Cover Page
Cover Page - shares | 9 Months Ended | |
Jun. 29, 2019 | Aug. 01, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 29, 2019 | |
Document Transition Report | false | |
Entity File Number | 000-02382 | |
Entity Registrant Name | MTS SYSTEMS CORPORATION | |
Entity Incorporation, State or Country Code | MN | |
Entity Tax Identification Number | 41-0908057 | |
Entity Address, Address Line One | 14000 Technology Drive | |
Entity Address, City or Town | Eden Prairie, | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55344 | |
City Area Code | 952 | |
Local Phone Number | 937-4000 | |
Title of 12(b) Security | Common stock, $0.25 par value | |
Trading Symbol | MTSC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 19,334,452 | |
Entity Central Index Key | 0000068709 | |
Current Fiscal Year End Date | --09-28 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 29, 2019 | Sep. 29, 2018 |
Current assets | ||
Cash and cash equivalents | $ 75,735 | $ 71,804 |
Accounts receivable, net of allowance for doubtful accounts of $5,430 and $5,004, respectively | 131,365 | 122,243 |
Unbilled accounts receivable, net | 68,804 | 70,474 |
Inventories, net | 164,853 | 139,109 |
Prepaid expenses and other current assets | 27,118 | 24,572 |
Total current assets | 467,875 | 428,202 |
Property and equipment, net | 92,893 | 90,269 |
Goodwill | 403,448 | 369,275 |
Intangible assets, net | 285,299 | 246,138 |
Other long-term assets | 3,986 | 2,263 |
Deferred income taxes | 3,818 | 3,249 |
Total assets | 1,257,319 | 1,139,396 |
Current liabilities | ||
Current maturities of long-term debt, net | 28,316 | 32,738 |
Accounts payable | 39,495 | 47,886 |
Accrued payroll and related costs | 43,893 | 43,554 |
Advance payments from customers | 87,935 | 80,131 |
Accrued warranty costs | 3,843 | 5,418 |
Accrued income taxes | 3,736 | 4,928 |
Accrued dividends | 5,568 | 5,312 |
Other accrued liabilities | 35,367 | 19,146 |
Total current liabilities | 248,153 | 239,113 |
Long-term debt, less current maturities, net | 434,200 | 355,640 |
Deferred income taxes | 50,315 | 46,482 |
Non-current accrued income taxes | 5,745 | 6,158 |
Defined benefit pension plan obligation | 9,062 | 9,177 |
Other long-term liabilities | 15,305 | 4,894 |
Total liabilities | 762,780 | 661,464 |
Shareholders' Equity | ||
Common stock, $0.25 par value; 64,000 shares authorized: 18,736 and 17,856 shares issued and outstanding as of June 29, 2019 and September 29, 2018, respectively | 4,684 | 4,464 |
Additional paid-in capital | 179,015 | 171,407 |
Retained earnings | 316,249 | 300,585 |
Accumulated other comprehensive income (loss) | (5,409) | 1,476 |
Total shareholders' equity | 494,539 | 477,932 |
Total liabilities and shareholders' equity | $ 1,257,319 | $ 1,139,396 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 29, 2019 | Sep. 29, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 5,430 | $ 5,004 |
Common stock, par value (in dollars per share) | $ 0.25 | $ 0.25 |
Common stock, shares authorized (in shares) | 64,000,000 | 64,000,000 |
Common stock, shares issued (in shares) | 18,736,000 | 17,856,000 |
Common stock, shares outstanding (in shares) | 18,736,000 | 17,856,000 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Revenue | ||||
Revenue | $ 232,209 | $ 194,668 | $ 668,436 | $ 580,153 |
Cost of Sales | ||||
Total cost of sales | 147,106 | 118,384 | 417,678 | 351,116 |
Gross profit | 85,103 | 76,284 | 250,758 | 229,037 |
Operating expenses | ||||
Selling and marketing | 33,321 | 32,171 | 98,805 | 94,796 |
General and administrative | 20,621 | 19,081 | 63,804 | 58,635 |
Research and development | 8,160 | 8,768 | 23,008 | 26,235 |
Total operating expenses | 62,102 | 60,020 | 185,617 | 179,666 |
Income from operations | 23,001 | 16,264 | 65,141 | 49,371 |
Interest expense, net | (6,687) | (6,249) | (20,873) | (19,761) |
Other income (expense), net | (124) | 30 | 195 | 81 |
Income before income taxes | 16,190 | 10,045 | 44,463 | 29,691 |
Income tax provision (benefit) | 2,605 | 1,066 | 6,217 | (20,877) |
Net income | $ 13,585 | $ 8,979 | $ 38,246 | $ 50,568 |
Basic | ||||
Earnings per share (in dollars per share) | $ 0.70 | $ 0.47 | $ 1.99 | $ 2.64 |
Weighted average common shares outstanding (in shares) | 19,297 | 19,174 | 19,255 | 19,149 |
Diluted | ||||
Earnings per share (in dollars per share) | $ 0.70 | $ 0.47 | $ 1.97 | $ 2.62 |
Weighted average common shares outstanding (in shares) | 19,520 | 19,305 | 19,436 | 19,269 |
Dividends declared per share (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.90 | $ 0.90 |
Product | ||||
Revenue | ||||
Revenue | $ 205,528 | $ 168,651 | $ 587,297 | $ 503,345 |
Cost of Sales | ||||
Cost of goods and services sold | 130,514 | 103,182 | 368,260 | 304,809 |
Service | ||||
Revenue | ||||
Revenue | 26,681 | 26,017 | 81,139 | 76,808 |
Cost of Sales | ||||
Cost of goods and services sold | $ 16,592 | $ 15,202 | $ 49,418 | $ 46,307 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 13,585 | $ 8,979 | $ 38,246 | $ 50,568 |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation gain (loss) adjustments | 506 | (8,056) | (2,165) | (385) |
Derivative instruments | ||||
Unrealized net gain (loss) | (1,074) | 2,089 | (2,882) | 3,359 |
Net (gain) loss reclassified to earnings | (655) | (516) | (2,136) | 274 |
Defined benefit pension plan | ||||
Unrealized net gain (loss) | 419 | 78 | (167) | (193) |
Net (gain) loss reclassified to earnings | 95 | 92 | 286 | 278 |
Currency exchange rate gain (loss) | (82) | 413 | 179 | 145 |
Other comprehensive income (loss) | (791) | (5,900) | (6,885) | 3,478 |
Comprehensive income (loss) | $ 12,794 | $ 3,079 | $ 31,361 | $ 54,046 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Balance at the beginning of the year at Sep. 30, 2017 | $ 428,777 | $ 4,440 | $ 163,632 | $ 261,258 | $ (553) |
Balance at the beginning of the year (in shares) at Sep. 30, 2017 | 17,760 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Total comprehensive income | 54,046 | 50,568 | 3,478 | ||
Exercise of stock options (in shares) | 13 | ||||
Exercise of stock options | 630 | $ 3 | 627 | ||
Stock-based compensation (in shares) | 71 | ||||
Stock-based compensation | 5,366 | $ 18 | 5,348 | ||
Issuance for employee stock purchase plan (in shares) | 24 | ||||
Issuance for employee stock purchase plan | 1,071 | $ 6 | 1,065 | ||
Common stock purchased and retired (in shares) | (24) | ||||
Common stock purchased and retired | (1,306) | $ (6) | (1,300) | ||
Dividends | (16,034) | (16,034) | |||
Balance at the end of the year (in shares) at Jun. 30, 2018 | 17,844 | ||||
Balance at the end of the year at Jun. 30, 2018 | 472,550 | $ 4,461 | 169,339 | 295,825 | 2,925 |
Balance at the beginning of the year at Mar. 31, 2018 | 472,230 | $ 4,448 | 166,757 | 292,200 | 8,825 |
Balance at the beginning of the year (in shares) at Mar. 31, 2018 | 17,792 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Total comprehensive income | 3,079 | 8,979 | (5,900) | ||
Exercise of stock options (in shares) | 9 | ||||
Exercise of stock options | 418 | $ 2 | 416 | ||
Stock-based compensation (in shares) | 41 | ||||
Stock-based compensation | 2,188 | $ 11 | 2,177 | ||
Issuance for employee stock purchase plan (in shares) | 12 | ||||
Issuance for employee stock purchase plan | 538 | $ 3 | 535 | ||
Common stock purchased and retired (in shares) | (10) | ||||
Common stock purchased and retired | (549) | $ (3) | (546) | ||
Dividends | (5,354) | (5,354) | |||
Balance at the end of the year (in shares) at Jun. 30, 2018 | 17,844 | ||||
Balance at the end of the year at Jun. 30, 2018 | 472,550 | $ 4,461 | 169,339 | 295,825 | 2,925 |
Balance at the beginning of the year at Sep. 29, 2018 | 477,932 | $ 4,464 | 171,407 | 300,585 | 1,476 |
Balance at the beginning of the year (in shares) at Sep. 29, 2018 | 17,856 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Total comprehensive income | 31,361 | 38,246 | (6,885) | ||
Conversion of tangible equity units (in shares) | 781 | ||||
Conversion of tangible equity units | $ 195 | (195) | |||
Exercise of stock options (in shares) | 23 | ||||
Exercise of stock options | 1,140 | $ 6 | 1,134 | ||
Stock-based compensation (in shares) | 88 | ||||
Stock-based compensation | 7,515 | $ 22 | 7,493 | ||
Issuance for employee stock purchase plan (in shares) | 16 | ||||
Issuance for employee stock purchase plan | 557 | $ 4 | 553 | ||
Common stock purchased and retired (in shares) | (28) | ||||
Common stock purchased and retired | (1,384) | $ (7) | (1,377) | ||
Dividends | (16,355) | (16,355) | |||
Balance at the end of the year (in shares) at Jun. 29, 2019 | 18,736 | ||||
Balance at the end of the year at Jun. 29, 2019 | 494,539 | $ 4,684 | 179,015 | 316,249 | (5,409) |
Balance at the beginning of the year at Mar. 30, 2019 | 485,054 | $ 4,475 | 176,918 | 308,279 | (4,618) |
Balance at the beginning of the year (in shares) at Mar. 30, 2019 | 17,900 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Total comprehensive income | 12,794 | 13,585 | (791) | ||
Conversion of tangible equity units (in shares) | 781 | ||||
Conversion of tangible equity units | $ 195 | (195) | |||
Exercise of stock options (in shares) | 20 | ||||
Exercise of stock options | 996 | $ 5 | 991 | ||
Stock-based compensation (in shares) | 55 | ||||
Stock-based compensation | 2,296 | $ 14 | 2,282 | ||
Common stock purchased and retired (in shares) | (20) | ||||
Common stock purchased and retired | (986) | $ (5) | (981) | ||
Dividends | (5,615) | (5,615) | |||
Balance at the end of the year (in shares) at Jun. 29, 2019 | 18,736 | ||||
Balance at the end of the year at Jun. 29, 2019 | $ 494,539 | $ 4,684 | $ 179,015 | $ 316,249 | $ (5,409) |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends per share (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.90 | $ 0.90 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 29, 2019 | Jun. 30, 2018 | |
Cash Flows from Operating Activities | ||
Net income | $ 38,246 | $ 50,568 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities | ||
Stock-based compensation | 7,298 | 5,378 |
Fair value adjustment to acquired inventory | 1,141 | 0 |
Net periodic pension benefit cost | 871 | 890 |
Depreciation and amortization | 28,153 | 25,858 |
(Gain) loss on sale or disposal of property and equipment | 552 | 171 |
Amortization of debt issuance costs | 2,807 | 3,824 |
Deferred income taxes | (1,430) | (30,189) |
Bad debt provision (recovery), net | 586 | 1,344 |
Other | 0 | (111) |
Changes in operating assets and liabilities | ||
Accounts receivable and unbilled accounts receivable | (15,444) | 22,915 |
Inventories, net | 1,013 | (15,158) |
Prepaid expenses | (2,310) | (784) |
Accounts payable | (11,361) | (283) |
Accrued payroll and related costs | (1,396) | (10,525) |
Advance payments from customers | (6,390) | 1,987 |
Accrued warranty costs | (1,571) | (422) |
Other assets and liabilities | 9,205 | (3,352) |
Net Cash Provided by (Used in) Operating Activities | 49,970 | 52,111 |
Cash Flows from Investing Activities | ||
Purchases of property and equipment | (17,377) | (9,777) |
Proceeds from sale of property and equipment | 10 | 69 |
Purchases of business, net of acquired cash | (83,526) | 0 |
Other | (285) | 823 |
Net Cash Provided by (Used in) Investing Activities | (101,178) | (8,885) |
Cash Flows from Financing Activities | ||
Proceeds from issuance of long-term debt | 80,391 | 0 |
Payment of long-term debt | (3,861) | (63,233) |
Payment of debt component of tangible equity units | (4,818) | (6,805) |
Payment of debt issuance costs for revolving credit facility | (542) | 0 |
Receipts under short-term borrowings | 35,000 | 12,750 |
Payments under short-term borrowings | (35,000) | (12,750) |
Cash dividends | (16,099) | (15,958) |
Proceeds from exercise of stock options and employee stock purchase plan | 1,697 | 1,701 |
Payments to purchase and retire common stock | (1,384) | (1,306) |
Net Cash Provided by (Used in) Financing Activities | 55,384 | (85,601) |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (245) | 45 |
Cash and Cash Equivalents | ||
Increase (decrease) during the period | 3,931 | (42,330) |
Balance, beginning of period | 71,804 | 108,733 |
Balance, end of period | 75,735 | 66,403 |
Cash paid during the period for | ||
Interest | 18,244 | 16,768 |
Income taxes | 9,295 | 7,645 |
Non-cash investing and financing activities | ||
Dividends declared not yet paid | $ 5,568 | $ 5,354 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Jun. 29, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The consolidated financial statements include the accounts of MTS Systems Corporation and its wholly owned subsidiaries. Significant intercompany account balances and transactions have been eliminated. The terms "MTS," "we," "us," "the Company" or "our" in this Quarterly Report on Form 10-Q, unless the context otherwise requires, refer to MTS Systems Corporation and its wholly owned subsidiaries. We have prepared the interim unaudited consolidated financial statements included herein pursuant to the rules and regulations of the United States (U.S.) Securities and Exchange Commission (SEC). The information furnished in these consolidated financial statements includes normal recurring adjustments and reflects all adjustments that are, in our opinion, necessary for a fair presentation of such financial statements. The consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). GAAP requires us to make estimates and assumptions that affect amounts reported. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to SEC rules and regulations. The accompanying consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 29, 2018 filed with the SEC. Interim results of operations for the third fiscal quarter ended June 29, 2019 are not necessarily indicative of the results to be expected for the full fiscal year. We have a 5-4-4 week, quarterly accounting cycle with our fiscal year ending on the Saturday closest to September 30. Fiscal year 2019 ending on September 28, 2019 will consist of 52 weeks. Fiscal year 2018 ended on September 29, 2018 consisted of 52 weeks. Changes to Significant Accounting Policies The following accounting policies have been updated since our fiscal year 2018 Annual Report on Form 10-K. Revenue Recognition As described in Note 2, we adopted Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), followed by related amendments, on September 30, 2018 under the modified retrospective transition method. Our new revenue recognition accounting policy and disclosures relative to this guidance are included in Note 3. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 9 Months Ended |
Jun. 29, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently Issued Accounting Pronouncements | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Leases In February 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-02, Leases (Topic 842), followed by related amendments (collectively, "the new lease standard"), which requires lessees to recognize most leases on the balance sheet for the rights and obligations created by those leases. Under the new lease standard, a company recognizes a right-of-use asset, representing the right to use the underlying asset for the lease term, and a corresponding lease liability for all leases with terms greater than 12 months. The new lease standard requires enhanced disclosures regarding the amount, timing and uncertainty of cash flows arising from a company's leases. Adoption of the new lease standard is required for annual periods beginning after December 15, 2018, including interim periods within that annual period, which is our fiscal year 2020. The new guidance is required to be adopted using a modified retrospective transition method, and an optional transition method may be elected to use the effective date as the date of initial application on transition. We intend to adopt the new lease standard for our fiscal year 2020 under the optional transition method with an effective date of September 29, 2019. As a result, we will not adjust our comparative period financial information or make the new required lease disclosures for periods before the effective date, and we will record the impact from adoption as a cumulative-effect reduction to retained earnings as of the effective date. We are currently planning to elect the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs, and we are currently evaluating the other practical expedients available under the new lease standard. We continue to make progress with preparation for the adoption and implementation of the new lease standard, including assessing the completeness of our lease arrangements, evaluating practical expedients and accounting policy elections, revising our lease-related accounting policies, assessing impacts to controls, and implementing a lease software solution. We anticipate the adoption of the new lease standard will result in an increase in assets and liabilities on our Consolidated Balance Sheet. The impact on our Consolidated Statement of Income and Consolidated Statement of Cash Flows is being evaluated. We continue to evaluate the impact that these changes in methodology will have on our financial condition, results of operations and disclosures. Other In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , followed by related amendments, which changes the accounting for credit losses on instruments measured at amortized cost by adding an impairment model that is based on expected losses rather than incurred losses. An entity will recognize as an allowance its estimate of expected credit losses, which is believed to result in more timely recognition of such losses as the standard eliminates the probable initial recognition threshold. Adoption of the standard is required for annual periods beginning after December 15, 2019, including interim periods within that annual period, which is our fiscal year 2021. The new guidance is required to be adopted using a modified retrospective approach with a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period of adoption. Early adoption is permitted for annual periods beginning after December 15, 2018, including interim periods within that annual period, which is our fiscal year 2020. We have not yet evaluated the impact the adoption of this guidance may have on our financial condition, results of operations or disclosures. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework–Changes to the Disclosure Requirements for Fair Value Measurement , which eliminates, amends and adds disclosure requirements for fair value measurements. The standard is required to be adopted for annual periods beginning after December 15, 2019, including interim periods within that annual period, which is our fiscal year 2021. Certain disclosures in the new guidance are to be applied using a retrospective approach while other disclosures are to be applied using a prospective approach. Early adoption is permitted. We have not yet evaluated the impact the adoption of this guidance may have on our financial condition, results of operations or disclosures. In August 2018, the FASB issued ASU No. 2018-14, Compensation–Retirement Benefits–Defined Benefit Plans–General (Subtopic 715-20): Disclosure Framework–Changes to the Disclosure Requirements for Defined Benefit Plans , which eliminates, amends and adds disclosure requirements for defined benefit pension and other postretirement plans. The standard is required to be adopted for annual periods ending after December 15, 2020, which is our fiscal year 2021. The new guidance is to be applied using a retrospective approach with early adoption permitted. We have not yet evaluated the impact the adoption of this guidance may have on our financial condition, results of operations or disclosures. Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), followed by related amendments (collectively, "the new revenue standard" or "ASC 606"), to provide a single, comprehensive revenue recognition model for all contracts with customers. Under the new revenue standard, a company recognizes revenue to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. Determination of when and how revenue is recognized is based on a five-step analysis. Enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from a company's contracts with customers are required. We adopted the new revenue standard on September 30, 2018 for our fiscal year 2019 under the modified retrospective transition method. As of September 30, 2018, we recorded a cumulative-effect reduction to the opening balance of our fiscal year 2019 retained earnings of $6,227 , net of tax, for the net deferral of previously recognized revenue and related cost of sales, partially offset by the capitalization and deferral of pre-contract costs. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. See Note 3 for our new revenue recognition accounting policy and disclosures relative to this guidance. In March 2016, the FASB issued ASU No. 2016-04, Liabilities—Extinguishments of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Products , which amends existing guidance on extinguishing financial liabilities for certain prepaid stored-value products. The standard requires recognition of the expected breakage amount or the value that is ultimately not redeemed either proportionally in earnings as redemption occurs or when redemption is remote, if issuers are not entitled to breakage. We adopted the standard on a modified retrospective basis for the annual period ending September 28, 2019, including interim periods within that annual period. The adoption of this guidance had no impact on our financial condition, results of operations or disclosures. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory , which requires companies to account for the income tax effects of intercompany sales and transfers of assets other than inventory when the transfer occurs. Existing guidance required companies to defer the income tax effects of intercompany transfers of assets until the asset has been sold to an outside party or otherwise recognized. We adopted the standard on a modified retrospective basis for the annual period ending September 28, 2019, including interim periods within that annual period. The adoption of this guidance had no impact on our financial condition, results of operations or disclosures. In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the income statement. The standard requires the service cost component of net periodic benefit cost to be presented in the same income statement line items as other employee compensation costs arising from services rendered during the period, with only the service cost component eligible for capitalization in assets. Other components of the net periodic benefit cost are to be stated separately from the line items that include the service cost and outside of operating income. These components are not eligible for capitalization in assets. We adopted the standard for the annual period ending September 28, 2019, including interim periods within that annual period, retrospectively for the presentation in the income statement of the service cost component and the other components of net periodic pension cost and prospectively for the capitalization in assets of the service cost component of net periodic pension cost. The adoption of this guidance did not have a material impact on our current or prior year financial condition, results of operations or disclosures. Therefore, the comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , which amends the hedge accounting model in Accounting Standards Codification (ASC) 815 to enable entities to better portray the economics of their risk management activities in the financial statements and enhance the transparency and understandability of hedge results. We early adopted the standard on a modified retrospective basis for the annual period ending September 28, 2019, including interim periods within that annual period. The adoption of this guidance had no impact on our current or prior year financial condition, results of operations or disclosures. |
Revenue
Revenue | 9 Months Ended |
