Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 23, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | NOVT | ||
Entity Registrant Name | NOVANTA INC | ||
Entity Central Index Key | 1,076,930 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 34,596,971 | ||
Entity Public Float | $ 1,021,670,127 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 100,057 | $ 68,108 |
Accounts receivable, net of allowance of $554 and $565, respectively | 81,482 | 63,769 |
Inventories | 91,278 | 59,745 |
Prepaid income taxes and income taxes receivable | 4,387 | 2,058 |
Prepaid expenses and other current assets | 10,675 | 5,570 |
Total current assets | 287,879 | 199,250 |
Property, plant and equipment, net | 61,718 | 35,421 |
Deferred tax assets | 7,052 | 8,593 |
Other assets | 4,018 | 12,502 |
Intangible assets, net | 155,048 | 61,743 |
Goodwill | 210,988 | 108,128 |
Total assets | 726,703 | 425,637 |
Current Liabilities | ||
Current portion of long-term debt | 9,119 | 7,366 |
Accounts payable | 39,793 | 32,213 |
Income taxes payable | 5,942 | 3,969 |
Accrued expenses and other current liabilities | 43,314 | 26,948 |
Total current liabilities | 98,168 | 70,496 |
Long-term debt | 225,500 | 70,554 |
Deferred tax liabilities | 25,672 | 1,294 |
Income taxes payable | 3,754 | 5,710 |
Other liabilities | 15,141 | 18,713 |
Total liabilities | 368,235 | 166,767 |
Commitments and Contingencies (Note 16) | ||
Redeemable noncontrolling interest | 46,923 | |
Stockholders’ Equity: | ||
Common shares, no par value; Authorized shares: unlimited; Issued and outstanding: 34,595 and 34,458, respectively | 423,856 | 423,856 |
Additional paid-in capital | 33,309 | 30,276 |
Accumulated deficit | (127,740) | (167,547) |
Accumulated other comprehensive loss | (17,880) | (27,715) |
Total stockholders’ equity | 311,545 | 258,870 |
Total liabilities, noncontrolling interest and stockholders’ equity | $ 726,703 | $ 425,637 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 554 | $ 565 |
Common shares, Authorized | Unlimited | Unlimited |
Common shares, no par value | $ 0 | $ 0 |
Common shares, Issued | 34,595 | 34,458 |
Common shares, outstanding | 34,595 | 34,458 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Revenue | $ 521,290 | $ 384,758 | $ 373,598 |
Cost of revenue | 300,759 | 222,306 | 215,708 |
Gross profit | 220,531 | 162,452 | 157,890 |
Operating expenses: | |||
Research and development and engineering | 41,673 | 32,002 | 31,043 |
Selling, general and administrative | 102,025 | 81,691 | 82,049 |
Amortization of purchased intangible assets | 12,096 | 8,251 | 7,611 |
Restructuring, acquisition and divestiture related costs | 7,542 | 7,945 | 8,254 |
Total operating expenses | 163,336 | 129,889 | 128,957 |
Operating income from continuing operations | 57,195 | 32,563 | 28,933 |
Interest income (expense), net | (7,165) | (4,559) | (5,180) |
Foreign exchange transaction gains (losses), net | (447) | 2,317 | (23) |
Other income (expense), net | 142 | 2,201 | 2,663 |
Gain on acquisition of business | 26,409 | ||
Gain on disposal of business | 19,629 | ||
Income from continuing operations before income taxes | 76,134 | 32,522 | 46,022 |
Income tax provision | 13,827 | 10,519 | 10,394 |
Income from continuing operations | 62,307 | 22,003 | 35,628 |
Loss from discontinued operations, net of tax | (13) | ||
Consolidated net income | 62,307 | 22,003 | 35,615 |
Less: Net income attributable to noncontrolling interest | (2,256) | ||
Net income attributable to Novanta Inc. | $ 60,051 | $ 22,003 | $ 35,615 |
Earnings per common share from continuing operations (Note 9): | |||
Basic | $ 1.14 | $ 0.63 | $ 1.03 |
Diluted | 1.13 | 0.63 | 1.02 |
Loss per common share from discontinued operations (Note 9): | |||
Basic | 0 | ||
Diluted | 0 | ||
Earnings per common share attributable to Novanta Inc. (Note 9): | |||
Basic | 1.14 | 0.63 | 1.03 |
Diluted | $ 1.13 | $ 0.63 | $ 1.02 |
Weighted average common shares outstanding—basic | 34,817 | 34,694 | 34,579 |
Weighted average common shares outstanding—diluted | 35,280 | 34,914 | 34,827 |
Amounts attributable to Novanta Inc.: | |||
Income from continuing operations | $ 60,051 | $ 22,003 | $ 35,628 |
Loss from discontinued operations | (13) | ||
Net income attributable to Novanta Inc. | $ 60,051 | $ 22,003 | $ 35,615 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Statement Of Income And Comprehensive Income [Abstract] | ||||
Consolidated net income | $ 62,307 | $ 22,003 | $ 35,615 | |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments, net of tax | [1] | 8,909 | (7,524) | (4,083) |
Pension liability adjustments, net of tax | [2] | 926 | (1,361) | 1,709 |
Total other comprehensive income (loss) | 9,835 | (8,885) | (2,374) | |
Total consolidated comprehensive income | 72,142 | 13,118 | 33,241 | |
Less: Comprehensive income attributable to noncontrolling interest | (2,256) | |||
Comprehensive income attributable to Novanta Inc. | $ 69,886 | $ 13,118 | $ 33,241 | |
[1] | The tax effect on this component of comprehensive income was ($94), $36 and $193 in 2017, 2016 and 2015, respectively. | |||
[2] | The tax effect on this component of comprehensive income was $277, ($462) and $307 in 2017, 2016 and 2015, respectively. |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Foreign currency translation adjustments - Tax effect on component of comprehensive income | $ (94) | $ 36 | $ 193 |
Pension liability adjustments, tax effect on the component of comprehensive income | $ 277 | $ (462) | $ 307 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Shares | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Noncontrolling Interest |
Balance at Dec. 31, 2014 | $ 211,254 | $ 423,856 | $ 28,590 | $ (16,456) | $ (225,165) | $ 429 |
Balance (in shares) at Dec. 31, 2014 | 34,219 | |||||
Net income | 35,615 | 35,615 | ||||
Common stock issued under stock plans (in shares) | 398 | |||||
Shares withheld for taxes on vested stock awards | (1,941) | (1,941) | ||||
Shares withheld for taxes on vested stock awards (in shares) | (150) | |||||
Repurchases of common stock | (1,627) | (1,627) | ||||
Repurchases of common stock (in shares) | (122) | |||||
Share-based compensation | 4,065 | 4,065 | ||||
Tax benefit (shortfalls) of vested stock awards | 138 | 138 | ||||
Other comprehensive income (loss), net of tax | (2,374) | (2,374) | ||||
Dissolution of minority interest | (429) | $ (429) | ||||
Balance at Dec. 31, 2015 | 244,701 | $ 423,856 | 29,225 | (18,830) | (189,550) | |
Balance (in shares) at Dec. 31, 2015 | 34,345 | |||||
Net income | 22,003 | 22,003 | ||||
Common stock issued under stock plans | 181 | 181 | ||||
Common stock issued under stock plans (in shares) | 351 | |||||
Shares withheld for taxes on vested stock awards | (1,789) | (1,789) | ||||
Shares withheld for taxes on vested stock awards (in shares) | (129) | |||||
Repurchases of common stock | (1,634) | (1,634) | ||||
Repurchases of common stock (in shares) | (109) | |||||
Share-based compensation | 4,293 | 4,293 | ||||
Other comprehensive income (loss), net of tax | (8,885) | (8,885) | ||||
Balance at Dec. 31, 2016 | 258,870 | $ 423,856 | 30,276 | (27,715) | (167,547) | |
Balance (in shares) at Dec. 31, 2016 | 34,458 | |||||
Net income | 60,051 | 60,051 | ||||
Adjustment of redeemable noncontrolling interest to estimated redemption value (Note 17) | (20,244) | (20,244) | ||||
Common stock issued under stock plans (in shares) | 228 | |||||
Shares withheld for taxes on vested stock awards | (2,090) | (2,090) | ||||
Shares withheld for taxes on vested stock awards (in shares) | (77) | |||||
Repurchases of common stock | (370) | (370) | ||||
Repurchases of common stock (in shares) | (14) | |||||
Share-based compensation | 5,493 | 5,493 | ||||
Other comprehensive income (loss), net of tax | 9,835 | 9,835 | ||||
Balance at Dec. 31, 2017 | $ 311,545 | $ 423,856 | $ 33,309 | $ (17,880) | $ (127,740) | |
Balance (in shares) at Dec. 31, 2017 | 34,595 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Consolidated net income | $ 62,307 | $ 22,003 | $ 35,615 |
Less: Loss from discontinued operations, net of tax | 13 | ||
Income from continuing operations | 62,307 | 22,003 | 35,628 |
Adjustments to reconcile income from continuing operations to net cash provided by operating activities of continuing operations: | |||
Depreciation and amortization | 30,758 | 20,357 | 19,114 |
Provision for inventory excess and obsolescence | 1,421 | 3,091 | 1,934 |
Share-based compensation | 5,493 | 4,293 | 4,387 |
Deferred income taxes | (2,560) | (1,766) | (1,692) |
Earnings from equity-method investment | (104) | (2,191) | (2,657) |
Dividend from equity-method investment | 2,341 | ||
Gain on acquisition of business | (26,409) | ||
Gain on disposal of business | (19,629) | ||
Gain on sale of fixed assets | 36 | (1,707) | 1 |
Contingent consideration adjustments | 425 | 1,267 | 430 |
Inventory acquisition fair value adjustment | 4,754 | 173 | 215 |
Non-cash interest expense | 825 | 882 | 935 |
Other non-cash items | 283 | 813 | 1,192 |
Changes in assets and liabilities which provided (used) cash, excluding effects from businesses purchased or classified as held for sale: | |||
Accounts receivable | (2,077) | (6,394) | (7,526) |
Inventories | (13,587) | (2,917) | (3,338) |
Prepaid expenses and other current assets | (2,169) | (1,729) | 902 |
Prepaid income taxes and income taxes receivable | (2,282) | 462 | 3,431 |
Accounts payable, income taxes payable, accrued expenses and other current liabilities | 8,993 | 10,590 | 2,167 |
Other non-current assets and liabilities | (2,729) | (1,780) | (2,065) |
Cash provided by operating activities of continuing operations | 63,378 | 47,788 | 33,429 |
Cash used in operating activities of discontinued operations | (13) | ||
Cash provided by operating activities | 63,378 | 47,788 | 33,416 |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (9,094) | (8,462) | (5,552) |
Acquisition of businesses, net of cash acquired | (168,332) | (8,958) | (25,987) |
Acquisition of intangible assets | (3,980) | ||
Proceeds from sale of business, net of transaction costs | 29,570 | ||
Proceeds from sale of property, plant and equipment | 46 | 7,037 | 127 |
Cash used in investing activities of continuing operations | (177,380) | (14,363) | (1,842) |
Cash provided by investing activities of discontinued operations | 1,498 | 209 | |
Cash used in investing activities | (177,380) | (12,865) | (1,633) |
Cash flows from financing activities: | |||
Borrowings under revolving credit facility | 176,769 | 13,000 | |
Repayments of long-term debt and revolving credit facility | (26,925) | (16,250) | (30,500) |
Payments of debt issuance costs | (655) | (2,523) | |
Payments of withholding taxes from stock-based awards | (2,090) | (1,789) | (1,941) |
Payments of contingent considerations | (2,546) | ||
Repurchases of common stock | (370) | (1,634) | (1,627) |
Other financing activities | (853) | (993) | (467) |
Cash provided by (used in) financing activities of continuing operations | 143,330 | (23,189) | (21,535) |
Cash provided by (used in) financing activities of discontinued operations | 0 | 0 | 0 |
Cash provided by (used in) financing activities | 143,330 | (23,189) | (21,535) |
Effect of exchange rates on cash and cash equivalents | 2,621 | (3,585) | (1,435) |
Increase in cash and cash equivalents | 31,949 | 8,149 | 8,813 |
Cash and cash equivalents, beginning of year | 68,108 | 59,959 | 51,146 |
Cash and cash equivalents, end of year | 100,057 | 68,108 | 59,959 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 5,832 | 2,917 | 3,784 |
Cash paid for income taxes | 21,121 | 14,058 | 10,688 |
Income tax refunds received | 337 | 932 | 3,939 |
Supplemental disclosure of non-cash investing activity: | |||
Accrual for capital expenditures | $ 1,601 | $ 1,253 | $ 1,180 |
Organization and Presentation
Organization and Presentation | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Organization and Presentation | 1. Organization and Presentation Novanta Inc. and its subsidiaries (collectively referred to as “Novanta”, the “Company”, “we”, “us”, “our”) is a leading global supplier of core technology solutions that give healthcare and advanced industrial original equipment manufacturers (“OEMs”) a competitive advantage. We combine deep proprietary technology expertise and competencies in photonics, vision and precision motion with a proven ability to solve complex technical challenges. This enables Novanta to engineer core components and sub-systems that deliver extreme precision and performance, tailored to our customers’ demanding applications. Basis of Presentation These consolidated financial statements have been prepared by the Company in U.S. dollars and in accordance with accounting principles generally accepted in the U.S., applied on a consistent basis. The consolidated financial statements include the accounts of Novanta Inc. and its subsidiaries. Intercompany accounts and transactions have been eliminated. Prior to January 10, 2017, the Company had an approximately 41% ownership interest in Laser Quantum Limited (“Laser Quantum”), a privately held company located in the United Kingdom, which was accounted for under the equity method of accounting. On January 10, 2017, the Company acquired an additional approximately 35% of the outstanding shares of Laser Quantum. As a result of this transaction, the Company’s ownership position in Laser Quantum increased from approximately 41% to approximately 76%. Since January 10, 2017, Laser Quantum has been consolidated in the Company’s consolidated financial statements. Reclassifications Certain immaterial reclassifications have been made in the consolidated statements of cash flows for prior periods to conform to the current year presentation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Estimates and assumptions are reviewed on an on-going basis and the effects of revisions are reflected in the period in which they are deemed to be necessary. The Company evaluates its estimates based on historical experience, current conditions and various other assumptions that it believes are reasonable under the circumstances. Actual results could differ significantly from those estimates. Foreign Currency Translation The financial statements of the Company and its subsidiaries outside the United States have been translated into U.S. dollars. Assets and liabilities of foreign operations are translated from foreign currencies into U.S. dollars at the exchange rates in effect as of the balance sheet date. Revenue and expenses are translated at the weighted average exchange rates for the period. Accordingly, gains and losses resulting from translating foreign currency financial statements are reported as cumulative translation adjustment, a separate component of other comprehensive income (loss) in stockholders’ equity. Foreign currency transaction gains and losses, primarily from transactions denominated in currencies other than the functional currencies, are included in the accompanying consolidated statements of operations. Cash Equivalents Cash equivalents are highly liquid investments with original maturities of three months or less. These investments are carried at cost, which approximates fair value. Long-Term Investments Prior to January 10, 2017, the Company accounted for Laser Quantum under the equity method of accounting. During the years ended December 31, 2017, 2016 and 2015, the Company recognized income from its equity method investment amounting to $0.1 million, $2.2 million and $2.7 million, respectively, which was included in other income (expense) in the accompanying consolidated statements of operations. At December 31, 2016, the Company’s net investment in Laser Quantum was $8.5 million and was included in other assets on the consolidated balance sheet. The summarized financial information for Laser Quantum is as follows (in thousands): Year Ended December 31, 2016 2015 Revenue $ 23,526 $ 25,599 Income from operations $ 5,537 $ 7,362 Net income $ 5,389 $ 6,925 December 31, 2016 Total assets (1) $ 25,043 Total liabilities $ 1,556 (1) Total assets at December 31, 2016 included cash and cash equivalents of $15.5 million. In March 2016, the Company received a cash dividend of $2.3 million from Laser Quantum. The dividend was reported as a reduction to the carrying value of the Company’s net investment in Laser Quantum in the balance sheet and a cash inflow from operating activities in the consolidated statement of cash flows. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amounts, net of an allowance for doubtful accounts based on the Company’s best estimate of probable credit losses resulting from the inability of the Company’s customers to make required payments. The Company determines the allowance based on a variety of factors, including the age of amounts outstanding relative to their contractual due date, specific customer factors, and other known risks and economic trends. Charges related to the allowance for doubtful accounts are included as selling, general and administrative expenses and are recorded in the period that the outstanding receivables are determined to be uncollectible. Account balances are charged off against the allowance when the Company believes it is probable that the receivable will not be recovered. For the years ended December 31, 2017, 2016 and 2015, changes in the allowance for doubtful accounts were as follows (in thousands): 2017 2016 2015 Balance at beginning of year $ 565 $ 500 $ 282 Provision charged to selling, general and administrative expenses 283 135 285 Allowance resulting from acquisitions 52 15 5 Write-offs, net of recoveries of amounts previously reserved (358 ) (82 ) (29 ) Divestiture of JK Lasers — — (30 ) Exchange rate changes 12 (3 ) (13 ) Balance at end of year $ 554 $ 565 $ 500 Inventories Inventories, which include materials and conversion costs, are stated at the lower of cost or net realizable value, using the first-in, first-out method. Cost includes the cost of purchased materials, inbound freight charges, external and internal processing and applicable labor and overhead costs. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company periodically reviews quantities of inventories on hand and compares these amounts to the expected use of each product. The Company records a charge to cost of revenue for the amount required to reduce the carrying value of inventory to the net realizable value. Property, Plant and Equipment Property, plant and equipment are recorded at cost, adjusted for any impairment, less accumulated depreciation. The Company uses the straight-line method to calculate the depreciation of its property, plant and equipment over their estimated useful lives. Estimated useful lives range from 3 to 30 years for buildings and building improvements and 3 to 10 years for machinery and equipment. Leasehold improvements are depreciated over the lesser of their useful lives or the lease terms, including any renewal period options that are reasonably assured of being exercised. Repairs and maintenance costs are expensed as incurred. Certain costs to develop software for internal use are capitalized when the criteria under Accounting Standards Codification (“ASC”) 350-40, “Internal-Use Software,” are met. Lease arrangements meeting the criteria of ASC 840-30, “Leases – Capital Leases,” are capitalized based on the present value of future minimum lease payments and depreciated over the term of the lease. In 2016, the Company sold its facilities in Chatsworth, California and Orlando, Florida and recognized a gain of $1.7 million as part of restructuring, acquisition and divestiture related costs. Goodwill, Intangible Assets and Long-Lived Assets Goodwill represents the excess of the purchase price over the tangible assets, identifiable intangible assets and assumed liabilities acquired in a business combination. Allocations of the purchase price are based upon a valuation of the fair value of assets acquired and liabilities assumed as of the acquisition date. Goodwill and indefinite-lived intangibles are not amortized but are assessed for impairment at least annually to ensure their current fair values exceed their carrying values. The Company’s most significant intangible assets are customer relationships, patents and acquired technologies, trademarks and trade names. The fair values of intangible assets are based on valuations using an income approach, with estimates and assumptions provided by management of the acquired companies and the Company. The process for estimating the fair values of identifiable intangible assets requires the use of significant estimates and assumptions, including estimating future cash flows and developing appropriate discount rates. All definite-lived intangible assets are amortized over the periods in which their economic benefits are expected to be realized. The Company reviews the useful life assumptions, including the classification of certain intangible assets as “indefinite-lived”, on a periodic basis to determine if changes in circumstances warrant revisions to them. Costs associated with patent and intellectual property applications, renewals or extensions are expensed as incurred. The Company evaluates its goodwill, intangible assets and other long-lived assets for impairment at the reporting unit level which is generally at least one level below our reportable segments. Impairment Charges Impairment analyses of goodwill and indefinite-lived intangible assets are conducted in accordance with ASC 350, “Intangibles —Goodwill and Other.” The Company performs its goodwill impairment test annually as of the beginning of the second quarter or more frequently if indicators are present, or changes in circumstances suggest, that an impairment may exist. The Company has the option of first performing a qualitative (“Step 0”) assessment to determine whether it is necessary to perform the quantitative two-step impairment test. In performing the Step 0 assessment, the Company reviews qualitative factors both specific to the reporting unit and to the Company as a whole, such as financial performance, macroeconomic conditions, industry and market considerations, and the fair value of each reporting unit at the last valuation date. If the Company elects this option and believes, as a result of the Step 0 assessment, that it is more likely than not that the carrying value of the reporting unit exceeds its fair value, the quantitative two-step impairment test is required; otherwise, no further testing is required. Alternatively, the Company may elect to bypass the Step 0 qualitative assessment and perform the quantitative two-step impairment test. This two-step approach requires a comparison of the carrying value of each of the Company’s reporting units to the estimated fair value of these reporting units. The fair value of a reporting unit is estimated primarily using a discounted cash flow (“DCF”) method with a weighted average cost of capital. If the carrying value of a reporting unit exceeds its fair value, the Company calculates the implied fair value of the reporting unit’s goodwill and compares it to the carrying value. If the carrying value of the goodwill exceeds its implied fair value, an impairment charge is recorded for the difference. The Company assesses indefinite-lived intangible assets for impairment on an annual basis as of the beginning of the second quarter, and more frequently if indicators are present, or changes in circumstances suggest, that an impairment may exist. The Company will also reassess the continuing classification of these indefinite-lived intangible assets as indefinite-lived when circumstances change such that the useful life may no longer be considered indefinite. The fair values of the Company’s indefinite-lived intangible assets are determined using the relief from royalty method, based on forecasted revenues. If the fair value of an indefinite-lived intangible asset is less than its carrying value, an impairment charge is recorded for the difference between the carrying value and the fair value of the impaired asset. The carrying amounts of definite-lived long-lived assets are reviewed for impairment whenever changes in events or circumstances indicate that their carrying values may not be recoverable. The recoverability of the carrying value is generally determined by comparison of the asset group’s carrying value to its undiscounted future cash flows. When this test indicates a potential for impairment, a fair value assessment is performed. Once an impairment is determined and measured, an impairment charge is recorded for the difference between the carrying value and the fair value of the impaired asset. Revenue Recognition The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, price is fixed or determinable, and collection of the resulting receivable is reasonably assured. Revenue recognition requires judgment and estimates, which may affect the amount and timing of revenue recognized in any given period. The Company’s revenue transactions are comprised of both single-element and multiple-element transactions. Multiple-element transactions may include two or more products, and occasionally non-standard/extended warranties or preventative maintenance plans. For multiple-element transactions, revenue is generally recognized upon shipment, using the relative selling price method in accordance with ASC 605-25, “Revenue – Multiple-Element Arrangements.” Single-element transactions are typically recognized upon shipment at their contractually stated prices. The Company generally provides warranties for its products. The standard warranty period is typically 12 months to 24 months for the Photonics and Precision Motion segments and 12 months to 36 months for the Vision segment. The standard warranty period for product sales is accounted for under the provisions of ASC 450, “Contingencies,” as the Company has the ability to ascertain the likelihood of the liability and can estimate the amount of the liability. A provision for the estimated cost related to warranty is recorded to cost of revenue at the time revenue is recognized. The Company’s estimate of costs to service the warranty obligations is based on historical experience and expectations of future conditions. To the extent that the Company experiences warranty claims or costs associated with servicing those claims that differ from the original estimates, revisions to the estimated warranty liability are recorded at that time. The Company occasionally sells optional non-standard/extended warranty services and preventative maintenance contracts to customers. The Company accounts for these agreements in accordance with provisions of ASC 605-20-25-3, “Separately Priced Extended Warranty and Product Maintenance Contracts,” under which it recognizes the separately priced extended warranty and preventative maintenance fees ratably over the associated period. At the request of its customers, the Company may perform maintenance and repair services on products previously sold to those customers. These services are usually in the form of time and materials based contracts which are short in duration. Revenue for time and materials services is recorded at the completion of services requested under a customer’s purchase order. Research and Development and Engineering Costs Research and development and engineering (“R&D”) expenses are primarily comprised of employee related expenses and cost of materials for R&D projects. These costs are expensed as incurred. Share-Based Compensation The Company records the expense associated with share-based compensation awards to employees and directors based on the fair value of awards as of the grant date. For stock-based compensation awards that vest over time based on employment, the associated expenses are recognized in the consolidated statements of operations ratably over the vesting period, net of estimated forfeitures. The Company also grants two types of performance-based awards to certain members of the executive management team: non-GAAP earnings per share performance-based restricted stock units (“EPS-PSUs”) and relative total shareholder return performance-based restricted stock units (“TSR-PSUs”). For EPS-PSUs, stock-based compensation expense is recognized ratably over the vesting period when it is probable that the performance targets are expected to be achieved based on management’s projections. Management’s projections are revised, if necessary, in subsequent periods when underlying factors change the evaluation of the probability of achieving the performance targets. Accordingly, share-based compensation expense associated with EPS-PSUs may differ significantly from period to period based on changes in the probability of achieving performance targets. Shipping & Handling Costs Shipping and handling costs are recorded in cost of revenue. Advertising Costs Advertising costs are expensed to selling, general and administrative expenses as incurred and were not material for 2017, 2016 and 2015. Restructuring, Acquisition and Divestiture Related Costs The Company accounts for its restructuring activities in accordance with the provisions of ASC 420, “Exit or Disposal Cost Obligations.” The Company makes assumptions related to the amounts of employee severance benefits and related costs, time period over which facilities will remain vacant, useful lives and residual value of long-lived assets, sublease terms, sublease rental rates and discount rates. Estimates and assumptions are based on the best information available at the time the obligation is recognized. These estimates are reviewed and revised as facts and circumstances dictate. Acquisition related costs incurred to effect a business combination, including finders’ fees, legal, valuation and other professional or consulting fees, are expensed as incurred. Acquisition related costs also include expenses recognized under earn-out agreements in connection with acquisitions. Expenses associated with divestiture activities, including legal and professional fees directly related to the completion of a business divestiture, are expensed as incurred. Accounting for Income Taxes The asset and liability method is used to account for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. This method also requires the recognition of future tax benefits, such as net operating loss carryforwards, to the extent that it is more likely than not that such benefits will be realized. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the temporary differences are expected to be recovered or settled. A valuation allowance is established to reduce the deferred tax assets if it is more likely than not that some or all of the related tax benefits will not be realized in the future. Valuation allowances are reassessed periodically to determine whether it is more likely than not that the tax benefits will be realized in the future and that any valuation allowance should be released. The majority of the Company’s business activities are conducted through its subsidiaries outside of Canada. Earnings from these subsidiaries are generally indefinitely reinvested in the local businesses. Further, local laws and regulations may also restrict certain subsidiaries from paying dividends to their parents. As such, the Company generally does not accrue income taxes for the repatriation of such earnings in accordance with ASC 740, “Income Taxes.” To the extent that there are excess accumulated earnings that the Company intends to repatriate from any such subsidiaries, the Company recognizes deferred tax liabilities on such foreign earnings. The Company assesses its income tax positions and records tax benefits for all years subject to examination based on the evaluation of the facts, circumstances, and information available at each reporting date. For those tax positions with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information, the Company records a tax benefit. For those income tax positions that are not likely to be sustained, no tax benefit is recognized in the consolidated financial statements. The Company recognizes interest and penalties related to uncertain tax positions as part of the provision for income taxes. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the “Tax Reform Act”). Further information on the tax impacts of the Tax Reform Act is included in Note 14 to the Consolidated Financial Statements. Foreign Currency Contracts The Company uses foreign currency contracts as a part of its strategy to limit its exposures related to foreign currency denominated monetary assets and liabilities. The time duration of these foreign currency contracts approximates the underlying foreign currency transaction exposures, generally less than three months. These contracts are not designated as cash flow, fair value or net investment hedges. Changes in the fair value of these foreign currency contracts are recognized in income from continuing operations. Recent Accounting Pronouncements Statement of Cash Flows Classification of Certain Cash Receipts and Cash Payments In August 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which provides further clarification on eight cash flow classification issues. ASU 2016-15 further clarifies the classification of the following: (i) debt prepayment or debt extinguishment costs; (ii) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; (iii) contingent consideration payments made after a business combination; (iv) proceeds from the settlement of insurance claims; (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (vi) distributions received from equity method investees; (vii) beneficial interests in securitization transactions; and (viii) separately identifiable cash flows and application of the predominance principle. ASU 2016-15 will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. ASU 2016-15 should be applied using a retrospective transition method for each period presented. The Company adopted ASU 2016-15 during the first quarter of 2017. The adoption of ASU 2016-15 resulted in $2.5 million of payments of contingent considerations being reported as cash used in financing activities on the Company’s consolidated statements of cash flows in 2017. Inventories In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory,” which simplifies the subsequent measurement of inventories by replacing the current lower of cost or market test with a lower of cost or net realizable value test. ASU 2015-11 will be effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. The Company adopted this pronouncement in the first quarter of 2017. The adoption of ASU-2015-11 did not have a material impact on our consolidated financial statements. Derivatives and Hedging In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” which amends and simplifies existing guidance in order to better align a company’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements. ASU 2017-12 will become effective for fiscal years and interim reporting periods beginning after December 15, 2018, with early adoption permitted. The Company does not expect the adoption of ASU 2017-12 to have a material impact on its consolidated financial statements. Share-Based Compensation In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718),” which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. ASU 2017-09 requires that an entity account for the effects of a modification unless (i) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; (ii) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (iii) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. ASU 2017-09 will become effective prospectively for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company does not expect the adoption of ASU 2017-09 to have a material impact on its consolidated financial statements. Presentation of Net Periodic Pension Cost In March 2017, the FASB issued ASU 2017-07, “Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” which requires employers that offer or maintain defined benefit plans to disaggregate the service component from the other components of net benefit cost and provides guidance on the presentation of the service component and the other components of net benefit cost in the statement of operations. The new standard is effective for public companies for annual periods beginning after December 15, 2017. The Company will adopt the new standard in the first quarter of 2018 and will report its net periodic pension cost related to its frozen U.K. pension plan, consisting of interest cost, expected return on plan assets and amortization of actuarial gains (losses) only, in other income (expense) in the consolidated statement of operations upon adoption. The adoption will not have a material impact on the Company’s consolidated financial statements. Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which simplifies the accounting for goodwill impairment. The amendment in ASU 2017-04 removes Step-two of the goodwill impairment test, which requires a hypothetical purchase price allocation. ASU 2017-04 will become effective prospectively for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the impact of the new standard on its consolidated financial statements. Income Taxes In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory,” which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. ASU 2016-16 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Upon adoption of ASU 2016-16, an entity should apply the guidance on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company will adopt the new standard in the first quarter of 2018. The adoption of this guidance is expected to reduce total assets and stockholders’ equity by $2.6 million. Leases In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which provides comprehensive lease accounting guidance. The standard requires entities to recognize lease assets and liabilities on the balance sheet and to disclose key information about leasing arrangements. ASU 2016-02 will become effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of the potential impact of this guidance and an appropriate implementation strategy. While the Company’s evaluation of this guidance is in the early stages, the Company currently expects that the adoption of this guidance will result in a gross-up of assets and liabilities on its consolidated balance sheet. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09” or “Topic 606”), which provides new guidance for revenue recognition. ASU 2014-09 supersedes the revenue recognition requirements in ASC 605, “Revenue Recognition (Topic 605),” and requires entities to recognize revenue in a way that depicts the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. As amended by ASU 2015-14, “Revenue from Contracts with Customers – Deferral of the Effective Date,” ASU 2014-09 will be effective for annual and interim reporting periods beginning after December 15, 2017. Upon adoption of Topic 606, an entity may apply the new guidance either retrospectively to each prior reporting period presented (the “full retrospective method”) or retrospectively only to customer contracts not yet completed as of the date of adoption with the cumulative effect of initially applying the standard recognized in beginning retained earnings at the date of the initial application (the “modified retrospective method”). The Company has conducted various activities to prepare for the adoption of the new standard. The Company surveyed cross-functional leaders to identify potential revenue streams that could be impacted by Topic 606 and identified certain revenue streams that could be affected. The Company also reviewed a representative sample of individual customer contracts related to these various revenue streams to determine if the guidance under Topic 606 is expected to have a material impact on revenue recognition. The Company’s work indicates the adoption of Topic 606 is not expected to change the revenue recognition method on any material revenue streams of the Company and is not expected to have a material impact on the Company’s consolidated financial statements. The Company will adopt the new standard in the first quarter of 2018, using the modified retrospective method. In addition, the Company will elect to apply certain practical expedients allowed under the guidance. First, the Company does not intend to adjust the promised amount of consideration for the effects of a financing component because the transfer of a promised good to a customer and the customer’s payment for that good are typically expected to be one year or less. Second, the Company will exclude from its transaction price any amounts collected from customers for all sales tax or other similar taxes, which is consistent with the Company’s current practice. Third, the Company will elect to account for shipping and handling activities that occur after the transfer of control over the related goods as fulfillment activities rather than performance obligations. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Combinations | 3. Business Combinations 2017 Acquisitions WOM On July 3, 2017, the Company acquired 100% of the outstanding shares of W.O.M. World of Medicine GmbH (“WOM”), a Berlin, Germany-based provider of medical insufflators, pumps, and related disposables for OEMs in the minimally invasive surgery market, for a total purchase price of €118.1 million ($134.9 million). The acquisition was financed with a €118.0 million ($134.8 million) draw-down on the Company’s revolving credit facility. The Company expects that the addition of WOM will help the Company to better serve customers in minimally invasive surgery applications with a broader range of product offerings. WOM is included in the Company’s Vision reportable segment. The acquisition of WOM has been accounted for as a business combination. The allocation of the purchase price is based upon a valuation of assets acquired and liabilities assumed. Assets acquired and liabilities assumed have been recorded at their estimated fair values as of the acquisition date. The Company’s estimates and assumptions in determining the estimated fair values of certain assets and liabilities are subject to change within the measurement period (up to one year from the acquisition date) as a result of additional information obtained with regard to facts and circumstances that existed as of the acquisition date. The purchase price allocation is preliminary as the Company is in the process of collecting additional information for the valuation of accrued liabilities and unrecognized tax benefits. Based upon a preliminary valuation, the total purchase price allocation is as follows (in thousands): Amount Cash $ 1,400 Accounts receivable 11,807 Inventories 14,549 Property, plant and equipment 21,940 Intangible assets 59,732 Goodwill 55,632 Other assets 2,660 Total assets acquired 167,720 Accounts payable 4,398 Other liabilities 8,681 Deferred tax liabilities 19,707 Total liabilities assumed 32,786 Total assets acquired, net of liabilities assumed 134,934 Less: cash acquired 1,400 Total purchase price, net of cash acquired $ 133,534 The fair value of intangible assets is comprised of the following (dollar amounts in thousands): Weighted Average Estimated Fair Amortization Value Period Developed technologies $ 21,586 10 years Customer relationships 35,634 12 years Trademarks and trade names 2,284 10 years Backlog 228 1 year Total $ 59,732 The purchase price allocation resulted in $59.7 million of identifiable intangible assets and $55.6 million of goodwill. As the WOM acquisition is an acquisition of outstanding common shares, none of the resulting goodwill is deductible for tax purposes. Intangible assets are being amortized over their weighted average useful lives primarily based upon the pattern in which anticipated economic benefits from such assets are expected to be realized. The goodwill recorded represents the anticipated incremental value of future cash flows attributable to: (i) WOM’s ability to grow its business with existing and new customers, including leveraging the Company’s customer base; and (ii) cost improvements due to expansion in scale. The operating results of WOM were included in the Company’s results of operations beginning on July 3, 2017. WOM contributed revenues of $49.4 million and an operating loss from continuing operations before income taxes of $1.2 million for the year ended December 31, 2017. Operating loss from continuing operations before income taxes for the year ended December 31, 2017 included amortization of inventory fair value adjustments and amortization of purchased intangible assets of $6.0 million. Laser Quantum On January 10, 2017, the Company acquired an additional approximately 35% of the outstanding shares of Laser Quantum, a Manchester, United Kingdom-based provider of solid state continuous wave lasers, ultrafast lasers, and optical light engines to OEMs in the medical market, for £25.5 million ($31.1 million) in cash consideration. The purchase price was financed with cash on hand and a $30.0 million draw-down on the Company’s revolving credit facility. As a result of this transaction, the Company’s ownership position in Laser Quantum increased from approximately 41% to approximately 76%. By establishing control through a majority equity ownership, the Company expects to broaden its technology capability in photonics solutions for medical applications, particularly within the growing DNA sequencing market, while providing key enabling photonics-based technologies for instrumentation and life science applications such as biomedical imaging, cell sorting, and ophthalmology. Laser Quantum is included in the Company’s Photonics reportable segment. As part of this transaction, the Company and the remaining shareholders of Laser Quantum entered into a call and put option agreement for the purchase and sale, in 2020, of all the remaining Laser Quantum shares held by the remaining shareholders, subject to certain conditions. The purchase price for the remaining shares will be based on the proportionate share of the noncontrolling interest (“NCI”) in Laser Quantum’s cash on hand as of December 31, 2019 and a multiple of Laser Quantum’s EBITDA for the twelve months ending December 31, 2019, as defined in the call and put option agreement. In connection with the purchase price allocation, upon gaining control over Laser Quantum, the Company recognized a nontaxable gain of $26.4 million in the consolidated statement of operations for the twelve months ended December 31, 2017. The gain represented the excess of the fair value of the Company’s previously-held equity interest in Laser Quantum over its carrying value upon gaining control. The fair value of the approximately 41% equity interest previously held by the Company before the acquisition and the fair value of the approximately 24% NCI held by the remaining shareholders of Laser Quantum after the acquisition were determined using a combination of the discounted cash flow method (an income approach), the guideline public company method (a market approach), and the subject company transaction method (a market approach). The subject company transaction method was based on the purchase price paid by the Company for the acquisition of the additional approximately 35% of the outstanding shares, while giving consideration to the control and/or minority nature of the subject equity interests. The acquisition of the additional equity interest in Laser Quantum has been accounted for as a business combination. The allocation of the purchase price is based upon a valuation of assets acquired and liabilities assumed. Assets acquired and liabilities assumed have been recorded at their estimated fair values as of the acquisition date. The final purchase price allocation is as follows (in thousands): Amount Cash $ 15,343 Accounts receivable 2,739 Inventories 6,264 Property, plant and equipment 2,286 Intangible assets 38,955 Goodwill 31,168 Other assets 717 Total fair value of assets 97,472 Accounts payable 796 Other liabilities 2,068 Deferred tax liabilities 7,337 Total fair value of liabilities 10,201 Total fair value of assets, net of fair value of liabilities 87,271 Less: fair value of equity interest previously held by Novanta 34,637 Less: fair value of noncontrolling interest 21,582 Total purchase price paid by Novanta 31,052 Less: cash acquired 15,343 Purchase price, net of cash acquired $ 15,709 The fair value of intangible assets is comprised of the following (dollar amounts in thousands): Weighted Average Estimated Fair Amortization Value Period Developed technologies $ 15,501 15 years Customer relationships 19,990 15 years Trademarks and trade names 1,964 15 years Backlog 1,500 9 months Total $ 38,955 The purchase price allocation resulted in $39.0 million of identifiable intangible assets and $31.2 million of goodwill. As the Laser Quantum acquisition is an acquisition of outstanding common shares, none of the resulting goodwill is deductible for tax purposes. Intangible assets are being amortized over their weighted average useful lives primarily based upon the pattern in which anticipated economic benefits from such assets are expected to be realized. The goodwill recorded represents the anticipated incremental value of future cash flow potential attributable to: (i) Laser Quantum’s ability to grow its business with existing and new customers, including leveraging the Company’s broader customer base; and (ii) cost improvements due to expansion in scale. The operating results of Laser Quantum were included in the Company’s results of operations beginning on January 10, 2017. Laser Quantum contributed revenues of $44.7 million and income from continuing operations before income taxes of $11.3 million for the year ended December 31, 2017. Operating income from continuing operations before income taxes for the year ended December 31, 2017 included $7.1 million of expenses associated with the amortization of inventory fair value step-up and purchased intangible assets. ThingMagic On January 10, 2017, the Company acquired from Trimble Inc. certain assets and liabilities that constituted the business of ThingMagic, a Woburn, Massachusetts-based provider of ultra-high frequency (“UHF”) radio frequency identification (“RFID”) modules and finished RFID readers to OEMs in the medical and advanced industrial markets, for a total purchase price of $19.1 million. The acquisition was financed with cash on hand and a $12.0 million draw-down on the Company’s revolving credit facility. The Company expects that the addition of ThingMagic will broaden its portfolio of RFID solutions, while providing the resources to address the growing need for improvements in workflow solutions, patient safety, anti-counterfeiting, and asset tracking in a medical environment. ThingMagic is included in the Company’s Vision reportable segment. The acquisition of ThingMagic has been accounted for as a business combination. The allocation of the purchase price is based upon a valuation of assets acquired and liabilities assumed. Assets acquired and liabilities assumed have been recorded at their estimated fair values as of the acquisition date. The final purchase price allocation is as follows (in thousands): Amount Inventories $ 1,832 Intangible assets 7,423 Goodwill 9,929 Total assets acquired 19,184 Other liabilities 95 Total liabilities assumed 95 Total purchase price $ 19,089 The fair value of intangible assets is comprised of the following (dollar amounts in thousands): Weighted Average Estimated Fair Amortization Value Period Developed technologies $ 4,600 10 years Customer relationships 2,520 10 years Trademarks and trade names 303 5 years Total $ 7,423 The purchase price allocation resulted in $7.4 million of identifiable intangible assets and $9.9 million of goodwill. As the ThingMagic acquisition is treated as an acquisition of assets for income tax purposes, the goodwill acquired is expected to be fully deductible for tax purposes. Intangible assets are being amortized over their weighted average useful lives primarily based upon the pattern in which anticipated economic benefits from such assets are expected to be realized. The goodwill recorded represents the anticipated incremental value of future cash flows potentially attributable to: (i) ThingMagic’s ability to grow its business with existing and new customers, including leveraging the Company’s customer base; (ii) cost synergies in combining the research and development capabilities from ThingMagic with the existing RFID capabilities within Novanta; and (iii) cost improvements due to the integration of ThingMagic operations into the Company’s existing infrastructure. The operating results of ThingMagic were included in the Company’s results of operations beginning on January 10, 2017. ThingMagic contributed revenues of $8.6 million and operating income from continuing operations before income taxes of $0.4 million for the year ended December 31, 2017. Operating income from continuing operations before income taxes for the year ended December 31, 2017 included amortization of inventory fair value adjustments and amortization of purchased intangible assets of $1.5 million. The pro forma financial information reflecting the operating results of ThingMagic, as if it had been acquired as of January 1, 2016, would not differ materially from the operating results of the Company as reported for the year ended December 31, 2016. Unaudited Pro Forma Information The unaudited pro forma information presented below includes the effects of business combination accounting resulting from the acquisitions of WOM and Laser Quantum, including amortization of inventory fair value adjustments, amortization of intangible assets, interest expense on borrowings in connection with the acquisitions, elimination of the gain from the Laser Quantum acquisition and income from the Company’s previous equity method investment in Laser Quantum, and the related tax effects, as though the acquisitions had been consummated as of January 1, 2016. The unaudited pro forma financial information is presented for comparative purposes only and is not necessarily indicative of the results of operations that actually would have been achieved if the acquisitions had taken place on January 1, 2016. Year Ended December 31, 2017 2016 Revenue $ 562,818 $ 487,960 Income from continuing operations $ 39,630 $ 21,020 Earnings per share attributable to Novanta Inc. – Basic (1) $ 0.49 $ 0.62 Earnings per share attributable to Novanta Inc. – Diluted (1) $ 0.49 $ 0.61 (1) The computation of pro forma earnings per share attributable to Novanta Inc. included $20.2 million and zero adjustment of redeemable noncontrolling interest to estimated redemption value for the years ended December 31, 2017 and 2016, respectively. Pro forma earnings during the year ended December 31, 2017 were adjusted to exclude non-recurring items such as amortization of inventory fair value adjustments of $4.4 million, acquisition related costs of $4.3 million, the gain on business acquisition of $26.4 million and income from equity method investment of $0.1 million. Pro forma earnings during the year ended December 31, 2017 were adjusted to include an increase in amortization of intangible assets of $5.3 million and an increase in interest expense of $1.4 million associated with borrowings under the Company’s revolving credit facility used to fund the acquisitions. Pro forma earnings during the year ended December 31, 2016 were adjusted to exclude non-recurring items such as acquisition related costs of $1.2 million and income from equity method investment of $2.2 million. Pro forma earnings during the year ended December 31, 2016 were adjusted to include an increase in amortization of intangible assets of $12.5 million and an increase in interest expense of $3.9 million associated with borrowings under the Company’s revolving credit facility used to fund the acquisitions. 2016 Acquisitions Reach On May 24, 2016, the Company acquired 100% of the outstanding stock of Reach Technology Inc. (“Reach”), a Fremont, California-based provider of embedded touch screen technology solutions for OEMs in the medical and advanced industrial markets, for a total purchase price of $9.4 million. The Company expects that the addition of Reach will enable the Company to enhance its value proposition with medical OEM customers by adding Reach’s high-performance touch screen solutions to its product offerings. The final purchase price allocation is as follows (in thousands): Amount Cash $ 238 Accounts receivable 991 Inventory 1,611 Prepaid expenses and other current assets 12 Intangible assets 3,953 Goodwill 4,715 Total assets acquired 11,520 Accounts payable 280 Other liabilities 148 Deferred tax liabilities 1,474 Total liabilities assumed 1,902 Total assets acquired, net of liabilities assumed 9,618 Less: cash acquired 238 Total purchase price, net of cash acquired $ 9,380 The fair value of intangible assets is comprised of the following (dollar amounts in thousands): Weighted Average Estimated Fair Amortization Value Period Customer relationships $ 2,770 15 years Developed technology 500 7 years Trademarks and trade names 258 10 years Backlog 425 1 year Total $ 3,953 The purchase price allocation resulted in $4.7 million of goodwill and $4.0 million of identifiable intangible assets, none of which is expected to be deductible for tax purposes. Intangible assets are being amortized over their weighted average useful lives primarily based upon the pattern in which anticipated economic benefits from such assets are expected to be realized. The goodwill recorded represents the anticipated incremental value of future cash flow potential attributable to: (i) Reach’s ability to grow their business with existing and new customers, including leveraging the Company’s customer base, and (ii) cost improvements due to scale and more efficient operations. The operating results of Reach were included in the Company’s results of operations beginning on May 24, 2016. Reach is included in the Company’s Vision reportable segment. 2015 Acquisitions Skyetek On December 18, 2015, the Company acquired all assets and certain liabilities of Skyetek Inc. (“Skyetek”), a Denver, Colorado-based provider of embedded and standalone RFID solutions for medical OEMs, for a total purchase price of $2.8 million. The purchase price includes $2.6 million in cash paid for the acquisition and $0.2 million in estimated fair value of future contingent consideration payable upon the achievement of certain sales order commitment targets from October 2015 through June 2017. Lincoln Laser On November 9, 2015, the Company acquired certain assets and liabilities of Lincoln Laser Company (“Lincoln Laser”), a Phoenix, Arizona-based provider of ultrafast precision polygon scanners and other optical scanning solutions for the medical, food processing, and advanced industrial markets, for a total purchase price of $12.1 million. This total purchase price includes $9.8 million in cash paid for the acquisition and $2.3 million in estimated fair value of future contingent consideration payable upon the achievement of certain revenue targets for fiscal year 2016. The undiscounted range of the contingent consideration under the purchase and sale agreement was zero to $6.0 million. The actual contingent consideration payment was $1.4 million, which was paid during the first quarter of 2017. Lincoln Laser specializes in ultrafast scanning solutions, leveraging their expertise in polygon scanner design and electro-optic subsystems. Applimotion On February 19, 2015, the Company acquired 100% of the outstanding stock of Applimotion Inc. (“Applimotion”), a Loomis, California based provider of advanced precision motor and motion control technology to OEM customers in the medical and advanced industrial markets, for a total purchase price of $14.0 million. This total purchase price includes $13.0 million in cash paid for the acquisition and $1.0 million in estimated fair value of future contingent considerations payable upon the achievement of certain revenue targets for the fiscal years 2015 to 2017. The undiscounted range of contingent considerations was zero to $4.0 million. Based on Applimotion revenue performance for 2015 and 2016, the Company paid $1.2 million in contingent consideration during the first quarter of 2017. Based on revenue performance for 2016 and 2017, the Company paid $2.8 million in contingent consideration in January 2018. Applimotion specializes in motor applications that require highly precise and dynamic motion control. The acquisition enhances our strategic position in precision motion control by enabling us to offer a broader range of motion control technologies and integrated solutions. The final purchase price for Skyetek, Lincoln Laser and Applimotion was allocated as follows (in thousands): Amount Cash $ 331 Accounts receivable 3,166 Inventory 3,544 Prepaid expenses and other current assets 148 Property, plant and equipment 3,220 Intangible assets 11,370 Goodwill 12,668 Other assets 10 Total assets acquired 34,457 Accounts payable 1,681 Other liabilities 1,197 Deferred tax liabilities 2,308 Total liabilities assumed 5,186 Total assets acquired, net of liabilities assumed 29,271 Less: cash acquired 331 Total purchase price, net of cash acquired 28,940 Less: contingent consideration 3,459 Net cash used for acquisition of businesses $ 25,481 The fair value of intangible assets for Skyetek, Lincoln Laser and Applimotion is comprised of the following (dollar amounts in thousands): Weighted Average Estimated Fair Amortization Value Period Developed technologies $ 4,993 10 years Customer relationships 4,266 12 years Trademarks and trade names 593 9 years Non-compete covenant 684 4 years Backlog 834 1 year Total $ 11,370 The purchase price allocation resulted in $12.7 million of goodwill and $11.4 million of identifiable intangible assets, $10.3 million of which is expected to be deductible for tax purposes. Intangible assets are being amortized over their weighted average useful lives primarily based upon the pattern in which anticipated economic benefits from such assets are expected to be realized. The goodwill recorded represents the anticipated incremental value of future cash flow potential attributable to: (i) the ability to develop and market new products and technologies; (ii) the ability to develop relationships with new customers; and (iii) expected sales synergies from cross-selling current and future product offerings of Skyetek, Lincoln Laser, Applimotion and the Company to OEM customers. Acquisition Costs The Company recognized acquisition costs of $4.4 million, $0.2 million and $0.9 million in the years ended December 31, 2017, 2016 and 2015, respectively, related to the acquisitions of WOM, Laser Quantum, ThingMagic, Reach, Skyetek, Lincoln Laser, and Applimotion. These amounts were included in restructuring, acquisition and divestiture related costs in the consolidated statements of operations. |
Discontinued Operations and Div
Discontinued Operations and Divestitures | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Discontinued Operations and Divestitures | 4. Discontinued Operations and Divestitures Divestitures In April 2015, the Company completed the sale of certain assets and liabilities of the JK Lasers business, previously included in the Photonics reportable segment, for approximately $29.6 million in cash, net of final working capital adjustments and transactions costs. The Company recognized a pre-tax gain on sale of $19.6 million in the consolidated statement of operations during the year ended December 31, 2015. The JK Lasers business divestiture did not qualify for discontinued operations accounting treatment. Discontinued Operations In June 2015, the Company finalized an agreement to divest its 50% owned joint venture (the “India JV”) and recorded a pre-tax loss of less than $0.1 million in operating loss from discontinued operations, net of tax in the consolidated statement of operations during the year ended December 31, 2015. The India JV was reported as discontinued operations in the Company’s consolidated financial statements because it was part of the Scientific Lasers business that the Company divested in July 2014. All assets, liabilities, accumulated other comprehensive income and non-controlling interest of the India JV were derecognized as of the date of the agreement. In July 2014, the Company completed the sale of certain assets and liabilities of the Scientific Lasers business, operating under the Continuum and Quantronix brand names, for approximately $6.5 million, net of working capital adjustments. In accordance with the purchase and sale agreement, $1.5 million of the sales proceeds were held in escrow until January 2016. In January 2016, the $1.5 million escrow was released to the Company in full and is reported as cash flow from investing activities of discontinued operations. The following table presents the operating results which are reported as discontinued operations in the Company’s consolidated statements of operations (in thousands): Year Ended December 31, 2015 Loss from discontinued operations, before income tax $ (13 ) Loss from discontinued operations, net of tax $ (13 ) |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 5. Accumulated Other Comprehensive Income (Loss) Comprehensive income (loss) is defined as net income (loss) and other changes in stockholders’ equity that do not represent transactions with stockholders or in the Company’s stock. Changes in accumulated other comprehensive income (loss) is as follows (in thousands): Total Accumulated Other Cumulative Pension Comprehensive Translation Liability Income (Loss) Adjustments Adjustments Balance at December 31, 2014 $ (16,456 ) $ (5,615 ) $ (10,841 ) Other comprehensive income (loss) (3,249 ) (4,083 ) 834 Amounts reclassified from accumulated other comprehensive income (loss) (1) 875 — 875 Balance at December 31, 2015 $ (18,830 ) $ (9,698 ) $ (9,132 ) Other comprehensive loss (9,611 ) (7,524 ) (2,087 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) 726 — 726 Balance at December 31, 2016 $ (27,715 ) $ (17,222 ) $ (10,493 ) Other comprehensive income (loss) 8,790 8,909 (119 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) 1,045 — 1,045 Balance at December 31, 2017 $ (17,880 ) $ (8,313 ) $ (9,567 ) (1) The amounts reclassified from accumulated other comprehensive income (loss) were included in selling, general and administrative expenses in the consolidated statements of operations. |
Goodwill, Intangible Assets and
Goodwill, Intangible Assets and Impairment Charges | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill, Intangible Assets and Impairment Charges | 6. Goodwill, Intangible Assets and Impairment Charges Goodwill The following table summarizes changes in goodwill during the year ended December 31, 2017 (in thousands): December 31, 2017 Balance at beginning of year $ 108,128 Goodwill acquired from Laser Quantum acquisition 31,168 Goodwill acquired from ThingMagic acquisition 9,929 Goodwill acquired from WOM acquisition 55,632 Effect of foreign exchange rate changes 6,131 Balance at end of year $ 210,988 Goodwill acquired from the Laser Quantum acquisition is reflected in the Photonics segment. Goodwill acquired from the WOM and ThingMagic acquisitions is reflected in the Vision segment. Goodwill by reportable segment as of December 31, 2017 is as follows (in thousands): Reportable Segment Photonics Vision Precision Motion Total Goodwill $ 170,818 $ 157,436 $ 33,963 $ 362,217 Accumulated impairment of goodwill (102,461 ) (31,722 ) (17,046 ) (151,229 ) Total $ 68,357 $ 125,714 $ 16,917 $ 210,988 Goodwill by reportable segment as of December 31, 2016 is as follows (in thousands): Reportable Segment Photonics Vision Precision Motion Total Goodwill $ 136,278 $ 89,116 $ 33,963 $ 259,357 Accumulated impairment of goodwill (102,461 ) (31,722 ) (17,046 ) (151,229 ) Total $ 33,817 $ 57,394 $ 16,917 $ 108,128 Intangible Assets Intangible assets as of December 31, 2017 and 2016, respectively, are summarized as follows (dollar amounts in thousands): December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Life (Years) Amortizable intangible assets: Patents and acquired technologies $ 130,890 $ (77,295 ) $ 53,595 10.2 Customer relationships 131,809 (52,015 ) 79,794 12.3 Customer backlog 2,524 (2,284 ) 240 0.8 Non-compete covenant 2,514 (1,956 ) 558 0.9 Trademarks and trade names 15,708 (7,874 ) 7,834 9.7 Amortizable intangible assets 283,445 (141,424 ) 142,021 11.3 Non-amortizable intangible assets: Trade names 13,027 — 13,027 Total $ 296,472 $ (141,424 ) $ 155,048 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Life (Years) Amortizable intangible assets: Patents and acquired technologies $ 84,742 $ (67,902 ) $ 16,840 7.6 Customer relationships 69,554 (42,934 ) 26,620 12.9 Customer backlog 622 (540 ) 82 0.9 Non-compete covenant 2,514 (1,419 ) 1,095 2.0 Trademarks and trade names 10,709 (6,630 ) 4,079 8.3 Amortizable intangible assets 168,141 (119,425 ) 48,716 10.2 Non-amortizable intangible assets: Trade names 13,027 — 13,027 Total $ 181,168 $ (119,425 ) $ 61,743 All definite-lived intangible assets are amortized either on a straight-line basis or an economic benefit basis over their remaining estimated useful life. Amortization expense for patents and acquired technologies is included in cost of revenue in the accompanying consolidated statements of operations. Amortization expense for customer relationships and definite-lived trademarks, trade names and other intangibles is included in operating expenses in the accompanying consolidated statements of operations. Amortization expense is as follows (in thousands): Year Ended December 31, 2017 2016 2015 Amortization expense – cost of revenue $ 8,824 $ 4,164 $ 4,712 Amortization expense – operating expenses 12,096 8,251 7,611 Total amortization expense $ 20,920 $ 12,415 $ 12,323 Estimated future amortization expense for each of the five succeeding years and thereafter is as follows (in thousands): Year Ending December 31, Cost of Revenue Operating Expenses Total 2018 $ 9,742 $ 14,584 $ 24,326 2019 8,877 13,511 22,388 2020 7,980 11,051 19,031 2021 7,088 10,238 17,326 2022 5,682 8,586 14,268 Thereafter 14,226 30,456 44,682 Total $ 53,595 $ 88,426 $ 142,021 Impairment Charges The Company performed the most recent annual goodwill and indefinite-lived intangible asset impairment test as of the beginning of the second quarter of 2017 using a Step 0 assessment, noting no impairment. The Company’s assessment included reviewing factors such as financial performance, macroeconomic conditions, industry and market considerations, and the fair value of each reporting unit at the last valuation date, which exceeded the carrying value by at least 20%. The Company did not have any goodwill or indefinite-lived intangible asset impairment charges during 2017, 2016 or 2015. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 7. Fair Value Measurements ASC 820, “Fair Value Measurement,” establishes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the third is considered unobservable: Level 1: Quoted prices for identical assets or liabilities in active markets which the Company can access. Level 2: Observable inputs other than those described in Level 1. Level 3: Unobservable inputs. Cash Equivalents The Company’s cash equivalents are highly liquid investments with original maturities of three months of less, which represent the only asset the Company measures at fair value on a recurring basis. The Company determines the fair value of our cash equivalents using a market approach based on quoted prices in active markets. The fair values of cash, accounts receivable, income taxes receivable, accounts payable, income taxes payable and accrued expenses and other current liabilities approximate their carrying values because of their short-term nature. Foreign Currency Contracts The Company addresses market risks from changes in foreign currency exchange rates through a risk management program that includes the use of derivative financial instruments to mitigate certain balance sheet foreign currency transaction exposures. The Company uses foreign currency forward contracts as a part of its strategy to manage exposures related to foreign currency denominated monetary assets and liabilities. Contingent Consideration On December 14, 2016, the Company acquired certain video signal processing and management technologies used in medical visualization solutions. Under the purchase and sale agreement, the owners are eligible to receive contingent consideration based on the achievement of certain revenue targets from 2018 to 2021. The undiscounted range of possible contingent consideration is zero to €5.5 million ($6.6 million). If such targets are achieved, the contingent consideration would be payable in cash in four installments from 2019 to 2022. As the acquired assets did not meet the definition of a business, the fair value of the contingent consideration is recognized when probable and estimable and is capitalized as part of the cost of the acquired assets. In December 2017, the Company recorded an estimated fair value of $1.3 million in contingent consideration, which is reported as a long-term liability in other liabilities on the consolidated balance sheet as of December 31, 2017. On December 18, 2015, the Company acquired all assets and certain liabilities of Skyetek Inc. (“Skyetek”). Under the purchase and sale agreement for the Skyetek acquisition, the owners of Skyetek were eligible to receive contingent consideration based on the achievement of certain sales order commitment targets from October 2015 through June 2017. The undiscounted range of possible contingent consideration was zero to $0.3 million. If such targets were achieved, the contingent consideration would be payable in 2017. The Company recognized an estimated fair value of $0.2 million as part of the purchase price as of the acquisition date. Based on the actual sales order commitments through June 2017, the Company paid $0.1 million as the final Skyetek contingent consideration in the third quarter of 2017. On November 11, 2015, the Company acquired Lincoln Laser Company (“Lincoln Laser”). Under the purchase and sale agreement for the Lincoln Laser acquisition, the shareholders of Lincoln Laser were eligible to receive contingent consideration based on the achievement of certain revenue targets for fiscal year 2016. The estimated fair value of the contingent consideration of $2.3 million was determined based on the Monte Carlo valuation method and was recorded as part of the purchase price as of the acquisition date. Based on Lincoln Laser’s fiscal year 2016 revenue results, the fair value of the contingent consideration was adjusted to $1.4 million as of December 31, 2016. The Company paid $1.4 million as final settlement of the contingent consideration in the first quarter of 2017. On February 19, 2015, the Company acquired Applimotion Inc. (“Applimotion”). Under the purchase and sale agreement for the Applimotion acquisition, the shareholders of Applimotion are eligible to receive contingent consideration based on the achievement of certain revenue targets for fiscal years 2015 to 2017. The undiscounted range of contingent considerations is zero to $4.0 million. If such targets are achieved, the contingent consideration will be payable in cash in two installments in 2017 and 2018, respectively. The estimated fair value of the contingent consideration of $1.0 million was determined based on the Monte Carlo valuation method and was recorded as part of the purchase price as of the acquisition date. Subsequent changes in the estimated fair value of this contingent liability are recorded in the consolidated statement of operations in restructuring, acquisition and divestiture related costs until the liability is fully settled. Under the Monte Carlo valuation method, the fair value of the contingent consideration for Applimotion was $3.6 million as of December 31, 2016. Based on Applimotion’s revenue performance for 2015 and 2016, the Company paid $1.2 million in contingent consideration in the first quarter of 2017. Based on Applimotion’s revenue performance for 2016 and 2017, the fair value for the remaining contingent consideration for Applimotion was adjusted to $2.8 million, which is reported as a current liability in accrued expenses and other current liabilities on the consolidated balance sheet as of December 31, 2017. The Company paid $2.8 million as the final Applimotion contingent consideration payment in January 2018. The following table summarizes the fair values of the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 (in thousands): Quoted Prices in Significant Other Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) Assets Cash equivalents $ 2,665 $ 2,665 $ — $ — Prepaid expenses and other current assets: Foreign currency forward contracts 150 — 150 — $ 2,815 $ 2,665 $ 150 $ — Liabilities Accrued expenses and other current liabilities: Contingent consideration - Current $ 2,800 $ — $ — $ 2,800 Foreign currency forward contracts (1) — — — — Other liabilities: Contingent consideration - Long-term 1,304 — — 1,304 $ 4,104 $ — $ — $ 4,104 (1) The unrealized loss from foreign currency forward contracts was nominal as of December 31, 2017. The following table summarizes the fair values of the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2016 (in thousands): Quoted Prices in Significant Other Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) Assets Cash equivalents $ 9,569 $ 9,569 $ — $ — Liabilities Accrued expenses and other current liabilities: Contingent consideration - Current $ 2,775 $ — $ — $ 2,775 Other liabilities: Contingent consideration - Long-term 2,381 — — 2,381 $ 5,156 $ — $ — $ 5,156 During the years ended December 31, 2017 and 2016, there were no transfers between fair value levels. Changes in the fair value of our Level 3 contingent consideration for the year ended December 31, 2017 was as follows (in thousands): Contingent Consideration Balance at December 31, 2016 $ 5,156 Payments of contingent consideration (2,781 ) Fair value adjustments 1,729 Balance at December 31, 2017 $ 4,104 As of December 31, 2017, the significant unobservable inputs used in the fair value measurement of the Company’s contingent consideration were historical revenues, projected revenues and a discount rate. Increases or decreases in the unobservable inputs would result in a higher or lower fair value measurement. Except for the assets and liabilities acquired from the WOM, Laser Quantum and ThingMagic acquisitions, as disclosed in Note 3, there were no assets and liabilities that were measured at fair value on a non-recurring basis during 2017. See Note 11 for discussion of the estimated fair value of the Company’s outstanding debt and Note 13 for discussion of the estimated fair value of the Company’s pension plan assets. |
Foreign Currency Contracts
Foreign Currency Contracts | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Foreign Currency Contracts | 8. Foreign Currency Contracts The Company addresses market risks from changes in foreign currency exchange rates through a risk management program that includes the use of derivative financial instruments to mitigate certain foreign currency transaction exposures from future settlement of non-functional currency monetary assets and liabilities as of the end of a period. The Company does not enter into derivative transactions for speculative purposes. Gains and losses on derivative financial instruments substantially offset losses and gains on underlying hedged exposures. Furthermore, the Company manages its exposure to counterparty risk on derivative instruments by entering into contracts with a diversified group of major financial institutions and by actively monitoring outstanding positions. Beginning in September 2017, the Company commenced a foreign currency hedging program through the use of forward contracts as a part of its strategy to limit its exposures related to monetary assets and liabilities denominated in currencies other than the functional currency. These forward contracts are not designated as cash flow, fair value or net investment hedges. Changes in the fair value of these forward contracts are recognized in income from continuing operations. As of December 31, 2017, the notional amount and fair value of the Company’s foreign currency forward contracts was $17.9 million and a net gain of $0.2 million, respectively. For the year ended December 31, 2017, the Company recognized an aggregate net gain of $0.2 million, which is included in foreign exchange transaction gains (losses) in the consolidated statement of operations. |
