Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 29, 2017 | Oct. 19, 2017 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 29, 2017 | |
Amendment Flag | false | |
Entity Registrant Name | Graco Inc. | |
Entity Central Index Key | 42,888 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-29 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 56,130,000 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | GGG |
Consolidated Statements of Earn
Consolidated Statements of Earnings (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2017 | Sep. 23, 2016 | Sep. 29, 2017 | Sep. 23, 2016 | |
Income Statement [Abstract] | ||||
Net Sales | $ 379,812 | $ 327,192 | $ 1,099,885 | $ 980,230 |
Cost of products sold | 176,347 | 150,594 | 507,206 | 456,695 |
Gross Profit | 203,465 | 176,598 | 592,679 | 523,535 |
Product development | 14,815 | 14,671 | 44,215 | 44,964 |
Selling, marketing and distribution | 57,941 | 49,269 | 168,912 | 158,106 |
General and administrative | 31,072 | 31,194 | 95,325 | 99,710 |
Operating Earnings | 99,637 | 81,464 | 284,227 | 220,755 |
Interest expense | 3,901 | 4,432 | 12,110 | 13,468 |
Other expense (income), net | (656) | 416 | (1,454) | (338) |
Earnings Before Income Taxes | 96,392 | 76,616 | 273,571 | 207,625 |
Income taxes | 20,932 | 22,228 | 57,551 | 62,738 |
Net Earnings | $ 75,460 | $ 54,388 | $ 216,020 | $ 144,887 |
Basic earnings per share | $ 1.35 | $ 0.98 | $ 3.87 | $ 2.61 |
Diluted earnings per share | 1.30 | 0.95 | 3.73 | 2.55 |
Cash dividends declared (in dollars per share) | $ 0.36 | $ 0.33 | $ 1.08 | $ 0.99 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2017 | Sep. 23, 2016 | Sep. 29, 2017 | Sep. 23, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Earnings | $ 75,460 | $ 54,388 | $ 216,020 | $ 144,887 |
Components of other comprehensive income (loss) | ||||
Cumulative translation adjustment | 574 | (6,642) | 17,921 | (16,679) |
Pension and postretirement medical liability adjustment | 2,250 | 1,707 | 6,034 | 4,957 |
Income taxes - pension and postretirement medical liability adjustment | (797) | (619) | (2,280) | (1,823) |
Other comprehensive income (loss) | 2,027 | (5,554) | 21,675 | (13,545) |
Comprehensive Income | $ 77,487 | $ 48,834 | $ 237,695 | $ 131,342 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 29, 2017 | Dec. 30, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 140,000 | $ 52,365 |
Accounts receivable, less allowances of $14,100 and $12,700 | 258,632 | 218,365 |
Inventories | 222,878 | 201,609 |
Other current assets | 20,889 | 31,023 |
Total current assets | 642,399 | 503,362 |
Property, Plant and Equipment | ||
Cost | 518,486 | 489,642 |
Accumulated depreciation | (319,058) | (300,046) |
Property, Plant and Equipment, net | 199,428 | 189,596 |
Goodwill | 272,858 | 259,849 |
Other Intangible Assets, net | 181,108 | 178,336 |
Deferred Income Taxes | 81,756 | 86,653 |
Other Assets | 26,674 | 25,313 |
Total Assets | 1,404,223 | 1,243,109 |
Current Liabilities | ||
Notes payable to banks | 6,215 | 8,913 |
Current portion of long term debt | 75,000 | 0 |
Trade accounts payable | 46,603 | 39,988 |
Salaries and incentives | 49,574 | 37,109 |
Dividends payable | 20,196 | 20,088 |
Other current liabilities | 90,683 | 71,887 |
Total current liabilities | 288,271 | 177,985 |
Long-term Debt | 225,000 | 305,685 |
Retirement Benefits and Deferred Compensation | 145,224 | 159,250 |
Deferred Income Taxes | 17,433 | 17,672 |
Other Non-current Liabilities | 8,306 | 8,697 |
Shareholders’ Equity | ||
Common stock | 56,115 | 55,834 |
Additional paid-in-capital | 504,072 | 453,394 |
Retained earnings | 280,355 | 206,820 |
Accumulated other comprehensive income (loss) | (120,553) | (142,228) |
Total shareholders’ equity | 719,989 | 573,820 |
Total Liabilities and Shareholders’ Equity | $ 1,404,223 | $ 1,243,109 |
Consolidated Balance Sheets (U5
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 29, 2017 | Dec. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Receivables allowances | $ 14,100 | $ 12,700 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 29, 2017 | Sep. 23, 2016 | |
Statement of Cash Flows [Abstract] | ||
Net Earnings | $ 216,020 | $ 144,887 |
Adjustments to reconcile net earnings to net cash provided by operating activities | ||
Depreciation and amortization | 33,620 | 36,846 |
Deferred income taxes | 58 | (8,470) |
Share-based compensation | 19,154 | 16,143 |
Change in | ||
Accounts receivable | (31,614) | 6,100 |
Inventories | (16,788) | 1,628 |
Trade accounts payable | 4,319 | 1,057 |
Salaries and incentives | 7,214 | (6,914) |
Retirement benefits and deferred compensation | (8,595) | 7,431 |
Other accrued liabilities | 25,402 | 9,379 |
Other | (2,642) | (367) |
Net cash provided by operating activities | 246,148 | 207,720 |
Cash Flows From Investing Activities | ||
Property, plant and equipment additions | (28,899) | (34,347) |
Acquisition of businesses, net of cash acquired | (12,905) | (48,643) |
Change in restricted assets | 1,349 | 150 |
Other | (124) | (130) |
Net cash provided by (used in) investing activities | (40,579) | (82,970) |
Cash Flows From Financing Activities | ||
Borrowings (payments) on short-term lines of credit, net | (3,361) | (7,349) |
Borrowings on long-term line of credit | 293,880 | 532,724 |
Payments on long-term line of credit | (299,565) | (569,639) |
Common stock issued | 53,422 | 28,729 |
Common stock repurchased | (90,160) | (48,050) |
Taxes paid related to net share settlement of equity awards | (10,735) | (3,165) |
Cash dividends paid | (60,273) | (55,058) |
Net cash provided by (used in) financing activities | (116,792) | (121,808) |
Effect of exchange rate changes on cash | (1,142) | (1,915) |
Net increase (decrease) in cash and cash equivalents | 87,635 | 1,027 |
Cash and Cash Equivalents | ||
Beginning of year | 52,365 | 52,295 |
End of period | $ 140,000 | $ 53,322 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 29, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated balance sheet of Graco Inc. and Subsidiaries (the “Company”) as of September 29, 2017 and the related statements of earnings and comprehensive income for the three and nine months ended September 29, 2017 and September 23, 2016 , and cash flows for the nine months ended September 29, 2017 and September 23, 2016 have been prepared by the Company and have not been audited. In the opinion of management, these consolidated financial statements reflect all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position of the Company as of September 29, 2017 , and the results of operations and cash flows for all periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Therefore, these statements should be read in conjunction with the financial statements and notes thereto included in the Company’s 2016 Annual Report on Form 10-K. The results of operations for interim periods are not necessarily indicative of results that will be realized for the full fiscal year. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 29, 2017 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 29, September 23, September 29, September 23, Net earnings available to common shareholders $ 75,460 $ 54,388 $ 216,020 $ 144,887 Weighted average shares outstanding for basic earnings per share 56,023 55,684 55,864 55,571 Dilutive effect of stock options computed using the treasury stock method and the average market price 2,181 1,285 2,084 1,335 Weighted average shares outstanding for diluted earnings per share 58,204 56,969 57,948 56,906 Basic earnings per share $ 1.35 $ 0.98 $ 3.87 $ 2.61 Diluted earnings per share $ 1.30 $ 0.95 $ 3.73 $ 2.55 Stock options to purchase 6,000 and 1,034,000 shares were not included in the September 29, 2017 and September 23, 2016 computations of diluted earnings per share, respectively, because they would have been anti-dilutive. |
