Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 30, 2018 | Apr. 18, 2018 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 30, 2018 | |
Amendment Flag | false | |
Entity Registrant Name | Graco Inc. | |
Entity Central Index Key | 42,888 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-28 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 167,606,000 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | GGG |
Consolidated Statements of Earn
Consolidated Statements of Earnings (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Net Sales | $ 406,348 | $ 340,590 |
Cost of products sold | 183,927 | 154,745 |
Gross Profit | 222,421 | 185,845 |
Product development | 15,289 | 14,259 |
Selling, marketing and distribution | 62,522 | 54,389 |
General and administrative | 32,914 | 29,762 |
Operating Earnings | 111,696 | 87,435 |
Interest expense | 3,233 | 4,055 |
Other expense, net | 1,035 | 1,805 |
Earnings Before Income Taxes | 107,428 | 81,575 |
Income taxes | 21,918 | 20,843 |
Net Earnings | $ 85,510 | $ 60,732 |
Basic earnings per share | $ 0.51 | $ 0.36 |
Diluted earnings per share | 0.49 | 0.35 |
Cash dividends declared (in dollars per share) | $ 0.13 | $ 0.12 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net Earnings | $ 85,510 | $ 60,732 |
Components of other comprehensive income (loss) | ||
Cumulative translation adjustment | 8,746 | 6,318 |
Pension and postretirement medical liability adjustment | 1,826 | 2,000 |
Income taxes - pension and postretirement medical liability adjustment | (401) | (766) |
Other comprehensive income | 10,171 | 7,552 |
Comprehensive Income | $ 95,681 | $ 68,284 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 30, 2018 | Dec. 29, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 113,832 | $ 103,662 |
Accounts receivable, less allowances of $5,600 and $4,300 | 292,144 | 266,080 |
Inventories | 267,298 | 239,349 |
Other current assets | 42,960 | 34,247 |
Total current assets | 716,234 | 643,338 |
Property, Plant and Equipment | ||
Property, Plant and Equipment, net | 207,676 | 204,298 |
Goodwill | 298,087 | 278,789 |
Other Intangible Assets, net | 186,823 | 183,056 |
Deferred Income Taxes | 52,124 | 50,916 |
Other Assets | 30,587 | 30,220 |
Total Assets | 1,491,531 | 1,390,617 |
Current Liabilities | ||
Notes payable to banks | 11,931 | 6,578 |
Trade accounts payable | 60,096 | 48,748 |
Salaries and incentives | 35,870 | 55,884 |
Dividends payable | 22,446 | 22,260 |
Other current liabilities | 150,287 | 112,368 |
Total current liabilities | 280,630 | 245,838 |
Long-term Debt | 285,195 | 226,035 |
Retirement Benefits and Deferred Compensation | 175,349 | 172,411 |
Deferred Income Taxes | 17,697 | 17,253 |
Other Non-current Liabilities | 5,481 | 6,017 |
Shareholders’ Equity | ||
Common stock | 168,033 | 169,319 |
Additional paid-in-capital | 515,693 | 499,934 |
Retained earnings | 176,524 | 181,599 |
Accumulated other comprehensive income (loss) | (133,071) | (127,789) |
Total shareholders’ equity | 727,179 | 723,063 |
Total Liabilities and Shareholders’ Equity | $ 1,491,531 | $ 1,390,617 |
Consolidated Balance Sheets (U5
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Mar. 30, 2018 | Dec. 29, 2017 |
Statement of Financial Position [Abstract] | ||
Receivables allowances | $ 5.6 | $ 4.3 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2018 | Mar. 31, 2017 | |
Statement of Cash Flows [Abstract] | ||
Net Earnings | $ 85,510 | $ 60,732 |
Adjustments to reconcile net earnings to net cash provided by operating activities | ||
Depreciation and amortization | 12,651 | 11,094 |
Deferred income taxes | (2,037) | (864) |
Share-based compensation | 6,622 | 5,477 |
Change in | ||
Accounts receivable | (20,798) | (23,207) |
Inventories | (7,142) | (12,209) |
Trade accounts payable | (1,659) | 2,806 |
Salaries and incentives | (22,803) | (12,124) |
Retirement benefits and deferred compensation | 3,558 | 3,715 |
Other accrued liabilities | 6,247 | 16,149 |
Other | (1,397) | (1,345) |
Net cash provided by operating activities | 58,752 | 50,224 |
Cash Flows From Investing Activities | ||
Property, plant and equipment additions | (8,961) | (8,200) |
Acquisition of businesses, net of cash acquired | (10,880) | (9,968) |
Change in restricted assets | 21 | 638 |
Other | 5 | (62) |
Net cash provided by (used in) investing activities | (19,815) | (17,592) |
Cash Flows From Financing Activities | ||
Borrowings (payments) on short-term lines of credit, net | 5,050 | 261 |
Borrowings on long-term line of credit | 115,465 | 191,120 |
Payments on long-term debt and line of credit | (58,828) | (119,150) |
Common stock issued | 17,316 | 30,127 |
Common stock repurchased | (84,719) | (90,160) |
Cash dividends paid | (22,445) | (20,118) |
Net cash provided by (used in) financing activities | (28,161) | (7,920) |
Effect of exchange rate changes on cash | (606) | (509) |
Net increase (decrease) in cash and cash equivalents | 10,170 | 24,203 |
Cash and Cash Equivalents | ||
Beginning of year | 103,662 | 52,365 |
End of period | $ 113,832 | $ 76,568 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 30, 2018 | |
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 March 30, 2018 and the related statements of earnings and comprehensive income for the three months ended March 30, 2018 and March 31, 2017 , and cash flows for the three months ended March 30, 2018 and March 31, 2017 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 March 30, 2018 , 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 2017 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. |
Revenue Recognition (Notes)
Revenue Recognition (Notes) | 3 Months Ended |