Earnings (Loss) per Common Shar
Earnings (Loss) per Common Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) per Common Share | 9. Earnings (Loss) per Common Share Basic earnings (loss) per common share is computed by dividing net income attributable to Novanta Inc. after adjustment of redeemable noncontrolling interest to estimated redemption value by the weighted average number of common shares outstanding during the year. The Company recognizes changes in the redeemable noncontrolling interest redemption value by adjusting the carrying amount of the redeemable noncontrolling interest as of the end of the period to the higher of: (i) the estimated redemption value assuming the end of the period is also the redemption date or (ii) the carrying value without any redemption value adjustments. Such adjustments are recorded in retained earnings in stockholders’ equity instead of net income attributable to Novanta Inc. For both basic and diluted earnings (loss) per common share, such redemption value adjustments are included in the calculation of the numerator. For diluted earnings (loss) per common share, the denominator also includes the dilutive effect of outstanding restricted stock units, stock options and total shareholder return performance restricted stock units determined using the treasury stock method. Dilutive effects of contingently issuable shares are included in the weighted average dilutive share calculation using the treasury method when the contingencies have been resolved. For years in which net losses are generated, the dilutive potential common shares are excluded from the calculation of diluted earnings per share as the effect would be anti-dilutive. The following table sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except per share amounts): Year Ended December 31, 2017 2016 2015 Numerators: Income from continuing operations $ 62,307 $ 22,003 $ 35,628 Less: Net income attributable to noncontrolling interest (2,256 ) — — Income from continuing operations attributable to Novanta Inc. 60,051 22,003 35,628 Less: Adjustment of redeemable noncontrolling interest to estimated redemption value (see Note 17) (20,244 ) — — Income from continuing operations attributable to Novanta Inc. after adjustment of redeemable noncontrolling interest to estimated redemption value 39,807 22,003 35,628 Loss from discontinued operations — — (13 ) Net income attributable to Novanta Inc. after adjustment of redeemable noncontrolling interest to estimated redemption value $ 39,807 $ 22,003 $ 35,615 Denominators: Weighted average common shares outstanding— basic 34,817 34,694 34,579 Dilutive potential common shares 463 220 248 Weighted average common shares outstanding— diluted 35,280 34,914 34,827 Antidilutive common shares excluded from above — 85 — Basic Earnings (Loss) per Common Share: From continuing operations $ 1.14 $ 0.63 $ 1.03 From discontinued operations $ — $ — $ (0.00 ) Basic earnings (loss) per share attributable to Novanta Inc. $ 1.14 $ 0.63 $ 1.03 Diluted Earnings (Loss) per Common Share: From continuing operations $ 1.13 $ 0.63 $ 1.02 From discontinued operations $ — $ — $ (0.00 ) Diluted earnings (loss) per share attributable to Novanta Inc. $ 1.13 $ 0.63 $ 1.02 Common Stock Repurchases In October 2013, the Company’s Board of Directors authorized a share repurchase plan under which the Company may repurchase outstanding shares of the Company’s common stock up to an aggregate amount of $10.0 million. The shares may be repurchased from time to time, at the Company’s discretion, based on ongoing assessment of the capital needs of the business, the market price of the Company’s common stock, and general market conditions. Shares may also be repurchased through an accelerated stock purchase agreement, on the open market or in privately negotiated transactions in accordance with applicable federal securities laws. Repurchases may be made under certain SEC regulations, which would permit common stock to be repurchased when the Company would otherwise be prohibited from doing so under insider trading laws. The share repurchase plan does not obligate the Company to acquire any particular amount of common stock. No time limit was set for the completion of the share repurchase program, and the program may be suspended or discontinued at any time. The Company expects to fund the share repurchases through cash on hand and future cash generated from operations. During 2017, the Company repurchased 14 thousand shares in the open market for an aggregate purchase price of $0.4 million at an average price of $26.41 per share. As of December 31, 2017, the Company had repurchased an aggregate of 296 thousand shares for an aggregate purchase price of $4.2 million at an average price of $14.05 per share. |
Supplementary Balance Sheet Inf
Supplementary Balance Sheet Information | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Supplementary Balance Sheet Information | 10. Supplementary Balance Sheet Information The following tables provide the details of selected balance sheet items as of the dates indicated (in thousands): Inventories December 31, 2017 2016 Raw materials $ 57,277 $ 39,822 Work-in-process 14,847 8,012 Finished goods 16,443 9,511 Demo and consigned inventory 2,711 2,400 Total inventories $ 91,278 $ 59,745 Property, Plant and Equipment, Net December 31, 2017 2016 Cost: Land, buildings and improvements $ 53,055 $ 38,384 Machinery and equipment 74,122 52,136 Total cost 127,177 90,520 Accumulated depreciation (65,459 ) (55,099 ) Property, plant and equipment, net $ 61,718 $ 35,421 As of December 31, 2017 and 2016, the Company had gross assets under capital lease of $13.6 million and $13.2 million, respectively. The assets acquired under capital leases are included in land, buildings and improvements and machinery and equipment and the related amortization expense is included in depreciation expense. The Company also capitalized software development costs of $2.0 million, $2.3 million and $1.9 million in 2017, 2016 and 2015, respectively, in accordance with the guidance in ASC 350-40, “Internal-Use Software.” The following table summarizes depreciation expense on property, plant and equipment, including demo units and assets under capital leases (in thousands): Year Ended December 31, 2017 2016 2015 Depreciation expense $ 9,838 $ 8,558 $ 7,873 The following table summarizes total accumulated depreciation on assets under capital leases as of the dates indicated (in thousands): December 31, 2017 2016 Accumulated depreciation on assets under capital leases $ 6,097 $ 4,950 Accrued Expenses and Other Current Liabilities The following table summarizes accrued expenses and other current liabilities as of the dates indicated (in thousands): December 31, 2017 2016 Accrued compensation and benefits $ 17,348 $ 9,647 Accrued warranty 4,835 3,142 Accrued restructuring 440 1,371 Accrued professional services 1,469 1,237 Accrued contingent considerations 2,800 2,775 Customer deposits 3,634 1,164 Other 12,788 7,612 Total $ 43,314 $ 26,948 Accrued Warranty The following table summarizes accrued warranty activities for the periods indicated (in thousands): Year Ended December 31, 2017 2016 2015 Balance at beginning of year $ 3,142 $ 3,335 $ 3,044 Provision charged to cost of revenue 3,169 1,673 2,025 Warranty liabilities acquired from acquisitions 1,307 23 132 Use of provision (2,857 ) (1,849 ) (1,454 ) Divestiture of JK Lasers — — (389 ) Foreign currency exchange rate changes 74 (40 ) (23 ) Balance at end of year $ 4,835 $ 3,142 $ 3,335 Other Long Term Liabilities The following table summarizes other long term liabilities as of the dates indicated (in thousands ): December 31, 2017 2016 Capital lease obligations $ 7,947 $ 8,111 Accrued pension liabilities 3,853 5,957 Accrued contingent considerations 1,304 2,381 Other 2,037 2,264 Total $ 15,141 $ 18,713 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | 11. Debt Debt consisted of the following (in thousands): December 31, 2017 2016 Senior Credit Facilities – term loan $ 9,200 $ 7,500 Less: unamortized debt issuance costs (81 ) (134 ) Total current portion of long-term debt $ 9,119 $ 7,366 Senior Credit Facilities – term loan $ 79,125 $ 63,750 Senior Credit Facilities – revolving credit facility 149,453 10,000 Less: unamortized debt issuance costs (3,078 ) (3,196 ) Total long-term debt $ 225,500 $ 70,554 Total Senior Credit Facilities $ 234,619 $ 77,920 Senior Credit Facilities On May 19, 2016, the Company entered into the second amended and restated credit agreement (the “Second Amended and Restated Credit Agreement”) with new and existing lenders for an aggregate credit facility of $300.0 million, consisting of a $75.0 million, 5-year term loan facility and a $225.0 million, 5-year revolving credit facility (collectively, the “Senior Credit Facilities”). The Senior Credit Facilities mature in May 2021. The Second Amended and Restated Credit Agreement amended and restated the amended and restated credit agreement dated December 27, 2012. The borrowings outstanding under the Senior Credit Facilities bear interest at rates based on (a) the Eurocurrency Rate, as defined in the Second Amended and Restated Credit Agreement, plus a rate ranging from 1.75% to 2.75% per annum or (b) the Base Rate, as defined in the Second Amended and Restated Credit Agreement, plus a rate ranging from 0.75% to 1.75% per annum, in each case based upon the Company’s consolidated leverage ratio. The Company is also required to pay a commitment fee on unused commitments under the revolving credit facility ranging between 0.25% and 0.45% per annum, which is based upon the Company’s consolidated leverage ratio. The Second Amended and Restated Credit Agreement contains various customary representations, warranties and covenants applicable to the Company and its subsidiaries, including: (i) limitations on restricted payments, including dividend payments and stock repurchases, provided that the Company and its subsidiaries may repurchase their equity interests, so long as immediately after giving effect to the repurchase, the Company’s consolidated leverage ratio is no more than 2.50; (ii) limitations on fundamental changes involving the Company and its subsidiaries; (iii) limitations on the disposition of assets; and (iv) limitations on indebtedness, investments, and liens. The Second Amended and Restated Credit Agreement also requires the Company to satisfy certain financial covenants, such as maintaining a minimum consolidated fixed charge coverage ratio of 1.50 and a maximum consolidated leverage ratio of 3.00. The maximum consolidated leverage ratio will increase to 3.50 for four consecutive quarters following an acquisition with an aggregate consideration greater than or equal to $50.0 million. On August 1, 2017, the Company entered into an amendment (the “Third Amendment”) to the Second Amended and Restated Credit Agreement. The Third Amendment increased the borrowing limit under the revolving credit facility from $225 million to $325 million and reset the uncommitted accordion feature to $125 million for potential future expansion. Additionally, the Third Amendment increased the term loan balance from $65.6 million to $90.6 million. Under the Third Amendment, the Company is required to pay quarterly scheduled principal repayments of $2.3 million beginning in October 2017, with the final installment of $56.1 million due upon maturity in May 2021. Borrowings under the revolving credit facility may be repaid at any time through May 2021, the date of maturity date of the Senior Credit Facilities. The Company may voluntarily prepay loans or reduce commitments under the Senior Credit Facilities, in whole or in part, without premium or penalty, subject to certain minimum principal amounts. On February 26, 2018, the Company entered into a fourth amendment (the “Fourth Amendment”) to the Second Amended and Restated Credit Agreement. The Fourth Amendment increases the maximum permitted consolidated leverage ratio from 3.00 to 3.50, increases the maximum consolidated leverage ratio for permitted acquisitions and stock repurchases from 2.50 to 3.00, increases the maximum permitted consolidated leverage ratio for a designated acquisition from 3.00 to 3.50, and increases the maximum leverage ratio for four consecutive quarters following a designated acquisition from 3.50 to 4.00. Certain other technical changes were made to the Second Amended and Restated Credit Agreement as a result of the Fourth Amendment and are not considered material. As of December 31, 2017, the outstanding principal under the Company’s term loan facility is scheduled to be repaid as follows (in thousands): Principal Amount 2018 $ 9,200 2019 9,200 2020 9,200 2021 60,725 Total debt repayments $ 88,325 The Company may be required to prepay outstanding loans under the Second Amended and Restated Credit Agreement with the net proceeds of certain asset dispositions and incurrences of certain debt. At the election of the Company, and so long as no default shall have occurred, the Company may reinvest all, or any portion of, the net proceeds from such asset dispositions or incurrences of debt within a year. As of December 31, 2017, the Company had $175.5 million available to be drawn under the revolving credit facility. Excluding commitment fees, the weighted average interest rate for the Senior Credit Facilities was approximately 3.06% as of December 31, 2017. The commitment fee rate for the unused commitments under the revolving credit facility was approximately 0.4% as of December 31, 2017. Guarantees The Senior Credit Facilities is guaranteed by the Company, JADAK LLC, NDS Surgical Imaging LLC and Novanta Technologies UK Limited (collectively, “Guarantors”). Each Guarantor, jointly and severally, unconditionally guarantees the due and punctual payment of the principal, interest and fees under the Senior Credit Facilities, when due and payable, whether at maturity, by required prepayment, by acceleration or otherwise. In addition, Guarantors guarantee the due and punctual payment, fees and interest on the overdue principal of the Senior Credit Facilities and the due and punctual performance of all obligations of the Company in accordance with the terms of the Second Amended and Restated Credit Agreement. Furthermore, each Guarantor, jointly and severally, unconditionally guarantees that in the event of any extension, renewal, amendment, refinancing or modification of any of the Senior Credit Facilities, amounts due will be promptly paid in full when due in accordance with the terms of the extension or renewal, at stated maturity, by acceleration or otherwise. The obligations of each Guarantor are limited to the maximum amount, after giving effect to all other contingent and fixed liabilities or any collections from, or payments made by or on behalf of, any other Guarantor. Each Guarantor that makes a payment or distribution under a Guarantee is entitled to a contribution from each other Guarantor of its pro rata share based on the adjusted net assets of each Guarantor. If at any time any payment of any of the obligations of the Guarantors is rescinded or must otherwise be returned upon the insolvency, bankruptcy or reorganization of the Company, a Guarantor or otherwise, the Guarantees will continue to be effective or be reinstated, as the case may be, as though such payment had not been made. Each Guarantor may be released from its obligations under its respective Guarantee and its obligations under the Second Amended and Restated Credit Agreement upon the occurrence of certain events, including, but not limited to: (i) the Guarantor ceasing to be a subsidiary; and (ii) payment in full of the principal and accrued and unpaid interest on the Senior Credit Facilities and all other obligations. The maximum potential amount of future payments the Guarantors could be required to make under the Guarantee is the principal amount of the Senior Credit Facilities plus all accrued and unpaid interest thereon. However, as of December 31, 2017, the Guarantors are not expected to be required to perform under the Guarantee. Liens The Company’s obligations under the Senior Credit Facilities are secured, on a senior basis, by a lien on substantially all of the assets of the Company and certain United States (“U.S.”), United Kingdom (“U.K.”) and German subsidiaries and guaranteed by the Company and these subsidiaries. The Second Amended and Restated Credit Agreement also contains customary events of default. Deferred Financing Costs In connection with the execution of the Third Amendment, the Company capitalized an additional $0.7 million deferred financing costs. The Company allocated these costs between the term loan and the revolving credit facility and is amortizing the costs on a straight-line basis over the term of the Senior Credit Facilities. Previously unamortized deferred financing costs related to the Second Amended and Restated Credit Agreement dated May 19, 2016 and amended and restated credit agreement dated December 27, 2012 will continue to be amortized. Non-cash interest expense related to the amortization of the deferred financing costs was $0.8 million, $0.9 million and $0.9 million in 2017, 2016 and 2015, respectively. Unamortized deferred financing costs are presented as a reduction to the debt balances on the consolidated balance sheet as of December 31, 2017. Fair Value of Debt As of December 31, 2017 and 2016, the outstanding balance of the Company’s debt approximated its fair value based on current rates available to the Company for debt of the same maturities. The fair value of the Company’s debt is classified as Level 2 under the fair value hierarchy. |
Capital Stock and Share-Based C
Capital Stock and Share-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Capital Stock and Share-Based Compensation | 12. Capital Stock and Share-Based Compensation Capital Stock The authorized capital of the Company consists of an unlimited number of common shares without nominal or par value. Holders of common shares are entitled to one vote per share. Holders of common shares are entitled to receive dividends, if and when declared by the Board of Directors, and to share ratably in its assets legally available for distribution to the stockholders in the event of liquidation. Holders of common shares have no redemption or conversion rights. 2010 Incentive Award Plan In November 2010, the Company’s stockholders approved the 2010 Incentive Award Plan (the “2010 Incentive Plan”) under which the Company may grant share-based compensation awards to employees, consultants and directors. In May 2014, the Company’s stockholders approved the amended and restated 2010 Incentive Award Plan and, in July 2016, the Company approved a further amended and restated 2010 Incentive Award Plan (as amended, the “Amended and Restated 2010 Incentive Plan”). The maximum number of shares which can be issued pursuant to the Amended and Restated 2010 Incentive Plan is 4,398,613, subject to adjustment as set forth in the Amended and Restated 2010 Incentive Plan. The Amended and Restated 2010 Incentive Plan provides for the grant of incentive stock options, non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights, deferred stock, deferred stock units, dividend equivalents, performance awards and stock payments (collectively referred to as “Awards”). The Amended and Restated 2010 Incentive Plan allows the Company to continue to grant Awards intended to constitute “performance-based compensation” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended, and includes certain provisions that reflect good corporate governance practices. The Amended and Restated 2010 Incentive Plan provides for specific limits on the number of shares with respect to Awards that may be granted to any person during any calendar year and the amount of cash that can be paid with respect to Awards to any one person during any calendar year. The Amended and Restated 2010 Incentive Plan will expire and no further Awards may be granted after April 9, 2024. As of December 31, 2017, there were 1,301,310 shares available for future awards under the Amended and Restated 2010 Incentive Plan. Shares subject to Awards that have expired, forfeited or settled in cash, or repurchased by the Company at the same price paid by the awardee may be added back to the number of shares available for grant under the Amended and Restated 2010 Incentive Plan and may be granted as new Awards. Notwithstanding the foregoing, the following shares will not be added back to the number of shares available for grant: (a) shares that are used to pay the exercise price for an option, (b) shares tendered or withheld to pay taxes with respect to any Award (other than options and stock appreciation rights) to the extent they exceed the number of shares with a fair market value equal to the tax liability based on minimum withholding rates, (c) shares tendered or withheld to pay taxes with respect to options and stock appreciation rights, (d) shares subject to a stock appreciation right that are not issued in connection with the stock settlement of the stock appreciation right on exercise thereof, and (e) shares purchased on the open market with the cash proceeds from the exercise of options. Shares issued to satisfy Awards under the Amended and Restated 2010 Incentive Plan may be previously authorized but unissued shares, treasury shares or shares repurchased on the open market. Share-Based Compensation Expense The table below summarizes share-based compensation expense recorded in income from continuing operations (in thousands): Year Ended December 31, 2017 2016 2015 Selling, general and administrative $ 5,065 $ 3,920 $ 3,960 Research and development and engineering 221 117 170 Cost of revenue 207 256 257 Restructuring, acquisition and divestiture related costs — — (322 ) Total share-based compensation expense $ 5,493 $ 4,293 $ 4,065 The expense recorded during each of the years ended December 31, 2017, 2016 and 2015 included $0.5 million related to deferred stock units granted to the members of the Company’s Board of Directors pursuant to the Company’s Amended and Restated 2010 Incentive Plan. As of December 31, 2017, the Company’s outstanding equity awards for which compensation expense will be recognized in the future consist of time-based restricted stock units, performance stock units, and stock options granted under the Amended and Restated 2010 Incentive Plan. The Company expects to record aggregate share-based compensation expense of $9.8 million, net of estimated forfeitures, subsequent to December 31, 2017, over a weighted average period of 2.61 years, for all outstanding equity awards. Restricted Stock Units and Deferred Stock Units The Company’s restricted stock units (“RSUs”) have generally been issued with vesting periods ranging from three years to five years and vest based solely on service conditions. Accordingly, the Company recognizes compensation expense on a straight-line basis over the requisite service period. The Company reduces the compensation expense by an estimated forfeiture rate which is based on anticipated forfeitures and actual experience. Deferred stock units (“DSUs”) are granted to the members of the Company’s Board of Directors. The compensation expense associated with the DSUs is recognized in full on the respective date of grant, as DSUs are fully vested and non-forfeitable upon grant. The table below summarizes activities relating to restricted and deferred stock units issued and outstanding under the Amended and Restated 2010 Incentive Plan during 2017: Restricted and Deferred Stock Units (in thousands) Weighted Average Grant Date Fair Value Weighted Average Remaining Vesting Period (in years) Aggregate Intrinsic Value (1) (in thousands) Unvested at December 31, 2016 635 $ 13.97 Granted 248 $ 25.62 Vested (224 ) $ 14.05 Forfeited (45 ) $ 18.18 Unvested at December 31, 2017 614 $ 18.35 1.86 years $ 30,721 Expected to vest as of December 31, 2017 589 $ 18.13 1.86 years $ 29,436 (1) The aggregate intrinsic value is calculated based on the fair value of $50.00 per share of the Company’s common stock on December 31, 2017 due to the fact that the restricted stock units carry a $0 purchase price. The total fair value of restricted stock units that vested in 2017 and deferred stock units that were granted and vested in 2017, based on the market price of the underlying stock on the day of vesting, was $6.0 million. Performance Stock Units The Company granted two types of performance-based stock awards to certain members of the executive management team: non-GAAP EPS performance-based restricted stock units (“EPS-PSUs”) and relative total shareholder return performance-based restricted stock units (“TSR-PSUs”). Both types of performance-based restricted stock units generally cliff vest on the first day following the end of the three-year performance period. The number of common shares to be issued upon settlement following vesting of the EPS-PSUs is determined based on the Company’s cumulative non-GAAP EPS over the three-year performance period against the target established by the Company’s Board of Directors at the time of grant and will be in the range of zero to 200% of the target number of shares. The Company recognizes compensation expense ratably over the performance period based on the number of shares that are deemed probable of vesting at the end of the three-year performance cycle. This probability assessment is performed quarterly and the cumulative effect of a change in the estimated compensation expense, if any, is recognized in the consolidated statement of operations in the period in which such determination is made. The number of common shares to be issued upon settlement following vesting of the TSR-PSUs is determined based on the relative market performance of the Company’s common stock compared to the Russell 2000 Index over the three-year performance period using a payout formula established by the Company’s Board of Directors at the time of grant and will be in the range of zero to 200% of the target number of shares. The Company recognizes the related compensation expense based on the fair value of the TSR-PSUs, determined using Monte-Carlo valuation model as of the grant date, on a straight-line basis from the grant date to the end of the three-year performance period. Compensation expense will not be affected by the number of TSR-PSUs that will actually vest at the end of the three-year performance period. The table below summarizes activities relating to performance-based stock awards issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during 2017: Performance Stock Units (1) (in thousands) Weighted Average Grant Date Fair Value Weighted Average Remaining Vesting Period (in years) Aggregate Intrinsic Value (2) (in thousands) Unvested at December 31, 2016 29 $ 14.13 Granted 60 $ 28.80 Vested — $ — Forfeited — $ — Unvested at December 31, 2017 89 $ 24.00 1.68 years $ 4,474 Expected to vest as of December 31, 2017 89 $ 24.00 1.68 years $ 4,474 (1) The unvested PSUs are shown in this table at target, except for the number of shares vested, which reflect the shares earned. As of December 31, 2017, the maximum number of PSUs available to be earned is approximately 179 thousand. (2) The aggregate intrinsic value is calculated based on the fair value of $50.00 per share of the Company’s common stock on December 31, 2017 due to the fact that the performance stock units carry a $0 purchase price. The fair value of the TSR-PSUs at the date of grant was estimated using the Monte-Carlo valuation model with the following assumptions: Year Ended December 31, 2017 Grant-date stock price $ 24.30 Expected volatility 28.6 % Risk-free interest rate 1.44 % Expected annual dividend yield — Weighted average fair value $ 33.31 Stock Options On March 30, 2016, the Company granted 193 thousand stock options to certain members of the executive management team to purchase common shares of the Company at a price equal to the closing market price of the Company’s common shares on the date of grant. The stock options vest ratably on the anniversary date of the grant date over a three-year period and expire on the tenth anniversary of the grant date. The fair value of stock options is estimated using the Black-Scholes valuation model. Key input assumptions used to estimate the fair value of stock options include the expected option term, the expected volatility of the Company’s common stock over the expected term of the options, the risk-free interest rate, and the expected dividend yield. The Company recognizes the compensation expense of stock options on a straight-line basis in the consolidated statement of operations over the vesting period. No stock options were granted or exercised during 2017. The following table shows stock options that were outstanding, exercisable and expected to vest as of December 31, 2017 and the related weighted average exercise price, weighted average remaining contractual term and aggregate intrinsic value: Number of Shares (In thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (1) (In thousands) Stock options outstanding 103 $ 14.13 8.25 years $ 3,690 Stock options exercisable 34 $ 14.13 8.25 years $ 1,230 Stock options expected to vest 103 $ 14.13 8.25 years $ 3,690 (1) The aggregate intrinsic value is calculated as the difference between the closing market price of $50.00 per share of the Company’s common stock on December 31, 2017 and the exercise price of the stock options. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | 13. Employee Benefit Plans Defined Benefit Plans The Company maintains a defined benefit pension plan in the United Kingdom (the “U.K. Plan”). The U.K. Plan was closed to new membership in 1997 and stopped accruing additional pension benefits for existing members in 2003. Benefits under the U.K. Plan were based on the employees’ years of service and compensation as of the date the plan was frozen in 2003, adjusted for inflation. The Company continues to fund the plan in sufficient amounts to cover current benefit payments as well as to fund a portion of the unfunded pension obligations based on periodic agreements with the trustees of the U.K. Plan. The net periodic pension cost consisted of the following components (in thousands): Year Ended December 31, 2017 2016 2015 Components of the net periodic pension cost: Interest cost $ 991 $ 1,232 $ 1,340 Expected return on plan assets (1,665 ) (1,566 ) (1,844 ) Amortization of actuarial losses 1,045 726 875 Net periodic pension cost $ 371 $ 392 $ 371 The actuarial assumptions used to compute the net periodic pension cost for the years ended December 31, 2017, 2016 and 2015, respectively, were as follows: Year Ended December 31, 2017 2016 2015 Weighted-average discount rate 2.6 % 3.8 % 3.5 % Weighted-average long-term rate of return on plan assets 5.2 % 5.3 % 5.6 % The actuarial assumptions used to compute the benefit obligations as of December 31, 2017 and 2016, respectively, were as follows: December 31, 2017 2016 Weighted-average discount rate 2.4 % 2.6 % Rate of inflation 2.9 % 3.0 % The discount rates used are derived from (AA) corporate bonds that have maturities approximating the terms of the related obligations. In estimating the expected return on plan assets, the Company considered the historical performance of the major asset classes held by the U.K. Plan and current forecasts of future rates of return for these asset classes. The following table provides a reconciliation of benefit obligations and plan assets of the U.K. Plan (in thousands): December 31, 2017 2016 Change in benefit obligation: Projected benefit obligation at beginning of year $ 37,261 $ 35,914 Interest cost 991 1,232 Actuarial (gains) losses (27 ) 7,425 Benefits paid (1,313 ) (809 ) Foreign currency exchange rate changes 3,417 (6,501 ) Projected benefit obligation at end of year $ 40,329 $ 37,261 Accumulated benefit obligation at end of year $ 40,329 $ 37,261 Change in plan assets: Fair value of plan assets at beginning of year $ 31,304 $ 32,374 Actual return on plan assets 2,605 4,522 Employer contributions 887 868 Benefits paid (1,313 ) (809 ) Foreign currency exchange rate changes 2,993 (5,651 ) Fair value of plan assets at end of year $ 36,476 $ 31,304 Funded status at end of year $ (3,853 ) $ (5,957 ) Amounts included in accumulated other comprehensive loss not yet recognized in net periodic pension cost: Net actuarial losses at beginning of year $ (11,697 ) $ (9,874 ) Net actuarial gains (losses) during the year 967 (4,469 ) Amounts reclassified from accumulated other comprehensive income to income before income taxes 1,045 726 Foreign currency exchange rate changes (808 ) 1,920 Net actuarial loss $ (10,493 ) $ (11,697 ) Amounts expected to be amortized from accumulated other comprehensive loss into net periodic pension cost over the next fiscal year consists of: Net actuarial loss $ 957 $ 1,148 The funded status of the U.K. Plan is included in other long term liabilities in the accompanying consolidated balance sheets. The following table reflects the total expected benefit payments to plan participants and have been estimated based on the same assumptions used to measure the Company’s benefit obligations as of December 31, 2017 (in thousands): Amount 2018 $ 768 2019 999 2020 1,234 2021 1,430 2022 1,169 2023-2026 8,320 Total $ 13,920 In the U.K., funding valuations are conducted every three years in order to determine the future level of contributions. Based on the results of the most recent valuation completed in the fourth quarter of 2015, the Company’s annual contributions will be approximately $0.9 million in 2018. A new funding valuation is expected to be performed in 2018 using market assumptions as of December 31, 2017. Fair Value of Plan Assets The trustees of the U.K. Plan have the fiduciary responsibilities to manage the plan assets in consultation with the Company. The overall objective is to invest plan assets in a portfolio of diversified assets, primarily through the use of institutional collective funds, to achieve balanced growth through a combination of investments in equities for long-term growth and investments in debt instruments that match a portion of the expected future benefit payments and to maintain adequate liquidity to make pension payments to pensioners. The following table summarizes the fair values of Plan assets by asset category as of December 31, 2017 (in thousands): Asset Category Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Not Subject to Leveling Mutual Funds: Balanced (1) $ 26,816 $ — $ — $ — $ 26,816 Fixed income (2) 9,524 — — — 9,524 Cash 136 136 — — — Total $ 36,476 $ 136 $ — $ — $ 36,340 (1) This class comprises a diversified portfolio of global investments which seeks a balanced return between capital growth and fixed income and is allocated on a weighted average basis as follows: equities (38%), bonds (27%), other assets (31%) and cash (4%). (2) This class comprises a diversified portfolio of global investments which seeks fixed income growth and is allocated on a weighted average basis as follows: bonds (92%) and cash (8%). The following table summarizes the fair values of Plan assets by asset category as of December 31, 2016 (in thousands): Asset Category Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Not Subject to Leveling Mutual Funds: Balanced (1) $ 23,317 $ — $ — $ — $ 23,317 Growth (2) 3,239 — — — 3,239 Fixed income (3) 4,512 — — — 4,512 Cash 236 236 — — — Total $ 31,304 $ 236 $ — $ — $ 31,068 (1) This class comprises a diversified portfolio of global investments which seeks a balanced return between capital growth and fixed income and is allocated on a weighted average basis as follows: equities (34%), bonds (36%), other assets (27%) and cash (3%). (2) This class comprises a diversified portfolio of global investments which seeks long-term capital growth and is allocated on a weighted average basis as follows: equities (59%), bonds (16%), other assets (22%), and cash (3%). (3) This class comprises a diversified portfolio of global investments which seeks fixed income growth and is allocated on a weighted average basis as follows: bonds (93%), other assets (1%) and cash (6%). The tables above present the fair value of plan assets in accordance with the fair value hierarchy. In 2016, the Company adopted ASU 2015-07, “Fair Value Measurement (Topic 820): Disclosure for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent).” As a result of the adoption, pension plan assets measured using the net asset value per share (or its equivalent) are presented as “Not Subject to Leveling.” Except for cash, pension plan assets are measured using net asset value per share (or its equivalent). These investments have quoted prices in inactive markets and there are significant other observable inputs which can be corroborated by observable market data for substantially the full term of the plan assets. Defined Contribution Plans The Company has defined contribution employee savings plans in the U.K., Japan, and the U.S. The Company matches the contributions of participating employees on the basis of percentages specified in each plan. Company matching contributions to the plans were $3.1 million, $2.5 million and $2.7 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. Income Taxes Components of the Company’s income (loss) from continuing operations before income taxes are as follows (in thousands): Year Ended December 31, 2017 2016 2015 Income (loss) from continuing operations before income taxes: Canada $ (2,036 ) $ (1,872 ) $ (1,674 ) U.S. 37,327 20,422 23,298 Other 40,843 13,972 24,398 Total $ 76,134 $ 32,522 $ 46,022 Components of the Company’s income tax provision (benefit) are as follows (in thousands): Year Ended December 31, 2017 2016 2015 Current Canada $ 146 $ 43 $ 96 U.S. 9,434 9,678 8,136 Other 6,807 2,564 3,854 16,387 12,285 12,086 Deferred Canada — — — U.S. 2,396 (2,378 ) (3,239 ) Other (4,956 ) 612 1,547 (2,560 ) (1,766 ) (1,692 ) Total $ 13,827 $ 10,519 $ 10,394 The Company is incorporated in Canada and therefore uses the Canadian statutory rate for income tax disclosure. The reconciliation of the statutory Canadian tax rate to the effective tax rate related to income before income taxes from continuing operations is as follows (in thousands, except percentage data): Year Ended December 31, 2017 2016 2015 Statutory Canadian tax rate 29.00 % 28.50 % 27.00 % Expected income tax provision at Canadian statutory tax rate $ 22,079 $ 9,269 $ 12,426 International tax rate differences (2,038 ) 891 304 State income taxes, net 674 503 453 Withholding and other taxes 484 441 731 Permanent differences 274 179 1,000 Section 199 deduction (1,148 ) (1,063 ) (1,188 ) Tax credits (984 ) (1,095 ) (990 ) Statutory tax rate changes 2,823 (856 ) 95 Uncertain tax positions (1,607 ) (103 ) 121 Change in valuation allowance (354 ) 1,202 (612 ) Acquisition contingent consideration adjustments 149 762 — Transaction costs 1,011 649 270 Provision to return differences 225 (93 ) (617 ) IRS audit — — (748 ) Gain on Laser Quantum acquisition (6,586 ) — — UK patent box (1,646 ) — — JK Lasers divestiture — — (1,432 ) Other 471 (167 ) 581 Reported income tax provision $ 13,827 $ 10,519 $ 10,394 Effective tax rate 18.2 % 32.3 % 22.6 % On December 22, 2017, the President of the United States signed into law the Tax Reform Act. The Tax Reform Act significantly changes U.S. tax law by, among other things, lowering corporate income tax rates, implementing a territorial tax system, providing a one-time transition Toll Charge on foreign earnings, creating a new limitation on deductible interest expense and modifying the limitation on officer compensation. The Tax Reform Act permanently reduces the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. The Company’s accounting for the Tax Reform Act is incomplete. However, the Securities and Exchange Commission has issued guidance that allows for a measurement period of up to one year after the enactment date of the Tax Reform Act to finalize the recording of the related tax impacts. The Company has made reasonable estimates of the effects on the consolidated statements of operations and consolidated balance sheets and has, therefore, recorded provisional amounts. Provisional amounts recorded as of December 31, 2017 are subject to refinement due to various factors, including, but not limited to, changes in interpretations, analysis and assumptions made by the Company, additional guidance that may be issued by the U.S. Department of the Treasury and the Internal Revenue Service, and any updates or changes to estimates that the Company has utilized to calculate the transition impact. The Company currently anticipates finalizing and recording any resulting adjustments by December 2018. As a result of the Tax Reform Act, the Company was required to revalue deferred tax assets and liabilities at the newly enacted 21% U.S. federal corporate income tax rate. This revaluation resulted in an additional income tax provision of $2.8 million in income from continuing operations for the year ended December 31, 2017 and a corresponding reduction in the net deferred tax assets and liabilities. Because of the ownership structure of the Company, the Company’s foreign entities outside the U.S. are not considered controlled foreign corporations of the U.S. company, as defined under U.S. tax principles, and accordingly, the accumulated earnings of these foreign subsidiaries are not subject to the one-time Toll Charge under the Tax Reform Act. Deferred income taxes result principally from temporary differences in the recognition of certain revenue and expense items and operating loss and tax credit carryforwards for financial and tax reporting purposes. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2017 and 2016 are as follows (in thousands): December 31, 2017 2016 Deferred tax assets: Losses $ 9,407 $ 9,557 Compensation related deductions 3,687 4,437 Tax credits 2,594 2,318 Unrealized currency gains/losses 183 — Restructuring related liabilities 172 471 Inventory 3,400 5,869 Amortization — 3,082 Warranty 768 1,049 Other — 1,688 Total deferred tax assets 20,211 28,471 Valuation allowance on deferred tax assets (12,811 ) (13,014 ) Net deferred tax assets $ 7,400 $ 15,457 Deferred tax liabilities: Equity-method investment $ — $ (1,370 ) Depreciation (1,353 ) (749 ) Amortization (23,496 ) (4,162 ) Unrealized currency gains/losses — (659 ) Other (1,171 ) (1,218 ) Total deferred tax liabilities $ (26,020 ) $ (8,158 ) Net deferred income tax assets (liabilities) $ (18,620 ) $ 7,299 In determining its income tax provisions, the Company calculated deferred tax assets and liabilities for each separate jurisdiction. The Company then considered a number of factors, including positive and negative evidence related to the realization of its deferred tax assets, to determine whether a valuation allowance should be recognized with respect to its deferred tax assets. In 2017, the Company released valuation allowance of $0.1 million recorded on net operating losses and other timing items in certain tax jurisdictions. Further, the Company released $0.3 million of valuation allowance recorded on certain U.S. state net operating losses. In 2016, the Company recorded valuation allowance of $1.3 million against its current year net operating losses and other timing items in certain tax jurisdictions. The Company also reduced its Canadian loss carryforward and other attributes and the related valuation allowance of $0.3 million. Further, the Company released $0.1 million of valuation allowance recorded on certain U.S. state net operating losses and utilized $0.4 million of its U.S. capital loss carryforward against the current year net capital gain. Valuation allowance continues to be provided on the remaining balances of certain U.S. state net operating losses and certain foreign tax attributes that the Company has determined that it is more likely than not that they will not be realized. In conjunction with the Company’s ongoing review of its actual results and anticipated future earnings, the Company continuously reassesses the possibility of releasing the valuation allowance currently in place on its deferred tax assets. As of December 31, 2017, the Company had net operating loss carryforwards of $3.7 million (tax effected) available to reduce future taxable income. Of this amount, approximately $1.0 million relates to the U.S. and expires through 2036; and $2.7 million relates to Canada and expires starting in 2032. In addition, the Company had capital loss carryforwards of $5.7 million, which had a full valuation allowance. Of this amount, $5.2 million and $0.5 million related to Canada and the U.K, respectively. As of December 31, 2016, the Company had net operating loss carryforwards of $4.4 million (tax effected) available to reduce future taxable income. Of this amount, approximately $1.3 million relates to the U.S. and expires through 2035; and $3.1 million relates to Canada and expires starting in 2031. In addition, the Company had capital loss carryforwards of $5.2 million, which had a full valuation allowance. Of this amount, $4.7 million and $0.5 million related to Canada and the U.K, respectively. As of December 31, 2017, the Company had tax credit carryforwards of approximately $2.6 million available to reduce income taxes in future years. Approximately $0.7 million relates to the U.S. state tax attributes, of which $0.6 million will expire through 2032 and $0.1 million can be carried forward indefinitely. The remaining $1.9 million tax credit carryforwards were related to Canada, of which $1.2 million expires through 2022 and $0.7 million can be carried forward indefinitely. As of December 31, 2016, the Company had tax credit carryforwards of approximately $2.3 million available to reduce income taxes in future years. Approximately $0.5 million relates to the U.S. state tax attributes, of which $0.4 million will expire through 2031 and $0.1 million can be carried forward indefinitely. The remaining $1.8 million tax credit carryforwards were related to Canada, of which $1.1 million expires through 2022 and $0.7 million can be carried forward indefinitely. Income and foreign withholding taxes have not been recognized on the excess of the amount for financial reporting purposes over the tax basis of investments in foreign subsidiaries that are essentially permanent in nature. This amount becomes taxable upon a repatriation of assets from a subsidiary or a sale or liquidation of a subsidiary. The amount of undistributed earnings of foreign subsidiaries totaled $98.0 million as of December 31, 2017. However, these undistributed earnings are generally not subject to the repatriation taxes under the Tax Reform Act. The estimated unrecognized income and foreign tax withholding tax liability on this temporary difference is approximately $0.2 million. As of December 31, 2017, the Company’s total amount of gross unrecognized tax benefits was $4.1 million, of which $3.4 million would favorably affect the effective tax rate if benefited. Over the next twelve months, the Company may need to record up to $0.2 million of previously unrecognized tax benefits due to statute of limitations closures. The Company believes there are no jurisdictions in which the outcome of unresolved issues or claims is likely to be material to its results of operations, financial position or cash flows. Furthermore, the Company believes that it has adequately provided for all income tax uncertainties. As of December 31, 2016, the Company’s total amount of gross unrecognized tax benefits was $5.0 million, of which $4.0 million would favorably affect the effective tax rate is benefited. The reconciliation of the total amounts of unrecognized tax benefits is as follows (in thousands): Balance at December 31, 2014 $ 6,274 Additions based on tax positions related to the current year 752 Additions for tax positions of prior years 78 Reductions to tax positions of prior years (626 ) Reductions to tax positions resulting from a lapse of the applicable statute of limitations (226 ) Settlements with tax authorities (762 ) Balance at December 31, 2015 5,490 Additions based on tax positions related to the current year 561 Additions for tax positions of prior years 88 Reductions to tax positions of prior years (45 ) Reductions to tax positions resulting from a lapse of the applicable statute of limitations (842 ) Settlements with tax authorities (290 ) Balance at December 31, 2016 4,962 Additions based on tax positions related to the current year 991 Additions for tax positions of prior years 496 Reductions to tax positions of prior years (28 ) Reductions to tax positions resulting from a lapse of the applicable statute of limitations (1,577 ) Settlements with tax authorities (755 ) Balance at December 31, 2017 $ 4,089 The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2017 and 2016, the Company had approximately $0.4 million and $1.1 million, respectively, of accrued interest and penalties related to uncertain tax positions. During the years ended December 31, 2017 and 2016, the Company recognized less than $0.1 million of expense for an increase in interest and penalties related to uncertain tax positions. The Company files income tax returns in Canada, the U.S., and various states and foreign jurisdictions. Generally, the Company is no longer subject to U.S. or foreign income tax examinations, including transfer pricing tax audits, by tax authorities for the years before 2007. The Company’s income tax returns may be reviewed by tax authorities in the following countries for the following periods under the appropriate statute of limitations: United States 2014 - Present Canada 2014 - Present United Kingdom 2016 - Present Germany 2013 - Present The Netherlands 2012 - Present China 2008 - Present Japan 2013 - Present |
Restructuring, Acquisition and
Restructuring, Acquisition and Divestiture Related Costs | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring And Related Activities [Abstract] | |
Restructuring, Acquisition and Divestiture Related Costs | 15. Restructuring, Acquisition and Divestiture Related Costs The following table summarizes restructuring, acquisition and divestiture related costs recorded in the accompanying consolidated statements of operations (in thousands): Year Ended December 31, 2017 2016 2015 2016 restructuring $ 332 $ 3,049 $ 3,148 2015 restructuring — — 1,484 2011 restructuring 14 (79 ) 1,208 Total restructuring charges $ 346 $ 2,970 $ 5,840 Acquisition and related charges $ 7,196 $ 4,975 $ 1,301 Divestiture related charges — — 1,113 Total acquisition and divestiture related charges $ 7,196 $ 4,975 $ 2,414 Total restructuring, acquisition and divestiture related costs $ 7,542 $ 7,945 $ 8,254 2016 Restructuring During the third quarter of 2015, the Company initiated the 2016 restructuring program, which included consolidating certain manufacturing operations to optimize facility footprint and better utilize resources, and reducing redundant costs due to productivity cost savings and business volume reductions. In August 2016, the Company sold its facility in Chatsworth, California for a net cash consideration of $3.4 million and recognized a gain on sale of $1.6 million as part of restructuring, acquisition and divestiture related costs. As of December 31, 2017, the Company incurred cumulative costs related to this restructuring plan totaling $6.5 million, net of the gain on the sale of the Chatsworth, California facility. The plan was completed in 2017. The following table summarizes restructuring costs associated with the 2016 restructuring program for each segment and unallocated corporate costs (in thousands): Year Ended Cumulative Costs as of December 31, 2017 December 31, 2016 December 31, 2015 December 31, 2017 Photonics $ — $ 813 $ 55 $ 868 Vision 331 1,862 2,200 4,393 Precision Motion — 106 833 939 Unallocated Corporate and Shared Services 1 268 60 329 Total $ 332 $ 3,049 $ 3,148 $ 6,529 2015 Restructuring During the first quarter of 2015, the Company implemented a program to eliminate redundant costs, as a result of acquisition and divestiture activities, to better align operations to the Company’s strategic growth plans, to further integrate its business lines, and as a consequence of productivity initiatives. Restructuring costs incurred in 2015 of $1.4 million and $0.1 million were related to severance and other, respectively. The plan was completed during 2015. The following table summarizes the total costs for each segment and unallocated corporate costs related to the 2015 restructuring plan (in thousands): Year Ended December 31, 2015 Photonics $ 542 Vision 525 Precision Motion 79 Unallocated Corporate and Shared Services 338 Total $ 1,484 2011 Restructuring In November 2011, the Company announced a strategic initiative (“2011 restructuring”) which aimed to consolidate operations to reduce the Company’s cost structure and improve operational efficiency. In total, eleven facilities have been exited as part of the 2011 restructuring plan. These eliminations resulted in the consolidation of the manufacturing facilities of the Scientific Lasers business and the optics products, the consolidation of the Company’s German operations into one facility, the consolidation of the laser scanners business into the Company’s Bedford, Massachusetts facility and the consolidation of the Company’s Japan operation into one facility. Included in the eleven facilities exited are five facilities exited as part of the Semiconductor and Laser Systems business divestitures. The restructuring costs for the Semiconductor and Laser Systems businesses have been excluded from the table below as they have been reported as part of the operating results from discontinued operations. The Company substantially completed the 2011 restructuring program in 2013. In March 2016, the Company sold its previously exited Laser Systems facility located in Orlando, Florida for cash at the net carrying value of $3.5 million. In December 2016, the lease agreement for the Company’s previously exited laser scanner business facility was terminated, which resulted in a benefit of $0.2 million. The following table summarizes restructuring costs for each segment and unallocated corporate costs related to the 2011 restructuring plan (in thousands): Cumulative Year Ended December 31, Costs as of 2017 2016 2015 December 31, 2017 Photonics $ — $ (188 ) $ — $ 1,751 Vision — — — 48 Precision Motion — — — 122 Unallocated Corporate and Shared Services 14 109 1,208 3,276 Total $ 14 $ (79 ) $ 1,208 $ 5,197 Rollforward of Accrued Expenses Related to Restructuring The following table summarizes the accrual activities, by component, related to the Company’s restructuring charges recorded in the accompanying consolidated balance sheets (in thousands): Total Severance Facility Depreciation Other (b) Balance at December 31, 2015 $ 1,882 $ 1,358 $ 406 $ — $ 118 Restructuring charges (a) 4,929 2,738 777 616 798 Reserves reversed (322 ) (322 ) — — — Cash payments (4,181 ) (3,170 ) (104 ) — (907 ) Non-cash write-offs and other adjustments (572 ) 7 32 (616 ) 5 Balance at December 31, 2016 1,736 611 1,111 — 14 Restructuring charges 346 185 146 — 15 Cash payments (1,212 ) (692 ) (503 ) — (17 ) Non-cash write-offs and other adjustments (64 ) (65 ) 9 — (8 ) Balance at December 31, 2017 $ 806 $ 39 $ 763 $ — $ 4 (a) Excludes $1.6 million of gain on the sale of the Chatsworth, California facility. (b) Other restructuring charges mainly related to consulting fees and relocation costs. The Company expects to make $0.4 million in cash payments during the twelve months ending December 31, 2018 . Acquisition and Divestiture Related Charges Acquisition related costs incurred to effect business combinations, including finders’ fees, legal, valuation and other professional or consulting fees, totaled $6.8 million, $2.5 million, and $1.5 million during 2017, 2016, and 2015, respectively. Acquisition related costs recognized under earn-out agreements in connection with acquisitions totaled $0.4 million, $2.5 million, and $(0.2) million during 2017, 2016, and 2015, respectively. Expenses associated with divestiture activities of $1.1 million during 2015 included legal and professional fees directly related to the completion of the JK Lasers divestiture. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 16. Commitments and Contingencies Operating Leases The Company leases certain equipment and facilities under operating lease agreements. Most of these lease agreements expire between 2018 and 2022. In the U.K., where longer lease terms are more common, the Company has a land lease that extends through 2078. During the years ended December 31, 2017, 2016 and 2015, the Company recorded lease expense of $5.5 million, $4.2 million and $4.5 million, respectively. In addition to the base rent, the Company is generally required to pay insurance, real estate taxes and maintenance costs which are recorded in lease expense. In connection with the sale of the Scientific Lasers business in 2014, the Company assigned to the buyer the lease for the facility in San Jose, California, where the Scientific Lasers business operated. The buyer assumed all of the rights and obligations under the original lease, including the duty to pay the rent for the remainder term of the lease. So long as the buyer performs its obligations as the tenant, as required by the Asset and Equity Purchase Agreement for its acquisition of the Scientific Lasers business, the Company has no responsibilities for the lease. Should the buyer cease performance under the lease, however, the landlord could still pursue the Company as the original tenant until February 28, 2019, the end of the lease term. In the meantime, the Company has indemnification rights against the buyer under the Asset and Equity Purchase Agreement for such buyer’s default. The lease associated with this facility has been excluded from the operating lease commitments table below. Capital Leases Gross assets under capital lease as of December 31, 2017 and 2016, respectively, are summarized as follows (in thousands): 2017 2016 Land, buildings and improvements $ 9,133 $ 9,133 Machinery and equipment 4,429 4,026 Total gross assets under capital lease $ 13,562 $ 13,159 Future Lease Payments Future minimum lease payments under operating and capital leases expiring subsequent to December 31, 2017, including operating leases associated with facilities that have been vacated as a result of the Company’s restructuring actions, are summarized as follows (in thousands): Year Ended December 31, Operating Lease Capital Lease (1) 2018 $ 6,695 $ 1,013 2019 4,861 995 2020 3,121 983 2021 2,481 907 2022 605 907 Thereafter 6,449 6,325 Total minimum lease payments $ 24,212 $ 11,130 (1) Capital lease payments include interest payments of $2.7 million. Purchase Commitments As of December 31, 2017, the Company had purchase commitments primarily for inventory purchases of $86.4 million. These purchase commitments are expected to be incurred as follows: $78.7 million in 2018, $5.6 million in 2019 and $2.1 million in 2020. Legal Proceedings The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. The Company reviews the status of each significant matter and assesses the potential financial exposure on a quarterly basis. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. Significant judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable. Because of uncertainties related to these matters, accruals are based only on the best information available as of the date of the consolidated balance sheet. As additional information becomes available, the Company reassesses the potential liability related to any pending claims and litigation and may revise its estimates. The Company does not believe that the outcome of these claims will have a material adverse effect upon its consolidated financial statements but there can be no assurance that any such claims, or any similar claims, would not have a material adverse effect upon its consolidated financial statements. Guarantees and Indemnifications In the normal course of its operations, the Company executes agreements that provide for indemnification and guarantees to counterparties in transactions such as business dispositions, sale of assets, sale of products and operating leases. Additionally, the by-laws of the Company require it to indemnify certain current or former directors, officers, and employees of the Company against expenses incurred by them in connection with each proceeding in which he or she is involved as a result of serving or having served in certain capacities. Indemnification is not available with respect to a proceeding as to which it has been adjudicated that the person did not act in good faith in the reasonable belief that the action was in the best interests of the Company. Certain of the Company’s officers and directors are also a party to indemnification agreements with the Company. These indemnification agreements provide, among other things, that the director and officer shall be indemnified to the fullest extent permitted by applicable law against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by such officer or director in connection with any proceeding by reason of his or her relationship with the Company. In addition, the indemnification agreements provide for the advancement of expenses incurred by such director or officer in connection with any proceeding covered by the indemnification agreement, subject to the conditions set forth therein and to the extent such advancement is not prohibited by law. The indemnification agreements also set out the procedures for determining entitlement to indemnification, the requirements relating to notice and defense of claims for which indemnification is sought, the procedures for enforcement of indemnification rights, the limitations on and exclusions from indemnification, and the minimum levels of directors’ and officers’ liability insurance to be maintained by the Company. On July 1, 2013, the Company provided a Guarantee (the “Guarantee”) in favor of the trustees of the U.K. Plan with respect to all present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally and in any capacity whatsoever) of Novanta Technologies UK Limited, a wholly owned subsidiary of Novanta Inc. Credit Risks and Other Uncertainties The Company maintains financial instruments such as cash and cash equivalents and trade receivables. From time to time, certain of these instruments may subject the Company to concentrations of credit risk whereby one institution may hold a significant portion of the cash and cash equivalents, or one customer may represent a large portion of the accounts receivable balances. There was no significant concentration of credit risk related to the Company’s position in trade accounts receivable as no individual customer represented 10% or more of the Company’s outstanding accounts receivable at December 31, 2017 and 2016. Credit risk with respect to trade accounts receivables is generally minimized because of the diversification of the Company’s operations, as well as its large customer base and its geographical dispersion. Certain of the components and materials included in the Company’s products are currently obtained from single source suppliers. There can be no assurance that a disruption of the supply of such components and materials would not create substantial manufacturing delays and additional cost to the Company. The Company’s operations involve a number of other risks and uncertainties including, but not limited to, the effects of general economic conditions, rapidly changing technology, and international operations. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interest | 12 Months Ended |
Dec. 31, 2017 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interest | 17. Redeemable Noncontrolling Interest As a result of the Company’s acquisition of additional outstanding shares of Laser Quantum from the remaining shareholders on January 10, 2017, the Company increased its ownership position in Laser Quantum from approximately 41% to approximately 76% and began to consolidate the operating results of Laser Quantum in the consolidated financial statements. As part of the purchase agreement, the Company and the remaining shareholders entered into a call and put option agreement for the purchase and sale, in 2020, of all remaining Laser Quantum shares held by the remaining shareholders, subject to certain conditions. The purchase price for the remaining shares will be based on the proportionate share of the noncontrolling interest in Laser Quantum’s cash on hand as of December 31, 2019 and a multiple of Laser Quantum’s EBITDA for the twelve months ending December 31, 2019, as defined in the call and put option agreement. As a result of the put option held by the remaining shareholders, the noncontrolling interest is considered a redeemable equity instrument and is presented as temporary equity on the consolidated balance sheet. The proportionate share of the net income from Laser Quantum attributable to the noncontrolling interest has been reported as a reduction to the consolidated net income in the Company’s consolidated statement of operations and an increase to the carrying value of the redeemable noncontrolling interest. The initial value of the noncontrolling interest of £17.7 million ($21.6 million) was measured at fair value at the date of the acquisition. The value of the noncontrolling interest was determined using a combination of the discounted cash flow method (an income approach), the guideline public company method (a market approach), and the subject company transaction method (a market approach). The Company carries the redeemable noncontrolling interest at the higher of (i) the carrying value without any redemption value adjustments or (ii) the estimated redemption value as of the end of the reporting period. The estimated redemption value is determined as of the end of the reporting period as if it were also the redemption date for the instrument. The resulting adjustments are recorded in retained earnings in shareholders’ equity and do not affect net income attributable to Novanta Inc. In 2017, the Company increased the carrying value of the redeemable noncontrolling interest by $20.2 million to reflect the estimated redemption value as of December 31, 2017. The following table presents the reconciliation of changes in the Company’s redeemable noncontrolling interest (in thousands): Redeemable Noncontrolling Interest Balance as of December 31, 2016 $ — Acquisition of noncontrolling interest 21,582 Net income attributable to noncontrolling interest 2,256 Adjustment of redeemable noncontrolling interest to estimated redemption value (1) 20,244 Foreign currency translation 2,841 Balance as of December 31, 2017 $ 46,923 (1) Adjustment of the carrying value of redeemable noncontrolling interest to the estimated redemption value was recognized in retained earnings instead of the consolidated statement of operations but was included in the computation of earnings per share attributable to Novanta Inc. (see Note 9). |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | 18. Segment Information Reportable Segments The Company evaluates the performance of, and allocates resources to, its segments based on revenue, gross profit and operating profit. The Company’s reportable segments have been identified based on commonality and adjacency of technologies, applications and customers amongst the Company’s individual product lines. The Company determined that disclosing sales by specific product was impracticable due to the highly customized and extensive portfolio of products offered to customers. We operate in three reportable segments: Photonics, Vision, and Precision Motion. The reportable segments and their principal activities consist of the following: Photonics The Photonics segment designs, manufactures and markets photonics-based solutions, including laser scanning and laser beam delivery, CO2 laser, continuous wave and ultrafast laser, and optical light engine products to customers worldwide. The segment serves highly demanding photonics-based applications such as industrial material processing, metrology, medical and life science imaging, DNA sequencing, and medical laser procedures. The vast majority of the segment’s product offerings are sold to OEM customers. The segment sells these products both directly, utilizing a highly technical sales force, and indirectly, through resellers and distributors. Vision The Vision segment designs, manufactures and markets a range of medical grade technologies, including medical insufflators, pumps and related disposables; surgical displays and operating room integration technologies; optical data collection and machine vision technologies; radio frequency identification (“RFID”) technologies; thermal printers; spectrometry technologies; and embedded touch screen solutions. The vast majority of the segment’s product offerings are sold to OEM customers. The segment sells these products both directly, utilizing a highly technical sales force, and indirectly, through resellers and distributors. Precision Motion The Precision Motion segment designs, manufactures and markets optical encoders, precision motor and motion control technology, air bearing spindles and precision machined components to customers worldwide. The vast majority of the segment’s product offerings are sold to OEM customers. The segment sells these products both directly, utilizing a highly technical sales force, and indirectly, through resellers and distributors. Reportable Segment Financial Information Revenue, gross profit, operating income (loss) from continuing operations, depreciation and amortization, accounts receivable and inventory by reportable segments are as follows (in thousands): Year Ended December 31, 2017 2016 2015 Revenue Photonics $ 232,359 $ 174,158 $ 168,331 Vision 183,074 122,250 124,725 Precision Motion 105,857 88,350 80,542 Total $ 521,290 $ 384,758 $ 373,598 Year Ended December 31, 2017 2016 2015 Gross Profit Photonics $ 106,117 $ 76,696 $ 73,602 Vision 69,249 47,181 48,966 Precision Motion 46,564 40,044 36,709 Unallocated Corporate and Shared Services (1,399 ) (1,469 ) (1,387 ) Total $ 220,531 $ 162,452 $ 157,890 Year Ended December 31, 2017 2016 2015 Operating Income (Loss) from Continuing Operations Photonics $ 51,289 $ 34,825 $ 35,971 Vision 7,883 (1,277 ) (2,057 ) Precision Motion 27,146 21,101 16,877 Unallocated Corporate and Shared Services (29,123 ) (22,086 ) (21,858 ) Total $ 57,195 $ 32,563 $ 28,933 Year Ended December 31, 2017 2016 2015 Depreciation and Amortization Photonics $ 13,806 $ 6,738 $ 6,083 Vision 13,590 10,402 8,599 Precision Motion 2,308 2,439 2,533 Unallocated Corporate and Shared Services 1,054 1,394 2,981 Total $ 30,758 $ 20,973 $ 20,196 December 31, 2017 2016 2015 Accounts Receivable Photonics $ 33,490 $ 28,886 $ 21,763 Vision 36,089 22,885 21,691 Precision Motion 11,903 11,998 13,734 Total accounts receivable $ 81,482 $ 63,769 $ 57,188 Inventory Photonics 44,451 28,976 29,501 Vision 33,836 20,656 19,583 Precision Motion 12,991 10,113 10,482 Total inventory $ 91,278 $ 59,745 $ 59,566 Total segment assets $ 172,760 $ 123,514 $ 116,754 December 31, 2017 2016 2015 Total Assets Total segment assets $ 172,760 $ 123,514 $ 116,754 Cash and cash equivalents 100,057 68,108 59,959 Prepaid income taxes and income taxes receivable 4,387 2,058 2,510 Prepaid expenses and other current assets 10,675 5,570 5,989 Property, plant and equipment, net 61,718 35,421 40,550 Deferred tax assets 7,052 8,593 7,885 Other assets 4,018 12,502 12,673 Intangible assets, net 155,048 61,743 66,269 Goodwill 210,988 108,128 103,456 Total $ 726,703 $ 425,637 $ 416,045 Geographic Information The Company aggregates geographic revenue based on the customer location where products are shipped. Revenue from these customers is as follows (in thousands, except percentage data): Year Ended December 31, 2017 2016 2015 Revenue % of Total Revenue % of Total Revenue % of Total United States $ 220,583 42.3 % $ 154,756 40.2 % $ 154,825 41.4 % Germany 68,003 13.0 55,940 14.5 54,743 14.7 Rest of Europe 81,001 15.5 51,705 13.4 48,277 12.9 China 56,128 10.8 44,225 11.5 38,491 10.3 Rest of Asia-Pacific 84,727 16.3 60,104 15.6 62,467 16.7 Other 10,848 2.1 18,028 4.8 14,795 4.0 Total $ 521,290 100.0 % $ 384,758 100.0 % $ 373,598 100.0 % Long-lived assets consist of property, plant and equipment, net, and are aggregated based on the location of the assets. A summary of these long-lived assets is as follows (in thousands): December 31, 2017 2016 2015 United States $ 29,920 $ 29,509 $ 34,907 Europe 30,621 4,588 4,014 China 1,127 1,286 1,593 Asia-Pacific and other 50 38 36 Total $ 61,718 $ 35,421 $ 40,550 Significant Customers No customer accounted for greater than 10% of the Company’s revenue during the years ended December 31, 2017, 2016 or 2015. |
Organization and Presentation (
Organization and Presentation (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These consolidated financial statements have been prepared by the Company in U.S. dollars and in accordance with accounting principles generally accepted in the U.S., applied on a consistent basis. The consolidated financial statements include the accounts of Novanta Inc. and its subsidiaries. Intercompany accounts and transactions have been eliminated. Prior to January 10, 2017, the Company had an approximately 41% ownership interest in Laser Quantum Limited (“Laser Quantum”), a privately held company located in the United Kingdom, which was accounted for under the equity method of accounting. On January 10, 2017, the Company acquired an additional approximately 35% of the outstanding shares of Laser Quantum. As a result of this transaction, the Company’s ownership position in Laser Quantum increased from approximately 41% to approximately 76%. Since January 10, 2017, Laser Quantum has been consolidated in the Company’s consolidated financial statements. |
Reclassifications | Reclassifications Certain immaterial reclassifications have been made in the consolidated statements of cash flows for prior periods to conform to the current year presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Estimates and assumptions are reviewed on an on-going basis and the effects of revisions are reflected in the period in which they are deemed to be necessary. The Company evaluates its estimates based on historical experience, current conditions and various other assumptions that it believes are reasonable under the circumstances. Actual results could differ significantly from those estimates. |
Foreign Currency Translation | Foreign Currency Translation The financial statements of the Company and its subsidiaries outside the United States have been translated into U.S. dollars. Assets and liabilities of foreign operations are translated from foreign currencies into U.S. dollars at the exchange rates in effect as of the balance sheet date. Revenue and expenses are translated at the weighted average exchange rates for the period. Accordingly, gains and losses resulting from translating foreign currency financial statements are reported as cumulative translation adjustment, a separate component of other comprehensive income (loss) in stockholders’ equity. Foreign currency transaction gains and losses, primarily from transactions denominated in currencies other than the functional currencies, are included in the accompanying consolidated statements of operations. |
Cash Equivalents | Cash Equivalents Cash equivalents are highly liquid investments with original maturities of three months or less. These investments are carried at cost, which approximates fair value. |
Long-Term Investments | Long-Term Investments Prior to January 10, 2017, the Company accounted for Laser Quantum under the equity method of accounting. During the years ended December 31, 2017, 2016 and 2015, the Company recognized income from its equity method investment amounting to $0.1 million, $2.2 million and $2.7 million, respectively, which was included in other income (expense) in the accompanying consolidated statements of operations. At December 31, 2016, the Company’s net investment in Laser Quantum was $8.5 million and was included in other assets on the consolidated balance sheet. The summarized financial information for Laser Quantum is as follows (in thousands): Year Ended December 31, 2016 2015 Revenue $ 23,526 $ 25,599 Income from operations $ 5,537 $ 7,362 Net income $ 5,389 $ 6,925 December 31, 2016 Total assets (1) $ 25,043 Total liabilities $ 1,556 (1) Total assets at December 31, 2016 included cash and cash equivalents of $15.5 million. In March 2016, the Company received a cash dividend of $2.3 million from Laser Quantum. The dividend was reported as a reduction to the carrying value of the Company’s net investment in Laser Quantum in the balance sheet and a cash inflow from operating activities in the consolidated statement of cash flows. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amounts, net of an allowance for doubtful accounts based on the Company’s best estimate of probable credit losses resulting from the inability of the Company’s customers to make required payments. The Company determines the allowance based on a variety of factors, including the age of amounts outstanding relative to their contractual due date, specific customer factors, and other known risks and economic trends. Charges related to the allowance for doubtful accounts are included as selling, general and administrative expenses and are recorded in the period that the outstanding receivables are determined to be uncollectible. Account balances are charged off against the allowance when the Company believes it is probable that the receivable will not be recovered. For the years ended December 31, 2017, 2016 and 2015, changes in the allowance for doubtful accounts were as follows (in thousands): 2017 2016 2015 Balance at beginning of year $ 565 $ 500 $ 282 Provision charged to selling, general and administrative expenses 283 135 285 Allowance resulting from acquisitions 52 15 5 Write-offs, net of recoveries of amounts previously reserved (358 ) (82 ) (29 ) Divestiture of JK Lasers — — (30 ) Exchange rate changes 12 (3 ) (13 ) Balance at end of year $ 554 $ 565 $ 500 |
Inventories | Inventories Inventories, which include materials and conversion costs, are stated at the lower of cost or net realizable value, using the first-in, first-out method. Cost includes the cost of purchased materials, inbound freight charges, external and internal processing and applicable labor and overhead costs. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company periodically reviews quantities of inventories on hand and compares these amounts to the expected use of each product. The Company records a charge to cost of revenue for the amount required to reduce the carrying value of inventory to the net realizable value. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost, adjusted for any impairment, less accumulated depreciation. The Company uses the straight-line method to calculate the depreciation of its property, plant and equipment over their estimated useful lives. Estimated useful lives range from 3 to 30 years for buildings and building improvements and 3 to 10 years for machinery and equipment. Leasehold improvements are depreciated over the lesser of their useful lives or the lease terms, including any renewal period options that are reasonably assured of being exercised. Repairs and maintenance costs are expensed as incurred. Certain costs to develop software for internal use are capitalized when the criteria under Accounting Standards Codification (“ASC”) 350-40, “Internal-Use Software,” are met. Lease arrangements meeting the criteria of ASC 840-30, “Leases – Capital Leases,” are capitalized based on the present value of future minimum lease payments and depreciated over the term of the lease. In 2016, the Company sold its facilities in Chatsworth, California and Orlando, Florida and recognized a gain of $1.7 million as part of restructuring, acquisition and divestiture related costs. |