Share-Based Awards
Share-Based Awards | 9 Months Ended |
Sep. 29, 2017 | |
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |
Share-Based Awards | Share-Based Awards Options on common shares granted and outstanding, as well as the weighted average exercise price, are shown below (in thousands, except exercise prices): Option Shares Weighted Average Exercise Price Options Exercisable Weighted Average Exercise Price Outstanding, December 30, 2016 5,535 $ 55.26 3,672 $ 45.40 Granted 575 92.13 Exercised (1,138 ) 40.97 Canceled (38 ) 80.31 Outstanding, September 29, 2017 4,934 $ 62.66 3,071 $ 51.40 The Company recognized year-to-date share-based compensation of $19.2 million in 2017 and $16.1 million in 2016 . As of September 29, 2017 , there was $12.5 million of unrecognized compensation cost related to unvested options, expected to be recognized over a weighted average period of 2.3 years. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions and results: Nine Months Ended September 29, September 23, Expected life in years 7.0 7.0 Interest rate 2.2 % 1.4 % Volatility 26.7 % 30.1 % Dividend yield 1.6 % 1.8 % Weighted average fair value per share $ 24.23 $ 19.00 Under the Company’s Employee Stock Purchase Plan, the Company issued 167,000 shares in 2017 and 170,000 shares in 2016 . The fair value of the employees’ purchase rights under this Plan was estimated on the date of grant. The benefit of the 15 percent discount from the lesser of the fair market value per common share on the first day and the last day of the plan year was added to the fair value of the employees’ purchase rights determined using the Black-Scholes option-pricing model with the following assumptions and results: Nine Months Ended September 29, September 23, Expected life in years 1.0 1.0 Interest rate 0.9 % 0.7 % Volatility 22.3 % 24.6 % Dividend yield 1.5 % 1.7 % Weighted average fair value per share $ 21.97 $ 19.14 |
Retirement Benefits
Retirement Benefits | 9 Months Ended |
Sep. 29, 2017 | |
Defined Benefit Plan [Abstract] | |
Retirement Benefits | Retirement Benefits The components of net periodic benefit cost for retirement benefit plans were as follows (in thousands): Three Months Ended Nine Months Ended September 29, September 23, September 29, September 23, Pension Benefits Service cost $ 1,917 $ 1,968 $ 5,732 $ 5,880 Interest cost 3,874 3,902 11,477 11,765 Expected return on assets (4,236 ) (4,504 ) (12,700 ) (13,509 ) Amortization and other 2,408 2,491 6,932 7,410 Net periodic benefit cost $ 3,963 $ 3,857 $ 11,441 $ 11,546 Postretirement Medical Service cost $ 150 $ 136 $ 451 $ 407 Interest cost 274 271 820 813 Amortization (2 ) (120 ) (7 ) (360 ) Net periodic benefit cost $ 422 $ 287 $ 1,264 $ 860 The Company made a $20 million tax-deductible contribution to its funded U.S. defined benefit plan in the third quarter of 2017. Also in the third quarter, the Company approved an amendment to restructure the plan effective October 30, 2017. Under the restructuring, the plan will purchase insurance contracts to settle a portion of its benefit obligations. The Company expects that net periodic benefit cost for the fourth quarter will include a settlement loss related to the restructuring , estimated to be in the range of $11 million to $13 million . The actual amount of the settlement loss will depend on the value of plan assets, the amount transferred to the insurance company and the discount rate as of the measurement date. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 29, 2017 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Changes in components of accumulated other comprehensive income (loss), net of tax were (in thousands): Pension and Postretirement Medical Cumulative Translation Adjustment Total Balance, June 24, 2016 $ (67,876 ) $ (44,612 ) $ (112,488 ) Other comprehensive income (loss) before reclassifications — (6,642 ) (6,642 ) Amounts reclassified from accumulated other comprehensive income 1,088 — 1,088 Balance, September 23, 2016 $ (66,788 ) $ (51,254 ) $ (118,042 ) Balance, June 30, 2017 $ (74,125 ) $ (48,455 ) $ (122,580 ) Other comprehensive income (loss) before reclassifications — 574 574 Amounts reclassified from accumulated other comprehensive income 1,453 — 1,453 Balance, September 29, 2017 $ (72,672 ) $ (47,881 ) $ (120,553 ) Balance, December 25, 2015 $ (69,922 ) $ (34,575 ) $ (104,497 ) Other comprehensive income (loss) before reclassifications — (16,679 ) (16,679 ) Amounts reclassified from accumulated other comprehensive income 3,134 — 3,134 Balance, September 23, 2016 $ (66,788 ) $ (51,254 ) $ (118,042 ) Balance, December 30, 2016 $ (76,426 ) $ (65,802 ) $ (142,228 ) Other comprehensive income (loss) before reclassifications — 17,921 17,921 Amounts reclassified from accumulated other comprehensive income 3,754 — 3,754 Balance, September 29, 2017 $ (72,672 ) $ (47,881 ) $ (120,553 ) Amounts related to pension and postretirement medical adjustments are reclassified to pension cost, which is allocated to cost of products sold and operating expenses based on salaries and wages, approximately as follows (in thousands): Three Months Ended Nine Months Ended September 29, September 23, September 29, September 23, Cost of products sold $ 765 $ 611 $ 2,093 $ 1,776 Product development 331 241 887 706 Selling, marketing and distribution 703 578 1,865 1,633 General and administrative 451 277 1,189 842 Total before tax $ 2,250 $ 1,707 $ 6,034 $ 4,957 Income tax (benefit) (797 ) (619 ) (2,280 ) (1,823 ) Total after tax $ 1,453 $ 1,088 $ 3,754 $ 3,134 On February 21, 2017, the Company entered into an accelerated share repurchase arrangement (“ASR”) with a financial institution. In exchange for an up-front payment of $90 million , the financial institution delivered 850,000 shares of Company common stock with a fair value of $78 million . The total number of shares ultimately delivered under the ASR was determined at the end of the purchase period based on the volume weighted-average price (“VWAP”) of the Company’s common stock during that period. The purchase period ended in the third quarter and the Company received an additional 31,499 shares to complete the ASR at an average realized price of $102.10 per share. The Company accounted for the up-front payment as a reduction of shareholders’ equity in the period made. Shares received under the ASR were retired and reflected as a reduction of outstanding shares on the date delivered for purposes of calculating earnings per share. The forward contract aspect of the ASR met all of the applicable criteria for equity classification, and therefore was accounted for as a derivative indexed to the Company's equity. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 29, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company has three reportable segments, Industrial, Process and Contractor. Sales and operating earnings by segment were as follows (in thousands): Three Months Ended Nine Months Ended September 29, September 23, September 29, September 23, Net Sales Industrial $ 178,461 $ 150,893 $ 509,719 $ 454,978 Process 73,656 67,077 217,084 196,068 Contractor 127,695 109,222 373,082 329,184 Total $ 379,812 $ 327,192 $ 1,099,885 $ 980,230 Operating Earnings Industrial $ 61,790 $ 50,573 $ 177,121 $ 147,419 Process 12,088 10,394 38,969 25,305 Contractor 33,471 25,593 93,249 71,700 Unallocated corporate (expense) (7,712 ) (5,096 ) (25,112 ) (23,669 ) Total $ 99,637 $ 81,464 $ 284,227 $ 220,755 Assets by segment were as follows (in thousands): September 29, December 30, Industrial $ 575,024 $ 546,366 Process 335,769 318,444 Contractor 254,342 208,016 Unallocated corporate 239,088 170,283 Total $ 1,404,223 $ 1,243,109 Geographic information follows (in thousands): Three Months Ended Nine Months Ended September 29, September 23, September 29, September 23, Net Sales (based on customer location) United States $ 190,178 $ 171,988 $ 559,651 $ 511,273 Other countries 189,634 155,204 540,234 468,957 Total $ 379,812 $ 327,192 $ 1,099,885 $ 980,230 September 29, December 30, Long-lived Assets United States $ 161,034 $ 151,911 Other countries 38,394 37,685 Total $ 199,428 $ 189,596 |
Inventories
Inventories | 9 Months Ended |
Sep. 29, 2017 | |
Inventory, Net [Abstract] | |
Inventories | Inventories Major components of inventories were as follows (in thousands): September 29, December 30, Finished products and components $ 111,481 $ 113,643 Products and components in various stages of completion 59,961 50,557 Raw materials and purchased components 98,720 84,631 Subtotal 270,162 248,831 Reduction to LIFO cost (47,284 ) (47,222 ) Total $ 222,878 $ 201,609 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 29, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Components of other intangible assets were (dollars in thousands): Finite Life Indefinite Life Customer Patents and Trademarks, Trade Total As of September 29, 2017 Cost $ 176,065 $ 18,322 $ 1,070 $ 57,853 $ 253,310 Accumulated amortization (51,312 ) (7,448 ) (472 ) — (59,232 ) Foreign currency translation (9,029 ) (703 ) (57 ) (3,181 ) (12,970 ) Book value $ 115,724 $ 10,171 $ 541 $ 54,672 $ 181,108 Weighted average life in years 13 10 4 N/A As of December 30, 2016 Cost $ 170,284 $ 17,321 $ 895 $ 57,853 $ 246,353 Accumulated amortization (41,599 ) (6,088 ) (337 ) — (48,024 ) Foreign currency translation (13,630 ) (1,055 ) (59 ) (5,249 ) (19,993 ) Book value $ 115,055 $ 10,178 $ 499 $ 52,604 $ 178,336 Weighted average life in years 13 10 4 N/A Amortization of intangibles for the quarter was $3.8 million in 2017 and $4.6 million in 2016 and for the year to date was $11.0 million in 2017 and $14.3 million in 2016 . Estimated annual amortization expense based on the current carrying amount of other intangible assets is as follows (in thousands): 2017 2018 2019 2020 2021 Thereafter Estimated Amortization Expense $ 14,834 $ 14,959 $ 14,630 $ 14,448 $ 14,279 $ 64,311 Changes in the carrying amount of goodwill for each reportable segment were (in thousands): Industrial Process Contractor Total Balance, December 30, 2016 $ 150,556 $ 96,561 $ 12,732 $ 259,849 Additions (adjustments) from business acquisitions 7,152 (63 ) — 7,089 Foreign currency translation 4,480 1,440 — 5,920 Balance, September 29, 2017 $ 162,188 $ 97,938 $ 12,732 $ 272,858 |
Other Current Liabilities
Other Current Liabilities | 9 Months Ended |
Sep. 29, 2017 | |
Accrued Liabilities, Current [Abstract] | |
Other Current Liabilities | Other Current Liabilities Components of other current liabilities were (in thousands): September 29, December 30, Accrued self-insurance retentions $ 7,164 $ 7,105 Accrued warranty and service liabilities 9,876 8,934 Accrued trade promotions 8,126 6,007 Payable for employee stock purchases 7,188 9,328 Customer advances and deferred revenue 21,097 9,400 Income taxes payable 9,778 8,608 Other 27,454 22,505 Total $ 90,683 $ 71,887 The Company manages certain self-insured loss exposures through a wholly-owned captive insurance subsidiary. Cash balances of $7.9 million as of September 29, 2017 and $9.2 million as of December 30, 2016 were restricted to funding of the captive's loss reserves and are included within other current assets on the Company's Consolidated Balance Sheets. A liability is established for estimated future warranty and service claims that relate to current and prior period sales. The Company estimates warranty costs based on historical claim experience and other factors including evaluating specific product warranty issues. Following is a summary of activity in accrued warranty and service liabilities (in thousands): Balance, December 30, 2016 $ 8,934 Charged to expense 5,708 Margin on parts sales reversed 1,977 Reductions for claims settled (6,743 ) Balance, September 29, 2017 $ 9,876 |
Fair Value
Fair Value | 9 Months Ended |
Sep. 29, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Assets and liabilities measured at fair value on a recurring basis and fair value measurement level were as follows (in thousands): Level September 29, December 30, Assets Cash surrender value of life insurance 2 $ 15,480 $ 13,785 Forward exchange contracts 2 513 571 Total assets at fair value $ 15,993 $ 14,356 Liabilities Contingent consideration 3 $ 4,081 $ 4,081 Deferred compensation 2 3,640 3,265 Forward exchange contracts 2 — — Total liabilities at fair value $ 7,721 $ 7,346 Contracts insuring the lives of certain employees who are eligible to participate in certain non-qualified pension and deferred compensation plans are held in trust. Cash surrender value of the contracts is based on performance measurement funds that shadow the deferral investment allocations made by participants in certain deferred compensation plans. The deferred compensation liability balances are valued based on amounts allocated by participants to the underlying performance measurement funds. Contingent consideration liability represents the estimated value (using a probability-weighted expected return approach) of future payments to be made to previous owners of an acquired business based on future revenues. Long-term notes payable with fixed interest rates have a carrying amount of $300 million (including $75 million classified as current) and an estimated fair value of $325 million as of September 29, 2017 and $325 million as of December 30, 2016 . The fair value of variable rate borrowings approximates carrying value. The Company uses significant other observable inputs to estimate fair value (level 2 of the fair value hierarchy) based on the present value of future cash flows and rates that would be available for issuance of debt with similar terms and remaining maturities. