Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 19, 2019 | Jun. 29, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
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 Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 34,900,599 | ||
Entity Public Float | $ 1,779,955,516 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 82,043 | $ 100,057 |
Accounts receivable, net of allowance of $321 and $554, respectively | 83,955 | 81,482 |
Inventories | 104,764 | 91,278 |
Prepaid income taxes and income taxes receivable | 1,852 | 4,387 |
Prepaid expenses and other current assets | 9,155 | 10,675 |
Total current assets | 281,769 | 287,879 |
Property, plant and equipment, net | 65,464 | 61,718 |
Deferred tax assets | 9,492 | 7,052 |
Other assets | 2,269 | 4,018 |
Intangible assets, net | 142,920 | 155,048 |
Goodwill | 217,662 | 210,988 |
Total assets | 719,576 | 726,703 |
Current Liabilities | ||
Current portion of long-term debt | 4,535 | 9,119 |
Accounts payable | 50,733 | 39,793 |
Income taxes payable | 2,633 | 5,942 |
Accrued expenses and other current liabilities | 46,295 | 43,314 |
Total current liabilities | 104,196 | 98,168 |
Long-term debt | 202,843 | 225,500 |
Deferred tax liabilities | 22,632 | 25,672 |
Income taxes payable | 4,463 | 3,754 |
Other liabilities | 17,187 | 15,141 |
Total liabilities | 351,321 | 368,235 |
Commitments and Contingencies (Note 17) | ||
Redeemable noncontrolling interest | 46,923 | |
Stockholders’ Equity: | ||
Common shares, no par value; Authorized shares: unlimited; Issued and outstanding: 34,886 and 34,595, respectively | 423,856 | 423,856 |
Additional paid-in capital | 46,018 | 33,309 |
Accumulated deficit | (79,092) | (127,740) |
Accumulated other comprehensive loss | (22,527) | (17,880) |
Total stockholders’ equity | 368,255 | 311,545 |
Total liabilities, noncontrolling interest and stockholders’ equity | $ 719,576 | $ 726,703 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 321 | $ 554 |
Common shares, Authorized | Unlimited | Unlimited |
Common shares, no par value | $ 0 | $ 0 |
Common shares, Issued | 34,886 | 34,595 |
Common shares, outstanding | 34,886 | 34,595 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Revenue | $ 614,337 | $ 521,290 | $ 384,758 |
Cost of revenue | 352,809 | 300,759 | 222,306 |
Gross profit | 261,528 | 220,531 | 162,452 |
Operating expenses: | |||
Research and development and engineering | 51,024 | 41,673 | 32,002 |
Selling, general and administrative | 115,900 | 101,654 | 81,299 |
Amortization of purchased intangible assets | 15,550 | 12,096 | 8,251 |
Restructuring, acquisition and divestiture related costs | 8,041 | 7,542 | 7,945 |
Total operating expenses | 190,515 | 162,965 | 129,497 |
Operating income | 71,013 | 57,566 | 32,955 |
Interest income (expense), net | (9,814) | (7,165) | (4,559) |
Foreign exchange transaction gains (losses), net | 147 | (447) | 2,317 |
Other income (expense), net | (44) | (229) | 1,809 |
Gain on acquisition of business | 26,409 | ||
Income before income taxes | 61,302 | 76,134 | 32,522 |
Income tax provision | 10,207 | 13,827 | 10,519 |
Consolidated net income | 51,095 | 62,307 | 22,003 |
Less: Net income attributable to noncontrolling interest | (1,986) | (2,256) | |
Net income attributable to Novanta Inc. | $ 49,109 | $ 60,051 | $ 22,003 |
Earnings per common share attributable to Novanta Inc. (Note 10): | |||
Basic | $ 1.46 | $ 1.14 | $ 0.63 |
Diluted | $ 1.43 | $ 1.13 | $ 0.63 |
Weighted average common shares outstanding—basic | 34,913 | 34,817 | 34,694 |
Weighted average common shares outstanding—diluted | 35,473 | 35,280 | 34,914 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Statement Of Income And Comprehensive Income [Abstract] | ||||
Consolidated net income | $ 51,095 | $ 62,307 | $ 22,003 | |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments, net of tax | [1] | (4,172) | 8,909 | (7,524) |
Pension liability adjustments, net of tax | [2] | (475) | 926 | (1,361) |
Total other comprehensive income (loss) | (4,647) | 9,835 | (8,885) | |
Total consolidated comprehensive income | 46,448 | 72,142 | 13,118 | |
Less: Comprehensive income attributable to noncontrolling interest | (1,986) | (2,256) | ||
Comprehensive income attributable to Novanta Inc. | $ 44,462 | $ 69,886 | $ 13,118 | |
[1] | The tax effect on this component of comprehensive income was ($93), ($94) and $36 in 2018, 2017 and 2016, respectively. | |||
[2] | The tax effect on this component of comprehensive income was ($153), $277 and ($462) in 2018, 2017 and 2016, respectively. |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Foreign currency translation adjustments - Tax effect on component of comprehensive income | $ (93) | $ (94) | $ 36 |
Pension liability adjustments, tax effect on the component of comprehensive income | $ (153) | $ 277 | $ (462) |
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 |
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 | |||
Redeemable noncontrolling interest redemption value adjustment (Note 5) | (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 | ||||
Net income | 49,109 | 49,109 | |||
Redeemable noncontrolling interest redemption value adjustment (Note 5) | 1,781 | 1,781 | |||
Acquisition of noncontrolling interest | 14,401 | 14,401 | |||
Acquisition of noncontrolling interest (in shares) | 213 | ||||
Common stock issued under stock plans (in shares) | 231 | ||||
Shares withheld for taxes on vested stock awards | (3,556) | (3,556) | |||
Shares withheld for taxes on vested stock awards (in shares) | (64) | ||||
Repurchases of common stock | (5,850) | (5,850) | |||
Repurchases of common stock (in shares) | (89) | ||||
Share-based compensation | 7,714 | 7,714 | |||
Adoption of ASU 2016-16 | ASU 2016-16 | (2,242) | (2,242) | |||
Other comprehensive income (loss), net of tax | (4,647) | (4,647) | |||
Balance at Dec. 31, 2018 | $ 368,255 | $ 423,856 | $ 46,018 | $ (22,527) | $ (79,092) |
Balance (in shares) at Dec. 31, 2018 | 34,886 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Consolidated net income | $ 51,095 | $ 62,307 | $ 22,003 |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | |||
Depreciation and amortization | 37,052 | 30,758 | 20,357 |
Provision for inventory excess and obsolescence | 1,898 | 1,421 | 3,091 |
Share-based compensation | 7,714 | 5,493 | 4,293 |
Deferred income taxes | (6,076) | (2,560) | (1,766) |
Earnings from equity-method investment | (104) | (2,191) | |
Dividend from equity-method investment | 2,341 | ||
Gain on acquisition of business | (26,409) | ||
(Gain) loss on sale of fixed assets | 106 | 36 | (1,707) |
Contingent consideration adjustments | 425 | 1,267 | |
Inventory acquisition fair value adjustment | 4,754 | 173 | |
Non-cash interest expense | 955 | 825 | 882 |
Other non-cash items | (165) | 283 | 813 |
Changes in assets and liabilities which provided/(used) cash, excluding effects from businesses acquisitions: | |||
Accounts receivable | (1,156) | (2,077) | (6,394) |
Inventories | (15,603) | (13,587) | (2,917) |
Prepaid expenses and other current assets | 1,350 | (2,169) | (1,729) |
Prepaid income taxes and income taxes receivable | 2,165 | (2,282) | 462 |
Accounts payable, income taxes payable, accrued expenses and other current liabilities | 11,238 | 8,993 | 10,590 |
Other non-current assets and liabilities | (926) | (2,729) | (1,780) |
Cash provided by operating activities | 89,647 | 63,378 | 47,788 |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (14,658) | (9,094) | (8,462) |
Acquisition of businesses, net of cash acquired and working capital adjustments | (29,600) | (168,332) | (8,958) |
Acquisition of assets | (1,599) | (3,980) | |
Release of escrow from sale of business | 1,498 | ||
Proceeds from sale of property, plant and equipment | 267 | 46 | 7,037 |
Cash used in investing activities | (45,590) | (177,380) | (12,865) |
Cash flows from financing activities: | |||
Borrowings under revolving credit facility | 55,253 | 176,769 | |
Repayments of term loan and revolving credit facility | (74,648) | (26,925) | (16,250) |
Payments of debt issuance costs | (655) | (2,523) | |
Payments of withholding taxes from stock-based awards | (3,556) | (2,090) | (1,789) |
Payments of contingent considerations | (2,546) | ||
Repurchases of common stock | (5,850) | (370) | (1,634) |
Acquisition of noncontrollling interest | (30,800) | ||
Other financing activities | (563) | (853) | (993) |
Cash provided by (used in) financing activities | (60,164) | 143,330 | (23,189) |
Effect of exchange rates on cash and cash equivalents | (1,907) | 2,621 | (3,585) |
Increase (decrease) in cash and cash equivalents | (18,014) | 31,949 | 8,149 |
Cash and cash equivalents, beginning of year | 100,057 | 68,108 | 59,959 |
Cash and cash equivalents, end of year | 82,043 | 100,057 | 68,108 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 8,924 | 5,832 | 2,917 |
Cash paid for income taxes | 20,323 | 21,121 | 14,058 |
Income tax refunds received | 3,011 | 337 | 932 |
Supplemental disclosure of non-cash investing activity: | |||
Accrual for capital expenditures | $ 1,187 | $ 1,601 | $ 1,253 |
Organization and Presentation
Organization and Presentation | 12 Months Ended |
Dec. 31, 2018 | |
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 medical and advanced industrial original equipment manufacturers (“OEMs”) a competitive advantage. Novanta combines 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 the customers’ demanding applications. Basis of Presentation These consolidated financial statements have been prepared by the Company in United States (“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. During the years ended December 31, 2017 and 2016, the Company recognized income from its equity method investment amounting to $0.1 million and $2.2 million, respectively, which was included in other income (expense) in the accompanying consolidated statements of operations. 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
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 U.S. 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 adjustments, a separate component of other comprehensive income (loss) in stockholders’ equity. Foreign currency transaction gains and losses, 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. 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 certain that the receivable will not be recovered. For the years ended December 31, 2018, 2017 and 2016, changes in the allowance for doubtful accounts were as follows (in thousands): 2018 2017 2016 Balance at beginning of year $ 554 $ 565 $ 500 Provision charged to selling, general and administrative expenses 66 283 135 Allowance resulting from acquisitions — 52 15 Write-offs, net of recoveries of amounts previously reserved (295 ) (358 ) (82 ) Exchange rate changes (4 ) 12 (3 ) Balance at end of year $ 321 $ 554 $ 565 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. 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 developed 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 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.” During the second quarter of 2018, the Company adopted Accounting Standards Update (“ASU”) 2017-14, “Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”), which eliminates Step Two of the goodwill impairment test. 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 assessment to determine whether it is necessary to perform the quantitative impairment test. In performing the qualitative assessment, the Company reviews 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 qualitative assessment, that it is more likely than not that the carrying value of the reporting unit exceeds its fair value, the quantitative impairment test is required; otherwise, no further testing is required. Alternatively, the Company may elect to bypass the qualitative assessment and perform the quantitative impairment test. This 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, 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 See Note 3 for the Company’s revenue recognition policy. 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 share-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”). Share-based compensation expense associated with EPS-PSUs 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. When the estimated achievement levels are adjusted at a later date, a cumulative adjustment to the share-based compensation expense previously recognized would be required. Accordingly, share-based compensation expense associated with EPS-PSUs may differ significantly from period to period based on changes to the probability of achieving performance targets. Share-based compensation expense associated with TSR-PSUs is based on the fair value of the TSR-PSUs, determined using the Monte-Carlo valuation model, as of the grant date and is recognized on a straight-line basis from the grant date to the end of the performance period. Compensation expense will not be affected by the number of TSR-PSUs that will actually vest at the end of the performance period. Advertising Costs Advertising costs are expensed to selling, general and administrative expenses as incurred and were not material for 2018, 2017 and 2016. 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. 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 before income taxes. Recent Accounting Pronouncements Standard Description Effective Date Effect on the Financial Statements or Other Significant Matters In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118.” ASU 2018-05 allows SEC registrants to record provisional amounts in earnings for the year ended December 31, 2017 due to the complexities involved in accounting for the income tax effects of the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”). Companies have up to one year from the enactment of the Tax Reform Act (the “measurement period”) to obtain, prepare, and analyze the information that is needed in order to complete the accounting under ASC Topic 740. Any provisional amounts or adjustments to provisional amounts during the measurement period should be included in income from operations as an adjustment to tax provision (benefit) in the reporting period in which the amounts are determined. January 1, 2018. The Company adopted ASU 2018-05 during the first quarter of 2018. The adoption of ASU 2018-05 did not have a material impact on the Company’s consolidated financial statements. See Note 15. In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” ASU 2018-02 allows an entity to reclassify the income tax effects of the Tax Reform Act on items within accumulated other comprehensive income to retained earnings. ASU 2018-02 shall be applied either in the period of adoption or retrospectively to each period (or periods) in which the effects of the change in the U.S. federal corporate income tax rate in the Tax Reform Act is recognized. January 1, 2019. Early adoption is permitted. The Company does not expect the adoption of ASU 2018-02 to have a material impact on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (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 should be applied prospectively to an award modified on or after the adoption date. January 1, 2018. The Company adopted ASU 2017-09 during the first quarter of 2018. The adoption of ASU 2017-09 did not have a material impact on the Company’s consolidated financial statements. 