleges that the projections should have provided a reconciliation of non-GAAP financial measures to GAAP, that the S-4 fails to disclose details about the bankers' precedent transactions analyses and DCF analyses and that there was insufficient disclosure regarding the discretionary payment of $3.0 million to Credit Suisse at the closing of the merger. The complaint seeks, among other relief, a preliminary injunction to prevent further advancement of the transaction and a direction to the director defendants to disseminate a true and non-misleading Registration Statement. The case was voluntarily dismissed on June 25, 2021. On June 1, 2021, a purported stockholder of the Company filed a complaint in the United States District Court for the Southern District of New York against the Company and members of its board of directors alleging violations of the federal securities laws for misleading and incomplete disclosures in the S-4/A (Wolf v. Coherent, Inc., et al., Case No. 1:21-cv-04848). Specifically, the complaint challenges the disclosures relating to the Company's and II-VI's financial projections, the analyses of the Company's financial advisors, BofA Securities and Credit Suisse, and potential conflicts of interest involving Credit Suisse. Among other things, the complaint alleges that the projections should have provided all line items used to calculate certain metrics and a reconciliation of non-GAAP financial measures to GAAP, that the S-4 fails to disclose details about the bankers' precedent transactions analyses, DCF analyses and price targets analyses and that there was insufficient disclosure regarding the relationships between Credit Suisse and either the Company or II-VI. The complaint seeks, among other relief, a preliminary injunction to prevent further advancement of the transaction and a direction to the director defendants to disseminate a true and non-misleading Registration Statement. The case was voluntarily dismissed on June 24, 2021. On June 2, 2021, a purported stockholder of the Company filed a complaint in the United States District Court for the District of Delaware against the Company and members of its board of directors alleging violations of the federal securities laws for misleading and incomplete disclosures in the S-4/A (Lawrence v. Coherent, Inc., et al., Case No. 1:21-cv-00808). Specifically, the complaint challenges the disclosures relating to Coherent's and II-VI's financial projections and the analyses of the Company's financial advisors, BofA Securities and Credit Suisse. Among other things, the complaint alleges that the projections should have provided a reconciliation of non-GAAP financial measures to GAAP, that the S-4 fails to disclose details about the bankers' precedent transactions analyses and DCF analyses, that there was insufficient disclosure regarding the discretionary payment of $3.0 million to Credit Suisse at the closing of the merger, and that there was insufficient disclosure regarding the calculation of BofA Securities' compensation. The complaint seeks, among other relief, a preliminary injunction to prevent further advancement of the transaction and a direction to the director defendants to disseminate a true and non-misleading Registration Statement. The case was voluntarily dismissed on July 8, 2021. On June 2, 2021, a purported stockholder of the Company filed a complaint in the United States District Court for the Northern District of California against the Company and members of its board of directors alleging violations of the federal securities laws for misleading and incomplete disclosures in the S-4/A (Lawrence v. Coherent, Inc., et al., Case No. 5:21-cv-04193). Specifically, the complaint challenges the disclosures relating to Coherent's and II-VI's financial projections and the analyses of the Company's financial advisors, BofA Securities and Credit Suisse. Among other things, the complaint alleges that the projections should have provided a reconciliation of non-GAAP financial measures to GAAP, that the S-4 fails to disclose details about the bankers' precedent transactions analyses and DCF analyses, that there was insufficient disclosure regarding the discretionary payment of $3.0 million to Credit Suisse at the closing of the merger, and that there was insufficient disclosure regarding the calculation of BofA Securities' compensation. The complaint seeks, among other relief, a preliminary injunction to prevent further advancement of the transaction and a direction to the director defendants to disseminate a true and non-misleading Registration Statement. The case was voluntarily dismissed on June 3, 2021. On June 3, 2021, a purported stockholder of the Company filed a complaint in the United States District Court for the Northern District of California against the Company and members of its board of directors alleging violations of the federal securities laws for misleading and incomplete disclosures in the S-4/A (Finger v. Coherent, Inc., et al., Case No. 5:21-cv-04217). Specifically, the complaint challenges the disclosures relating to Coherent's and II-VI's financial projections and the analyses of the Company's financial advisors, BofA Securities and Credit Suisse. Among other things, the complaint alleges that the projections should have provided a reconciliation of non-GAAP financial measures to GAAP, that the S-4 fails to disclose details about the bankers' precedent transactions analyses and DCF analyses, that there was insufficient disclosure regarding the discretionary payment of $3.0 million to Credit Suisse at the closing of the merger, and that there was insufficient disclosure regarding the calculation of BofA Securities' compensation. The complaint seeks, among other relief, a preliminary injunction to prevent further advancement of the transaction and a direction to the director defendants to disseminate a true and non-misleading Registration Statement. The case was voluntarily dismissed on July 8, 2021. On June 10, 2021, a purported stockholder of the Company filed a complaint in the United States District Court for the Eastern District of Pennsylvania against the Company and members of its board of directors alleging violations of the federal securities laws for misleading and incomplete disclosures in the S-4/A (Waterman v. Coherent, Inc., et al., Case No. 2:21-cv-02623). Specifically, the complaint challenges the disclosures relating to the analyses of the Company's financial advisors, BofA Securities and Credit Suisse. Among other things, the complaint alleges that the S-4 fails to disclose details about the bankers' precedent transactions analyses, price targets analyses, and DCF analyses. The complaint seeks, among other relief, a preliminary injunction to prevent further advancement of the transaction and a direction to the director defendants to disseminate a true and non-misleading Registration Statement. The case was voluntarily dismissed on July 8, 2021. On June 11, 2021, a purported stockholder of the Company filed a complaint in the United States District Court for the Northern District of California against the Company and members of its board of directors alleging violations of the federal securities laws for misleading and incomplete disclosures in the S-4/A (Anderson v. Coherent, Inc., et al., Case No. 5:21-cv-04505). Specifically, the complaint challenges the disclosures relating to Coherent's and II-VI's financial projections and the analyses of the Company's financial advisors, BofA Securities and Credit Suisse. Among other things, the complaint alleges that the projections should have provided a reconciliation of non-GAAP financial measures to GAAP, that the S-4 fails to disclose details about the bankers' precedent transactions analyses and DCF analyses and that there was insufficient disclosure regarding the discretionary payment of $3.0 million to Credit Suisse at the closing of the merger. The complaint seeks, among other relief, a preliminary injunction to prevent further advancement of the transaction and a direction to the |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Jul. 03, 2021 | |
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 Nine Months Ended July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020 Weighted average shares outstanding—basic 24,435 24,159 24,362 24,075 Dilutive effect of employee stock awards 407 — — — Weighted average shares outstanding—diluted 24,842 24,159 24,362 24,075 Net income (loss) $ 30,262 $ (8,708) $ (127,809) $ (421,828) For the three months ended July 3, 2021 a total of 406,568 potentially dilutive securities have been excluded from the diluted share calculation as their effect was anti-dilutive. For the nine months ended July 3, 2021 and the three and nine months ended July 4, 2020, all potentially dilutive securities have been excluded from the diluted share calculation as we reported a net loss for those periods. |
Other Income (Expense)
Other Income (Expense) | 9 Months Ended |