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 29, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | A new accounting standard that changed certain aspects of accounting for share-based payments became effective for the Company in the first quarter of 2017. Excess tax benefits on exercised stock options that were previously credited to equity now reduce the current income tax provision. For the quarter, the change in accounting for excess tax benefits decreased the current income tax provision and increased net earnings by $3.2 million , reduced the effective income tax rate by 3 percentage points , and increased diluted earnings per share by $0.06 . For the year to date, the change in accounting for excess tax benefits decreased the current income tax provision and increased net earnings by $20.5 million , reduced the effective income tax rate by 7 percentage points , and increased diluted earnings per share by $0.36 . Under the new standard, excess tax benefits are no longer reclassified out of cash flows from operating activities to financing activities in the Consolidated Statements of Cash Flows. We elected to apply the cash flow presentation requirements retrospectively to all periods presented, which resulted in a year-to-date increase in previously reported net cash provided by operating activities and a decrease in net cash provided by financing activities of $5.5 million for the nine months ended September 23, 2016. Also under the new standard, the Company elected to account for share-based grant forfeitures as they occur. The impact of the change in accounting for forfeitures was no t significant, and was reflected in share-based compensation cost in the first quarter. |
New Accounting Pronouncements Not yet Adopted | In May 2014, the Financial Accounting Standards Board (FASB) issued a final standard on revenue from contracts with customers. The new standard sets forth a single comprehensive model for recognizing and reporting revenue. The new standard will become effective for the Company beginning with the first quarter of 2018, and the Company plans to adopt the accounting standard using the modified retrospective transition approach. The modified retrospective transition approach will recognize any changes from the beginning of the year of initial application through retained earnings with no restatement of comparative periods. We have established an implementation team and engaged a third-party consultant to assist with our assessment of the impact of the new revenue guidance on our operations, consolidated financial statements and related disclosures. To date, this assessment has included (1) utilizing questionnaires to assist with the identification of our revenue streams, (2) performing contract analyses for each revenue stream identified, (3) assessing the noted differences in recognition and measurement that may result from adopting this new standard, (4) performing detailed analyses of contracts with large customers, and (5) performing transaction level testing (based on our designed test plans) for consistency with contract provisions that affect revenue recognition. Based on the preliminary results of the evaluation, which is still in process, nothing has come to our attention that would indicate that adoption of the new standard will have a material impact on our consolidated financial statements. However, given our acquisition strategy, there may be additional revenue streams acquired prior to the adoption date. We currently believe the most significant potential change relates to whether certain project-based revenues will be recognized over time or at a point in time, although our technical analysis of potential impacts is still on-going. We also anticipate changes to the consolidated balance sheet related to accounts receivable, contract assets, and contract liabilities. We are in the process of evaluating and designing the necessary changes to our business processes, policies, systems and controls to support recognition and disclosure under the new standard. Further, we are continuing to assess what incremental disaggregated revenue disclosures will be required in our consolidated financial statements. The implementation team has reported these findings and the progress of the project to the Audit Committee of our Board of Directors. In March 2017, the FASB issued a final standard that changes the presentation of net periodic benefit cost related to defined benefit plans. The Company will adopt the standard when it becomes effective in fiscal 2018 and it will be applied retrospectively to all periods presented. Under the new standard, net periodic benefit costs are required to be disaggregated between service costs presented as operating expenses and other components of pension costs presented as non-operating expenses. The Company currently charges service costs to segment operations and includes other components of pension cost in unallocated corporate operating expenses. Under the new standard, unallocated corporate operating expenses will decrease, operating earnings will increase and other expense will increase by the amount of other (non-service) components of pension cost. There will be no impact on reported segment earnings, net earnings or earnings per shar |
Recent Accounting Pronounceme18
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 29, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | A new accounting standard that changed certain aspects of accounting for share-based payments became effective for the Company in the first quarter of 2017. Excess tax benefits on exercised stock options that were previously credited to equity now reduce the current income tax provision. For the quarter, the change in accounting for excess tax benefits decreased the current income tax provision and increased net earnings by $3.2 million , reduced the effective income tax rate by 3 percentage points , and increased diluted earnings per share by $0.06 . For the year to date, the change in accounting for excess tax benefits decreased the current income tax provision and increased net earnings by $20.5 million , reduced the effective income tax rate by 7 percentage points , and increased diluted earnings per share by $0.36 . Under the new standard, excess tax benefits are no longer reclassified out of cash flows from operating activities to financing activities in the Consolidated Statements of Cash Flows. We elected to apply the cash flow presentation requirements retrospectively to all periods presented, which resulted in a year-to-date increase in previously reported net cash provided by operating activities and a decrease in net cash provided by financing activities of $5.5 million for the nine months ended September 23, 2016. Also under the new standard, the Company elected to account for share-based grant forfeitures as they occur. The impact of the change in accounting for forfeitures was no t significant, and was reflected in share-based compensation cost in the first quarter. In May 2014, the Financial Accounting Standards Board (FASB) issued a final standard on revenue from contracts with customers. The new standard sets forth a single comprehensive model for recognizing and reporting revenue. The new standard will become effective for the Company beginning with the first quarter of 2018, and the Company plans to adopt the accounting standard using the modified retrospective transition approach. The modified retrospective transition approach will recognize any changes from the beginning