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.” ASU 2017-07 requires employers that offer or maintain defined benefit plans to disaggregate the service component from the other components of net periodic benefit cost and provides guidance on the presentation of the service component and the other components of net periodic benefit cost in the statement of operations. ASU 2017-07 should be applied retrospectively for the presentation of net periodic benefit cost in the statement of operations. January 1, 2018. The Company retrospectively adopted ASU 2017-07 during the first quarter of 2018. The adoption of ASU 2017-07 resulted in the reclassification of $0.4 million of the Company’s net periodic benefit costs related to its frozen U.K. pension plan from Selling, general and administrative expenses into Other income (expense) in the consolidated statement of operations for both 2017 and 2016. In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” ASU 2016-16 requires that an entity recognize the income tax consequences of an intra-entity transfer of an asset other than inventory in the period in which the transfer occurs. ASU 2016-16 shall be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. January 1, 2018. The Company adopted ASU 2016-16 during the first quarter of 2018 using the modified retrospective approach. The adoption resulted in the reclassification of $2.5 million of prepaid income taxes and income taxes receivable, of which $2.2 million was recorded to Accumulated deficit and $0.3 million was recognized as net deferred tax assets, for the year ended December 31, 2018. The Company will recognize incremental deferred income tax expense thereafter as these net deferred tax assets are utilized. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers – Deferral of the Effective Date.” ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition,” 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. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgements, and changes in judgements and assets recognized from costs incurred to fulfill a contract. January 1, 2018. The Company adopted ASU 2014-09 during the first quarter of 2018 using the modified retrospective method. ASU 2014-09 has been applied to those contracts which had not been completed as of January 1, 2018 and all new contracts entered into by the Company subsequent to January 1, 2018. All prior period financial statements and disclosures are presented in accordance with Topic 605. The adoption of ASU 2014-09 did not have an impact on the Company’s Accumulated deficit. See Note 3. In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU 2017-04 simplifies the accounting for goodwill impairment by removing Step Two of the goodwill impairment test, which requires a hypothetical purchase price allocation. ASU 2017-04 should be applied on a prospective basis. January 1, 2020. Early adoption is permitted. The Company adopted ASU 2017-04 during the second quarter of 2018. The adoption of ASU 2017-04 had no impact on the Company’s consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” ASU 2017-12 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 should be applied to hedging relationships existing on the date of adoption. The effect of the adoption should be reflected as of the beginning of the fiscal year of adoption. January 1, 2019. Early adoption is permitted. The Company does not expect the adoption of ASU 2017-12 to have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842) – Targeted Improvements.” ASU 2016-02 requires a lessee to recognize on the balance sheet a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for both finance and operating leases and to disclose key information about leasing arrangements. ASU 2016-02 should be applied as of the beginning of the earliest period presented in the financial statements using a modified retrospective approach. ASU 2018-11 provides an additional (and optional) transition method which allows entities to apply ASU 2016-02 as of the adoption date and recognize a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. January 1, 2019. Early adoption is permitted. The Company will adopt the new standard in the first quarter of 2019, using the modified retrospective method. The Company expects this standard will have a material effect on its consolidated balance sheets with the recognition of new right-of-use assets and lease liabilities for all operating leases longer than one year in duration. Upon adoption, the Company estimates both assets and liabilities on the consolidated balance sheet will increase by approximately $32.0 million to $37.0 million. The Company does not expect the adoption to have a significant impact upon its consolidated statements of operations and cash flows. Changes in lease population or changes in incremental borrowing rates may alter this estimate. The Company will expand the consolidated financial statement disclosures upon adoption of this standard. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | 3. Revenue The Company recognizes revenue when control of promised goods or services is transferred to customers. The transfer of control generally occurs upon shipment when title and risk of loss pass to the customer. The vast majority of the Company’s revenue is generated from the sale of distinct products. Revenue is measured as the amount of consideration the Company expects to receive in exchange for such products, which is generally at contractually stated prices. Sales taxes and value added taxes collected concurrently with revenue generating activities are excluded from revenue. Performance Obligations Substantially all of the Company’s revenue is recognized at a point in time, upon shipment, rather than over time. At the request of its customers, the Company may perform professional services, generally for the maintenance and repair of products previously sold to those customers and for engineering services. Professional services are typically short in duration, mostly less than one month, and aggregate to less than 3% of the Company’s consolidated revenue. Revenue is typically recognized at a point in time when control transfers to the customer upon completion of professional services. These services generally involve a single distinct performance obligation. The consideration expected to be received in exchange for such services is normally the contractually stated amount. The Company occasionally sells separately priced non-standard/extended warranty services or preventative maintenance plans with the sale of products. The transfer of control over the service plans is over time. The Company recognizes the related revenue ratably over the terms of the service plans. The transaction price of a contract is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are generally determined based on the prices charged to customers or using the expected cost plus a margin. Shipping & Handling Costs The Company accounts for shipping and handling activities that occur after the transfer of control over the related goods as fulfillment activities rather than performance obligations. The shipping and handling fees charged to customers are recognized as revenue and the related costs are recorded in cost of revenue at the time of transfer of control. Warranties 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 reasonably 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’s experience in warranty claims or costs associated with servicing those claims differ from the original estimates, revisions to the estimated warranty liability are recorded at that time, with an offsetting adjustment to cost of revenue. Practical Expedients and Exemptions The Company expenses incremental direct costs of obtaining a contract when incurred if the expected amortization period is one year or less. These costs are recorded within selling, general and administrative expenses in the consolidated statement of operations. The Company does not 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 one year or less. Contract Liabilities Contract liabilities consist of deferred revenue and advance payments from customers, including amounts that are refundable. These contract liabilities are classified as either current or long-term liabilities in the consolidated balance sheet based on the timing of when the Company expects to recognize the related revenue. As of December 31, 2018 and January 1, 2018 (the date of adoption of Topic 606), contract liabilities were $4.7 million and $5.4 million, respectively, and are included in accrued expenses and other current liabilities and other liabilities in the accompanying consolidated balance sheets. The decrease in the contract liability balance during the year ended December 31, 2018 is primarily due to $3.2 million of revenue recognized during the period that was included in the contract liability balance at the date of adoption, partially offset by cash payments received in advance of satisfying performance obligations. Disaggregated Revenue See Note 19 for the Company’s disaggregation of revenue by segment, geography and end market. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | 4. Business Combinations 2018 Acquisitions During the year ended December 31, 2018, the Company acquired two businesses for total cash considerations of $33.5 million, including the acquisition of Zettlex Holdings Limited ("Zettlex"). The consolidated statement of operations includes the operating results of the businesses from the dates of acquisition. Zettlex On May 1, 2018, the Company acquired 100% of the outstanding stock of Zettlex, a Cambridge, United Kingdom-based provider of inductive encoder products that provide absolute and accurate positioning, even in extreme operating environments, to OEMs in the medical and advanced industrial markets. The purchase price of £23.3 million ($32.0 million), net of working capital adjustments, was financed with cash on hand and borrowings under the Company’s revolving credit facility. The addition of Zettlex broadens the range of components and solutions that the Company can provide to customers by combining its commercial resources and application-specific competencies with Zettlex's technologies and strong team. Zettlex is included in the Company’s Precision Motion reportable segment. The acquisition of Zettlex 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 fair values of intangible assets were based on valuations using an income approach, with estimates and assumptions provided by management of Zettlex 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. The excess of the purchase price over the tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill. The final purchase price allocation is as follows (in thousands): Amount Cash $ 3,776 Accounts receivable 2,237 Inventories 928 Property, plant and equipment 2,590 Intangible assets 14,585 Goodwill 11,790 Other assets 145 Total assets acquired 36,051 Accounts payable 509 Accrued expenses and other liabilities 1,035 Deferred tax liabilities 2,481 Total liabilities assumed 4,025 Total assets acquired, net of liabilities assumed 32,026 Less: cash acquired 3,776 Total purchase price, net of cash acquired $ 28,250 The fair value of intangible assets is comprised of the following (dollar amounts in thousands): Weighted Average Estimated Fair Amortization Value Period Developed technologies $ 3,027 10 years Customer relationships 9,494 15 years Trademarks and trade names 550 10 years Backlog 1,514 1 year Total $ 14,585 The purchase price allocation resulted in $14.6 million of identifiable intangible assets and $11.8 million of goodwill. As the Zettlex 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 potentially attributable to: (i) Zettlex’s ability to grow its business with existing and new customers, including leveraging the Company’s customer base; and (ii) cost improvements due to the integration of Zettlex operations into the Company’s existing infrastructure. The operating results of Zettlex were included in the Company’s results of operations beginning on May 1, 2018. Zettlex contributed revenues of $8.3 million and a loss before income taxes of $1.8 million for the year ended December 31, 2018. Loss before income taxes for the year ended December 31, 2018 included amortization of purchased intangible assets of $1.3 million and compensation expense of $4.4 million recognized under earn-out agreements. The pro forma financial information reflecting the operating results of Zettlex, as if it had been acquired as of January 1, 2017, would not differ materially from the operating results of the Company as reported for the year ended December 31, 2017. 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 final 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 was an acquisition of outstanding common shares, none of the resulting goodwill was 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 is included in the Company’s Vision reportable segment. 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%. 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 would have been 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. 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% noncontrolling interest 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 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 was an acquisition of outstanding common shares, none of the resulting goodwill was 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. 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 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 was 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 is included in the Company’s Vision reportable segment. 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 intangible assets, interest expense on borrowings in connection with the acquisitions, and 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 Consolidated net income $ 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 for 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 for 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 for 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 for 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 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. Acquisition Costs The Company recognized acquisition costs of $1.1 million, $4.4 million and $0.2 million in the years ended December 31, 2018, 2017 and 2016, respectively, related to the acquisitions that occurred during those years. These costs consisted of finders’ fees, legal, valuation and other professional or consulting fees. These amounts were included in restructuring, acquisition and divestiture related costs in the consolidated statements of operations. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interest | 12 Months Ended |
Dec. 31, 2018 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interest | 5. 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 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. As a result of the put option held by the remaining shareholders, the noncontrolling interest was considered a redeemable equity instrument and was presented as temporary equity on the consolidated balance sheet. The proportionate share of the net income from Laser Quantum attributable to the noncontrolling interest was 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 was measured at a fair value of £17.7 million ($21.6 million) as of January 10, 2017. On the consolidated balance sheet, the Company reported 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 was determined as of the end of the reporting period as if it were also the redemption date for the instrument. The resulting adjustments were recorded in retained earnings in shareholders’ equity and did not affect net income attributable to Novanta Inc. However, these adjustments were included in the determination of earnings per common share (See Note 10). On September 27, 2018, the Company acquired the remaining approximately 24% of the outstanding shares of Laser Quantum for an aggregate consideration of $45.1 million, consisting of $30.7 million of cash and 213,219 shares of the Company’s restricted stock. The restricted stock will become fully vested upon achievement of certain milestones included in the restricted stock agreement. Restricted stock not otherwise vested as of December 31, 2025 will be subject to forfeiture. The acquisition was accounted for as a transaction among shareholders. No gain or loss was recognized in the consolidated statements of operations for the year ended December 31, 2018. The difference between the carrying amount on the balance sheet prior to the acquisition of the redeemable noncontrolling interest and the purchase price was recorded as an adjustment to retained earnings in stockholders’ equity. The following table summarizes the changes in the Company’s redeemable noncontrolling interest in the twelve months ended December 31, 2018 (in thousands): Redeemable Noncontrolling Interest Balance as of December 31, 2017 $ 46,923 Net income attributable to noncontrolling interest 1,986 Redeemable noncontrolling interest redemption value adjustment (1,781 ) Foreign currency translation (1,926 ) Acquisition of noncontrolling interest (45,202 ) Balance as of December 31, 2018 $ — |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 6. 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, 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 ) Other comprehensive loss (5,473 ) (4,172 ) (1,301 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) 826 — 826 Balance at December 31, 2018 $ (22,527 ) $ (12,485 ) $ (10,042 ) (1) The amounts reclassified from accumulated other comprehensive income (loss) were included in other income (expense) in the consolidated statements of operations. |