Jul. 03, 2021 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense) | OTHER INCOME (EXPENSE) Other income (expense) is as follows (in thousands): Three Months Ended Nine Months Ended July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020 Foreign exchange loss $ (1,323) $ (1,623) $ (2,955) $ (3,316) Gain on deferred compensation investments, net 2,672 619 7,538 1,426 Other (164) 499 505 568 Other—net $ 1,185 $ (505) $ 5,088 $ (1,322) |
Income Taxes
Income Taxes | 9 Months Ended |
Jul. 03, 2021 | |
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. Our effective tax rates on income before income taxes for the three months and loss before income taxes for the nine months ended July 3, 2021 were 22.1% and 12.0%, respectively. Our effective tax rates for the three months and nine months ended July 3, 2021 were unfavorably impacted primarily due to the impact of income subject to foreign tax rates that are higher than the U.S. tax rates, the deferred taxes on 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), partially offset by the benefit of federal research and development tax credits and our Singapore tax exemption. Additionally, our nine months effective tax rate was also unfavorably impacted due to the establishment of valuation allowances for certain foreign deferred tax assets in the first quarter of fiscal 2021. |
Defined Benefit Plans
Defined Benefit Plans | 9 Months Ended |
Jul. 03, 2021 | |
Postemployment Benefits [Abstract] | |
Defined Benefits Plans | DEFINED BENEFIT PLANS For the three and nine months ended July 3, 2021, net periodic cost under our defined benefit plans was $0.8 million and $1.8 million, respectively. For the three and nine months ended July 4, 2020, net periodic cost under our defined benefit plans was $0.6 million and $1.4 million, respectively. The service cost component of net periodic costs is included in selling, general and administrative ("SG&A") expenses, and the interest costs, net actuarial (gain) loss and other components are included in Other—net in the condensed consolidated statements of operations. |
Segment and Geographic Informat
Segment and Geographic Information | 9 Months Ended |
Jul. 03, 2021 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | SEGMENT AND GEOGRAPHIC INFORMATION We are 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 machine tools primarily used for industrial laser materials processing, which serve important end markets like automotive, machine tools, consumer goods and medical device manufacturing as well as applications in aerospace and defense. 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 (loss) from operations is the measure of profit and loss that our CODM uses to assess performance and make decisions. Assets by segment are not a measure used to assess the performance of the company by the CODM and thus are not reported in our disclosures. Income (loss) 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 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 (loss) from operations for our operating segments and a reconciliation of our total income (loss) from operations to income (loss) before income taxes (in thousands): Three Months Ended Nine Months Ended July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020 Net sales: OEM Laser Sources $ 235,774 $ 184,694 $ 670,184 $ 559,364 Industrial Lasers & Systems 159,985 113,636 425,610 352,884 Total net sales $ 395,759 $ 298,330 $ 1,095,794 $ 912,248 Income (loss) from operations: OEM Laser Sources $ 54,310 $ 42,853 $ 155,353 $ 126,030 Industrial Lasers & Systems 13,239 (20,571) 7,930 (512,716) Corporate and other (25,445) (23,456) (300,465) (53,209) Total income (loss) from operations 42,104 (1,174) (137,182) (439,895) Total other expense, net (3,277) (4,282) (8,092) (12,979) Income (loss) before income taxes $ 38,827 $ (5,456) $ (145,274) $ (452,874) 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 and nine months ended July 3, 2021 and July 4, 2020 is based on the location of the end customer. Sales to unaffiliated customers are as follows (in thousands): Three Months Ended Nine Months Ended SALES July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020 United States $ 88,370 $ 65,094 $ 242,638 $ 215,236 Foreign countries: South Korea 67,883 63,428 202,274 180,412 China 76,005 52,837 205,649 148,407 Japan 28,900 22,272 92,394 70,990 Asia-Pacific, other 38,589 24,090 97,320 67,889 Germany 38,815 28,650 104,385 90,485 Europe, other 36,624 27,917 99,692 95,130 Rest of World 20,573 14,042 51,442 43,699 Total foreign countries sales 307,389 233,236 853,156 697,012 Total sales $ 395,759 $ 298,330 $ 1,095,794 $ 912,248 Major Customers We had one customer during the three and nine months ended July 3, 2021 that accounted for 13.9% and 15.5% of net sales, respectively. This same customer accounted for 17.1% and 16.7% of net sales during the three and nine months ended July 4, 2020, respectively. This customer purchased primarily from our OLS segment. |
Restructuring Charges
Restructuring Charges | 9 Months Ended |
Jul. 03, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring charges | RESTRUCTURING CHARGES In June 2019, we announced our plans to exit a portion of our high power fiber laser ("HPFL") business and consolidate all HPFL manufacturing and engineering functions in our Tampere, Finland facility by transferring certain HPFL activities from our Hamburg, Germany facility. We recorded charges in the first, second and third quarters of fiscal 2020 of $0.6 million, $0.5 million and $0.1 million, respectively, primarily related to accelerated depreciation and project management consulting. We also vacated our leased facility in Santa Clara at the end of the lease term on July 31, 2020 and combined operations into our owned Santa Clara headquarters. We incurred costs in the second quarter of fiscal 2021of $0.1 million and for the first, second and third quarters of fiscal 2020 of $0.2 million, $0.6 million and $0.4 million, respectively, related to this project. We also incurred costs in the first quarter of fiscal 2020 of $0.1 million for other projects. In the fourth quarter of fiscal 2020, we began a restructuring program in our ILS segment which includes management reorganizations, the planned closure of certain manufacturing sites, and the right-sizing of global sales, service, order admin, marketing communication and certain administrative functions, among others. In the first, second and third quarters of fiscal 2021, we incurred costs of $5.4 million, $3.6 million and $0.2 million, respectively, primarily related to write-offs of excess inventory and accruals for vendor commitments, which are recorded in cost of sales, estimated severance and accelerated depreciation. 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 quarters of fiscal 2021 and 2020 (in thousands): Severance Related Asset Write-Offs Other Total Balances, October 3, 2020 $ 2,611 $ — $ 230 $ 2,841 Provision 819 3,509 1,055 5,383 Payments and other (555) (3,509) (281) (4,345) Balances, January 2, 2021 2,875 — 1,004 3,879 Provision 2,775 558 325 3,658 Payments and other (2,032) (558) (623) (3,213) Balances, April 3, 2021 3,618 — 706 4,324 Provision (244) 318 86 160 Payments and other (756) (318) (282) (1,356) Balances, July 3, 2021 $ 2,618 $ — $ 510 $ 3,128 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 Provision 85 915 79 1,079 Payments and other (3,715) (915) (87) (4,717) Balances, April 4, 2020 4,045 — 212 4,257 Provision (77) 554 41 518 Payments and other (3,136) (554) (31) (3,721) Balances, July 4, 2020 $ 832 $ — $ 222 $ 1,054 At July 3, 2021, $3.1 million of accrued severance related and other costs were included in other current liabilities. The severance, asset write-offs for inventory, accruals for vendor commitments, accelerated depreciation and other costs in the first, second and third quarters of fiscal 2021 primarily related to the restructuring program that began in the fourth quarter of fiscal 2020. The asset write-offs for accelerated depreciation and other costs in the first, second and third quarters 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 into our owned Santa Clara headquarters. By segment, $0.2 million and $9.1 million of restructuring costs were incurred in the ILS segment and $0.0 million and $0.1 million were incurred in the OLS segment in the three and nine months ended July 3, 2021, respectively. In the three and nine months ended July 4, 2020, $0.1 million and $1.3 million of the restructuring costs were incurred in the ILS segment and $0.4 million and $1.2 million were incurred in the OLS segment, respectively. 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) | 9 Months Ended |
Jul. 03, 2021 | |
Accounting Policies [Abstract] | |