of the year of initial application through retained earnings with no restatement of comparative periods. We have established an implementation team and engaged a third-party consultant to assist with our assessment of the impact of the new revenue guidance on our operations, consolidated financial statements and related disclosures. To date, this assessment has included (1) utilizing questionnaires to assist with the identification of our revenue streams, (2) performing contract analyses for each revenue stream identified, (3) assessing the noted differences in recognition and measurement that may result from adopting this new standard, (4) performing detailed analyses of contracts with large customers, and (5) performing transaction level testing (based on our designed test plans) for consistency with contract provisions that affect revenue recognition. Based on the preliminary results of the evaluation, which is still in process, nothing has come to our attention that would indicate that adoption of the new standard will have a material impact on our consolidated financial statements. However, given our acquisition strategy, there may be additional revenue streams acquired prior to the adoption date. We currently believe the most significant potential change relates to whether certain project-based revenues will be recognized over time or at a point in time, although our technical analysis of potential impacts is still on-going. We also anticipate changes to the consolidated balance sheet related to accounts receivable, contract assets, and contract liabilities. We are in the process of evaluating and designing the necessary changes to our business processes, policies, systems and controls to support recognition and disclosure under the new standard. Further, we are continuing to assess what incremental disaggregated revenue disclosures will be required in our consolidated financial statements. The implementation team has reported these findings and the progress of the project to the Audit Committee of our Board of Directors. In March 2017, the FASB issued a final standard that changes the presentation of net periodic benefit cost related to defined benefit plans. The Company will adopt the standard when it becomes effective in fiscal 2018 and it will be applied retrospectively to all periods presented. Under the new standard, net periodic benefit costs are required to be disaggregated between service costs presented as operating expenses and other components of pension costs presented as non-operating expenses. The Company currently charges service costs to segment operations and includes other components of pension cost in unallocated corporate operating expenses. Under the new standard, unallocated corporate operating expenses will decrease, operating earnings will increase and other expense will increase by the amount of other (non-service) components of pension cost. There will be no impact on reported segment earnings, net earnings or earnings per share. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 29, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted EPS | The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 29, September 23, September 29, September 23, Net earnings available to common shareholders $ 75,460 $ 54,388 $ 216,020 $ 144,887 Weighted average shares outstanding for basic earnings per share 56,023 55,684 55,864 55,571 Dilutive effect of stock options computed using the treasury stock method and the average market price 2,181 1,285 2,084 1,335 Weighted average shares outstanding for diluted earnings per share 58,204 56,969 57,948 56,906 Basic earnings per share $ 1.35 $ 0.98 $ 3.87 $ 2.61 Diluted earnings per share $ 1.30 $ 0.95 $ 3.73 $ 2.55 |
Share-Based Awards (Tables)
Share-Based Awards (Tables) | 9 Months Ended |
Sep. 29, 2017 | |
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |
Options Activity and Outstanding | Options on common shares granted and outstanding, as well as the weighted average exercise price, are shown below (in thousands, except exercise prices): Option Shares Weighted Average Exercise Price Options Exercisable Weighted Average Exercise Price Outstanding, December 30, 2016 5,535 $ 55.26 3,672 $ 45.40 Granted 575 92.13 Exercised (1,138 ) 40.97 Canceled (38 ) 80.31 Outstanding, September 29, 2017 4,934 $ 62.66 3,071 $ 51.40 |
Options Fair Value Inputs | The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions and results: Nine Months Ended September 29, September 23, Expected life in years 7.0 7.0 Interest rate 2.2 % 1.4 % Volatility 26.7 % 30.1 % Dividend yield 1.6 % 1.8 % Weighted average fair value per share $ 24.23 $ 19.00 |
ESPP Fair Value Inputs | The benefit of the 15 percent discount from the lesser of the fair market value per common share on the first day and the last day of the plan year was added to the fair value of the employees’ purchase rights determined using the Black-Scholes option-pricing model with the following assumptions and results: Nine Months Ended September 29, September 23, Expected life in years 1.0 1.0 Interest rate 0.9 % 0.7 % Volatility 22.3 % 24.6 % Dividend yield 1.5 % 1.7 % Weighted average fair value per share $ 21.97 $ 19.14 |
Retirement Benefits (Tables)
Retirement Benefits (Tables) | 9 Months Ended |
Sep. 29, 2017 | |
Defined Benefit Plan [Abstract] | |
Components of Net Periodic Benefit Cost | The components of net periodic benefit cost for retirement benefit plans were as follows (in thousands): Three Months Ended Nine Months Ended September 29, September 23, September 29, September 23, Pension Benefits Service cost $ 1,917 $ 1,968 $ 5,732 $ 5,880 Interest cost 3,874 3,902 11,477 11,765 Expected return on assets (4,236 ) (4,504 ) (12,700 ) (13,509 ) Amortization and other 2,408 2,491 6,932 7,410 Net periodic benefit cost $ 3,963 $ 3,857 $ 11,441 $ 11,546 Postretirement Medical Service cost $ 150 $ 136 $ 451 $ 407 Interest cost 274 271 820 813 Amortization (2 ) (120 ) (7 ) (360 ) Net periodic benefit cost $ 422 $ 287 $ 1,264 $ 860 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 29, 2017 | |
Stockholders' Equity Note [Abstract] | |
Changes in AOCI | Changes in components of accumulated other comprehensive income (loss), net of tax were (in thousands): Pension and Postretirement Medical Cumulative Translation Adjustment Total Balance, June 24, 2016 $ (67,876 ) $ (44,612 ) $ (112,488 ) Other comprehensive income (loss) before reclassifications — (6,642 ) (6,642 ) Amounts reclassified from accumulated other comprehensive income 1,088 — 1,088 Balance, September 23, 2016 $ (66,788 ) $ (51,254 ) $ (118,042 ) Balance, June 30, 2017 $ (74,125 ) $ (48,455 ) $ (122,580 ) Other comprehensive income (loss) before reclassifications — 574 574 Amounts reclassified from accumulated other comprehensive income 1,453 — 1,453 Balance, September 29, 2017 $ (72,672 ) $ (47,881 ) $ (120,553 ) Balance, December 25, 2015 $ (69,922 ) $ (34,575 ) $ (104,497 ) Other comprehensive income (loss) before reclassifications — (16,679 ) (16,679 ) Amounts reclassified from accumulated other comprehensive income 3,134 — 3,134 Balance, September 23, 2016 $ (66,788 ) $ (51,254 ) $ (118,042 ) Balance, December 30, 2016 $ (76,426 ) $ (65,802 ) $ (142,228 ) Other comprehensive income (loss) before reclassifications — 17,921 17,921 Amounts reclassified from accumulated other comprehensive income 3,754 — 3,754 Balance, September 29, 2017 $ (72,672 ) $ (47,881 ) $ (120,553 ) |