Goodwill, Intangibles and Long-Lived Assets | Goodwill, Intangible Assets and Long-Lived Assets Goodwill represents the excess of the purchase price over the tangible assets, identifiable intangible assets and assumed liabilities acquired in a business combination. Allocations of the purchase price are based upon a valuation of the fair value of assets acquired and liabilities assumed as of the acquisition date. Goodwill and indefinite-lived intangibles are not amortized but are assessed for impairment at least annually to ensure their current fair values exceed their carrying values. The Company’s most significant intangible assets are customer relationships, patents and acquired technologies, trademarks and trade names. The fair values of intangible assets are based on valuations using an income approach, with estimates and assumptions provided by management of the acquired companies and the Company. The process for estimating the fair values of identifiable intangible assets requires the use of significant estimates and assumptions, including estimating future cash flows and developing appropriate discount rates. All definite-lived intangible assets are amortized over the periods in which their economic benefits are expected to be realized. The Company reviews the useful life assumptions, including the classification of certain intangible assets as “indefinite-lived”, on a periodic basis to determine if changes in circumstances warrant revisions to them. Costs associated with patent and intellectual property applications, renewals or extensions are expensed as incurred. The Company evaluates its goodwill, intangible assets and other long-lived assets for impairment at the reporting unit level which is generally at least one level below our reportable segments. |
Impairment Charges | Impairment Charges Impairment analyses of goodwill and indefinite-lived intangible assets are conducted in accordance with ASC 350, “Intangibles —Goodwill and Other.” The Company performs its goodwill impairment test annually as of the beginning of the second quarter or more frequently if indicators are present, or changes in circumstances suggest, that an impairment may exist. The Company has the option of first performing a qualitative (“Step 0”) assessment to determine whether it is necessary to perform the quantitative two-step impairment test. In performing the Step 0 assessment, the Company reviews qualitative factors both specific to the reporting unit and to the Company as a whole, such as financial performance, macroeconomic conditions, industry and market considerations, and the fair value of each reporting unit at the last valuation date. If the Company elects this option and believes, as a result of the Step 0 assessment, that it is more likely than not that the carrying value of the reporting unit exceeds its fair value, the quantitative two-step impairment test is required; otherwise, no further testing is required. Alternatively, the Company may elect to bypass the Step 0 qualitative assessment and perform the quantitative two-step impairment test. This two-step approach requires a comparison of the carrying value of each of the Company’s reporting units to the estimated fair value of these reporting units. The fair value of a reporting unit is estimated primarily using a discounted cash flow (“DCF”) method with a weighted average cost of capital. If the carrying value of a reporting unit exceeds its fair value, the Company calculates the implied fair value of the reporting unit’s goodwill and compares it to the carrying value. If the carrying value of the goodwill exceeds its implied fair value, an impairment charge is recorded for the difference. The Company assesses indefinite-lived intangible assets for impairment on an annual basis as of the beginning of the second quarter, and more frequently if indicators are present, or changes in circumstances suggest, that an impairment may exist. The Company will also reassess the continuing classification of these indefinite-lived intangible assets as indefinite-lived when circumstances change such that the useful life may no longer be considered indefinite. The fair values of the Company’s indefinite-lived intangible assets are determined using the relief from royalty method, based on forecasted revenues. If the fair value of an indefinite-lived intangible asset is less than its carrying value, an impairment charge is recorded for the difference between the carrying value and the fair value of the impaired asset. The carrying amounts of definite-lived long-lived assets are reviewed for impairment whenever changes in events or circumstances indicate that their carrying values may not be recoverable. The recoverability of the carrying value is generally determined by comparison of the asset group’s carrying value to its undiscounted future cash flows. When this test indicates a potential for impairment, a fair value assessment is performed. Once an impairment is determined and measured, an impairment charge is recorded for the difference between the carrying value and the fair value of the impaired asset. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, price is fixed or determinable, and collection of the resulting receivable is reasonably assured. Revenue recognition requires judgment and estimates, which may affect the amount and timing of revenue recognized in any given period. The Company’s revenue transactions are comprised of both single-element and multiple-element transactions. Multiple-element transactions may include two or more products, and occasionally non-standard/extended warranties or preventative maintenance plans. For multiple-element transactions, revenue is generally recognized upon shipment, using the relative selling price method in accordance with ASC 605-25, “Revenue – Multiple-Element Arrangements.” Single-element transactions are typically recognized upon shipment at their contractually stated prices. The Company generally provides warranties for its products. The standard warranty period is typically 12 months to 24 months for the Photonics and Precision Motion segments and 12 months to 36 months for the Vision segment. The standard warranty period for product sales is accounted for under the provisions of ASC 450, “Contingencies,” as the Company has the ability to ascertain the likelihood of the liability and can estimate the amount of the liability. A provision for the estimated cost related to warranty is recorded to cost of revenue at the time revenue is recognized. The Company’s estimate of costs to service the warranty obligations is based on historical experience and expectations of future conditions. To the extent that the Company experiences warranty claims or costs associated with servicing those claims that differ from the original estimates, revisions to the estimated warranty liability are recorded at that time. The Company occasionally sells optional non-standard/extended warranty services and preventative maintenance contracts to customers. The Company accounts for these agreements in accordance with provisions of ASC 605-20-25-3, “Separately Priced Extended Warranty and Product Maintenance Contracts,” under which it recognizes the separately priced extended warranty and preventative maintenance fees ratably over the associated period. At the request of its customers, the Company may perform maintenance and repair services on products previously sold to those customers. These services are usually in the form of time and materials based contracts which are short in duration. Revenue for time and materials services is recorded at the completion of services requested under a customer’s purchase order. |
Research and Development and Engineering Costs | Research and Development and Engineering Costs Research and development and engineering (“R&D”) expenses are primarily comprised of employee related expenses and cost of materials for R&D projects. These costs are expensed as incurred. |
Share-Based Compensation | Share-Based Compensation The Company records the expense associated with share-based compensation awards to employees and directors based on the fair value of awards as of the grant date. For stock-based compensation awards that vest over time based on employment, the associated expenses are recognized in the consolidated statements of operations ratably over the vesting period, net of estimated forfeitures. The Company also grants two types of performance-based awards to certain members of the executive management team: non-GAAP earnings per share performance-based restricted stock units (“EPS-PSUs”) and relative total shareholder return performance-based restricted stock units (“TSR-PSUs”). For EPS-PSUs, stock-based compensation expense is recognized ratably over the vesting period when it is probable that the performance targets are expected to be achieved based on management’s projections. Management’s projections are revised, if necessary, in subsequent periods when underlying factors change the evaluation of the probability of achieving the performance targets. Accordingly, share-based compensation expense associated with EPS-PSUs may differ significantly from period to period based on changes in the probability of achieving performance targets. |
Shipping & Handling Costs | Shipping & Handling Costs Shipping and handling costs are recorded in cost of revenue. |
Advertising Costs | Advertising Costs Advertising costs are expensed to selling, general and administrative expenses as incurred and were not material for 2017, 2016 and 2015. |
Restructuring, Acquisition and Divestiture Related Costs | Restructuring, Acquisition and Divestiture Related Costs The Company accounts for its restructuring activities in accordance with the provisions of ASC 420, “Exit or Disposal Cost Obligations.” The Company makes assumptions related to the amounts of employee severance benefits and related costs, time period over which facilities will remain vacant, useful lives and residual value of long-lived assets, sublease terms, sublease rental rates and discount rates. Estimates and assumptions are based on the best information available at the time the obligation is recognized. These estimates are reviewed and revised as facts and circumstances dictate. Acquisition related costs incurred to effect a business combination, including finders’ fees, legal, valuation and other professional or consulting fees, are expensed as incurred. Acquisition related costs also include expenses recognized under earn-out agreements in connection with acquisitions. Expenses associated with divestiture activities, including legal and professional fees directly related to the completion of a business divestiture, are expensed as incurred. |
Accounting for Income Taxes | Accounting for Income Taxes The asset and liability method is used to account for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. This method also requires the recognition of future tax benefits, such as net operating loss carryforwards, to the extent that it is more likely than not that such benefits will be realized. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the temporary differences are expected to be recovered or settled. A valuation allowance is established to reduce the deferred tax assets if it is more likely than not that some or all of the related tax benefits will not be realized in the future. Valuation allowances are reassessed periodically to determine whether it is more likely than not that the tax benefits will be realized in the future and that any valuation allowance should be released. The majority of the Company’s business activities are conducted through its subsidiaries outside of Canada. Earnings from these subsidiaries are generally indefinitely reinvested in the local businesses. Further, local laws and regulations may also restrict certain subsidiaries from paying dividends to their parents. As such, the Company generally does not accrue income taxes for the repatriation of such earnings in accordance with ASC 740, “Income Taxes.” To the extent that there are excess accumulated earnings that the Company intends to repatriate from any such subsidiaries, the Company recognizes deferred tax liabilities on such foreign earnings. The Company assesses its income tax positions and records tax benefits for all years subject to examination based on the evaluation of the facts, circumstances, and information available at each reporting date. For those tax positions with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information, the Company records a tax benefit. For those income tax positions that are not likely to be sustained, no tax benefit is recognized in the consolidated financial statements. The Company recognizes interest and penalties related to uncertain tax positions as part of the provision for income taxes. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the “Tax Reform Act”). Further information on the tax impacts of the Tax Reform Act is included in Note 14 to the Consolidated Financial Statements. |
Foreign Currency Contracts | Foreign Currency Contracts The Company uses foreign currency contracts as a part of its strategy to limit its exposures related to foreign currency denominated monetary assets and liabilities. The time duration of these foreign currency contracts approximates the underlying foreign currency transaction exposures, generally less than three months. These contracts are not designated as cash flow, fair value or net investment hedges. Changes in the fair value of these foreign currency contracts are recognized in income from continuing operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Statement of Cash Flows Classification of Certain Cash Receipts and Cash Payments In August 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which provides further clarification on eight cash flow classification issues. ASU 2016-15 further clarifies the classification of the following: (i) debt prepayment or debt extinguishment costs; (ii) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; (iii) contingent consideration payments made after a business combination; (iv) proceeds from the settlement of insurance claims; (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (vi) distributions received from equity method investees; (vii) beneficial interests in securitization transactions; and (viii) separately identifiable cash flows and application of the predominance principle. ASU 2016-15 will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. ASU 2016-15 should be applied using a retrospective transition method for each period presented. The Company adopted ASU 2016-15 during the first quarter of 2017. The adoption of ASU 2016-15 resulted in $2.5 million of payments of contingent considerations being reported as cash used in financing activities on the Company’s consolidated statements of cash flows in 2017. Inventories In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory,” which simplifies the subsequent measurement of inventories by replacing the current lower of cost or market test with a lower of cost or net realizable value test. ASU 2015-11 will be effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. The Company adopted this pronouncement in the first quarter of 2017. The adoption of ASU-2015-11 did not have a material impact on our consolidated financial statements. Derivatives and Hedging In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” which amends and simplifies existing guidance in order to better align a company’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements. ASU 2017-12 will become effective for fiscal years and interim reporting periods beginning after December 15, 2018, with early adoption permitted. The Company does not expect the adoption of ASU 2017-12 to have a material impact on its consolidated financial statements. Share-Based Compensation In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718),” which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. ASU 2017-09 requires that an entity account for the effects of a modification unless (i) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; (ii) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (iii) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. ASU 2017-09 will become effective prospectively for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company does not expect the adoption of ASU 2017-09 to have a material impact on its consolidated financial statements. Presentation of Net Periodic Pension Cost In March 2017, the FASB issued ASU 2017-07, “Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” which requires employers that offer or maintain defined benefit plans to disaggregate the service component from the other components of net benefit cost and provides guidance on the presentation of the service component and the other components of net benefit cost in the statement of operations. The new standard is effective for public companies for annual periods beginning after December 15, 2017. The Company will adopt the new standard in the first quarter of 2018 and will report its net periodic pension cost related to its frozen U.K. pension plan, consisting of interest cost, expected return on plan assets and amortization of actuarial gains (losses) only, in other income (expense) in the consolidated statement of operations upon adoption. The adoption will not have a material impact on the Company’s consolidated financial statements. Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which simplifies the accounting for goodwill impairment. The amendment in ASU 2017-04 removes Step-two of the goodwill impairment test, which requires a hypothetical purchase price allocation. ASU 2017-04 will become effective prospectively for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the impact of the new standard on its consolidated financial statements. Income Taxes In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory,” which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. ASU 2016-16 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Upon adoption of ASU 2016-16, an entity should apply the guidance on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company will adopt the new standard in the first quarter of 2018. The adoption of this guidance is expected to reduce total assets and stockholders’ equity by $2.6 million. Leases In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which provides comprehensive lease accounting guidance. The standard requires entities to recognize lease assets and liabilities on the balance sheet and to disclose key information about leasing arrangements. ASU 2016-02 will become effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of the potential impact of this guidance and an appropriate implementation strategy. While the Company’s evaluation of this guidance is in the early stages, the Company currently expects that the adoption of this guidance will result in a gross-up of assets and liabilities on its consolidated balance sheet. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09” or “Topic 606”), which provides new guidance for revenue recognition. ASU 2014-09 supersedes the revenue recognition requirements in ASC 605, “Revenue Recognition (Topic 605),” and requires entities to recognize revenue in a way that depicts the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. As amended by ASU 2015-14, “Revenue from Contracts with Customers – Deferral of the Effective Date,” ASU 2014-09 will be effective for annual and interim reporting periods beginning after December 15, 2017. Upon adoption of Topic 606, an entity may apply the new guidance either retrospectively to each prior reporting period presented (the “full retrospective method”) or retrospectively only to customer contracts not yet completed as of the date of adoption with the cumulative effect of initially applying the standard recognized in beginning retained earnings at the date of the initial application (the “modified retrospective method”). The Company has conducted various activities to prepare for the adoption of the new standard. The Company surveyed cross-functional leaders to identify potential revenue streams that could be impacted by Topic 606 and identified certain revenue streams that could be affected. The Company also reviewed a representative sample of individual customer contracts related to these various revenue streams to determine if the guidance under Topic 606 is expected to have a material impact on revenue recognition. The Company’s work indicates the adoption of Topic 606 is not expected to change the revenue recognition method on any material revenue streams of the Company and is not expected to have a material impact on the Company’s consolidated financial statements. The Company will adopt the new standard in the first quarter of 2018, using the modified retrospective method. In addition, the Company will elect to apply certain practical expedients allowed under the guidance. First, the Company does not intend to adjust the promised amount of consideration for the effects of a financing component because the transfer of a promised good to a customer and the customer’s payment for that good are typically expected to be one year or less. Second, the Company will exclude from its transaction price any amounts collected from customers for all sales tax or other similar taxes, which is consistent with the Company’s current practice. Third, the Company will elect to account for shipping and handling activities that occur after the transfer of control over the related goods as fulfillment activities rather than performance obligations. |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Changes in Allowance for Doubtful Accounts | For the years ended December 31, 2017, 2016 and 2015, changes in the allowance for doubtful accounts were as follows (in thousands): 2017 2016 2015 Balance at beginning of year $ 565 $ 500 $ 282 Provision charged to selling, general and administrative expenses 283 135 285 Allowance resulting from acquisitions 52 15 5 Write-offs, net of recoveries of amounts previously reserved (358 ) (82 ) (29 ) Divestiture of JK Lasers — — (30 ) Exchange rate changes 12 (3 ) (13 ) Balance at end of year $ 554 $ 565 $ 500 |
Laser Quantum | |
Summary of Financial Information of Laser Quantum - Income Statement | The summarized financial information for Laser Quantum is as follows (in thousands): Year Ended December 31, 2016 2015 Revenue $ 23,526 $ 25,599 Income from operations $ 5,537 $ 7,362 Net income $ 5,389 $ 6,925 |
Summary of Financial Information of Laser Quantum - Balance Sheet | December 31, 2016 Total assets (1) $ 25,043 Total liabilities $ 1,556 (1) Total assets at December 31, 2016 included cash and cash equivalents of $15.5 million. |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Unaudited Pro Forma Financial Information | The unaudited pro forma financial information is presented for comparative purposes only and is not necessarily indicative of the results of operations that actually would have been achieved if the acquisitions had taken place on January 1, 2016. Year Ended December 31, 2017 2016 Revenue $ 562,818 $ 487,960 Income from continuing operations $ 39,630 $ 21,020 Earnings per share attributable to Novanta Inc. – Basic (1) $ 0.49 $ 0.62 Earnings per share attributable to Novanta Inc. – Diluted (1) $ 0.49 $ 0.61 (1) The computation of pro forma earnings per share attributable to Novanta Inc. included $20.2 million and zero adjustment of redeemable noncontrolling interest to estimated redemption value for the years ended December 31, 2017 and 2016, respectively. |
World of Medicine GmbH | |
Summary of Fair Values of Assets Acquired and Liabilities Assumed Purchase Price Allocation | Based upon a preliminary valuation, the total purchase price allocation is as follows (in thousands): Amount Cash $ 1,400 Accounts receivable 11,807 Inventories 14,549 Property, plant and equipment 21,940 Intangible assets 59,732 Goodwill 55,632 Other assets 2,660 Total assets acquired 167,720 Accounts payable 4,398 Other liabilities 8,681 Deferred tax liabilities 19,707 Total liabilities assumed 32,786 Total assets acquired, net of liabilities assumed 134,934 Less: cash acquired 1,400 Total purchase price, net of cash acquired $ 133,534 |
Fair Value of Intangible Assets | The fair value of intangible assets is comprised of the following (dollar amounts in thousands): Weighted Average Estimated Fair Amortization Value Period Developed technologies $ 21,586 10 years Customer relationships 35,634 12 years Trademarks and trade names 2,284 10 years Backlog 228 1 year Total $ 59,732 |
Laser Quantum | |
Summary of Fair Values of Assets Acquired and Liabilities Assumed Purchase Price Allocation | The final purchase price allocation is as follows (in thousands): Amount Cash $ 15,343 Accounts receivable 2,739 Inventories 6,264 Property, plant and equipment 2,286 Intangible assets 38,955 Goodwill 31,168 Other assets 717 Total fair value of assets 97,472 Accounts payable 796 Other liabilities 2,068 Deferred tax liabilities 7,337 Total fair value of liabilities 10,201 Total fair value of assets, net of fair value of liabilities 87,271 Less: fair value of equity interest previously held by Novanta 34,637 Less: fair value of noncontrolling interest 21,582 Total purchase price paid by Novanta 31,052 Less: cash acquired 15,343 Purchase price, net of cash acquired $ 15,709 |
Fair Value of Intangible Assets | The fair value of intangible assets is comprised of the following (dollar amounts in thousands): Weighted Average Estimated Fair Amortization Value Period Developed technologies $ 15,501 15 years Customer relationships 19,990 15 years Trademarks and trade names 1,964 15 years Backlog 1,500 9 months Total $ 38,955 |
Thing Magic | |
Summary of Fair Values of Assets Acquired and Liabilities Assumed Purchase Price Allocation | The final purchase price allocation is as follows (in thousands): Amount Inventories $ 1,832 Intangible assets 7,423 Goodwill 9,929 Total assets acquired 19,184 Other liabilities 95 Total liabilities assumed 95 Total purchase price $ 19,089 |
Fair Value of Intangible Assets | The fair value of intangible assets is comprised of the following (dollar amounts in thousands): Weighted Average Estimated Fair Amortization Value Period Developed technologies $ 4,600 10 years Customer relationships 2,520 10 years Trademarks and trade names 303 5 years Total $ 7,423 |
Reach Technology Inc. | |
Summary of Fair Values of Assets Acquired and Liabilities Assumed Purchase Price Allocation | The final purchase price allocation is as follows (in thousands): Amount Cash $ 238 Accounts receivable 991 Inventory 1,611 Prepaid expenses and other current assets 12 Intangible assets 3,953 Goodwill 4,715 Total assets acquired 11,520 Accounts payable 280 Other liabilities 148 Deferred tax liabilities 1,474 Total liabilities assumed 1,902 Total assets acquired, net of liabilities assumed 9,618 Less: cash acquired 238 Total purchase price, net of cash acquired $ 9,380 |
Fair Value of Intangible Assets | The fair value of intangible assets is comprised of the following (dollar amounts in thousands): Weighted Average Estimated Fair Amortization Value Period Customer relationships $ 2,770 15 years Developed technology 500 7 years Trademarks and trade names 258 10 years Backlog 425 1 year Total $ 3,953 |
Skyetek, Lincoln Laser and Applimotion | |
Summary of Fair Values of Assets Acquired and Liabilities Assumed Purchase Price Allocation | The final purchase price for Skyetek, Lincoln Laser and Applimotion was allocated as follows (in thousands): Amount Cash $ 331 Accounts receivable 3,166 Inventory 3,544 Prepaid expenses and other current assets 148 Property, plant and equipment 3,220 Intangible assets 11,370 Goodwill 12,668 Other assets 10 Total assets acquired 34,457 Accounts payable 1,681 Other liabilities 1,197 Deferred tax liabilities 2,308 Total liabilities assumed 5,186 Total assets acquired, net of liabilities assumed 29,271 Less: cash acquired 331 Total purchase price, net of cash acquired 28,940 Less: contingent consideration 3,459 Net cash used for acquisition of businesses $ 25,481 |
Fair Value of Intangible Assets | The fair value of intangible assets for Skyetek, Lincoln Laser and Applimotion is comprised of the following (dollar amounts in thousands): Weighted Average Estimated Fair Amortization Value Period Developed technologies $ 4,993 10 years Customer relationships 4,266 12 years Trademarks and trade names 593 9 years Non-compete covenant 684 4 years Backlog 834 1 year Total $ 11,370 |
Discontinued Operations and D30
Discontinued Operations and Divestitures (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Operating Results Reported as Discontinued Operations | The following table presents the operating results which are reported as discontinued operations in the Company’s consolidated statements of operations (in thousands): Year Ended December 31, 2015 Loss from discontinued operations, before income tax $ (13 ) Loss from discontinued operations, net of tax $ (13 ) |
Accumulated Other Comprehensi31
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive income (loss) is as follows (in thousands): Total Accumulated Other Cumulative Pension Comprehensive Translation Liability Income (Loss) Adjustments Adjustments Balance at December 31, 2014 $ (16,456 ) $ (5,615 ) $ (10,841 ) Other comprehensive income (loss) (3,249 ) (4,083 ) 834 Amounts reclassified from accumulated other comprehensive income (loss) (1) 875 — 875 Balance at December 31, 2015 $ (18,830 ) $ (9,698 ) $ (9,132 ) Other comprehensive loss (9,611 ) (7,524 ) (2,087 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) 726 — 726 Balance at December 31, 2016 $ (27,715 ) $ (17,222 ) $ (10,493 ) Other comprehensive income (loss) 8,790 8,909 (119 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) 1,045 — 1,045 Balance at December 31, 2017 $ (17,880 ) $ (8,313 ) $ (9,567 ) (1) The amounts reclassified from accumulated other comprehensive income (loss) were included in selling, general and administrative expenses in the consolidated statements of operations. |
Goodwill, Intangible Assets a32
Goodwill, Intangible Assets and Impairment Charges (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Goodwill | The following table summarizes changes in goodwill during the year ended December 31, 2017 (in thousands): December 31, 2017 Balance at beginning of year $ 108,128 Goodwill acquired from Laser Quantum acquisition 31,168 Goodwill acquired from ThingMagic acquisition 9,929 Goodwill acquired from WOM acquisition 55,632 Effect of foreign exchange rate changes 6,131 Balance at end of year $ 210,988 |
Goodwill by Reportable Segment | Goodwill by reportable segment as of December 31, 2017 is as follows (in thousands): Reportable Segment Photonics Vision Precision Motion Total Goodwill $ 170,818 $ 157,436 $ 33,963 $ 362,217 Accumulated impairment of goodwill (102,461 ) (31,722 ) (17,046 ) (151,229 ) Total $ 68,357 $ 125,714 $ 16,917 $ 210,988 Goodwill by reportable segment as of December 31, 2016 is as follows (in thousands): Reportable Segment Photonics Vision Precision Motion Total Goodwill $ 136,278 $ 89,116 $ 33,963 $ 259,357 Accumulated impairment of goodwill (102,461 ) (31,722 ) (17,046 ) (151,229 ) Total $ 33,817 $ 57,394 $ 16,917 $ 108,128 |
Intangible Assets | Intangible assets as of December 31, 2017 and 2016, respectively, are summarized as follows (dollar amounts in thousands): December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Life (Years) Amortizable intangible assets: Patents and acquired technologies $ 130,890 $ (77,295 ) $ 53,595 10.2 Customer relationships 131,809 (52,015 ) 79,794 12.3 Customer backlog 2,524 (2,284 ) 240 0.8 Non-compete covenant 2,514 (1,956 ) 558 0.9 Trademarks and trade names 15,708 (7,874 ) 7,834 9.7 Amortizable intangible assets 283,445 (141,424 ) 142,021 11.3 Non-amortizable intangible assets: Trade names 13,027 — 13,027 Total $ 296,472 $ (141,424 ) $ 155,048 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Life (Years) Amortizable intangible assets: Patents and acquired technologies $ 84,742 $ (67,902 ) $ 16,840 7.6 Customer relationships 69,554 (42,934 ) 26,620 12.9 Customer backlog 622 (540 ) 82 0.9 Non-compete covenant 2,514 (1,419 ) 1,095 2.0 Trademarks and trade names 10,709 (6,630 ) 4,079 8.3 Amortizable intangible assets 168,141 (119,425 ) 48,716 10.2 Non-amortizable intangible assets: Trade names 13,027 — 13,027 Total $ 181,168 $ (119,425 ) $ 61,743 |
Amortization Expense of Intangible Assets | Amortization expense is as follows (in thousands): Year Ended December 31, 2017 2016 2015 Amortization expense – cost of revenue $ 8,824 $ 4,164 $ 4,712 Amortization expense – operating expenses 12,096 8,251 7,611 Total amortization expense $ 20,920 $ 12,415 $ 12,323 |
Estimated Future Amortization Expense | Estimated future amortization expense for each of the five succeeding years and thereafter is as follows (in thousands): Year Ending December 31, Cost of Revenue Operating Expenses Total 2018 $ 9,742 $ 14,584 $ 24,326 2019 8,877 13,511 22,388 2020 7,980 11,051 19,031 2021 7,088 10,238 17,326 2022 5,682 8,586 14,268 Thereafter 14,226 30,456 44,682 Total $ 53,595 $ 88,426 $ 142,021 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Values of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table summarizes the fair values of the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 (in thousands): Quoted Prices in Significant Other Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) Assets Cash equivalents $ 2,665 $ 2,665 $ — $ — Prepaid expenses and other current assets: Foreign currency forward contracts 150 — 150 — $ 2,815 $ 2,665 $ 150 $ — Liabilities Accrued expenses and other current liabilities: Contingent consideration - Current $ 2,800 $ — $ — $ 2,800 Foreign currency forward contracts (1) — — — — Other liabilities: Contingent consideration - Long-term 1,304 — — 1,304 $ 4,104 $ — $ — $ 4,104 (1) The unrealized loss from foreign currency forward contracts was nominal as of December 31, 2017. The following table summarizes the fair values of the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2016 (in thousands): Quoted Prices in Significant Other Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) Assets Cash equivalents $ 9,569 $ 9,569 $ — $ — Liabilities Accrued expenses and other current liabilities: Contingent consideration - Current $ 2,775 $ — $ — $ 2,775 Other liabilities: Contingent consideration - Long-term 2,381 — — 2,381 $ 5,156 $ — $ — $ 5,156 |
Changes in Fair Value of Level 3 Contingent Consideration | Changes in the fair value of our Level 3 contingent consideration for the year ended December 31, 2017 was as follows (in thousands): Contingent Consideration Balance at December 31, 2016 $ 5,156 Payments of contingent consideration (2,781 ) Fair value adjustments 1,729 Balance at December 31, 2017 $ 4,104 |
Earnings (Loss) per Common Sh34
Earnings (Loss) per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings (Loss) Per Share | The following table sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except per share amounts): Year Ended December 31, 2017 2016 2015 Numerators: Income from continuing operations $ 62,307 $ 22,003 $ 35,628 Less: Net income attributable to noncontrolling interest (2,256 ) — — Income from continuing operations attributable to Novanta Inc. 60,051 22,003 35,628 Less: Adjustment of redeemable noncontrolling interest to estimated redemption value (see Note 17) (20,244 ) — — Income from continuing operations attributable to Novanta Inc. after adjustment of redeemable noncontrolling interest to estimated redemption value 39,807 22,003 35,628 Loss from discontinued operations — — (13 ) Net income attributable to Novanta Inc. after adjustment of redeemable noncontrolling interest to estimated redemption value $ 39,807 $ 22,003 $ 35,615 Denominators: Weighted average common shares outstanding— basic 34,817 34,694 34,579 Dilutive potential common shares 463 220 248 Weighted average common shares outstanding— diluted 35,280 34,914 34,827 Antidilutive common shares excluded from above — 85 — Basic Earnings (Loss) per Common Share: From continuing operations $ 1.14 $ 0.63 $ 1.03 From discontinued operations $ — $ — $ (0.00 ) Basic earnings (loss) per share attributable to Novanta Inc. $ 1.14 $ 0.63 $ 1.03 Diluted Earnings (Loss) per Common Share: From continuing operations $ 1.13 $ 0.63 $ 1.02 From discontinued operations $ — $ — $ (0.00 ) Diluted earnings (loss) per share attributable to Novanta Inc. $ 1.13 $ 0.63 $ 1.02 |
Supplementary Balance Sheet I35
Supplementary Balance Sheet Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Inventories | Inventories December 31, 2017 2016 Raw materials $ 57,277 $ 39,822 Work-in-process 14,847 8,012 Finished goods 16,443 9,511 Demo and consigned inventory 2,711 2,400 Total inventories $ 91,278 $ 59,745 |
Property, Plant and Equipment, net | Property, Plant and Equipment, Net December 31, 2017 2016 Cost: Land, buildings and improvements $ 53,055 $ 38,384 Machinery and equipment 74,122 52,136 Total cost 127,177 90,520 Accumulated depreciation (65,459 ) (55,099 ) Property, plant and equipment, net $ 61,718 $ 35,421 |
Summary of Depreciation Expense on Property, Plant and Equipment, Including Demo Units and Assets under Capital Leases | The following table summarizes depreciation expense on property, plant and equipment, including demo units and assets under capital leases (in thousands): Year Ended December 31, 2017 2016 2015 Depreciation expense $ 9,838 $ 8,558 $ 7,873 |
Summary of Total Accumulated Depreciation on Assets under Capital Leases | The following table summarizes total accumulated depreciation on assets under capital leases as of the dates indicated (in thousands): December 31, 2017 2016 Accumulated depreciation on assets under capital leases $ 6,097 $ 4,950 |
Accrued Expenses and Other Current Liabilities | The following table summarizes accrued expenses and other current liabilities as of the dates indicated (in thousands): December 31, 2017 2016 Accrued compensation and benefits $ 17,348 $ 9,647 Accrued warranty 4,835 3,142 Accrued restructuring 440 1,371 Accrued professional services 1,469 1,237 Accrued contingent considerations 2,800 2,775 Customer deposits 3,634 1,164 Other 12,788 7,612 Total $ 43,314 $ 26,948 |
Accrued Warranty | The following table summarizes accrued warranty activities for the periods indicated (in thousands): Year Ended December 31, 2017 2016 2015 Balance at beginning of year $ 3,142 $ 3,335 $ 3,044 Provision charged to cost of revenue 3,169 1,673 2,025 Warranty liabilities acquired from acquisitions 1,307 23 132 Use of provision (2,857 ) (1,849 ) (1,454 ) Divestiture of JK Lasers — — (389 ) Foreign currency exchange rate changes 74 (40 ) (23 ) Balance at end of year $ 4,835 $ 3,142 $ 3,335 |