Recent Accounting Standards | Adoption of New Accounting Pronouncement In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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. We adopted ASU 2016-13 in the first quarter of fiscal 2021 with no material impact to our condensed consolidated financial statements. With the adoption of Topic 326, we are now assessing whether unrealized losses have resulted from a credit loss or other factors. We believe none of our unrealized losses on available-for-sale investments were other-than temporary or were attributable to credit losses as of July 3, 2021 and October 3, 2020 . We review our available-for-sale investments on a quarterly basis to identify a potential other-than-temporary impairment. We also do not have an intent to sell our investments and would not be required to sell them before they recover. The adoption of Topic 326 did not significantly change our approach to the valuation of trade receivables. We determine whether there is an expected loss on our accounts receivable by reviewing all available data, including our customers' latest available financial statements, their credit standing and our historical collection experience, as well as current and future market and economic conditions. As of July 3, 2021 and October 3, 2020, the allowance for credit losses on our trade receivables was $4.9 million and $5.4 million, respectively. Recently Issued Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform ("Topic 848"). Topic 848 provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate ("LIBOR") or by another reference rate expected to be discontinued. The guidance was effective beginning March 12, 2020 and can be applied prospectively through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform - Scope," which clarified the scope and application of the original guidance. We will adopt these standards when LIBOR is discontinued and do not expect them to have a material impact on our consolidated financial statements or related disclosures. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Jul. 03, 2021 | |
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 July 3, 2021 July 4, 2020 OEM Laser Sources Industrial Lasers & Systems OEM Laser Sources Industrial Lasers & Systems Net sales: Products (1) $ 145,219 $ 132,461 $ 109,995 $ 91,114 Other product and service revenues (2) 90,555 27,524 74,699 22,522 Total net sales $ 235,774 $ 159,985 $ 184,694 $ 113,636 (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 $16.5 million and $15.4 million for the three months ended July 3, 2021 and July 4, 2020, respectively, were recognized over time. Nine Months Ended July 3, 2021 July 4, 2020 OEM Laser Sources Industrial Lasers & Systems OEM Laser Sources Industrial Lasers & Systems Net sales: Products (1) $ 401,254 $ 343,383 $ 321,691 $ 277,710 Other product and service revenues (2) 268,930 82,227 237,673 75,174 Total net sales $ 670,184 $ 425,610 $ 559,364 $ 352,884 (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 $49.0 million and $46.3 million for the nine months ended July 3, 2021 and July 4, 2020, respectively, were recognized over time. Sales by market application and segment Three Months Ended July 3, 2021 July 4, 2020 OEM Laser Sources Industrial Lasers & Systems OEM Laser Sources Industrial Lasers & Systems Net sales: Microelectronics $ 142,012 $ 34,420 $ 123,635 $ 18,207 Precision manufacturing 12,805 90,657 7,581 74,156 Instrumentation 77,859 22,408 49,280 12,250 Aerospace and defense 3,098 12,500 4,198 9,023 Total net sales $ 235,774 $ 159,985 $ 184,694 $ 113,636 Nine Months Ended July 3, 2021 July 4, 2020 OEM Laser Sources Industrial Lasers & Systems OEM Laser Sources Industrial Lasers & Systems Net sales: Microelectronics $ 408,366 $ 85,191 $ 343,429 $ 50,726 Precision manufacturing 40,435 251,875 26,373 230,043 Instrumentation 212,213 61,614 174,304 47,814 Aerospace and defense 9,170 26,930 15,258 24,301 Total net sales $ 670,184 $ 425,610 $ 559,364 $ 352,884 |
Summary of Customer Deposits and Deferred Revenue | A roll forward of our customer deposits and deferred revenue is as follows (in thousands): Nine Months Ended July 3, 2021 July 4, 2020 Beginning balance (1) $ 56,339 $ 42,550 Additions to customer deposits and deferred revenue 164,357 137,747 Amount of customer deposits and deferred revenue recognized in income (2) (156,757) (126,501) Translation adjustments 70 260 Ending balance (3) $ 64,009 $ 54,056 (1) Beginning customer deposits and deferred revenue as of October 3, 2020 include $42,715 of current portion and $13,624 of long-term portion. 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) Amount of customer deposits and deferred revenue recognized in the three months ended July 3, 2021 and July 4, 2020 was $65,509 and $48,674, respectively. |
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 July 3, 2021 (in thousands): Remainder of fiscal 2021 Thereafter Total Performance obligations as of July 3, 2021 $ 33,813 $ 30,196 $ 64,009 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Jul. 03, 2021 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | Our preliminary allocation of the purchase price is as follows (in thousands): Tangible assets: Cash $ 537 Accounts receivable 1,763 Inventories 5,269 Prepaid expenses and other assets 823 Property and equipment 18,713 Liabilities assumed (1,856) Deferred tax liabilities (4,009) Intangible assets: Existing technology 2,800 In-process research and development 300 Customer relationships 300 Trademarks 100 Backlog 100 Goodwill 4,507 Total $ 29,347 |
Fair Values (Tables)
Fair Values (Tables) | 9 Months Ended |
Jul. 03, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities measured at fair value | Financial assets and liabilities measured at fair value as of July 3, 2021 and October 3, 2020 are summarized below (in thousands): Aggregate Fair Value Quoted Prices Significant Aggregate Fair Value Quoted Prices Significant July 3, 2021 October 3, 2020 (Level 1) (Level 2) (Level 1) (Level 2) Assets: Cash equivalents: Money market fund deposits $ 45,355 $ 45,355 $ — $ 36,646 $ 36,646 $ — Certificates of deposit 44,446 44,446 — 56,191 56,191 — Short-term investments: U.S. Treasury and agency obligations (1) 15,129 — 15,129 35,346 — 35,346 Prepaid and other assets: Foreign currency contracts (2) 940 — 940 812 — 812 Money market fund deposits — Deferred comp and supplemental plan (3) 492 492 — 203 203 — Mutual funds — Deferred comp and supplemental plan (3) 14,233 14,233 — 22,778 22,778 — Total $ 120,595 $ 104,526 $ 16,069 $ 151,976 $ 115,818 $ 36,158 Liabilities: Other current liabilities: Foreign currency contracts (2) (5,560) — (5,560) (2,811) — (2,811) Total $ 115,035 $ 104,526 $ 10,509 $ 149,165 $ 115,818 $ 33,347 ___________________________________________________ (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) 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 . |
Short-Term Investments (Tables)
Short-Term Investments (Tables) | 9 Months Ended |
Jul. 03, 2021 | |
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): July 3, 2021 Cost Basis Unrealized Unrealized Fair Value Cash and cash equivalents $ 394,098 $ — $ — $ 394,098 Short-term investments: Available-for-sale securities: U.S. Treasury and agency obligations $ 15,030 $ 99 $ — $ 15,129 Total short-term investments $ 15,030 $ 99 $ — $ 15,129 October 3, 2020 Cost Basis Unrealized Unrealized Fair Value Cash and cash equivalents $ 440,258 $ — $ — $ 440,258 Short-term investments: Available-for-sale securities: U.S. Treasury and agency obligations $ 35,311 $ 36 $ (1) $ 35,346 Total short-term investments $ 35,311 $ 36 $ (1) $ 35,346 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Jul. 03, 2021 | |
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 July 3, 2021 October 3, 2020 July 3, 2021 October 3, 2020 Foreign currency hedge contracts Purchase $ 217,945 $ 169,206 $ (5,554) $ (1,802) Sell $ (58,983) $ (166,813) $ 934 $ (197) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Jul. 03, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill by Segment | The changes in the carrying amount of goodwill, all of which is in the OLS segment, for the period from October 3, 2020 to July 3, 2021 are as follows (in thousands): OEM Laser Sources Balance as of October 3, 2020 $ 101,317 Additions (see Note 4) 4,507 Translation adjustments 830 Balance as of July 3, 2021 $ 106,654 |
Schedule of Components of Amortizable Intangible Assets | Components of our amortizable intangible assets are as follows (in thousands): July 3, 2021 October 3, 2020 Gross Accumulated Net Gross Accumulated Net Existing technology $ 40,232 $ (34,233) $ 5,999 $ 46,547 $ (37,630) $ 8,917 Customer relationships 22,498 (12,339) 10,159 24,388 (12,923) 11,465 Production know-how 2,300 (1,262) 1,038 2,300 (917) 1,383 In-process research & development 300 — 300 — — — Total $ 65,330 $ (47,834) $ 17,496 $ 73,235 $ (51,470) $ 21,765 |
Schedule of Estimated Amortization Expense | At July 3, 2021, estimated amortization expense for the remainder of fiscal 2021, the next five succeeding fiscal years and all fiscal years thereafter are as follows (in thousands): Estimated Amortization 2021 (remainder) $ 2,588 2022 4,013 2023 3,441 2024 2,658 2025 2,341 2026 2,001 Thereafter 154 Total (1) $ 17,196 (1) Excluding in-process research & development |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 9 Months Ended |