Jun. 29, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | REVENUE Adoption We adopted the new revenue standard on September 30, 2018 for our fiscal year 2019 under the modified retrospective transition method. We applied the new revenue standard to all contracts which were not completed as of the effective date and elected not to apply contract modification guidance retrospectively. As a result of adoption, we recorded a cumulative-effect reduction to the opening balance of our fiscal year 2019 retained earnings of $6,227 , net of tax, for the net deferral of previously recognized revenue and related cost of sales, partially offset by the capitalization and deferral of pre-contract costs. The timing of revenue recognition for the majority of our products and contracts remains substantially unchanged under the new revenue standard, with the exception of certain contracts in our Test & Simulation segment (Test & Simulation). Dependent on contract-specific terms that evidence customer control of the work in process or an enforceable right to payment with no alternative use, certain contracts have a delay in revenue recognition until the customer takes control of the product, while certain contracts accelerate the recognition of revenue over the life of the contract. Under the new revenue standard, certain costs to obtain contracts (i.e., pre-contract costs) are capitalized at contract inception and recognized as revenue is earned. While we do not expect the adoption of the new revenue standard to have a significant impact on annual revenue recognized, our financial condition or results of operations, we do expect that it will have an impact on the timing of revenue recognition in interim periods. The impact of adopting the new revenue standard on our Consolidated Statements of Income and Consolidated Balance Sheets is as follows: Consolidated Statements of Income Three Months Ended June 29, 2019 As Reported Balances without Adoption of ASC 606 Effect of Change Revenue $ 232,209 $ 213,443 $ 18,766 Cost of sales 147,106 136,563 10,543 Gross profit 85,103 76,880 8,223 Selling and marketing 33,321 33,075 246 Income tax provision (benefit) 2,605 1,326 1,279 Net income 13,585 6,887 6,698 Nine Months Ended June 29, 2019 As Reported Balances without Adoption of ASC 606 Effect of Change Revenue $ 668,436 $ 636,546 $ 31,890 Cost of sales 417,678 397,295 20,383 Gross profit 250,758 239,251 11,507 Selling and marketing 98,805 98,566 239 Income tax provision (benefit) 6,217 4,363 1,854 Net income 38,246 28,832 9,414 Consolidated Balance Sheets June 29, 2019 As Reported Balances without Adoption of ASC 606 Effect of Change Assets Accounts receivable, net $ 131,365 $ 133,548 $ (2,183 ) Unbilled accounts receivable, net 68,804 59,784 9,020 Inventories, net 164,853 156,108 8,745 Prepaid expenses and other current assets 27,118 24,003 3,115 Other long-term assets 3,986 2,880 1,106 Deferred income taxes 3,818 3,167 651 Liabilities and Shareholders' Equity Advance payments from customers 87,935 84,970 2,965 Accrued income taxes 3,736 3,345 391 Other accrued liabilities 35,367 20,566 14,801 Deferred income taxes 50,315 51,540 (1,225 ) Other long-term liabilities 15,305 15,021 284 Accumulated other comprehensive income (loss) (5,409 ) (5,460 ) 51 Retained earnings 316,249 313,062 3,187 The cumulative effect of the changes made to our September 29, 2018 Consolidated Balance Sheet from the modified retrospective adoption of the new revenue standard is as follows: Consolidated Balance Sheets Balance at September 29, 2018 Adjustments due to ASC 606 Adoption Balance at September 30, 2018 Assets Accounts receivable, net $ 122,243 $ (4,481 ) $ 117,762 Unbilled accounts receivable, net 70,474 (8,002 ) 62,472 Inventories, net 139,109 16,727 155,836 Prepaid expenses and other current assets 24,572 4,651 29,223 Other long-term assets 2,263 1,060 3,323 Deferred income taxes 3,249 643 3,892 Liabilities and Shareholders' Equity Advance payments from customers 80,131 13,568 93,699 Other accrued liabilities 19,146 (2,504 ) 16,642 Deferred income taxes 46,482 (1,228 ) 45,254 Other long-term liabilities 4,894 6,989 11,883 Retained earnings 300,585 (6,227 ) 294,358 Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for transferring those goods or providing those services. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are known, the contract has commercial substance and collectability of consideration is probable. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under the new revenue standard. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Many of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. In situations when our contract includes distinct goods or services that are substantially the same and have the same pattern of transfer to the customer over time, they are recognized as a series of distinct goods or services. For contracts with multiple performance obligations, we allocate the contract's transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. We do not adjust the promised amount of consideration for the effects of a significant financing component if we expect, at contract inception, that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Revenue is recorded net of taxes collected from customers, and taxes collected are recorded as current liabilities until remitted to the relevant government authority. Shipping and handling costs associated with outbound freight after control of a product has transferred are accounted for as a fulfillment cost and are included in cost of sales in the Consolidated Statements of Income. The following is a description of the product offerings, end markets, typical revenue transactions and payment terms for each of our two reportable segments. See Note 15 for further information on reportable segments. Test & Simulation Test & Simulation manufactures and sells equipment and related software and services which are used by customers to characterize a product's mechanical properties or performance. Our solutions simulate forces and motions that customers expect their products to encounter in use or are necessary to properly characterize the product's performance. Primary Test & Simulation markets include transportation, infrastructure, energy, aerospace, materials science, medical, flight training and amusement parks. A typical system is a comprehensive solution which includes a reaction frame to hold the prototype specimen; a hydraulic or electro-mechanical power source; actuators to create the force or motion; and a computer controller with specialized software to coordinate the actuator movement and to measure, record and manipulate results. Our portfolio of Test & Simulation solutions includes standard, configurable testing products; engineered products which combine standard product configurations with a moderate degree of customization per customer specifications; and highly customized, highly engineered testing solutions built to address the customer's unique business need, which can include development of first-of-a-kind technology. To complement our Test & Simulation products, we provide our customers with a spectrum of services to maximize product performance including installation, product life cycle management, professional training, calibration and metrology, technical consulting and onsite and factory repair and maintenance. In addition, we sell a variety of accessories and spare parts. The manufacturing cycle for a typical system ranges from weeks to 12 months , depending on the complexity of the system and the availability of components, and can be up to three years for larger, more complex systems. For certain contracts, the order to revenue cycle may extend beyond the manufacturing cycle, such as when the manufacturing start date is driven by the customer's project timeline or when the contract terms require equipment installation and commissioning and customer acceptance prior to point-in-time revenue recognition. Test & Simulation contracts often have multiple performance obligations, most commonly due to the contract covering multiple phases of the product life cycle (i.e., equipment design and production, installation and commissioning, extended warranty and software maintenance). The primary method used to estimate standalone selling price is the expected cost plus a margin approach under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service. Test & Simulation revenue is recognized either over time as work progresses or point-in-time, depending on contract-specific terms and the pattern of transfer of control of the product or service to the customer. Revenue from services is recognized in the period the service is performed or ratably over the period of the related service contract. Equipment revenue is recognized over time when: (i) control is transferred to the customer over time as work progresses; or (ii) contract terms evidence customer control of the work in process or an enforceable right to payment with no alternative use. Equipment revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying the performance obligation. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Equipment contract costs include materials, component parts, labor and overhead costs. Equipment revenue is recognized point-in-time when either: (i) control is transferred to the customer at a point-in-time when obligations under the terms of the contract are satisfied; or (ii) contract terms do not evidence customer control of the work in process or an enforceable right to payment with no alternative use, and consequently revenue is deferred as work progresses. Satisfaction of performance obligations under the terms of the contract occurs either upon product shipment (as evidenced by delivery or shipment terms), completion of equipment installation and commissioning, or customer acceptance. For our Test & Simulation contracts with customers, payment terms vary and are subject to negotiation. Typical payment terms include progress payments based on specified events or milestones. For some contracts, we are entitled to receive an advance payment. Sensors Our Sensors segment (Sensors) manufactures and sells high-performance sensors which provide measurements of vibration, pressure, position, force and sound in a variety of applications. Our Sensors products are used to enable automation, enhance precision and safety, and lower our customers' production costs by improving performance and reducing downtime. Primary Sensors markets include automotive, aerospace and defense, industrial, and research and development. Our Sensors products are sold as configurable, standard units; utilize piezoelectric or magnetostriction technology; and are ideal for use in harsh operating environments to provide accurate and reliable sensor information. To complement our Sensors products, we also provide spare parts and services. The cycle from contract inception to shipment of equipment is typically one to three months , with the exception of certain high-volume contracts which are fulfilled in a series of shipments over an extended period. Our Sensors contracts generally have a single performance obligation which is satisfied at a point in time. The performance obligation is a stand-alone sensor product, accessory, service or software license. Sensors contracts are generally fixed-price purchase order fulfillment contracts, and the transaction price is equal to the observable consideration in the contract. Revenue is recognized when obligations under the terms of the contract with our customer are satisfied; generally this occurs with the transfer of control upon product shipment (as evidenced by shipment or delivery terms) or with the performance of the service. Certain contracts are measured using the as invoiced practical expedient as we have a right to consideration from a customer in an amount that corresponds directly with the value to the customer of our performance completed to date. For our Sensors contracts with customers, payment terms are generally within 90 days. The timing of satisfying our Sensors performance obligations does not vary significantly from the typical timing of payment. For certain high-volume contracts, we are entitled to receive an advance payment. Disaggregation of Revenue We disaggregate our revenue by reportable segment, sales type (product or service), the timing of recognition of revenue for transfer of goods or services to customers (point-in-time or over time), and geographic market based on the billing location of the customer. See Note 15 for further information on our reportable segments and intersegment revenue. Three Months Ended June 29, 2019 Test & Simulation Sensors Intersegment Total Sales type Product $ 123,573 $ 82,305 $ (350 ) $ 205,528 Service 24,755 1,926 — 26,681 Total revenue $ 148,328 $ 84,231 $ (350 ) $ 232,209 Timing of recognition Point-in-time $ 95,247 $ 77,978 $ (350 ) $ 172,875 Over time 53,081 6,253 — 59,334 Total revenue $ 148,328 $ 84,231 $ (350 ) $ 232,209 Geographic market Americas $ 47,892 $ 42,365 $ (350 ) $ 89,907 Europe 34,137 26,994 — 61,131 Asia 66,299 14,872 — 81,171 Total revenue $ 148,328 $ 84,231 $ (350 ) $ 232,209 Nine Months Ended June 29, 2019 Test & Simulation Sensors Intersegment Total Sales type Product $ 348,992 $ 239,345 $ (1,040 ) $ 587,297 Service 75,928 5,211 — 81,139 Total revenue $ 424,920 $ 244,556 $ (1,040 ) $ 668,436 Timing of recognition Point-in-time $ 273,226 $ 231,507 $ (1,040 ) $ 503,693 Over time 151,694 13,049 — 164,743 Total revenue $ 424,920 $ 244,556 $ (1,040 ) $ 668,436 Geographic market Americas $ 138,780 $ 119,069 $ (1,040 ) $ 256,809 Europe 92,300 79,995 — 172,295 Asia 193,840 45,492 — 239,332 Total revenue $ 424,920 $ 244,556 $ (1,040 ) $ 668,436 Contract Assets and Liabilities Contract assets and contract liabilities are as follows: June 29, September 29, Contract assets $ 68,804 $ 70,474 Contract liabilities 98,675 80,131 The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled accounts receivable (contract assets) and advance payments from customers (contract liabilities). Contract balances are classified as assets or liabilities on a contract-by-contract basis at the end of each reporting period. Contract liabilities represent payments received from customers at contract inception and at milestones per contract provisions. These payments are recorded in advance payments from customers and other long-term liabilities in our Consolidated Balance Sheets (current and non-current portions, respectively) and are liquidated as revenue is recognized. Conversely, when billing occurs subsequent to revenue recognition for contracts recognized over time, balances are recorded in unbilled accounts receivable, net in our Consolidated Balance Sheets. As customers are billed, unbilled accounts receivable balances are transferred to accounts receivable, net in the Consolidated Balance Sheets. Significant changes in contract assets and contract liabilities are as follows: Contract Assets Balance, September 29, 2018 $ 70,474 Cumulative transition adjustment upon adoption (8,002 ) Changes in estimated stage of completion 92,958 Transfers to accounts receivable, net (88,506 ) Acquisitions 1 1,518 Other 362 Balance, June 29, 2019 $ 68,804 Contract Liabilities Balance, September 29, 2018 $ 80,131 Cumulative transition adjustment upon adoption 20,557 Revenue recognized included in balance at beginning of period (70,294 ) Increases due to payments received, excluding amounts recognized as revenue during period 64,248 Acquisitions 1 4,853 Other (820 ) Balance, June 29, 2019 $ 98,675 1 See Note 16 for additional information regarding acquisitions. Remaining Performance Obligations As of June 29, 2019 , we had approximately $227,000 of remaining performance obligations on contracts with an original expected duration of one year or more which are primarily related to Test & Simulation. As of June 29, 2019 , we expect to recognize approximately 77% of these remaining performance obligations as revenue within one year, an additional 19% within two years and the balance thereafter. We do not disclose the value of remaining performance obligations for contracts with an original expected duration of one year or less. Contract Estimates For contracts recognized over time, we estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract. Contract estimates are based on various assumptions to project the outcome of future events that may span several years. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, and internal and subcontractor performance. Pricing is established at or prior to the time of sale with our customers, and we record sales at the agreed-upon selling price. The terms of a contract or the historical business practice can give rise to variable consideration due to but not limited to volume discounts, penalties and early payment discounts. We estimate variable consideration at the most likely amount we will receive from customers. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized for such transaction will not occur, or when the uncertainty associated with the variable consideration is resolved. In general, variable consideration in our contracts relates to the entire contract. As a result, the variable consideration is allocated proportionately to all performance obligations. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us at contract inception. There are no significant instances where variable consideration is constrained and not recorded at the initial time of sale. As a significant change in one or more of these estimates could affect the profitability of our contracts, we review and update our contract-related estimates regularly. We recognize adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance is recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the total loss in the period it is identified. Our review of contract-related estimates has not resulted in adjustments that are significant to our results of operations. Contract Modifications When contracts are modified to account for changes in contract specifications and requirements, we consider whether the modification either creates new, or changes existing, enforceable rights and obligations. Contract modifications that are for goods or services that are not distinct from the existing contract, due to the significant integration with the original product or service provided, are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price, and our measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. When the modifications include additional performance obligations that are distinct and at a relative stand-alone selling price, they are accounted for as a new contract and performance obligation and recognized prospectively. Warranties and Returns For both Test & Simulation and Sensors, we provide a manufacturer's warranty on our products and systems which is included in customer contracts. At the time a sale is recognized, we record estimated future warranty costs. See Note 5 for further discussion of our product warranty liabilities. We also offer separately-priced extended warranties or service-type contracts on certain products for which revenue is recognized over the contractual period or as services are rendered. Our sales terms generally do not allow for a right of return except for situations where the product fails. When the right of return exists, we recognize revenue for the transferred products at the expected amount of consideration for which we will be entitled. Pre-contract Costs We recognize an asset for the incremental costs of obtaining a contract with a customer (i.e., pre-contract costs) when costs are considered recoverable. Capitalized pre-contract costs, consisting primarily of Test & Simulation sales commissions, are amortized as the related revenue is recognized. We recognized total capitalized pre-contract costs of $5,694 in prepaid expenses and other current assets and other long-term assets in the Consolidated Balance Sheets as of June 29, 2019 and related expense of $1,747 and $5,616 in the Consolidated Statements of Income during the three and nine months ended June 29, 2019 , respectively. |
Inventories
Inventories | 9 Months Ended |
Jun. 29, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES Inventories consist of material, labor and overhead costs and are stated at the lower of cost or net realizable value determined under the first-in, first-out accounting method. Certain inventories are measured using the weighted average cost method. Inventories, net are as follows: June 29, September 29, Components, assemblies and parts $ 107,389 $ 93,020 Customer projects in various stages of completion 45,814 35,675 Finished goods 11,650 10,414 Total inventories, net $ 164,853 $ 139,109 We adopted the new revenue standard effective September 30, 2018 under the modified retrospective transition method which impacted inventories, net. See Note 3 for the impact of this adoption on our Consolidated Balance Sheets. |
Warranty Obligations
Warranty Obligations | 9 Months Ended |
Jun. 29, 2019 | |
Product Warranties Disclosures [Abstract] | |
Warranty Obligations | WARRANTY OBLIGATIONS Sales of our products and systems are subject to limited warranty obligations that are included in customer contracts. For sales that include installation services, warranty obligations generally extend for a period of 12 to 24 months from the date of either shipment or acceptance based on the contract terms. Product obligations generally extend for a period of 12 to 24 months from the date of purchase. Certain products offered in our Sensors segment include a lifetime warranty. Under the terms of these warranties, we are obligated to repair or replace any components or assemblies deemed defective due to workmanship or materials. We reserve the right to reject warranty claims where it is determined that failure is due to normal wear, customer modifications, improper maintenance or misuse. We record general warranty provisions based on an estimated warranty expense percentage applied to current period revenue. The percentage applied reflects our historical warranty claims experience over the preceding 12 -month period. Both the experience percentage and the warranty liability are evaluated on an ongoing basis for adequacy. Warranty provisions are also recognized for certain unanticipated product claims that are individually significant. Changes to accrued warranty costs are as follows: Three Months Ended Nine Months Ended June 29, June 30, June 29, June 30, Beginning accrued warranty costs $ 4,741 $ 6,191 $ 5,418 $ 6,018 Warranty claims (1,051 ) (1,384 ) (3,497 ) (3,969 ) Warranty provisions 150 756 1,941 3,483 Adjustments to preexisting warranties — 50 (15 ) 64 Currency translation 3 (24 ) (4 ) (7 ) Ending accrued warranty costs $ 3,843 $ 5,589 $ 3,843 $ 5,589 |
Capital Assets
Capital Assets | 9 Months Ended |
Jun. 29, 2019 | |
Capital Assets [Abstract] | |