Mar. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | 2. Revenue Recognition Adoption of New Accounting Standard In May 2014, the Financial Accounting Standards Board (FASB) issued a final standard on revenue from contracts with customers, contained in Accounting Standards Codification Topic 606 (“ASC 606”). The new standard sets forth a single comprehensive model for recognizing and reporting revenue. ASC 606 was effective for the Company as of December 30, 2017, the beginning of our fiscal year 2018. The Company adopted the new accounting standard using the modified retrospective transition approach. Application of the transition requirements had no material impact on operations or beginning retained earnings. We record revenue under ASC 606 at a single point in time, when control is transferred to the customer, which is consistent with past practice. Under ASC 606, rights of return are recorded as a refund liability and a recovery asset is established for the value of product expected to be returned. We previously classified rights of return, net of amounts expected to be recovered, as an allowance reducing accounts receivable. We reclassified prior period balance sheet amounts to conform to ASC 606 requirements. This resulted in an increase in accounts receivable of $9.7 million , a recovery asset of $1.7 million included in other current assets and $11.4 million of refund liability included in other current liabilities as of December 29, 2017. Accounting Policy Revenue is recognized upon the satisfaction of performance obligations, which occurs when control of the good or service transfers to the customer. This is generally on the date of shipment; however certain sales have terms requiring recognition when received by the customer. In cases where there are specific customer acceptance provisions, revenue is recognized at the later of customer acceptance or shipment (subject to shipping terms). Payment terms are established based on the type of product, distributor capabilities and competitive market conditions. We generally determine standalone selling prices based on the prices charged to customers for all material performance obligations. Variable consideration is accounted for as a price adjustment (sales adjustment). Following are examples of variable consideration that affect the Company's reported revenue. Early payment discounts are provided to certain customers and within certain regions. Rights of return are typically contractually limited, amounts are estimable, and the Company records provisions for anticipated returns at the time revenue is recognized. This includes promotions when, from time to time, the Company may promote the sale of new products by agreeing to accept returns of superseded products. Trade promotions are offered to distributors and end users through various programs, generally with terms of one year or less. Such promotions include rebates based on annual purchases and sales growth, coupons and reimbursement for competitive products. Payment of incentives may take the form of cash, trade credit, promotional merchandise or free product. Rebates are accrued based on the program rates and progress toward the probability weighted estimate of annual sales amount and sales growth. Additional promotions include cooperative advertising arrangements. Under cooperative advertising arrangements, the Company reimburses the distributor for a portion of its advertising costs related to the Company’s products; estimated costs are accrued at the time of sale and classified as selling, marketing and distribution expense. The estimated costs related to coupon programs are accrued at the time of sale and classified as selling, marketing and distribution expense or cost of products sold, depending on the type of incentive offered. The considerations payable to customers are deemed as broad based and are not recorded against net sales. Shipping and handling costs incurred for the delivery of goods to customers are included in cost of goods sold. Amounts billed to customers for shipping and handling are included in net sales. Deferred Revenues We defer revenue when cash payments are received or due in advance of our performance, including amounts which are refundable. This is also the case for services associated with certain product sales. The balance in the deferred revenue and customer advances for the three months ended March 30, 2018 was $46.2 million and consists primarily of cash payments received or due in advance of satisfying our performance obligations. The revenue recognized for the three months ended March 30, 2018 related to deferred revenue as of December 29, 2017 was $24.7 million . Our payment terms vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, we require payment before the products or services are delivered to the customer . Practical Expedients and Exemptions We have made an accounting policy election to account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of assessing such activities as performance obligations. We have made an accounting policy election to exclude from the transaction price all sales taxes related to revenue producing transactions collected from the customer for a governmental authority. We apply the new revenue standard requirements to a portfolio of contracts (or performance obligations) with similar characteristics for transactions where it is expected that the effects on the financial statements of applying the revenue recognition guidance to the portfolio would not differ materially from applying this guidance to the individual contracts (or performance obligations) within that portfolio . We have made an accounting policy election to not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer. If the revenue related to a performance obligation that includes goods or services that are immaterial in the context of the contract is recognized before those immaterial goods or services are transferred to the customer, then the related costs to transfer those goods or services are accrued. We generally expense incremental costs of obtaining a contract when incurred because the amortization period would be less than one year. These costs primarily relate to sales commissions and are recorded in selling, marketing and distribution expense. We disclose disaggregated revenues by reporting segment and geography in accordance with the revenue standard. See Note 7 Segment Information. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 30, 2018 | |