Jul. 03, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Inventories | Inventories consist of the following (in thousands): July 3, 2021 October 3, 2020 Purchased parts and assemblies $ 111,907 $ 116,957 Work-in-process 173,029 173,871 Finished goods 115,611 135,928 Total inventories $ 400,547 $ 426,756 |
Schedule of Prepaid Expenses and Other Assets | Prepaid expenses and other assets consist of the following (in thousands): July 3, 2021 October 3, 2020 Prepaid and refundable income taxes $ 38,552 $ 50,548 Other taxes receivable 13,180 13,006 Prepaid expenses and other assets 36,012 24,696 Total prepaid expenses and other assets $ 87,744 $ 88,250 |
Schedule of Other Assets | Other assets consist of the following (in thousands): July 3, 2021 October 3, 2020 Assets related to deferred compensation arrangements $ 35,050 $ 39,720 Deferred tax assets 146,316 102,028 Right of use assets, net - operating leases (See Note 11) 75,929 85,905 Right of use assets, net - finance leases (See Note 11) 101 656 Other assets 15,299 14,266 Total other assets $ 272,695 $ 242,575 |
Schedule of Other Current Liabilities | Other current liabilities consist of the following (in thousands): July 3, 2021 October 3, 2020 Accrued payroll and benefits $ 95,265 $ 54,211 Operating lease liability, current (See Note 11) 15,721 15,366 Finance lease liability, current (See Note 11) 94 399 Deferred revenue 29,586 32,998 Warranty reserve 31,968 35,032 Accrued expenses and other 39,671 36,432 Customer deposits 19,617 9,717 Total other current liabilities $ 231,922 $ 184,155 |
Schedule of Components of Reserve for Warranty Costs | Components of the reserve for warranty costs during the first nine months of fiscal 2021 and 2020 were as follows (in thousands): Nine Months Ended July 3, 2021 July 4, 2020 Beginning balance $ 35,032 $ 36,460 Additions related to current period sales 23,473 28,669 Warranty costs incurred in the current period (27,059) (30,773) Accruals resulting from acquisitions 170 — Adjustments to accruals related to foreign exchange and other 352 615 Ending balance $ 31,968 $ 34,971 |
Schedule of Other Long-Term Liabilities | Other long-term liabilities consist of the following (in thousands): July 3, 2021 October 3, 2020 Long-term taxes payable $ 18,779 $ 15,374 Operating lease liability, long-term (See Note 11) 65,195 75,264 Finance lease liability, long-term (See Note 11) — 178 Deferred compensation 37,398 42,854 Defined benefit plan liabilities 46,619 45,810 Deferred tax liabilities 20,644 15,721 Deferred revenue 14,806 13,624 Asset retirement obligations liability 6,162 5,892 Other long-term liabilities 4,592 6,357 Total other long-term liabilities $ 214,195 $ 221,074 |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Jul. 03, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Debt | Short-term borrowings and current portion of long-term obligations consist of the following (in thousands): July 3, 2021 October 3, 2020 Current portion of Euro Term Loan (1) $ 5,055 $ 4,970 1.3% Term loan due 2024 1,479 1,465 1.0% State of Connecticut term loan due 2023 385 382 Facility construction loan in Germany due 2030 811 — Line of credit borrowings 10,000 10,000 Total short-term borrowings and current portion of long-term obligations $ 17,730 $ 16,817 (1) Net of debt issuance costs of $2.9 million and $2.9 million at July 3, 2021 and October 3, 2020, respectively. |
Schedule of Long-term Debt | Long-term obligations consist of the following (in thousands): July 3, 2021 October 3, 2020 Euro Term Loan due 2024 (1) $ 406,009 $ 406,099 1.3% Term loan due 2024 3,327 4,395 1.0% State of Connecticut term loan due 2023 357 646 Facility construction loan in Germany due 2030 27,576 — Total long-term obligations $ 437,269 $ 411,140 (1) Net of debt issuance costs of $3.8 million and $5.9 million at July 3, 2021 and October 3, 2020, respectively. |
Schedule of Maturities of Long-term Debt | Contractual maturities of our debt obligations, excluding line of credit borrowings, as of July 3, 2021 are as follows (in thousands): Amount 2021 (remainder) $ 2,447 2022 11,409 2023 12,909 2024 404,627 2025 3,244 Thereafter 17,033 Total $ 451,669 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Jul. 03, 2021 | |
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 Nine Months Ended July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020 Operating lease cost $ 5,165 $ 4,907 $ 15,941 $ 14,875 Variable lease cost 342 348 1,013 1,036 Short-term lease cost 15 123 38 383 Sublease income (2) (32) (7) (96) Total lease cost $ 5,520 $ 5,346 $ 16,985 $ 16,198 July 3, 2021 July 4, 2020 Weighted average remaining lease term 7.4 8.1 Weighted average discount rate 5.0 % 4.9 % Supplemental cash flow information related to leases are as follows (in thousands): Nine Months Ended July 3, 2021 July 4, 2020 Operating cash outflows from operating leases $ 15,453 $ 14,672 ROU assets obtained in exchange for new operating lease liabilities 3,237 2,746 |
Operating Lease maturity | As of July 3, 2021, maturities of our operating lease liabilities, which do not include short-term leases and variable lease payments, are as follows (in thousands): Operating Leases 2021 (remainder) $ 4,305 2022 18,650 2023 15,953 2024 12,480 2025 11,136 Thereafter 37,289 Total minimum lease payments 99,813 Amounts representing interest (18,897) Present value of total lease liabilities $ 80,916 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Jul. 03, 2021 | |
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 and nine months ended July 3, 2021 and July 4, 2020, respectively, were estimated using the following weighted-average assumptions: Employee Stock Purchase Plan Three Months Ended Nine Months Ended July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020 Expected life in years 0.5 0.5 0.5 0.5 Volatility 54.0 % 63.7 % 50.5 % 53.0 % Risk-free interest rate 0.06 % 0.54 % 0.09 % 1.27 % Expected dividend yield — % — % — % — % Weighted average fair value per share $ 66.94 $ 43.35 $ 46.14 $ 43.81 |
Schedule of Weighted Average Assumptions of Performance Units | The weighted average fair value for the performance units granted for the nine months ended July 3, 2021 and July 4, 2020 was determined using a Monte Carlo simulation model incorporating the following weighted average assumptions: Nine Months Ended July 3, 2021 July 4, 2020 Risk-free interest rate 0.19 % 0.90 % Volatility 51.7 % 50.4 % Weighted average fair value per share $ 119.54 $ 162.14 |
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 and nine months ended July 3, 2021 and July 4, 2020 (in thousands): Three Months Ended Nine Months Ended July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020 Cost of sales $ 1,720 $ 1,237 $ 5,981 $ 3,430 Research and development 1,100 1,469 3,329 2,924 Selling, general and administrative 7,328 11,680 22,115 24,722 Income tax benefit (1,185) (1,552) (4,103) (3,414) $ 8,963 $ 12,834 $ 27,322 $ 27,662 |
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 nine months of fiscal 2021 (in thousands, except per share amounts): Time Based Restricted Stock Units Performance Based Restricted Stock Units Number of Weighted Number of Weighted Nonvested stock at October 3, 2020 419 $ 144.87 136 $ 177.54 Granted 294 136.46 64 119.43 Vested (1) (224) 144.89 (12) 118.45 Forfeited (9) 136.46 (30) 315.05 Nonvested stock at July 3, 2021 480 $ 139.86 158 $ 131.90 (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 market based awards, the recipient may earn between 0% and 200% of the award. Under the terms of the performance based awards based on free cash flow targets, the recipient may earn between 0% and 100% of the award. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Jul. 03, 2021 | |
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 Nine Months Ended July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020 Weighted average shares outstanding—basic 24,435 24,159 24,362 24,075 Dilutive effect of employee stock awards 407 — — — Weighted average shares outstanding—diluted 24,842 24,159 24,362 24,075 Net income (loss) $ 30,262 $ (8,708) $ (127,809) $ (421,828) |
Other Income (Expense) (Tables)
Other Income (Expense) (Tables) | 9 Months Ended |
Jul. 03, 2021 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Nonoperating Income (Expense) | Other income (expense) is as follows (in thousands): Three Months Ended Nine Months Ended July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020 Foreign exchange loss $ (1,323) $ (1,623) $ (2,955) $ (3,316) Gain on deferred compensation investments, net 2,672 619 7,538 1,426 Other (164) 499 505 568 Other—net $ 1,185 $ (505) $ 5,088 $ (1,322) |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 9 Months Ended |
Jul. 03, 2021 | |
Segment Reporting [Abstract] | |