Goodwill, Intangible Assets and
Goodwill, Intangible Assets and Impairment Charges | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill, Intangible Assets and Impairment Charges | 7. Goodwill, Intangible Assets and Impairment Charges Goodwill The following table summarizes changes in goodwill during the year ended December 31, 2018 (in thousands): December 31, 2018 Balance at beginning of year $ 210,988 Goodwill acquired from acquisitions 12,011 Effect of foreign exchange rate changes (5,337 ) Balance at end of year $ 217,662 Goodwill by reportable segment as of December 31, 2018 is as follows (in thousands): Reportable Segment Photonics Vision Precision Motion Total Goodwill $ 168,955 $ 155,017 $ 44,919 $ 368,891 Accumulated impairment of goodwill (102,461 ) (31,722 ) (17,046 ) (151,229 ) Total $ 66,494 $ 123,295 $ 27,873 $ 217,662 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 Intangible Assets Intangible assets as of December 31, 2018 and 2017, respectively, are summarized as follows (dollar amounts in thousands): December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Life (Years) Amortizable intangible assets: Patents and developed technologies $ 134,034 $ (86,623 ) $ 47,411 9.0 Customer relationships 139,097 (64,174 ) 74,923 11.7 Customer backlog 1,738 (1,191 ) 547 0.4 Non-compete covenant 2,514 (2,493 ) 21 0.1 Trademarks and trade names 15,915 (8,924 ) 6,991 9.1 Amortizable intangible assets 293,298 (163,405 ) 129,893 10.5 Non-amortizable intangible assets: Trade names 13,027 — 13,027 Total $ 306,325 $ (163,405 ) $ 142,920 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Life (Years) Amortizable intangible assets: Patents and developed 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 Amortizable intangible assets as of December 31, 2018 included intangible assets of $1.2 million recognized in conjunction with the acquisition of certain customer relationships in September 2018. 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 developed 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, 2018 2017 2016 Amortization expense – cost of revenue $ 10,060 $ 8,824 $ 4,164 Amortization expense – operating expenses 15,550 12,096 8,251 Total amortization expense $ 25,610 $ 20,920 $ 12,415 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 2019 $ 9,222 $ 14,733 $ 23,955 2020 8,321 12,395 20,716 2021 7,406 11,489 18,895 2022 6,308 9,666 15,974 2023 5,409 8,153 13,562 Thereafter 10,745 26,046 36,791 Total $ 47,411 $ 82,482 $ 129,893 Impairment Charges The Company did not have any goodwill or indefinite-lived intangible asset impairment charges during 2018, 2017 or 2016. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 8. 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 or less, which represent an asset the Company measures at fair value on a recurring basis. The Company determines the fair value of 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. Subsequent changes in the estimated fair value of this contingent liability are recorded as adjustments to the carrying value of the asset acquired and amortized over the remaining useful life of the underlying asset. In December 2017, the Company recorded an estimated fair value of $1.3 million in contingent consideration, which was reported as a long-term liability in other liabilities on the consolidated balance sheet as of December 31, 2017. Based on 2018 revenue performance and the most recent revenue projections for fiscal years 2019 to 2021, the fair value of the contingent consideration was adjusted to $3.4 million, which is reported as a long-term liability in other liabilities on the consolidated balance sheet as of December 31, 2018. On February 19, 2015, the Company acquired Applimotion Inc. (“Applimotion”). Under the purchase and sale agreement for the Applimotion acquisition, the shareholders of Applimotion were eligible to receive contingent consideration based on the achievement of certain revenue targets for fiscal years 2015 to 2017. If such targets were achieved, the contingent consideration would be payable in cash in two installments in 2017 and 2018, respectively. The estimated initial 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. As a result of Applimotion’s fiscal year 2015 and 2016 revenue results, contingent consideration of $1.2 million was paid in the first quarter of 2017. Based on Applimotion’s fiscal year 2016 and 2017 revenue results, the fair value for the remaining contingent consideration was adjusted to $2.8 million 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, 2018 (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 $ 4,288 $ 4,288 $ — $ — Prepaid expenses and other current assets: Foreign currency forward contracts 15 — 15 — $ 4,303 $ 4,288 $ 15 $ — Liabilities Accrued expenses and other current liabilities: Foreign currency forward contracts $ 182 $ — $ 182 $ — Other liabilities: Contingent consideration - Long-term 3,376 — — 3,376 $ 3,558 $ — $ 182 $ 3,376 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. During the years ended December 31, 2018 and 2017, there were no transfers between fair value levels. Changes in the fair value of Level 3 contingent consideration for the year ended December 31, 2018 were as follows (in thousands): Contingent Consideration Balance at December 31, 2017 $ 4,104 Payments (2,800 ) Fair value adjustments 2,072 Balance at December 31, 2018 $ 3,376 As of December 31, 2018, 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. See Note 12 for discussion of the estimated fair value of the Company’s outstanding debt and Note 14 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, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Foreign Currency Contracts | 9. 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 the underlying hedged exposures. Furthermore, the Company manages its exposure to counterparty risks 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 of the Company and its subsidiaries. These forward contracts are not designated as cash flow, fair value or net investment hedges. All changes in the fair value of these forward contracts are recognized in income before income taxes. As of December 31, 2018, the notional amount and fair value of the Company’s foreign currency forward contracts was $31.2 million and a net loss of $0.2 million, respectively. 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 years ended December 31, 2018 and 2017, the Company recognized aggregate net gains of $1.5 million and $0.2 million, respectively, which were included in foreign exchange transaction gains (losses) in the consolidated statements of operations. |
Earnings per Common Share
Earnings per Common Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per Common Share | 10. Earnings per Common Share Basic earnings per common share is computed by dividing net income attributable to Novanta Inc., after redeemable noncontrolling interest redemption value adjustment, 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 per common share, such redemption value adjustments are included in the calculation of the numerator. For diluted earnings per common share, the denominator also includes the dilutive effect of outstanding restricted stock units, stock options, non-GAAP EPS performance-based restricted stock units and total shareholder return performance-based restricted stock units determined using the treasury stock method. Dilutive effects of attainment-based contingently issuable shares granted to the former Laser Quantum noncontrolling interest shareholders and the non-GAAP EPS performance-based restricted stock units will be included in the weighted average dilutive share calculation when the performance targets have been achieved. The dilutive effects of market-based contingently issuable shares are included in the weighted average dilutive share calculation based on the number of shares, if any, that would be issuable as of the end of the reporting period. 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 per share (in thousands, except per share amounts): Year Ended December 31, 2018 2017 2016 Numerators: Consolidated net income $ 51,095 $ 62,307 $ 22,003 Less: Net income attributable to noncontrolling interest (1,986 ) (2,256 ) — Net income attributable to Novanta Inc. 49,109 60,051 22,003 Redeemable noncontrolling interest redemption value adjustment (see Note 5) 1,781 (20,244 ) — Net income attributable to Novanta Inc. after adjustment for redeemable noncontrolling interest redemption value $ 50,890 $ 39,807 $ 22,003 Denominators: Weighted average common shares outstanding— basic 34,913 34,817 34,694 Dilutive potential common shares 560 463 220 Weighted average common shares outstanding— diluted 35,473 35,280 34,914 Antidilutive common shares excluded from above 4 — 85 Earnings per Common Share Attributable to Novanta Inc.: Basic $ 1.46 $ 1.14 $ 0.63 Diluted $ 1.43 $ 1.13 $ 0.63 |
Supplementary Balance Sheet Inf
Supplementary Balance Sheet Information | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Supplementary Balance Sheet Information | 11. 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, 2018 2017 Raw materials $ 69,008 $ 57,277 Work-in-process 15,982 14,847 Finished goods 17,337 16,443 Demo and consigned inventory 2,437 2,711 Total inventories $ 104,764 $ 91,278 Property, Plant and Equipment, Net December 31, 2018 2017 Cost: Land, buildings and improvements $ 56,068 $ 53,055 Machinery and equipment 77,918 74,122 Total cost 133,986 127,177 Accumulated depreciation (68,522 ) (65,459 ) Property, plant and equipment, net $ 65,464 $ 61,718 As of December 31, 2018 and 2017, the Company had gross assets under capital lease of $13.5 million and $13.6 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 $1.1 million, $2.0 million and $2.3 million in 2018, 2017 and 2016, 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, 2018 2017 2016 Depreciation expense $ 11,442 $ 9,838 $ 8,558 The following table summarizes total accumulated depreciation on assets under capital leases as of the dates indicated (in thousands): December 31, 2018 2017 Accumulated depreciation on assets under capital leases $ 6,901 $ 6,097 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, 2018 2017 Accrued compensation and benefits $ 24,545 $ 17,348 Accrued warranty 4,510 4,835 Contract liabilities, current portion 4,165 4,790 Other 13,075 16,341 Total $ 46,295 $ 43,314 Accrued Warranty The following table summarizes changes in accrued warranty for the periods indicated (in thousands): Year Ended December 31, 2018 2017 2016 Balance at beginning of year $ 4,835 $ 3,142 $ 3,335 Provision charged to cost of revenue 3,111 3,169 1,673 Warranty liabilities acquired from acquisitions — 1,307 23 Use of provision (3,341 ) (2,857 ) (1,849 ) Foreign currency exchange rate changes (95 ) 74 (40 ) Balance at end of year $ 4,510 $ 4,835 $ 3,142 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 12. Debt Debt consisted of the following (in thousands): December 31, 2018 2017 Senior Credit Facilities – term loan $ 4,600 $ 9,200 Less: unamortized debt issuance costs (65 ) (81 ) Total current portion of long-term debt 4,535 9,119 Senior Credit Facilities – term loan 69,925 79,125 Senior Credit Facilities – revolving credit facility 135,058 149,453 Less: unamortized debt issuance costs (2,140 ) (3,078 ) Total long-term debt 202,843 225,500 Total Senior Credit Facilities $ 207,378 $ 234,619 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 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 increased the maximum permitted consolidated leverage ratio from 3.00 to 3.50, increased the maximum consolidated leverage ratio for permitted acquisitions and stock repurchases from 2.50 to 3.00, increased the maximum permitted consolidated leverage ratio for a designated acquisition from 3.00 to 3.50, and increased the maximum permitted leverage ratio for four consecutive quarters following a designated acquisition from 3.50 to 4.00. The Fourth Amendment also made certain other technical changes to the Second Amended and Restated Credit Agreement. As of December 31, 2018, the outstanding principal under the Company’s term loan facility is scheduled to be repaid as follows (in thousands): Principal Amount 2019 $ 4,600 2020 9,200 2021 60,725 Total debt repayments $ 74,525 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, 2018, the Company had $189.9 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 3.37% as of December 31, 2018. The commitment fee rate for the unused commitments under the revolving credit facility was approximately 0.4% as of December 31, 2018. Guarantees The Senior Credit Facilities is guaranteed by Novanta Inc., Novanta Corporation, NDS Surgical Imaging LLC, Novanta Europe GmbH, Novanta UK Investments Holding Limited 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, 2018, the Guarantors were 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 Novanta Inc., Novanta Corporation, NDS Surgical Imaging LLC, Novanta Europe GmbH, Novanta UK Investments Holding Limited and Novanta Technologies UK Limited. The Second Amended and Restated Credit Agreement also contains customary events of default. Deferred Financing Costs The Company capitalized deferred financing costs related to the execution of the Third Amendment dated August 1, 2017, the Second Amended and Restated Credit Agreement dated May 19, 2016 and the amended and restated credit agreement dated December 27, 2012. The Company allocated the deferred financing costs between the term loan and the revolving credit facility based on the maximum borrowing capacity and amortizes the costs on a straight-line basis over the term of the Senior Credit Facilities. Non-cash interest expense related to the amortization of the deferred financing costs was $1.0 million, $0.8 million and $0.9 million in 2018, 2017 and 2016, respectively. Unamortized deferred financing costs are presented as a reduction to the debt balances on the consolidated balance sheets. Fair Value of Debt As of December 31, 2018 and 2017, 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, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Capital Stock and Share-Based Compensation | 13. 