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 March 30, March 31, Net earnings available to common shareholders $ 85,510 $ 60,732 Weighted average shares outstanding for basic earnings per share 169,073 167,304 Dilutive effect of stock options computed using the treasury stock method and the average market price 6,576 5,833 Weighted average shares outstanding for diluted earnings per share 175,649 173,137 Basic earnings per share $ 0.51 $ 0.36 Diluted earnings per share $ 0.49 $ 0.35 Stock options to purchase 1,020,000 and 2,655,000 shares were not included in the March 30, 2018 and March 31, 2017 computations of diluted earnings per share, respectively, because they would have been anti-dilutive. |
Share-Based Awards
Share-Based Awards | 3 Months Ended |
Mar. 30, 2018 | |
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 29, 2017 13,290 $ 21.99 7,729 $ 18.33 Granted 1,078 43.89 Exercised (269 ) 16.19 Canceled (23 ) 22.86 Outstanding, March 30, 2018 14,076 $ 23.78 8,960 $ 19.69 The Company recognized year-to-date share-based compensation of $6.6 million in 2018 and $5.5 million in 2017 . As of March 30, 2018 , there was $20.1 million of unrecognized compensation cost related to unvested options, expected to be recognized over a weighted average period of 1.8 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: Three Months Ended March 30, March 31, Expected life in years 7.5 7.0 Interest rate 2.8 % 2.3 % Volatility 25.6 % 26.7 % Dividend yield 1.2 % 1.6 % Weighted average fair value per share $ 12.79 $ 7.98 Under the Company’s Employee Stock Purchase Plan, the Company issued 480,000 shares in 2018 and 500,000 shares in 2017 . 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: Three Months Ended March 30, March 31, Expected life in years 1.0 1.0 Interest rate 2.1 % 0.9 % Volatility 21.3 % 22.3 % Dividend yield 1.2 % 1.5 % Weighted average fair value per share $ 10.28 $ 7.32 |
Retirement Benefits
Retirement Benefits | 3 Months Ended |
Mar. 30, 2018 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Retirement Benefits | Retirement Benefits The components of net periodic benefit cost for retirement benefit plans were as follows (in thousands): Three Months Ended March 30, March 31, Pension Benefits Service cost $ 2,213 $ 2,061 Interest cost 3,434 3,930 Expected return on assets (4,086 ) (4,352 ) Amortization and other 2,095 2,325 Net periodic benefit cost $ 3,656 $ 3,964 Postretirement Medical Service cost $ 175 $ 175 Interest cost 264 275 Amortization 136 50 Net periodic benefit cost $ 575 $ 500 |
Accounting Standards Update 2017-07 [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | 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 adopted the standard effective for the first quarter of 2018, and the Company has applied the change retrospectively to all periods presented. Under the new standard, net periodic benefit costs are disaggregated between service costs presented as operating expenses and other components of pension costs presented as non-operating expenses. The Company previously charged service costs to segment operations and included other components of pension cost in unallocated corporate operating expenses. Under the new standard, unallocated corporate operating expenses decreased, operating earnings increased and other expense increased by the amount of non-service components of pension cost, including the amount of changes in cash surrender value of insurance contracts used to fund certain non-qualified pension and deferred compensation arrangements. There was no impact on reported net earnings or earnings per share. The retrospective application of the new standard resulted in increases of $1.6 million to previously reported operating earnings and other non-operating expense for the quarter ended March 31, 2017 . |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | 6. 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, December 30, 2016 $ (76,426 ) $ (65,802 ) $ (142,228 ) Other comprehensive income (loss) before reclassifications — 6,318 6,318 Reclassified to pension cost and deferred tax 1,234 — 1,234 Balance, March 31, 2017 $ (75,192 ) $ (59,484 ) $ (134,676 ) Balance, December 29, 2017 $ (78,430 ) $ (49,359 ) $ (127,789 ) Other comprehensive income (loss) before reclassifications — 8,746 8,746 Reclassified to pension cost and deferred tax 1,425 — 1,425 Reclassified to retained earnings $ (15,453 ) $ — $ (15,453 ) Balance, March 30, 2018 $ (92,458 ) $ (40,613 ) $ (133,071 ) Amounts related to pension and postretirement medical adjustments are reclassified to non-service components of pension cost that are included within other non-operating expenses. In February 2018, FASB issued a new standard related to reclassification of certain tax effects from accumulated other comprehensive income (AOCI). We early-adopted the new standard in the first quarter of 2018. We elected to reclassify $15.5 million from accumulated other comprehensive income to retained earnings, representing the amount of "stranded" tax effects resulting from the change in the U.S. federal tax rate and the consequent revaluation of deferred tax assets related to pension and postretirement medical expense. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 30, 2018 | |
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 March 30, March 31, Net Sales Industrial $ 195,196 $ 156,390 Process 80,035 70,029 Contractor 131,117 114,171 Total $ 406,348 $ 340,590 Operating Earnings Industrial $ 69,125 $ 53,735 Process 17,702 13,463 Contractor 31,411 26,019 Unallocated corporate (expense) (6,542 ) (5,782 ) Total $ 111,696 $ 87,435 Assets by segment were as follows (in thousands): March 30, December 29, Industrial $ 640,222 $ 572,436 Process 344,613 345,572 Contractor 291,664 255,615 Unallocated corporate 215,032 216,994 Total $ 1,491,531 $ 1,390,617 Geographic information follows (in thousands): Three Months Ended March 30, March 31, Net Sales (based on customer location) United States $ 193,782 $ 174,854 Other countries 212,566 165,736 Total $ 406,348 $ 340,590 March 30, December 29, Long-lived Assets United States $ 164,445 $ 163,416 Other countries 43,231 40,882 Total $ 207,676 $ 204,298 |
Inventories
Inventories | 3 Months Ended |
Mar. 30, 2018 | |
Inventory, Net [Abstract] | |