Summary of Other Long Term Liabilities | The following table summarizes other long term liabilities as of the dates indicated (in thousands ): December 31, 2017 2016 Capital lease obligations $ 7,947 $ 8,111 Accrued pension liabilities 3,853 5,957 Accrued contingent considerations 1,304 2,381 Other 2,037 2,264 Total $ 15,141 $ 18,713 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt consisted of the following (in thousands): December 31, 2017 2016 Senior Credit Facilities – term loan $ 9,200 $ 7,500 Less: unamortized debt issuance costs (81 ) (134 ) Total current portion of long-term debt $ 9,119 $ 7,366 Senior Credit Facilities – term loan $ 79,125 $ 63,750 Senior Credit Facilities – revolving credit facility 149,453 10,000 Less: unamortized debt issuance costs (3,078 ) (3,196 ) Total long-term debt $ 225,500 $ 70,554 Total Senior Credit Facilities $ 234,619 $ 77,920 |
Repayments of Outstanding Principal under Term Loan Facility | On August 1, 2017, the Company entered into an amendment (the “Third Amendment”) to the Second Amended and Restated Credit Agreement. The Third Amendment increased the borrowing limit under the revolving credit facility from $225 million to $325 million and reset the uncommitted accordion feature to $125 million for potential future expansion. Additionally, the Third Amendment increased the term loan balance from $65.6 million to $90.6 million. Under the Third Amendment, the Company is required to pay quarterly scheduled principal repayments of $2.3 million beginning in October 2017, with the final installment of $56.1 million due upon maturity in May 2021. Borrowings under the revolving credit facility may be repaid at any time through May 2021, the date of maturity date of the Senior Credit Facilities. The Company may voluntarily prepay loans or reduce commitments under the Senior Credit Facilities, in whole or in part, without premium or penalty, subject to certain minimum principal amounts. On February 26, 2018, the Company entered into a fourth amendment (the “Fourth Amendment”) to the Second Amended and Restated Credit Agreement. The Fourth Amendment increases the maximum permitted consolidated leverage ratio from 3.00 to 3.50, increases the maximum consolidated leverage ratio for permitted acquisitions and stock repurchases from 2.50 to 3.00, increases the maximum permitted consolidated leverage ratio for a designated acquisition from 3.00 to 3.50, and increases the maximum leverage ratio for four consecutive quarters following a designated acquisition from 3.50 to 4.00. Certain other technical changes were made to the Second Amended and Restated Credit Agreement as a result of the Fourth Amendment and are not considered material. As of December 31, 2017, the outstanding principal under the Company’s term loan facility is scheduled to be repaid as follows (in thousands): Principal Amount 2018 $ 9,200 2019 9,200 2020 9,200 2021 60,725 Total debt repayments $ 88,325 |
Capital Stock and Share-Based37
Capital Stock and Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Share-Based Compensation Expense Recorded In Income from Continuing Operations in Statements of Operations | The table below summarizes share-based compensation expense recorded in income from continuing operations (in thousands): Year Ended December 31, 2017 2016 2015 Selling, general and administrative $ 5,065 $ 3,920 $ 3,960 Research and development and engineering 221 117 170 Cost of revenue 207 256 257 Restructuring, acquisition and divestiture related costs — — (322 ) Total share-based compensation expense $ 5,493 $ 4,293 $ 4,065 |
Fair Value of TSR Performance-Based Restricted Stock Units Estimated Using Monte-Carol Valuation Model | The fair value of the TSR-PSUs at the date of grant was estimated using the Monte-Carlo valuation model with the following assumptions: Year Ended December 31, 2017 Grant-date stock price $ 24.30 Expected volatility 28.6 % Risk-free interest rate 1.44 % Expected annual dividend yield — Weighted average fair value $ 33.31 |
2010 Incentive Award Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Restricted Stock Issued and Outstanding | The table below summarizes activities relating to restricted and deferred stock units issued and outstanding under the Amended and Restated 2010 Incentive Plan during 2017: Restricted and Deferred Stock Units (in thousands) Weighted Average Grant Date Fair Value Weighted Average Remaining Vesting Period (in years) Aggregate Intrinsic Value (1) (in thousands) Unvested at December 31, 2016 635 $ 13.97 Granted 248 $ 25.62 Vested (224 ) $ 14.05 Forfeited (45 ) $ 18.18 Unvested at December 31, 2017 614 $ 18.35 1.86 years $ 30,721 Expected to vest as of December 31, 2017 589 $ 18.13 1.86 years $ 29,436 (1) The aggregate intrinsic value is calculated based on the fair value of $50.00 per share of the Company’s common stock on December 31, 2017 due to the fact that the restricted stock units carry a $0 purchase price. |
Performance Stock Units Issued and Outstanding | The number of common shares to be issued upon settlement following vesting of the TSR-PSUs is determined based on the relative market performance of the Company’s common stock compared to the Russell 2000 Index over the three-year performance period using a payout formula established by the Company’s Board of Directors at the time of grant and will be in the range of zero to 200% of the target number of shares. The Company recognizes the related compensation expense based on the fair value of the TSR-PSUs, determined using Monte-Carlo valuation model as of the grant date, on a straight-line basis from the grant date to the end of the three-year performance period. Compensation expense will not be affected by the number of TSR-PSUs that will actually vest at the end of the three-year performance period. The table below summarizes activities relating to performance-based stock awards issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during 2017: Performance Stock Units (1) (in thousands) Weighted Average Grant Date Fair Value Weighted Average Remaining Vesting Period (in years) Aggregate Intrinsic Value (2) (in thousands) Unvested at December 31, 2016 29 $ 14.13 Granted 60 $ 28.80 Vested — $ — Forfeited — $ — Unvested at December 31, 2017 89 $ 24.00 1.68 years $ 4,474 Expected to vest as of December 31, 2017 89 $ 24.00 1.68 years $ 4,474 (1) The unvested PSUs are shown in this table at target, except for the number of shares vested, which reflect the shares earned. As of December 31, 2017, the maximum number of PSUs available to be earned is approximately 179 thousand. (2) The aggregate intrinsic value is calculated based on the fair value of $50.00 per share of the Company’s common stock on December 31, 2017 due to the fact that the performance stock units carry a $0 purchase price. |
Stock Options Outstanding, Exercisable and Expected to Vest | The following table shows stock options that were outstanding, exercisable and expected to vest as of December 31, 2017 and the related weighted average exercise price, weighted average remaining contractual term and aggregate intrinsic value Number of Shares (In thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (1) (In thousands) Stock options outstanding 103 $ 14.13 8.25 years $ 3,690 Stock options exercisable 34 $ 14.13 8.25 years $ 1,230 Stock options expected to vest 103 $ 14.13 8.25 years $ 3,690 (1) The aggregate intrinsic value is calculated as the difference between the closing market price of $50.00 per share of the Company’s common stock on December 31, 2017 and the exercise price of the stock options. |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |
Net Periodic Pension Cost | The net periodic pension cost consisted of the following components (in thousands): Year Ended December 31, 2017 2016 2015 Components of the net periodic pension cost: Interest cost $ 991 $ 1,232 $ 1,340 Expected return on plan assets (1,665 ) (1,566 ) (1,844 ) Amortization of actuarial losses 1,045 726 875 Net periodic pension cost $ 371 $ 392 $ 371 |
Actuarial Assumptions used to Compute net Periodic Pension Cost and Funded Status | The actuarial assumptions used to compute the net periodic pension cost for the years ended December 31, 2017, 2016 and 2015, respectively, were as follows: Year Ended December 31, 2017 2016 2015 Weighted-average discount rate 2.6 % 3.8 % 3.5 % Weighted-average long-term rate of return on plan assets 5.2 % 5.3 % 5.6 % The actuarial assumptions used to compute the benefit obligations as of December 31, 2017 and 2016, respectively, were as follows: December 31, 2017 2016 Weighted-average discount rate 2.4 % 2.6 % Rate of inflation 2.9 % 3.0 % |
Reconciliation of Benefit Obligations and Plan Assets of U.K. Plan | The following table provides a reconciliation of benefit obligations and plan assets of the U.K. Plan (in thousands): December 31, 2017 2016 Change in benefit obligation: Projected benefit obligation at beginning of year $ 37,261 $ 35,914 Interest cost 991 1,232 Actuarial (gains) losses (27 ) 7,425 Benefits paid (1,313 ) (809 ) Foreign currency exchange rate changes 3,417 (6,501 ) Projected benefit obligation at end of year $ 40,329 $ 37,261 Accumulated benefit obligation at end of year $ 40,329 $ 37,261 Change in plan assets: Fair value of plan assets at beginning of year $ 31,304 $ 32,374 Actual return on plan assets 2,605 4,522 Employer contributions 887 868 Benefits paid (1,313 ) (809 ) Foreign currency exchange rate changes 2,993 (5,651 ) Fair value of plan assets at end of year $ 36,476 $ 31,304 Funded status at end of year $ (3,853 ) $ (5,957 ) Amounts included in accumulated other comprehensive loss not yet recognized in net periodic pension cost: Net actuarial losses at beginning of year $ (11,697 ) $ (9,874 ) Net actuarial gains (losses) during the year 967 (4,469 ) Amounts reclassified from accumulated other comprehensive income to income before income taxes 1,045 726 Foreign currency exchange rate changes (808 ) 1,920 Net actuarial loss $ (10,493 ) $ (11,697 ) Amounts expected to be amortized from accumulated other comprehensive loss into net periodic pension cost over the next fiscal year consists of: Net actuarial loss $ 957 $ 1,148 The funded status of the U.K. Plan is included in other long term liabilities in the accompanying consolidated balance sheets. |
Expected Future Benefit Payments | The following table reflects the total expected benefit payments to plan participants and have been estimated based on the same assumptions used to measure the Company’s benefit obligations as of December 31, 2017 (in thousands): Amount 2018 $ 768 2019 999 2020 1,234 2021 1,430 2022 1,169 2023-2026 8,320 Total $ 13,920 |
Summary of Fair Value of Plan Assets by Asset Category | The following table summarizes the fair values of Plan assets by asset category as of December 31, 2017 (in thousands): Asset Category Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Not Subject to Leveling Mutual Funds: Balanced (1) $ 26,816 $ — $ — $ — $ 26,816 Fixed income (2) 9,524 — — — 9,524 Cash 136 136 — — — Total $ 36,476 $ 136 $ — $ — $ 36,340 (1) This class comprises a diversified portfolio of global investments which seeks a balanced return between capital growth and fixed income and is allocated on a weighted average basis as follows: equities (38%), bonds (27%), other assets (31%) and cash (4%). (2) This class comprises a diversified portfolio of global investments which seeks fixed income growth and is allocated on a weighted average basis as follows: bonds (92%) and cash (8%). The following table summarizes the fair values of Plan assets by asset category as of December 31, 2016 (in thousands): Asset Category Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Not Subject to Leveling Mutual Funds: Balanced (1) $ 23,317 $ — $ — $ — $ 23,317 Growth (2) 3,239 — — — 3,239 Fixed income (3) 4,512 — — — 4,512 Cash 236 236 — — — Total $ 31,304 $ 236 $ — $ — $ 31,068 (1) This class comprises a diversified portfolio of global investments which seeks a balanced return between capital growth and fixed income and is allocated on a weighted average basis as follows: equities (34%), bonds (36%), other assets (27%) and cash (3%). (2) This class comprises a diversified portfolio of global investments which seeks long-term capital growth and is allocated on a weighted average basis as follows: equities (59%), bonds (16%), other assets (22%), and cash (3%). (3) This class comprises a diversified portfolio of global investments which seeks fixed income growth and is allocated on a weighted average basis as follows: bonds (93%), other assets (1%) and cash (6%). |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Components of Income (Loss) from Continuing Operations | Components of the Company’s income (loss) from continuing operations before income taxes are as follows (in thousands): Year Ended December 31, 2017 2016 2015 Income (loss) from continuing operations before income taxes: Canada $ (2,036 ) $ (1,872 ) $ (1,674 ) U.S. 37,327 20,422 23,298 Other 40,843 13,972 24,398 Total $ 76,134 $ 32,522 $ 46,022 |
Components of Income Tax Provision (Benefit) | Components of the Company’s income tax provision (benefit) are as follows (in thousands): Year Ended December 31, 2017 2016 2015 Current Canada $ 146 $ 43 $ 96 U.S. 9,434 9,678 8,136 Other 6,807 2,564 3,854 16,387 12,285 12,086 Deferred Canada — — — U.S. 2,396 (2,378 ) (3,239 ) Other (4,956 ) 612 1,547 (2,560 ) (1,766 ) (1,692 ) Total $ 13,827 $ 10,519 $ 10,394 |
Reconciliation of Statutory Canadian Tax rate to Effective Tax Rate | The reconciliation of the statutory Canadian tax rate to the effective tax rate related to income before income taxes from continuing operations is as follows (in thousands, except percentage data): Year Ended December 31, 2017 2016 2015 Statutory Canadian tax rate 29.00 % 28.50 % 27.00 % Expected income tax provision at Canadian statutory tax rate $ 22,079 $ 9,269 $ 12,426 International tax rate differences (2,038 ) 891 304 State income taxes, net 674 503 453 Withholding and other taxes 484 441 731 Permanent differences 274 179 1,000 Section 199 deduction (1,148 ) (1,063 ) (1,188 ) Tax credits (984 ) (1,095 ) (990 ) Statutory tax rate changes 2,823 (856 ) 95 Uncertain tax positions (1,607 ) (103 ) 121 Change in valuation allowance (354 ) 1,202 (612 ) Acquisition contingent consideration adjustments 149 762 — Transaction costs 1,011 649 270 Provision to return differences 225 (93 ) (617 ) IRS audit — — (748 ) Gain on Laser Quantum acquisition (6,586 ) — — UK patent box (1,646 ) — — JK Lasers divestiture — — (1,432 ) Other 471 (167 ) 581 Reported income tax provision $ 13,827 $ 10,519 $ 10,394 Effective tax rate 18.2 % 32.3 % 22.6 % |
Significant Components of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2017 and 2016 are as follows (in thousands): December 31, 2017 2016 Deferred tax assets: Losses $ 9,407 $ 9,557 Compensation related deductions 3,687 4,437 Tax credits 2,594 2,318 Unrealized currency gains/losses 183 — Restructuring related liabilities 172 471 Inventory 3,400 5,869 Amortization — 3,082 Warranty 768 1,049 Other — 1,688 Total deferred tax assets 20,211 28,471 Valuation allowance on deferred tax assets (12,811 ) (13,014 ) Net deferred tax assets $ 7,400 $ 15,457 Deferred tax liabilities: Equity-method investment $ — $ (1,370 ) Depreciation (1,353 ) (749 ) Amortization (23,496 ) (4,162 ) Unrealized currency gains/losses — (659 ) Other (1,171 ) (1,218 ) Total deferred tax liabilities $ (26,020 ) $ (8,158 ) Net deferred income tax assets (liabilities) $ (18,620 ) $ 7,299 |
Reconciliation of Total Amounts of Unrecognized Tax Benefits | The reconciliation of the total amounts of unrecognized tax benefits is as follows (in thousands): Balance at December 31, 2014 $ 6,274 Additions based on tax positions related to the current year 752 Additions for tax positions of prior years 78 Reductions to tax positions of prior years (626 ) Reductions to tax positions resulting from a lapse of the applicable statute of limitations (226 ) Settlements with tax authorities (762 ) Balance at December 31, 2015 5,490 Additions based on tax positions related to the current year 561 Additions for tax positions of prior years 88 Reductions to tax positions of prior years (45 ) Reductions to tax positions resulting from a lapse of the applicable statute of limitations (842 ) Settlements with tax authorities (290 ) Balance at December 31, 2016 4,962 Additions based on tax positions related to the current year 991 Additions for tax positions of prior years 496 Reductions to tax positions of prior years (28 ) Reductions to tax positions resulting from a lapse of the applicable statute of limitations (1,577 ) Settlements with tax authorities (755 ) Balance at December 31, 2017 $ 4,089 |
Income Tax Returns to be Reviewed | The Company’s income tax returns may be reviewed by tax authorities in the following countries for the following periods under the appropriate statute of limitations: United States 2014 - Present Canada 2014 - Present United Kingdom 2016 - Present Germany 2013 - Present The Netherlands 2012 - Present China 2008 - Present Japan 2013 - Present |
Restructuring, Acquisition an40
Restructuring, Acquisition and Divestiture Related Costs (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring And Related Activities [Abstract] | |
Schedule Of Restructuring And Related Cost | The following table summarizes restructuring, acquisition and divestiture related costs recorded in the accompanying consolidated statements of operations (in thousands): Year Ended December 31, 2017 2016 2015 2016 restructuring $ 332 $ 3,049 $ 3,148 2015 restructuring — — 1,484 2011 restructuring 14 (79 ) 1,208 Total restructuring charges $ 346 $ 2,970 $ 5,840 Acquisition and related charges $ 7,196 $ 4,975 $ 1,301 Divestiture related charges — — 1,113 Total acquisition and divestiture related charges $ 7,196 $ 4,975 $ 2,414 Total restructuring, acquisition and divestiture related costs $ 7,542 $ 7,945 $ 8,254 |
Summary of Restructuring Costs for Each Segment and Unallocated Corporate Costs | The following table summarizes restructuring costs associated with the 2016 restructuring program for each segment and unallocated corporate costs (in thousands): Year Ended Cumulative Costs as of December 31, 2017 December 31, 2016 December 31, 2015 December 31, 2017 Photonics $ — $ 813 $ 55 $ 868 Vision 331 1,862 2,200 4,393 Precision Motion — 106 833 939 Unallocated Corporate and Shared Services 1 268 60 329 Total $ 332 $ 3,049 $ 3,148 $ 6,529 The following table summarizes the total costs for each segment and unallocated corporate costs related to the 2015 restructuring plan (in thousands): Year Ended December 31, 2015 Photonics $ 542 Vision 525 Precision Motion 79 Unallocated Corporate and Shared Services 338 Total $ 1,484 The following table summarizes restructuring costs for each segment and unallocated corporate costs related to the 2011 restructuring plan (in thousands): Cumulative Year Ended December 31, Costs as of 2017 2016 2015 December 31, 2017 Photonics $ — $ (188 ) $ — $ 1,751 Vision — — — 48 Precision Motion — — — 122 Unallocated Corporate and Shared Services 14 109 1,208 3,276 Total $ 14 $ (79 ) $ 1,208 $ 5,197 |
Summary of Accrual Activities by Components Related to Company's Restructuring Plans | The following table summarizes the accrual activities, by component, related to the Company’s restructuring charges recorded in the accompanying consolidated balance sheets (in thousands): Total Severance Facility Depreciation Other (b) Balance at December 31, 2015 $ 1,882 $ 1,358 $ 406 $ — $ 118 Restructuring charges (a) 4,929 2,738 777 616 798 Reserves reversed (322 ) (322 ) — — — Cash payments (4,181 ) (3,170 ) (104 ) — (907 ) Non-cash write-offs and other adjustments (572 ) 7 32 (616 ) 5 Balance at December 31, 2016 1,736 611 1,111 — 14 Restructuring charges 346 185 146 — 15 Cash payments (1,212 ) (692 ) (503 ) — (17 ) Non-cash write-offs and other adjustments (64 ) (65 ) 9 — (8 ) Balance at December 31, 2017 $ 806 $ 39 $ 763 $ — $ 4 (a) Excludes $1.6 million of gain on the sale of the Chatsworth, California facility. (b) Other restructuring charges mainly related to consulting fees and relocation costs. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Gross Assets under Capital Lease | Gross assets under capital lease as of December 31, 2017 and 2016, respectively, are summarized as follows (in thousands): 2017 2016 Land, buildings and improvements $ 9,133 $ 9,133 Machinery and equipment 4,429 4,026 Total gross assets under capital lease $ 13,562 $ 13,159 |
Future Minimum Lease Payments Under Operating and Capital Leases | Future Lease Payments Future minimum lease payments under operating and capital leases expiring subsequent to December 31, 2017, including operating leases associated with facilities that have been vacated as a result of the Company’s restructuring actions, are summarized as follows (in thousands): Year Ended December 31, Operating Lease Capital Lease (1) 2018 $ 6,695 $ 1,013 2019 4,861 995 2020 3,121 983 2021 2,481 907 2022 605 907 Thereafter 6,449 6,325 Total minimum lease payments $ 24,212 $ 11,130 (1) Capital lease payments include interest payments of $2.7 million. |
Redeemable Noncontrolling Int42
Redeemable Noncontrolling Interest (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Noncontrolling Interest [Abstract] | |
Schedule of Reconciliation of Changes in Redeemable Noncontrolling Interest | The following table presents the reconciliation of changes in the Company’s redeemable noncontrolling interest (in thousands): Redeemable Noncontrolling Interest Balance as of December 31, 2016 $ — Acquisition of noncontrolling interest 21,582 Net income attributable to noncontrolling interest 2,256 Adjustment of redeemable noncontrolling interest to estimated redemption value (1) 20,244 Foreign currency translation 2,841 Balance as of December 31, 2017 $ 46,923 1. Adjustment of the carrying value of redeemable noncontrolling interest to the estimated redemption value was recognized in retained earnings instead of the consolidated statement of operations but was included in the computation of earnings per share attributable to Novanta Inc. (see Note 9). |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Revenue, Gross Profit, Operating Income (Loss) from Continuing Operations, Depreciation and Amortization, Accounts Receivable and Inventory by Reportable Segments | Revenue, gross profit, operating income (loss) from continuing operations, depreciation and amortization, accounts receivable and inventory by reportable segments are as follows (in thousands): Year Ended December 31, 2017 2016 2015 Revenue Photonics $ 232,359 $ 174,158 $ 168,331 Vision 183,074 122,250 124,725 Precision Motion 105,857 88,350 80,542 Total $ 521,290 $ 384,758 $ 373,598 Year Ended December 31, 2017 2016 2015 Gross Profit Photonics $ 106,117 $ 76,696 $ 73,602 Vision 69,249 47,181 48,966 Precision Motion 46,564 40,044 36,709 Unallocated Corporate and Shared Services (1,399 ) (1,469 ) (1,387 ) Total $ 220,531 $ 162,452 $ 157,890 Year Ended December 31, 2017 2016 2015 Operating Income (Loss) from Continuing Operations Photonics $ 51,289 $ 34,825 $ 35,971 Vision 7,883 (1,277 ) (2,057 ) Precision Motion 27,146 21,101 16,877 Unallocated Corporate and Shared Services (29,123 ) (22,086 ) (21,858 ) Total $ 57,195 $ 32,563 $ 28,933 Year Ended December 31, 2017 2016 2015 Depreciation and Amortization Photonics $ 13,806 $ 6,738 $ 6,083 Vision 13,590 10,402 8,599 Precision Motion 2,308 2,439 2,533 Unallocated Corporate and Shared Services 1,054 1,394 2,981 Total $ 30,758 $ 20,973 $ 20,196 December 31, 2017 2016 2015 Accounts Receivable Photonics $ 33,490 $ 28,886 $ 21,763 Vision 36,089 22,885 21,691 Precision Motion 11,903 11,998 13,734 Total accounts receivable $ 81,482 $ 63,769 $ 57,188 Inventory Photonics 44,451 28,976 29,501 Vision 33,836 20,656 19,583 Precision Motion 12,991 10,113 10,482 Total inventory $ 91,278 $ 59,745 $ 59,566 Total segment assets $ 172,760 $ 123,514 $ 116,754 December 31, 2017 2016 2015 Total Assets Total segment assets $ 172,760 $ 123,514 $ 116,754 Cash and cash equivalents 100,057 68,108 59,959 Prepaid income taxes and income taxes receivable 4,387 2,058 2,510 Prepaid expenses and other current assets 10,675 5,570 5,989 Property, plant and equipment, net 61,718 35,421 40,550 Deferred tax assets 7,052 8,593 7,885 Other assets 4,018 12,502 12,673 Intangible assets, net 155,048 61,743 66,269 Goodwill 210,988 108,128 103,456 Total $ 726,703 $ 425,637 $ 416,045 |
Schedule of Geographic Revenue | The Company aggregates geographic revenue based on the customer location where products are shipped. Revenue from these customers is as follows (in thousands, except percentage data): Year Ended December 31, 2017 2016 2015 Revenue % of Total Revenue % of Total Revenue % of Total United States $ 220,583 42.3 % $ 154,756 40.2 % $ 154,825 41.4 % Germany 68,003 13.0 55,940 14.5 54,743 14.7 Rest of Europe 81,001 15.5 51,705 13.4 48,277 12.9 China 56,128 10.8 44,225 11.5 38,491 10.3 Rest of Asia-Pacific 84,727 16.3 60,104 15.6 62,467 16.7 Other 10,848 2.1 18,028 4.8 14,795 4.0 Total $ 521,290 100.0 % $ 384,758 100.0 % $ 373,598 100.0 % |
Summary of Long-lived Assets | Long-lived assets consist of property, plant and equipment, net, and are aggregated based on the location of the assets. A summary of these long-lived assets is as follows (in thousands): December 31, 2017 2016 2015 United States $ 29,920 $ 29,509 $ 34,907 Europe 30,621 4,588 4,014 China 1,127 1,286 1,593 Asia-Pacific and other 50 38 36 Total $ 61,718 $ 35,421 $ 40,550 |
Organization and Presentation -
Organization and Presentation - Additional Information (Details) - Laser Quantum | Jan. 10, 2017 | Jan. 09, 2017 |
Organization And Business Activities [Line Items] | ||
Equity method investment ownership percentage on Laser Quantum | 76.00% | 41.00% |
Percentage of additional shares acquired | 35.00% |
Summary of Significant Accoun45
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 10, 2017 | |
Significant Accounting Policies [Line Items] | ||||||
Earnings from equity investment | $ 104 | $ 2,191 | $ 2,657 | |||
Cash dividend received | 2,341 | |||||
Gain on sale of facilities | (36) | 1,707 | (1) | |||
ASU 2016-15 | Payments of Contingent Considerations Reported As Cash Used in Financing Activities | ||||||
Significant Accounting Policies [Line Items] | ||||||
Impact on consolidated financial statements upon adoption of new accounting standard update | 2,500 | |||||
ASU 2016-16 | Expected Reduction in Total Assets and Equity | Scenario, Forecast | ||||||
Significant Accounting Policies [Line Items] | ||||||
Impact on consolidated financial statements upon adoption of new accounting standard update | $ 2,600 | |||||
Restructuring, Acquisition and Divestiture Related Costs | Facility Closing | ||||||
Significant Accounting Policies [Line Items] | ||||||
Gain on sale of facilities | 1,700 | |||||
Laser Quantum | ||||||
Significant Accounting Policies [Line Items] | ||||||
Percentage of additional shares acquired | 35.00% | |||||
Earnings from equity investment | $ 100 | 2,200 | $ 2,700 | |||
Net investment | $ 8,500 | |||||
Cash dividend received | $ 2,300 | |||||
Maximum | ||||||
Significant Accounting Policies [Line Items] | ||||||
Cash equivalents original maturity period | 3 months | |||||
Maximum | Photonics | ||||||
Significant Accounting Policies [Line Items] | ||||||
Standard warranty period | 24 months | |||||
Maximum | Precision Motion | ||||||
Significant Accounting Policies [Line Items] | ||||||
Standard warranty period | 24 months | |||||
Maximum | Vision | ||||||
Significant Accounting Policies [Line Items] | ||||||
Standard warranty period | 36 months | |||||
Maximum | Buildings and improvements | ||||||
Significant Accounting Policies [Line Items] | ||||||
Property, plant and equipment, estimated useful lives | 30 years | |||||
Maximum | Machinery and Equipment | ||||||
Significant Accounting Policies [Line Items] | ||||||
Property, plant and equipment, estimated useful lives | 10 years | |||||
Minimum | Photonics | ||||||
Significant Accounting Policies [Line Items] | ||||||
Standard warranty period | 12 months | |||||
Minimum | Precision Motion | ||||||
Significant Accounting Policies [Line Items] | ||||||
Standard warranty period | 12 months | |||||
Minimum | Vision | ||||||
Significant Accounting Policies [Line Items] | ||||||
Standard warranty period | 12 months | |||||
Minimum | Buildings and improvements | ||||||
Significant Accounting Policies [Line Items] | ||||||
Property, plant and equipment, estimated useful lives | 3 years | |||||
Minimum | Machinery and Equipment | ||||||
Significant Accounting Policies [Line Items] | ||||||
Property, plant and equipment, estimated useful lives | 3 years |
Summary of Financial Informatio
Summary of Financial Information of Laser Quantum - Income Statement (Details) - Laser Quantum - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule Of Financial Statements Information [Line Items] | ||
Revenue | $ 23,526 | $ 25,599 |
Income from operations | 5,537 | 7,362 |
Net income | $ 5,389 | $ 6,925 |
Summary of Financial Informat47
Summary of Financial Information of Laser Quantum - Balance Sheet (Details) - Laser Quantum $ in Thousands | Dec. 31, 2016USD ($) | |
Schedule Of Financial Statements Information [Line Items] | ||
Total assets | $ 25,043 | [1] |
Total liabilities | $ 1,556 | |
[1] | Total assets at December 31, 2016 included cash and cash equivalents of $15.5 million. |
Summary of Financial Informat48
Summary of Financial Information of Laser Quantum - Balance Sheet (Details) (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule Of Financial Statements Information [Line Items] | ||||
Cash and cash equivalents | $ 100,057 | $ 68,108 | $ 59,959 | $ 51,146 |
Laser Quantum | ||||
Schedule Of Financial Statements Information [Line Items] | ||||
Cash and cash equivalents | $ 15,500 |
Changes in Allowance for Doubtf
Changes in Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance For Doubtful Accounts Receivable Rollforward | |||
Balance at beginning of year | $ 565 | $ 500 | $ 282 |
Provision charged to selling, general and administrative expenses | 283 | 135 | 285 |
Allowance resulting from acquisitions | 52 | 15 | 5 |
Write-offs, net of recoveries of amounts previously reserved | (358) | (82) | (29) |
Divestiture of JK Lasers | (30) | ||
Exchange rate changes | 12 | (3) | (13) |
Balance at end of year | $ 554 | $ 565 | $ 500 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) € in Millions, £ in Millions | Jul. 03, 2017USD ($) | Jul. 03, 2017EUR (€) | Jan. 10, 2017USD ($) | Jan. 10, 2017GBP (£) | May 24, 2016USD ($) | Dec. 18, 2015USD ($) | Nov. 09, 2015USD ($) | Feb. 19, 2015USD ($) | Jan. 31, 2018USD ($) | Sep. 29, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jul. 03, 2017EUR (€) |
Business Acquisition [Line Items] | ||||||||||||||||
Goodwill | $ 210,988,000 | $ 210,988,000 | $ 108,128,000 | $ 103,456,000 | ||||||||||||
Gain on business acquisition | 26,409,000 | |||||||||||||||
Acquisition and related charges | 7,196,000 | 4,975,000 | 1,301,000 | |||||||||||||
Amortization of intangible assets | 12,096,000 | 8,251,000 | 7,611,000 | |||||||||||||
Future contingent consideration | 1,304,000 | 1,304,000 | $ 2,381,000 | |||||||||||||
World of Medicine GmbH | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Percentage of shares acquired | 100.00% | 100.00% | ||||||||||||||
Total purchase price | $ 134,934,000 | € 118.1 | ||||||||||||||
Intangible assets | 59,732,000 | |||||||||||||||
Goodwill | 55,632,000 | |||||||||||||||
Goodwill assets expected to be deductible for tax purposes | 0 | |||||||||||||||
Revenues | 49,400,000 | |||||||||||||||
Income (loss) from continuing operations before income taxes | (1,200,000) | |||||||||||||||
Amortization of inventory fair value adjustments and purchased intangible assets, included in operating income (loss) | $ 6,000,000 | |||||||||||||||
Total purchase price, net of cash acquired | $ 133,534,000 | |||||||||||||||
World of Medicine GmbH | Maximum | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Estimated fair value measurement period from acquisition date | 1 year | 1 year | ||||||||||||||
World of Medicine GmbH | Revolving Credit Facility | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Amount draw-down to finance acquisition | $ 134,800,000 | € 118 | ||||||||||||||
Laser Quantum | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Percentage of shares acquired | 35.00% | |||||||||||||||
Total purchase price | $ 87,271,000 | |||||||||||||||
Intangible assets | 38,955,000 | |||||||||||||||
Goodwill | 31,168,000 | |||||||||||||||
Goodwill assets expected to be deductible for tax purposes | 0 | |||||||||||||||
Revenues | 44,700,000 | |||||||||||||||
Income (loss) from continuing operations before income taxes | 11,300,000 | |||||||||||||||
Amortization of inventory fair value adjustments and purchased intangible assets, included in operating income (loss) | $ 7,100,000 | |||||||||||||||
Total purchase price paid by Novanta | $ 31,052,000 | £ 25.5 | ||||||||||||||
Percentage of equity interest held before acquisition | 41.00% | 41.00% | ||||||||||||||
Percentage of equity interest held after acquisition | 76.00% | |||||||||||||||
Option to purchase and sell remaining shareholders shares, year | 2,020 | |||||||||||||||
Gain on business acquisition | $ 26,400,000 | |||||||||||||||
Equity method investment ownership percentage on Laser Quantum | 41.00% | 41.00% | ||||||||||||||
Non controlling interest held by remaining shareholders | 24.00% | |||||||||||||||
Total purchase price, net of cash acquired | $ 15,709,000 | |||||||||||||||
Laser Quantum | Revolving Credit Facility | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Amount draw-down to finance acquisition | 30,000,000 | |||||||||||||||
Thing Magic | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Total purchase price | 19,089,000 | |||||||||||||||
Intangible assets | 7,423,000 | |||||||||||||||
Goodwill | 9,929,000 | |||||||||||||||
Revenues | 8,600,000 | |||||||||||||||
Income (loss) from continuing operations before income taxes | 400,000 | |||||||||||||||
Amortization of inventory fair value adjustments and purchased intangible assets, included in operating income (loss) | 1,500,000 | |||||||||||||||
Thing Magic | Revolving Credit Facility | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Amount draw-down to finance acquisition | $ 12,000,000 | |||||||||||||||
World of Medicine GmbH and Laser Quantum | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Gain on business acquisition | 26,400,000 | |||||||||||||||
Amortization of inventory fair value adjustments | 4,400,000 | |||||||||||||||
Acquisition and related charges | 4,300,000 | $ 1,200,000 | ||||||||||||||
Income from equity method investments | 100,000 | 2,200,000 | ||||||||||||||
World of Medicine GmbH and Laser Quantum | Increase in Amortization of Intangible Assets | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Amortization of intangible assets | 5,300,000 | 12,500,000 | ||||||||||||||
World of Medicine GmbH and Laser Quantum | Increase in Interest Expense | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Interest expense | 1,400,000 | 3,900,000 | ||||||||||||||
Reach Technology Inc. | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Percentage of shares acquired | 100.00% | |||||||||||||||
Total purchase price | $ 9,618,000 | |||||||||||||||
Intangible assets | 3,953,000 | |||||||||||||||
Goodwill | 4,715,000 | |||||||||||||||
Total purchase price, net of cash acquired | 9,380,000 | |||||||||||||||
Goodwill and intangible assets expected to be deductible for tax purposes | $ 0 | |||||||||||||||
Skyetek Inc. | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Total purchase price paid by Novanta | $ 2,600,000 | |||||||||||||||
Total purchase price, net of cash acquired | 2,800,000 | |||||||||||||||
Future contingent consideration | 200,000 | |||||||||||||||
Undiscounted range of outcomes, minimum | 0 | |||||||||||||||
Undiscounted range of outcomes, maximum | $ 300,000 | |||||||||||||||
Contingent consideration payment | $ 100,000 | |||||||||||||||
Lincoln Laser Company | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Total purchase price paid by Novanta | $ 9,800,000 | |||||||||||||||
Total purchase price, net of cash acquired | 12,100,000 | |||||||||||||||
Future contingent consideration | 2,300,000 | |||||||||||||||
Undiscounted range of outcomes, minimum | 0 | |||||||||||||||
Undiscounted range of outcomes, maximum | $ 6,000,000 | |||||||||||||||
Contingent consideration payment | $ 1,400,000 | |||||||||||||||
Applimotion Inc. | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Percentage of shares acquired | 100.00% | |||||||||||||||
Total purchase price paid by Novanta | $ 13,000,000 | |||||||||||||||
Total purchase price, net of cash acquired | 14,000,000 | |||||||||||||||
Future contingent consideration | 1,000,000 | |||||||||||||||
Undiscounted range of outcomes, minimum | 0 | |||||||||||||||
Undiscounted range of outcomes, maximum | $ 4,000,000 | |||||||||||||||
Contingent consideration payment | $ 1,200,000 | |||||||||||||||
Applimotion Inc. | Subsequent Event | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Contingent consideration payment | $ 2,800,000 | |||||||||||||||
Skyetek, Lincoln Laser and Applimotion | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Total purchase price | 29,271,000 | |||||||||||||||
Intangible assets | 11,370,000 | |||||||||||||||
Goodwill | 12,668,000 | |||||||||||||||
Total purchase price, net of cash acquired | 28,940,000 | |||||||||||||||
Goodwill and intangible assets expected to be deductible for tax purposes | 10,300,000 | |||||||||||||||
Future contingent consideration | 3,459,000 | |||||||||||||||
Closed Acquisitions | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Acquisition and related charges | $ 4,400,000 | $ 200,000 | $ 900,000 |
Summary of Fair Values of Asset
Summary of Fair Values of Assets Acquired and Liabilities Assumed Purchase Price Allocation (Details) $ in Thousands, € in Millions, £ in Millions | Jul. 03, 2017USD ($) | Jan. 10, 2017USD ($) | Jan. 10, 2017GBP (£) | May 24, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jul. 03, 2017EUR (€) | Jan. 10, 2017GBP (£) |
Business Acquisition [Line Items] | |||||||||
Goodwill | $ 210,988 | $ 108,128 | $ 103,456 | ||||||
Less: contingent consideration | 1,304 | 2,381 | |||||||
Net cash used for acquisition of businesses | $ 168,332 | $ 8,958 | 25,987 | ||||||
World of Medicine GmbH | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash | $ 1,400 | ||||||||
Accounts receivable | 11,807 | ||||||||
Inventories | 14,549 | ||||||||
Property, plant and equipment | 21,940 | ||||||||
Intangible assets | 59,732 | ||||||||
Goodwill | 55,632 | ||||||||
Other assets | 2,660 | ||||||||
Total assets acquired | 167,720 | ||||||||
Accounts payable | 4,398 | ||||||||
Other liabilities | 8,681 | ||||||||
Deferred tax liabilities | 19,707 | ||||||||
Total liabilities assumed | 32,786 | ||||||||
Total assets acquired, net of liabilities assumed | 134,934 | € 118.1 | |||||||
Less: cash acquired | 1,400 | ||||||||
Total purchase price, net of cash acquired | $ 133,534 | ||||||||
Laser Quantum | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash | $ 15,343 | ||||||||
Accounts receivable | 2,739 | ||||||||
Inventories | 6,264 | ||||||||
Property, plant and equipment | 2,286 | ||||||||
Intangible assets | 38,955 | ||||||||
Goodwill | 31,168 | ||||||||
Other assets | 717 | ||||||||
Total assets acquired | 97,472 | ||||||||
Accounts payable | 796 | ||||||||
Other liabilities | 2,068 | ||||||||
Deferred tax liabilities | 7,337 | ||||||||
Total liabilities assumed | 10,201 | ||||||||
Total assets acquired, net of liabilities assumed | 87,271 | ||||||||
Less: fair value of equity interest previously held by Novanta | 34,637 | ||||||||
Less: fair value of noncontrolling interest | 21,582 | £ 17.7 | |||||||
Total purchase price paid by Novanta | 31,052 | £ 25.5 | |||||||
Less: cash acquired | 15,343 | ||||||||
Total purchase price, net of cash acquired | 15,709 | ||||||||
Thing Magic | |||||||||
Business Acquisition [Line Items] | |||||||||
Inventories | 1,832 | ||||||||
Intangible assets | 7,423 | ||||||||
Goodwill | 9,929 | ||||||||
Total assets acquired | 19,184 | ||||||||
Other liabilities | 95 | ||||||||
Total liabilities assumed | 95 | ||||||||