Schedule of sales and income (loss) from operations | The following table provides net sales and income (loss) from operations for our operating segments and a reconciliation of our total income (loss) from operations to income (loss) before income taxes (in thousands): Three Months Ended Nine Months Ended July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020 Net sales: OEM Laser Sources $ 235,774 $ 184,694 $ 670,184 $ 559,364 Industrial Lasers & Systems 159,985 113,636 425,610 352,884 Total net sales $ 395,759 $ 298,330 $ 1,095,794 $ 912,248 Income (loss) from operations: OEM Laser Sources $ 54,310 $ 42,853 $ 155,353 $ 126,030 Industrial Lasers & Systems 13,239 (20,571) 7,930 (512,716) Corporate and other (25,445) (23,456) (300,465) (53,209) Total income (loss) from operations 42,104 (1,174) (137,182) (439,895) Total other expense, net (3,277) (4,282) (8,092) (12,979) Income (loss) before income taxes $ 38,827 $ (5,456) $ (145,274) $ (452,874) Sales to unaffiliated customers are as follows (in thousands): Three Months Ended Nine Months Ended SALES July 3, 2021 July 4, 2020 July 3, 2021 July 4, 2020 United States $ 88,370 $ 65,094 $ 242,638 $ 215,236 Foreign countries: South Korea 67,883 63,428 202,274 180,412 China 76,005 52,837 205,649 148,407 Japan 28,900 22,272 92,394 70,990 Asia-Pacific, other 38,589 24,090 97,320 67,889 Germany 38,815 28,650 104,385 90,485 Europe, other 36,624 27,917 99,692 95,130 Rest of World 20,573 14,042 51,442 43,699 Total foreign countries sales 307,389 233,236 853,156 697,012 Total sales $ 395,759 $ 298,330 $ 1,095,794 $ 912,248 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 9 Months Ended |
Jul. 03, 2021 | |
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 quarters of fiscal 2021 and 2020 (in thousands): Severance Related Asset Write-Offs Other Total Balances, October 3, 2020 $ 2,611 $ — $ 230 $ 2,841 Provision 819 3,509 1,055 5,383 Payments and other (555) (3,509) (281) (4,345) Balances, January 2, 2021 2,875 — 1,004 3,879 Provision 2,775 558 325 3,658 Payments and other (2,032) (558) (623) (3,213) Balances, April 3, 2021 3,618 — 706 4,324 Provision (244) 318 86 160 Payments and other (756) (318) (282) (1,356) Balances, July 3, 2021 $ 2,618 $ — $ 510 $ 3,128 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 Provision 85 915 79 1,079 Payments and other (3,715) (915) (87) (4,717) Balances, April 4, 2020 4,045 — 212 4,257 Provision (77) 554 41 518 Payments and other (3,136) (554) (31) (3,721) Balances, July 4, 2020 $ 832 $ — $ 222 $ 1,054 |
Recent Accounting Standards (De
Recent Accounting Standards (Details) - USD ($) $ in Millions | Jul. 03, 2021 | Oct. 03, 2020 |
Accounting Policies [Abstract] | ||
Allowance for Doubtful Accounts, Premiums and Other Receivables | $ 4.9 | $ 5.4 |
Revenue Recognition Disaggregat
Revenue Recognition Disaggregation of revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2021 | Jul. 04, 2020 | Jul. 03, 2021 | Jul. 04, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 395,759 | $ 298,330 | $ 1,095,794 | $ 912,248 |
OEM Laser Sources | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 235,774 | 184,694 | 670,184 | 559,364 |
Industrial Lasers & Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 159,985 | 113,636 | 425,610 | 352,884 |
Products | OEM Laser Sources | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 145,219 | 109,995 | 401,254 | 321,691 |
Products | Industrial Lasers & Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 132,461 | 91,114 | 343,383 | 277,710 |
Other products and services revenues | OEM Laser Sources | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 90,555 | 74,699 | 268,930 | 237,673 |
Other products and services revenues | Industrial Lasers & Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 27,524 | 22,522 | 82,227 | 75,174 |
Sales of spare parts | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 16,500 | 15,400 | 49,000 | 46,300 |
Microelectronics | OEM Laser Sources | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 142,012 | 123,635 | 408,366 | 343,429 |
Microelectronics | Industrial Lasers & Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 34,420 | 18,207 | 85,191 | 50,726 |
Precision manufacturing | OEM Laser Sources | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 12,805 | 7,581 | 40,435 | 26,373 |
Precision manufacturing | Industrial Lasers & Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 90,657 | 74,156 | 251,875 | 230,043 |
Instrumentation | OEM Laser Sources | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 77,859 | 49,280 | 212,213 | 174,304 |
Instrumentation | Industrial Lasers & Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 22,408 | 12,250 | 61,614 | 47,814 |
Aerospace and defense | OEM Laser Sources | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 3,098 | 4,198 | 9,170 | 15,258 |
Aerospace and defense | Industrial Lasers & Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 12,500 | $ 9,023 | $ 26,930 | $ 24,301 |
Revenue Recognition Contract ba
Revenue Recognition Contract balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Jul. 03, 2021 | Jul. 04, 2020 | Jul. 03, 2021 | Jul. 04, 2020 | Oct. 03, 2020 | Sep. 28, 2019 | |
Change in Contract with Customer, Liability [Abstract] | ||||||
Contract with customer, beginning balance | $ 56,339 | $ 42,550 | ||||
Additions to customer deposits and deferred revenue | 164,357 | 137,747 | ||||
Amount of customer deposits and deferred revenue recognized in income | $ 65,509 | $ 48,674 | (156,757) | (126,501) | ||
Translation adjustments | 70 | 260 | ||||
Contract with customer, ending balance | 64,009 | 54,056 | 64,009 | 54,056 | ||
Customer deposits | 49,203 | 41,329 | 49,203 | 41,329 | $ 42,715 | $ 34,538 |
Customer deposits and deferred revenue, noncurrent | $ 14,806 | $ 12,727 | $ 14,806 | $ 12,727 | $ 13,624 | $ 8,012 |
Revenue Recognition Performance
Revenue Recognition Performance Obligations (Details) $ in Thousands | Jul. 03, 2021USD ($) |
Revenue from Contract with Customer [Abstract] | |
Performance Obligations | $ 64,009 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-04 | |
Revenue from Contract with Customer [Abstract] | |
Performance Obligations | $ 33,813 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-03 | |
Revenue from Contract with Customer [Abstract] | |
Performance Obligations | $ 30,196 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation period | 1 year |
Business Combinations (Details)
Business Combinations (Details) - USD ($) | Apr. 19, 2021 | Mar. 25, 2021 | Mar. 09, 2021 | Jan. 18, 2021 | Jul. 03, 2021 | Jul. 04, 2020 | Jul. 03, 2021 | Jul. 04, 2020 | Oct. 03, 2020 |
Business Acquisition [Line Items] | |||||||||
Goodwill | $ 106,654,000 | $ 106,654,000 | $ 101,317,000 | ||||||
Merger and acquisition costs | 2,578,000 | $ 0 | 234,574,000 | $ 0 | |||||
Lumentum Holdings Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Payments to Acquire Businesses, Gross | $ 175 | $ 100 | |||||||
Business Acquisition, Share Price | $ 1.0109 | $ 1.1851 | |||||||
Merger and acquisition costs | $ 217,600,000 | ||||||||
II-VI Incorporated | |||||||||
Business Acquisition [Line Items] | |||||||||
Payments to Acquire Businesses, Gross | $ 220 | ||||||||
Business Acquisition, Share Price | $ 0.91 | ||||||||
Electro-optics Technology, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Payments to Acquire Businesses, Gross | $ 29,300,000 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents | 537,000 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | 1,763,000 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 5,269,000 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets | 823,000 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 18,713,000 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities | (1,856,000) | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities | (4,009,000) | ||||||||
Goodwill | 4,507,000 | ||||||||
Total | 29,347,000 | ||||||||
Merger and acquisition costs | $ 200,000 | $ 300,000 | |||||||
Electro-optics Technology, Inc. | Minimum | |||||||||
Business Acquisition [Line Items] | |||||||||
Useful life | 1 year | ||||||||
Electro-optics Technology, Inc. | Maximum | |||||||||
Business Acquisition [Line Items] | |||||||||
Useful life | 5 years | ||||||||
Electro-optics Technology, Inc. | Developed Technology Rights | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets | 2,800,000 | ||||||||
Electro-optics Technology, Inc. | In Process Research and Development | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets | 300,000 | ||||||||
Electro-optics Technology, Inc. | Customer-Related Intangible Assets | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets | 300,000 | ||||||||
Electro-optics Technology, Inc. | Marketing-Related Intangible Assets | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets | 100,000 | ||||||||
Electro-optics Technology, Inc. | Order or Production Backlog [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets | $ 100,000 |
Fair Values (Details)