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. Common Stock Repurchases In October 2013, the Company’s Board of Directors authorized a share repurchase plan (the “2013 Repurchase Plan”) under which the Company could repurchase outstanding shares of the Company’s common stock up to an aggregate amount of $10.0 million. During 2018, the Company repurchased 89 thousand shares in the open market for an aggregate purchase price of $5.9 million at an average price of $65.43 per share. As of December 31, 2018, the Company had repurchased an aggregate of 385 thousand shares for an aggregate purchase price of $10.0 million at an average price of $25.97 per share. As of December 31, 2018, the Company had completed the 2013 Repurchase Plan. In October 2018, the Company’s Board of Directors approved a new share repurchase plan (the “2018 Repurchase Plan”) authorizing the repurchase of an additional $25.0 million worth of common shares. Under the 2018 Repurchase Plan, 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 2018 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 2018 Repurchase Plan, and the plan 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. As of December 31, 2018, no shares had been repurchased under the 2018 Repurchase Plan. 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 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, 2018, there were 950,865 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 operating income (in thousands): Year Ended December 31, 2018 2017 2016 Selling, general and administrative $ 6,997 $ 5,065 $ 3,920 Research and development and engineering 438 221 117 Cost of revenue 211 207 256 Restructuring, acquisition and divestiture related costs 68 — — Total share-based compensation expense $ 7,714 $ 5,493 $ 4,293 The expense recorded during each of the years ended December 31, 2018, 2017 and 2016 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, 2018, 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 an aggregate share-based compensation expense of $13.1 million, net of estimated forfeitures, over a weighted average period of 2.24 years subsequent to December 31, 2018, for all outstanding equity awards as of December 31, 2018. 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 2018: 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, 2017 614 $ 18.35 Granted 130 $ 55.27 Vested (188 ) $ 18.77 Forfeited (27 ) $ 24.53 Unvested at December 31, 2018 529 $ 26.98 1.59 years $ 33,308 Expected to vest as of December 31, 2018 509 $ 26.31 1.59 years $ 32,041 (1) The aggregate intrinsic value is calculated based on the fair value of $63.00 per share of the Company’s common stock on December 31, 2018 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 2018 and deferred stock units that were granted and vested in 2018, based on the market price of the underlying stock on the day of vesting, was $10.5 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 2018: 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, 2017 89 $ 24.00 Granted 48 $ 62.17 Vested — $ — Forfeited — $ — Unvested at December 31, 2018 137 $ 37.28 1.14 years $ 8,645 Expected to vest as of December 31, 2018 167 $ 33.21 1.14 years $ 10,491 (1) The unvested PSUs are shown in this table at target, except for the number of shares vested, which reflect the shares earned and number of shares expected to vest. As of December 31, 2018, the maximum number of PSUs available to be earned is approximately 274 thousand. (2) The aggregate intrinsic value is calculated based on the fair value of $63.00 per share of the Company’s common stock on December 31, 2018 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, 2018 Grant-date stock price $ 53.85 Expected volatility 30.35 % Risk-free interest rate 2.37 % Expected annual dividend yield — Weighted average fair value $ 70.49 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 2018. The following table shows stock options that were outstanding, exercisable and expected to vest as of December 31, 2018 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 7.25 $ 5,027 Stock options exercisable 69 $ 14.13 7.25 $ 3,351 Stock options expected to vest 34 $ 14.13 7.25 $ 1,676 (1) The aggregate intrinsic value is calculated as the difference between the closing market price of $63.00 per share of the Company’s common stock on December 31, 2018 and the exercise price of the stock options. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | 14. Employee Benefit Plans 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 $3.9 million, $3.1 million and $2.5 million for the years ended December 31, 2018, 2017 and 2016, respectively. Defined Benefit Plans The Company maintains a frozen 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 accordance with the pension regulations in the U.K. and 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, 2018 2017 2016 Components of the net periodic pension cost: Interest cost $ 939 $ 991 $ 1,232 Expected return on plan assets (1,717 ) (1,665 ) (1,566 ) Amortization of actuarial losses 826 1,045 726 Net periodic pension cost $ 48 $ 371 $ 392 The actuarial assumptions used to compute the net periodic pension cost for the years ended December 31, 2018, 2017 and 2016, respectively, were as follows: Year Ended December 31, 2018 2017 2016 Weighted-average discount rate 2.4 % 2.6 % 3.8 % Weighted-average long-term rate of return on plan assets 4.8 % 5.2 % 5.3 % The actuarial assumptions used to compute the benefit obligations as of December 31, 2018 and 2017, respectively, were as follows: December 31, 2018 2017 Weighted-average discount rate 2.7 % 2.4 % Rate of inflation 2.8 % 2.9 % The discount rates used are derived from (AA) corporate bonds that have maturities approximating the terms of the pension obligations under the U.K. Plan. 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, 2018 2017 Change in benefit obligation: Projected benefit obligation at beginning of year $ 40,329 $ 37,261 Interest cost 939 991 Actuarial (gains) losses (1,718 ) (27 ) Benefits paid (1,301 ) (1,313 ) Prior service cost (1) 754 — Foreign currency exchange rate changes (2,121 ) 3,417 Projected benefit obligation at end of year $ 36,882 $ 40,329 Accumulated benefit obligation at end of year $ 36,882 $ 40,329 Change in plan assets: Fair value of plan assets at beginning of year $ 36,476 $ 31,304 Actual return on plan assets (1,083 ) 2,605 Employer contributions 941 887 Benefits paid (1,301 ) (1,313 ) Foreign currency exchange rate changes (1,909 ) 2,993 Fair value of plan assets at end of year $ 33,124 $ 36,476 Funded status at end of year $ (3,758 ) $ (3,853 ) Amounts included in accumulated other comprehensive loss not yet recognized in net periodic pension cost: Net actuarial losses at beginning of year $ (10,493 ) $ (11,697 ) Net actuarial gains (losses) during the year (1,082 ) 967 Prior service cost arising during the year (1) (754 ) — Amounts reclassified from accumulated other comprehensive income to income before income taxes 826 1,045 Foreign currency exchange rate changes 383 (808 ) Net actuarial loss $ (11,120 ) $ (10,493 ) 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 $ 959 $ 957 Prior service cost 29 — (1) On October 26, 2018, the High Court of Justice in the U.K. ruled that the Guaranteed Minimum Pensions (“GMPs”) provided by pension schemes need to equalize lifetime GMP benefits between genders. In order to meet the requirements set out by the High Court, the Company recorded an estimate of $0.8 million additional benefit obligations based on the existing plan participants, the date the U.K. Plan was allowed to stop accruing additional benefits, the pension plan rules and the approach taken to equalize the benefits. The additional benefit obligation will be amortized and recognized as part of net periodic pension cost in the consolidated statement of operations over the average remaining life expectancy of the plan participants. 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, 2018 (in thousands): Amount 2019 $ 859 2020 1,133 2021 1,197 2022 1,038 2023 1,137 2024-2026 8,370 Total $ 13,734 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, the Company’s annual contributions will be approximately $0.9 million in 2019 and will increase by 2.9% per year thereafter. 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, 2018 (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) $ 24,564 $ — $ — $ — $ 24,564 Fixed income (2) 8,451 — — — 8,451 Cash 109 109 — — — Total $ 33,124 $ 109 $ — $ — $ 33,015 (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 (42%), bonds (19%), other assets (38%) and cash (1%). (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 (86%) and cash (14%). 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 long-term capital growth and is allocated on a weighted average basis as follows: bonds (92%) and cash (8%). |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 15. Income Taxes Components of the Company’s income (loss) before income taxes are as follows (in thousands): Year Ended December 31, 2018 2017 2016 Income (loss) before income taxes: Canada $ (796 ) $ (2,036 ) $ (1,872 ) U.S. 39,356 37,327 20,422 Other 22,742 40,843 13,972 Total $ 61,302 $ 76,134 $ 32,522 Components of the Company’s income tax provision (benefit) are as follows (in thousands): Year Ended December 31, 2018 2017 2016 Current Canada $ 75 $ 146 $ 43 U.S. 8,095 9,434 9,678 Other 8,113 6,807 2,564 16,283 16,387 12,285 Deferred Canada — — — U.S. (2,272 ) 2,396 (2,378 ) Other (3,804 ) (4,956 ) 612 (6,076 ) (2,560 ) (1,766 ) Total $ 10,207 $ 13,827 $ 10,519 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 is as follows (in thousands, except percentage data): Year Ended December 31, 2018 2017 2016 Statutory Canadian tax rate 29.00 % 29.00 % 28.50 % Expected income tax provision at Canadian statutory tax rate $ 17,778 $ 22,079 $ 9,269 International tax rate differences (4,474 ) (2,038 ) 891 U.S. state income taxes, net 831 674 503 Withholding and other taxes 550 484 441 Permanent differences and other 1,015 1,582 84 Section 199 deduction — (1,148 ) (1,063 ) Foreign-derived intangible income (1,628 ) — — Tax credits (1,250 ) (984 ) (1,095 ) Statutory tax rate changes (285 ) 2,823 (856 ) Uncertain tax positions 190 (1,607 ) (103 ) Change in valuation allowance (262 ) (354 ) 1,202 Acquisition contingent consideration adjustments 833 149 762 Transaction costs 172 1,011 649 Provision to return differences (385 ) 225 (93 ) Benefit from share-based compensation (931 ) (837 ) (72 ) Gain on Laser Quantum acquisition — (6,586 ) — UK patent box (1,947 ) (1,646 ) — Reported income tax provision $ 10,207 $ 13,827 $ 10,519 Effective tax rate 16.7 % 18.2 % 32.3 % On December 22, 2017, the President of the United States signed into law the Tax Reform Act. The Tax Reform Act significantly changed U.S. tax law by, among other things, lowering corporate income tax rates, implementing a territorial tax system, providing a one-time transition tax on the repatriation of foreign earnings (the “Toll Charge”), creating a new limitation on deductible interest expense and modifying the limitation on officer compensation. The Tax Reform Act permanently reduced the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the Tax Reform Act, the Company revalued its deferred tax assets and liabilities as of December 31, 2017 at the new 21% U.S. federal corporate income tax rate. 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 or global intangible low-taxed income (the “GILTI”) under the Tax Reform Act. In addition, the Company is not currently subject to the base erosion anti-abuse tax (the “BEAT”) as the Company’s revenue is below the threshold requirement under the Tax Reform Act. During the year ended December 31, 2018, there were no changes made to the provisional amounts recognized in 2017 in connection with the enactment of the Tax Reform Act. The accounting for the income tax effects of the Tax Reform Act is completed as of December 31, 2018. 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, 2018 and 2017 are as follows (in thousands): December 31, 2018 2017 Deferred tax assets: Losses $ 9,385 $ 9,407 Compensation related deductions 4,780 3,687 Inventories 4,170 3,400 Tax credits 2,785 2,594 Unrealized currency gains/losses — 183 Restructuring related liabilities 202 172 Warranty 35 768 Other 885 — Total deferred tax assets 22,242 20,211 Valuation allowance on deferred tax assets (12,884 ) (12,811 ) Net deferred tax assets $ 9,358 $ 7,400 Deferred tax liabilities: Depreciation $ (1,867 ) $ (1,353 ) Amortization (20,258 ) (23,496 ) Unrealized currency gains/losses (373 ) — Other — (1,171 ) Total deferred tax liabilities $ (22,498 ) $ (26,020 ) Net deferred income tax assets (liabilities) $ (13,140 ) $ (18,620 ) 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 2018, the Company recorded an additional $0.4 million valuation allowance associated with an increase in deferred tax assets in Canada. In 2018, the Company released valuation allowance of $0.3 million recorded on net operating losses and other timing items in certain tax jurisdictions. In 2017, the Company released valuation allowance of $0.4 million recorded on net operating losses and other timing items in certain tax jurisdictions. 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, 2018, the Company had net operating loss carryforwards of $3.7 million (tax effected) available to reduce future taxable income. Of this amount, approximately $0.7 million relates to the U.S. and expires through 2037; and $3.0 million relates to Canada and expires starting in 2033. 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, 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, 2018, the Company had tax credit carryforwards of approximately $2.8 million available to reduce income taxes in future years. Approximately $0.9 million relates to the U.S. state tax credits, of which $0.8 million will expire through 2033 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, 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. 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 $135.6 million as of December 31, 2018. However, these undistributed earnings are generally not subject to the repatriation taxes under the Tax Reform Act. The estimated unrecognized income tax and foreign withholding tax liability on this temporary difference is approximately $0.3 million. As of December 31, 2018, the Company’s total amount of gross unrecognized tax benefits was $4.7 million, of which $3.6 million would favorably affect the effective tax rate if benefited. Over the next twelve months, the Company may need to record up to $0.5 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, 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. The reconciliation of the total amounts of unrecognized tax benefits is as follows (in thousands): 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 Additions based on tax positions related to the current year 394 Additions for tax positions of prior years 655 Reductions to tax positions of prior years (69 ) Reductions to tax positions resulting from a lapse of the applicable statute of limitations (239 ) Settlements with tax authorities (105 ) Balance at December 31, 2018 $ 4,725 The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2018 and 2017, the Company had approximately $0.5 million and $0.4 million, respectively, of accrued interest and penalties related to uncertain tax positions. During the years ended December 31, 2018 and 2017, 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 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 2009. 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 2015 - Present Canada 2015 - Present United Kingdom 2017 - Present Germany 2014 - Present The Netherlands 2012 - Present China 2009 - Present Japan 2013 - Present |
Restructuring, Acquisition and
Restructuring, Acquisition and Divestiture Related Costs | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring And Related Activities [Abstract] | |