Capital Assets | CAPITAL ASSETS Property and Equipment Property and equipment, net are as follows: June 29, September 29, Land and improvements $ 3,924 $ 2,881 Buildings and improvements 59,949 58,880 Machinery and equipment 217,728 203,647 Assets held under capital leases 2,796 2,815 Total property and equipment 284,397 268,223 Less: Accumulated depreciation (191,504 ) (177,954 ) Total property and equipment, net $ 92,893 $ 90,269 Goodwill Changes to the carrying amount of goodwill are as follows: Test & Simulation Sensors Total Balance, September 29, 2018 $ 24,631 $ 344,644 $ 369,275 Acquisitions 1 34,423 — 34,423 Currency translation (230 ) (20 ) (250 ) Balance, June 29, 2019 $ 58,824 $ 344,624 $ 403,448 1 See Note 16 for additional information regarding acquisitions. Intangible Assets Intangible assets are as follows: June 29, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted Average Useful Life (in Years) Software development costs 2 $ 37,265 $ (15,969 ) $ 21,296 6.4 Technology and patents 59,362 (14,934 ) 44,428 14.9 Trademarks and trade names 12,658 (3,641 ) 9,017 20.6 Customer lists 180,147 (31,692 ) 148,455 15.7 Land-use rights 2,334 (914 ) 1,420 26.0 Other 3,754 (571 ) 3,183 4.0 Trade names 57,500 — 57,500 Indefinite Total intangible assets $ 353,020 $ (67,721 ) $ 285,299 14.5 September 29, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted Average Useful Life (in Years) Software development costs 2 $ 31,251 $ (15,860 ) $ 15,391 6.5 Technology and patents 46,405 (12,188 ) 34,217 14.9 Trademarks and trade names 6,754 (2,987 ) 3,767 25.4 Customer lists 156,971 (23,314 ) 133,657 15.8 Land-use rights 2,336 (730 ) 1,606 26.0 Trade names 57,500 — 57,500 Indefinite Total intangible assets $ 301,217 $ (55,079 ) $ 246,138 14.8 2 The gross carrying amount of software development costs as of June 29, 2019 and September 29, 2018 includes $19,560 and $15,391 , respectively, of intangible assets not yet placed in service. Amortization expense recognized related to finite-lived intangible assets is as follows: Three Months Ended Nine Months Ended June 29, June 30, June 29, June 30, Amortization expense $ 4,449 $ 3,453 $ 12,668 $ 10,388 Estimated future amortization expense related to finite-lived intangible assets is as follows: Amortization Expense Remainder of 2019 $ 4,356 2020 17,420 2021 18,527 2022 19,450 2023 18,543 2024 18,172 Thereafter 131,331 Future amortization amounts presented above are estimates. Actual future amortization expense may be different due to fluctuations in foreign currency exchange rates, future acquisitions, impairments, changes in amortization periods or other factors. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Jun. 29, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS In determining the fair value of financial assets and liabilities, we currently utilize market data or other assumptions that we believe market participants would use in pricing the asset or liability in the principal or most advantageous market and adjust for non-performance and/or other risk associated with the Company as well as counterparties, as appropriate. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: • Level 1: Unadjusted quoted prices that are available in active markets for identical assets or liabilities accessible to us at the measurement date. • Level 2: Inputs other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. • Level 3: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The hierarchy gives the highest priority to Level 1, as this level provides the most reliable measure of fair value, while giving the lowest priority to Level 3. Assets and Liabilities Measured at Fair Value on a Recurring Basis Financial assets and liabilities subject to fair value measurements on a recurring basis are as follows: June 29, 2019 Level 1 Level 2 Level 3 Total Assets Currency contracts 1 $ — $ 350 $ — $ 350 Interest rate swap 2 — 1,664 — 1,664 Total assets — 2,014 — 2,014 Liabilities Currency contracts 1 — 490 — 490 Total liabilities $ — $ 490 $ — $ 490 September 29, 2018 Level 1 Level 2 Level 3 Total Assets Currency contracts 1 $ — $ 1,080 $ — $ 1,080 Interest rate swap 2 — 7,411 — 7,411 Total assets — 8,491 — 8,491 Liabilities Currency contracts 1 — 173 — 173 Total liabilities $ — $ 173 $ — $ 173 1 Based on observable market transactions of spot currency rates and forward currency rates on equivalently-termed instruments. Carrying amounts of the financial assets and liabilities are equal to the fair value. See Note 8 for additional information on derivative financial instruments. 2 Based on London Interbank Offered Rate (LIBOR) and spot rates. Carrying amount of the financial asset is equal to the fair value. See Note 8 for additional information on derivative financial instruments. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis We measure certain financial instruments at fair value on a nonrecurring basis. These assets primarily include goodwill, intangible assets and other long-lived assets acquired either as part of a business acquisition, individually or with a group of other assets, as well as property and equipment. These assets were initially measured and recognized at amounts equal to the fair value determined as of the date of acquisition or purchase subject to changes in value only for foreign currency translation. Periodically, these assets are tested for impairment by comparing their respective carrying values to the estimated fair value of the reporting unit or asset group in which they reside. In the event any of these assets were to become impaired, we would recognize an impairment loss equal to the amount by which the carrying value of the reporting unit, impaired asset or asset group exceeds its estimated fair value. Fair value measurements of reporting units are estimated using an income approach involving discounted or undiscounted cash flow models that contain certain Level 3 inputs requiring management judgment, including projections of economic conditions and customer demand, revenue and margins, changes in competition, operating costs, working capital requirements and new product introductions. Fair value measurements of the reporting units associated with our goodwill balances and our indefinite-lived intangible assets are estimated at least annually in the fourth quarter of each fiscal year for purposes of impairment testing if a quantitative analysis is performed. Fair value measurements associated with our intangible assets, other long-lived assets and property and equipment are estimated when events or changes in circumstances such as market value, asset utilization, physical change, legal factors or other matters indicate that the carrying value may not be recoverable. See Note 6 for additional information on goodwill, indefinite-lived intangible assets, other long-lived assets and property and equipment. Assets and Liabilities Not Measured at Fair Value Certain financial instruments are not measured at fair value but are recorded at carrying amounts approximating fair value based on their short-term nature or variable interest rate. These financial instruments include cash and cash equivalents, accounts receivable, unbilled accounts receivable, accounts payable and short-term borrowings. Other Financial Instruments Other financial instruments subject to fair value measurements include debt, which is recorded at carrying value in the Consolidated Balance Sheets. The carrying amount and estimated fair values of our debt are as follows: June 29, 2019 Carrying Fair Value Level 1 Level 2 Level 3 Debt component of tangible equity units 1 $ 2,472 $ 2,871 $ — $ 2,871 $ — Tranche B term loan 2 387,966 388,936 — 388,936 — Total debt $ 390,438 $ 391,807 $ — $ 391,807 $ — September 29, 2018 Carrying Fair Value Level 1 Level 2 Level 3 Debt component of tangible equity units 1 $ 7,290 $ 8,626 $ — $ 8,626 $ — Tranche B term loan 2 391,416 395,330 — 395,330 — Total debt $ 398,706 $ 403,956 $ — $ 403,956 $ — 1 The fair value of the 8.75% tangible equity units (TEUs) is based on the most recently quoted price for the outstanding securities, adjusted for any known significant deviations in value. The estimated fair value of these long-term obligations is not necessarily indicative of the amount that would be realized in a current market exchange. See Note 12 for additional information on the TEUs. 2 The fair value of the tranche B term loan is based on the most recently quoted market price for the outstanding debt instrument, adjusted for any known significant deviations in value. The estimated fair value of the debt obligation is not necessarily indicative of the amount that would be realized in a current market exchange. See Note 9 for additional information on debt instruments. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Jun. 29, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Our currency exchange contracts and interest rate swap are designated as cash flow hedges and qualify as hedging instruments. We also have derivatives that are not designated as cash flow hedges and, therefore, are accounted for and reported under foreign currency guidance. Regardless of designation for accounting purposes, we believe all of our derivative instruments are hedges of transactional risk exposures. The fair value of our outstanding designated and undesignated derivative assets and liabilities are reported in the Consolidated Balance Sheets as follows: June 29, 2019 Prepaid Expenses and Other Current Assets Other Accrued Liabilities Designated hedge derivatives Cash flow derivatives $ 350 $ 265 Interest rate swap 1,664 — Total designated hedge derivatives 2,014 265 Undesignated hedge derivatives Balance sheet derivatives — 225 Total hedge derivatives $ 2,014 $ 490 September 29, 2018 Prepaid Expenses and Other Current Assets Other Accrued Liabilities Designated hedge derivatives Cash flow derivatives $ 989 $ 173 Interest rate swap 7,411 — Total designated hedge derivatives 8,400 173 Undesignated hedge derivatives Balance sheet derivatives 91 — Total hedge derivatives $ 8,491 $ 173 A reconciliation of the net fair value of designated hedge derivatives subject to master netting arrangements that are recorded in the Consolidated Balance Sheets to the net fair value that could have been reported in the Consolidated Balance Sheets are as follows: Gross Recognized Amount Gross Offset Amount Net Amount Presented Derivatives Subject to Offset Cash Collateral Received Net Amount June 29, 2019 Assets $ 2,014 $ — $ 2,014 $ (179 ) $ — $ 1,835 Liabilities 265 — 265 (179 ) — 86 September 29, 2018 Assets $ 8,400 $ — $ 8,400 $ (173 ) $ — $ 8,227 Liabilities 173 — 173 (173 ) — — Cash Flow Hedging – Currency Risks Currency exchange contracts utilized to maintain the functional currency value of expected financial transactions denominated in foreign currencies are designated as cash flow hedges. Gains and losses related to changes in the market value of these contracts are reported as a component of accumulated other comprehensive income (AOCI) within shareholders' equity in the Consolidated Balance Sheets and reclassified to earnings in the same line item in the Consolidated Statements of Income and in the same period as the recognition of the underlying hedged transaction. We periodically assess whether our currency exchange contracts are effective and, when a contract is determined to be no longer effective as a hedge, we discontinue hedge accounting prospectively. As of June 29, 2019 and September 29, 2018 , we had outstanding cash flow hedge currency exchange contracts with gross notional U.S. dollar equivalent amounts of $35,412 and $39,856 , respectively. Upon netting offsetting contracts to sell foreign currencies against contracts to purchase foreign currencies, irrespective of contract maturity dates, the net notional U.S. dollar equivalent amount of contracts outstanding was $28,176 and $29,315 as of June 29, 2019 and September 29, 2018 , respectively. As of June 29, 2019 , the net market value of the foreign currency exchange contracts was a net asset of $85 , consisting of $350 in assets and $265 in liabilities. As of September 29, 2018 , the net market value of the foreign currency exchange contracts was a net asset of $816 , consisting of $989 in assets and $173 in liabilities. The pretax amounts recognized in AOCI on currency exchange contracts, including (gains) losses reclassified into earnings in the Consolidated Statements of Income and gains (losses) recognized in other comprehensive income (loss) (OCI), are as follows: Three Months Ended Nine Months Ended June 29, June 30, June 29, June 30, Beginning unrealized net gain (loss) in AOCI $ 192 $ (1,092 ) $ 672 $ (443 ) Net (gain) loss reclassified into revenue (142 ) (273 ) (743 ) 1,031 Net gain (loss) recognized in OCI (46 ) 1,967 75 14 Ending unrealized net gain (loss) in AOCI $ 4 $ 602 $ 4 $ 602 As of June 29, 2019 , the amount projected to be reclassified from AOCI into earnings in the next 12 months was a net gain of $98 . The maximum remaining maturity of any forward or optional contract as of June 29, 2019 was 1.4 years . Interest Rate Swap On October 20, 2016, we entered into a floating to fixed interest rate swap agreement to mitigate our exposure to interest rate increases related to a portion of our tranche B term loan facility. The total notional amount of the interest rate swap was $225,000 as of June 29, 2019 . The swap agreement expires April 3, 2021. As a result of this agreement, every month we pay fixed interest at 1.256% in exchange for interest received at one month U.S. LIBOR. The market value of the interest rate swap as of June 29, 2019 was an asset of $1,664 . The interest rate swap has been designated as a cash flow hedge. As a result, changes in the fair value of the interest rate swap are recorded in AOCI within shareholders' equity in the Consolidated Balance Sheets. The pretax amounts recognized in AOCI on the interest rate swap, including (gains) losses reclassified into earnings in the Consolidated Statements of Income and gains (losses) recognized in OCI, are as follows: Three Months Ended Nine Months Ended June 29, June 30, June 29, June 30, Beginning unrealized net gain (loss) in AOCI $ 3,684 $ 6,925 $ 7,411 $ 3,499 Net (gain) loss reclassified into interest expense (695 ) (422 ) (1,988 ) (661 ) Net gain (loss) recognized in OCI (1,325 ) 851 (3,759 ) 4,516 Ending unrealized net gain (loss) in AOCI $ 1,664 $ 7,354 $ 1,664 $ 7,354 As of June 29, 2019 , the amount projected to be reclassified from AOCI into earnings in the next 12 months was a net gain of $1,391 . Foreign Currency Balance Sheet Derivatives We also use foreign currency derivative contracts to maintain the functional currency value of monetary assets and liabilities denominated in non-functional foreign currencies. The gains and losses related to the changes in the market value of these derivative contracts are included in other income (expense), net in the Consolidated Statements of Income. As of June 29, 2019 and September 29, 2018 , we had outstanding foreign currency balance sheet derivative contracts with gross notional U.S. dollar equivalent amounts of $94,824 and $90,816 , respectively. Upon netting offsetting contracts by counterparty banks to sell foreign currencies against contracts to purchase foreign currencies, irrespective of contract maturity dates, the net notional U.S. dollar equivalent amount of contracts outstanding as of June 29, 2019 and September 29, 2018 was $27,833 and $28,271 , respectively. As of June 29, 2019 and September 29, 2018 , the net market value of the foreign exchange balance sheet derivative contracts was a net liability of $225 and a net asset of $91 , respectively. The net gain (loss) recognized in the Consolidated Statements of Income on foreign exchange balance sheet derivative contracts is as follows: Three Months Ended Nine Months Ended June 29, June 30, June 29, June 30, Net gain (loss) recognized in other income (expense), net $ 218 $ 981 $ (170 ) $ (46 ) |
Financing
Financing | 9 Months Ended |
Jun. 29, 2019 | |
Debt Disclosure [Abstract] | |
Financing | FINANCING Long-term debt consists of the following: June 29, September 29, Long-term debt Tranche B term loan, 1.00% amortizing per year, maturing July 5, 2023 $ 387,966 $ 391,416 Revolving credit facility, non-current portion, expiring July 5, 2022 80,391 — Tangible equity units, 8.75% coupon, maturing July 1, 2019 1 2,472 7,290 Capital lease obligations 1,572 2,000 Total long-term debt 472,401 400,706 Less: Unamortized underwriting discounts, commissions and other expenses (6,567 ) (8,623 ) Less: Current maturities of tranche B term loan debt 2, 3 (28,600 ) (28,600 ) Less: Current maturities of TEU debt 2 (2,472 ) (7,290 ) Less: Current maturities of capital lease obligations 2 (562 ) (553 ) Total long-term debt, less current maturities, net $ 434,200 $ 355,640 1 See Note 12 for additional information on our TEUs issued in the third quarter of fiscal year 2016. 2 In addition to the current maturities above, current maturities of long-term debt, net in the Consolidated Balance Sheets includes the current portion of unamortized underwriting discounts, commissions and other expenses of $3,318 and $3,705 as of June 29, 2019 and September 29, 2018 , respectively. 3 As of June 29, 2019 and September 29, 2018 , current maturities of tranche B term loan consist of the 1% annual payment and the calculated or estimated required annual Excess Cash Flow payment as defined below, as well as planned prepayments. Tranche B Term Loan and Revolving Credit Facility We have a credit agreement with U.S. Bank National Association and HSBC Bank USA, National Association as Co-Documentation Agents, Wells Fargo Bank, National Association as Syndication Agent, JPMorgan Chase Bank, N.A. as Administrative Agent and JP Morgan Chase Bank, N.A. and Wells Fargo Securities, LLC as Joint Bookrunners and Joint Lead Arrangers (the Credit Agreement). The Credit Agreement as amended provides for senior secured credit facilities consisting of a $150,000 revolving credit facility (the Revolving Credit Facility), which expires on July 5, 2022, and a $460,000 tranche B term loan facility (the Term Facility) which expires on July 5, 2023. The proceeds of the Revolving Credit Facility can be drawn upon to refinance existing indebtedness, for working capital and for other general corporate purposes, up to a maximum of $150,000 . The Term Facility amortizes in equal quarterly installments equal to 1% of the original principal amount. The proceeds of the Term Facility were used for financing the acquisition of PCB Group, Inc. (PCB) in fiscal year 2016. Borrowings on the Revolving Credit Facility were used for financing the acquisition of E2M Technologies B.V. (E2M) in the first quarter of fiscal year 2019. In the first quarter of fiscal year 2019, in conjunction with the E2M acquisition, we entered into a third amendment to the Credit Agreement to increase the borrowing capacity on the Revolving Credit Facility from $120,000 to $150,000 and extend the expiration date of the Revolving Credit Facility from July 5, 2021 to July 5, 2022. Additionally, the required performance levels under certain financial covenants were modified. During the nine months ended June 29, 2019 , we incurred debt financing costs of $541 as a result of this amendment which were capitalized in current maturities of long-term debt, net and long-term debt, less current maturities, net in the Consolidated Balance Sheets. The primary categories of borrowing include Alternate Base Rate (ABR) Borrowings (ABR Term Loans and ABR Revolving Loans), Swingline Loans and Eurocurrency Borrowings (Eurocurrency Term Loans and Eurocurrency Revolving Loans), each as defined in the Credit Agreement. ABR Borrowings and Swingline Loans made in U.S. dollars under the Credit Agreement bear interest at a rate per annum equal to the ABR plus the Applicable Rate (as defined in the Credit Agreement). The ABR is defined as the greater of (a) the Prime Rate (as defined in the Credit Agreement) in effect on such day, (b) the New York Federal Reserve Bank (NYFRB) rate (as defined in the Credit Agreement) in effect on such day plus ½ of 1.00% , or (c) the Adjusted LIBOR (as defined in the Credit Agreement) for a one-month interest period in dollars on such day plus 1.00% . The ABR for ABR Term Loans shall not be less than 1.75% per annum. The Applicable Rate for any ABR Revolving Loans will be based upon the leverage ratio applicable on such date. As of June 29, 2019 , the Applicable Rate for ABR Term Loans was 2.25% per annum. Eurocurrency Borrowings made under the Credit Agreement bear interest at a rate per annum equal to the Adjusted LIBOR Rate plus the Applicable Rate. The Adjusted LIBOR Rate is defined as an interest rate per annum equal to (a) the LIBOR Rate for such interest period multiplied by (b) the Statutory Reserve Rate (as defined in the Credit Agreement). The Applicable Rate for any Eurocurrency Revolving Loan is based upon the leverage ratio applicable on such date. The Adjusted LIBOR Rate for Eurocurrency Term Loans shall not be less than 0.75% per annum. Based on our leverage ratio as of June 29, 2019 , the Applicable Rate for Eurocurrency Revolving Loans was 3.00% . As of June 29, 2019 , the Applicable Rate for Eurocurrency Term Loans was 3.25% per annum, plus the applicable Adjusted LIBOR Rate of 2.41% . The weighted average interest rate on Term Facility debt during the nine months ended June 29, 2019 was 5.67% . As of June 29, 2019 , there was $80,391 of outstanding borrowings under the Revolving Credit Facility which is included in long-term debt, less current maturities, net in the Consolidated Balance Sheets. As of September 29, 2018 , there were no outstanding borrowings under the Revolving Credit Facility. We had outstanding letters of credit drawn from the Revolving Credit Facility totaling $22,580 and $20,448 as of June 29, 2019 and September 29, 2018 , respectively, leaving approximately $47,029 and $99,552 , respectively, of unused borrowing capacity. Commitment fees are payable on the unused portion of the Revolving Credit Facility at rates between 0.25% and 0.40% based on our leverage ratio. During the three and nine months ended June 29, 2019 , commitment fees incurred totaled $52 and $176 , respectively. During the three and nine months ended June 30, 2018 , commitment fees incurred totaled $94 and $250 , respectively. The Credit Agreement governing the Term Facility requires us to prepay outstanding term loans, subject to certain exceptions, depending on the leverage ratio with (a) up to 50% of the our annual Excess Cash Flow (as defined in the Credit Agreement) and (b) 100% of the net cash proceeds of (i) certain asset sales and casualty and condemnation events, subject to reinvestment rights and certain other exceptions; and (ii) any incurrence or issuance of certain debt, other than debt permitted under the Credit Agreement. We may voluntarily prepay outstanding loans under the Term Facility at any time without premium or penalty. All obligations under the Credit Agreement are unconditionally guaranteed by certain of our existing wholly-owned domestic subsidiaries, and are secured, subject to certain exceptions, by substantially all of our assets and the assets of our subsidiary guarantors. Under the Credit Agreement, we are subject to customary affirmative and negative covenants, including, among others, restrictions on our ability to incur debt, create liens, dispose of assets, make investments, loans, advances, guarantees, and acquisitions, enter into transactions with affiliates, and enter into any restrictive agreements and customary events of default (including payment defaults, covenant defaults, change of control defaults and bankruptcy defaults). The Credit Agreement also contains financial covenants, including the ratio of consolidated total indebtedness to adjusted consolidated earnings before income, taxes, depreciation and amortization (Adjusted EBITDA), as defined in the Credit Agreement, as well as the ratio of Adjusted EBITDA to consolidated interest expense. These covenants restrict our ability to purchase outstanding shares of our common stock. As of June 29, 2019 and September 29, 2018 , we were in compliance with these financial covenants. See Note 7 for additional information on the fair value of the tranche B term loan and the TEU debt. Interest Rate Swap On October 20, 2016, in order to mitigate our exposure to interest rate increases on our variable rate debt, we entered into a variable to fixed amortizing interest rate swap. See Note 8 for additional information on derivative financial instruments. The interest rate swap will be reduced to the following notional amounts over the next three years: Notional Amount October 3, 2019 $ 180,000 October 3, 2020 125,000 April 3, 2021 — |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Jun. 29, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION We compensate our officers, directors and employees with stock-based compensation under the 2017 Stock Incentive Plan (the 2017 Plan) approved by our shareholders and administered under the supervision of our Board of Directors. As of June 29, 2019 , a total of 968 shares were available for issuance under the 2017 Plan. We make an annual stock grant under the 2017 Plan of stock options, restricted stock units and performance restricted stock units, as well as stock grants throughout the fiscal year. For fiscal years 2019 , 2018 and 2017 , the annual stock grant occurred in December 2018, April 2018 and April 2017, respectively. Stock Options During the nine months ended June 29, 2019 , 231 stock options were granted at a weighted average fair value of $9.91 . During the nine months ended June 30, 2018 , 245 stock options were granted at a weighted average fair value of $11.10 . Restricted Stock Units and Performance Restricted Stock Units We award restricted stock units to directors and key employees and performance restricted stock units to key employees. During the nine months ended June 29, 2019 , we granted 129 restricted stock units and 40 performance restricted stock units to directors, officers and employees. During the nine months ended June 30, 2018 , we granted 109 restricted stock units and 29 performance restricted stock units. The fair value of the restricted stock units and performance restricted stock units granted during the nine months ended June 29, 2019 and June 30, 2018 was $46.67 and $49.63 , respectively, representing the market value of our shares as of the date of grant less the present value of estimated foregone dividends over the vesting period. Employee Stock Purchase Plan Our U.S. employees are eligible to participate in the 2012 Employee Stock Purchase Plan (2012 ESPP) approved by our shareholders. As of June 29, 2019 , 599 shares were available for issuance under the 2012 ESPP. During the nine months ended June 29, 2019 and June 30, 2018 , we issued 16 and 24 shares, respectively, under the 2012 ESPP at a weighted average price per share of $34.11 and $44.39 |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Tax Cuts and Jobs Act (the Tax