Total assets acquired, net of liabilities assumed | $ 19,089 | ||||||||
Reach Technology Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash | $ 238 | ||||||||
Accounts receivable | 991 | ||||||||
Inventories | 1,611 | ||||||||
Prepaid expenses and other current assets | 12 | ||||||||
Intangible assets | 3,953 | ||||||||
Goodwill | 4,715 | ||||||||
Total assets acquired | 11,520 | ||||||||
Accounts payable | 280 | ||||||||
Other liabilities | 148 | ||||||||
Deferred tax liabilities | 1,474 | ||||||||
Total liabilities assumed | 1,902 | ||||||||
Total assets acquired, net of liabilities assumed | 9,618 | ||||||||
Less: cash acquired | 238 | ||||||||
Total purchase price, net of cash acquired | $ 9,380 | ||||||||
Skyetek, Lincoln Laser and Applimotion | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash | 331 | ||||||||
Accounts receivable | 3,166 | ||||||||
Inventories | 3,544 | ||||||||
Prepaid expenses and other current assets | 148 | ||||||||
Property, plant and equipment | 3,220 | ||||||||
Intangible assets | 11,370 | ||||||||
Goodwill | 12,668 | ||||||||
Other assets | 10 | ||||||||
Total assets acquired | 34,457 | ||||||||
Accounts payable | 1,681 | ||||||||
Other liabilities | 1,197 | ||||||||
Deferred tax liabilities | 2,308 | ||||||||
Total liabilities assumed | 5,186 | ||||||||
Total assets acquired, net of liabilities assumed | 29,271 | ||||||||
Less: cash acquired | 331 | ||||||||
Total purchase price, net of cash acquired | 28,940 | ||||||||
Less: contingent consideration | 3,459 | ||||||||
Net cash used for acquisition of businesses | $ 25,481 |
Fair Value of Intangible Assets
Fair Value of Intangible Assets (Details) - USD ($) $ in Thousands | Jul. 03, 2017 | Jan. 10, 2017 | May 24, 2016 | Dec. 31, 2015 |
World of Medicine GmbH | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 59,732 | |||
Laser Quantum | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 38,955 | |||
Thing Magic | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | 7,423 | |||
Reach Technology Inc. | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 3,953 | |||
Skyetek, Lincoln Laser and Applimotion | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 11,370 | |||
Developed Technologies | World of Medicine GmbH | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 21,586 | |||
Amortization Period of intangible assets | 10 years | |||
Developed Technologies | Laser Quantum | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 15,501 | |||
Amortization Period of intangible assets | 15 years | |||
Developed Technologies | Thing Magic | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 4,600 | |||
Amortization Period of intangible assets | 10 years | |||
Developed Technologies | Reach Technology Inc. | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 500 | |||
Amortization Period of intangible assets | 7 years | |||
Developed Technologies | Skyetek, Lincoln Laser and Applimotion | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 4,993 | |||
Amortization Period of intangible assets | 10 years | |||
Customer Relationships | World of Medicine GmbH | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 35,634 | |||
Amortization Period of intangible assets | 12 years | |||
Customer Relationships | Laser Quantum | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 19,990 | |||
Amortization Period of intangible assets | 15 years | |||
Customer Relationships | Thing Magic | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 2,520 | |||
Amortization Period of intangible assets | 10 years | |||
Customer Relationships | Reach Technology Inc. | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 2,770 | |||
Amortization Period of intangible assets | 15 years | |||
Customer Relationships | Skyetek, Lincoln Laser and Applimotion | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 4,266 | |||
Amortization Period of intangible assets | 12 years | |||
Trademarks and Trade Names | World of Medicine GmbH | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 2,284 | |||
Amortization Period of intangible assets | 10 years | |||
Trademarks and Trade Names | Laser Quantum | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 1,964 | |||
Amortization Period of intangible assets | 15 years | |||
Trademarks and Trade Names | Thing Magic | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 303 | |||
Amortization Period of intangible assets | 5 years | |||
Trademarks and Trade Names | Reach Technology Inc. | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 258 | |||
Amortization Period of intangible assets | 10 years | |||
Trademarks and Trade Names | Skyetek, Lincoln Laser and Applimotion | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 593 | |||
Amortization Period of intangible assets | 9 years | |||
Non-compete Covenant | Skyetek, Lincoln Laser and Applimotion | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 684 | |||
Amortization Period of intangible assets | 4 years | |||
Backlog | World of Medicine GmbH | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 228 | |||
Amortization Period of intangible assets | 1 year | |||
Backlog | Laser Quantum | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 1,500 | |||
Amortization Period of intangible assets | 9 months | |||
Backlog | Reach Technology Inc. | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 425 | |||
Amortization Period of intangible assets | 1 year | |||
Backlog | Skyetek, Lincoln Laser and Applimotion | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 834 | |||
Amortization Period of intangible assets | 1 year |
Summary of Unaudited Pro Forma
Summary of Unaudited Pro Forma Financial Information (Details) - World of Medicine GmbH and Laser Quantum - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | ||
Revenue | $ 562,818 | $ 487,960 |
Income from continuing operations | $ 39,630 | $ 21,020 |
Earnings per share attributable to Novanta Inc. - Basic | $ 0.49 | $ 0.62 |
Earnings per share attributable to Novanta Inc. - Diluted | $ 0.49 | $ 0.61 |
Summary of Unaudited Pro Form54
Summary of Unaudited Pro Forma Financial Information (Parenthetical) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Business Combinations [Abstract] | |||
Adjustment of redeemable noncontrolling interest to estimated redemption value | $ 20,244 | [1] | $ 0 |
[1] | Adjustment of the carrying value of redeemable noncontrolling interest to the estimated redemption value was recognized in retained earnings instead of the consolidated statement of operations but was included in the computation of earnings per share attributable to Novanta Inc. (see Note 9). |
Discontinued Operations and D55
Discontinued Operations and Divestitures - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Jan. 31, 2016 | Apr. 30, 2015 | Jul. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2015 | Jun. 30, 2015 | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||||
Proceeds from sale of business, net of transaction costs | $ 29,570,000 | |||||
JK Lasers Business | ||||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||||
Proceeds from sale of business, net of transaction costs | $ 29,600,000 | |||||
Pre-tax gain (loss) on sale of business | 19,600,000 | |||||
Excel Laser Technology Private Limited | ||||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||||
Minority interest ownership percentage | 50.00% | |||||
Ownership in joint venture, Excel Laser Technology Private Limited | Maximum | ||||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||||
Pre-tax gain (loss) on sale of business | $ (100,000) | |||||
Scientific Lasers Business | ||||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||||
Proceeds from sale of business, net of transaction costs | $ 6,500,000 | |||||
Sale proceeds held in escrow | $ 1,500,000 | |||||
Sale proceeds held in escrow, period | 2016-01 | |||||
Escrow deposit released | $ 1,500,000 |
Operating Results Reported as D
Operating Results Reported as Discontinued Operations (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Discontinued Operations And Disposal Groups [Abstract] | |
Loss from discontinued operations, before income tax | $ (13) |
Loss from discontinued operations, net of tax | $ (13) |
Accumulated Other Comprehensi57
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | $ 258,870 | |||
Other comprehensive income (loss) | 8,790 | $ (9,611) | $ (3,249) | |
Amounts reclassified from accumulated other comprehensive income (loss) | [1] | 1,045 | 726 | 875 |
Ending Balance | 311,545 | 258,870 | ||
Total Accumulated Other Foreign Currency Comprehensive Translation Pension Income (Loss) | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | (27,715) | (18,830) | (16,456) | |
Ending Balance | (17,880) | (27,715) | (18,830) | |
Cumulative Translation Adjustments | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | (17,222) | (9,698) | (5,615) | |
Other comprehensive income (loss) | 8,909 | (7,524) | (4,083) | |
Ending Balance | (8,313) | (17,222) | (9,698) | |
Pension Liability Adjustments | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | (10,493) | (9,132) | (10,841) | |
Other comprehensive income (loss) | (119) | (2,087) | 834 | |
Amounts reclassified from accumulated other comprehensive income (loss) | [1] | 1,045 | 726 | 875 |
Ending Balance | $ (9,567) | $ (10,493) | $ (9,132) | |
[1] | The amounts reclassified from accumulated other comprehensive income (loss) were included in selling, general and administrative expenses in the consolidated statements of operations. |
Summary of Changes in Goodwill
Summary of Changes in Goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Goodwill [Line Items] | |
Balance at beginning of year | $ 108,128 |
Effect of foreign exchange rate changes | 6,131 |
Balance at end of year | 210,988 |
Laser Quantum | |
Goodwill [Line Items] | |
Goodwill acquired | 31,168 |
Thing Magic | |
Goodwill [Line Items] | |
Goodwill acquired | 9,929 |
World of Medicine GmbH | |
Goodwill [Line Items] | |
Goodwill acquired | $ 55,632 |
Goodwill By Reportable Segment
Goodwill By Reportable Segment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Goodwill [Line Items] | |||
Goodwill | $ 362,217 | $ 259,357 | |
Accumulated impairment of goodwill | (151,229) | (151,229) | |
Total | 210,988 | 108,128 | $ 103,456 |
Photonics | |||
Goodwill [Line Items] | |||
Goodwill | 170,818 | 136,278 | |
Accumulated impairment of goodwill | (102,461) | (102,461) | |
Total | 68,357 | 33,817 | |
Vision | |||
Goodwill [Line Items] | |||
Goodwill | 157,436 | 89,116 | |
Accumulated impairment of goodwill | (31,722) | (31,722) | |
Total | 125,714 | 57,394 | |
Precision Motion | |||
Goodwill [Line Items] | |||
Goodwill | 33,963 | 33,963 | |
Accumulated impairment of goodwill | (17,046) | (17,046) | |
Total | $ 16,917 | $ 16,917 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Intangible Assets Disclosure [Line Items] | |||
Amortizable intangible assets, gross carrying amount | $ 283,445 | $ 168,141 | |
Amortizable intangible assets, accumulated amortization | (141,424) | (119,425) | |
Amortizable intangible assets, net carrying amount | $ 142,021 | $ 48,716 | |
Amortizable intangible assets, weighted average remaining life (Years) | 11 years 3 months 18 days | 10 years 2 months 12 days | |
Non-amortizable intangible assets | $ 13,027 | $ 13,027 | |
Gross carrying amount | 296,472 | 181,168 | |
Net carrying amount | 155,048 | 61,743 | $ 66,269 |
Patents and Acquired Technologies | |||
Schedule of Intangible Assets Disclosure [Line Items] | |||
Amortizable intangible assets, gross carrying amount | 130,890 | 84,742 | |
Amortizable intangible assets, accumulated amortization | (77,295) | (67,902) | |
Amortizable intangible assets, net carrying amount | $ 53,595 | $ 16,840 | |
Amortizable intangible assets, weighted average remaining life (Years) | 10 years 2 months 12 days | 7 years 7 months 6 days | |
Customer Relationships | |||
Schedule of Intangible Assets Disclosure [Line Items] | |||
Amortizable intangible assets, gross carrying amount | $ 131,809 | $ 69,554 | |
Amortizable intangible assets, accumulated amortization | (52,015) | (42,934) | |
Amortizable intangible assets, net carrying amount | $ 79,794 | $ 26,620 | |
Amortizable intangible assets, weighted average remaining life (Years) | 12 years 3 months 18 days | 12 years 10 months 24 days | |
Customer Backlog | |||
Schedule of Intangible Assets Disclosure [Line Items] | |||
Amortizable intangible assets, gross carrying amount | $ 2,524 | $ 622 | |
Amortizable intangible assets, accumulated amortization | (2,284) | (540) | |
Amortizable intangible assets, net carrying amount | $ 240 | $ 82 | |
Amortizable intangible assets, weighted average remaining life (Years) | 9 months 18 days | 10 months 24 days | |
Non-compete Covenant | |||
Schedule of Intangible Assets Disclosure [Line Items] | |||
Amortizable intangible assets, gross carrying amount | $ 2,514 | $ 2,514 | |
Amortizable intangible assets, accumulated amortization | (1,956) | (1,419) | |
Amortizable intangible assets, net carrying amount | $ 558 | $ 1,095 | |
Amortizable intangible assets, weighted average remaining life (Years) | 10 months 24 days | 2 years | |
Trademarks and Trade Names | |||
Schedule of Intangible Assets Disclosure [Line Items] | |||
Amortizable intangible assets, gross carrying amount | $ 15,708 | $ 10,709 | |
Amortizable intangible assets, accumulated amortization | (7,874) | (6,630) | |
Amortizable intangible assets, net carrying amount | $ 7,834 | $ 4,079 | |
Amortizable intangible assets, weighted average remaining life (Years) | 9 years 8 months 12 days | 8 years 3 months 18 days |
Amortization Expense of Intangi
Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Amortization expense – cost of revenue | $ 8,824 | $ 4,164 | $ 4,712 |
Amortization expense – operating expenses | 12,096 | 8,251 | 7,611 |
Total amortization expense | $ 20,920 | $ 12,415 | $ 12,323 |
Estimated Future Amortization E
Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Finite Lived Intangible Assets [Line Items] | ||
2,018 | $ 24,326 | |
2,019 | 22,388 | |
2,020 | 19,031 | |
2,021 | 17,326 | |
2,022 | 14,268 | |
Thereafter | 44,682 | |
Amortizable intangible assets, net carrying amount | 142,021 | $ 48,716 |
Cost of Revenue | ||
Finite Lived Intangible Assets [Line Items] | ||
2,018 | 9,742 | |
2,019 | 8,877 | |
2,020 | 7,980 | |
2,021 | 7,088 | |
2,022 | 5,682 | |
Thereafter | 14,226 | |
Amortizable intangible assets, net carrying amount | 53,595 | |
Operating Expenses | ||
Finite Lived Intangible Assets [Line Items] | ||
2,018 | 14,584 | |
2,019 | 13,511 | |
2,020 | 11,051 | |
2,021 | 10,238 | |
2,022 | 8,586 | |
Thereafter | 30,456 | |
Amortizable intangible assets, net carrying amount | $ 88,426 |
Goodwill, Intangible Assets a63
Goodwill, Intangible Assets and Impairment Charges - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 01, 2017 | |
Goodwill And Intangible Assets [Line Items] | ||||
Impairment of goodwill and intangible assets | $ 0 | $ 0 | $ 0 | |
Minimum | ||||
Goodwill And Intangible Assets [Line Items] | ||||
Reporting unit in excess of carrying value | 20.00% |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) € in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Jan. 31, 2018USD ($) | Sep. 29, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($)Installment | Dec. 31, 2016USD ($) | Dec. 14, 2016USD ($) | Dec. 14, 2016EUR (€) | Dec. 18, 2015USD ($) | Nov. 11, 2015USD ($) | Nov. 09, 2015USD ($) | Feb. 19, 2015USD ($) | |
Business Acquisition Contingent Consideration [Line Items] | |||||||||||
Payments of contingent consideration | $ 2,781,000 | ||||||||||
Video Signal Processing and Management Technologies | |||||||||||
Business Acquisition Contingent Consideration [Line Items] | |||||||||||
Business combination, date of agreement | Dec. 14, 2016 | ||||||||||
Number of contingent consideration installments | Installment | 4 | ||||||||||
Undiscounted range of outcomes, minimum | $ 0 | ||||||||||
Undiscounted range of outcomes, maximum | $ 6,600,000 | € 5.5 | |||||||||
Video Signal Processing and Management Technologies | Long-term Liability in Other Liabilities | |||||||||||
Business Acquisition Contingent Consideration [Line Items] | |||||||||||
Estimated fair value of contingent consideration | $ 1,300,000 | ||||||||||
Skyetek Inc. | |||||||||||
Business Acquisition Contingent Consideration [Line Items] | |||||||||||
Business combination, date of agreement | Dec. 18, 2015 | ||||||||||
Undiscounted range of outcomes, minimum | $ 0 | ||||||||||
Undiscounted range of outcomes, maximum | 300,000 | ||||||||||
Estimated fair value of contingent consideration | $ 200,000 | ||||||||||
Name of acquired entity | Skyetek Inc. | ||||||||||
Payments of contingent consideration | $ 100,000 | ||||||||||
Lincoln Laser Company | |||||||||||
Business Acquisition Contingent Consideration [Line Items] | |||||||||||
Business combination, date of agreement | Nov. 11, 2015 | ||||||||||
Undiscounted range of outcomes, minimum | $ 0 | ||||||||||
Undiscounted range of outcomes, maximum | $ 6,000,000 | ||||||||||
Estimated fair value of contingent consideration | $ 1,400,000 | $ 2,300,000 | |||||||||
Name of acquired entity | Lincoln Laser Company | ||||||||||
Payments of contingent consideration | $ 1,400,000 | ||||||||||
Applimotion Inc. | |||||||||||
Business Acquisition Contingent Consideration [Line Items] | |||||||||||
Business combination, date of agreement | Feb. 19, 2015 | ||||||||||
Number of contingent consideration installments | Installment | 2 | ||||||||||
Undiscounted range of outcomes, minimum | $ 0 | ||||||||||
Undiscounted range of outcomes, maximum | 4,000,000 | ||||||||||
Estimated fair value of contingent consideration | $ 3,600,000 | $ 1,000,000 | |||||||||
Name of acquired entity | Applimotion Inc. | ||||||||||
Payments of contingent consideration | $ 1,200,000 | ||||||||||
Applimotion Inc. | Subsequent Event | |||||||||||
Business Acquisition Contingent Consideration [Line Items] | |||||||||||
Payments of contingent consideration | $ 2,800,000 | ||||||||||
Applimotion Inc. | Current Liability in Accrued Expenses and Other Current Liabilities | |||||||||||
Business Acquisition Contingent Consideration [Line Items] | |||||||||||
Estimated fair value of contingent consideration | $ 2,800,000 |
Fair Values of Assets and Liabi
Fair Values of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Liabilities | ||
Contingent consideration - Current | $ 2,800 | $ 2,775 |
Contingent consideration - Long-term | 1,304 | 2,381 |
Fair Value Measurements Recurring | ||
Assets | ||
Cash equivalents | 2,665 | 9,569 |
Assets, fair value | 2,815 | |
Liabilities | ||
Liabilities, fair value | 4,104 | 5,156 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Cash equivalents | 2,665 | 9,569 |
Assets, fair value | 2,665 | |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Assets, fair value | 150 | |
Fair Value Measurements Recurring | Significant Other Unobservable Inputs (Level 3) | ||
Liabilities | ||
Liabilities, fair value | 4,104 | 5,156 |
Fair Value Measurements Recurring | Prepaid Expenses and Other Current Assets | ||
Assets | ||
Foreign currency forward contracts | 150 | |
Fair Value Measurements Recurring | Prepaid Expenses and Other Current Assets | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Foreign currency forward contracts | 150 | |
Fair Value Measurements Recurring | Accrued Expenses and Other Current Liabilities | ||
Liabilities | ||
Contingent consideration - Current | 2,800 | 2,775 |
Fair Value Measurements Recurring | Accrued Expenses and Other Current Liabilities | Significant Other Unobservable Inputs (Level 3) | ||
Liabilities | ||
Contingent consideration - Current | 2,800 | 2,775 |
Fair Value Measurements Recurring | Other Liabilities | ||
Liabilities | ||
Contingent consideration - Long-term | 1,304 | 2,381 |
Fair Value Measurements Recurring | Other Liabilities | Significant Other Unobservable Inputs (Level 3) | ||
Liabilities | ||
Contingent consideration - Long-term | $ 1,304 | $ 2,381 |
Summary of Changes in the Fair
Summary of Changes in the Fair Value of Level 3 Contingent Consideration (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Fair Value Disclosures [Abstract] | |
Beginning balance | $ 5,156 |
Payments of contingent consideration | (2,781) |
Fair value adjustments | 1,729 |
Ending balance | $ 4,104 |
Foreign Currency Contracts - Ad
Foreign Currency Contracts - Additional Information (Details) - Foreign Currency Forward Contracts $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Derivative [Line Items] | |
Notional amount of foreign currency forward contracts | $ 17.9 |
Fair value of foreign currency forward contracts | 17.9 |
Net gain on foreign currency forward contracts | 0.2 |
Foreign Exchange Transaction Gains (Losses) | |
Derivative [Line Items] | |
Net gain on foreign currency forward contracts | $ 0.2 |
Computation of Basic and Dilute
Computation of Basic and Diluted Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Numerators: | ||||
Income from continuing operations | $ 62,307 | $ 22,003 | $ 35,628 | |
Less: Net income attributable to noncontrolling interest | (2,256) | |||
Income from continuing operations attributable to Novanta Inc. | 60,051 | 22,003 | 35,628 | |
Less: Adjustment of redeemable noncontrolling interest to estimated redemption value (see Note 17) | (20,244) | [1] | 0 | |
Income from continuing operations attributable to Novanta Inc. after adjustment of redeemable noncontrolling interest to estimated redemption value | 39,807 | 22,003 | 35,628 | |
Loss from discontinued operations | (13) | |||
Net income attributable to Novanta Inc. after adjustment of redeemable noncontrolling interest to estimated redemption value | $ 39,807 | $ 22,003 | $ 35,615 | |
Denominators: | ||||
Weighted average common shares outstanding—basic | 34,817 | 34,694 | 34,579 | |
Dilutive potential common shares | 463 | 220 | 248 | |
Weighted average common shares outstanding— diluted | 35,280 | 34,914 | 34,827 | |
Antidilutive common shares excluded from above | 85 | |||
Basic Earnings (Loss) per Common Share: | ||||
From continuing operations | $ 1.14 | $ 0.63 | $ 1.03 | |
From discontinued operations | 0 | |||
Basic earnings (loss) per share attributable to Novanta Inc. | 1.14 | 0.63 | 1.03 | |
Diluted Earnings (Loss) per Common Share: | ||||
From continuing operations | 1.13 | 0.63 | 1.02 | |
From discontinued operations | 0 | |||
Diluted earnings (loss) per share attributable to Novanta Inc. | $ 1.13 | $ 0.63 | $ 1.02 | |
[1] | Adjustment of the carrying value of redeemable noncontrolling interest to the estimated redemption value was recognized in retained earnings instead of the consolidated statement of operations but was included in the computation of earnings per share attributable to Novanta Inc. (see Note 9). |
Earnings (Loss) Per Common Sh69
Earnings (Loss) Per Common Share - Additional Information (Details) - USD ($) $ / shares in Units, shares in Thousands | 12 Months Ended | 51 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Oct. 31, 2013 | |
Computation Of Earnings Per Share Line Items | |||||
Repurchase of common stock | $ 370,000 | $ 1,634,000 | $ 1,627,000 | ||
Common Stock Repurchase Plan | |||||
Computation Of Earnings Per Share Line Items | |||||
Shares repurchased | 14 | 296 | |||
Repurchase of common stock | $ 400,000 | $ 4,200,000 | |||
Shares repurchased, average cost per share | $ 26.41 | $ 14.05 | |||
Maximum | |||||
Computation Of Earnings Per Share Line Items | |||||
Common stock repurchase program authorized amount | $ 10,000,000 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 57,277 | $ 39,822 | |
Work-in-process | 14,847 | 8,012 | |
Finished goods | 16,443 | 9,511 | |
Demo and consigned inventory | 2,711 | 2,400 | |
Total inventories | $ 91,278 | $ 59,745 | $ 59,566 |
Property Plant and Equipment, N
Property Plant and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Property Plant And Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 127,177 | $ 90,520 | |
Accumulated depreciation | (65,459) | (55,099) | |
Property, plant and equipment, net | 61,718 | 35,421 | $ 40,550 |
Land, Buildings and Improvements | |||
Property Plant And Equipment [Line Items] | |||
Property, plant and equipment, gross | 53,055 | 38,384 | |
Machinery and Equipment | |||
Property Plant And Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 74,122 | $ 52,136 |
Supplementary Balance Sheet I72
Supplementary Balance Sheet Information - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||
Asset capitalized under capital lease | $ 13,562 | $ 13,159 | |
Capitalized software development costs | $ 2,000 | $ 2,300 | $ 1,900 |
Summary of Depreciation Expense
Summary of Depreciation Expense on Property, Plant and Equipment, Including Demo Units and Assets under Capital Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||
Depreciation expense | $ 9,838 | $ 8,558 | $ 7,873 |
Summary of Total Accumulated De
Summary of Total Accumulated Depreciation on Assets under Capital Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Accumulated depreciation on assets under capital leases | $ 6,097 | $ 4,950 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Other Liabilities Disclosure [Abstract] | ||||
Accrued compensation and benefits | $ 17,348 | $ 9,647 | ||
Accrued warranty | 4,835 | 3,142 | $ 3,335 | $ 3,044 |
Accrued restructuring | 440 | 1,371 | ||
Accrued professional services | 1,469 | 1,237 | ||
Accrued contingent considerations | 2,800 | 2,775 | ||
Customer deposits | 3,634 | 1,164 | ||
Other | 12,788 | 7,612 | ||
Total | $ 43,314 | $ 26,948 |
Accrued Warranty (Details)
Accrued Warranty (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Product Warranties Disclosures [Abstract] | |||
Balance at beginning of year | $ 3,142 | $ 3,335 | $ 3,044 |
Provision charged to cost of revenue | 3,169 | 1,673 | 2,025 |
Warranty liabilities acquired from acquisitions | 1,307 | 23 | 132 |
Use of provision | (2,857) | (1,849) | (1,454) |
Divestiture of JK Lasers | (389) | ||
Foreign currency exchange rate changes | 74 | (40) | (23) |
Balance at end of year | $ 4,835 | $ 3,142 | $ 3,335 |
Summary of Other Long Term Liab
Summary of Other Long Term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Other Liabilities Noncurrent [Abstract] | ||
Capital lease obligations | $ 7,947 | $ 8,111 |
Accrued pension liabilities | 3,853 | 5,957 |
Accrued contingent considerations | 1,304 | 2,381 |
Other | 2,037 | 2,264 |
Total | $ 15,141 | $ 18,713 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Total current portion of long-term debt | $ 9,119 | $ 7,366 |
Total long-term debt | 225,500 | 70,554 |
Total Senior Credit Facilities | 234,619 | 77,920 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Current portion of long-term debt, Gross | 9,200 | 7,500 |
Long-term debt, Gross | 79,125 | 63,750 |
Total Senior Credit Facilities | 88,325 | |
Term Loan And Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Less: unamortized debt issuance costs | (81) | (134) |
Less: unamortized debt issuance costs | (3,078) | (3,196) |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, Gross | $ 149,453 | $ 10,000 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | Feb. 26, 2018 | Aug. 01, 2017 | May 19, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jul. 28, 2017 |
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 300,000,000 | ||||||
Senior credit facilities maturity period | 5 years | ||||||
Senior credit facilities maturity year | 2021-05 | ||||||
Maximum consolidated leverage ratio | 300.00% | ||||||
Second amended and restated credit agreement, covenants | The Second Amended and Restated Credit Agreement also requires the Company to satisfy certain financial covenants, such as maintaining a minimum consolidated fixed charge coverage ratio of 1.50 and a maximum consolidated leverage ratio of 3.00. The maximum consolidated leverage ratio will increase to 3.50 for four consecutive quarters following an acquisition with an aggregate consideration greater than or equal to $50.0 million. | ||||||
Minimum consolidated fixed charge coverage ratio | 150.00% | ||||||
Long-term debt including current maturities | $ 234,619,000 | $ 77,920,000 | |||||
Debt weighted average interest rate | 3.06% | ||||||
Non-cash interest expense related to amortization of deferred financing costs | $ 800,000 | $ 900,000 | $ 900,000 | ||||
Eurocurrency Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate | 1.75% | ||||||
Eurocurrency Rate | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate | 2.75% | ||||||
Base Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate | 0.75% | ||||||
Base Rate | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate | 1.75% | ||||||
Second Amended and Restated Credit Agreement | Subsequent Event | |||||||
Debt Instrument [Line Items] | |||||||
Maximum consolidated leverage ratio | 300.00% | ||||||
Second Amended and Restated Credit Agreement | Subsequent Event | Permitted Acquisitions and Stock Repurchases | |||||||
Debt Instrument [Line Items] | |||||||
Maximum consolidated leverage ratio | 250.00% | ||||||
Second Amended and Restated Credit Agreement | Subsequent Event | Designated Acquisition | |||||||
Debt Instrument [Line Items] | |||||||
Maximum consolidated leverage ratio | 300.00% | ||||||
Second Amended and Restated Credit Agreement | Subsequent Event | Four Consecutive Quarters Following Designated Acquisition | |||||||
Debt Instrument [Line Items] | |||||||
Maximum consolidated leverage ratio | 350.00% | ||||||
Second Amended and Restated Credit Agreement | Acquisition with Aggregate Consideration Greater than or Equal to $50 million | |||||||
Debt Instrument [Line Items] | |||||||
Maximum consolidated leverage ratio | 350.00% | ||||||
Debt instrument, covenant, required business acquisition consideration, minimum | $ 50,000,000 | ||||||
Second Amended and Restated Credit Facility | Repurchase of Equity Interests | |||||||
Debt Instrument [Line Items] | |||||||
Maximum consolidated leverage ratio | 250.00% | ||||||
Third Amendment | |||||||
Debt Instrument [Line Items] | |||||||
Senior credit facilities maturity year | 2021-05 | ||||||
Debt instrument, frequency of periodic payment | quarterly | ||||||
Deferred financing costs | $ 700,000 | ||||||
Fourth Amendment | Subsequent Event | |||||||
Debt Instrument [Line Items] | |||||||
Maximum consolidated leverage ratio | 350.00% | ||||||
Second amended and restated credit agreement, covenants | The Fourth Amendment increases the maximum permitted consolidated leverage ratio from 3.00 to 3.50, increases the maximum consolidated leverage ratio for permitted acquisitions and stock repurchases from 2.50 to 3.00, increases the maximum permitted consolidated leverage ratio for a designated acquisition from 3.00 to 3.50, and increases the maximum leverage ratio for four consecutive quarters following a designated acquisition from 3.50 to 4.00. | ||||||
Fourth Amendment | Subsequent Event | Permitted Acquisitions and Stock Repurchases | |||||||
Debt Instrument [Line Items] | |||||||
Maximum consolidated leverage ratio | 300.00% | ||||||
Fourth Amendment | Subsequent Event | Designated Acquisition | |||||||
Debt Instrument [Line Items] | |||||||
Maximum consolidated leverage ratio | 350.00% | ||||||
Fourth Amendment | Subsequent Event | Four Consecutive Quarters Following Designated Acquisition | |||||||
Debt Instrument [Line Items] | |||||||
Maximum consolidated leverage ratio | 400.00% | ||||||
Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt including current maturities | $ 88,325,000 | ||||||
Term Loan | Second Amended and Restated Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 75,000,000 | ||||||
Long-term debt including current maturities | $ 65,600,000 | ||||||
Term Loan | Third Amendment | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt including current maturities | $ 90,600,000 | ||||||
Quarterly installments payable | 2,300,000 | ||||||
Debt instrument, final installment amount | 56,100,000 | ||||||
Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 225,000,000 | ||||||
Unused commitment fees percentage | 0.40% | ||||||
Revolving Credit Facility | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Unused commitment fees percentage | 0.25% | ||||||
Revolving Credit Facility | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Unused commitment fees percentage | 0.45% | ||||||
Revolving Credit Facility | Third Amendment | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | 325,000,000 | ||||||
Line of credit facility accordion feature | $ 125,000,000 | ||||||
Available for borrowings capacity | $ 175,500,000 |
Repayments of Outstanding Princ
Repayments of Outstanding Principal under Term Loan Facility (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Long Term Debt Maturities Repayments Of Principal [Line Items] | ||
Total Senior Credit Facilities | $ 234,619 | $ 77,920 |
Term Loan | ||
Long Term Debt Maturities Repayments Of Principal [Line Items] | ||
2,018 | 9,200 | |
2,019 | 9,200 | |
2,020 | 9,200 | |
2,021 | 60,725 | |
Total Senior Credit Facilities | $ 88,325 |
Capital Stock and Share-Based81
Capital Stock and Share-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | May 31, 2014 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share-based compensation expense recognized | $ 5,493 | $ 4,293 | $ 4,065 | |||
Unrecognized stock-based compensation expense | $ 9,800 | 9,800 | ||||
Unrecognized stock-based compensation expense, weighted-average recognition period | 2 years 7 months 9 days | |||||
Deferred Stock Units | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share-based compensation expense recognized | $ 500 | $ 500 | $ 500 | |||
2010 Incentive Award Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Maximum number of shares to be issued | 4,398,613 | |||||
Incentive plan and award expiration date | Apr. 9, 2024 | |||||
Shares available for future issuance | 1,301,310 | 1,301,310 | ||||
2010 Incentive Award Plan | Restricted Stock Units (RSUs) | Minimum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
2010 Incentive Award Plan | Restricted Stock Units (RSUs) | Maximum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 5 years | |||||
2010 Incentive Award Plan | Restricted Deferred Stock Units | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Total value of restricted stock and deferred stock units vested | $ 6,000 | |||||
2010 Incentive Award Plan | EPS Performance-based Restricted Stock Units | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
2010 Incentive Award Plan | EPS Performance-based Restricted Stock Units | Minimum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Range of percentage of shares to be issued upon settlement following vesting of target number of shares | 0.00% | |||||
2010 Incentive Award Plan | EPS Performance-based Restricted Stock Units | Maximum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Range of percentage of shares to be issued upon settlement following vesting of target number of shares | 200.00% | |||||
2010 Incentive Award Plan | TSR Performance-based Restricted Stock Units | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
2010 Incentive Award Plan | TSR Performance-based Restricted Stock Units | Minimum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Range of percentage of shares to be issued upon settlement following vesting of target number of shares | 0.00% | |||||
2010 Incentive Award Plan | TSR Performance-based Restricted Stock Units | Maximum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Range of percentage of shares to be issued upon settlement following vesting of target number of shares | 200.00% | |||||
2010 Incentive Award Plan | Stock Options | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
Stock options, Granted | 193,000 | 0 | ||||
Stock options, Expiration Period | 10 years | |||||
Stock options, Exercised | 0 |
Capital Stock and Share-Based82
Capital Stock and Share-Based Compensation - Share-Based Compensation Expense Recorded In Income from Continuing Operations in Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 5,493 | $ 4,293 | $ 4,065 |
Selling, general and administrative | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 5,065 | 3,920 | 3,960 |
Research and development and engineering | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 221 | 117 | 170 |
Cost of Revenue | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 207 | $ 256 | 257 |
Restructuring, acquisition and divestiture related costs | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share-based compensation expense, adjustment | $ (322) |
Capital Stock and Share-Based83
Capital Stock and Share-Based Compensation - Restricted Stock Units Issued and Outstanding (Details) - 2010 Incentive Award Plan - Restricted Stock Units (RSUs) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)$ / sharesshares | ||
Restricted Stock Units | ||
Unvested, Beginning Balance | shares | 635 | |
Granted | shares | 248 | |
Vested | shares | (224) | |
Forfeited | shares | (45) | |
Unvested, Ending Balance | shares | 614 | |
Expected to vest at end of period | shares | 589 | |
Weighted Average Grant Date Fair Value | ||
Unvested, Beginning Balance | $ / shares | $ 13.97 | |
Granted | $ / shares | 25.62 | |
Vested | $ / shares | 14.05 | |
Forfeited | $ / shares | 18.18 | |
Unvested, Ending Balance | $ / shares | 18.35 | |
Expected to vest at end of period | $ / shares | $ 18.13 | |
Weighted Average Remaining Vesting Period (in years) | ||
Unvested at end of period | 1 year 10 months 9 days | |
Expected to vest at end of period | 1 year 10 months 9 days | |
Aggregate Intrinsic Value | ||
Unvested at end of period | $ | $ 30,721 | [1] |
Expected to vest at end of period | $ | $ 29,436 | [1] |
[1] | The aggregate intrinsic value is calculated based on the fair value of $50.00 per share of the Company’s common stock on December 31, 2017 due to the fact that the restricted stock units carry a $0 purchase price. |
Capital Stock and Share-Based84
Capital Stock and Share-Based Compensation - Restricted Stock Units Issued and Outstanding (Parenthetical) (Details) - 2010 Incentive Award Plan - Restricted Stock Units (RSUs) | Dec. 31, 2017$ / shares |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Common stock fair value per share | $ 50 |
Restricted stock units purchase price per share | $ 0 |
Capital Stock and Share-Based85
Capital Stock and Share-Based Compensation - Performance Stock Units Issued and Outstanding (Details) - 2010 Incentive Award Plan - Performance Stock Units $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)$ / sharesshares | ||
Performance Stock Units | ||
Unvested, Beginning Balance | shares | 29 | [1] |
Granted | shares | 60 | [1] |
Unvested, Ending Balance | shares | 89 | [1] |
Expected to vest at end of period | shares | 89 | [1] |
Weighted Average Grant Date Fair Value | ||
Unvested, Beginning Balance | $ / shares | $ 14.13 | |
Granted | $ / shares | 28.80 | |
Unvested, Ending Balance | $ / shares | 24 | |
Expected to vest at end of period | $ / shares | $ 24 | |
Weighted Average Remaining Vesting Period (in years) | ||
Unvested at end of period | 1 year 8 months 4 days | |
Expected to vest at end of period | 1 year 8 months 4 days | |
Aggregate Intrinsic Value | ||
Unvested at end of period | $ | $ 4,474 | [2] |
Expected to vest at end of period | $ | $ 4,474 | [2] |
[1] | The unvested PSUs are shown in this table at target, except for the number of shares vested, which reflect the shares earned. As of December 31, 2017, the maximum number of PSUs available to be earned is approximately 179 thousand. | |
[2] | The aggregate intrinsic value is calculated based on the fair value of $50.00 per share of the Company’s common stock on December 31, 2017 due to the fact that the performance stock units carry a $0 purchase price |
Capital Stock and Share-Based86
Capital Stock and Share-Based Compensation - Performance Stock Units Issued and Outstanding (Parenthetical) (Details) - 2010 Incentive Award Plan - Performance Stock Units | Dec. 31, 2017$ / sharesshares |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Maximum number of PSUs available to be earned | shares | 179,000 |