Restructuring, Acquisition and Divestiture Related Costs | 16. 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, 2018 2017 2016 2019 restructuring $ 378 $ — $ — 2018 restructuring 1,647 — — 2016 restructuring — 332 3,049 2011 restructuring — 14 (79 ) Total restructuring and divestiture related charges $ 2,025 $ 346 $ 2,970 Acquisition and related charges 6,016 7,196 4,975 Total restructuring, acquisition and divestiture related costs $ 8,041 $ 7,542 $ 7,945 2019 Restructuring During the fourth quarter of 2018, the Company implemented a restructuring plan intended to realign operations, reduce costs, achieve operational efficiencies and focus resources on growth initiatives. In 2018, the Company recorded $0.4 million in severance and related costs in connection with the 2019 restructuring plan. These costs were primarily reported in the Vision reportable segment. The Company anticipates completing the 2019 restructuring program in 2019 and expects to incur restructuring charges of $2.0 million to $3.5 million related to the 2019 restructuring program in the next twelve months. 2018 Restructuring During the second quarter of 2018, the Company initiated a program to integrate manufacturing operations as a result of recent acquisition activities. In 2018, the Company recorded $1.6 million in severance and related costs in connection with the 2018 restructuring plan. The Company anticipates completing the 2018 restructuring program during the third quarter of 2019. The following table summarizes restructuring costs incurred to date and the Company’s expected cumulative costs associated with the 2018 restructuring program (in thousands): Year Ended Expected Cumulative Costs December 31, 2018 December 31, 2018 Photonics $ — $ — Vision 1,579 $2,300 - $2,600 Precision Motion — — Unallocated Corporate and Shared Services 68 $100 Total $ 1,647 $ $2,400 - $2,700 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. 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, 2017 Photonics $ — $ 813 $ 868 Vision 331 1,862 4,393 Precision Motion — 106 939 Unallocated Corporate and Shared Services 1 268 329 Total $ 332 $ 3,049 $ 6,529 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. 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 December 31, 2017 Photonics $ — $ (188 ) $ 1,751 Vision — — 48 Precision Motion — — 122 Unallocated Corporate and Shared Services 14 109 3,276 Total $ 14 $ (79 ) $ 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 Other (a) 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 Restructuring charges 2,025 1,862 — 163 Cash payments (1,490 ) (962 ) (373 ) (155 ) Non-cash write-offs and other adjustments (65 ) (63 ) (2 ) — Balance at December 31, 2018 $ 1,276 $ 876 $ 388 $ 12 (a) Other restructuring charges mainly related to consulting fees and relocation costs. The Company expects to make $1.1 million in cash payments during the twelve months ending December 31, 2019 . Acquisition and Divestiture Related Charges Acquisition related costs incurred to effect business combinations, primarily including finders’ fees, legal, valuation and other professional or consulting fees, totaled $1.4 million, $6.8 million, and $2.5 million during 2018, 2017, and 2016, respectively. Acquisition related costs recognized under earn-out agreements in connection with acquisitions totaled $4.6 million, $0.4 million, and $2.5 million during 2018, 2017, and 2016, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 17. Commitments and Contingencies Operating Leases The Company leases certain equipment and facilities under operating lease agreements. Most of these lease agreements expire between 2019 and 2031. In the U.K., where longer lease terms are more common, the Company has a land lease that extends through 2078. During 2018, 2017 and 2016, the Company recorded lease expense of $7.4 million, $5.5 million and $4.2 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. Capital Leases Gross assets under capital lease as of December 31, 2018 and 2017, respectively, are summarized as follows (in thousands): 2018 2017 Land, buildings and improvements $ 9,133 $ 9,133 Machinery and equipment 4,404 4,429 Total gross assets under capital lease $ 13,537 $ 13,562 Future Lease Payments Future minimum lease payments under operating and capital leases expiring subsequent to December 31, 2018, 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) 2019 $ 7,797 $ 990 2020 6,263 980 2021 5,757 907 2022 5,264 907 2023 4,719 930 Thereafter 26,149 5,394 Total minimum lease payments $ 55,949 $ 10,108 (1) Capital lease payments include interest payments of $2.3 million. Purchase Commitments As of December 31, 2018, the Company had purchase commitments primarily for inventory purchases of $99.0 million. These purchase commitments are expected to be incurred as follows: $93.9 million in 2019 and $5.1 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, 2018 and 2017. 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. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 18. Related Party Transactions Certain members of the Company’s board of directors currently serve on the board of directors or as an advisor of companies that are customers of the Company. All contracts with related parties are executed at arm’s length in the ordinary course of business. The aggregate revenue from these customers was $40.0 million in 2018. There was $0.6 million in accounts receivable due from these customers as of December 31, 2018. There were no material transactions with related parties in 2017 or 2016. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 19. Segment Information Reportable Segments The Company’s Chief Operating Decision Maker (“CODM”) utilizes financial information to make decisions about allocating resources and assessing performance for the entire Company. 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 revenue by specific product was impracticable due to the highly customized and extensive portfolio of technologies offered to customers. Based upon the information provided to the CODM, the Company has determined it operates 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, 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 for advanced industrial processes, 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; visualization solutions; wireless imaging and operating room integration technologies; optical data collection and machine vision technologies; radio frequency identification (“RFID”) technologies; thermal chart recorders; 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 and inductive encoders, precision motor and motion control sub-assemblies, air bearings, 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), depreciation and amortization expenses, accounts receivable and inventories by reportable segments are as follows (in thousands): Year Ended December 31, 2018 2017 2016 Revenue Photonics $ 249,339 $ 232,359 $ 174,158 Vision 232,902 183,074 122,250 Precision Motion 132,096 105,857 88,350 Total $ 614,337 $ 521,290 $ 384,758 Year Ended December 31, 2018 2017 2016 Gross Profit Photonics $ 117,109 $ 106,117 $ 76,696 Vision 87,198 69,249 47,181 Precision Motion 59,477 46,564 40,044 Unallocated Corporate and Shared Services (2,256 ) (1,399 ) (1,469 ) Total $ 261,528 $ 220,531 $ 162,452 Year Ended December 31, 2018 2017 2016 Operating Income (Loss) Photonics $ 59,285 $ 51,660 $ 35,217 Vision 8,991 7,883 (1,277 ) Precision Motion 31,674 27,146 21,101 Unallocated Corporate and Shared Services (28,937 ) (29,123 ) (22,086 ) Total $ 71,013 $ 57,566 $ 32,955 Year Ended December 31, 2018 2017 2016 Depreciation and Amortization Expenses Photonics $ 12,042 $ 13,806 $ 6,738 Vision 20,657 13,590 10,402 Precision Motion 3,627 2,308 2,439 Unallocated Corporate and Shared Services 726 1,054 1,394 Total $ 37,052 $ 30,758 $ 20,973 December 31, 2018 2017 Accounts Receivable Photonics $ 31,536 $ 33,490 Vision 34,414 36,089 Precision Motion 18,005 11,903 Total accounts receivable $ 83,955 $ 81,482 Inventories Photonics 41,623 44,451 Vision 42,498 33,836 Precision Motion 20,643 12,991 Total inventories $ 104,764 $ 91,278 Total segment assets $ 188,719 $ 172,760 December 31, 2018 2017 Total Assets Total segment assets $ 188,719 $ 172,760 Cash and cash equivalents 82,043 100,057 Prepaid income taxes and income taxes receivable 1,852 4,387 Prepaid expenses and other current assets 9,155 10,675 Property, plant and equipment, net 65,464 61,718 Deferred tax assets 9,492 7,052 Other assets 2,269 4,018 Intangible assets, net 142,920 155,048 Goodwill 217,662 210,988 Total $ 719,576 $ 726,703 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, 2018 2017 2016 Revenue % of Total Revenue % of Total Revenue % of Total United States $ 242,243 39.4 % $ 220,583 42.3 % $ 154,756 40.2 % Germany 88,027 14.3 68,003 13.0 55,940 14.5 Rest of Europe 105,608 17.2 81,001 15.5 51,705 13.4 China 66,414 10.8 56,128 10.8 44,225 11.5 Rest of Asia-Pacific 104,300 17.0 84,727 16.3 60,104 15.6 Other 7,745 1.3 10,848 2.1 18,028 4.8 Total $ 614,337 100.0 % $ 521,290 100.0 % $ 384,758 100.0 % 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, 2018 2017 United States $ 32,029 $ 29,920 Europe 31,696 30,621 China 1,636 1,127 Rest of Asia-Pacific 103 50 Total $ 65,464 $ 61,718 Revenue by End Market The Company primarily operates in two end markets: the advanced industrial market and the medical market. Revenue by end market was approximately as follows: Year Ended December 31, 2018 2017 2016 Advanced Industrial 50 % 50 % 60 % Medical 50 % 50 % 40 % Total 100 % 100 % 100 % The majority of revenue from the Photonics and Precision Motion segments is generated from sales to customers in the advanced industrial market. The majority of revenue from the Vision segment is generated from sales to customers in the medical market. Significant Customers No customer accounted for greater than 10% of the Company’s revenue during the years ended December 31, 2018, 2017 or 2016. |
Organization and Presentation (
Organization and Presentation (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These consolidated financial statements have been prepared by the Company in United States (“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. During the years ended December 31, 2017 and 2016, the Company recognized income from its equity method investment amounting to $0.1 million and $2.2 million, respectively, which was included in other income (expense) in the accompanying consolidated statements of operations. 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. |
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 U.S. 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 adjustments, a separate component of other comprehensive income (loss) in stockholders’ equity. Foreign currency transaction gains and losses, 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. |
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 certain that the receivable will not be recovered. For the years ended December 31, 2018, 2017 and 2016, changes in the allowance for doubtful accounts were as follows (in thousands): 2018 2017 2016 Balance at beginning of year $ 554 $ 565 $ 500 Provision charged to selling, general and administrative expenses 66 283 135 Allowance resulting from acquisitions — 52 15 Write-offs, net of recoveries of amounts previously reserved (295 ) (358 ) (82 ) Exchange rate changes (4 ) 12 (3 ) Balance at end of year $ 321 $ 554 $ 565 |
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. |
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 developed 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 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.” During the second quarter of 2018, the Company adopted Accounting Standards Update (“ASU”) 2017-14, “Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”), which eliminates Step Two of the goodwill impairment test. 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 assessment to determine whether it is necessary to perform the quantitative impairment test. In performing the qualitative assessment, the Company reviews 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 qualitative assessment, that it is more likely than not that the carrying value of the reporting unit exceeds its fair value, the quantitative impairment test is required; otherwise, no further testing is required. Alternatively, the Company may elect to bypass the qualitative assessment and perform the quantitative impairment test. This 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, 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 See Note 3 for the Company’s revenue recognition policy. The Company recognizes revenue when control of promised goods or services is transferred to customers. The transfer of control generally occurs upon shipment when title and risk of loss pass to the customer. The vast majority of the Company’s revenue is generated from the sale of distinct products. Revenue is measured as the amount of consideration the Company expects to receive in exchange for such products, which is generally at contractually stated prices. Sales taxes and value added taxes collected concurrently with revenue generating activities are excluded from revenue. Performance Obligations Substantially all of the Company’s revenue is recognized at a point in time, upon shipment, rather than over time. At the request of its customers, the Company may perform professional services, generally for the maintenance and repair of products previously sold to those customers and for engineering services. Professional services are typically short in duration, mostly less than one month, and aggregate to less than 3% of the Company’s consolidated revenue. Revenue is typically recognized at a point in time when control transfers to the customer upon completion of professional services. These services generally involve a single distinct performance obligation. The consideration expected to be received in exchange for such services is normally the contractually stated amount. The Company occasionally sells separately priced non-standard/extended warranty services or preventative maintenance plans with the sale of products. The transfer of control over the service plans is over time. The Company recognizes the related revenue ratably over the terms of the service plans. The transaction price of a contract is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are generally determined based on the prices charged to customers or using the expected cost plus a margin. Shipping & Handling Costs The Company accounts for shipping and handling activities that occur after the transfer of control over the related goods as fulfillment activities rather than performance obligations. The shipping and handling fees charged to customers are recognized as revenue and the related costs are recorded in cost of revenue at the time of transfer of control. Warranties 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 reasonably 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’s experience in warranty claims or costs associated with servicing those claims differ from the original estimates, revisions to the estimated warranty liability are recorded at that time, with an offsetting adjustment to cost of revenue. Practical Expedients and Exemptions The Company expenses incremental direct costs of obtaining a contract when incurred if the expected amortization period is one year or less. These costs are recorded within selling, general and administrative expenses in the consolidated statement of operations. The Company does not 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 one year or less. Contract Liabilities Contract liabilities consist of deferred revenue and advance payments from customers, including amounts that are refundable. These contract liabilities are classified as either current or long-term liabilities in the consolidated balance sheet based on the timing of when the Company expects to recognize the related revenue. As of December 31, 2018 and January 1, 2018 (the date of adoption of Topic 606), contract liabilities were $4.7 million and $5.4 million, respectively, and are included in accrued expenses and other current liabilities and other liabilities in the accompanying consolidated balance sheets. The decrease in the contract liability balance during the year ended December 31, 2018 is primarily due to $3.2 million of revenue recognized during the period that was included in the contract liability balance at the date of adoption, partially offset by cash payments received in advance of satisfying performance obligations. Disaggregated Revenue See Note 19 for the Company’s disaggregation of revenue by segment, geography and end market. |