Inventories | Inventories Major components of inventories were as follows (in thousands): March 30, December 29, Finished products and components $ 137,197 $ 124,327 Products and components in various stages of completion 77,340 61,274 Raw materials and purchased components 103,312 103,407 Subtotal 317,849 289,008 Reduction to LIFO cost (50,551 ) (49,659 ) Total $ 267,298 $ 239,349 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 30, 2018 | |
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 March 30, 2018 Cost $ 181,143 $ 19,802 $ 1,071 $ 61,237 $ 263,253 Accumulated amortization (57,497 ) (8,327 ) (608 ) — (66,432 ) Foreign currency translation (6,983 ) (529 ) (61 ) (2,425 ) (9,998 ) Book value $ 116,663 $ 10,946 $ 402 $ 58,812 $ 186,823 Weighted average life in years 13 10 4 N/A As of December 29, 2017 Cost $ 179,826 $ 18,479 $ 1,071 $ 59,553 $ 258,929 Accumulated amortization (54,076 ) (7,795 ) (542 ) — (62,413 ) Foreign currency translation (9,186 ) (727 ) (61 ) (3,486 ) (13,460 ) Book value $ 116,564 $ 9,957 $ 468 $ 56,067 $ 183,056 Weighted average life in years 13 10 4 N/A Amortization of intangibles for the quarter was $4.0 million in 2018 and $3.6 million in 2017 . Estimated annual amortization expense based on the current carrying amount of other intangible assets is as follows (in thousands): 2018 2019 2020 2021 2022 Thereafter Estimated Amortization Expense $ 15,995 $ 15,663 $ 15,464 $ 15,247 $ 15,162 $ 54,472 Changes in the carrying amount of goodwill for each reportable segment were (in thousands): Industrial Process Contractor Total Balance, December 29, 2017 $ 161,673 $ 97,971 $ 19,145 $ 278,789 Additions from business acquisitions 15,446 170 459 16,075 Foreign currency translation 2,464 759 3,223 Balance, March 30, 2018 $ 179,583 $ 98,900 $ 19,604 $ 298,087 The Company completed business acquisitions in 2018 that were not material to the consolidated financial statements. |
Other Current Liabilities
Other Current Liabilities | 3 Months Ended |
Mar. 30, 2018 | |
Accrued Liabilities, Current [Abstract] | |
Other Current Liabilities | Other Current Liabilities Components of other current liabilities were (in thousands): March 30, December 29, Accrued self-insurance retentions $ 7,780 $ 7,956 Accrued warranty and service liabilities 11,108 10,535 Accrued trade promotions 6,156 10,588 Payable for employee stock purchases 2,314 10,053 Customer advances and deferred revenue 46,172 22,632 Income taxes payable 29,580 7,564 Right of return refund liability 11,699 11,412 Other 35,478 31,628 Total $ 150,287 $ 112,368 The Company manages certain self-insured loss exposures through a wholly-owned captive insurance subsidiary. Cash balances of $9.2 million as of March 30, 2018 and $9.2 million as of December 29, 2017 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 29, 2017 $ 10,535 Charged to expense 2,003 Margin on parts sales reversed 1,053 Reductions for claims settled (2,483 ) Balance, March 30, 2018 $ 11,108 |
Fair Value
Fair Value | 3 Months Ended |
Mar. 30, 2018 | |
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 March 30, December 29, Assets Cash surrender value of life insurance 2 $ 15,952 $ 16,128 Forward exchange contracts 2 36 — Total assets at fair value $ 15,988 $ 16,128 Liabilities Contingent consideration 3 $ 4,081 $ 4,081 Deferred compensation 2 4,142 3,836 Forward exchange contracts 2 — 517 Total liabilities at fair value $ 8,223 $ 8,434 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 $225 million and an estimated fair value of $240 million as of March 30, 2018 and $245 million as of December 29, 2017 . 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. |
Income Taxes (Notes)
Income Taxes (Notes) | 3 Months Ended |
Mar. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 12. Income Taxes The effective income tax rate was 20 percent for the quarter, down 5 percentage points from the first quarter last year . Excess tax benefits related to stock option exercises reduced the effective tax rate by 1 percentage point in the first quarter of 2018 and 4 percentage points in the first quarter last year. U.S. federal income tax reform legislation (the "Tax Act") passed at the end of 2017 decreased the effective tax rate by 8 percentage points compared to last year. Our accounting for certain income tax effects of the Tax Act related to the transition tax is incomplete; however, we have determined reasonable estimates for those effects and have recorded provisional amounts in our consolidated financial statements as of March 30, 2018 and December 29, 2017. We did not make any measurement-period adjustments to those amounts during the quarter. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements Not yet Adopted | In February 2016, FASB issued a final standard on leases contained in Accounting Standards Codification Topic 842 (“ASC 842”). The new standard is effective for the Company in the first quarter of 2019 and requires most leases to be recorded on the balance sheet. The Company plans to adopt the new accounting standard using the modified retrospective transition approach and will elect to use the package of practical expedients. 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 that has started the process of gathering and analyzing our lease contracts. Based on preliminary results of the process, which has not been completed, nothing has come to our attention that would indicate that adoption of the new standard will have a material impact on our earnings or shareholders equity. We expect that the recording of right-of-use assets and associated lease liabilities will be material to our consolidated balance sheet; however, we are unable to determine an amount at this time. We are in the process of evaluating changes to our business processes, systems and controls needed to support recognition and disclosure under the new standard. Further, we are continuing to assess any incremental disclosures that will be required in our consolidated financial statements. |
Revenue Recognition (Policies)
Revenue Recognition (Policies) | 3 Months Ended |