Fair Values (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Oct. 03, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Current portion of long term obligation, amortized cost | $ 7,700 | $ 6,800 |
Long-term obligations | 437,269 | 411,140 |
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 | 14,233 | 22,778 |
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 | 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 | 14,233 | 22,778 |
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 | 104,526 | 115,818 |
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 | 16,069 | 36,158 |
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 | 120,595 | 151,976 |
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 | 104,526 | 115,818 |
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 | 10,509 | 33,347 |
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 | 115,035 | 149,165 |
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 | 45,355 | 36,646 |
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 | 45,355 | 36,646 |
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 | 492 | 203 |
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 | 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 | 492 | 203 |
Fair Value, Measurements, Recurring | Certificates of deposit | Cash equivalents: | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 44,446 | 56,191 |
Fair Value, Measurements, Recurring | Certificates of deposit | 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 | Certificates of deposit | Cash equivalents: | Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 44,446 | 56,191 |
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 | 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 | 15,129 | 35,346 |
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 | 15,129 | 35,346 |
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 | 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 | 940 | 812 |
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 | 940 | 812 |
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 | 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 | (5,560) | (2,811) |
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 | $ (5,560) | $ (2,811) |
Short-Term Investments (Details
Short-Term Investments (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Oct. 03, 2020 | Jul. 04, 2020 |
Schedule of Investments [Line Items] | |||
Cash and cash equivalents, Cost Basis | $ 394,098 | $ 440,258 | |
Cash and cash equivalent, Unrealized Gains | 0 | 0 | |
Cash and cash equivalent, Unrealized Losses | 0 | 0 | |
Cash and cash equivalents | 394,098 | 440,258 | $ 378,992 |
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain (Loss), before Tax | 100 | 100 | |
Short-term investments: | |||
Schedule of Investments [Line Items] | |||
Debt Securities, Available-for-sale, Amortized Cost | 15,030 | 35,311 | |
Available-for-sale securities, Unrealized Gains | 99 | 36 | |
Available-for-sale securities, Unrealized Losses | 0 | (1) | |
Available-for-sale securities: Fair Value | 15,129 | 35,346 | |
Short-term investments: | U.S. Treasury and agency obligations | |||
Schedule of Investments [Line Items] | |||
Debt Securities, Available-for-sale, Amortized Cost | 15,030 | 35,311 | |
Available-for-sale securities, Unrealized Gains | 99 | 36 | |
Available-for-sale securities, Unrealized Losses | 0 | (1) | |
Available-for-sale securities: Fair Value | $ 15,129 | $ 35,346 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Notional and Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jul. 03, 2021 | Jul. 04, 2020 | Jul. 03, 2021 | Jul. 04, 2020 | Oct. 03, 2020 | |
Derivatives, Fair Value [Line Items] | |||||
Loss on derivatives | $ 500 | $ 1,100 | $ 2,100 | $ 1,200 | |
Derivatives not designated as hedging instruments | Purchase | Euro | |||||
Derivatives, Fair Value [Line Items] | |||||
Derivative asset, notional amount | 217,945 | 217,945 | $ 169,206 | ||
Derivative asset, Fair Value | (5,554) | (5,554) | (1,802) | ||
Derivatives not designated as hedging instruments | Sell | Euro | |||||
Derivatives, Fair Value [Line Items] | |||||
Derivative liability, notional amount | (58,983) | (58,983) | (166,813) | ||
Derivative liability, Fair Value | $ 934 | $ 934 | $ (197) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Apr. 04, 2020 | Jul. 03, 2021 | Jul. 04, 2020 | |
Goodwill [Line Items] | |||
Impairment charges | $ 0 | $ (327,203) | |
Industrial Lasers & Systems | |||
Goodwill [Line Items] | |||
Impairment charges | $ (327,200) | ||
Intangible Assets | Industrial Lasers & Systems | |||
Goodwill [Line Items] | |||
Non-cash pre-tax charges | 33,900 | ||
Property, Plant and Equipment | Industrial Lasers & Systems | |||
Goodwill [Line Items] | |||
Non-cash pre-tax charges | 85,600 | ||
Right-Of-Use Assets | Industrial Lasers & Systems | |||
Goodwill [Line Items] | |||
Non-cash pre-tax charges | $ 1,800 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Apr. 04, 2020 | Jul. 03, 2021 | Jul. 04, 2020 | |
Goodwill [Roll Forward] | |||
Goodwill, beginning of period | $ 101,317 | ||
Impairment charges | 0 | $ (327,203) | |
Goodwill, end of period | 106,654 | ||
OEM Laser Sources | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning of period | 101,317 | ||
Translation adjustments | 830 | ||
Goodwill, end of period | 106,654 | ||
Goodwill, Acquired During Period | $ 4,507 | ||
Industrial Lasers & Systems | |||
Goodwill [Roll Forward] | |||
Impairment charges | $ (327,200) |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Jul. 03, 2021 | Jul. 04, 2020 | Oct. 03, 2020 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | $ 65,330 | $ 73,235 | |
Accumulated Amortization | (47,834) | (51,470) | |
Net including IPRD | 17,496 | 21,765 | |
Amortization expense for intangible assets | (8,174) | $ (27,166) | |
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | |||
2021 (remainder) | 2,588 | ||
2022 | 4,013 | ||
2023 | 3,441 | ||
2024 | 2,658 | ||
2025 | 2,341 | ||
2026 | 2,001 | ||
Thereafter | 154 | ||
Net excluding IPRD | 17,196 | ||
Existing technology | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 40,232 | 46,547 | |
Accumulated Amortization | (34,233) | (37,630) | |
Net including IPRD | 5,999 | 8,917 | |
Customer relationships | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 22,498 | 24,388 | |
Accumulated Amortization | (12,339) | (12,923) | |
Net including IPRD | 10,159 | 11,465 | |
Production know-how | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 2,300 | 2,300 | |
Accumulated Amortization | (1,262) | (917) | |
Net including IPRD | 1,038 | $ 1,383 | |
Foreign exchange | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Amortization expense for intangible assets | 300 | $ (1,800) | |
Research and Development Asset, Transaction [Domain] | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 300 | ||
Net including IPRD | $ 300 |
Balance Sheet Details (Details)
Balance Sheet Details (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Jul. 03, 2021 | Jul. 04, 2020 | Oct. 03, 2020 | |
Inventory, Net [Abstract] | |||
Purchased parts and assemblies | $ 111,907 | $ 116,957 | |
Work-in-process | 173,029 | 173,871 | |
Finished goods | 115,611 | 135,928 | |
Total inventories | 400,547 | 426,756 | |
Prepaid Expense and Other Assets, Current [Abstract] | |||
Prepaid and refundable income taxes | 38,552 | 50,548 | |
Other taxes receivable | 13,180 | 13,006 | |
Prepaid expenses and other assets | 36,012 | 24,696 | |
Total prepaid expenses and other assets | 87,744 | 88,250 | |
Other Assets, Noncurrent Disclosure [Abstract] | |||
Assets related to deferred compensation arrangements | 35,050 | 39,720 | |
Deferred tax assets | 146,316 | 102,028 | |
Right of use assets, net - operating leases (See Note 11) | 75,929 | 85,905 | |
Right of use assets, net - finance leases (See Note 11) | 101 | 656 | |
Other assets | 15,299 | 14,266 | |
Total other assets | 272,695 | 242,575 | |
Other Liabilities, Current [Abstract] | |||
Accrued payroll and benefits | 95,265 | 54,211 | |
Operating lease liability, current (See Note 11) | 15,721 | 15,366 | |
Finance lease liability, current (See Note 11) | 94 | 399 | |
Deferred revenue | 29,586 | 32,998 | |
Warranty reserve | 31,968 | 35,032 | |
Accrued expenses and other | 39,671 | 36,432 | |
Customer deposits | 19,617 | 9,717 | |
Total other current liabilities | 231,922 | 184,155 | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | |||
Beginning balance | 35,032 | $ 36,460 | |
Additions related to current period sales | 23,473 | 28,669 | |
Warranty costs incurred in the current period | (27,059) | (30,773) | |
Accruals resulting from acquisitions | 170 | 0 | |
Adjustments to accruals related to foreign exchange and other | 352 | 615 | |
Ending balance | 31,968 | $ 34,971 | |
Other Liabilities, Noncurrent [Abstract] | |||
Long-term taxes payable | 18,779 | 15,374 | |
Operating lease liability, long-term (See Note 11) | 65,195 | 75,264 | |
Finance lease liability, long-term (See Note 11) | 0 | 178 | |
Deferred compensation | 37,398 | 42,854 | |
Defined benefit plan liabilities | 46,619 | 45,810 | |