Common stock fair value per share | $ 50 |
Performance stock units purchase price per share | $ 0 |
Capital Stock and Share-Based87
Capital Stock and Share-Based Compensation - Fair Value of TSR Performance-Based Restricted Stock Units Estimated Using Monte-Carol Valuation Model (Details) - TSR Performance-based Restricted Stock Units | 12 Months Ended |
Dec. 31, 2017$ / shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Grant-date stock price | $ 24.30 |
Expected volatility | 28.60% |
Risk-free interest rate | 1.44% |
Expected annual dividend yield | 0.00% |
Weighted average fair value | $ 33.31 |
Capital Stock and Share-Based88
Capital Stock and Share-Based Compensation - Stock Options Outstanding, Exercisable and Expected to Vest (Details) - 2010 Incentive Award Plan - Stock Options $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Number of Shares | |
Stock options outstanding | shares | 103 |
Stock options exercisable | shares | 34 |
Stock options expected to vest | shares | 103 |
Weighted Average Exercise Price | |
Stock options outstanding | $ / shares | $ 14.13 |
Stock options exercisable | $ / shares | 14.13 |
Stock options expected to vest | $ / shares | $ 14.13 |
Weighted Average Remaining Contractual Term (years) | |
Stock options outstanding | 8 years 3 months |
Stock options exercisable | 8 years 3 months |
Stock options expected to vest | 8 years 3 months |
Aggregate Intrinsic Value | |
Stock options outstanding | $ | $ 3,690 |
Stock options exercisable | $ | 1,230 |
Stock options expected to vest | $ | $ 3,690 |
Capital Stock and Share-Based89
Capital Stock and Share-Based Compensation - Stock Options Outstanding, Exercisable and Expected to Vest (Details) (Parenthetical) (Details) | Dec. 31, 2017$ / shares |
2010 Incentive Award Plan | Stock Options | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Common stock fair value per share | $ 50 |
Net Periodic Pension Cost (Deta
Net Periodic Pension Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components of the net periodic pension cost: | |||
Interest cost | $ 991 | $ 1,232 | $ 1,340 |
Expected return on plan assets | (1,665) | (1,566) | (1,844) |
Amortization of actuarial losses | 1,045 | 726 | 875 |
Net periodic pension cost | $ 371 | $ 392 | $ 371 |
Defined Benefit Plan, Sponsor Location [Extensible List] | us-gaap:ForeignPlanMember | us-gaap:ForeignPlanMember | us-gaap:ForeignPlanMember |
Actuarial Assumptions used to C
Actuarial Assumptions used to Compute Net Periodic Pension Cost (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Compensation And Retirement Disclosure [Abstract] | |||
Defined Benefit Plan, Sponsor Location [Extensible List] | us-gaap:ForeignPlanMember | us-gaap:ForeignPlanMember | us-gaap:ForeignPlanMember |
Weighted-average discount rate | 2.60% | 3.80% | 3.50% |
Weighted-average long-term rate of return on plan assets | 5.20% | 5.30% | 5.60% |
Actuarial Assumptions used to92
Actuarial Assumptions used to Compute Benefit Obligations (Details) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Compensation And Retirement Disclosure [Abstract] | |||
Defined Benefit Plan, Sponsor Location [Extensible List] | us-gaap:ForeignPlanMember | us-gaap:ForeignPlanMember | us-gaap:ForeignPlanMember |
Weighted-average discount rate | 2.40% | 2.60% | |
Rate of inflation | 2.90% | 3.00% |
Reconciliation of Benefit Oblig
Reconciliation of Benefit Obligations and Plan Assets of U.K. Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Change in benefit obligation: | |||
Projected benefit obligation at beginning of year | $ 37,261 | $ 35,914 | |
Interest cost | 991 | 1,232 | $ 1,340 |
Actuarial (gains) losses | (27) | 7,425 | |
Benefits paid | (1,313) | (809) | |
Foreign currency exchange rate changes | 3,417 | (6,501) | |
Projected benefit obligation at end of year | 40,329 | 37,261 | 35,914 |
Accumulated benefit obligation at end of year | 40,329 | 37,261 | |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 31,304 | 32,374 | |
Actual return on plan assets | 2,605 | 4,522 | |
Employer contributions | 887 | 868 | |
Benefits paid | (1,313) | (809) | |
Foreign currency exchange rate changes | 2,993 | (5,651) | |
Fair value of plan assets at end of year | 36,476 | 31,304 | 32,374 |
Funded status at end of year | (3,853) | (5,957) | |
Amounts included in accumulated other comprehensive loss not yet recognized in net periodic pension cost: | |||
Net actuarial losses at beginning of year | (11,697) | (9,874) | |
Net actuarial gains (losses) during the year | 967 | (4,469) | |
Amounts reclassified from accumulated other comprehensive income to income before income taxes | 1,045 | 726 | |
Foreign currency exchange rate changes | (808) | 1,920 | |
Net actuarial loss | (10,493) | (11,697) | $ (9,874) |
Amounts expected to be amortized from accumulated other comprehensive loss into net periodic pension cost over the next fiscal year consists of: | |||
Net actuarial loss | $ 957 | $ 1,148 | |
Defined Benefit Plan, Sponsor Location [Extensible List] | us-gaap:ForeignPlanMember | us-gaap:ForeignPlanMember | us-gaap:ForeignPlanMember |
Expected Future Benefit Payment
Expected Future Benefit Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Compensation And Retirement Disclosure [Abstract] | |||
2,018 | $ 768 | ||
2,019 | 999 | ||
2,020 | 1,234 | ||
2,021 | 1,430 | ||
2,022 | 1,169 | ||
2023-2026 | 8,320 | ||
Total | $ 13,920 | ||
Defined Benefit Plan, Sponsor Location [Extensible List] | us-gaap:ForeignPlanMember | us-gaap:ForeignPlanMember | us-gaap:ForeignPlanMember |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Compensation And Retirement Disclosure [Abstract] | |||
Defined Benefit Plan, Sponsor Location [Extensible List] | us-gaap:ForeignPlanMember | us-gaap:ForeignPlanMember | us-gaap:ForeignPlanMember |
Funding valuation period | 3 years | ||
Defined benefit plan contributions by employer | $ 887 | $ 868 | |
Defined benefit plan estimated employer contributions for 2018 | 900 | ||
Contribution to defined contribution plan by employer | $ 3,100 | $ 2,500 | $ 2,700 |
Summary of Fair Value of Plan A
Summary of Fair Value of Plan Assets by Asset Category (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Fair Value of Plan Assets | $ 36,476 | $ 31,304 | $ 32,374 | |||
Defined Benefit Plan, Sponsor Location [Extensible List] | us-gaap:ForeignPlanMember | us-gaap:ForeignPlanMember | us-gaap:ForeignPlanMember | |||
Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Fair Value of Plan Assets | $ 136 | $ 236 | ||||
Not Subject to Leveling | ASU 2015-07 | ||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Fair Value of Plan Assets | 36,340 | 31,068 | ||||
Balanced Fund | ||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Fair Value of Plan Assets | 26,816 | [1] | 23,317 | [2] | ||
Balanced Fund | Not Subject to Leveling | ASU 2015-07 | ||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Fair Value of Plan Assets | 26,816 | [1] | 23,317 | [2] | ||
Fixed Income | ||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Fair Value of Plan Assets | 9,524 | [3] | 4,512 | [4] | ||
Fixed Income | Not Subject to Leveling | ASU 2015-07 | ||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Fair Value of Plan Assets | 9,524 | [3] | 4,512 | [4] | ||
Growth Funds | ||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Fair Value of Plan Assets | [5] | 3,239 | ||||
Growth Funds | Not Subject to Leveling | ASU 2015-07 | ||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Fair Value of Plan Assets | [5] | 3,239 | ||||
Cash | ||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Fair Value of Plan Assets | 136 | 236 | ||||
Cash | Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Fair Value of Plan Assets | $ 136 | $ 236 | ||||
[1] | This class comprises a diversified portfolio of global investments which seeks a balanced return between capital growth and fixed income and is allocated on a weighted average basis as follows: equities (38%), bonds (27%), other assets (31%) and cash (4%). | |||||
[2] | This class comprises a diversified portfolio of global investments which seeks a balanced return between capital growth and fixed income and is allocated on a weighted average basis as follows: equities (34%), bonds (36%), other assets (27%) and cash (3%). | |||||
[3] | This class comprises a diversified portfolio of global investments which seeks fixed income growth and is allocated on a weighted average basis as follows: bonds (92%) and cash (8%). | |||||
[4] | This class comprises a diversified portfolio of global investments which seeks fixed income growth and is allocated on a weighted average basis as follows: bonds (93%), other assets (1%) and cash (6%). | |||||
[5] | This class comprises a diversified portfolio of global investments which seeks long-term capital growth and is allocated on a weighted average basis as follows: equities (59%), bonds (16%), other assets (22%), and cash (3%). |
Summary of Fair Value of Plan97
Summary of Fair Value of Plan Assets by Asset Category (Parenthetical) (Details) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Defined Benefit Plan, Sponsor Location [Extensible List] | us-gaap:ForeignPlanMember | us-gaap:ForeignPlanMember | us-gaap:ForeignPlanMember |
Bonds | Balanced Fund | |||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Defined benefit plan, target plan asset allocations | 27.00% | 36.00% | |
Bonds | Fixed Income | |||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Defined benefit plan, target plan asset allocations | 92.00% | 93.00% | |
Bonds | Growth Funds | |||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Defined benefit plan, target plan asset allocations | 16.00% | ||
Equity Securities | Balanced Fund | |||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Defined benefit plan, target plan asset allocations | 38.00% | 34.00% | |
Equity Securities | Growth Funds | |||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Defined benefit plan, target plan asset allocations | 59.00% | ||
Other Asset | Balanced Fund | |||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Defined benefit plan, target plan asset allocations | 31.00% | 27.00% | |
Other Asset | Fixed Income | |||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Defined benefit plan, target plan asset allocations | 1.00% | ||
Other Asset | Growth Funds | |||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Defined benefit plan, target plan asset allocations | 22.00% | ||
Cash | Balanced Fund | |||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Defined benefit plan, target plan asset allocations | 4.00% | 3.00% | |
Cash | Fixed Income | |||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Defined benefit plan, target plan asset allocations | 8.00% | 6.00% | |
Cash | Growth Funds | |||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Defined benefit plan, target plan asset allocations | 3.00% |
Components of Income (Loss) fro
Components of Income (Loss) from Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income (loss) from continuing operations before income taxes: | |||
Income from continuing operations before income taxes | $ 76,134 | $ 32,522 | $ 46,022 |
CANADA | |||
Income (loss) from continuing operations before income taxes: | |||
Foreign | (2,036) | (1,872) | (1,674) |
UNITED STATES | |||
Income (loss) from continuing operations before income taxes: | |||
U.S. | 37,327 | 20,422 | 23,298 |
Other Countries | |||
Income (loss) from continuing operations before income taxes: | |||
Foreign | $ 40,843 | $ 13,972 | $ 24,398 |
Components of Income Tax Provis
Components of Income Tax Provision (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components Of Income Tax Expense Benefit [Line Items] | |||
Current income tax provision (benefit) | $ 16,387 | $ 12,285 | $ 12,086 |
Deferred income tax provision (benefit) | (2,560) | (1,766) | (1,692) |
Income Tax Provision (benefit) | 13,827 | 10,519 | 10,394 |
CANADA | |||
Components Of Income Tax Expense Benefit [Line Items] | |||
Current income tax provision (benefit) | 146 | 43 | 96 |
Deferred income tax provision (benefit) | 0 | 0 | |
UNITED STATES | |||
Components Of Income Tax Expense Benefit [Line Items] | |||
Current income tax provision (benefit) | 9,434 | 9,678 | 8,136 |
Deferred income tax provision (benefit) | 2,396 | (2,378) | (3,239) |
Other Countries | |||
Components Of Income Tax Expense Benefit [Line Items] | |||
Current income tax provision (benefit) | 6,807 | 2,564 | 3,854 |
Deferred income tax provision (benefit) | $ (4,956) | $ 612 | $ 1,547 |
Reconciliation of Statutory Can
Reconciliation of Statutory Canadian Tax rate to Effective Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule Of Effective Tax Rate Reconciliation [Line Items] | |||
Statutory Canadian tax rate | 35.00% | ||
Income Tax Provision (benefit) | $ 13,827 | $ 10,519 | $ 10,394 |
Canada Revenue Agency | |||
Schedule Of Effective Tax Rate Reconciliation [Line Items] | |||
Statutory Canadian tax rate | 29.00% | 28.50% | 27.00% |
Expected income tax provision at Canadian statutory tax rate | $ 22,079 | $ 9,269 | $ 12,426 |
International tax rate differences | (2,038) | 891 | 304 |
State income taxes, net | 674 | 503 | 453 |
Withholding and other taxes | 484 | 441 | 731 |
Permanent differences | 274 | 179 | 1,000 |
Section 199 deduction | (1,148) | (1,063) | (1,188) |
Tax credits | (984) | (1,095) | (990) |
Statutory tax rate changes | 2,823 | (856) | 95 |
Uncertain tax positions | (1,607) | (103) | 121 |
Change in valuation allowance | (354) | 1,202 | (612) |
Acquisition contingent consideration adjustments | 149 | 762 | |
Transaction costs | 1,011 | 649 | 270 |
Provision to return differences | 225 | (93) | (617) |
IRS audit | (748) | ||
Gain on Laser Quantum acquisition | (6,586) | ||
UK patent box | (1,646) | ||
JK Lasers divestiture | (1,432) | ||
Other | 471 | (167) | 581 |
Income Tax Provision (benefit) | $ 13,827 | $ 10,519 | $ 10,394 |
Effective tax rate | 18.20% | 32.30% | 22.60% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes [Line Items] | |||||
Statutory Canadian tax rate | 35.00% | ||||
Additional income tax provision from revaluation of tax rate | $ 2,800 | ||||
Valuation allowances recorded on operating losses in certain tax jurisdictions | 100 | $ 1,300 | |||
Capital loss carryforward | 300 | 100 | |||
Capital loss carryforward | 5,700 | 5,200 | |||
Loss carryforwards | 3,700 | 4,400 | |||
Tax credits | 2,600 | 2,300 | |||
Undistributed earnings of foreign subsidiaries | 98,000 | ||||
Estimated unrecognized income and foreign tax liabilities related to undistributed earnings of foreign subsidiaries | 200 | ||||
Unrecognized tax benefits | 4,089 | 4,962 | $ 5,490 | $ 6,274 | |
Unrecognized tax benefits that will impact tax rate if recognized | 3,400 | 4,000 | |||
Unrecognized tax benefit income tax interest and penalties accrued | 400 | 1,100 | |||
Unrecognized tax benefits, income tax penalties and interest expense | 100 | 100 | |||
Maximum | |||||
Income Taxes [Line Items] | |||||
Maximum unrecognized tax benefits expected to be recorded in next twelve months | 200 | ||||
Utilized Capital Loss Carryforwards | |||||
Income Taxes [Line Items] | |||||
Capital loss carryforward | 400 | ||||
CANADA | |||||
Income Taxes [Line Items] | |||||
Adjusted loss carryforward and related valuation allowance | 300 | ||||
Capital loss carryforward | 5,200 | 4,700 | |||
Loss carryforwards | $ 2,700 | $ 3,100 | |||
Operating loss carryforwards expiration year | 2,032 | 2,031 | |||
Tax credits | $ 1,900 | $ 1,800 | |||
CANADA | Tax Credit That Will Expire In Certain Period | |||||
Income Taxes [Line Items] | |||||
Tax credits | $ 1,200 | $ 1,100 | |||
Tax credits, expiration Year | 2,022 | 2,022 | |||
CANADA | Tax Credits That Can Be Carried Forward Indefinitely | |||||
Income Taxes [Line Items] | |||||
Tax credits | $ 700 | $ 700 | |||
UNITED STATES | |||||
Income Taxes [Line Items] | |||||
Loss carryforwards | $ 1,000 | $ 1,300 | |||
Operating loss carryforwards expiration year | 2,036 | 2,035 | |||
Tax credits | $ 700 | $ 500 | |||
UNITED STATES | Tax Credit That Will Expire In Certain Period | |||||
Income Taxes [Line Items] | |||||
Tax credits | $ 600 | $ 400 | |||
Tax credits, expiration Year | 2,032 | 2,031 | |||
UNITED STATES | Tax Credits That Can Be Carried Forward Indefinitely | |||||
Income Taxes [Line Items] | |||||
Tax credits | $ 100 | $ 100 | |||
UNITED KINGDOM | |||||
Income Taxes [Line Items] | |||||
Capital loss carryforward | $ 500 | $ 500 | |||
Scenario, Forecast | |||||
Income Taxes [Line Items] | |||||
Statutory Canadian tax rate | 21.00% |
Significant Components of Defer
Significant Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Losses | $ 9,407 | $ 9,557 |
Compensation related deductions | 3,687 | 4,437 |
Tax credits | 2,594 | 2,318 |
Unrealized currency gains/losses | 183 | |
Restructuring related liabilities | 172 | 471 |
Inventory | 3,400 | 5,869 |
Amortization | 3,082 | |
Warranty | 768 | 1,049 |
Other | 1,688 | |
Total deferred tax assets | 20,211 | 28,471 |
Valuation allowance on deferred tax assets | (12,811) | (13,014) |
Net deferred tax assets | 7,400 | 15,457 |
Deferred tax liabilities: | ||
Equity-method investment | (1,370) | |
Depreciation | (1,353) | (749) |
Amortization | (23,496) | (4,162) |
Unrealized currency gains/losses | (659) | |
Other | (1,171) | (1,218) |
Total deferred tax liabilities | (26,020) | (8,158) |
Net deferred income tax (liabilities) | $ (18,620) | |
Net deferred income tax assets | $ 7,299 |
Reconciliation of Total Amounts
Reconciliation of Total Amounts of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Beginning balance of unrecognized tax benefits | $ 4,962 | $ 5,490 | $ 6,274 |
Additions based on tax positions related to the current year | 991 | 561 | 752 |
Additions for tax positions of prior years | 496 | 88 | 78 |
Reductions to tax positions of prior years | (28) | (45) | (626) |
Reductions to tax positions resulting from a lapse of the applicable statute of limitations | (1,577) | (842) | (226) |
Settlements with tax authorities | (755) | (290) | (762) |
Ending balance of unrecognized tax benefits | $ 4,089 | $ 4,962 | $ 5,490 |
Income Tax Returns to be Review
Income Tax Returns to be Reviewed (Details) | 12 Months Ended |
Dec. 31, 2017 | |
UNITED STATES | |
Income Tax Examination [Line Items] | |
Income tax returns to be reviewed | 2,014 |
CANADA | |
Income Tax Examination [Line Items] | |
Income tax returns to be reviewed | 2,014 |
UNITED KINGDOM | |
Income Tax Examination [Line Items] | |
Income tax returns to be reviewed | 2,016 |
GERMANY | |
Income Tax Examination [Line Items] | |
Income tax returns to be reviewed | 2,013 |
THE NETHERLANDS | |
Income Tax Examination [Line Items] | |
Income tax returns to be reviewed | 2,012 |
CHINA | |
Income Tax Examination [Line Items] | |
Income tax returns to be reviewed | 2,008 |
JAPAN | |
Income Tax Examination [Line Items] | |
Income tax returns to be reviewed | 2,013 |
Schedule of Restructuring, Acqu
Schedule of Restructuring, Acquisition and Divestiture Related Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Cost And Reserve [Line Items] | |||
Total restructuring charges | $ 346 | $ 2,970 | $ 5,840 |
Acquisition and related charges | 7,196 | 4,975 | 1,301 |
Divestiture related charges | 1,113 | ||
Total acquisition and divestiture related charges | 7,196 | 4,975 | 2,414 |
Total restructuring, acquisition and divestiture related costs | 7,542 | 7,945 | 8,254 |
2016 Restructuring | |||
Restructuring Cost And Reserve [Line Items] | |||
Total restructuring charges | 332 | 3,049 | 3,148 |
2015 Restructuring | |||
Restructuring Cost And Reserve [Line Items] | |||
Total restructuring charges | 1,484 | ||
2011 Restructuring | |||
Restructuring Cost And Reserve [Line Items] | |||
Total restructuring charges | $ 14 | $ (79) | $ 1,208 |
Restructuring, Acquisition a106
Restructuring, Acquisition and Divestiture Related Costs - Additional Information (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | 16 Months Ended | 74 Months Ended | ||||||
Dec. 31, 2016USD ($) | Aug. 31, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017Facility | ||
Restructuring and Acquisition Related Costs [Line Items] | ||||||||||
Proceeds from the sale of property, plant and equipment | $ 46 | $ 7,037 | $ 127 | |||||||
Gain on sale of facilities | (36) | 1,707 | (1) | |||||||
Restructuring Costs | 346 | 2,970 | 5,840 | |||||||
Cash payments | 1,212 | 4,181 | ||||||||
Acquisition and related charges | 7,196 | 4,975 | 1,301 | |||||||
Divestiture related charges | 1,113 | |||||||||
Finders' Fees, Legal, Valuation And Other Professional Or Consulting Fees | ||||||||||
Restructuring and Acquisition Related Costs [Line Items] | ||||||||||
Acquisition and related charges | 6,800 | 2,500 | 1,500 | |||||||
Earn-out Agreement | ||||||||||
Restructuring and Acquisition Related Costs [Line Items] | ||||||||||
Acquisition and related charges | 400 | 2,500 | (200) | |||||||
Scenario, Forecast | ||||||||||
Restructuring and Acquisition Related Costs [Line Items] | ||||||||||
Cash payments | $ 400 | |||||||||
Severance | ||||||||||
Restructuring and Acquisition Related Costs [Line Items] | ||||||||||
Cash payments | 692 | 3,170 | ||||||||
Other Restructuring Charges | ||||||||||
Restructuring and Acquisition Related Costs [Line Items] | ||||||||||
Cash payments | [1] | $ 17 | 907 | |||||||
2016 Restructuring | ||||||||||
Restructuring and Acquisition Related Costs [Line Items] | ||||||||||
Restructuring plan | During the third quarter of 2015, the Company initiated the 2016 restructuring program, which included consolidating certain manufacturing operations to optimize facility footprint and better utilize resources, and reducing redundant costs due to productivity cost savings and business volume reductions. In August 2016, the Company sold its facility in Chatsworth, California for a net cash consideration of $3.4 million and recognized a gain on sale of $1.6 million as part of restructuring, acquisition and divestiture related costs. As of December 31, 2017, the Company incurred cumulative costs related to this restructuring plan totaling $6.5 million, net of the gain on the sale of the Chatsworth, California facility. The plan was completed in 2017. | |||||||||
Restructuring Costs | $ 332 | 3,049 | 3,148 | |||||||
2016 Restructuring | Cumulative Restructuring Costs | ||||||||||
Restructuring and Acquisition Related Costs [Line Items] | ||||||||||
Restructuring Costs | $ 6,500 | |||||||||
2016 Restructuring | Chatsworth Facility | ||||||||||
Restructuring and Acquisition Related Costs [Line Items] | ||||||||||
Proceeds from the sale of property, plant and equipment | $ 3,400 | |||||||||
Gain on sale of facilities | $ 1,600 | 1,600 | ||||||||
2015 Restructuring | ||||||||||
Restructuring and Acquisition Related Costs [Line Items] | ||||||||||
Restructuring plan | During the first quarter of 2015, the Company implemented a program to eliminate redundant costs, as a result of acquisition and divestiture activities, to better align operations to the Company’s strategic growth plans, to further integrate its business lines, and as a consequence of productivity initiatives. Restructuring costs incurred in 2015 of $1.4 million and $0.1 million were related to severance and other, respectively. The plan was completed during 2015. | |||||||||
Restructuring Costs | 1,484 | |||||||||
2015 Restructuring | Severance | ||||||||||
Restructuring and Acquisition Related Costs [Line Items] | ||||||||||
Restructuring Costs | 1,400 | |||||||||
2015 Restructuring | Other Restructuring Charges | ||||||||||
Restructuring and Acquisition Related Costs [Line Items] | ||||||||||
Restructuring Costs | 100 | |||||||||
2011 Restructuring | ||||||||||
Restructuring and Acquisition Related Costs [Line Items] | ||||||||||
Restructuring plan | In November 2011, the Company announced a strategic initiative (“2011 restructuring”) which aimed to consolidate operations to reduce the Company’s cost structure and improve operational efficiency. In total, eleven facilities have been exited as part of the 2011 restructuring plan. These eliminations resulted in the consolidation of the manufacturing facilities of the Scientific Lasers business and the optics products, the consolidation of the Company’s German operations into one facility, the consolidation of the laser scanners business into the Company’s Bedford, Massachusetts facility and the consolidation of the Company’s Japan operation into one facility. Included in the eleven facilities exited are five facilities exited as part of the Semiconductor and Laser Systems business divestitures. The restructuring costs for the Semiconductor and Laser Systems businesses have been excluded from the table below as they have been reported as part of the operating results from discontinued operations. The Company substantially completed the 2011 restructuring program in 2013. In March 2016, the Company sold its previously exited Laser Systems facility located in Orlando, Florida for cash at the net carrying value of $3.5 million. In December 2016, the lease agreement for the Company’s previously exited laser scanner business facility was terminated, which resulted in a benefit of $0.2 million. | |||||||||
Restructuring Costs | $ 14 | $ (79) | $ 1,208 | |||||||
Number of facilities exited | Facility | 11 | |||||||||
2011 Restructuring | Semiconductor and Laser Systems Business [Member] | ||||||||||
Restructuring and Acquisition Related Costs [Line Items] | ||||||||||
Number of facilities exited | Facility | 5 | |||||||||
2011 Restructuring | Orlando Facility | ||||||||||
Restructuring and Acquisition Related Costs [Line Items] | ||||||||||
Proceeds from the sale of property, plant and equipment | $ 3,500 | |||||||||
2011 Restructuring | Laser Scanner | ||||||||||
Restructuring and Acquisition Related Costs [Line Items] | ||||||||||
Gain on sale of facilities | $ 200 | |||||||||
[1] | Other restructuring charges mainly related to consulting fees and relocation costs. |
Summary of Restructuring Costs
Summary of Restructuring Costs for Each Segment and Unallocated Corporate Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Costs | $ 346 | $ 2,970 | $ 5,840 |
2016 Restructuring | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Costs | 332 | 3,049 | 3,148 |
Cumulative Costs | 6,529 | ||
2016 Restructuring | Photonics | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Costs | 813 | 55 | |
Cumulative Costs | 868 | ||
2016 Restructuring | Vision | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Costs | 331 | 1,862 | 2,200 |
Cumulative Costs | 4,393 | ||
2016 Restructuring | Precision Motion | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Costs | 106 | 833 | |
Cumulative Costs | 939 | ||
2016 Restructuring | Unallocated Corporate and Shared Services | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Costs | 1 | 268 | 60 |
Cumulative Costs | 329 | ||
2015 Restructuring | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Costs | 1,484 | ||
2015 Restructuring | Photonics | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Costs | 542 | ||
2015 Restructuring | Vision | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Costs | 525 | ||
2015 Restructuring | Precision Motion | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Costs | 79 | ||
2015 Restructuring | Unallocated Corporate and Shared Services | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Costs | 338 | ||
2011 Restructuring | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Costs | 14 | (79) | 1,208 |
Cumulative Costs | 5,197 | ||
2011 Restructuring | Photonics | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Costs | (188) | ||
Cumulative Costs | 1,751 | ||
2011 Restructuring | Vision | |||
Restructuring Cost And Reserve [Line Items] | |||
Cumulative Costs | 48 | ||
2011 Restructuring | Precision Motion | |||
Restructuring Cost And Reserve [Line Items] | |||
Cumulative Costs | 122 | ||
2011 Restructuring | Unallocated Corporate and Shared Services | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Costs | 14 | $ 109 | $ 1,208 |
Cumulative Costs | $ 3,276 |
Summary of Accrual Activities b
Summary of Accrual Activities by Components Related to Company's Restructuring Charges (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | |||
Restructuring Cost And Reserve [Line Items] | ||||
Accrued expense beginning balance | $ 1,736 | $ 1,882 | ||
Restructuring charges | 346 | 4,929 | [1] | |
Reserves reversed | (322) | |||
Cash payments | (1,212) | (4,181) | ||
Non-cash write-offs and other adjustments | (64) | (572) | ||
Accrued expense ending balance | 806 | 1,736 | ||
Severance | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Accrued expense beginning balance | 611 | 1,358 | ||
Restructuring charges | 185 | 2,738 | [1] | |
Reserves reversed | (322) | |||
Cash payments | (692) | (3,170) | ||
Non-cash write-offs and other adjustments | (65) | 7 | ||
Accrued expense ending balance | 39 | 611 | ||
Facility | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Accrued expense beginning balance | 1,111 | 406 | ||
Restructuring charges | 146 | 777 | [1] | |
Cash payments | (503) | (104) | ||
Non-cash write-offs and other adjustments | 9 | 32 | ||
Accrued expense ending balance | 763 | 1,111 | ||
Depreciation | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring charges | [1] | 616 | ||
Non-cash write-offs and other adjustments | (616) | |||
Other Restructuring Charges | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Accrued expense beginning balance | [2] | 14 | 118 | |
Restructuring charges | [2] | 15 | 798 | [1] |
Cash payments | [2] | (17) | (907) | |
Non-cash write-offs and other adjustments | [2] | (8) | 5 | |
Accrued expense ending balance | [2] | $ 4 | $ 14 | |
[1] | Excludes $1.6 million of gain on the sale of the Chatsworth, California facility. | |||
[2] | Other restructuring charges mainly related to consulting fees and relocation costs. |
Summary of Accrual Activitie109
Summary of Accrual Activities by Components Related to Company's Restructuring Charges (Parenthetical) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Cost And Reserve [Line Items] | ||||
Gain on sale of facilities | $ (36) | $ 1,707 | $ (1) | |
2016 Restructuring | Chatsworth Facility | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Gain on sale of facilities | $ 1,600 | $ 1,600 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)Customer | Dec. 31, 2016USD ($)Customer | Dec. 31, 2015USD ($) | |
Commitments And Contingencies Disclosure [Line Items] | |||
Lease expense | $ 5.5 | $ 4.2 | $ 4.5 |
Purchase commitments | 86.4 | ||
Purchase commitments, 2018 | 78.7 | ||
Purchase commitments, 2019 | 5.6 | ||
Purchase commitments, 2020 | $ 2.1 | ||
Number of customer accounted on accounts receivable balance | Customer | 1 | ||
Number of customers accounted for 10% or more of accounts receivable | Customer | 0 | 0 | |
Minimum | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Lease agreement expiration year | 2,018 | ||
Maximum | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Lease agreement expiration year | 2,022 | ||
Land | Maximum | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Lease agreement expiration year | 2,078 |
Commitments and Contingencie111
Commitments and Contingencies - Schedule of Gross Assets under Capital Lease (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Capital Leased Assets [Line Items] | ||
Total gross assets under capital lease | $ 13,562 | $ 13,159 |
Land, Buildings and Improvements | ||
Capital Leased Assets [Line Items] | ||
Total gross assets under capital lease | 9,133 | 9,133 |
Machinery and Equipment | ||
Capital Leased Assets [Line Items] | ||
Total gross assets under capital lease | $ 4,429 | $ 4,026 |
Future Minimum Lease Payments u
Future Minimum Lease Payments under Operating and Capital Leases (Details) $ in Thousands | Dec. 31, 2017USD ($) | |
Operating Leases | ||
2,018 | $ 6,695 | |
2,019 | 4,861 | |
2,020 | 3,121 | |
2,021 | 2,481 | |
2,022 | 605 | |
Thereafter | 6,449 | |
Total minimum lease payments | 24,212 | |
Capital Leases | ||
2,018 | 1,013 | [1] |
2,019 | 995 | [1] |
2,020 | 983 | [1] |
2,021 | 907 | [1] |
2,022 | 907 | [1] |
Thereafter | 6,325 | [1] |
Total minimum lease payments | $ 11,130 | [1] |
[1] | Capital lease payments include interest payments of $2.7 million |
Future Minimum Lease Payment113
Future Minimum Lease Payments under Operating and Capital Leases (Parenthetical) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Capital lease payments interest included in payment | $ 2.7 |
Redeemable Noncontrolling In114
Redeemable Noncontrolling Interest- Additional Information (Details) $ in Thousands, £ in Millions | 12 Months Ended | ||||
Dec. 31, 2017USD ($) | [1] | Dec. 31, 2016USD ($) | Jan. 10, 2017USD ($) | Jan. 10, 2017GBP (£) | |
Minority Interest [Line Items] | |||||
Adjustment of redeemable noncontrolling interest to estimated redemption value | $ 20,244 | $ 0 | |||
Laser Quantum | |||||
Minority Interest [Line Items] | |||||
Percentage of equity interest held before acquisition | 41.00% | 41.00% | 41.00% | ||
Percentage of equity interest held after acquisition | 76.00% | 76.00% | |||
Initial fair value of noncontrolling interest | $ 21,582 | £ 17.7 | |||
[1] | Adjustment of the carrying value of redeemable noncontrolling interest to the estimated redemption value was recognized in retained earnings instead of the consolidated statement of operations but was included in the computation of earnings per share attributable to Novanta Inc. (see Note 9). |
Redeemable Noncontrolling In115
Redeemable Noncontrolling Interest- Schedule of Reconciliation of Changes in Redeemable Noncontrolling Interest (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Noncontrolling Interest [Abstract] | |||
Acquisition of noncontrolling interest | $ 21,582 | ||
Net income attributable to noncontrolling interest | 2,256 | ||
Adjustment of redeemable noncontrolling interest to estimated redemption value | 20,244 | [1] | $ 0 |
Foreign currency translation | 2,841 | ||
Balance as of December 31, 2017 | $ 46,923 | ||
[1] | Adjustment of the carrying value of redeemable noncontrolling interest to the estimated redemption value was recognized in retained earnings instead of the consolidated statement of operations but was included in the computation of earnings per share attributable to Novanta Inc. (see Note 9). |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2017CustomerSegment | Dec. 31, 2016Customer | Dec. 31, 2015Customer | |
Segment Reporting [Abstract] | |||
Number of reportable segments | Segment | 3 | ||
Number of customers exceeded ten percentage of revenue | Customer | 0 | 0 | 0 |
Revenue, Gross Profit and Opera
Revenue, Gross Profit and Operating Income (Loss) from Continuing Operations by Reportable Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 521,290 | $ 384,758 | $ 373,598 |
Gross Profit | 220,531 | 162,452 | 157,890 |
Operating Income (Loss) from Continuing Operations | 57,195 | 32,563 | 28,933 |
Photonics | |||
Segment Reporting Information [Line Items] | |||
Revenue | 232,359 | 174,158 | 168,331 |
Gross Profit | 106,117 | 76,696 | 73,602 |
Operating Income (Loss) from Continuing Operations | 51,289 | 34,825 | 35,971 |
Vision | |||
Segment Reporting Information [Line Items] | |||
Revenue | 183,074 | 122,250 | 124,725 |
Gross Profit | 69,249 | 47,181 | 48,966 |
Operating Income (Loss) from Continuing Operations | 7,883 | (1,277) | (2,057) |
Precision Motion | |||
Segment Reporting Information [Line Items] | |||
Revenue | 105,857 | 88,350 | 80,542 |
Gross Profit | 46,564 | 40,044 | 36,709 |
Operating Income (Loss) from Continuing Operations | 27,146 | 21,101 | 16,877 |
Unallocated Corporate and Shared Services | |||
Segment Reporting Information [Line Items] | |||
Gross Profit | (1,399) | (1,469) | (1,387) |
Operating Income (Loss) from Continuing Operations | $ (29,123) | $ (22,086) | $ (21,858) |
Depreciation and Amortization b
Depreciation and Amortization by Reportable Segments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Depreciation and Amortization | |||
Depreciation and amortization | $ 30,758 | $ 20,973 | $ 20,196 |
Photonics | |||
Depreciation and Amortization | |||
Depreciation and amortization | 13,806 | 6,738 | 6,083 |
Vision | |||
Depreciation and Amortization | |||
Depreciation and amortization | 13,590 | 10,402 | 8,599 |
Precision Motion | |||
Depreciation and Amortization | |||
Depreciation and amortization | 2,308 | 2,439 | 2,533 |
Unallocated Corporate and Shared Services | |||
Depreciation and Amortization | |||
Depreciation and amortization | $ 1,054 | $ 1,394 | $ 2,981 |
Accounts Receivable and Invento
Accounts Receivable and Inventory by Reportable Segments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts Receivable | |||
Total accounts receivable | $ 81,482 | $ 63,769 | $ 57,188 |
Inventory | |||
Total inventory | 91,278 | 59,745 | 59,566 |
Total segment assets | 172,760 | 123,514 | 116,754 |
Photonics | |||
Accounts Receivable | |||
Total accounts receivable | 33,490 | 28,886 | 21,763 |
Inventory | |||
Total inventory | 44,451 | 28,976 | 29,501 |
Vision | |||
Accounts Receivable | |||
Total accounts receivable | 36,089 | 22,885 | 21,691 |
Inventory | |||
Total inventory | 33,836 | 20,656 | 19,583 |
Precision Motion | |||
Accounts Receivable | |||
Total accounts receivable | 11,903 | 11,998 | 13,734 |
Inventory | |||
Total inventory | $ 12,991 | $ 10,113 | $ 10,482 |
Total Assets by Reportable Segm
Total Assets by Reportable Segments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
ASSETS | ||||
Total segment assets | $ 172,760 | $ 123,514 | $ 116,754 | |
Cash and cash equivalents | 100,057 | 68,108 | 59,959 | $ 51,146 |
Prepaid income taxes and income taxes receivable | 4,387 | 2,058 | 2,510 | |
Prepaid expenses and other current assets | 10,675 | 5,570 | 5,989 | |
Property, plant and equipment, net | 61,718 | 35,421 | 40,550 | |
Deferred tax assets | 7,052 | 8,593 | 7,885 | |
Other assets | 4,018 | 12,502 | 12,673 | |
Intangible assets, net | 155,048 | 61,743 | 66,269 | |
Goodwill | 210,988 | 108,128 | 103,456 | |
Total assets | $ 726,703 | $ 425,637 | $ 416,045 |
Schedule of Geographic Revenue
Schedule of Geographic Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 521,290 | $ 384,758 | $ 373,598 |
Percentage of Total | 100.00% | 100.00% | 100.00% |
UNITED STATES | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 220,583 | $ 154,756 | $ 154,825 |
Percentage of Total | 42.30% | 40.20% | 41.40% |
GERMANY | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 68,003 | $ 55,940 | $ 54,743 |
Percentage of Total | 13.00% | 14.50% | 14.70% |
Rest Of Europe | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 81,001 | $ 51,705 | $ 48,277 |
Percentage of Total | 15.50% | 13.40% | 12.90% |
CHINA | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 56,128 | $ 44,225 | $ 38,491 |
Percentage of Total | 10.80% | 11.50% | 10.30% |
Rest of Asia-Pacific | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 84,727 | $ 60,104 | $ 62,467 |
Percentage of Total | 16.30% | 15.60% | 16.70% |
Other Countries | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 10,848 | $ 18,028 | $ 14,795 |
Percentage of Total | 2.10% | 4.80% | 4.00% |
Summary of Long-lived Assets (D
Summary of Long-lived Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Long-Lived Assets by Geographical Areas [Line Items] | |||
Property, plant and equipment, net | $ 61,718 | $ 35,421 | $ 40,550 |
UNITED STATES | |||
Long-Lived Assets by Geographical Areas [Line Items] | |||
Property, plant and equipment, net | 29,920 | 29,509 | 34,907 |
Europe | |||
Long-Lived Assets by Geographical Areas [Line Items] | |||
Property, plant and equipment, net | 30,621 | 4,588 | 4,014 |
CHINA | |||
Long-Lived Assets by Geographical Areas [Line Items] | |||
Property, plant and equipment, net | 1,127 | 1,286 | 1,593 |
Asia Pacific And Other Non Us Countries | |||
Long-Lived Assets by Geographical Areas [Line Items] | |||
Property, plant and equipment, net | $ 50 | $ 38 | $ 36 |