Act) was enacted into law on December 22, 2017 and made significant changes to U.S. federal corporate tax law. Effective January 1, 2018, the Tax Act lowered the U.S. corporate tax rate from 35% to 21% and prompted various other changes to U.S. federal corporate tax law, including the establishment of a territorial-style system for taxing foreign-source income of domestic multinational corporations and a one-time deemed repatriation tax on untaxed foreign earnings. The Tax Act resulted in a U.S. federal blended statutory rate of 24.5% for fiscal year 2018 and a rate of 21.0% for fiscal year 2019. Generally, the impacts of new tax legislation would be required to be recorded in the period of enactment, which was our first quarter of fiscal year 2018. However, in March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 , which incorporates various SEC paragraphs from Staff Accounting Bulletin No. 118 into income tax accounting guidance effective immediately, allowing registrants to record provisional amounts during a one-year measurement period. As of December 29, 2018, we completed our accounting for the tax effects of the Tax Act at the conclusion of the one-year measurement period. As a result, the income tax provision for the three months ended December 29, 2018 includes certain discrete benefits of $1,293 for Tax Act measurement period adjustments. The discrete benefits relate to $1,297 of additional dividends received deduction for certain foreign tax credits included in the mandatory deemed repatriation tax calculation, partially offset by $4 of expense for other Tax Act measurement period adjustments. The additional dividends received deduction is based on our assessment of the treatment under the applicable provisions of the Tax Act as written and enacted during the first quarter of fiscal year 2019. The Department of the Treasury provided regulatory updates during the three months ended June 29, 2019, causing us to change our assessment of the benefit associated with the dividends received deduction, and in the third quarter of fiscal year 2019 to reverse the entire benefit of $1,297 that was recorded in the first quarter of fiscal year 2019. The effective tax rate for the nine months ended June 29, 2019 increased primarily due to certain discrete benefits in the prior year for the estimated impact of the Tax Act. Excluding the impact of certain discrete benefits in the prior year, the effective tax rate for the nine months ended June 29, 2019 decreased as compared to the same prior year period. Factors that affected the effective tax rate for the nine months ended June 29, 2019 included impacts of the Tax Act, such as elimination of the domestic manufacturing deduction and the implementation of the global intangible low-taxed income (GILTI) provision. These increases were offset by favorable aspects of the Tax Act, such as the decrease in the U.S. income tax rate and provisions for incentivizing foreign-derived intangible income (FDII). In the first quarter of fiscal year 2019, we made an accounting policy election to treat the future tax impacts of the GILTI provisions of the Tax Act as a period cost to the extent applicable. The income tax benefit for the nine months ended June 30, 2018 included certain discrete benefits of $25,378 for the estimated impact of the Tax Act. The discrete benefits related to $32,264 of estimated benefit from the remeasurement of our estimated net deferred tax liabilities, partially offset by $6,886 of estimated expense associated with the mandatory deemed repatriation tax. The income tax benefit for fiscal year 2018 included certain discrete benefits of $25,008 for the estimated impact of the Tax Act. The discrete benefits primarily related to $31,647 of estimated benefit from the remeasurement of our estimated net deferred tax liabilities, partially offset by $6,639 of estimated expense associated with the mandatory deemed repatriation tax. As of June 29, 2019 , the liability for unrecognized tax benefits was $5,745 , of which $3,269 would favorably affect our effective tax rate, if recognized. As of September 29, 2018 , the liability for unrecognized tax benefits was $6,158 , of which $3,740 would favorably affect our effective tax rate, if recognized. As of June 29, 2019 , we do no t expect significant changes in the amount of unrecognized tax benefits during the next twelve months. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Jun. 29, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | SHAREHOLDERS' EQUITY Tangible Equity Units During the third quarter of fiscal year 2016, we issued 1,150 TEUs in a registered public offering primarily to finance the acquisition of PCB, to repay amounts outstanding under our existing revolving credit facility and to pay related costs, fees and expenses. Total proceeds, net of underwriting discounts, commissions and other expenses were $110,926 . Each TEU has a stated amount of $100 per TEU and is comprised of a prepaid stock purchase contract and a senior amortizing note having a final installment payment date of July 1, 2019. We allocated the proceeds from the issuance of the TEUs between equity and debt based on the relative fair values of the respective components of each TEU. The fair value of the prepaid stock purchase contracts, net of underwriting discounts, commissions and other expenses, was recorded in additional paid-in capital in the Consolidated Balance Sheets. The fair value of the senior amortizing note, net of underwriting discounts, commissions and other expenses, was split between current maturities of long-term debt, net and long-term debt, less current maturities, net in the Consolidated Balance Sheets. Underwriting discounts, commissions and other costs directly associated with the TEU-related debt were amortized using the effective interest rate method over the three -year term of the instrument. The aggregate values assigned upon issuance to each component of the TEUs, based on the relative fair value of the respective components, were as follows: Equity Component Debt Component Total Fair value price per TEU 1 $ 76.19 $ 23.81 $ 100.00 Gross proceeds $ 87,614 $ 27,386 $ 115,000 Less: Underwriting discounts and commissions (2,628 ) (822 ) (3,450 ) Less: Other expenses 2 (475 ) (149 ) (624 ) Issuance of TEUs, net $ 84,511 $ 26,415 $ 110,926 1 The fair value price allocation between equity and debt for each TEU was determined using a discounted cash flow model. 2 Other expenses include direct and incremental costs related to the issuance of the TEUs. Equity Component Unless converted earlier at the option of the holder, each prepaid stock purchase contract automatically settle on July 1, 2019. If converted prior to the automatic settlement date at the option of the holder, the minimum of 1.9841 shares of our common stock are delivered to the holder of each prepaid stock purchase contract. On the automatic settlement date, a minimum of 1.9841 shares and a maximum of 2.3810 shares of our common stock, subject to adjustment based upon the applicable market value discussed below, will be delivered to the holder of each prepaid stock purchase contract at the settlement date. The number of shares of our common stock issuable upon settlement of each purchase contract on July 1, 2019 will be determined as follows: • if the applicable market value is equal to or greater than the threshold appreciation price of $50.40 per share, holders will receive 1.9841 shares of common stock per purchase contract, or the minimum settlement rate ; • if the applicable market value is greater than the reference price of $42.00 per share, but less than the threshold appreciation price of $50.40 per share, holders will receive a number of shares of common stock equal to $100 per TEU divided by the applicable market value; or • if the applicable market value is less than or equal to the reference price of $42.00 per share, holders will receive 2.3810 shares of common stock per purchase contract, or the maximum settlement rate. The "applicable market value" is defined as the average of the daily volume-weighted average price of the common stock on each of the 20 consecutive trading days beginning on, and including, the 23 rd scheduled trading day immediately preceding July 1, 2019. During the fourth quarter of fiscal year 2017, certain holders of our TEUs elected to early convert the equity component on 473 of our outstanding TEUs at the minimum conversion rate of 1.9841 which resulted in the issuance of 939 shares of our common stock. During the third quarter of fiscal year 2019, certain holders of our TEUs elected to early convert the equity component on 394 of our outstanding TEUs at the minimum conversion rate of 1.9841 which resulted in the issuance of 781 shares of our common stock. During fiscal year 2018, no holders of our TEUs elected to early convert the equity component of our outstanding TEUs. Subsequent to the end of the third quarter of fiscal year 2019, on July 1, 2019, the remaining 283 outstanding TEUs were converted at the minimum conversion rate of 1.9841 which resulted in the issuance of approximately 560 shares of our common stock. Debt Component The amortizing senior note was issued with an initial principal amount of $27,386 , or $23.8136 per TEU. Equal quarterly cash installments of $2.1875 per amortizing note are paid, which in the aggregate are equivalent to a 8.75% cash distribution per year with respect to each $100 stated amount per TEU. Each installment constitutes a payment of interest and partial repayment of principal. On July 1, 2019, subsequent to the end of the third quarter of fiscal year 2019, the final installment was paid. Earnings Per Common Share The TEUs have a dilutive effect on our earnings per share. The 1.9841 minimum shares to be issued are included in the calculation of basic weighted average shares outstanding. The 0.3969 difference between the minimum shares and the 2.3810 maximum shares are potentially dilutive, and accordingly, are included in our diluted earnings per share on a pro rata basis to the extent the applicable market value is higher than the reference price but less than the threshold appreciation price. See Note 13 for additional information regarding the calculation of earnings per share. Capped Calls In connection with the pricing of the TEUs sold in our public offering in fiscal year 2016, we purchased capped calls from third party banking institutions (Capped Calls) for $7,935 . The initial Capped Calls were for 2,282 equivalent shares of our common stock with a strike price of $50.40 , a cap price of $58.80 and an expiration date of July 1, 2019. The value of the Capped Calls is settled with shares of our common stock, based on the approximate market value of our common stock at such time, and could be settled as the TEUs were early converted or settled upon expiration on July 1, 2019 (Capped Call Expiration). During the fourth quarter of fiscal year 2017, we settled approximately 10% of the Capped Calls, which resulted in us receiving and retiring 12 shares of our common stock. No Capped Calls were settled during the nine months ended June 29, 2019 and fiscal year 2018. On June 13, 2018, we amended the agreements with third party banking institutions for the outstanding Capped Calls (Capped Call Agreements) to modify the timing of settlement to be only upon expiration for all outstanding Capped Calls. Per the Capped Call Agreements, the outstanding Capped Calls are for 2,054 equivalent shares of our common stock with a strike price of $50.40 and a cap price of $57.97 . The Capped Calls will be automatically settled upon Capped Call Expiration in the fourth quarter of fiscal year 2019 with shares of our common stock based on the average market value of our common stock as defined in the Capped Call Agreements. As of June 29, 2019 , the range of shares of our common stock to be received for the outstanding Capped Calls was a minimum of 0 shares to a maximum of 268 shares, which will be realized if the average market value of our common stock as defined in the Capped Call Agreements is at or below $50.40 or at $57.97 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Jun. 29, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Basic earnings per share is computed by dividing net income by the daily weighted average number of common shares outstanding during the applicable period. The TEUs are assumed to be settled at the minimum settlement amount of 1.9841 shares per TEU when calculating weighted-average common shares outstanding for purposes of basic earnings per share. Using the treasury stock method, diluted earnings per share includes the potentially dilutive effect of common shares issued in connection with outstanding stock-based compensation options and grants. The potentially dilutive effect of common shares issued in connection with outstanding stock options is determined based on the average market price for the period. For diluted earnings per share, the TEUs are assumed to be settled at a conversion factor based on our daily volume-weighted average price per share of our common stock for the 20 consecutive trading days preceding the end of the current fiscal quarter not to exceed 2.3810 shares of common stock per TEU. Under the treasury stock method, shares associated with certain stock options have been excluded from the diluted weighted average shares outstanding calculation because the exercise of those options would lead to a net reduction in common shares outstanding or anti-dilution. As a result, stock options to acquire 835 and 667 weighted common shares have been excluded from the diluted weighted average common shares outstanding calculation for the three months ended June 29, 2019 and June 30, 2018 , respectively. Stock options to acquire 812 and 548 weighted common shares have been excluded from the diluted weighted average common shares outstanding calculation for the nine months ended June 29, 2019 and June 30, 2018 , respectively. In connection with the pricing of the TEUs, we purchased capped calls. The capped calls will not be reflected in the calculation of diluted earnings per share until settled as they will lead to a net reduction in common shares outstanding or anti-dilution. See Note 12 for additional information on our equity instruments. Basic and diluted earnings per share are calculated as follows: Three Months Ended Nine Months Ended June 29, June 30, June 29, June 30, Net income $ 13,585 $ 8,979 $ 38,246 $ 50,568 Weighted average common shares outstanding 19,297 19,174 19,255 19,149 Effect of dilutive securities Stock-based compensation 223 131 181 120 Weighted average dilutive common shares outstanding 19,520 19,305 19,436 19,269 Earnings per share Basic $ 0.70 $ 0.47 $ 1.99 $ 2.64 Diluted 0.70 0.47 1.97 2.62 |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 9 Months Ended |
Jun. 29, 2019 | |
Equity [Abstract] | |
Other Comprehensive Income (Loss) | OTHER COMPREHENSIVE INCOME (LOSS) Other comprehensive income (loss), a component of shareholders' equity, consists of foreign currency translation adjustments, gains or losses on derivative instruments and defined benefit pension plan adjustments. Income tax expense or benefit allocated to each component of other comprehensive income (loss) is as follows: Three Months Ended Nine Months Ended June 29, 2019 Pre-tax Tax Net Pretax Tax Net Foreign currency translation gain (loss) adjustments $ 506 $ — $ 506 $ (2,165 ) $ — $ (2,165 ) Derivative instruments Unrealized net gain (loss) (1,371 ) 297 (1,074 ) (3,684 ) 802 (2,882 ) Net (gain) loss reclassified to earnings (837 ) 182 (655 ) (2,731 ) 595 (2,136 ) Defined benefit pension plan Unrealized net gain (loss) 600 (181 ) 419 (239 ) 72 (167 ) Net (gain) loss reclassified to earnings 134 (39 ) 95 408 (122 ) 286 Currency exchange rate gain (loss) (82 ) — (82 ) 179 — 179 Other comprehensive income (loss) $ (1,050 ) $ 259 $ (791 ) $ (8,232 ) $ 1,347 $ (6,885 ) Three Months Ended Nine Months Ended June 30, 2018 Pre-tax Tax Net Pretax Tax Net Foreign currency translation gain (loss) adjustments $ (8,056 ) $ — $ (8,056 ) $ (385 ) $ — $ (385 ) Derivative instruments Unrealized net gain (loss) 2,817 (728 ) 2,089 4,530 (1,171 ) 3,359 Net (gain) loss reclassified to earnings (695 ) 179 (516 ) 370 (96 ) 274 Defined benefit pension plan Unrealized net gain (loss) 111 (33 ) 78 (277 ) 84 (193 ) Net (gain) loss reclassified to earnings 131 (39 ) 92 398 (120 ) 278 Currency exchange rate gain (loss) 413 — 413 145 — 145 Other comprehensive income (loss) $ (5,279 ) $ (621 ) $ (5,900 ) $ 4,781 $ (1,303 ) $ 3,478 The changes in the net-of-tax balances of each component of AOCI are as follows: Three Months Ended Nine Months Ended June 29, 2019 Adjustments Adjustments Foreign Currency Translation Unrealized Derivative Instrument Defined Benefit Pension Plan Total Foreign Currency Translation Unrealized Derivative Instrument Defined Benefit Pension Plan Total Beginning balance $ (899 ) $ 3,031 $ (6,750 ) $ (4,618 ) $ 1,772 $ 6,320 $ (6,616 ) $ 1,476 Other comprehensive net gain (loss) reclassifications 506 (1,074 ) 337 (231 ) (2,165 ) (2,882 ) 12 (5,035 ) Net (gain) loss reclassified to earnings — (655 ) 95 (560 ) — (2,136 ) 286 (1,850 ) Other comprehensive income (loss) 506 (1,729 ) 432 (791 ) (2,165 ) (5,018 ) 298 (6,885 ) Ending balance $ (393 ) $ 1,302 $ (6,318 ) $ (5,409 ) $ (393 ) $ 1,302 $ (6,318 ) $ (5,409 ) Three Months Ended Nine Months Ended June 30, 2018 Adjustments Adjustments Foreign Unrealized Defined Total Foreign Unrealized Defined Total Beginning balance $ 11,617 $ 4,013 $ (6,805 ) $ 8,825 $ 3,946 $ 1,953 $ (6,452 ) $ (553 ) Other comprehensive net gain (loss) reclassifications (8,056 ) 2,089 491 (5,476 ) (385 ) 3,359 (48 ) 2,926 Net (gain) loss reclassified to earnings — (516 ) 92 (424 ) — 274 278 552 Other comprehensive income (loss) (8,056 ) 1,573 583 (5,900 ) (385 ) 3,633 230 3,478 Ending balance $ 3,561 $ 5,586 $ (6,222 ) $ 2,925 $ 3,561 $ 5,586 $ (6,222 ) $ 2,925 The effect on certain line items in the Consolidated Statements of Income of amounts reclassified out of AOCI are as follows: Three Months Ended Nine Months Ended Affected Line Item in the Consolidated Statements of Income June 29, June 30, June 29, June 30, Derivative instruments Currency exchange contracts gain (loss) $ 142 $ 273 $ 743 $ (1,031 ) Revenue Interest rate swap contracts gain (loss) 695 422 1,988 661 Interest expense, net Income tax benefit (expense) (182 ) (179 ) (595 ) 96 Income tax provision (benefit) Total net gain (loss) on derivative instruments 655 516 2,136 (274 ) Net income Defined benefit pension plan 1 Actuarial loss — (71 ) — (217 ) Cost of sales Actuarial loss — (38 ) — (113 ) Selling and marketing Actuarial loss — (22 ) — (68 ) General and administrative Actuarial loss (134 ) — (408 ) — Other income (expense), net Total actuarial loss (134 ) (131 ) (408 ) (398 ) Income before income taxes Income tax benefit 39 39 122 120 Income tax provision (benefit) Total net loss on pension plan (95 ) (92 ) (286 ) (278 ) Net income Total net of tax reclassifications out of AOCI included in net income $ 560 $ 424 $ 1,850 $ (552 ) 1 |
Business Segment Information
Business Segment Information | 9 Months Ended |
Jun. 29, 2019 | |
Segment Reporting [Abstract] | |
Business Segment Information | BUSINESS SEGMENT INFORMATION Our Chief Executive Officer (the Chief Operating Decision Maker) regularly reviews financial information for our two reportable segments, Test & Simulation and Sensors. Test & Simulation manufactures and sells equipment and related software and services which are used by customers to characterize a product's mechanical properties or performance. Sensors manufactures and sells high-performance sensors which provide measurements of vibration, pressure, position, force and sound in a variety of applications. In evaluating each segment's performance, our Chief Executive Officer focuses on income from operations. This measure excludes interest income and expense, income taxes and other non-operating items. Corporate expenses, including costs associated with various support functions such as human resources, information technology, legal, finance and accounting, and general and administrative costs are allocated to the reportable segments on the basis of revenue. The accounting policies of the reportable segments are the same as those described in Note 1 to the Consolidated Financial Statements found in our Annual Report on Form 10-K for the fiscal year ended September 29, 2018 and in Note 3 of this Quarterly Report on Form 10-Q. Intersegment revenue is based on standard costs with reasonable mark-ups established between the reportable segments. All significant intersegment amounts are eliminated to arrive at consolidated financial results. Financial information by reportable segment is as follows: Three Months Ended Nine Months Ended June 29, June 30, June 29, June 30, Revenue Test & Simulation $ 148,328 $ 116,055 $ 424,920 $ 344,496 Sensors 84,231 79,000 244,556 236,501 Intersegment eliminations (350 ) (387 ) (1,040 ) (844 ) Total revenue $ 232,209 $ 194,668 $ 668,436 $ 580,153 Income from operations Test & Simulation $ 11,424 $ 3,873 $ 31,439 $ 12,777 Sensors 11,556 12,398 33,694 36,623 Intersegment eliminations 21 (7 ) 8 (29 ) Total income from operations $ 23,001 $ 16,264 $ 65,141 $ 49,371 |
Business Acquisitions
Business Acquisitions | 9 Months Ended |
Jun. 29, 2019 | |
Business Combinations [Abstract] | |