AOCI Reclassifications to Pension Cost | Amounts related to pension and postretirement medical adjustments are reclassified to pension cost, which is allocated to cost of products sold and operating expenses based on salaries and wages, approximately as follows (in thousands): Three Months Ended Nine Months Ended September 29, September 23, September 29, September 23, Cost of products sold $ 765 $ 611 $ 2,093 $ 1,776 Product development 331 241 887 706 Selling, marketing and distribution 703 578 1,865 1,633 General and administrative 451 277 1,189 842 Total before tax $ 2,250 $ 1,707 $ 6,034 $ 4,957 Income tax (benefit) (797 ) (619 ) (2,280 ) (1,823 ) Total after tax $ 1,453 $ 1,088 $ 3,754 $ 3,134 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 29, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting - Operations and Assets | Sales and operating earnings by segment were as follows (in thousands): Three Months Ended Nine Months Ended September 29, September 23, September 29, September 23, Net Sales Industrial $ 178,461 $ 150,893 $ 509,719 $ 454,978 Process 73,656 67,077 217,084 196,068 Contractor 127,695 109,222 373,082 329,184 Total $ 379,812 $ 327,192 $ 1,099,885 $ 980,230 Operating Earnings Industrial $ 61,790 $ 50,573 $ 177,121 $ 147,419 Process 12,088 10,394 38,969 25,305 Contractor 33,471 25,593 93,249 71,700 Unallocated corporate (expense) (7,712 ) (5,096 ) (25,112 ) (23,669 ) Total $ 99,637 $ 81,464 $ 284,227 $ 220,755 Assets by segment were as follows (in thousands): September 29, December 30, Industrial $ 575,024 $ 546,366 Process 335,769 318,444 Contractor 254,342 208,016 Unallocated corporate 239,088 170,283 Total $ 1,404,223 $ 1,243,109 |
Segment Reporting - Geographic | Geographic information follows (in thousands): Three Months Ended Nine Months Ended September 29, September 23, September 29, September 23, Net Sales (based on customer location) United States $ 190,178 $ 171,988 $ 559,651 $ 511,273 Other countries 189,634 155,204 540,234 468,957 Total $ 379,812 $ 327,192 $ 1,099,885 $ 980,230 September 29, December 30, Long-lived Assets United States $ 161,034 $ 151,911 Other countries 38,394 37,685 Total $ 199,428 $ 189,596 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 29, 2017 | |
Inventory, Net [Abstract] | |
Components of Inventories | Major components of inventories were as follows (in thousands): September 29, December 30, Finished products and components $ 111,481 $ 113,643 Products and components in various stages of completion 59,961 50,557 Raw materials and purchased components 98,720 84,631 Subtotal 270,162 248,831 Reduction to LIFO cost (47,284 ) (47,222 ) Total $ 222,878 $ 201,609 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 29, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | Components of other intangible assets were (dollars in thousands): Finite Life Indefinite Life Customer Patents and Trademarks, Trade Total As of September 29, 2017 Cost $ 176,065 $ 18,322 $ 1,070 $ 57,853 $ 253,310 Accumulated amortization (51,312 ) (7,448 ) (472 ) — (59,232 ) Foreign currency translation (9,029 ) (703 ) (57 ) (3,181 ) (12,970 ) Book value $ 115,724 $ 10,171 $ 541 $ 54,672 $ 181,108 Weighted average life in years 13 10 4 N/A As of December 30, 2016 Cost $ 170,284 $ 17,321 $ 895 $ 57,853 $ 246,353 Accumulated amortization (41,599 ) (6,088 ) (337 ) — (48,024 ) Foreign currency translation (13,630 ) (1,055 ) (59 ) (5,249 ) (19,993 ) Book value $ 115,055 $ 10,178 $ 499 $ 52,604 $ 178,336 Weighted average life in years 13 10 4 N/A |
Future Amortization Expense | Estimated annual amortization expense based on the current carrying amount of other intangible assets is as follows (in thousands): 2017 2018 2019 2020 2021 Thereafter Estimated Amortization Expense $ 14,834 $ 14,959 $ 14,630 $ 14,448 $ 14,279 $ 64,311 |
Goodwill Rollforward | Changes in the carrying amount of goodwill for each reportable segment were (in thousands): Industrial Process Contractor Total Balance, December 30, 2016 $ 150,556 $ 96,561 $ 12,732 $ 259,849 Additions (adjustments) from business acquisitions 7,152 (63 ) — 7,089 Foreign currency translation 4,480 1,440 — 5,920 Balance, September 29, 2017 $ 162,188 $ 97,938 $ 12,732 $ 272,858 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 29, 2017 | |
Accrued Liabilities, Current [Abstract] | |
Components of Other Current Liabilities | Components of other current liabilities were (in thousands): September 29, December 30, Accrued self-insurance retentions $ 7,164 $ 7,105 Accrued warranty and service liabilities 9,876 8,934 Accrued trade promotions 8,126 6,007 Payable for employee stock purchases 7,188 9,328 Customer advances and deferred revenue 21,097 9,400 Income taxes payable 9,778 8,608 Other 27,454 22,505 Total $ 90,683 $ 71,887 |
Accrued Warranty Activity | Following is a summary of activity in accrued warranty and service liabilities (in thousands): Balance, December 30, 2016 $ 8,934 Charged to expense 5,708 Margin on parts sales reversed 1,977 Reductions for claims settled (6,743 ) Balance, September 29, 2017 $ 9,876 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 29, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Schedule | Assets and liabilities measured at fair value on a recurring basis and fair value measurement level were as follows (in thousands): Level September 29, December 30, Assets Cash surrender value of life insurance 2 $ 15,480 $ 13,785 Forward exchange contracts 2 513 571 Total assets at fair value $ 15,993 $ 14,356 Liabilities Contingent consideration 3 $ 4,081 $ 4,081 Deferred compensation 2 3,640 3,265 Forward exchange contracts 2 — — Total liabilities at fair value $ 7,721 $ 7,346 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2017 | Sep. 23, 2016 | Sep. 29, 2017 | Sep. 23, 2016 | |
Earnings Per Share [Abstract] | ||||
Net earnings available to common shareholders | $ 75,460 | $ 54,388 | $ 216,020 | $ 144,887 |
Weighted average shares outstanding for basic earnings per share | 56,023,000 | 55,684,000 | 55,864,000 | 55,571,000 |
Dilutive effect of stock options computed using the treasury stock method and the average market price | 2,181,000 | 1,285,000 | 2,084,000 | 1,335,000 |
Weighted average shares outstanding for diluted earnings per share | 58,204,000 | 56,969,000 | 57,948,000 | 56,906,000 |
Basic earnings per share | $ 1.35 | $ 0.98 | $ 3.87 | $ 2.61 |
Diluted earnings per share | $ 1.30 | $ 0.95 | $ 3.73 | $ 2.55 |
Antidilutive securities excluded from the computation of diluted earnings per share | 6,000 | 1,034,000 |
Share-Based Awards - Options Ac
Share-Based Awards - Options Activity and Outstanding (Details) - $ / shares shares in Thousands | 9 Months Ended | |
Sep. 29, 2017 | Dec. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Beginning (in shares) | 5,535 | |
Options granted (in shares) | 575 | |
Options exercised (in shares) | (1,138) | |
Options canceled (in shares) | (38) | |
Ending (in shares) | 4,934 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Beginning (dollars per share) | $ 55.26 | |
Granted (dollars per share) | 92.13 | |