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 share-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”). Share-based compensation expense associated with EPS-PSUs 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. When the estimated achievement levels are adjusted at a later date, a cumulative adjustment to the share-based compensation expense previously recognized would be required. Accordingly, share-based compensation expense associated with EPS-PSUs may differ significantly from period to period based on changes to the probability of achieving performance targets. Share-based compensation expense associated with TSR-PSUs is based on the fair value of the TSR-PSUs, determined using the Monte-Carlo valuation model, as of the grant date and is recognized on a straight-line basis from the grant date to the end of the performance period. Compensation expense will not be affected by the number of TSR-PSUs that will actually vest at the end of the performance period. |
Advertising Costs | Advertising Costs Advertising costs are expensed to selling, general and administrative expenses as incurred and were not material for 2018, 2017 and 2016. |
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. |
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 before income taxes. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Standard Description Effective Date Effect on the Financial Statements or Other Significant Matters In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118.” ASU 2018-05 allows SEC registrants to record provisional amounts in earnings for the year ended December 31, 2017 due to the complexities involved in accounting for the income tax effects of the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”). Companies have up to one year from the enactment of the Tax Reform Act (the “measurement period”) to obtain, prepare, and analyze the information that is needed in order to complete the accounting under ASC Topic 740. Any provisional amounts or adjustments to provisional amounts during the measurement period should be included in income from operations as an adjustment to tax provision (benefit) in the reporting period in which the amounts are determined. January 1, 2018. The Company adopted ASU 2018-05 during the first quarter of 2018. The adoption of ASU 2018-05 did not have a material impact on the Company’s consolidated financial statements. See Note 15. In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” ASU 2018-02 allows an entity to reclassify the income tax effects of the Tax Reform Act on items within accumulated other comprehensive income to retained earnings. ASU 2018-02 shall be applied either in the period of adoption or retrospectively to each period (or periods) in which the effects of the change in the U.S. federal corporate income tax rate in the Tax Reform Act is recognized. January 1, 2019. Early adoption is permitted. The Company does not expect the adoption of ASU 2018-02 to have a material impact on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (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 should be applied prospectively to an award modified on or after the adoption date. January 1, 2018. The Company adopted ASU 2017-09 during the first quarter of 2018. The adoption of ASU 2017-09 did not have a material impact on the Company’s consolidated financial statements. 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.” ASU 2017-07 requires employers that offer or maintain defined benefit plans to disaggregate the service component from the other components of net periodic benefit cost and provides guidance on the presentation of the service component and the other components of net periodic benefit cost in the statement of operations. ASU 2017-07 should be applied retrospectively for the presentation of net periodic benefit cost in the statement of operations. January 1, 2018. The Company retrospectively adopted ASU 2017-07 during the first quarter of 2018. The adoption of ASU 2017-07 resulted in the reclassification of $0.4 million of the Company’s net periodic benefit costs related to its frozen U.K. pension plan from Selling, general and administrative expenses into Other income (expense) in the consolidated statement of operations for both 2017 and 2016. In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” ASU 2016-16 requires that an entity recognize the income tax consequences of an intra-entity transfer of an asset other than inventory in the period in which the transfer occurs. ASU 2016-16 shall be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. January 1, 2018. The Company adopted ASU 2016-16 during the first quarter of 2018 using the modified retrospective approach. The adoption resulted in the reclassification of $2.5 million of prepaid income taxes and income taxes receivable, of which $2.2 million was recorded to Accumulated deficit and $0.3 million was recognized as net deferred tax assets, for the year ended December 31, 2018. The Company will recognize incremental deferred income tax expense thereafter as these net deferred tax assets are utilized. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers – Deferral of the Effective Date.” ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition,” 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. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgements, and changes in judgements and assets recognized from costs incurred to fulfill a contract. January 1, 2018. The Company adopted ASU 2014-09 during the first quarter of 2018 using the modified retrospective method. ASU 2014-09 has been applied to those contracts which had not been completed as of January 1, 2018 and all new contracts entered into by the Company subsequent to January 1, 2018. All prior period financial statements and disclosures are presented in accordance with Topic 605. The adoption of ASU 2014-09 did not have an impact on the Company’s Accumulated deficit. See Note 3. In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU 2017-04 simplifies the accounting for goodwill impairment by removing Step Two of the goodwill impairment test, which requires a hypothetical purchase price allocation. ASU 2017-04 should be applied on a prospective basis. January 1, 2020. Early adoption is permitted. The Company adopted ASU 2017-04 during the second quarter of 2018. The adoption of ASU 2017-04 had no impact on the Company’s consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” ASU 2017-12 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 should be applied to hedging relationships existing on the date of adoption. The effect of the adoption should be reflected as of the beginning of the fiscal year of adoption. January 1, 2019. Early adoption is permitted. The Company does not expect the adoption of ASU 2017-12 to have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842) – Targeted Improvements.” ASU 2016-02 requires a lessee to recognize on the balance sheet a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for both finance and operating leases and to disclose key information about leasing arrangements. ASU 2016-02 should be applied as of the beginning of the earliest period presented in the financial statements using a modified retrospective approach. ASU 2018-11 provides an additional (and optional) transition method which allows entities to apply ASU 2016-02 as of the adoption date and recognize a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. January 1, 2019. Early adoption is permitted. The Company will adopt the new standard in the first quarter of 2019, using the modified retrospective method. The Company expects this standard will have a material effect on its consolidated balance sheets with the recognition of new right-of-use assets and lease liabilities for all operating leases longer than one year in duration. Upon adoption, the Company estimates both assets and liabilities on the consolidated balance sheet will increase by approximately $32.0 million to $37.0 million. The Company does not expect the adoption to have a significant impact upon its consolidated statements of operations and cash flows. Changes in lease population or changes in incremental borrowing rates may alter this estimate. The Company will expand the consolidated financial statement disclosures upon adoption of this standard. |
Shipping & Handling Costs | Shipping & Handling Costs The Company accounts for shipping and handling activities that occur after the transfer of control over the related goods as fulfillment activities rather than performance obligations. The shipping and handling fees charged to customers are recognized as revenue and the related costs are recorded in cost of revenue at the time of transfer of control. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Changes in Allowance for Doubtful Accounts | For the years ended December 31, 2018, 2017 and 2016, changes in the allowance for doubtful accounts were as follows (in thousands): 2018 2017 2016 Balance at beginning of year $ 554 $ 565 $ 500 Provision charged to selling, general and administrative expenses 66 283 135 Allowance resulting from acquisitions — 52 15 Write-offs, net of recoveries of amounts previously reserved (295 ) (358 ) (82 ) Exchange rate changes (4 ) 12 (3 ) Balance at end of year $ 321 $ 554 $ 565 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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 Consolidated net income $ 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. |
Zettlex Holdings Limited | |
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 $ 3,776 Accounts receivable 2,237 Inventories 928 Property, plant and equipment 2,590 Intangible assets 14,585 Goodwill 11,790 Other assets 145 Total assets acquired 36,051 Accounts payable 509 Accrued expenses and other liabilities 1,035 Deferred tax liabilities 2,481 Total liabilities assumed 4,025 Total assets acquired, net of liabilities assumed 32,026 Less: cash acquired 3,776 Total purchase price, net of cash acquired $ 28,250 |
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 $ 3,027 10 years Customer relationships 9,494 15 years Trademarks and trade names 550 10 years Backlog 1,514 1 year Total $ 14,585 |
World of Medicine GmbH | |
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 $ 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 |
ThingMagic | |
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 |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interest (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Noncontrolling Interest [Abstract] | |
Summary of Changes in Noncontrolling Interest | The following table summarizes the changes in the Company’s redeemable noncontrolling interest in the twelve months ended December 31, 2018 (in thousands): Redeemable Noncontrolling Interest Balance as of December 31, 2017 $ 46,923 Net income attributable to noncontrolling interest 1,986 Redeemable noncontrolling interest redemption value adjustment (1,781 ) Foreign currency translation (1,926 ) Acquisition of noncontrolling interest (45,202 ) Balance as of December 31, 2018 $ — |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 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 ) Other comprehensive loss (5,473 ) (4,172 ) (1,301 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) 826 — 826 Balance at December 31, 2018 $ (22,527 ) $ (12,485 ) $ (10,042 ) (1) The amounts reclassified from accumulated other comprehensive income (loss) were included in other income (expense) in the consolidated statements of operations. |
Goodwill, Intangible Assets a_2
Goodwill, Intangible Assets and Impairment Charges (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Goodwill | The following table summarizes changes in goodwill during the year ended December 31, 2018 (in thousands): December 31, 2018 Balance at beginning of year $ 210,988 Goodwill acquired from acquisitions 12,011 Effect of foreign exchange rate changes (5,337 ) Balance at end of year $ 217,662 |
Goodwill by Reportable Segment | Goodwill by reportable segment as of December 31, 2018 is as follows (in thousands): Reportable Segment Photonics Vision Precision Motion Total Goodwill $ 168,955 $ 155,017 $ 44,919 $ 368,891 Accumulated impairment of goodwill (102,461 ) (31,722 ) (17,046 ) (151,229 ) Total $ 66,494 $ 123,295 $ 27,873 $ 217,662 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 |
Intangible Assets | Intangible assets as of December 31, 2018 and 2017, respectively, are summarized as follows (dollar amounts in thousands): December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Life (Years) Amortizable intangible assets: Patents and developed technologies $ 134,034 $ (86,623 ) $ 47,411 9.0 Customer relationships 139,097 (64,174 ) 74,923 11.7 Customer backlog 1,738 (1,191 ) 547 0.4 Non-compete covenant 2,514 (2,493 ) 21 0.1 Trademarks and trade names 15,915 (8,924 ) 6,991 9.1 Amortizable intangible assets 293,298 (163,405 ) 129,893 10.5 Non-amortizable intangible assets: Trade names 13,027 — 13,027 Total $ 306,325 $ (163,405 ) $ 142,920 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Life (Years) Amortizable intangible assets: Patents and developed 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 |
Amortization Expense of Intangible Assets | Amortization expense is as follows (in thousands): Year Ended December 31, 2018 2017 2016 Amortization expense – cost of revenue $ 10,060 $ 8,824 $ 4,164 Amortization expense – operating expenses 15,550 12,096 8,251 Total amortization expense $ 25,610 $ 20,920 $ 12,415 |
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 2019 $ 9,222 $ 14,733 $ 23,955 2020 8,321 12,395 20,716 2021 7,406 11,489 18,895 2022 6,308 9,666 15,974 2023 5,409 8,153 13,562 Thereafter 10,745 26,046 36,791 Total $ 47,411 $ 82,482 $ 129,893 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 (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 $ 4,288 $ 4,288 $ — $ — Prepaid expenses and other current assets: Foreign currency forward contracts 15 — 15 — $ 4,303 $ 4,288 $ 15 $ — Liabilities Accrued expenses and other current liabilities: Foreign currency forward contracts $ 182 $ — $ 182 $ — Other liabilities: Contingent consideration - Long-term 3,376 — — 3,376 $ 3,558 $ — $ 182 $ 3,376 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 |
Changes in Fair Value of Level 3 Contingent Consideration | Changes in the fair value of Level 3 contingent consideration for the year ended December 31, 2018 were as follows (in thousands): Contingent Consideration Balance at December 31, 2017 $ 4,104 Payments (2,800 ) Fair value adjustments 2,072 Balance at December 31, 2018 $ 3,376 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings per Share | The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts): Year Ended December 31, 2018 2017 2016 Numerators: Consolidated net income $ 51,095 $ 62,307 $ 22,003 Less: Net income attributable to noncontrolling interest (1,986 ) (2,256 ) — Net income attributable to Novanta Inc. 49,109 60,051 22,003 Redeemable noncontrolling interest redemption value adjustment (see Note 5) 1,781 (20,244 ) — Net income attributable to Novanta Inc. after adjustment for redeemable noncontrolling interest redemption value $ 50,890 $ 39,807 $ 22,003 Denominators: Weighted average common shares outstanding— basic 34,913 34,817 34,694 Dilutive potential common shares 560 463 220 Weighted average common shares outstanding— diluted 35,473 35,280 34,914 Antidilutive common shares excluded from above 4 — 85 Earnings per Common Share Attributable to Novanta Inc.: Basic $ 1.46 $ 1.14 $ 0.63 Diluted $ 1.43 $ 1.13 $ 0.63 |
Supplementary Balance Sheet I_2
Supplementary Balance Sheet Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Inventories | Inventories December 31, 2018 2017 Raw materials $ 69,008 $ 57,277 Work-in-process 15,982 14,847 Finished goods 17,337 16,443 Demo and consigned inventory 2,437 2,711 Total inventories $ 104,764 $ 91,278 |