Business Acquisitions | BUSINESS ACQUISITIONS On November 21, 2018, we acquired all ownership interests of E2M for a cash purchase price of $80,287 . Based in Amsterdam, Netherlands, E2M is a leading manufacturer of high force, electrically driven actuation systems, serving primarily the human-rated entertainment and training simulation markets. The acquisition of E2M expands our technology and product offerings for human-rated simulation systems and brings key regulatory approvals and customers in the flight simulation and entertainment markets. The transaction was accounted for under the acquisition method of accounting. The acquired assets, liabilities and operating results have been included in our financial statements within Test & Simulation from the date of acquisition. During the three and nine months ended June 29, 2019 , we included $7,999 and $21,658 , respectively, of revenue from E2M in our Consolidated Statements of Income. We funded the acquisition of E2M primarily with borrowings on our Revolving Credit Facility. Costs of $1,133 associated with the acquisition of E2M were expensed as incurred. Pro forma information related to the acquisition of E2M has not been included as the impact on our consolidated results of operations was not considered material. The following table summarizes the preliminary fair value measurement of the assets acquired and liabilities assumed, net of cash acquired, as of the date of acquisition: Fair Value Finite-Lived Intangible Asset Lives (Years) Asset (Liability) Accounts receivable $ 4,651 Unbilled accounts receivable 1,518 Inventories 11,063 Prepaid expenses and other current assets 123 Property and equipment 672 Intangible assets Customer lists 21,652 15 Trademarks and trade names 5,926 15 Technology 12,650 15 Other intangible assets 3,761 4 Other long-term assets 60 Purchased goodwill 32,475 Accounts payable (3,657 ) Accrued payroll and related costs (1,328 ) Advance payments from customers (4,315 ) Accrued income taxes (290 ) Other accrued liabilities (127 ) Deferred income taxes (6,287 ) Net assets acquired $ 78,547 Supplemental information Consideration paid at closing $ 79,772 Post-closing purchase price adjustment 515 Less: Cash acquired (1,740 ) Purchase price, net of cash acquired $ 78,547 The allocation of purchase price consideration is considered preliminary as of June 29, 2019 with provisional amounts primarily related to inventory for customer projects in various stages of completion, intangible assets and certain tax related items included as our allocation process has not been finalized. We expect to finalize the allocation of purchase price as soon as possible, but no later than one year from the acquisition date. Goodwill was calculated as the difference between the acquisition date fair value of the total purchase price consideration and the fair value of the net assets acquired and represents the future economic benefits that we expect to achieve as a result of the acquisition. This resulted in a purchase price in excess of the fair value of identifiable net assets acquired. The purchase price also included the fair value of other assets that were not identifiable, not separately recognizable under accounting rules (e.g., assembled workforce) or of immaterial value. All of the goodwill was assigned to Test & Simulation. None of the goodwill is deductible for income tax purposes. The preliminary fair value of the acquired intangible assets was $43,989 . The acquired intangible assets are being amortized on a straight-line basis over the useful lives identified in the table above. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Jun. 29, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Issuance of Senior Unsecured Notes On July 16, 2019, we issued $350,000 in aggregate principal amount of 5.750% senior unsecured notes due 2027 (the Notes). The Notes were issued pursuant to an Indenture dated as of July 16, 2019 among us, the Guarantors (as defined therein) and Wells Fargo Bank, National Association, as trustee (the Indenture). The Notes will mature on August 15, 2027. Interest will accrue at the rate of 5.750% per annum and will be payable semi-annually on each February 15 and August 15, with the first interest payment due on February 15, 2020. We used the net proceeds after discounts and expenses of approximately $344,000 from this offering to repay all outstanding debt under the Revolving Credit Facility, to repay a portion of the Term Facility and for general corporate purposes. Termination of Interest Rate Swap In connection with the repayment of a portion of the Term Facility, we terminated the associated interest rate swap. As of June 29, 2019, the interest rate swap had a total notional amount of $225,000 . The market value of the interest rate swap as of June 29, 2019 was an asset of $1,664 . See Note 8 for additional information on our interest rate swap. Purchase of Assets On August 5, 2019, we executed an agreement with Meggitt PLC (MGGT.L), to purchase the assets of their Endevco sensors business for a cash purchase price of approximately $70,000 . Founded in 1947, Endevco is a historic leader in high performance test & measurement sensors used primarily in the testing of new products. This strategic product line purchase brings together two iconic brands in the test & measurement sensors market, in PCB and Endevco, and further enhances our long-term strategy of growth and market leadership in our core businesses. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Jun. 29, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The consolidated financial statements include the accounts of MTS Systems Corporation and its wholly owned subsidiaries. Significant intercompany account balances and transactions have been eliminated. The terms "MTS," "we," "us," "the Company" or "our" in this Quarterly Report on Form 10-Q, unless the context otherwise requires, refer to MTS Systems Corporation and its wholly owned subsidiaries. We have prepared the interim unaudited consolidated financial statements included herein pursuant to the rules and regulations of the United States (U.S.) Securities and Exchange Commission (SEC). The information furnished in these consolidated financial statements includes normal recurring adjustments and reflects all adjustments that are, in our opinion, necessary for a fair presentation of such financial statements. The consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). GAAP requires us to make estimates and assumptions that affect amounts reported. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to SEC rules and regulations. The accompanying consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 29, 2018 filed with the SEC. Interim results of operations for the third fiscal quarter ended June 29, 2019 |
Fiscal Period | We have a 5-4-4 week, quarterly accounting cycle with our fiscal year ending on the Saturday closest to September 30. Fiscal year 2019 ending on September 28, 2019 will consist of 52 weeks. Fiscal year 2018 ended on September 29, 2018 |
Recently Issued Accounting Pronouncements | Leases In February 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-02, Leases (Topic 842), followed by related amendments (collectively, "the new lease standard"), which requires lessees to recognize most leases on the balance sheet for the rights and obligations created by those leases. Under the new lease standard, a company recognizes a right-of-use asset, representing the right to use the underlying asset for the lease term, and a corresponding lease liability for all leases with terms greater than 12 months. The new lease standard requires enhanced disclosures regarding the amount, timing and uncertainty of cash flows arising from a company's leases. Adoption of the new lease standard is required for annual periods beginning after December 15, 2018, including interim periods within that annual period, which is our fiscal year 2020. The new guidance is required to be adopted using a modified retrospective transition method, and an optional transition method may be elected to use the effective date as the date of initial application on transition. We intend to adopt the new lease standard for our fiscal year 2020 under the optional transition method with an effective date of September 29, 2019. As a result, we will not adjust our comparative period financial information or make the new required lease disclosures for periods before the effective date, and we will record the impact from adoption as a cumulative-effect reduction to retained earnings as of the effective date. We are currently planning to elect the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs, and we are currently evaluating the other practical expedients available under the new lease standard. We continue to make progress with preparation for the adoption and implementation of the new lease standard, including assessing the completeness of our lease arrangements, evaluating practical expedients and accounting policy elections, revising our lease-related accounting policies, assessing impacts to controls, and implementing a lease software solution. We anticipate the adoption of the new lease standard will result in an increase in assets and liabilities on our Consolidated Balance Sheet. The impact on our Consolidated Statement of Income and Consolidated Statement of Cash Flows is being evaluated. We continue to evaluate the impact that these changes in methodology will have on our financial condition, results of operations and disclosures. Other In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , followed by related amendments, which changes the accounting for credit losses on instruments measured at amortized cost by adding an impairment model that is based on expected losses rather than incurred losses. An entity will recognize as an allowance its estimate of expected credit losses, which is believed to result in more timely recognition of such losses as the standard eliminates the probable initial recognition threshold. Adoption of the standard is required for annual periods beginning after December 15, 2019, including interim periods within that annual period, which is our fiscal year 2021. The new guidance is required to be adopted using a modified retrospective approach with a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period of adoption. Early adoption is permitted for annual periods beginning after December 15, 2018, including interim periods within that annual period, which is our fiscal year 2020. We have not yet evaluated the impact the adoption of this guidance may have on our financial condition, results of operations or disclosures. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework–Changes to the Disclosure Requirements for Fair Value Measurement , which eliminates, amends and adds disclosure requirements for fair value measurements. The standard is required to be adopted for annual periods beginning after December 15, 2019, including interim periods within that annual period, which is our fiscal year 2021. Certain disclosures in the new guidance are to be applied using a retrospective approach while other disclosures are to be applied using a prospective approach. Early adoption is permitted. We have not yet evaluated the impact the adoption of this guidance may have on our financial condition, results of operations or disclosures. In August 2018, the FASB issued ASU No. 2018-14, Compensation–Retirement Benefits–Defined Benefit Plans–General (Subtopic 715-20): Disclosure Framework–Changes to the Disclosure Requirements for Defined Benefit Plans , which eliminates, amends and adds disclosure requirements for defined benefit pension and other postretirement plans. The standard is required to be adopted for annual periods ending after December 15, 2020, which is our fiscal year 2021. The new guidance is to be applied using a retrospective approach with early adoption permitted. We have not yet evaluated the impact the adoption of this guidance may have on our financial condition, results of operations or disclosures. Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), followed by related amendments (collectively, "the new revenue standard" or "ASC 606"), to provide a single, comprehensive revenue recognition model for all contracts with customers. Under the new revenue standard, a company recognizes revenue to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. Determination of when and how revenue is recognized is based on a five-step analysis. Enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from a company's contracts with customers are required. We adopted the new revenue standard on September 30, 2018 for our fiscal year 2019 under the modified retrospective transition method. As of September 30, 2018, we recorded a cumulative-effect reduction to the opening balance of our fiscal year 2019 retained earnings of $6,227 , net of tax, for the net deferral of previously recognized revenue and related cost of sales, partially offset by the capitalization and deferral of pre-contract costs. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. See Note 3 for our new revenue recognition accounting policy and disclosures relative to this guidance. In March 2016, the FASB issued ASU No. 2016-04, Liabilities—Extinguishments of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Products , which amends existing guidance on extinguishing financial liabilities for certain prepaid stored-value products. The standard requires recognition of the expected breakage amount or the value that is ultimately not redeemed either proportionally in earnings as redemption occurs or when redemption is remote, if issuers are not entitled to breakage. We adopted the standard on a modified retrospective basis for the annual period ending September 28, 2019, including interim periods within that annual period. The adoption of this guidance had no impact on our financial condition, results of operations or disclosures. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory , which requires companies to account for the income tax effects of intercompany sales and transfers of assets other than inventory when the transfer occurs. Existing guidance required companies to defer the income tax effects of intercompany transfers of assets until the asset has been sold to an outside party or otherwise recognized. We adopted the standard on a modified retrospective basis for the annual period ending September 28, 2019, including interim periods within that annual period. The adoption of this guidance had no impact on our financial condition, results of operations or disclosures. In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the income statement. The standard requires the service cost component of net periodic benefit cost to be presented in the same income statement line items as other employee compensation costs arising from services rendered during the period, with only the service cost component eligible for capitalization in assets. Other components of the net periodic benefit cost are to be stated separately from the line items that include the service cost and outside of operating income. These components are not eligible for capitalization in assets. We adopted the standard for the annual period ending September 28, 2019, including interim periods within that annual period, retrospectively for the presentation in the income statement of the service cost component and the other components of net periodic pension cost and prospectively for the capitalization in assets of the service cost component of net periodic pension cost. The adoption of this guidance did not have a material impact on our current or prior year financial condition, results of operations or disclosures. Therefore, the comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , which amends the hedge accounting model in Accounting Standards Codification (ASC) 815 to enable entities to better portray the economics of their risk management activities in the financial statements and enhance the transparency and understandability of hedge results. We early adopted the standard on a modified retrospective basis for the annual period ending September 28, 2019, including interim periods within that annual period. The adoption of this guidance had no impact on our current or prior year financial condition, results of operations or disclosures. |
Revenue | Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for transferring those goods or providing those services. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are known, the contract has commercial substance and collectability of consideration is probable. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under the new revenue standard. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Many of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. In situations when our contract includes distinct goods or services that are substantially the same and have the same pattern of transfer to the customer over time, they are recognized as a series of distinct goods or services. For contracts with multiple performance obligations, we allocate the contract's transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. We do not adjust the promised amount of consideration for the effects of a significant financing component if we expect, at contract inception, that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Revenue is recorded net of taxes collected from customers, and taxes collected are recorded as current liabilities until remitted to the relevant government authority. Shipping and handling costs associated with outbound freight after control of a product has transferred are accounted for as a fulfillment cost and are included in cost of sales in the Consolidated Statements of Income. The following is a description of the product offerings, end markets, typical revenue transactions and payment terms for each of our two reportable segments. See Note 15 for further information on reportable segments. Test & Simulation Test & Simulation manufactures and sells equipment and related software and services which are used by customers to characterize a product's mechanical properties or performance. Our solutions simulate forces and motions that customers expect their products to encounter in use or are necessary to properly characterize the product's performance. Primary Test & Simulation markets include transportation, infrastructure, energy, aerospace, materials science, medical, flight training and amusement parks. A typical system is a comprehensive solution which includes a reaction frame to hold the prototype specimen; a hydraulic or electro-mechanical power source; actuators to create the force or motion; and a computer controller with specialized software to coordinate the actuator movement and to measure, record and manipulate results. Our portfolio of Test & Simulation solutions includes standard, configurable testing products; engineered products which combine standard product configurations with a moderate degree of customization per customer specifications; and highly customized, highly engineered testing solutions built to address the customer's unique business need, which can include development of first-of-a-kind technology. To complement our Test & Simulation products, we provide our customers with a spectrum of services to maximize product performance including installation, product life cycle management, professional training, calibration and metrology, technical consulting and onsite and factory repair and maintenance. In addition, we sell a variety of accessories and spare parts. The manufacturing cycle for a typical system ranges from weeks to 12 months , depending on the complexity of the system and the availability of components, and can be up to three years for larger, more complex systems. For certain contracts, the order to revenue cycle may extend beyond the manufacturing cycle, such as when the manufacturing start date is driven by the customer's project timeline or when the contract terms require equipment installation and commissioning and customer acceptance prior to point-in-time revenue recognition. Test & Simulation contracts often have multiple performance obligations, most commonly due to the contract covering multiple phases of the product life cycle (i.e., equipment design and production, installation and commissioning, extended warranty and software maintenance). The primary method used to estimate standalone selling price is the expected cost plus a margin approach under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service. Test & Simulation revenue is recognized either over time as work progresses or point-in-time, depending on contract-specific terms and the pattern of transfer of control of the product or service to the customer. Revenue from services is recognized in the period the service is performed or ratably over the period of the related service contract. Equipment revenue is recognized over time when: (i) control is transferred to the customer over time as work progresses; or (ii) contract terms evidence customer control of the work in process or an enforceable right to payment with no alternative use. Equipment revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying the performance obligation. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Equipment contract costs include materials, component parts, labor and overhead costs. Equipment revenue is recognized point-in-time when either: (i) control is transferred to the customer at a point-in-time when obligations under the terms of the contract are satisfied; or (ii) contract terms do not evidence customer control of the work in process or an enforceable right to payment with no alternative use, and consequently revenue is deferred as work progresses. Satisfaction of performance obligations under the terms of the contract occurs either upon product shipment (as evidenced by delivery or shipment terms), completion of equipment installation and commissioning, or customer acceptance. For our Test & Simulation contracts with customers, payment terms vary and are subject to negotiation. Typical payment terms include progress payments based on specified events or milestones. For some contracts, we are entitled to receive an advance payment. Sensors Our Sensors segment (Sensors) manufactures and sells high-performance sensors which provide measurements of vibration, pressure, position, force and sound in a variety of applications. Our Sensors products are used to enable automation, enhance precision and safety, and lower our customers' production costs by improving performance and reducing downtime. Primary Sensors markets include automotive, aerospace and defense, industrial, and research and development. Our Sensors products are sold as configurable, standard units; utilize piezoelectric or magnetostriction technology; and are ideal for use in harsh operating environments to provide accurate and reliable sensor information. To complement our Sensors products, we also provide spare parts and services. The cycle from contract inception to shipment of equipment is typically one to three months , with the exception of certain high-volume contracts which are fulfilled in a series of shipments over an extended period. Our Sensors contracts generally have a single performance obligation which is satisfied at a point in time. The performance obligation is a stand-alone sensor product, accessory, service or software license. Sensors contracts are generally fixed-price purchase order fulfillment contracts, and the transaction price is equal to the observable consideration in the contract. Revenue is recognized when obligations under the terms of the contract with our customer are satisfied; generally this occurs with the transfer of control upon product shipment (as evidenced by shipment or delivery terms) or with the performance of the service. Certain contracts are measured using the as invoiced practical expedient as we have a right to consideration from a customer in an amount that corresponds directly with the value to the customer of our performance completed to date. For our Sensors contracts with customers, payment terms are generally within 90 days. The timing of satisfying our Sensors performance obligations does not vary significantly from the typical timing of payment. For certain high-volume contracts, we are entitled to receive an advance payment. Contract Estimates For contracts recognized over time, we estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract. Contract estimates are based on various assumptions to project the outcome of future events that may span several years. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, and internal and subcontractor performance. Pricing is established at or prior to the time of sale with our customers, and we record sales at the agreed-upon selling price. The terms of a contract or the historical business practice can give rise to variable consideration due to but not limited to volume discounts, penalties and early payment discounts. We estimate variable consideration at the most likely amount we will receive from customers. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized for such transaction will not occur, or when the uncertainty associated with the variable consideration is resolved. In general, variable consideration in our contracts relates to the entire contract. As a result, the variable consideration is allocated proportionately to all performance obligations. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us at contract inception. There are no significant instances where variable consideration is constrained and not recorded at the initial time of sale. As a significant change in one or more of these estimates could affect the profitability of our contracts, we review and update our contract-related estimates regularly. We recognize adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance is recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the total loss in the period it is identified. Our review of contract-related estimates has not resulted in adjustments that are significant to our results of operations. Contract Modifications When contracts are modified to account for changes in contract specifications and requirements, we consider whether the modification either creates new, or changes existing, enforceable rights and obligations. Contract modifications that are for goods or services that are not distinct from the existing contract, due to the significant integration with the original product or service provided, are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price, and our measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. When the modifications include additional performance obligations that are distinct and at a relative stand-alone selling price, they are accounted for as a new contract and performance obligation and recognized prospectively. Warranties and Returns For both Test & Simulation and Sensors, we provide a manufacturer's warranty on our products and systems which is included in customer contracts. At the time a sale is recognized, we record estimated future warranty costs. See Note 5 for further discussion of our product warranty liabilities. We also offer separately-priced extended warranties or service-type contracts on certain products for which revenue is recognized over the contractual period or as services are rendered. Our sales terms generally do not allow for a right of return except for situations where the product fails. When the right of return exists, we recognize revenue for the transferred products at the expected amount of consideration for which we will be entitled. Pre-contract Costs The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled accounts receivable (contract assets) and advance payments from customers (contract liabilities). Contract balances are classified as assets or liabilities on a contract-by-contract basis at the end of each reporting period. Contract liabilities represent payments received from customers at contract inception and at milestones per contract provisions. These payments are recorded in advance payments from customers and other long-term liabilities in our Consolidated Balance Sheets (current and non-current portions, respectively) and are liquidated as revenue is recognized. Conversely, when billing occurs subsequent to revenue recognition for contracts recognized over time, balances are recorded in unbilled accounts receivable, net in our Consolidated Balance Sheets. As customers are billed, unbilled accounts receivable balances are transferred to accounts receivable, net in the Consolidated Balance Sheets. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Impact of 606 Adoption | The impact of adopting the new revenue standard on our Consolidated Statements of Income and Consolidated Balance Sheets is as follows: Consolidated Statements of Income Three Months Ended June 29, 2019 As Reported Balances without Adoption of ASC 606 Effect of Change Revenue $ 232,209 $ 213,443 $ 18,766 Cost of sales 147,106 136,563 10,543 Gross profit 85,103 76,880 8,223 Selling and marketing 33,321 33,075 246 Income tax provision (benefit) 2,605 1,326 1,279 Net income 13,585 6,887 6,698 Nine Months Ended June 29, 2019 As Reported Balances without Adoption of ASC 606 Effect of Change Revenue $ 668,436 $ 636,546 $ 31,890 Cost of sales 417,678 397,295 20,383 Gross profit 250,758 239,251 11,507 Selling and marketing 98,805 98,566 239 Income tax provision (benefit) 6,217 4,363 1,854 Net income 38,246 28,832 9,414 Consolidated Balance Sheets June 29, 2019 As Reported Balances without Adoption of ASC 606 Effect of Change Assets Accounts receivable, net $ 131,365 $ 133,548 $ (2,183 ) Unbilled accounts receivable, net 68,804 59,784 9,020 Inventories, net 164,853 156,108 8,745 Prepaid expenses and other current assets 27,118 24,003 3,115 Other long-term assets 3,986 2,880 1,106 Deferred income taxes 3,818 3,167 651 Liabilities and Shareholders' Equity Advance payments from customers 87,935 84,970 2,965 Accrued income taxes 3,736 3,345 391 Other accrued liabilities 35,367 20,566 14,801 Deferred income taxes 50,315 51,540 (1,225 ) Other long-term liabilities 15,305 15,021 284 Accumulated other comprehensive income (loss) (5,409 ) (5,460 ) 51 Retained earnings 316,249 313,062 3,187 The cumulative effect of the changes made to our September 29, 2018 Consolidated Balance Sheet from the modified retrospective adoption of the new revenue standard is as follows: Consolidated Balance Sheets Balance at September 29, 2018 Adjustments due to ASC 606 Adoption Balance at September 30, 2018 Assets Accounts receivable, net $ 122,243 $ (4,481 ) $ 117,762 Unbilled accounts receivable, net 70,474 (8,002 ) 62,472 Inventories, net 139,109 16,727 155,836 Prepaid expenses and other current assets 24,572 4,651 29,223 Other long-term assets 2,263 1,060 3,323 Deferred income taxes 3,249 643 3,892 Liabilities and Shareholders' Equity Advance payments from customers 80,131 13,568 93,699 Other accrued liabilities 19,146 (2,504 ) 16,642 Deferred income taxes 46,482 (1,228 ) 45,254 Other long-term liabilities 4,894 6,989 11,883 Retained earnings 300,585 (6,227 ) 294,358 |