Exercised (dollars per share) | 40.97 | |
Canceled (dollars per share) | 80.31 | |
Ending (dollars per share) | $ 62.66 | |
Options exercisable (in shares) | 3,071 | 3,672 |
Weighted average exercise price of exercisable options (dollars per share) | $ 51.40 | $ 45.40 |
Share-Based Awards - Options Fa
Share-Based Awards - Options Fair Value Inputs (Details) - Stock Option - $ / shares | 9 Months Ended | |
Sep. 29, 2017 | Sep. 23, 2016 | |
Fair Value Assumptions and Methodology [Abstract] | ||
Expected life in years | 7 years | 7 years |
Interest rate | 2.20% | 1.40% |
Volatility | 26.70% | 30.10% |
Dividend yield | 1.60% | 1.80% |
Weighted average fair value per share (in dollars per share) | $ 24.23 | $ 19 |
Share-Based Awards - ESPP Fair
Share-Based Awards - ESPP Fair Value Inputs (Details) - Employee Stock Purchase Plan - $ / shares | 9 Months Ended | |
Sep. 29, 2017 | Sep. 23, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life in years | 1 year | 1 year |
Interest rate | 0.90% | 0.70% |
Volatility | 22.30% | 24.60% |
Dividend yield | 1.50% | 1.70% |
Weighted average fair value per share (in dollars per share) | $ 21.97 | $ 19.14 |
Share-Based Awards - Narrative
Share-Based Awards - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 29, 2017 | Sep. 23, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Share-based compensation expense | $ 19.2 | $ 16.1 |
Unrecognized compensation cost | $ 12.5 | |
Weighted average recognition period | 2 years 4 months | |
Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employee stock purchase plan shares issued | 167,000 | 170,000 |
Stock purchase plan discount from market value | 15.00% |
Retirement Benefits (Details)
Retirement Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Dec. 29, 2017 | Sep. 29, 2017 | Sep. 23, 2016 | Sep. 29, 2017 | Sep. 23, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Defined Benefit Plan, Contributions by Employer | $ 20,000 | ||||
Minimum [Member] | Subsequent Event [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Defined Benefit Plan, Gain (Loss) Due to Settlement | $ 11,000 | ||||
Maximum [Member] | Subsequent Event [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Defined Benefit Plan, Gain (Loss) Due to Settlement | $ 13,000 | ||||
Pension | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | 1,917 | $ 1,968 | $ 5,732 | $ 5,880 | |
Interest cost | 3,874 | 3,902 | 11,477 | 11,765 | |
Expected return on assets | (4,236) | (4,504) | (12,700) | (13,509) | |
Amortization and other | 2,408 | 2,491 | 6,932 | 7,410 | |
Net periodic benefit cost | 3,963 | 3,857 | 11,441 | 11,546 | |
Postretirement Medical | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | 150 | 136 | 451 | 407 | |
Interest cost | 274 | 271 | 820 | 813 | |
Amortization | (2) | (120) | (7) | (360) | |
Net periodic benefit cost | $ 422 | $ 287 | $ 1,264 | $ 860 |
Shareholders' Equity - Changes
Shareholders' Equity - Changes in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2017 | Sep. 23, 2016 | Sep. 29, 2017 | Sep. 23, 2016 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Accumulated other comprehensive income (loss) | $ (122,580) | $ (112,488) | $ (142,228) | $ (104,497) |
Other comprehensive income (loss) before reclassifications | 574 | (6,642) | 17,921 | (16,679) |
Amounts reclassified from accumulated other comprehensive income | 1,453 | 1,088 | 3,754 | 3,134 |
Ending Accumulated other comprehensive income (loss) | (120,553) | (118,042) | (120,553) | (118,042) |
Pension and Postretirement Medical | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Accumulated other comprehensive income (loss) | (74,125) | (67,876) | (76,426) | (69,922) |
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income | 1,453 | 1,088 | 3,754 | 3,134 |
Ending Accumulated other comprehensive income (loss) | (72,672) | (66,788) | (72,672) | (66,788) |
Cumulative Translation Adjustment | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Accumulated other comprehensive income (loss) | (48,455) | (44,612) | (65,802) | (34,575) |
Other comprehensive income (loss) before reclassifications | 574 | (6,642) | 17,921 | (16,679) |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | 0 | 0 |
Ending Accumulated other comprehensive income (loss) | $ (47,881) | $ (51,254) | $ (47,881) | $ (51,254) |
Shareholders' Equity - AOCI Rec
Shareholders' Equity - AOCI Reclassifications to Pension Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2017 | Sep. 23, 2016 | Sep. 29, 2017 | Sep. 23, 2016 | |
Reclassification from AOCI | ||||
Reclassification after tax | $ 1,453 | $ 1,088 | $ 3,754 | $ 3,134 |
Pension and Postretirement Medical | ||||
Reclassification from AOCI | ||||
Reclassification before tax | 2,250 | 1,707 | 6,034 | 4,957 |
Income tax (benefit) | (797) | (619) | (2,280) | (1,823) |
Reclassification after tax | 1,453 | 1,088 | 3,754 | 3,134 |
Cost of products sold | Pension and Postretirement Medical | ||||
Reclassification from AOCI | ||||
Reclassification before tax | 765 | 611 | 2,093 | 1,776 |
Product development | Pension and Postretirement Medical | ||||
Reclassification from AOCI | ||||
Reclassification before tax | 331 | 241 | 887 | 706 |
Selling, marketing and distribution | Pension and Postretirement Medical | ||||
Reclassification from AOCI | ||||
Reclassification before tax | 703 | 578 | 1,865 | 1,633 |
General and administrative | Pension and Postretirement Medical | ||||
Reclassification from AOCI | ||||
Reclassification before tax | $ 451 | $ 277 | $ 1,189 | $ 842 |
Shareholders' Equity - Accelera
Shareholders' Equity - Accelerated Share Repurchase (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 29, 2017USD ($)$ / sharesshares | |
ASR Transaction Date February 21, 2017 [Member] | |
Accelerated Share Repurchases [Line Items] | |
ASR Initial Payment | $ | $ 90 |
ASR Initial Shares | shares | 850,000 |
ASR Fair Value of Initial Shares | $ | $ 78 |
ASR Settlement Date July 21, 2017 [Member] | |
Accelerated Share Repurchases [Line Items] | |
ASR Settlement Shares Received | shares | 31,499 |
ASR Final Price Paid Per Share | $ / shares | $ 102.10 |
Segment Reporting Information -
Segment Reporting Information - Operations and Assets (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 29, 2017USD ($) | Sep. 23, 2016USD ($) | Sep. 29, 2017USD ($)segment | Sep. 23, 2016USD ($) | Dec. 30, 2016USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 3 | ||||
Net Sales | $ 379,812 | $ 327,192 | $ 1,099,885 | $ 980,230 | |
Operating Earnings | 99,637 | 81,464 | 284,227 | 220,755 | |
Total Assets | 1,404,223 | 1,404,223 | $ 1,243,109 | ||
Operating Segments | Industrial | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 178,461 | 150,893 | 509,719 | 454,978 | |
Operating Earnings | 61,790 | 50,573 | 177,121 | 147,419 | |
Total Assets | 575,024 | 575,024 | 546,366 | ||
Operating Segments | Process | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 73,656 | 67,077 | 217,084 | 196,068 | |
Operating Earnings | 12,088 | 10,394 | 38,969 | 25,305 | |
Total Assets | 335,769 | 335,769 | 318,444 | ||
Operating Segments | Contractor | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 127,695 | 109,222 | 373,082 | 329,184 | |
Operating Earnings | 33,471 | 25,593 | 93,249 | 71,700 | |