Mar. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition, Policy [Policy Text Block] | Adoption of New Accounting Standard In May 2014, the Financial Accounting Standards Board (FASB) issued a final standard on revenue from contracts with customers, contained in Accounting Standards Codification Topic 606 (“ASC 606”). The new standard sets forth a single comprehensive model for recognizing and reporting revenue. ASC 606 was effective for the Company as of December 30, 2017, the beginning of our fiscal year 2018. The Company adopted the new accounting standard using the modified retrospective transition approach. Application of the transition requirements had no material impact on operations or beginning retained earnings. We record revenue under ASC 606 at a single point in time, when control is transferred to the customer, which is consistent with past practice. Under ASC 606, rights of return are recorded as a refund liability and a recovery asset is established for the value of product expected to be returned. We previously classified rights of return, net of amounts expected to be recovered, as an allowance reducing accounts receivable. We reclassified prior period balance sheet amounts to conform to ASC 606 requirements. This resulted in an increase in accounts receivable of $9.7 million , a recovery asset of $1.7 million included in other current assets and $11.4 million of refund liability included in other current liabilities as of December 29, 2017. Accounting Policy Revenue is recognized upon the satisfaction of performance obligations, which occurs when control of the good or service transfers to the customer. This is generally on the date of shipment; however certain sales have terms requiring recognition when received by the customer. In cases where there are specific customer acceptance provisions, revenue is recognized at the later of customer acceptance or shipment (subject to shipping terms). Payment terms are established based on the type of product, distributor capabilities and competitive market conditions. We generally determine standalone selling prices based on the prices charged to customers for all material performance obligations. Variable consideration is accounted for as a price adjustment (sales adjustment). Following are examples of variable consideration that affect the Company's reported revenue. Early payment discounts are provided to certain customers and within certain regions. Rights of return are typically contractually limited, amounts are estimable, and the Company records provisions for anticipated returns at the time revenue is recognized. This includes promotions when, from time to time, the Company may promote the sale of new products by agreeing to accept returns of superseded products. Trade promotions are offered to distributors and end users through various programs, generally with terms of one year or less. Such promotions include rebates based on annual purchases and sales growth, coupons and reimbursement for competitive products. Payment of incentives may take the form of cash, trade credit, promotional merchandise or free product. Rebates are accrued based on the program rates and progress toward the probability weighted estimate of annual sales amount and sales growth. Additional promotions include cooperative advertising arrangements. Under cooperative advertising arrangements, the Company reimburses the distributor for a portion of its advertising costs related to the Company’s products; estimated costs are accrued at the time of sale and classified as selling, marketing and distribution expense. The estimated costs related to coupon programs are accrued at the time of sale and classified as selling, marketing and distribution expense or cost of products sold, depending on the type of incentive offered. The considerations payable to customers are deemed as broad based and are not recorded against net sales. Shipping and handling costs incurred for the delivery of goods to customers are included in cost of goods sold. Amounts billed to customers for shipping and handling are included in net sales. Deferred Revenues We defer revenue when cash payments are received or due in advance of our performance, including amounts which are refundable. This is also the case for services associated with certain product sales. The balance in the deferred revenue and customer advances for the three months ended March 30, 2018 was $46.2 million and consists primarily of cash payments received or due in advance of satisfying our performance obligations. The revenue recognized for the three months ended March 30, 2018 related to deferred revenue as of December 29, 2017 was $24.7 million . Our payment terms vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, we require payment before the products or services are delivered to the customer . Practical Expedients and Exemptions We have made an accounting policy election to account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of assessing such activities as performance obligations. We have made an accounting policy election to exclude from the transaction price all sales taxes related to revenue producing transactions collected from the customer for a governmental authority. We apply the new revenue standard requirements to a portfolio of contracts (or performance obligations) with similar characteristics for transactions where it is expected that the effects on the financial statements of applying the revenue recognition guidance to the portfolio would not differ materially from applying this guidance to the individual contracts (or performance obligations) within that portfolio . We have made an accounting policy election to not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer. If the revenue related to a performance obligation that includes goods or services that are immaterial in the context of the contract is recognized before those immaterial goods or services are transferred to the customer, then the related costs to transfer those goods or services are accrued. |
Income Taxes (Policies)
Income Taxes (Policies) | 3 Months Ended |