Deferred tax liabilities | 20,644 | 15,721 | |
Deferred revenue | 14,806 | 13,624 | |
Asset retirement obligations liability | 6,162 | 5,892 | |
Other long-term liabilities | 4,592 | 6,357 | |
Total other long-term liabilities | $ 214,195 | $ 221,074 |
Borrowings (Details)
Borrowings (Details) € in Millions | Dec. 21, 2020EUR (€) | May 08, 2018 | Mar. 31, 2018USD ($) | Sep. 29, 2018USD ($) | Jul. 03, 2021EUR (€) | Jul. 03, 2021USD ($) | Nov. 07, 2016EUR (€) | Nov. 07, 2016USD ($) |
Debt [Line Items] | ||||||||
Additional sources of cash available | $ 15,100,000 | |||||||
Debt instrument, unused borrowing capacity, amount | 13,200,000 | |||||||
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 | ||||||
Loan Agreement December 21 2020 | Commerzbank | Foreign Line of Credit | ||||||||
Debt [Line Items] | ||||||||
Lines of credit, maximum borrowing capacity | € | € 24 | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.55% | |||||||
Amounts drawn upon line of credit | € | € 24 | |||||||
Debt Instrument, Term | 10 years | |||||||
Euro | ||||||||
Debt [Line Items] | ||||||||
Domestic line of credit drawn | € | € 10 | |||||||
Line of Credit, Foreign | Europe, other | ||||||||
Debt [Line Items] | ||||||||
Amounts drawn upon line of credit | 1,900,000 | |||||||
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 | |||||||
Short-term Debt [Line Items] | ||||||||
Debt Issuance costs for revolving credit facility | 28,500,000 | |||||||
Debt Issuance Costs, Gross | $ 500,000 | |||||||
Euro term loan | Minimum | Eurodollar | ||||||||
Debt [Line Items] | ||||||||
Debt instrument, interest rate, stepdown | 1.25% | |||||||
Euro term loan | Euro | ||||||||
Debt [Line Items] | ||||||||
Borrowed under forward contract purchased for the term loan | € | € 670 | |||||||
Forward contract purchased for the term loan | € | € 353.2 | |||||||
Additional euro currency rate | 0.010 | 0.010 | ||||||
Quarter principal payment requirement for euro term loan | 0.0025 | 0.0025 | ||||||
Euro term loan | Euro | 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 | |||||||
Additional base rate | 0.0050 | 0.0050 | ||||||
Debt Issuance costs for revolving credit facility | $ 2,300,000 | |||||||
debt issuance cost amortization period | 5 years | |||||||
Short-term Debt [Line Items] | ||||||||
Debt Issuance costs for revolving credit facility | $ 2,300,000 | |||||||
Revolving line of credit | Minimum | ||||||||
Debt [Line Items] | ||||||||
Base rate range after 1st year | 0.0225 | 0.0225 | ||||||
Applicable margin for base rate revolving loan | 0.0325 | 0.0325 | ||||||
Commitment fee accrues range on unused portion of revolving loan | 0.00375 | 0.00375 | ||||||
Revolving line of credit | Maximum | ||||||||
Debt [Line Items] | ||||||||
Commitment fee accrues range on unused portion of revolving loan | 0.005 | 0.005 |
Borrowings - Borrowings obligat
Borrowings - Borrowings obligation table (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Jul. 03, 2021 | Oct. 03, 2020 | Mar. 31, 2018 | |
Short-term Debt [Line Items] | |||
Total short-term borrowings and current portion of long-term obligations | $ 17,730 | $ 16,817 | |
Interest rate For 1.3% Term loan due 2024 | 1.30% | ||
Interest rate of state of Connecticut | 1.00% | ||
Euro term loan | |||
Short-term Debt [Line Items] | |||
Debt issuance cost for long term portion of the euro term loan | $ 3,800 | 5,900 | |
Debt Issuance Costs, Gross | $ 500 | ||
Euro term loan | |||
Short-term Debt [Line Items] | |||
Debt issuance cost for short term euro term loan | 2,900 | 2,900 | |
Short-term Debt | |||
Short-term Debt [Line Items] | |||
Euro Term Loan due 2024 | 5,055 | 4,970 | |
1.3% Term loan due 2024 | 1,479 | 1,465 | |
1.0% State of Connecticut term loan due 2023 | 385 | 382 | |
Line of credit borrowings | 10,000 | 10,000 | |
Total short-term borrowings and current portion of long-term obligations | 17,730 | 16,817 | |
Facility construction loan in Germany due 2030 | 811 | 0 | |
Long-term Debt | |||
Short-term Debt [Line Items] | |||
Euro Term Loan due 2024 | 406,009 | 406,099 | |
1.3% Term loan due 2024 | 3,327 | 4,395 | |
1.0% State of Connecticut term loan due 2023 | 357 | 646 | |
Long-term Debt | 437,269 | 411,140 | |
Facility construction loan in Germany due 2030 -LT | $ 27,576 | $ 0 |
Borrowings - Debt Maturity Tabl
Borrowings - Debt Maturity Table (Details) $ in Thousands | Jul. 03, 2021USD ($) |
Debt Disclosure [Abstract] | |
2021 (remainder) | $ 2,447 |
2022 | 11,409 |
2023 | 12,909 |
2024 | 404,627 |
Long-Term Debt, Maturity, Year Five | 3,244 |
Long-Term Debt, Maturity, after Year Five | 17,033 |
Total contractual obligation due amount | $ 451,669 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 04, 2020 | Jul. 03, 2021 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Finance lease arrangements | 3 years | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Finance lease arrangements | 9 years | |
Right-Of-Use Assets | Industrial Lasers & Systems | ||
Lessee, Lease, Description [Line Items] | ||
Non-cash pre-tax charges | $ 1.8 |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2021 | Jul. 04, 2020 | Jul. 03, 2021 | Jul. 04, 2020 | |
Leases [Abstract] | ||||
Operating lease cost | $ 5,165 | $ 4,907 | $ 15,941 | $ 14,875 |
Variable lease cost | 342 | 348 | 1,013 | 1,036 |
Short-term lease cost | 15 | 123 | 38 | 383 |
Sublease income | (2) | (32) | (7) | (96) |
Total lease cost | $ 5,520 | $ 5,346 | $ 16,985 | $ 16,198 |
Weighted average remaining lease term | 7 years 4 months 24 days | 8 years 1 month 6 days | 7 years 4 months 24 days | 8 years 1 month 6 days |
Weighted average discount rate | 5.00% | 4.90% | 5.00% | 4.90% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 03, 2021 | Jul. 04, 2020 | |
Leases [Abstract] | ||
Operating cash outflows from operating leases | $ 15,453 | $ 14,672 |
ROU assets obtained in exchange for new operating lease liabilities | $ 3,237 | $ 2,746 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities After Adoption of ASC 842 (Details) $ in Thousands | Jul. 03, 2021USD ($) |
Operating Leases | |
2021 (remainder) | $ 4,305 |
2022 | 18,650 |
2023 | 15,953 |
2024 | 12,480 |
2025 | 11,136 |
Thereafter | 37,289 |
Total minimum lease payments | 99,813 |
Amounts representing interest | (18,897) |
Present value of total lease liabilities | $ 80,916 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value of Stock Compensation (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2021 | Jul. 04, 2020 | Jul. 03, 2021 | Jul. 04, 2020 | |
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 | 6 months | 6 months |
Volatility | 54.00% | 63.70% | 50.50% | 53.00% |
Risk-free interest rate | 0.06% | 0.54% | 0.09% | 1.27% |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Weighted average fair value per share | $ 66.94 | $ 43.35 | $ 46.14 | $ 43.81 |
Performance restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Volatility | 51.70% | 50.40% | ||
Risk-free interest rate | 0.19% | 0.90% | ||
Weighted average fair value per share | $ 119.54 | $ 162.14 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2021 | Jul. 04, 2020 | Jul. 03, 2021 | Jul. 04, 2020 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated stock-based compensation expense | $ 8,963 | $ 12,834 | $ 27,322 | $ 27,662 |
Capitalized share-based compensation costs | 1,700 | 2,100 | 5,300 | 4,300 |
Amortization of capitalized share-based compensation expenses | 1,700 | 1,200 | 6,000 | 3,400 |
Total compensation cost, unvested stock-based awards granted but not yet recognized | 56,900 | $ 56,900 | ||
Total compensation cost, weighted-average period of amortization (in years) | 1 year 6 months | |||
Share-based Payment Arrangement, Accelerated Cost | 3,500 | |||
Period End | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Capitalized share-based compensation remaining | 2,100 | 2,400 | $ 2,100 | 2,400 |
Cost of sales | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated stock-based compensation expense | 1,720 | 1,237 | 5,981 | 3,430 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated stock-based compensation expense | 1,100 | 1,469 | 3,329 | 2,924 |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated stock-based compensation expense | 7,328 | 11,680 | 22,115 | 24,722 |
Income tax benefit | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Income tax benefit | $ (1,185) | $ (1,552) | $ (4,103) | $ (3,414) |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Options and Awards Activity (Details) shares in Thousands | 9 Months Ended |
Jul. 03, 2021$ / 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 | 419 |
Granted (in shares) | shares | 294 |
Vested (in shares) | shares | (224) |
Forfeited (in shares) | shares | (9) |
Nonvested stock, end of period (in shares) | shares | 480 |
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 | $ 144.87 |
Granted (in dollars per share) | $ / shares | 136.46 |
Vested (in dollars per share) | $ / shares | 144.89 |
Forfeited (in dollars per share) | $ / shares | 136.46 |