Disaggregation of Revenue | Three Months Ended June 29, 2019 Test & Simulation Sensors Intersegment Total Sales type Product $ 123,573 $ 82,305 $ (350 ) $ 205,528 Service 24,755 1,926 — 26,681 Total revenue $ 148,328 $ 84,231 $ (350 ) $ 232,209 Timing of recognition Point-in-time $ 95,247 $ 77,978 $ (350 ) $ 172,875 Over time 53,081 6,253 — 59,334 Total revenue $ 148,328 $ 84,231 $ (350 ) $ 232,209 Geographic market Americas $ 47,892 $ 42,365 $ (350 ) $ 89,907 Europe 34,137 26,994 — 61,131 Asia 66,299 14,872 — 81,171 Total revenue $ 148,328 $ 84,231 $ (350 ) $ 232,209 Nine Months Ended June 29, 2019 Test & Simulation Sensors Intersegment Total Sales type Product $ 348,992 $ 239,345 $ (1,040 ) $ 587,297 Service 75,928 5,211 — 81,139 Total revenue $ 424,920 $ 244,556 $ (1,040 ) $ 668,436 Timing of recognition Point-in-time $ 273,226 $ 231,507 $ (1,040 ) $ 503,693 Over time 151,694 13,049 — 164,743 Total revenue $ 424,920 $ 244,556 $ (1,040 ) $ 668,436 Geographic market Americas $ 138,780 $ 119,069 $ (1,040 ) $ 256,809 Europe 92,300 79,995 — 172,295 Asia 193,840 45,492 — 239,332 Total revenue $ 424,920 $ 244,556 $ (1,040 ) $ 668,436 |
Contract Assets and Contract Liabilities | Significant changes in contract assets and contract liabilities are as follows: Contract Assets Balance, September 29, 2018 $ 70,474 Cumulative transition adjustment upon adoption (8,002 ) Changes in estimated stage of completion 92,958 Transfers to accounts receivable, net (88,506 ) Acquisitions 1 1,518 Other 362 Balance, June 29, 2019 $ 68,804 Contract Liabilities Balance, September 29, 2018 $ 80,131 Cumulative transition adjustment upon adoption 20,557 Revenue recognized included in balance at beginning of period (70,294 ) Increases due to payments received, excluding amounts recognized as revenue during period 64,248 Acquisitions 1 4,853 Other (820 ) Balance, June 29, 2019 $ 98,675 1 See Note 16 for additional information regarding acquisitions. Contract assets and contract liabilities are as follows: June 29, September 29, Contract assets $ 68,804 $ 70,474 Contract liabilities 98,675 80,131 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories, net are as follows: June 29, September 29, Components, assemblies and parts $ 107,389 $ 93,020 Customer projects in various stages of completion 45,814 35,675 Finished goods 11,650 10,414 Total inventories, net $ 164,853 $ 139,109 |
Warranty Obligations (Tables)
Warranty Obligations (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Product Warranties Disclosures [Abstract] | |
Warranty Provisions and Claims | Changes to accrued warranty costs are as follows: Three Months Ended Nine Months Ended June 29, June 30, June 29, June 30, Beginning accrued warranty costs $ 4,741 $ 6,191 $ 5,418 $ 6,018 Warranty claims (1,051 ) (1,384 ) (3,497 ) (3,969 ) Warranty provisions 150 756 1,941 3,483 Adjustments to preexisting warranties — 50 (15 ) 64 Currency translation 3 (24 ) (4 ) (7 ) Ending accrued warranty costs $ 3,843 $ 5,589 $ 3,843 $ 5,589 |
Capital Assets (Tables)
Capital Assets (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Capital Assets [Abstract] | |
Property and Equipment | Property and equipment, net are as follows: June 29, September 29, Land and improvements $ 3,924 $ 2,881 Buildings and improvements 59,949 58,880 Machinery and equipment 217,728 203,647 Assets held under capital leases 2,796 2,815 Total property and equipment 284,397 268,223 Less: Accumulated depreciation (191,504 ) (177,954 ) Total property and equipment, net $ 92,893 $ 90,269 |
Goodwill | Changes to the carrying amount of goodwill are as follows: Test & Simulation Sensors Total Balance, September 29, 2018 $ 24,631 $ 344,644 $ 369,275 Acquisitions 1 34,423 — 34,423 Currency translation (230 ) (20 ) (250 ) Balance, June 29, 2019 $ 58,824 $ 344,624 $ 403,448 1 See Note 16 for additional information regarding acquisitions. |
Intangible Assets | Intangible assets are as follows: June 29, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted Average Useful Life (in Years) Software development costs 2 $ 37,265 $ (15,969 ) $ 21,296 6.4 Technology and patents 59,362 (14,934 ) 44,428 14.9 Trademarks and trade names 12,658 (3,641 ) 9,017 20.6 Customer lists 180,147 (31,692 ) 148,455 15.7 Land-use rights 2,334 (914 ) 1,420 26.0 Other 3,754 (571 ) 3,183 4.0 Trade names 57,500 — 57,500 Indefinite Total intangible assets $ 353,020 $ (67,721 ) $ 285,299 14.5 September 29, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted Average Useful Life (in Years) Software development costs 2 $ 31,251 $ (15,860 ) $ 15,391 6.5 Technology and patents 46,405 (12,188 ) 34,217 14.9 Trademarks and trade names 6,754 (2,987 ) 3,767 25.4 Customer lists 156,971 (23,314 ) 133,657 15.8 Land-use rights 2,336 (730 ) 1,606 26.0 Trade names 57,500 — 57,500 Indefinite Total intangible assets $ 301,217 $ (55,079 ) $ 246,138 14.8 2 The gross carrying amount of software development costs as of June 29, 2019 and September 29, 2018 includes $19,560 and $15,391 , respectively, of intangible assets not yet placed in service. |
Amortization Expense | Amortization expense recognized related to finite-lived intangible assets is as follows: Three Months Ended Nine Months Ended June 29, June 30, June 29, June 30, Amortization expense $ 4,449 $ 3,453 $ 12,668 $ 10,388 |
Estimated Future Amortization Expense on Finite-Lived Intangible Assets | Estimated future amortization expense related to finite-lived intangible assets is as follows: Amortization Expense Remainder of 2019 $ 4,356 2020 17,420 2021 18,527 2022 19,450 2023 18,543 2024 18,172 Thereafter 131,331 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Subject to Fair Value Measurements on a Recurring Basis | Financial assets and liabilities subject to fair value measurements on a recurring basis are as follows: June 29, 2019 Level 1 Level 2 Level 3 Total Assets Currency contracts 1 $ — $ 350 $ — $ 350 Interest rate swap 2 — 1,664 — 1,664 Total assets — 2,014 — 2,014 Liabilities Currency contracts 1 — 490 — 490 Total liabilities $ — $ 490 $ — $ 490 September 29, 2018 Level 1 Level 2 Level 3 Total Assets Currency contracts 1 $ — $ 1,080 $ — $ 1,080 Interest rate swap 2 — 7,411 — 7,411 Total assets — 8,491 — 8,491 Liabilities Currency contracts 1 — 173 — 173 Total liabilities $ — $ 173 $ — $ 173 1 Based on observable market transactions of spot currency rates and forward currency rates on equivalently-termed instruments. Carrying amounts of the financial assets and liabilities are equal to the fair value. See Note 8 for additional information on derivative financial instruments. 2 Based on London Interbank Offered Rate (LIBOR) and spot rates. Carrying amount of the financial asset is equal to the fair value. See Note 8 for additional information on derivative financial instruments. |
Schedule of Estimated Fair Values of Debt Instruments | The carrying amount and estimated fair values of our debt are as follows: June 29, 2019 Carrying Fair Value Level 1 Level 2 Level 3 Debt component of tangible equity units 1 $ 2,472 $ 2,871 $ — $ 2,871 $ — Tranche B term loan 2 387,966 388,936 — 388,936 — Total debt $ 390,438 $ 391,807 $ — $ 391,807 $ — September 29, 2018 Carrying Fair Value Level 1 Level 2 Level 3 Debt component of tangible equity units 1 $ 7,290 $ 8,626 $ — $ 8,626 $ — Tranche B term loan 2 391,416 395,330 — 395,330 — Total debt $ 398,706 $ 403,956 $ — $ 403,956 $ — 1 The fair value of the 8.75% tangible equity units (TEUs) is based on the most recently quoted price for the outstanding securities, adjusted for any known significant deviations in value. The estimated fair value of these long-term obligations is not necessarily indicative of the amount that would be realized in a current market exchange. See Note 12 for additional information on the TEUs. 2 The fair value of the tranche B term loan is based on the most recently quoted market price for the outstanding debt instrument, adjusted for any known significant deviations in value. The estimated fair value of the debt obligation is not necessarily indicative of the amount that would be realized in a current market exchange. See Note 9 for additional information on debt instruments. |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Outstanding Designated and Undesignated Derivative Assets and Liabilities | The fair value of our outstanding designated and undesignated derivative assets and liabilities are reported in the Consolidated Balance Sheets as follows: June 29, 2019 Prepaid Expenses and Other Current Assets Other Accrued Liabilities Designated hedge derivatives Cash flow derivatives $ 350 $ 265 Interest rate swap 1,664 — Total designated hedge derivatives 2,014 265 Undesignated hedge derivatives Balance sheet derivatives — 225 Total hedge derivatives $ 2,014 $ 490 September 29, 2018 Prepaid Expenses and Other Current Assets Other Accrued Liabilities Designated hedge derivatives Cash flow derivatives $ 989 $ 173 Interest rate swap 7,411 — Total designated hedge derivatives 8,400 173 Undesignated hedge derivatives Balance sheet derivatives 91 — Total hedge derivatives $ 8,491 $ 173 |
Reconciliation of the Net Fair Value of Designated Hedge Derivatives | A reconciliation of the net fair value of designated hedge derivatives subject to master netting arrangements that are recorded in the Consolidated Balance Sheets to the net fair value that could have been reported in the Consolidated Balance Sheets are as follows: Gross Recognized Amount Gross Offset Amount Net Amount Presented Derivatives Subject to Offset Cash Collateral Received Net Amount June 29, 2019 Assets $ 2,014 $ — $ 2,014 $ (179 ) $ — $ 1,835 Liabilities 265 — 265 (179 ) — 86 September 29, 2018 Assets $ 8,400 $ — $ 8,400 $ (173 ) $ — $ 8,227 Liabilities 173 — 173 (173 ) — — |
Pretax Amounts Recognized in Accumulated Other Comprehensive Income on Currency Contracts | The pretax amounts recognized in AOCI on currency exchange contracts, including (gains) losses reclassified into earnings in the Consolidated Statements of Income and gains (losses) recognized in other comprehensive income (loss) (OCI), are as follows: Three Months Ended Nine Months Ended June 29, June 30, June 29, June 30, Beginning unrealized net gain (loss) in AOCI $ 192 $ (1,092 ) $ 672 $ (443 ) Net (gain) loss reclassified into revenue (142 ) (273 ) (743 ) 1,031 Net gain (loss) recognized in OCI (46 ) 1,967 75 14 Ending unrealized net gain (loss) in AOCI $ 4 $ 602 $ 4 $ 602 |
Pretax Amounts Recognized in AOCI on Interest Rate Swaps | The pretax amounts recognized in AOCI on the interest rate swap, including (gains) losses reclassified into earnings in the Consolidated Statements of Income and gains (losses) recognized in OCI, are as follows: Three Months Ended Nine Months Ended June 29, June 30, June 29, June 30, Beginning unrealized net gain (loss) in AOCI $ 3,684 $ 6,925 $ 7,411 $ 3,499 Net (gain) loss reclassified into interest expense (695 ) (422 ) (1,988 ) (661 ) Net gain (loss) recognized in OCI (1,325 ) 851 (3,759 ) 4,516 Ending unrealized net gain (loss) in AOCI $ 1,664 $ 7,354 $ 1,664 $ 7,354 |
Net Gains (Losses) Recognized in Income for Foreign Exchange Balance Sheet Derivative Contracts | The net gain (loss) recognized in the Consolidated Statements of Income on foreign exchange balance sheet derivative contracts is as follows: Three Months Ended Nine Months Ended June 29, June 30, June 29, June 30, Net gain (loss) recognized in other income (expense), net $ 218 $ 981 $ (170 ) $ (46 ) |
Financing (Tables)
Financing (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consists of the following: June 29, September 29, Long-term debt Tranche B term loan, 1.00% amortizing per year, maturing July 5, 2023 $ 387,966 $ 391,416 Revolving credit facility, non-current portion, expiring July 5, 2022 80,391 — Tangible equity units, 8.75% coupon, maturing July 1, 2019 1 2,472 7,290 Capital lease obligations 1,572 2,000 Total long-term debt 472,401 400,706 Less: Unamortized underwriting discounts, commissions and other expenses (6,567 ) (8,623 ) Less: Current maturities of tranche B term loan debt 2, 3 (28,600 ) (28,600 ) Less: Current maturities of TEU debt 2 (2,472 ) (7,290 ) Less: Current maturities of capital lease obligations 2 (562 ) (553 ) Total long-term debt, less current maturities, net $ 434,200 $ 355,640 1 See Note 12 for additional information on our TEUs issued in the third quarter of fiscal year 2016. 2 In addition to the current maturities above, current maturities of long-term debt, net in the Consolidated Balance Sheets includes the current portion of unamortized underwriting discounts, commissions and other expenses of $3,318 and $3,705 as of June 29, 2019 and September 29, 2018 , respectively. 3 As of June 29, 2019 and September 29, 2018 , current maturities of tranche B term loan consist of the 1% annual payment and the calculated or estimated required annual Excess Cash Flow payment as defined below, as well as planned prepayments. |
Schedule of Derivative Instruments | The interest rate swap will be reduced to the following notional amounts over the next three years: Notional Amount October 3, 2019 $ 180,000 October 3, 2020 125,000 April 3, 2021 — |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Equity [Abstract] | |
Schedule of Tangible Equity Units | The aggregate values assigned upon issuance to each component of the TEUs, based on the relative fair value of the respective components, were as follows: Equity Component Debt Component Total Fair value price per TEU 1 $ 76.19 $ 23.81 $ 100.00 Gross proceeds $ 87,614 $ 27,386 $ 115,000 Less: Underwriting discounts and commissions (2,628 ) (822 ) (3,450 ) Less: Other expenses 2 (475 ) (149 ) (624 ) Issuance of TEUs, net $ 84,511 $ 26,415 $ 110,926 1 The fair value price allocation between equity and debt for each TEU was determined using a discounted cash flow model. 2 Other expenses include direct and incremental costs related to the issuance of the TEUs. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Basic and diluted earnings per share are calculated as follows: Three Months Ended Nine Months Ended June 29, June 30, June 29, June 30, Net income $ 13,585 $ 8,979 $ 38,246 $ 50,568 Weighted average common shares outstanding 19,297 19,174 19,255 19,149 Effect of dilutive securities Stock-based compensation 223 131 181 120 Weighted average dilutive common shares outstanding 19,520 19,305 19,436 19,269 Earnings per share Basic $ 0.70 $ 0.47 $ 1.99 $ 2.64 Diluted 0.70 0.47 1.97 2.62 |
Other Comprehensive Income (L_2
Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Equity [Abstract] | |
Schedule of Changes in Each Component of Accumulated Other Comprehensive Income | Income tax expense or benefit allocated to each component of other comprehensive income (loss) is as follows: Three Months Ended Nine Months Ended June 29, 2019 Pre-tax Tax Net Pretax Tax Net Foreign currency translation gain (loss) adjustments $ 506 $ — $ 506 $ (2,165 ) $ — $ (2,165 ) Derivative instruments Unrealized net gain (loss) (1,371 ) 297 (1,074 ) (3,684 ) 802 (2,882 ) Net (gain) loss reclassified to earnings (837 ) 182 (655 ) (2,731 ) 595 (2,136 ) Defined benefit pension plan Unrealized net gain (loss) 600 (181 ) 419 (239 ) 72 (167 ) Net (gain) loss reclassified to earnings 134 (39 ) 95 408 (122 ) 286 Currency exchange rate gain (loss) (82 ) — (82 ) 179 — 179 Other comprehensive income (loss) $ (1,050 ) $ 259 $ (791 ) $ (8,232 ) $ 1,347 $ (6,885 ) Three Months Ended Nine Months Ended June 30, 2018 Pre-tax Tax Net Pretax Tax Net Foreign currency translation gain (loss) adjustments $ (8,056 ) $ — $ (8,056 ) $ (385 ) $ — $ (385 ) Derivative instruments Unrealized net gain (loss) 2,817 (728 ) 2,089 4,530 (1,171 ) 3,359 Net (gain) loss reclassified to earnings (695 ) 179 (516 ) 370 (96 ) 274 Defined benefit pension plan Unrealized net gain (loss) 111 (33 ) 78 (277 ) 84 (193 ) Net (gain) loss reclassified to earnings 131 (39 ) 92 398 (120 ) 278 Currency exchange rate gain (loss) 413 — 413 145 — 145 Other comprehensive income (loss) $ (5,279 ) $ (621 ) $ (5,900 ) $ 4,781 $ (1,303 ) $ 3,478 The changes in the net-of-tax balances of each component of AOCI are as follows: Three Months Ended Nine Months Ended June 29, 2019 Adjustments Adjustments Foreign Currency Translation Unrealized Derivative Instrument Defined Benefit Pension Plan Total Foreign Currency Translation Unrealized Derivative Instrument Defined Benefit Pension Plan Total Beginning balance $ (899 ) $ 3,031 $ (6,750 ) $ (4,618 ) $ 1,772 $ 6,320 $ (6,616 ) $ 1,476 Other comprehensive net gain (loss) reclassifications 506 (1,074 ) 337 (231 ) (2,165 ) (2,882 ) 12 (5,035 ) Net (gain) loss reclassified to earnings — (655 ) 95 (560 ) — (2,136 ) 286 (1,850 ) Other comprehensive income (loss) 506 (1,729 ) 432 (791 ) (2,165 ) (5,018 ) 298 (6,885 ) Ending balance $ (393 ) $ 1,302 $ (6,318 ) $ (5,409 ) $ (393 ) $ 1,302 $ (6,318 ) $ (5,409 ) Three Months Ended Nine Months Ended June 30, 2018 Adjustments Adjustments Foreign Unrealized Defined Total Foreign Unrealized Defined Total Beginning balance $ 11,617 $ 4,013 $ (6,805 ) $ 8,825 $ 3,946 $ 1,953 $ (6,452 ) $ (553 ) Other comprehensive net gain (loss) reclassifications (8,056 ) 2,089 491 (5,476 ) (385 ) 3,359 (48 ) 2,926 Net (gain) loss reclassified to earnings — (516 ) 92 (424 ) — 274 278 552 Other comprehensive income (loss) (8,056 ) 1,573 583 (5,900 ) (385 ) 3,633 230 3,478 Ending balance $ 3,561 $ 5,586 $ (6,222 ) $ 2,925 $ 3,561 $ 5,586 $ (6,222 ) $ 2,925 |
Schedule of Amounts Reclassified Out of Accumulated Other Comprehensive Income | The effect on certain line items in the Consolidated Statements of Income of amounts reclassified out of AOCI are as follows: Three Months Ended Nine Months Ended Affected Line Item in the Consolidated Statements of Income June 29, June 30, June 29, June 30, Derivative instruments Currency exchange contracts gain (loss) $ 142 $ 273 $ 743 $ (1,031 ) Revenue Interest rate swap contracts gain (loss) 695 422 1,988 661 Interest expense, net Income tax benefit (expense) (182 ) (179 ) (595 ) 96 Income tax provision (benefit) Total net gain (loss) on derivative instruments 655 516 2,136 (274 ) Net income Defined benefit pension plan 1 Actuarial loss — (71 ) — (217 ) Cost of sales Actuarial loss — (38 ) — (113 ) Selling and marketing Actuarial loss — (22 ) — (68 ) General and administrative Actuarial loss (134 ) — (408 ) — Other income (expense), net Total actuarial loss (134 ) (131 ) (408 ) (398 ) Income before income taxes Income tax benefit 39 39 122 120 Income tax provision (benefit) Total net loss on pension plan (95 ) (92 ) (286 ) (278 ) Net income Total net of tax reclassifications out of AOCI included in net income $ 560 $ 424 $ 1,850 $ (552 ) 1 Change in classification of actuarial loss on defined benefit pension plan related to the adoption of ASU No. 2017-07 in fiscal year 2019. See Note 2 for additional information on the impact of adoption. |
Business Segment Information (T
Business Segment Information (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Segment Reporting [Abstract] | |
Financial Information by Reportable Segment | Financial information by reportable segment is as follows: Three Months Ended Nine Months Ended June 29, June 30, June 29, June 30, Revenue Test & Simulation $ 148,328 $ 116,055 $ 424,920 $ 344,496 Sensors 84,231 79,000 244,556 236,501 Intersegment eliminations (350 ) (387 ) (1,040 ) (844 ) Total revenue $ 232,209 $ 194,668 $ 668,436 $ 580,153 Income from operations Test & Simulation $ 11,424 $ 3,873 $ 31,439 $ 12,777 Sensors 11,556 12,398 33,694 36,623 Intersegment eliminations 21 (7 ) 8 (29 ) Total income from operations $ 23,001 $ 16,264 $ 65,141 $ 49,371 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 9 Months Ended |
Jun. 29, 2019 | |
Business Combinations [Abstract] | |
Fair Values Assigned to the Assets and Liabilities Assumed | The following table summarizes the preliminary fair value measurement of the assets acquired and liabilities assumed, net of cash acquired, as of the date of acquisition: Fair Value Finite-Lived Intangible Asset Lives (Years) Asset (Liability) Accounts receivable $ 4,651 Unbilled accounts receivable 1,518 Inventories 11,063 Prepaid expenses and other current assets 123 Property and equipment 672 Intangible assets Customer lists 21,652 15 Trademarks and trade names 5,926 15 Technology 12,650 15 Other intangible assets 3,761 4 Other long-term assets 60 Purchased goodwill 32,475 Accounts payable (3,657 ) Accrued payroll and related costs (1,328 ) Advance payments from customers (4,315 ) Accrued income taxes (290 ) Other accrued liabilities (127 ) Deferred income taxes (6,287 ) Net assets acquired $ 78,547 Supplemental information Consideration paid at closing $ 79,772 Post-closing purchase price adjustment 515 Less: Cash acquired (1,740 ) Purchase price, net of cash acquired $ 78,547 |
Recently Issued Accounting Pr_2
Recently Issued Accounting Pronouncements Recently Issued Accounting Pronouncements (Narrative) (Details) $ in Thousands | Sep. 30, 2018USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect of new accounting principle in period of adoption | $ 6,227 |
Accounting Standards Update 2014-09 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect of new accounting principle in period of adoption | $ 6,227 |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) $ in Thousands | 9 Months Ended | |
Jun. 29, 2019reporting_unit | Sep. 30, 2018USD ($) | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Cumulative effect of new accounting principle in period of adoption | $ (6,227) | |