Mar. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Accounting Changes [Text Block] | Our accounting for certain income tax effects of the Tax Act related to the transition tax is incomplete; however, we have determined reasonable estimates for those effects and have recorded provisional amounts in our consolidated financial statements as of March 30, 2018 and December 29, 2017. We did not make any measurement-period adjustments to those amounts during the quarter. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 30, 2018 | |
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 March 30, March 31, Net earnings available to common shareholders $ 85,510 $ 60,732 Weighted average shares outstanding for basic earnings per share 169,073 167,304 Dilutive effect of stock options computed using the treasury stock method and the average market price 6,576 5,833 Weighted average shares outstanding for diluted earnings per share 175,649 173,137 Basic earnings per share $ 0.51 $ 0.36 Diluted earnings per share $ 0.49 $ 0.35 |
Share-Based Awards (Tables)
Share-Based Awards (Tables) | 3 Months Ended |
Mar. 30, 2018 | |
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 29, 2017 13,290 $ 21.99 7,729 $ 18.33 Granted 1,078 43.89 Exercised (269 ) 16.19 Canceled (23 ) 22.86 Outstanding, March 30, 2018 14,076 $ 23.78 8,960 $ 19.69 |
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: Three Months Ended March 30, March 31, Expected life in years 7.5 7.0 Interest rate 2.8 % 2.3 % Volatility 25.6 % 26.7 % Dividend yield 1.2 % 1.6 % Weighted average fair value per share $ 12.79 $ 7.98 |
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: Three Months Ended March 30, March 31, Expected life in years 1.0 1.0 Interest rate 2.1 % 0.9 % Volatility 21.3 % 22.3 % Dividend yield 1.2 % 1.5 % Weighted average fair value per share $ 10.28 $ 7.32 |
Retirement Benefits (Tables)
Retirement Benefits (Tables) | 3 Months Ended |
Mar. 30, 2018 | |
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 March 30, March 31, Pension Benefits Service cost $ 2,213 $ 2,061 Interest cost 3,434 3,930 Expected return on assets (4,086 ) (4,352 ) Amortization and other 2,095 2,325 Net periodic benefit cost $ 3,656 $ 3,964 Postretirement Medical Service cost $ 175 $ 175 Interest cost 264 275 Amortization 136 50 Net periodic benefit cost $ 575 $ 500 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 30, 2018 | |
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, December 30, 2016 $ (76,426 ) $ (65,802 ) $ (142,228 ) Other comprehensive income (loss) before reclassifications — 6,318 6,318 Reclassified to pension cost and deferred tax 1,234 — 1,234 Balance, March 31, 2017 $ (75,192 ) $ (59,484 ) $ (134,676 ) Balance, December 29, 2017 $ (78,430 ) $ (49,359 ) $ (127,789 ) Other comprehensive income (loss) before reclassifications — 8,746 8,746 Reclassified to pension cost and deferred tax 1,425 — 1,425 Reclassified to retained earnings $ (15,453 ) $ — $ (15,453 ) Balance, March 30, 2018 $ (92,458 ) $ (40,613 ) $ (133,071 ) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting - Operations and Assets | Sales and operating earnings by segment were as follows (in thousands): Three Months Ended March 30, March 31, Net Sales Industrial $ 195,196 $ 156,390 Process 80,035 70,029 Contractor 131,117 114,171 Total $ 406,348 $ 340,590 Operating Earnings Industrial $ 69,125 $ 53,735 Process 17,702 13,463 Contractor 31,411 26,019 Unallocated corporate (expense) (6,542 ) (5,782 ) Total $ 111,696 $ 87,435 Assets by segment were as follows (in thousands): March 30, December 29, Industrial $ 640,222 $ 572,436 Process 344,613 345,572 Contractor 291,664 255,615 Unallocated corporate 215,032 216,994 Total $ 1,491,531 $ 1,390,617 |
Segment Reporting - Geographic | Geographic information follows (in thousands): Three Months Ended March 30, March 31, Net Sales (based on customer location) United States $ 193,782 $ 174,854 Other countries 212,566 165,736 Total $ 406,348 $ 340,590 March 30, December 29, Long-lived Assets United States $ 164,445 $ 163,416 Other countries 43,231 40,882 Total $ 207,676 $ 204,298 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 30, 2018 | |
Inventory, Net [Abstract] | |
Components of Inventories | Major components of inventories were as follows (in thousands): March 30, December 29, Finished products and components $ 137,197 $ 124,327 Products and components in various stages of completion 77,340 61,274 Raw materials and purchased components 103,312 103,407 Subtotal 317,849 289,008 Reduction to LIFO cost (50,551 ) (49,659 ) Total $ 267,298 $ 239,349 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 30, 2018 | |
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 March 30, 2018 Cost $ 181,143 $ 19,802 $ 1,071 $ 61,237 $ 263,253 Accumulated amortization (57,497 ) (8,327 ) (608 ) — (66,432 ) Foreign currency translation (6,983 ) (529 ) (61 ) (2,425 ) (9,998 ) Book value $ 116,663 $ 10,946 $ 402 $ 58,812 $ 186,823 Weighted average life in years 13 10 4 N/A As of December 29, 2017 Cost $ 179,826 $ 18,479 $ 1,071 $ 59,553 $ 258,929 Accumulated amortization (54,076 ) (7,795 ) (542 ) — (62,413 ) Foreign currency translation (9,186 ) (727 ) (61 ) (3,486 ) (13,460 ) Book value $ 116,564 $ 9,957 $ 468 $ 56,067 $ 183,056 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): 2018 2019 2020 2021 2022 Thereafter Estimated Amortization Expense $ 15,995 $ 15,663 $ 15,464 $ 15,247 $ 15,162 $ 54,472 |
Goodwill Rollforward | Changes in the carrying amount of goodwill for each reportable segment were (in thousands): Industrial Process Contractor Total Balance, December 29, 2017 $ 161,673 $ 97,971 $ 19,145 $ 278,789 Additions from business acquisitions 15,446 170 459 16,075 Foreign currency translation 2,464 759 3,223 Balance, March 30, 2018 $ 179,583 $ 98,900 $ 19,604 $ 298,087 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 30, 2018 | |
Accrued Liabilities, Current [Abstract] | |
Components of Other Current Liabilities | Components of other current liabilities were (in thousands): March 30, December 29, Accrued self-insurance retentions $ 7,780 $ 7,956 Accrued warranty and service liabilities 11,108 10,535 Accrued trade promotions 6,156 10,588 Payable for employee stock purchases 2,314 10,053 Customer advances and deferred revenue 46,172 22,632 Income taxes payable 29,580 7,564 Right of return refund liability 11,699 11,412 Other 35,478 31,628 Total $ 150,287 $ 112,368 |