Nonvested stock, end of period (in dollars per share) | $ / shares | $ 139.86 |
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 | 136 |
Granted (in shares) | shares | 64 |
Vested (in shares) | shares | (12) |
Forfeited (in shares) | shares | (30) |
Nonvested stock, end of period (in shares) | shares | 158 |
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 | $ 177.54 |
Granted (in dollars per share) | $ / shares | 119.43 |
Vested (in dollars per share) | $ / shares | 118.45 |
Forfeited (in dollars per share) | $ / shares | 315.05 |
Nonvested stock, end of period (in dollars per share) | $ / shares | $ 131.90 |
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% |
Performance Shares | Minimum | |
Restricted Stock Units and Awards [Abstract] | |
Percentage of performance-based awards earned by recipient | 0.00% |
Performance Shares | Maximum | |
Restricted Stock Units and Awards [Abstract] | |
Percentage of performance-based awards earned by recipient | 100.00% |
Commitments and Contingencies E
Commitments and Contingencies Export compliance matter (Details) € in Millions, $ in Millions | 3 Months Ended | 9 Months Ended |
Apr. 03, 2021USD ($) | Jul. 03, 2021EUR (€) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Export compliance related transactions | € | € 1.5 | |
Discretionary Payment To Financial Advisors | $ | $ 3 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Jul. 03, 2021 | Apr. 03, 2021 | Jan. 02, 2021 | Jul. 04, 2020 | Apr. 04, 2020 | Dec. 28, 2019 | Jul. 03, 2021 | Jul. 04, 2020 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||||||||
Weighted average shares outstanding—basic (in shares) | 24,435,000 | 24,159,000 | 24,362,000 | 24,075,000 | ||||
Dilutive effect of employee stock awards (in shares) | 407,000 | 0 | 0 | 0 | ||||
Weighted average shares outstanding—diluted (in shares) | 24,842,000 | 24,159,000 | 24,362,000 | 24,075,000 | ||||
Net income (loss) | $ 30,262 | $ (158,215) | $ 144 | $ (8,708) | $ (418,913) | $ 5,793 | $ (127,809) | $ (421,828) |
Dilutive securities excluded from calculation of dilutive shares | 406,568 |
Other Income (Expense) (Details
Other Income (Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2021 | Jul. 04, 2020 | Jul. 03, 2021 | Jul. 04, 2020 | |
Component of Other Income (Expense), Nonoperating [Line Items] | ||||
Other—net | $ 1,185 | $ (505) | $ 5,088 | $ (1,322) |
Foreign exchange loss | ||||
Component of Other Income (Expense), Nonoperating [Line Items] | ||||
Foreign exchange loss | (1,323) | (1,623) | (2,955) | (3,316) |
Gain on deferred compensation investments, net | ||||
Component of Other Income (Expense), Nonoperating [Line Items] | ||||
Gain on deferred compensation investments, net | 2,672 | 619 | 7,538 | 1,426 |
Other | ||||
Component of Other Income (Expense), Nonoperating [Line Items] | ||||
Other | $ (164) | $ 499 | $ 505 | $ 568 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | Mar. 25, 2021 | Jul. 03, 2021 | Jul. 04, 2020 | Jul. 03, 2021 | Jul. 04, 2020 |
Business Acquisition [Line Items] | |||||
Effective income tax rate (percent) | 22.10% | 59.60% | 12.00% | 6.90% | |
Lumentum Holdings Inc. | |||||
Business Acquisition [Line Items] | |||||
Merger and acquisition costs | $ 217,600,000 |
Defined Benefit Plans (Details)
Defined Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2021 | Jul. 04, 2020 | Jul. 03, 2021 | Jul. 04, 2020 | |
Postemployment Benefits [Abstract] | ||||
Net periodic pension (benefit) cost | $ 0.8 | $ 0.6 | $ 1.8 | $ 1.4 |
Segment and Geographic Inform_3
Segment and Geographic Information - Sales and Income (Loss) from Operations (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2021USD ($) | Jul. 04, 2020USD ($) | Jul. 03, 2021USD ($)segments | Jul. 04, 2020USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reporting segments | segments | 2 | |||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 395,759 | $ 298,330 | $ 1,095,794 | $ 912,248 |
Total income (loss) from operations | 42,104 | (1,174) | (137,182) | (439,895) |
Total other expense, net | (3,277) | (4,282) | (8,092) | (12,979) |
Income (loss) before income taxes | 38,827 | (5,456) | (145,274) | (452,874) |
OEM Laser Sources | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 235,774 | 184,694 | 670,184 | 559,364 |
Income (loss) from operations: | 54,310 | 42,853 | 155,353 | 126,030 |
Industrial Lasers & Systems | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 159,985 | 113,636 | 425,610 | 352,884 |
Income (loss) from operations: | 13,239 | (20,571) | 7,930 | (512,716) |
Corporate and other | ||||
Segment Reporting Information [Line Items] | ||||
Income (loss) from operations: | $ (25,445) | $ (23,456) | $ (300,465) | $ (53,209) |
Segment and Geographic Inform_4
Segment and Geographic Information - Schedule of sales by geographic regions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2021 | Jul. 04, 2020 | Jul. 03, 2021 | Jul. 04, 2020 | |
Geographic information [Line Items] | ||||
Net sales | $ 395,759 | $ 298,330 | $ 1,095,794 | $ 912,248 |
United States | ||||
Geographic information [Line Items] | ||||
Net sales | 88,370 | 65,094 | 242,638 | 215,236 |
Total foreign countries sales | ||||
Geographic information [Line Items] | ||||
Net sales | 307,389 | 233,236 | 853,156 | 697,012 |
South Korea | ||||
Geographic information [Line Items] | ||||
Net sales | 67,883 | 63,428 | 202,274 | 180,412 |
China | ||||
Geographic information [Line Items] | ||||
Net sales | 76,005 | 52,837 | 205,649 | 148,407 |
Japan | ||||
Geographic information [Line Items] | ||||
Net sales | 28,900 | 22,272 | 92,394 | 70,990 |
Asia-Pacific, other | ||||
Geographic information [Line Items] | ||||
Net sales | 38,589 | 24,090 | 97,320 | 67,889 |
Germany | ||||
Geographic information [Line Items] | ||||
Net sales | 38,815 | 28,650 | 104,385 | 90,485 |
Europe, other | ||||
Geographic information [Line Items] | ||||
Net sales | 36,624 | 27,917 | 99,692 | 95,130 |
Rest of World | ||||
Geographic information [Line Items] | ||||
Net sales | $ 20,573 | $ 14,042 | $ 51,442 | $ 43,699 |
Segment and Geographic Inform_5
Segment and Geographic Information - Major Customers (Details) - Customer Concentration Risk | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jul. 03, 2021 | Jul. 04, 2020 | Jul. 03, 2021 | Jul. 04, 2020 | Oct. 03, 2020 | |
Sales | Customer 1 | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 13.90% | 17.10% | 15.50% | 16.70% | |
Accounts receivable | Customer 3 | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 20.30% | 24.20% |
Restructuring Charges (Details)
Restructuring Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Jul. 03, 2021 | Apr. 03, 2021 | Jan. 02, 2021 | Jul. 04, 2020 | Apr. 04, 2020 | Dec. 28, 2019 | Jul. 03, 2021 | Jul. 04, 2020 | |
Restructuring Reserve [Roll Forward] | ||||||||
Starting balance | $ 4,324 | $ 3,879 | $ 2,841 | $ 4,257 | $ 7,895 | $ 8,494 | $ 2,841 | $ 8,494 |
Provision | 160 | 3,658 | 5,383 | 518 | 1,079 | 933 | ||
Payments and other | (1,356) | (3,213) | (4,345) | (3,721) | (4,717) | (1,532) | ||
Ending balance | 3,128 | 4,324 | 3,879 | 1,054 | 4,257 | 7,895 | 3,128 | 1,054 |
Restructuring cost incurred | 100 | |||||||
Restructuring charges relating to accelerated depreciation and consulting | 100 | 500 | 600 | |||||
Santa Clara facility combine project related restructuring charge | 100 | 400 | 600 | 200 | ||||
Industrial Lasers & Systems | ||||||||
Restructuring Reserve [Roll Forward] | ||||||||
Restructuring cost incurred | 200 | 100 | 9,100 | 1,300 | ||||
OEM Laser Sources | ||||||||
Restructuring Reserve [Roll Forward] | ||||||||
Restructuring cost incurred | 0 | 400 | 100 | 1,200 | ||||
Severance Related | ||||||||
Restructuring Reserve [Roll Forward] | ||||||||
Starting balance | 3,618 | 2,875 | 2,611 | 4,045 | 7,675 | 8,279 | 2,611 | 8,279 |
Provision | (244) | 2,775 | 819 | (77) | 85 | 54 | ||
Payments and other | (756) | (2,032) | (555) | (3,136) | (3,715) | (658) | ||
Ending balance | 2,618 | 3,618 | 2,875 | 832 | 4,045 | 7,675 | 2,618 | 832 |
Severance Related | Other current liabilities | ||||||||
Restructuring Reserve [Roll Forward] | ||||||||
Ending balance | 3,100 | 3,100 | ||||||
Asset Write-Offs | ||||||||
Restructuring Reserve [Roll Forward] | ||||||||
Starting balance | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Provision | 318 | 558 | 3,509 | 554 | 915 | 599 | ||
Payments and other | (318) | (558) | (3,509) | (554) | (915) | (599) | ||
Ending balance | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Other | ||||||||
Restructuring Reserve [Roll Forward] | ||||||||
Starting balance | 706 | 1,004 | 230 | 212 | 220 | 215 | 230 | 215 |
Provision | 86 | 325 | 1,055 | 41 | 79 | 280 | ||
Payments and other | (282) | (623) | (281) | (31) | (87) | (275) | ||
Ending balance | 510 | 706 | 1,004 | $ 222 | $ 212 | $ 220 | $ 510 | $ 222 |
Write-offs of Excess Inventory and Accruals for Vendor Commitments | ||||||||
Restructuring Reserve [Roll Forward] | ||||||||
Restructuring cost incurred | $ 200 | $ 3,600 | $ 5,400 |