Property, Plant and Equipment, net | Property, Plant and Equipment, Net December 31, 2018 2017 Cost: Land, buildings and improvements $ 56,068 $ 53,055 Machinery and equipment 77,918 74,122 Total cost 133,986 127,177 Accumulated depreciation (68,522 ) (65,459 ) Property, plant and equipment, net $ 65,464 $ 61,718 |
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, 2018 2017 2016 Depreciation expense $ 11,442 $ 9,838 $ 8,558 |
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, 2018 2017 Accumulated depreciation on assets under capital leases $ 6,901 $ 6,097 |
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, 2018 2017 Accrued compensation and benefits $ 24,545 $ 17,348 Accrued warranty 4,510 4,835 Contract liabilities, current portion 4,165 4,790 Other 13,075 16,341 Total $ 46,295 $ 43,314 |
Accrued Warranty | The following table summarizes changes in accrued warranty for the periods indicated (in thousands): Year Ended December 31, 2018 2017 2016 Balance at beginning of year $ 4,835 $ 3,142 $ 3,335 Provision charged to cost of revenue 3,111 3,169 1,673 Warranty liabilities acquired from acquisitions — 1,307 23 Use of provision (3,341 ) (2,857 ) (1,849 ) Foreign currency exchange rate changes (95 ) 74 (40 ) Balance at end of year $ 4,510 $ 4,835 $ 3,142 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt consisted of the following (in thousands): December 31, 2018 2017 Senior Credit Facilities – term loan $ 4,600 $ 9,200 Less: unamortized debt issuance costs (65 ) (81 ) Total current portion of long-term debt 4,535 9,119 Senior Credit Facilities – term loan 69,925 79,125 Senior Credit Facilities – revolving credit facility 135,058 149,453 Less: unamortized debt issuance costs (2,140 ) (3,078 ) Total long-term debt 202,843 225,500 Total Senior Credit Facilities $ 207,378 $ 234,619 |
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 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 increased the maximum permitted consolidated leverage ratio from 3.00 to 3.50, increased the maximum consolidated leverage ratio for permitted acquisitions and stock repurchases from 2.50 to 3.00, increased the maximum permitted consolidated leverage ratio for a designated acquisition from 3.00 to 3.50, and increased the maximum permitted leverage ratio for four consecutive quarters following a designated acquisition from 3.50 to 4.00. The Fourth Amendment also made certain other technical changes to the Second Amended and Restated Credit Agreement. As of December 31, 2018, the outstanding principal under the Company’s term loan facility is scheduled to be repaid as follows (in thousands): Principal Amount 2019 $ 4,600 2020 9,200 2021 60,725 Total debt repayments $ 74,525 |
Capital Stock and Share-Based_2
Capital Stock and Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Share-Based Compensation Expense Recorded In Operating Income | The table below summarizes share-based compensation expense recorded in operating income (in thousands): Year Ended December 31, 2018 2017 2016 Selling, general and administrative $ 6,997 $ 5,065 $ 3,920 Research and development and engineering 438 221 117 Cost of revenue 211 207 256 Restructuring, acquisition and divestiture related costs 68 — — Total share-based compensation expense $ 7,714 $ 5,493 $ 4,293 |
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, 2018 Grant-date stock price $ 53.85 Expected volatility 30.35 % Risk-free interest rate 2.37 % Expected annual dividend yield — Weighted average fair value $ 70.49 |
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 2018: 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, 2017 614 $ 18.35 Granted 130 $ 55.27 Vested (188 ) $ 18.77 Forfeited (27 ) $ 24.53 Unvested at December 31, 2018 529 $ 26.98 1.59 years $ 33,308 Expected to vest as of December 31, 2018 509 $ 26.31 1.59 years $ 32,041 (1) The aggregate intrinsic value is calculated based on the fair value of $63.00 per share of the Company’s common stock on December 31, 2018 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 2018: 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, 2017 89 $ 24.00 Granted 48 $ 62.17 Vested — $ — Forfeited — $ — Unvested at December 31, 2018 137 $ 37.28 1.14 years $ 8,645 Expected to vest as of December 31, 2018 167 $ 33.21 1.14 years $ 10,491 (1) The unvested PSUs are shown in this table at target, except for the number of shares vested, which reflect the shares earned and number of shares expected to vest. As of December 31, 2018, the maximum number of PSUs available to be earned is approximately 274 thousand. (2) The aggregate intrinsic value is calculated based on the fair value of $63.00 per share of the Company’s common stock on December 31, 2018 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, 2018 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 7.25 $ 5,027 Stock options exercisable 69 $ 14.13 7.25 $ 3,351 Stock options expected to vest 34 $ 14.13 7.25 $ 1,676 (1) The aggregate intrinsic value is calculated as the difference between the closing market price of $63.00 per share of the Company’s common stock on December 31, 2018 and the exercise price of the stock options. |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 2016 Components of the net periodic pension cost: Interest cost $ 939 $ 991 $ 1,232 Expected return on plan assets (1,717 ) (1,665 ) (1,566 ) Amortization of actuarial losses 826 1,045 726 Net periodic pension cost $ 48 $ 371 $ 392 |
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, 2018, 2017 and 2016, respectively, were as follows: Year Ended December 31, 2018 2017 2016 Weighted-average discount rate 2.4 % 2.6 % 3.8 % Weighted-average long-term rate of return on plan assets 4.8 % 5.2 % 5.3 % The actuarial assumptions used to compute the benefit obligations as of December 31, 2018 and 2017, respectively, were as follows: December 31, 2018 2017 Weighted-average discount rate 2.7 % 2.4 % Rate of inflation 2.8 % 2.9 % |
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, 2018 2017 Change in benefit obligation: Projected benefit obligation at beginning of year $ 40,329 $ 37,261 Interest cost 939 991 Actuarial (gains) losses (1,718 ) (27 ) Benefits paid (1,301 ) (1,313 ) Prior service cost (1) 754 — Foreign currency exchange rate changes (2,121 ) 3,417 Projected benefit obligation at end of year $ 36,882 $ 40,329 Accumulated benefit obligation at end of year $ 36,882 $ 40,329 Change in plan assets: Fair value of plan assets at beginning of year $ 36,476 $ 31,304 Actual return on plan assets (1,083 ) 2,605 Employer contributions 941 887 Benefits paid (1,301 ) (1,313 ) Foreign currency exchange rate changes (1,909 ) 2,993 Fair value of plan assets at end of year $ 33,124 $ 36,476 Funded status at end of year $ (3,758 ) $ (3,853 ) Amounts included in accumulated other comprehensive loss not yet recognized in net periodic pension cost: Net actuarial losses at beginning of year $ (10,493 ) $ (11,697 ) Net actuarial gains (losses) during the year (1,082 ) 967 Prior service cost arising during the year (1) (754 ) — Amounts reclassified from accumulated other comprehensive income to income before income taxes 826 1,045 Foreign currency exchange rate changes 383 (808 ) Net actuarial loss $ (11,120 ) $ (10,493 ) 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 $ 959 $ 957 Prior service cost 29 — (1) On October 26, 2018, the High Court of Justice in the U.K. ruled that the Guaranteed Minimum Pensions (“GMPs”) provided by pension schemes need to equalize lifetime GMP benefits between genders. In order to meet the requirements set out by the High Court, the Company recorded an estimate of $0.8 million additional benefit obligations based on the existing plan participants, the date the U.K. Plan was allowed to stop accruing additional benefits, the pension plan rules and the approach taken to equalize the benefits. The additional benefit obligation will be amortized and recognized as part of net periodic pension cost in the consolidated statement of operations over the average remaining life expectancy of the plan participants. 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, 2018 (in thousands): Amount 2019 $ 859 2020 1,133 2021 1,197 2022 1,038 2023 1,137 2024-2026 8,370 Total $ 13,734 |
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, 2018 (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) $ 24,564 $ — $ — $ — $ 24,564 Fixed income (2) 8,451 — — — 8,451 Cash 109 109 — — — Total $ 33,124 $ 109 $ — $ — $ 33,015 (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 (42%), bonds (19%), other assets (38%) and cash (1%). (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 (86%) and cash (14%). 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 long-term capital growth and is allocated on a weighted average basis as follows: bonds (92%) and cash (8%). |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Components of Income (Loss) Before Income Tax | Components of the Company’s income (loss) before income taxes are as follows (in thousands): Year Ended December 31, 2018 2017 2016 Income (loss) before income taxes: Canada $ (796 ) $ (2,036 ) $ (1,872 ) U.S. 39,356 37,327 20,422 Other 22,742 40,843 13,972 Total $ 61,302 $ 76,134 $ 32,522 |
Components of Income Tax Provision (Benefit) | Components of the Company’s income tax provision (benefit) are as follows (in thousands): Year Ended December 31, 2018 2017 2016 Current Canada $ 75 $ 146 $ 43 U.S. 8,095 9,434 9,678 Other 8,113 6,807 2,564 16,283 16,387 12,285 Deferred Canada — — — U.S. (2,272 ) 2,396 (2,378 ) Other (3,804 ) (4,956 ) 612 (6,076 ) (2,560 ) (1,766 ) Total $ 10,207 $ 13,827 $ 10,519 |
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 is as follows (in thousands, except percentage data): Year Ended December 31, 2018 2017 2016 Statutory Canadian tax rate 29.00 % 29.00 % 28.50 % Expected income tax provision at Canadian statutory tax rate $ 17,778 $ 22,079 $ 9,269 International tax rate differences (4,474 ) (2,038 ) 891 U.S. state income taxes, net 831 674 503 Withholding and other taxes 550 484 441 Permanent differences and other 1,015 1,582 84 Section 199 deduction — (1,148 ) (1,063 ) Foreign-derived intangible income (1,628 ) — — Tax credits (1,250 ) (984 ) (1,095 ) Statutory tax rate changes (285 ) 2,823 (856 ) Uncertain tax positions 190 (1,607 ) (103 ) Change in valuation allowance (262 ) (354 ) 1,202 Acquisition contingent consideration adjustments 833 149 762 Transaction costs 172 1,011 649 Provision to return differences (385 ) 225 (93 ) Benefit from share-based compensation (931 ) (837 ) (72 ) Gain on Laser Quantum acquisition — (6,586 ) — UK patent box (1,947 ) (1,646 ) — Reported income tax provision $ 10,207 $ 13,827 $ 10,519 Effective tax rate 16.7 % 18.2 % 32.3 % |
Significant Components of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2018 and 2017 are as follows (in thousands): December 31, 2018 2017 Deferred tax assets: Losses $ 9,385 $ 9,407 Compensation related deductions 4,780 3,687 Inventories 4,170 3,400 Tax credits 2,785 2,594 Unrealized currency gains/losses — 183 Restructuring related liabilities 202 172 Warranty 35 768 Other 885 — Total deferred tax assets 22,242 20,211 Valuation allowance on deferred tax assets (12,884 ) (12,811 ) Net deferred tax assets $ 9,358 $ 7,400 Deferred tax liabilities: Depreciation $ (1,867 ) $ (1,353 ) Amortization (20,258 ) (23,496 ) Unrealized currency gains/losses (373 ) — Other — (1,171 ) Total deferred tax liabilities $ (22,498 ) $ (26,020 ) Net deferred income tax assets (liabilities) $ (13,140 ) $ (18,620 ) |
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, 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 Additions based on tax positions related to the current year 394 Additions for tax positions of prior years 655 Reductions to tax positions of prior years (69 ) Reductions to tax positions resulting from a lapse of the applicable statute of limitations (239 ) Settlements with tax authorities (105 ) Balance at December 31, 2018 $ 4,725 |
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 2015 - Present Canada 2015 - Present United Kingdom 2017 - Present Germany 2014 - Present The Netherlands 2012 - Present China 2009 - Present Japan 2013 - Present |
Restructuring, Acquisition an_2
Restructuring, Acquisition and Divestiture Related Costs (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring And Related Activities [Abstract] | |
Schedule of 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, 2018 2017 2016 2019 restructuring $ 378 $ — $ — 2018 restructuring 1,647 — — 2016 restructuring — 332 3,049 2011 restructuring — 14 (79 ) Total restructuring and divestiture related charges $ 2,025 $ 346 $ 2,970 Acquisition and related charges 6,016 7,196 4,975 Total restructuring, acquisition and divestiture related costs $ 8,041 $ 7,542 $ 7,945 |
Summary of Restructuring Costs for Each Segment and Unallocated Corporate Costs | The following table summarizes restructuring costs incurred to date and the Company’s expected cumulative costs associated with the 2018 restructuring program (in thousands): Year Ended Expected Cumulative Costs December 31, 2018 December 31, 2018 Photonics $ — $ — Vision 1,579 $2,300 - $2,600 Precision Motion — — Unallocated Corporate and Shared Services 68 $100 Total $ 1,647 $ $2,400 - $2,700 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, 2017 Photonics $ — $ 813 $ 868 Vision 331 1,862 4,393 Precision Motion — 106 939 Unallocated Corporate and Shared Services 1 268 329 Total $ 332 $ 3,049 $ 6,529 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 December 31, 2017 Photonics $ — $ (188 ) $ 1,751 Vision — — 48 Precision Motion — — 122 Unallocated Corporate and Shared Services 14 109 3,276 Total $ 14 $ (79 ) $ 5,197 |
Summary of Accrual Activities by Components Related to Company's Restructuring Charges | 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 Other (a) 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 Restructuring charges 2,025 1,862 — 163 Cash payments (1,490 ) (962 ) (373 ) (155 ) Non-cash write-offs and other adjustments (65 ) (63 ) (2 ) — Balance at December 31, 2018 $ 1,276 $ 876 $ 388 $ 12 (a) Other restructuring charges mainly related to consulting fees and relocation costs. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Gross Assets under Capital Lease | Gross assets under capital lease as of December 31, 2018 and 2017, respectively, are summarized as follows (in thousands): 2018 2017 Land, buildings and improvements $ 9,133 $ 9,133 Machinery and equipment 4,404 4,429 Total gross assets under capital lease $ 13,537 $ 13,562 |
Future Minimum Lease Payments Under Operating and Capital Leases | Future Lease PaymentsFuture minimum lease payments under operating and capital leases expiring subsequent to December 31, 2018, 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) 2019 $ 7,797 $ 990 2020 6,263 980 2021 5,757 907 2022 5,264 907 2023 4,719 930 Thereafter 26,149 5,394 Total minimum lease payments $ 55,949 $ 10,108 (1) Capital lease payments include interest payments of $2.3 million. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Revenue, Gross Profit, Operating Income (Loss), Depreciation and Amortization Expenses, Accounts Receivable and Inventory by Reportable Segments | Revenue, gross profit, operating income (loss), depreciation and amortization expenses, accounts receivable and inventories by reportable segments are as follows (in thousands): Year Ended December 31, 2018 2017 2016 Revenue Photonics $ 249,339 $ 232,359 $ 174,158 Vision 232,902 183,074 122,250 Precision Motion 132,096 105,857 88,350 Total $ 614,337 $ 521,290 $ 384,758 Year Ended December 31, 2018 2017 2016 Gross Profit Photonics $ 117,109 $ 106,117 $ 76,696 Vision 87,198 69,249 47,181 Precision Motion 59,477 46,564 40,044 Unallocated Corporate and Shared Services (2,256 ) (1,399 ) (1,469 ) Total $ 261,528 $ 220,531 $ 162,452 Year Ended December 31, 2018 2017 2016 Operating Income (Loss) Photonics $ 59,285 $ 51,660 $ 35,217 Vision 8,991 7,883 (1,277 ) Precision Motion 31,674 27,146 21,101 Unallocated Corporate and Shared Services (28,937 ) (29,123 ) (22,086 ) Total $ 71,013 $ 57,566 $ 32,955 Year Ended December 31, 2018 2017 2016 Depreciation and Amortization Expenses Photonics $ 12,042 $ 13,806 $ 6,738 Vision 20,657 13,590 10,402 Precision Motion 3,627 2,308 2,439 Unallocated Corporate and Shared Services 726 1,054 1,394 Total $ 37,052 $ 30,758 $ 20,973 December 31, 2018 2017 Accounts Receivable Photonics $ 31,536 $ 33,490 Vision 34,414 36,089 Precision Motion 18,005 11,903 Total accounts receivable $ 83,955 $ 81,482 Inventories Photonics 41,623 44,451 Vision 42,498 33,836 Precision Motion 20,643 12,991 Total inventories $ 104,764 $ 91,278 Total segment assets $ 188,719 $ 172,760 December 31, 2018 2017 Total Assets Total segment assets $ 188,719 $ 172,760 Cash and cash equivalents 82,043 100,057 Prepaid income taxes and income taxes receivable 1,852 4,387 Prepaid expenses and other current assets 9,155 10,675 Property, plant and equipment, net 65,464 61,718 Deferred tax assets 9,492 7,052 Other assets 2,269 4,018 Intangible assets, net 142,920 155,048 Goodwill 217,662 210,988 Total $ 719,576 $ 726,703 |