Accrued Warranty Activity | Following is a summary of activity in accrued warranty and service liabilities (in thousands): Balance, December 29, 2017 $ 10,535 Charged to expense 2,003 Margin on parts sales reversed 1,053 Reductions for claims settled (2,483 ) Balance, March 30, 2018 $ 11,108 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 30, 2018 | |
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 March 30, December 29, Assets Cash surrender value of life insurance 2 $ 15,952 $ 16,128 Forward exchange contracts 2 36 — Total assets at fair value $ 15,988 $ 16,128 Liabilities Contingent consideration 3 $ 4,081 $ 4,081 Deferred compensation 2 4,142 3,836 Forward exchange contracts 2 — 517 Total liabilities at fair value $ 8,223 $ 8,434 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 30, 2018 | Dec. 29, 2017 | |
Revenue from Contract with Customer [Abstract] | ||
Deferred Revenue | $ 46,200 | |
Reserve for Sales Returns | $ 9,700 | |
Right to Recover Product, Current | 1,700 | |
Refund Liability, Current | 11,699 | $ 11,412 |
Deferred Revenue, Revenue Recognized | $ 24,700 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 30, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Net earnings available to common shareholders | $ 85,510 | $ 60,732 |
Weighted average shares outstanding for basic earnings per share | 169,073,000 | 167,304,000 |
Dilutive effect of stock options computed using the treasury stock method and the average market price | 6,576,000 | 5,833,000 |
Weighted average shares outstanding for diluted earnings per share | 175,649,000 | 173,137,000 |
Basic earnings per share | $ 0.51 | $ 0.36 |
Diluted earnings per share | $ 0.49 | $ 0.35 |
Antidilutive securities excluded from the computation of diluted earnings per share | 1,020,000 | 2,655,000 |
Share-Based Awards - Options Fa
Share-Based Awards - Options Fair Value Inputs (Details) - Stock Option - $ / shares | 3 Months Ended | |
Mar. 30, 2018 | Mar. 31, 2017 | |
Fair Value Assumptions and Methodology [Abstract] | ||
Expected life in years | 7 years 6 months | 7 years |
Interest rate | 2.80% | 2.30% |
Volatility | 25.60% | 26.70% |
Dividend yield | 1.20% | 1.60% |
Weighted average fair value per share (in dollars per share) | $ 12.79 | $ 7.98 |
Share-Based Awards - ESPP Fair
Share-Based Awards - ESPP Fair Value Inputs (Details) - Employee Stock Purchase Plan - $ / shares | 3 Months Ended | |
Mar. 30, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life in years | 1 year | 1 year |
Interest rate | 2.10% | 0.90% |
Volatility | 21.30% | 22.30% |
Dividend yield | 1.20% | 1.50% |
Weighted average fair value per share (in dollars per share) | $ 10.28 | $ 7.32 |
Share-Based Awards - Narrative
Share-Based Awards - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 30, 2018 | Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Share-based compensation expense | $ 6.6 | $ 5.5 |
Unrecognized compensation cost | $ 20.1 | |
Weighted average recognition period | 1 year 10 months | |
Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employee stock purchase plan shares issued | 480,000 | 500,000 |
Stock purchase plan discount from market value | 15.00% |
Retirement Benefits (Details)
Retirement Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2018 | Mar. 31, 2017 | |
Pension | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 2,213 | $ 2,061 |
Interest cost | 3,434 | 3,930 |
Expected return on assets | (4,086) | (4,352) |
Amortization and other | 2,095 | 2,325 |
Net periodic benefit cost | 3,656 | 3,964 |
Postretirement Medical | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 175 | 175 |
Interest cost | 264 | 275 |
Amortization | 136 | 50 |
Net periodic benefit cost | $ 575 | 500 |
Accounting Standards Update 2017-07 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 1,600 |
Shareholders' Equity - Changes
Shareholders' Equity - Changes in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2018 | Mar. 31, 2017 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Accumulated other comprehensive income (loss) | $ (127,789) | $ (142,228) |
Other comprehensive income (loss) before reclassifications | 8,746 | 6,318 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 1,425 | 1,234 |
Reclassified to Retained Earnings | (15,453) | |
Ending Accumulated other comprehensive income (loss) | (133,071) | (134,676) |
Pension and Postretirement Medical | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Accumulated other comprehensive income (loss) | (78,430) | (76,426) |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 1,425 | 1,234 |
Ending Accumulated other comprehensive income (loss) | (92,458) | (75,192) |
Cumulative Translation Adjustment | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Accumulated other comprehensive income (loss) | (49,359) | (65,802) |
Other comprehensive income (loss) before reclassifications | 8,746 | 6,318 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | 0 |
Ending Accumulated other comprehensive income (loss) | (40,613) | $ (59,484) |
Accounting Standards Update 2018-02 [Member] [Member] | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Other comprehensive income (loss) before reclassifications | 0 | |
Reclassified to Retained Earnings | $ (15,453) |
Segment Reporting Information -
Segment Reporting Information - Operations and Assets (Details) $ in Thousands | 3 Months Ended | ||
Mar. 30, 2018USD ($)segment | Mar. 31, 2017USD ($) | Dec. 29, 2017USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | segment | 3 | ||
Net Sales | $ 406,348 | $ 340,590 | |
Operating Earnings | 111,696 | 87,435 | |
Total Assets | 1,491,531 | $ 1,390,617 | |
Operating Segments | Industrial | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 195,196 | 156,390 | |
Operating Earnings | 69,125 | 53,735 | |
Total Assets | 640,222 | 572,436 | |
Operating Segments | Process | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 80,035 | 70,029 | |
Operating Earnings | 17,702 | 13,463 | |
Total Assets | 344,613 | 345,572 | |
Operating Segments | Contractor | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 131,117 | 114,171 | |
Operating Earnings | 31,411 | 26,019 | |