Total Assets | 254,342 | 254,342 | 208,016 | ||
Unallocated corporate | |||||
Segment Reporting Information [Line Items] | |||||
Operating Earnings | (7,712) | $ (5,096) | (25,112) | $ (23,669) | |
Total Assets | $ 239,088 | $ 239,088 | $ 170,283 |
Segment Reporting Information38
Segment Reporting Information - Geographic (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 29, 2017 | Sep. 23, 2016 | Sep. 29, 2017 | Sep. 23, 2016 | Dec. 30, 2016 | |
Geographic Information [Line Items] | |||||
Net Sales | $ 379,812 | $ 327,192 | $ 1,099,885 | $ 980,230 | |
Long-lived Assets | 199,428 | 199,428 | $ 189,596 | ||
United States | |||||
Geographic Information [Line Items] | |||||
Net Sales | 190,178 | 171,988 | 559,651 | 511,273 | |
Long-lived Assets | 161,034 | 161,034 | 151,911 | ||
Other countries | |||||
Geographic Information [Line Items] | |||||
Net Sales | 189,634 | $ 155,204 | 540,234 | $ 468,957 | |
Long-lived Assets | $ 38,394 | $ 38,394 | $ 37,685 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 29, 2017 | Dec. 30, 2016 |
Inventory, Net [Abstract] | ||
Finished products and components | $ 111,481 | $ 113,643 |
Products and components in various stages of completion | 59,961 | 50,557 |
Raw materials and purchased components | 98,720 | 84,631 |
Inventory gross | 270,162 | 248,831 |
Reduction to LIFO cost | (47,284) | (47,222) |
Total | $ 222,878 | $ 201,609 |
Intangible Assets - Other Intan
Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 29, 2017 | Dec. 30, 2016 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Total Cost | $ 253,310 | $ 246,353 |
Total Accumulated Amortization | (59,232) | (48,024) |
Total Foreign Currency Translation | (12,970) | (19,993) |
Total Book Value | 181,108 | 178,336 |
Trade Names | ||
Indefinite Life | ||
Cost | 57,853 | 57,853 |
Foreign currency translation | (3,181) | (5,249) |
Book value | 54,672 | 52,604 |
Customer Relationships | ||
Finite Life | ||
Cost | 176,065 | 170,284 |
Accumulated amortization | (51,312) | (41,599) |
Foreign currency translation | (9,029) | (13,630) |
Book value | $ 115,724 | $ 115,055 |
Weighted average life in years | 13 years | 13 years |
Patents and Proprietary Technology | ||
Finite Life | ||
Cost | $ 18,322 | $ 17,321 |
Accumulated amortization | (7,448) | (6,088) |
Foreign currency translation | (703) | (1,055) |
Book value | $ 10,171 | $ 10,178 |
Weighted average life in years | 10 years | 10 years |
Trademarks, Trade Names and Other | ||
Finite Life | ||
Cost | $ 1,070 | $ 895 |
Accumulated amortization | (472) | (337) |
Foreign currency translation | (57) | (59) |
Book value | $ 541 | $ 499 |
Weighted average life in years | 4 years | 4 years |
Intangible Assets - Future Amor
Intangible Assets - Future Amortization Expense (Details) $ in Thousands | Sep. 29, 2017USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Estimated amortization expense 2017 | $ 14,834 |
Estimated amortization expense 2018 | 14,959 |
Estimated amortization expense 2019 | 14,630 |
Estimated amortization expense 2020 | 14,448 |
Estimated amortization expense 2021 | 14,279 |
Estimated amortization expense thereafter | $ 64,311 |
Intangible Assets - Goodwill Ro
Intangible Assets - Goodwill Rollforward (Details) $ in Thousands | 9 Months Ended |
Sep. 29, 2017USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 259,849 |
Additions from business acquisitions | 7,089 |
Purchase accounting adjustments | (63) |
Foreign currency translation | 5,920 |
Ending balance | 272,858 |
Process | |
Goodwill [Roll Forward] | |
Beginning balance | 96,561 |
Additions from business acquisitions | 0 |
Purchase accounting adjustments | (63) |
Foreign currency translation | 1,440 |
Ending balance | 97,938 |
Industrial [Member] | |
Goodwill [Roll Forward] | |
Beginning balance | 150,556 |
Additions from business acquisitions | 7,152 |
Purchase accounting adjustments | 0 |
Foreign currency translation | 4,480 |
Ending balance | 162,188 |
Contractor | |
Goodwill [Roll Forward] | |
Beginning balance | 12,732 |
Additions from business acquisitions | 0 |
Purchase accounting adjustments | 0 |
Foreign currency translation | 0 |
Ending balance | $ 12,732 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2017 | Sep. 23, 2016 | Sep. 29, 2017 | Sep. 23, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 3.8 | $ 4.6 | $ 11 | $ 14.3 |
Other Current Liabilities - Com
Other Current Liabilities - Components of Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 29, 2017 | Dec. 30, 2016 |
Other Current Liabilities Details [Abstract] | ||
Accrued self-insurance retentions | $ 7,164 | $ 7,105 |
Accrued warranty and service liabilities | 9,876 | 8,934 |
Accrued trade promotions | 8,126 | 6,007 |
Payable for employee stock purchases | 7,188 | 9,328 |
Customer advances and deferred revenue | 21,097 | 9,400 |
Income taxes payable | 9,778 | 8,608 |
Other | 27,454 | 22,505 |
Total | $ 90,683 | $ 71,887 |
Other Current Liabilities - Acc
Other Current Liabilities - Accrued Warranty Activity (Details) $ in Thousands | 9 Months Ended |
Sep. 29, 2017USD ($) | |
Activity In Accrued Warranty And Service Liabilities Abstract | |
Balance, beginning of year | $ 8,934 |
Charged to expense | 5,708 |
Margin on parts sales reversed | 1,977 |
Reductions for claims settled | (6,743) |
Balance, end of period | $ 9,876 |
Other Current Liabilities - Nar
Other Current Liabilities - Narrative (Details) - USD ($) $ in Millions | Sep. 29, 2017 | Dec. 30, 2016 |
Other Current Assets | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash and cash equivalents | $ 7.9 | $ 9.2 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Thousands | Sep. 29, 2017 | Dec. 30, 2016 |
Assets | ||
Total assets at fair value | $ 15,993 | $ 14,356 |
Liabilities | ||
Total liabilities at fair value | 7,721 | 7,346 |
Long term debt, carrying amount | 300,000 | |
Long-term debt, current maturities | 75,000 | 0 |
Long term debt, fair value | 325,000 | 325,000 |
Level 2 | ||
Assets | ||
Cash surrender value of life insurance | 15,480 | 13,785 |
Forward exchange contracts | 513 | 571 |
Liabilities | ||
Deferred compensation | 3,640 | 3,265 |
Forward exchange contracts | 0 | 0 |
Level 3 | ||
Liabilities | ||
Contingent consideration | $ 4,081 | $ 4,081 |
Recent Accounting Pronounceme48
Recent Accounting Pronouncements Recent Accounting Pronouncements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 29, 2017 | Sep. 23, 2016 | Sep. 29, 2017 | Sep. 23, 2016 | Dec. 30, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Net Earnings | $ 75,460,000 | $ 54,388,000 | $ 216,020,000 | $ 144,887,000 | |
Diluted earnings per share | $ 1.30 | $ 0.95 | $ 3.73 | $ 2.55 | |
Net Cash Provided by (Used in) Operating Activities | $ 246,148,000 | $ 207,720,000 | |||
Net Cash Provided by (Used in) Financing Activities | (116,792,000) | $ (121,808,000) | |||
Accounting Standards Update 2016-09 [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Net Earnings | $ 3,200,000 | $ 20,500,000 | |||
Diluted earnings per share | $ 0.06 | $ 0.36 | |||
Net Cash Provided by (Used in) Operating Activities | $ 5,500,000 | ||||
Net Cash Provided by (Used in) Financing Activities | $ (5,500,000) | ||||
Effect of Change on Effective Tax Rate | (3.00%) | (7.00%) | |||
Cumulative Effect of Change on Equity | $ 0 |