Number of reportable segments | reporting_unit | 2 | |
Accounting Standards Update 2014-09 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Cumulative effect of new accounting principle in period of adoption | $ (6,227) | |
Minimum | Sensors | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Operating cycle | 1 month | |
Maximum | Test & Simulation | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Operating cycle | 12 months | |
Maximum | Sensors | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Operating cycle | 3 months |
Revenue (Impact of ASC 606 Adop
Revenue (Impact of ASC 606 Adoption) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 29, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Revenue | $ 232,209 | $ 194,668 | $ 668,436 | $ 580,153 | ||
Cost of sales | 147,106 | 118,384 | 417,678 | 351,116 | ||
Gross profit | 85,103 | 76,284 | 250,758 | 229,037 | ||
Selling and marketing | 33,321 | 32,171 | 98,805 | 94,796 | ||
Income tax provision (benefit) | 2,605 | 1,066 | 6,217 | (20,877) | ||
Net income | 13,585 | $ 8,979 | 38,246 | $ 50,568 | ||
Assets | ||||||
Accounts receivable, net | 131,365 | 131,365 | $ 117,762 | $ 122,243 | ||
Unbilled accounts receivable, net | 68,804 | 68,804 | 62,472 | 70,474 | ||
Inventories, net | 164,853 | 164,853 | 155,836 | 139,109 | ||
Prepaid expenses and other current assets | 27,118 | 27,118 | 29,223 | 24,572 | ||
Other long-term assets | 3,986 | 3,986 | 3,323 | 2,263 | ||
Deferred income taxes | 3,818 | 3,818 | 3,892 | 3,249 | ||
Liabilities and Shareholders' Equity | ||||||
Advance payments from customers | 87,935 | 87,935 | 93,699 | 80,131 | ||
Accrued income taxes | 3,736 | 3,736 | 4,928 | |||
Other accrued liabilities | 35,367 | 35,367 | 16,642 | 19,146 | ||
Deferred income taxes | 50,315 | 50,315 | 45,254 | 46,482 | ||
Other long-term liabilities | 15,305 | 15,305 | 11,883 | 4,894 | ||
Accumulated other comprehensive income (loss) | (5,409) | (5,409) | 1,476 | |||
Retained earnings | 316,249 | 316,249 | $ 294,358 | 300,585 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Revenue | 213,443 | 636,546 | ||||
Cost of sales | 136,563 | 397,295 | ||||
Gross profit | 76,880 | 239,251 | ||||
Selling and marketing | 33,075 | 98,566 | ||||
Income tax provision (benefit) | 1,326 | 4,363 | ||||
Net income | 6,887 | 28,832 | ||||
Assets | ||||||
Accounts receivable, net | 133,548 | 133,548 | ||||
Unbilled accounts receivable, net | 59,784 | 59,784 | ||||
Inventories, net | 156,108 | 156,108 | ||||
Prepaid expenses and other current assets | 24,003 | 24,003 | ||||
Other long-term assets | 2,880 | 2,880 | ||||
Deferred income taxes | 3,167 | 3,167 | ||||
Liabilities and Shareholders' Equity | ||||||
Advance payments from customers | 84,970 | 84,970 | ||||
Accrued income taxes | 3,345 | 3,345 | ||||
Other accrued liabilities | 20,566 | 20,566 | ||||
Deferred income taxes | 51,540 | 51,540 | ||||
Other long-term liabilities | 15,021 | 15,021 | ||||
Accumulated other comprehensive income (loss) | (5,460) | (5,460) | ||||
Retained earnings | 313,062 | 313,062 | ||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Revenue | 18,766 | 31,890 | ||||
Cost of sales | 10,543 | 20,383 | ||||
Gross profit | 8,223 | 11,507 | ||||
Selling and marketing | 246 | 239 | ||||
Income tax provision (benefit) | 1,279 | 1,854 | ||||
Net income | 6,698 | 9,414 | ||||
Assets | ||||||
Accounts receivable, net | (2,183) | (2,183) | (4,481) | |||
Unbilled accounts receivable, net | 9,020 | 9,020 | (8,002) | |||
Inventories, net | 8,745 | 8,745 | 16,727 | |||
Prepaid expenses and other current assets | 3,115 | 3,115 | 4,651 | |||
Other long-term assets | 1,106 | 1,106 | 1,060 | |||
Deferred income taxes | 651 | 651 | 643 | |||
Liabilities and Shareholders' Equity | ||||||
Advance payments from customers | 2,965 | 2,965 | 13,568 | |||
Accrued income taxes | 391 | 391 | ||||
Other accrued liabilities | 14,801 | 14,801 | (2,504) | |||
Deferred income taxes | (1,225) | (1,225) | (1,228) | |||
Other long-term liabilities | 284 | 284 | 6,989 | |||
Accumulated other comprehensive income (loss) | 51 | 51 | ||||
Retained earnings | $ 3,187 | $ 3,187 | $ (6,227) |
Revenue (Disaggregation) (Detai
Revenue (Disaggregation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 232,209 | $ 194,668 | $ 668,436 | $ 580,153 |
Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 89,907 | 256,809 | ||
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 61,131 | 172,295 | ||
Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 81,171 | 239,332 | ||
Point-in-time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 172,875 | 503,693 | ||
Over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 59,334 | 164,743 | ||
Product | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 205,528 | 168,651 | 587,297 | 503,345 |
Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 26,681 | 26,017 | 81,139 | 76,808 |
Operating Segments | Test & Simulation | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 148,328 | 116,055 | 424,920 | 344,496 |
Operating Segments | Test & Simulation | Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 47,892 | 138,780 | ||
Operating Segments | Test & Simulation | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 34,137 | 92,300 | ||
Operating Segments | Test & Simulation | Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 66,299 | 193,840 | ||
Operating Segments | Test & Simulation | Point-in-time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 95,247 | 273,226 | ||
Operating Segments | Test & Simulation | Over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 53,081 | 151,694 | ||
Operating Segments | Test & Simulation | Product | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 123,573 | 348,992 | ||
Operating Segments | Test & Simulation | Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 24,755 | 75,928 | ||
Operating Segments | Sensors | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 84,231 | 79,000 | 244,556 | 236,501 |
Operating Segments | Sensors | Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 42,365 | 119,069 | ||
Operating Segments | Sensors | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 26,994 | 79,995 | ||
Operating Segments | Sensors | Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 14,872 | 45,492 | ||
Operating Segments | Sensors | Point-in-time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 77,978 | 231,507 | ||
Operating Segments | Sensors | Over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 6,253 | 13,049 | ||
Operating Segments | Sensors | Product | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 82,305 | 239,345 | ||
Operating Segments | Sensors | Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,926 | 5,211 | ||
Intersegment Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | (350) | $ (387) | (1,040) | $ (844) |
Intersegment Eliminations | Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | (350) | (1,040) | ||
Intersegment Eliminations | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | ||
Intersegment Eliminations | Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | ||
Intersegment Eliminations | Point-in-time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | (350) | (1,040) | ||
Intersegment Eliminations | Over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | ||
Intersegment Eliminations | Product | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | (350) | (1,040) | ||
Intersegment Eliminations | Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 0 | $ 0 |
Revenue (Contract Assets and Li
Revenue (Contract Assets and Liabilities) (Details) - USD ($) $ in Thousands | Jun. 29, 2019 | Sep. 30, 2018 | Sep. 29, 2018 |
Revenue from Contract with Customer [Abstract] | |||
Contract assets | $ 68,804 | $ 62,472 | $ 70,474 |
Contract liabilities | $ 98,675 | $ 80,131 |
Revenue (Significant Changes in
Revenue (Significant Changes in Contact Assets and Liabilities) (Details) $ in Thousands | 9 Months Ended |
Jun. 29, 2019USD ($) | |
Change in Contract with Customer, Asset [Abstract] | |
Balance, September 29, 2018 | $ 70,474 |
Cumulative transition adjustment upon adoption | (8,002) |
Changes in estimated stage of completion | 92,958 |
Transfers to accounts receivable, net | (88,506) |
Acquisitions | 1,518 |
Other | 362 |
Balance, June 29, 2019 | 68,804 |
Change in Contract with Customer, Liability [Abstract] | |
Balance, September 29, 2018 | 80,131 |
Cumulative transition adjustment upon adoption | 20,557 |
Revenue recognized included in balance at beginning of period | (70,294) |
Increases due to payments received, excluding amounts recognized as revenue during period | 64,248 |
Acquisitions | 4,853 |
Other | (820) |
Balance, June 29, 2019 | $ 98,675 |
Revenue (Remaining Performance
Revenue (Remaining Performance Obligations) (Details) $ in Thousands | 9 Months Ended |
Jun. 29, 2019USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, amount | $ 227,000 |
Revenue, remaining performance obligation, optional exemption, nature | We do not disclose the value of remaining performance obligations for contracts with an original expected duration of one year or less. |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-06-30 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, percentage | 77.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-06-30 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, percentage | 19.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue (Pre-contract Costs) (D
Revenue (Pre-contract Costs) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Jun. 29, 2019USD ($) | Jun. 29, 2019USD ($) | |
Revenue from Contract with Customer [Abstract] | ||
Capitalized pre-contract costs | $ 5,694 | $ 5,694 |
Capitalized pre-contract costs, related expense | $ 1,747 | $ 5,616 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 29, 2019 | Sep. 30, 2018 | Sep. 29, 2018 |
Inventory Disclosure [Abstract] | |||
Components, assemblies and parts | $ 107,389 | $ 93,020 | |
Customer projects in various stages of completion | 45,814 | 35,675 | |
Finished goods | 11,650 | 10,414 | |
Total inventories, net | $ 164,853 | $ 155,836 | $ 139,109 |
Warranty Obligations (Warranty
Warranty Obligations (Warranty Provisions and Claims) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Product Warranty Liability [Line Items] | ||||
Number of previous months historical warranty claims used to calculate warranty expense percentage | 12 months | |||
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Beginning accrued warranty costs | $ 4,741 | $ 6,191 | $ 5,418 | $ 6,018 |
Warranty claims | (1,051) | (1,384) | (3,497) | (3,969) |
Warranty provisions | 150 | 756 | 1,941 | 3,483 |
Adjustments to preexisting warranties | 0 | 50 | (15) | 64 |
Currency translation | 3 | (24) | (4) | (7) |
Ending accrued warranty costs | $ 3,843 | $ 5,589 | $ 3,843 | $ 5,589 |
Minimum | ||||
Product Warranty Liability [Line Items] | ||||
Life of warranty obligations for sales that include installation services in months | 12 months | |||
Product obligation period from date of purchase in months | 12 months | |||
Maximum | ||||
Product Warranty Liability [Line Items] | ||||
Life of warranty obligations for sales that include installation services in months | 24 months | |||
Product obligation period from date of purchase in months | 24 months |
Capital Assets (Property and Eq
Capital Assets (Property and Equipment) (Details) - USD ($) $ in Thousands | Jun. 29, 2019 | Sep. 29, 2018 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 284,397 | $ 268,223 |
Less: Accumulated depreciation | (191,504) | (177,954) |
Total property and equipment, net | 92,893 | 90,269 |
Land and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 3,924 | 2,881 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 59,949 | 58,880 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 217,728 | 203,647 |
Assets held under capital leases | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 2,796 | $ 2,815 |
Capital Assets (Goodwill) (Deta
Capital Assets (Goodwill) (Details) $ in Thousands | 9 Months Ended |
Jun. 29, 2019USD ($) | |
Goodwill [Roll Forward] | |
Balance, September 29, 2018 | $ 369,275 |
Acquisitions | 34,423 |
Currency translation | (250) |
Balance, June 29, 2019 | 403,448 |
Test & Simulation | |
Goodwill [Roll Forward] | |
Balance, September 29, 2018 | 24,631 |
Acquisitions | 34,423 |
Currency translation | (230) |
Balance, June 29, 2019 | 58,824 |
Sensors | |
Goodwill [Roll Forward] | |
Balance, September 29, 2018 | 344,644 |
Acquisitions | 0 |
Currency translation | (20) |
Balance, June 29, 2019 | $ 344,624 |
Capital Assets (Intangible Asse
Capital Assets (Intangible Assets) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Jun. 29, 2019 | Sep. 29, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 353,020 | $ 301,217 |
Accumulated Amortization | (67,721) | (55,079) |
Intangible assets, net | $ 285,299 | $ 246,138 |
Weighted Average Useful Life (in Years) | 14 years 6 months | 14 years 9 months 18 days |
Software development costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 37,265 | $ 31,251 |
Accumulated Amortization | (15,969) | (15,860) |
Net Carrying Value | $ 21,296 | $ 15,391 |
Weighted Average Useful Life (in Years) | 6 years 4 months 24 days | 6 years 6 months |
Technology and patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 59,362 | $ 46,405 |
Accumulated Amortization | (14,934) | (12,188) |
Net Carrying Value | $ 44,428 | $ 34,217 |
Weighted Average Useful Life (in Years) | 14 years 10 months 24 days | 14 years 10 months 24 days |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 12,658 | $ 6,754 |
Accumulated Amortization | (3,641) | (2,987) |
Net Carrying Value | $ 9,017 | $ 3,767 |
Weighted Average Useful Life (in Years) | 20 years 7 months 6 days | 25 years 4 months 24 days |
Customer lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 180,147 | $ 156,971 |
Accumulated Amortization | (31,692) | (23,314) |
Net Carrying Value | $ 148,455 | $ 133,657 |
Weighted Average Useful Life (in Years) | 15 years 8 months 12 days | 15 years 9 months 18 days |
Land-use rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 2,334 | $ 2,336 |
Accumulated Amortization | (914) | (730) |
Net Carrying Value | $ 1,420 | $ 1,606 |
Weighted Average Useful Life (in Years) | 26 years | 26 years |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 3,754 | |
Accumulated Amortization | (571) | |
Net Carrying Value | $ 3,183 | |
Weighted Average Useful Life (in Years) | 4 years | |
Software Development Not Yet Placed In Service | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 19,560 | $ 15,391 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 57,500 | $ 57,500 |
Capital Assets (Amortization Ex
Capital Assets (Amortization Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Capital Assets [Abstract] | ||||
Amortization expense | $ 4,449 | $ 3,453 | $ 12,668 | $ 10,388 |
Capital Assets (Estimated Futur
Capital Assets (Estimated Future Amortization Expense on Intangible Assets) (Details) $ in Thousands | Jun. 29, 2019USD ($) |
Capital Assets [Abstract] | |
Remainder of 2019 | $ 4,356 |
2020 | 17,420 |
2021 | 18,527 |
2022 | 19,450 |
2023 | 18,543 |
2024 | 18,172 |
Thereafter | $ 131,331 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 29, 2019 | Sep. 29, 2018 |
Assets | ||
Currency contracts | $ 350 | $ 1,080 |
Total assets | 2,014 | 8,491 |
Liabilities | ||
Currency contracts | 490 | 173 |
Total liabilities | 490 | 173 |
Level 1 | ||
Assets | ||
Currency contracts | 0 | 0 |
Total assets | 0 | 0 |
Liabilities | ||
Currency contracts | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 | ||
Assets | ||
Currency contracts | 350 | 1,080 |
Total assets | 2,014 | 8,491 |
Liabilities | ||
Currency contracts | 490 | 173 |
Total liabilities | 490 | 173 |
Level 3 | ||
Assets | ||
Currency contracts | 0 | 0 |
Total assets | 0 | 0 |
Liabilities | ||
Currency contracts | 0 | 0 |
Total liabilities | 0 | 0 |
Interest rate swap | ||
Assets | ||
Interest rate swaps | 1,664 | 7,411 |
Interest rate swap | Level 1 | ||
Assets | ||
Interest rate swaps | 0 | 0 |
Interest rate swap | Level 2 | ||
Assets | ||
Interest rate swaps | 1,664 | 7,411 |
Interest rate swap | Level 3 | ||
Assets | ||
Interest rate swaps | $ 0 | $ 0 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Fair Value Debt Instruments) (Details) - USD ($) $ in Thousands | Jun. 29, 2019 | Sep. 29, 2018 | Jul. 02, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, fair value | $ 391,807 | $ 403,956 | |
Debt component of tangible equity units | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, fair value | $ 2,871 | 8,626 | |
Interest rate, percentage | 8.75% | 8.75% | |
Tranche B term loan | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, fair value | $ 388,936 | 395,330 | |
Carrying Value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, fair value | 390,438 | 398,706 | |
Carrying Value | Debt component of tangible equity units | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, fair value | 2,472 | 7,290 | |
Carrying Value | Tranche B term loan | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, fair value | 387,966 | 391,416 | |
Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, fair value | 0 | 0 | |
Level 1 | Debt component of tangible equity units | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, fair value | 0 | 0 | |
Level 1 | Tranche B term loan | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, fair value | 0 | 0 | |
Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, fair value | 391,807 | 403,956 | |
Level 2 | Debt component of tangible equity units | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, fair value | 2,871 | 8,626 | |
Level 2 | Tranche B term loan | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, fair value | 388,936 | 395,330 | |
Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, fair value | 0 | 0 | |
Level 3 | Debt component of tangible equity units | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, fair value | 0 | 0 | |
Level 3 | Tranche B term loan | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt, fair value | $ 0 | $ 0 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities (Fair Value of Outstanding Designated and Undesignated Derivative Assets and Liabilities) (Details) - USD ($) $ in Thousands | Jun. 29, 2019 | Sep. 29, 2018 |
Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 2,014 | $ 8,491 |
Other Accrued Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 490 | 173 |
Cash flow derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 350 | 989 |
Designated hedge derivatives | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 2,014 | 8,400 |
Designated hedge derivatives | Other Accrued Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 265 | 173 |
Designated hedge derivatives | Cash flow derivatives | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 350 | 989 |
Designated hedge derivatives | Cash flow derivatives | Other Accrued Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 265 | 173 |
Designated hedge derivatives | Interest rate swap | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 1,664 | 7,411 |
Designated hedge derivatives | Interest rate swap | Other Accrued Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 0 | 0 |
Hedge derivatives not designated | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 91 |
Hedge derivatives not designated | Other Accrued Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ 225 | $ 0 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities (Reconciliation of the Net Fair Value of Designated Hedge Derivatives) (Details) - Currency exchange contracts gain (loss) - USD ($) $ in Thousands | Jun. 29, 2019 | Sep. 29, 2018 |
Assets | ||
Gross Recognized Amount | $ 2,014 | $ 8,400 |
Gross Offset Amount | 0 | 0 |
Net Amount Presented | 2,014 | 8,400 |
Derivatives Subject to Offset | (179) | (173) |
Cash Collateral Received | 0 | 0 |
Net Amount | 1,835 | 8,227 |
Liabilities | ||
Gross Recognized Amount | 265 | 173 |
Gross Offset Amount | 0 | 0 |
Net Amount Presented | 265 | 173 |
Derivatives Subject to Offset | (179) | (173) |
Cash Collateral Received | 0 | 0 |
Net Amount | $ 86 | $ 0 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities (Narrative) (Details) - USD ($) | 9 Months Ended | |
Jun. 29, 2019 | Sep. 29, 2018 | |
Derivative [Line Items] | ||
Gain (loss) projected to be reclassified from Accumulated Other Comprehensive Income into earnings, within twelve months | $ 98,000 | |
Maximum remaining maturity of any forward or optional contract derivatives (in years) | 1 year 4 months 24 days | |
Cash flow derivatives | ||
Derivative [Line Items] | ||
Gross notional amount of foreign exchange derivatives outstanding | $ 35,412,000 | $ 39,856,000 |
Net notional amount of foreign exchange derivatives | 28,176,000 | 29,315,000 |
Foreign currency exchange contract asset (liability), net value | 85,000 | 816,000 |
Foreign currency exchange contract, net asset market value | 350,000 | 989,000 |
Foreign currency exchange contract, net liability market value | 265,000 | 173,000 |
Interest rate swap | ||
Derivative [Line Items] | ||
Gain (loss) projected to be reclassified from Accumulated Other Comprehensive Income into earnings, within twelve months | 1,391,000 | |
Notional amount | $ 225,000,000 | |
Fixed interest rate | 1.256% | |
Interest rate swaps | $ 1,664,000 | 7,411,000 |
Foreign exchange balance sheet derivative contracts | ||
Derivative [Line Items] | ||
Gross notional amount of foreign exchange derivatives outstanding | 94,824,000 | 90,816,000 |
Net notional amount of foreign exchange derivatives | 27,833,000 | 28,271,000 |
Foreign currency exchange contract asset (liability), net value | $ (225,000) | $ 91,000 |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities (Pretax Amounts Recognized in Accumulated Other Comprehensive Income on Currency Contracts) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Net (gain) loss reclassified into revenue | $ (655) | $ (516) | $ (2,136) | $ 274 |
Net gain (loss) recognized in OCI | (1,074) | 2,089 | (2,882) | 3,359 |
Currency exchange contracts gain (loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning unrealized net gain (loss) in AOCI | 192 | (1,092) | 672 | (443) |
Net (gain) loss reclassified into revenue | (142) | (273) | (743) | 1,031 |
Net gain (loss) recognized in OCI | (46) | 1,967 | 75 | 14 |
Ending unrealized net gain (loss) in AOCI | 4 | 602 | 4 | 602 |
Interest rate swap | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning unrealized net gain (loss) in AOCI | 3,684 | 6,925 | 7,411 | 3,499 |
Net (gain) loss reclassified into revenue | (695) | (422) | (1,988) | (661) |
Net gain (loss) recognized in OCI | (1,325) | 851 | (3,759) | 4,516 |
Ending unrealized net gain (loss) in AOCI | $ 1,664 | $ 7,354 | $ 1,664 | $ 7,354 |
Derivative Instruments and He_7
Derivative Instruments and Hedging Activities (Net Gains (Losses) Recognized in Income for Derivative Contracts) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Other Nonoperating Income (Expense) [Member] | ||||
Derivative [Line Items] | ||||
Net gain (loss) recognized in other income (expense), net | $ 218 | $ 981 | $ (170) | $ (46) |
Financing (Schedule of Long ter
Financing (Schedule of Long term Debt) (Details) - USD ($) $ in Thousands | Jun. 29, 2019 | Sep. 29, 2018 | Jul. 02, 2016 |
Debt Instrument [Line Items] | |||
Total long-term debt | $ 472,401 | $ 400,706 | |
Less: Unamortized underwriting discounts, commissions and other expenses | (6,567) | (8,623) | |
Total long-term debt, less current maturities, net | 434,200 | 355,640 | |
Current portion of unamortized underwriting discounts, commissions and other expenses | 3,318 | 3,705 | |
Term loan B facility | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 387,966 | 391,416 | |
Current maturities | $ (28,600) | $ (28,600) | |
Principal amount, amortization percentage | 1.00% | 1.00% | |
Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Total long-term debt | $ 80,391 | $ 0 | |
Tangible equity units senior amortizing note | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 2,472 | 7,290 | |
Current maturities | $ (2,472) | (7,290) | |
Interest rate, percentage | 8.75% | 8.75% | |
Capital lease obligations | |||
Debt Instrument [Line Items] | |||
Capital lease obligations | $ 1,572 | 2,000 | |
Less: Current maturities of capital lease obligations | $ (562) | $ (553) |
Financing (Narrative) (Details)
Financing (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | Dec. 29, 2018 | Sep. 29, 2018 | |
Line of Credit Facility [Line Items] | ||||||
Percent added to Adjusted LIBOR rate for one month interest period | 1.00% | |||||