Total Assets | 291,664 | 255,615 | |
Unallocated corporate | |||
Segment Reporting Information [Line Items] | |||
Operating Earnings | (6,542) | $ (5,782) | |
Total Assets | $ 215,032 | $ 216,994 |
Segment Reporting Information39
Segment Reporting Information - Geographic (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 30, 2018 | Mar. 31, 2017 | Dec. 29, 2017 | |
Geographic Information [Line Items] | |||
Net Sales | $ 406,348 | $ 340,590 | |
Long-lived Assets | 207,676 | $ 204,298 | |
United States | |||
Geographic Information [Line Items] | |||
Net Sales | 193,782 | 174,854 | |
Long-lived Assets | 164,445 | 163,416 | |
Other countries | |||
Geographic Information [Line Items] | |||
Net Sales | 212,566 | $ 165,736 | |
Long-lived Assets | $ 43,231 | $ 40,882 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 30, 2018 | Dec. 29, 2017 |
Inventory, Net [Abstract] | ||
Finished products and components | $ 137,197 | $ 124,327 |
Products and components in various stages of completion | 77,340 | 61,274 |
Raw materials and purchased components | 103,312 | 103,407 |
Inventory gross | 317,849 | 289,008 |
Reduction to LIFO cost | (50,551) | (49,659) |
Total | $ 267,298 | $ 239,349 |
Intangible Assets - Other Intan
Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 30, 2018 | Dec. 29, 2017 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Total Cost | $ 263,253 | $ 258,929 |
Total Accumulated Amortization | (66,432) | (62,413) |
Total Foreign Currency Translation | (9,998) | (13,460) |
Total Book Value | 186,823 | 183,056 |
Trade Names | ||
Indefinite Life | ||
Cost | 61,237 | 59,553 |
Foreign currency translation | (2,425) | (3,486) |
Book value | 58,812 | 56,067 |
Customer Relationships | ||
Finite Life | ||
Cost | 181,143 | 179,826 |
Accumulated amortization | (57,497) | (54,076) |
Foreign currency translation | (6,983) | (9,186) |
Book value | $ 116,663 | $ 116,564 |
Weighted average life in years | 13 years | 13 years |
Patents and Proprietary Technology | ||
Finite Life | ||
Cost | $ 19,802 | $ 18,479 |
Accumulated amortization | (8,327) | (7,795) |
Foreign currency translation | (529) | (727) |
Book value | $ 10,946 | $ 9,957 |
Weighted average life in years | 10 years | 10 years |
Trademarks, Trade Names and Other | ||
Finite Life | ||
Cost | $ 1,071 | $ 1,071 |
Accumulated amortization | (608) | (542) |
Foreign currency translation | (61) | (61) |
Book value | $ 402 | $ 468 |
Weighted average life in years | 4 years | 4 years |
Intangible Assets - Future Amor
Intangible Assets - Future Amortization Expense (Details) $ in Thousands | Mar. 30, 2018USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Estimated amortization expense 2018 | $ 15,995 |
Estimated amortization expense 2019 | 15,663 |
Estimated amortization expense 2020 | 15,464 |
Estimated amortization expense 2021 | 15,247 |
Estimated amortization expense 2022 | 15,162 |
Estimated amortization expense thereafter | $ 54,472 |
Intangible Assets - Goodwill Ro
Intangible Assets - Goodwill Rollforward (Details) $ in Thousands | 3 Months Ended |
Mar. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 278,789 |
Additions from business acquisitions | 16,075 |
Foreign currency translation | 3,223 |
Ending balance | 298,087 |
Process | |
Goodwill [Roll Forward] | |
Beginning balance | 97,971 |
Additions from business acquisitions | 170 |
Foreign currency translation | 759 |
Ending balance | 98,900 |
Industrial [Member] | |
Goodwill [Roll Forward] | |
Beginning balance | 161,673 |
Additions from business acquisitions | 15,446 |
Foreign currency translation | 2,464 |
Ending balance | 179,583 |
Contractor | |
Goodwill [Roll Forward] | |
Beginning balance | 19,145 |
Additions from business acquisitions | 459 |
Foreign currency translation | |
Ending balance | $ 19,604 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 30, 2018 | Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 4 | $ 3.6 |
Other Current Liabilities - Com
Other Current Liabilities - Components of Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 30, 2018 | Dec. 29, 2017 |
Other Current Liabilities Details [Abstract] | ||
Accrued self-insurance retentions | $ 7,780 | $ 7,956 |
Accrued warranty and service liabilities | 11,108 | 10,535 |
Accrued trade promotions | 6,156 | 10,588 |
Payable for employee stock purchases | 2,314 | 10,053 |
Customer advances and deferred revenue | 46,172 | 22,632 |
Income taxes payable | 29,580 | 7,564 |
Refund Liability, Current | 11,699 | 11,412 |
Other | 35,478 | 31,628 |
Total | $ 150,287 | $ 112,368 |
Other Current Liabilities - Acc
Other Current Liabilities - Accrued Warranty Activity (Details) $ in Thousands | 3 Months Ended |
Mar. 30, 2018USD ($) | |
Activity In Accrued Warranty And Service Liabilities Abstract | |
Balance, beginning of year | $ 10,535 |
Charged to expense | 2,003 |
Margin on parts sales reversed | 1,053 |
Reductions for claims settled | (2,483) |
Balance, end of period | $ 11,108 |
Other Current Liabilities - Nar
Other Current Liabilities - Narrative (Details) - USD ($) $ in Millions | Mar. 30, 2018 | Dec. 29, 2017 |
Other Current Assets | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash and cash equivalents | $ 9.2 | $ 9.2 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Thousands | Mar. 30, 2018 | Dec. 29, 2017 |
Assets | ||
Total assets at fair value | $ 15,988 | $ 16,128 |
Liabilities | ||
Total liabilities at fair value | 8,223 | 8,434 |
Long term debt, carrying amount | 225,000 | |
Long term debt, fair value | 240,000 | 245,000 |
Level 2 | ||
Assets | ||
Cash surrender value of life insurance | 15,952 | 16,128 |
Forward exchange contracts | 36 | 0 |
Liabilities | ||
Deferred compensation | 4,142 | 3,836 |
Forward exchange contracts | 0 | 517 |
Level 3 | ||
Liabilities | ||
Contingent consideration | $ 4,081 | $ 4,081 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 30, 2018Rate | Mar. 31, 2017Rate | |
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate | 20.00% | |
Stock compensation excess tax benefit | 1.00% | 4.00% |
Effective Income Tax Rate Total Decrease | (5.00%) | |
Effective Income Tax Rate Reconciliation, Impact of 2017 Tax Cuts and Jobs Act, percent | (8.00%) |