Commitment fees incurred on credit facility | $ 52,000 | $ 94,000 | $ 176,000 | $ 250,000 | ||
Annual excess cash flow percentage per credit agreement | 50.00% | |||||
Net cash proceed percentage per credit agreement | 100.00% | |||||
Alternate base rate | ||||||
Line of Credit Facility [Line Items] | ||||||
Effective interest rate applicable to outstanding credit facility (in hundredths) | 2.25% | 2.25% | ||||
Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility, commitment fees payable, percent | 0.25% | |||||
Minimum | Alternate base rate | ||||||
Line of Credit Facility [Line Items] | ||||||
Effective interest rate applicable to outstanding credit facility (in hundredths) | 1.75% | 1.75% | ||||
Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility, commitment fees payable, percent | 0.40% | |||||
Revolving credit facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility, borrowing capacity | $ 150,000,000 | $ 150,000,000 | ||||
Maximum borrowing capacity | 150,000,000 | 150,000,000 | $ 150,000,000 | $ 120,000,000 | ||
Debt issuance costs | 541,000 | 541,000 | ||||
Short-term borrowings | 80,391,000 | 80,391,000 | 0 | |||
Letters of credit outstanding, amount | 22,580,000 | 22,580,000 | 20,448,000 | |||
Line of credit facility, remaining borrowing capacity | 47,029,000 | $ 47,029,000 | $ 99,552,000 | |||
Revolving credit facility | London interbank offered rate (LIBOR) | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 0.50% | |||||
Term loan B facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility, borrowing capacity | $ 460,000,000 | $ 460,000,000 | ||||
Principal amount, amortization percentage | 1.00% | 1.00% | 1.00% | |||
Weighted average interest rate | 5.67% | 5.67% | ||||
Eurocurrency term loans | ||||||
Line of Credit Facility [Line Items] | ||||||
Effective interest rate applicable to outstanding credit facility (in hundredths) | 3.25% | 3.25% | ||||
Eurocurrency term loans | London interbank offered rate (LIBOR) | ||||||
Line of Credit Facility [Line Items] | ||||||
Effective interest rate applicable to outstanding credit facility (in hundredths) | 2.41% | 2.41% | ||||
Eurocurrency term loans | Minimum | London interbank offered rate (LIBOR) | ||||||
Line of Credit Facility [Line Items] | ||||||
Effective interest rate applicable to outstanding credit facility (in hundredths) | 0.75% | 0.75% | ||||
Eurocurrency borrowing | London interbank offered rate (LIBOR) | ||||||
Line of Credit Facility [Line Items] | ||||||
Effective interest rate applicable to outstanding credit facility (in hundredths) | 3.00% | 3.00% |
Financing (Schedule of Interest
Financing (Schedule of Interest Rate Swap) (Details) | Oct. 20, 2016USD ($) |
Debt Disclosure [Abstract] | |
October 3, 2019 | $ 180,000,000 |
October 3, 2020 | 125,000,000 |
April 3, 2021 | $ 0 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - $ / shares shares in Thousands | 9 Months Ended | |
Jun. 29, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for grant (in shares) | 968 | |
Options granted (in shares) | 231 | 245 |
Weighted average grant date fair value (in dollars per share) | $ 9.91 | $ 11.10 |
Restricted stock units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average grant date fair value (in dollars per share) | 46.67 | 49.63 |
Performance shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average grant date fair value (in dollars per share) | $ 46.67 | 49.63 |
2012 ESPP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for grant (in shares) | 599 | |
Weighted average grant date fair value (in dollars per share) | $ 34.11 | $ 44.39 |
Stock issued during period (in shares) | 16 | 24 |
Directors, Officers and Employees | Restricted stock units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted issued (in shares) | 129 | 109 |
Directors, Officers and Employees | Performance shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted issued (in shares) | 40 | 29 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 29, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | Sep. 29, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Federal statutory income tax rate, percent | 21.00% | 24.50% | ||
Income tax discrete benefits | $ 1,293 | $ 25,378 | $ 25,008 | |
Change in enacted tax rate | $ (1,297) | (32,264) | (31,647) | |
Tax Cuts and Jobs Act of 2017, other measurement period adjustment, income tax expense | 4 | |||
Tax Cuts And Jobs Act Of 2017, potential future income tax expense (benefit) | 1,297 | |||
Tax Cuts and Jobs Act of 2017, income tax expense, accounting complete, mandatory deemed repatriation tax | $ 6,886 | 6,639 | ||
Unrecognized tax benefits | 5,745 | 6,158 | ||
Unrecognized tax benefits that would favorably impact the effective tax rate on continuing operations | $ 3,269 | $ 3,740 |
Shareholders' Equity (Tangible
Shareholders' Equity (Tangible Equity Units Narrative) (Details) Tangible_Equity_Unit in Thousands, $ in Thousands | 3 Months Ended |
Jul. 02, 2016USD ($)Tangible_Equity_Unit$ / per_TEU | |
Debt Instrument [Line Items] | |
Issued tangible equity units (in tangible equity units) | Tangible_Equity_Unit | 1,150 |
Tangible equity units, issued, net | $ | $ 110,926 |
Fair value price per TEU (in dollars per tangible equity unit) | 100 |
Tangible equity units senior amortizing note | |
Debt Instrument [Line Items] | |
Fair value price per TEU (in dollars per tangible equity unit) | 100 |
Amortization period of costs | 3 years |
Shareholders' Equity (Schedule
Shareholders' Equity (Schedule of TEU Components) (Details) $ in Thousands | 3 Months Ended |
Jul. 02, 2016USD ($)$ / per_TEU | |
Debt Instrument [Line Items] | |
Fair value price per TEU (in dollars per tangible equity unit) | $ / per_TEU | 100 |
Gross proceeds | $ 115,000 |
Less: Underwriting discounts and commissions | (3,450) |
Less: Other expenses | (624) |
Issuance of TEUs, net | $ 110,926 |
Equity Component | |
Debt Instrument [Line Items] | |
Fair value price per TEU (in dollars per tangible equity unit) | $ / per_TEU | 76.19 |
Gross proceeds | $ 87,614 |
Less: Underwriting discounts and commissions | (2,628) |
Less: Other expenses | (475) |
Issuance of TEUs, net | $ 84,511 |
Debt Component | |
Debt Instrument [Line Items] | |
Fair value price per TEU (in dollars per tangible equity unit) | $ / per_TEU | 23.81 |
Gross proceeds | $ 27,386 |
Less: Underwriting discounts and commissions | (822) |
Less: Other expenses | (149) |
Issuance of TEUs, net | $ 26,415 |
Shareholders' Equity (Equity Co
Shareholders' Equity (Equity Component) (Details) Tangible_Equity_Unit in Thousands | Jul. 01, 2019Tangible_Equity_Unitshares | Jun. 29, 2019Tangible_Equity_Unitshares | Sep. 30, 2017Tangible_Equity_Unitshares | Jul. 02, 2016trade_day$ / shares$ / per_TEUshares | Jun. 29, 2019trade_dayshares | Sep. 29, 2018Tangible_Equity_Unit |
Debt Instrument [Line Items] | ||||||
Fair value price per TEU (in dollars per tangible equity unit) | $ / per_TEU | 100 | |||||
Equity Component | ||||||
Debt Instrument [Line Items] | ||||||
Fair value price per TEU (in dollars per tangible equity unit) | $ / per_TEU | 76.19 | |||||
Threshold consecutive trading days | trade_day | 20 | 20 | ||||
Threshold trading days | trade_day | 23 | |||||
Tangible equity units amount of units settled | Tangible_Equity_Unit | 394 | 473 | ||||
Shares of common stock issued (in shares) | 781,000 | 939,000 | ||||
Tangible equity units prepaid stock purchase contracts, outstanding units | Tangible_Equity_Unit | 677 | |||||
Equity Component | Common Class A | ||||||
Debt Instrument [Line Items] | ||||||
Threshold stock price (in dollars per share) | $ / shares | $ 50.40 | |||||
Debt instrument convertible reference price (in dollars per share) | $ / shares | $ 42 | |||||
Equity Component | Minimum | Common Class A | ||||||
Debt Instrument [Line Items] | ||||||
Convertible, number of equity instruments per contract (in shares) | 1.9841 | 1.9841 | 1.9841 | 1.9841 | ||
Equity Component | Maximum | Common Class A | ||||||
Debt Instrument [Line Items] | ||||||
Convertible, number of equity instruments per contract (in shares) | 2.3810 | 2.3810 | ||||
Subsequent Event | Equity Component | ||||||
Debt Instrument [Line Items] | ||||||
Convertible, number of equity instruments per contract (in shares) | 1.9841 | |||||
Tangible equity units amount of units settled | Tangible_Equity_Unit | 283 | |||||
Shares of common stock issued (in shares) | 560,000 |
Shareholders' Equity (Debt Comp
Shareholders' Equity (Debt Component) (Details) | 3 Months Ended | |
Jul. 02, 2016USD ($)$ / per_TEU | Jun. 29, 2019 | |
Debt Instrument [Line Items] | ||
Fair value price per TEU (in dollars per tangible equity unit) | 100 | |
Tangible equity units senior amortizing note | ||
Debt Instrument [Line Items] | ||
Principal amount | $ | $ 27,386,000 | |
Principal amount per note (in dollars per TEU) | 23.8136 | |
Periodic payment per note, after initial payment | $ | $ 2.1875 | |
Interest rate, percentage | 8.75% | 8.75% |
Fair value price per TEU (in dollars per tangible equity unit) | 100 |
Shareholders' Equity (Earnings
Shareholders' Equity (Earnings per Common Share) (Details) - Common Class A - shares | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Sep. 30, 2017 | Jul. 02, 2016 | Jun. 29, 2019 | |
Tangible equity units senior amortizing note | ||||
Class of Stock [Line Items] | ||||
Incremental common shares attributable to dilutive effect of conversion of debt securities (in shares) | 0.3969 | |||
Equity Component | Minimum | ||||
Class of Stock [Line Items] | ||||
Convertible, number of equity instruments per contract (in shares) | 1.9841 | 1.9841 | 1.9841 | 1.9841 |
Equity Component | Maximum | ||||
Class of Stock [Line Items] | ||||
Convertible, number of equity instruments per contract (in shares) | 2.3810 | 2.3810 |
Shareholders' Equity (Capped Ca
Shareholders' Equity (Capped Call Transaction) (Details) $ / shares in Units, $ in Thousands | Jun. 13, 2018shares$ / shares | Sep. 30, 2017shares | Jun. 29, 2019$ / sharesshares | Sep. 29, 2018shares | Oct. 01, 2016USD ($)shares$ / shares |
Class of Stock [Line Items] | |||||
Capped calls settled, percentage | 10.00% | ||||
Settlement of capped calls (in shares) | 12,000 | 0 | 0 | ||
Capped Calls | |||||
Class of Stock [Line Items] | |||||
Additional paid in capital, capped calls | $ | $ 7,935 | ||||
Capped calls initial equivalent shares (in shares) | 2,282,000 | ||||
Capped Calls | Minimum | |||||
Class of Stock [Line Items] | |||||
Option indexed to issuer's equity, strike price (in dollars per share) | $ / shares | $ 50.40 | ||||
Capped Calls | Maximum | |||||
Class of Stock [Line Items] | |||||
Option indexed to issuer's equity, strike price (in dollars per share) | $ / shares | $ 58.80 | ||||
Capped Call Agreements | |||||
Class of Stock [Line Items] | |||||
Capped calls outstanding equivalent shares (in shares) | 2,054,000 | ||||
Capped Call Agreements | Minimum | |||||
Class of Stock [Line Items] | |||||
Option indexed to issuer's equity, strike price (in dollars per share) | $ / shares | $ 50.40 | $ 50.40 | |||
Capped Call Agreements | Maximum | |||||
Class of Stock [Line Items] | |||||
Option indexed to issuer's equity, strike price (in dollars per share) | $ / shares | $ 57.97 | $ 57.97 | |||
Capped Call Agreements | Common Stock | Minimum | |||||
Class of Stock [Line Items] | |||||
Common stock to be received and retired under capped calls (in shares) | 0 | ||||
Capped Call Agreements | Common Stock | Maximum | |||||
Class of Stock [Line Items] | |||||
Common stock to be received and retired under capped calls (in shares) | 268,000 |
Earnings Per Share (Narrative)
Earnings Per Share (Narrative) (Details) | 3 Months Ended | 9 Months Ended | ||||
Jun. 29, 2019shares | Jun. 30, 2018shares | Sep. 30, 2017shares | Jul. 02, 2016trade_dayshares | Jun. 29, 2019trade_dayshares | Jun. 30, 2018shares | |
Class of Stock [Line Items] | ||||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 835,000 | 667,000 | 812,000 | 548,000 | ||
Equity Component | ||||||
Class of Stock [Line Items] | ||||||
Threshold consecutive trading days | trade_day | 20 | 20 | ||||
Equity Component | Minimum | Common Class A | ||||||
Class of Stock [Line Items] | ||||||
Convertible, number of equity instruments per contract (in shares) | 1.9841 | 1.9841 | 1.9841 | 1.9841 | ||
Equity Component | Maximum | Common Class A | ||||||
Class of Stock [Line Items] | ||||||
Convertible, number of equity instruments per contract (in shares) | 2.3810 | 2.3810 |
Earnings Per Share (Schedule of
Earnings Per Share (Schedule of Earnings per Share, Basic and Diluted) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 13,585 | $ 8,979 | $ 38,246 | $ 50,568 |
Weighted average common shares outstanding (in shares) | 19,297 | 19,174 | 19,255 | 19,149 |
Effect of dilutive securities | ||||
Stock-based compensation (in shares) | 223 | 131 | 181 | 120 |
Weighted average dilutive common shares outstanding (in shares) | 19,520 | 19,305 | 19,436 | 19,269 |
Earnings per share | ||||
Basic (in dollars per share) | $ 0.70 | $ 0.47 | $ 1.99 | $ 2.64 |
Diluted (in dollars per share) | $ 0.70 | $ 0.47 | $ 1.97 | $ 2.62 |
Other Comprehensive Income (L_3
Other Comprehensive Income (Loss) (Schedule of Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Net | ||||
Other comprehensive income (loss), before reclassifications, net of tax | $ (231) | $ (5,476) | $ (5,035) | $ 2,926 |
Net (gain) loss reclassified to earnings, net of tax | (560) | (424) | (1,850) | 552 |
Other comprehensive income (loss) | (791) | (5,900) | (6,885) | 3,478 |
Other comprehensive income (loss) | ||||
Pre-tax | ||||
Other comprehensive income (loss), before tax | (1,050) | (5,279) | (8,232) | 4,781 |
Tax | ||||
Other comprehensive income (loss), tax | 259 | (621) | 1,347 | (1,303) |
Net | ||||
Other comprehensive income (loss) | (791) | (5,900) | (6,885) | 3,478 |
Foreign Currency Translation | ||||
Pre-tax | ||||
Other comprehensive income (loss), before reclassifications, pretax | 506 | (8,056) | (2,165) | (385) |
Net | ||||
Other comprehensive income (loss), before reclassifications, net of tax | 506 | (8,056) | (2,165) | (385) |
Net (gain) loss reclassified to earnings, net of tax | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) | 506 | (8,056) | (2,165) | (385) |
Unrealized Derivative Instrument | ||||
Pre-tax | ||||
Other comprehensive income (loss), before reclassifications, pretax | (1,371) | 2,817 | (3,684) | 4,530 |
Net (gain) loss reclassified to earnings | (837) | (695) | (2,731) | 370 |
Tax | ||||
Other comprehensive income (loss) before reclassifications, tax | 297 | (728) | 802 | (1,171) |
Net (gain) loss reclassified to earnings, tax | 182 | 179 | 595 | (96) |
Net | ||||
Other comprehensive income (loss), before reclassifications, net of tax | (1,074) | 2,089 | (2,882) | 3,359 |
Net (gain) loss reclassified to earnings, net of tax | (655) | (516) | (2,136) | 274 |
Other comprehensive income (loss) | (1,729) | 1,573 | (5,018) | 3,633 |
Defined Benefit Pension Plan | ||||
Pre-tax | ||||
Other comprehensive income (loss), before reclassifications, pretax | 600 | 111 | (239) | (277) |
Net (gain) loss reclassified to earnings | 134 | 131 | 408 | 398 |
Tax | ||||
Other comprehensive income (loss) before reclassifications, tax | (181) | (33) | 72 | 84 |
Net (gain) loss reclassified to earnings, tax | (39) | (39) | (122) | (120) |
Net | ||||
Other comprehensive income (loss), before reclassifications, net of tax | 419 | 78 | (167) | (193) |
Net (gain) loss reclassified to earnings, net of tax | 95 | 92 | 286 | 278 |
Currency exchange rate gain (loss) | ||||
Pre-tax | ||||
Other comprehensive income (loss), before reclassifications, pretax | (82) | 413 | 179 | 145 |
Net | ||||
Other comprehensive income (loss), before reclassifications, net of tax | $ (82) | $ 413 | $ 179 | $ 145 |
Other Comprehensive Income (L_4
Other Comprehensive Income (Loss) (Schedule of Changes in each Component of AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at the beginning of the year | $ 485,054 | $ 472,230 | $ 477,932 | $ 428,777 |
Other comprehensive net gain (loss) reclassifications | (231) | (5,476) | (5,035) | 2,926 |
Net (gain) loss reclassified to earnings | (560) | (424) | (1,850) | 552 |
Other comprehensive income (loss) | (791) | (5,900) | (6,885) | 3,478 |
Balance at the end of the year | 494,539 | 472,550 | 494,539 | 472,550 |
Other comprehensive income (loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at the beginning of the year | (4,618) | 8,825 | 1,476 | (553) |
Other comprehensive income (loss) | (791) | (5,900) | (6,885) | 3,478 |
Balance at the end of the year | (5,409) | 2,925 | (5,409) | 2,925 |
Foreign Currency Translation | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at the beginning of the year | (899) | 11,617 | 1,772 | 3,946 |
Other comprehensive net gain (loss) reclassifications | 506 | (8,056) | (2,165) | (385) |
Net (gain) loss reclassified to earnings | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) | 506 | (8,056) | (2,165) | (385) |
Balance at the end of the year | (393) | 3,561 | (393) | 3,561 |
Unrealized Derivative Instrument | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at the beginning of the year | 3,031 | 4,013 | 6,320 | 1,953 |
Other comprehensive net gain (loss) reclassifications | (1,074) | 2,089 | (2,882) | 3,359 |
Net (gain) loss reclassified to earnings | (655) | (516) | (2,136) | 274 |
Other comprehensive income (loss) | (1,729) | 1,573 | (5,018) | 3,633 |
Balance at the end of the year | 1,302 | 5,586 | 1,302 | 5,586 |
Defined Benefit Pension Plan | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at the beginning of the year | (6,750) | (6,805) | (6,616) | (6,452) |
Other comprehensive net gain (loss) reclassifications | 337 | 491 | 12 | (48) |
Net (gain) loss reclassified to earnings | 95 | 92 | 286 | 278 |
Other comprehensive income (loss) | 432 | 583 | 298 | 230 |
Balance at the end of the year | $ (6,318) | $ (6,222) | $ (6,318) | $ (6,222) |
Other Comprehensive Income (L_5
Other Comprehensive Income (Loss) (Schedule of Amounts Reclassified out of AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Revenue | $ 232,209 | $ 194,668 | $ 668,436 | $ 580,153 |
Interest expense, net | (6,687) | (6,249) | (20,873) | (19,761) |
Provision for income taxes | (2,605) | (1,066) | (6,217) | 20,877 |
Cost of sales | (147,106) | (118,384) | (417,678) | (351,116) |
Selling and marketing | (33,321) | (32,171) | (98,805) | (94,796) |
General and administrative | (20,621) | (19,081) | (63,804) | (58,635) |
Other income (expense), net | (124) | 30 | 195 | 81 |
Income before income taxes | 16,190 | 10,045 | 44,463 | 29,691 |
Net income | 13,585 | 8,979 | 38,246 | 50,568 |
Reclassification Out Of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net income | 560 | 424 | 1,850 | (552) |
Reclassification Out Of Accumulated Other Comprehensive Income | Unrealized Derivative Instrument | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Provision for income taxes | (182) | (179) | (595) | 96 |
Net income | 655 | 516 | 2,136 | (274) |
Reclassification Out Of Accumulated Other Comprehensive Income | Defined Benefit Pension Plan | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Provision for income taxes | 39 | 39 | 122 | 120 |
Cost of sales | 0 | (71) | 0 | (217) |
Selling and marketing | 0 | (38) | 0 | (113) |
General and administrative | 0 | (22) | 0 | (68) |
Other income (expense), net | (134) | 0 | (408) | 0 |
Income before income taxes | (134) | (131) | (408) | (398) |
Net income | (95) | (92) | (286) | (278) |
Reclassification Out Of Accumulated Other Comprehensive Income | Currency exchange contracts gain (loss) | Unrealized Derivative Instrument | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Revenue | 142 | 273 | 743 | (1,031) |
Reclassification Out Of Accumulated Other Comprehensive Income | Interest rate swap | Unrealized Derivative Instrument | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest expense, net | $ 695 | $ 422 | $ 1,988 | $ 661 |
Business Segment Information (F
Business Segment Information (Financial Information by Reportable Segment) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 29, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 29, 2019USD ($)segment | Jun. 30, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of operating segments | segment | 2 | |||
Total revenue | $ 232,209 | $ 194,668 | $ 668,436 | $ 580,153 |
Total income from operations | 23,001 | 16,264 | 65,141 | 49,371 |
Operating Segments | Test & Simulation | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 148,328 | 116,055 | 424,920 | 344,496 |
Total income from operations | 11,424 | 3,873 | 31,439 | 12,777 |
Operating Segments | Sensors | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 84,231 | 79,000 | 244,556 | 236,501 |
Total income from operations | 11,556 | 12,398 | 33,694 | 36,623 |
Intersegment Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | (350) | (387) | (1,040) | (844) |
Total income from operations | $ 21 | $ (7) | $ 8 | $ (29) |
Business Acquisitions (Narrativ
Business Acquisitions (Narrative) (Details) - USD ($) $ in Thousands | Nov. 21, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | Jun. 29, 2019 | Jun. 30, 2018 |
Business Acquisition [Line Items] | |||||
Revenue | $ 232,209 | $ 194,668 | $ 668,436 | $ 580,153 | |
E2M Technologies B.V. | |||||
Business Acquisition [Line Items] | |||||
Cash paid at closing | $ 80,287 | ||||
Revenue | $ 7,999 | 21,658 | |||
Acquisition costs | $ 1,133 | ||||
Intangible assets | $ 43,989 |
Business Acquisitions (Fair Val
Business Acquisitions (Fair Values Assigned to the Assets and Liabilities Assumed) (Details) - USD ($) $ in Thousands | Nov. 21, 2018 | Jun. 29, 2019 | Jun. 30, 2018 | Sep. 29, 2018 |
Asset (Liability) | ||||
Goodwill | $ 403,448 | $ 369,275 | ||
Supplemental information | ||||
Total estimated purchase price, net of cash acquired | $ 83,526 | $ 0 | ||
Finite-Lived Intangible Asset Lives (Years) | 14 years 6 months | 14 years 9 months 18 days | ||
E2M Technologies B.V. | ||||
Asset (Liability) | ||||
Accounts receivable | $ 4,651 | |||
Unbilled accounts receivable | 1,518 | |||
Inventories | 11,063 | |||
Prepaid expenses and other current assets | 123 | |||
Property and equipment | 672 | |||
Intangible assets | 43,989 | |||
Other long-term assets | 60 | |||
Goodwill | 32,475 | |||
Accounts payable | (3,657) | |||
Accrued payroll and related costs | (1,328) | |||
Advance payments from customers | (4,315) | |||
Accrued income taxes | (290) | |||
Other accrued liabilities | (127) | |||
Deferred income taxes | (6,287) | |||
Net assets acquired | 78,547 | |||
Supplemental information | ||||
Cash paid at closing | 79,772 | |||
Business Combination, Post-closing Purchase Price Adjustment | 515 | |||
Less: Cash acquired | (1,740) | |||
Total estimated purchase price, net of cash acquired | 78,547 | |||
Customer lists | ||||
Supplemental information | ||||
Finite-Lived Intangible Asset Lives (Years) | 15 years 8 months 12 days | 15 years 9 months 18 days | ||
Customer lists | E2M Technologies B.V. | ||||
Asset (Liability) | ||||
Intangible assets | 21,652 | |||
Supplemental information | ||||
Finite-Lived Intangible Asset Lives (Years) | 15 years | |||
Trademarks and trade names | ||||
Supplemental information | ||||
Finite-Lived Intangible Asset Lives (Years) | 20 years 7 months 6 days | 25 years 4 months 24 days | ||
Trademarks and trade names | E2M Technologies B.V. | ||||
Asset (Liability) | ||||
Intangible assets | 5,926 | |||
Supplemental information | ||||
Finite-Lived Intangible Asset Lives (Years) | 15 years | |||
Technology | E2M Technologies B.V. | ||||
Asset (Liability) | ||||
Intangible assets | 12,650 | |||
Supplemental information | ||||
Finite-Lived Intangible Asset Lives (Years) | 15 years | |||
Other Intangible Assets | ||||
Supplemental information | ||||
Finite-Lived Intangible Asset Lives (Years) | 4 years | |||
Other Intangible Assets | E2M Technologies B.V. | ||||
Asset (Liability) | ||||
Intangible assets | $ 3,761 | |||
Supplemental information | ||||
Finite-Lived Intangible Asset Lives (Years) | 4 years |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) | Aug. 05, 2019 | Jul. 16, 2019 |
Subsequent Event [Line Items] | ||
Cash paid for asset acquisition | $ 70,000,000 | |
5.750% Senior Unsecured Notes Due 2027 | Unsecured Debt | ||
Subsequent Event [Line Items] | ||
Principal amount | $ 350,000,000 | |
Interest rate, percentage | 5.75% | |
Net proceeds from issuance of debt | $ 344,000,000 |
Uncategorized Items - q3fy19mts
Label | Element | Value |
Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (33,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (6,227,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 33,000 |