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, 2018 2017 2016 Revenue % of Total Revenue % of Total Revenue % of Total United States $ 242,243 39.4 % $ 220,583 42.3 % $ 154,756 40.2 % Germany 88,027 14.3 68,003 13.0 55,940 14.5 Rest of Europe 105,608 17.2 81,001 15.5 51,705 13.4 China 66,414 10.8 56,128 10.8 44,225 11.5 Rest of Asia-Pacific 104,300 17.0 84,727 16.3 60,104 15.6 Other 7,745 1.3 10,848 2.1 18,028 4.8 Total $ 614,337 100.0 % $ 521,290 100.0 % $ 384,758 100.0 % |
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, 2018 2017 United States $ 32,029 $ 29,920 Europe 31,696 30,621 China 1,636 1,127 Rest of Asia-Pacific 103 50 Total $ 65,464 $ 61,718 |
Revenue By End Market | The Company primarily operates in two end markets: the advanced industrial market and the medical market. Revenue by end market was approximately as follows: Year Ended December 31, 2018 2017 2016 Advanced Industrial 50 % 50 % 60 % Medical 50 % 50 % 40 % Total 100 % 100 % 100 % |
Organization and Presentation -
Organization and Presentation - Additional Information (Details) - USD ($) $ in Thousands | Sep. 27, 2018 | Jan. 10, 2017 | Jan. 09, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Organization And Business Activities [Line Items] | |||||
Earnings from equity investment | $ 104 | $ 2,191 | |||
Laser Quantum | |||||
Organization And Business Activities [Line Items] | |||||
Equity method investment ownership percentage on Laser Quantum | 76.00% | 41.00% | |||
Earnings from equity investment | $ 100 | $ 2,200 | |||
Percentage of outstanding shares acquired | 24.00% | 35.00% | |||
Consideration transferred in cash and restricted stock for percentage of shares acquired | $ 45,100 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Significant Accounting Policies [Line Items] | |||
Reclassification of net periodic benefit costs | $ 48 | $ 371 | $ 392 |
Accumulated deficit | 79,092 | 127,740 | |
Deferred tax assets, net | 9,358 | 7,400 | |
ASU 2017-07 | |||
Significant Accounting Policies [Line Items] | |||
Reclassification of net periodic benefit costs | $ 400 | $ 400 | |
ASU 2016-16 | |||
Significant Accounting Policies [Line Items] | |||
Reclassification of prepaid income taxes and income taxes receivable | 2,500 | ||
Accumulated deficit | 2,200 | ||
Deferred tax assets, net | $ 300 | ||
Maximum | |||
Significant Accounting Policies [Line Items] | |||
Cash equivalents original maturity period | 3 months | ||
Maximum | ASU 2016-02 | |||
Significant Accounting Policies [Line Items] | |||
Increase in assets and liabilities due to adoption of new accounting standard | $ 37,000 | ||
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 | ASU 2016-02 | |||
Significant Accounting Policies [Line Items] | |||
Increase in assets and liabilities due to adoption of new accounting standard | $ 32,000 | ||
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 |
Changes in Allowance for Doubtf
Changes in Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance For Doubtful Accounts Receivable Rollforward | |||
Balance at beginning of year | $ 554 | $ 565 | $ 500 |
Provision charged to selling, general and administrative expenses | 66 | 283 | 135 |
Allowance resulting from acquisitions | 52 | 15 | |
Write-offs, net of recoveries of amounts previously reserved | (295) | (358) | (82) |
Exchange rate changes | (4) | 12 | (3) |
Balance at end of year | $ 321 | $ 554 | $ 565 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Jan. 01, 2018 | |
Adoption of Topic 606 | ||
Revenue [Line Items] | ||
Contract liabilities | $ 4.7 | $ 5.4 |
Revenue recognized | $ 3.2 | |
Warranties | ||
Revenue [Line Items] | ||
Standard product warranty description | 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 reasonably estimate the amount of the liability. | |
Maximum | ||
Revenue [Line Items] | ||
Percentage of revenue for professional services | 3.00% | |
Period when revenue for professional and engineering services requested under customer contract is recognized | 1 month | |
Incremental Cost amortization expected period | 1 year | |
Transfer of a promised good to a customer and the customer’s payment | 1 year | |
Maximum | Photonics and Precision Motion | Warranties | ||
Revenue [Line Items] | ||
Standard warranty period on products | 24 months | |
Maximum | Vision | Warranties | ||
Revenue [Line Items] | ||
Standard warranty period on products | 36 months | |
Minimum | Photonics and Precision Motion | Warranties | ||
Revenue [Line Items] | ||
Standard warranty period on products | 12 months | |
Minimum | Vision | Warranties | ||
Revenue [Line Items] | ||
Standard warranty period on products | 12 months |
Revenue - Additional Informat_2
Revenue - Additional Information (Details1) | Dec. 31, 2018 |
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-01-01 | |
Revenue [Line Items] | |
Remaining performance obligation for contracts | 1 year |
Business Combinations - Additio
Business Combinations - Additional Information (Details) € in Millions, £ in Millions | May 01, 2018USD ($) | Jul. 03, 2017USD ($) | Jul. 03, 2017EUR (€) | Jan. 10, 2017USD ($) | Jan. 10, 2017GBP (£) | May 24, 2016USD ($) | Dec. 31, 2018USD ($)Business | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 27, 2018 | May 01, 2018GBP (£) | Jul. 03, 2017EUR (€) |
Business Acquisition [Line Items] | ||||||||||||
Number of businesses acquired | Business | 2 | |||||||||||
Total cash consideration | $ 33,500,000 | |||||||||||
Goodwill | 217,662,000 | $ 210,988,000 | ||||||||||
Amortization of intangible assets including cost of goods sold amortization | 25,610,000 | 20,920,000 | $ 12,415,000 | |||||||||
Gain on business acquisition | 26,409,000 | |||||||||||
Acquisition and related charges | 6,016,000 | 7,196,000 | 4,975,000 | |||||||||
Income from equity method investments | 104,000 | $ 2,191,000 | ||||||||||
Zettlex Holdings Limited | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Percentage of shares acquired | 100.00% | 100.00% | ||||||||||
Purchase price | $ 32,026,000 | £ 23.3 | ||||||||||
Intangible assets | 14,585,000 | |||||||||||
Goodwill | 11,790,000 | |||||||||||
Goodwill assets expected to be deductible for tax purposes | 0 | |||||||||||
Revenues | 8,300,000 | |||||||||||
Income (loss) before income taxes | (1,800,000) | |||||||||||
Amortization of intangible assets including cost of goods sold amortization | 1,300,000 | |||||||||||
Compensation expense recognized under earn-out agreements | $ 4,400,000 | |||||||||||
Total purchase price, net of cash acquired | $ 28,250,000 | |||||||||||
World of Medicine GmbH | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Percentage of shares acquired | 100.00% | 100.00% | ||||||||||
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 | |||||||||||
Total purchase price, net of cash acquired | 133,534,000 | |||||||||||
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] | ||||||||||||
Total cash consideration | $ 31,052,000 | £ 25.5 | ||||||||||
Percentage of shares acquired | 35.00% | 24.00% | ||||||||||
Purchase price | $ 87,271,000 | |||||||||||
Intangible assets | 38,955,000 | |||||||||||
Goodwill | 31,168,000 | |||||||||||
Goodwill assets expected to be deductible for tax purposes | $ 0 | |||||||||||
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 | |||||||||||
Total purchase price, net of cash acquired | $ 15,709,000 | |||||||||||
Laser Quantum | Remaining Shareholders of Laser Quantum | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Non controlling interest held by remaining shareholders | 24.00% | |||||||||||
Laser Quantum | Revolving Credit Facility | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Amount draw-down to finance acquisition | $ 30,000,000 | |||||||||||
ThingMagic | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Purchase price | 19,089,000 | |||||||||||
Intangible assets | 7,423,000 | |||||||||||
Goodwill | 9,929,000 | |||||||||||
ThingMagic | 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 including cost of goods sold amortization | 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, net of cash acquired | $ 9,400,000 | |||||||||||
Closed Acquisitions | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Acquisition and related charges | $ 1,100,000 | $ 4,400,000 | $ 200,000 |
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 | May 01, 2018USD ($) | Jul. 03, 2017USD ($) | Jan. 10, 2017USD ($) | Jan. 10, 2017GBP (£) | Dec. 31, 2018USD ($) | May 01, 2018GBP (£) | Dec. 31, 2017USD ($) | Jul. 03, 2017EUR (€) | Jan. 10, 2017GBP (£) |
Business Acquisition [Line Items] | |||||||||
Goodwill | $ 217,662 | $ 210,988 | |||||||
Total purchase price paid by Novanta | $ 33,500 | ||||||||
Zettlex Holdings Limited | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash | $ 3,776 | ||||||||
Accounts receivable | 2,237 | ||||||||
Inventories | 928 | ||||||||
Property, plant and equipment | 2,590 | ||||||||
Intangible assets | 14,585 | ||||||||
Goodwill | 11,790 | ||||||||
Other assets | 145 | ||||||||
Total assets acquired | 36,051 | ||||||||
Accounts payable | 509 | ||||||||
Accrued expenses and other liabilities | 1,035 | ||||||||
Deferred tax liabilities | 2,481 | ||||||||
Total liabilities assumed | 4,025 | ||||||||
Total assets acquired, net of liabilities assumed | 32,026 | £ 23.3 | |||||||
Less: cash acquired | 3,776 | ||||||||
Total purchase price, net of cash acquired | $ 28,250 | ||||||||
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 | ||||||||
ThingMagic | |||||||||
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 |
Fair Value of Intangible Assets
Fair Value of Intangible Assets (Details) - USD ($) $ in Thousands | May 01, 2018 | Jul. 03, 2017 | Jan. 10, 2017 |
Zettlex Holdings Limited | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Intangible Assets Estimated Fair Value | $ 14,585 | ||
World of Medicine GmbH | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Intangible Assets Estimated Fair Value | $ 59,732 | ||
Laser Quantum | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Intangible Assets Estimated Fair Value | $ 38,955 | ||
ThingMagic | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Intangible Assets Estimated Fair Value | 7,423 | ||
Developed Technologies | Zettlex Holdings Limited | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Intangible Assets Estimated Fair Value | $ 3,027 | ||
Intangible Assets Weighted Average Amortization Period | 10 years | ||
Developed Technologies | World of Medicine GmbH | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Intangible Assets Estimated Fair Value | $ 21,586 | ||
Intangible Assets Weighted Average Amortization Period | 10 years | ||
Developed Technologies | Laser Quantum | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Intangible Assets Estimated Fair Value | $ 15,501 | ||
Intangible Assets Weighted Average Amortization Period | 15 years | ||
Developed Technologies | ThingMagic | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Intangible Assets Estimated Fair Value | $ 4,600 | ||
Intangible Assets Weighted Average Amortization Period | 10 years | ||
Customer Relationships | Zettlex Holdings Limited | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Intangible Assets Estimated Fair Value | $ 9,494 | ||
Intangible Assets Weighted Average Amortization Period | 15 years | ||
Customer Relationships | World of Medicine GmbH | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Intangible Assets Estimated Fair Value | $ 35,634 | ||
Intangible Assets Weighted Average Amortization Period | 12 years | ||
Customer Relationships | Laser Quantum | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Intangible Assets Estimated Fair Value | $ 19,990 | ||
Intangible Assets Weighted Average Amortization Period | 15 years | ||
Customer Relationships | ThingMagic | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Intangible Assets Estimated Fair Value | $ 2,520 | ||
Intangible Assets Weighted Average Amortization Period | 10 years | ||
Trademarks and Trade Names | Zettlex Holdings Limited | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Intangible Assets Estimated Fair Value | $ 550 | ||
Intangible Assets Weighted Average Amortization Period | 10 years | ||
Trademarks and Trade Names | World of Medicine GmbH | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Intangible Assets Estimated Fair Value | $ 2,284 | ||
Intangible Assets Weighted Average Amortization Period | 10 years | ||
Trademarks and Trade Names | Laser Quantum | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Intangible Assets Estimated Fair Value | $ 1,964 | ||
Intangible Assets Weighted Average Amortization Period | 15 years | ||
Trademarks and Trade Names | ThingMagic | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Intangible Assets Estimated Fair Value | $ 303 | ||
Intangible Assets Weighted Average Amortization Period | 5 years | ||
Backlog | Zettlex Holdings Limited | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Intangible Assets Estimated Fair Value | $ 1,514 | ||
Intangible Assets Weighted Average Amortization Period | 1 year | ||
Backlog | World of Medicine GmbH | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Intangible Assets Estimated Fair Value | $ 228 | ||
Intangible Assets Weighted Average Amortization Period | 1 year | ||
Backlog | Laser Quantum | |||
Acquired Finite Lived Intangible Assets [Line Items] | |||
Intangible Assets Estimated Fair Value | $ 1,500 | ||
Intangible Assets Weighted Average Amortization Period | 9 months |
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 |
Consolidated net income | $ 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 Form_2
Summary of Unaudited Pro Forma Financial Information (Parenthetical) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Business Combinations [Abstract] | ||
Adjustment of redeemable noncontrolling interest to estimated redemption value | $ 20.2 | $ 0 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interest- Additional Information (Details) £ in Millions | Sep. 27, 2018USD ($)shares | Dec. 31, 2018USD ($) | Jan. 10, 2017USD ($) | Jan. 10, 2017GBP (£) | Dec. 31, 2016 |
Minority Interest [Line Items] | |||||
Consideration transferred in cash | $ 30,800,000 | ||||
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 | $ 21,582,000 | £ 17.7 | |||
Percentage of outstanding shares acquired | 24.00% | 35.00% | 35.00% | ||
Consideration transferred in cash and restricted stock for percentage of shares acquired | $ 45,100,000 | ||||
Consideration transferred in cash | $ 30,700,000 | ||||
Gain (loss) recognized on acquisition | $ 0 | ||||
Laser Quantum | Restricted Stock | |||||
Minority Interest [Line Items] | |||||
Consideration transferred in restricted stock shares | shares | 213,219 | ||||
Vesting date | Dec. 31, 2025 |
Redeemable Noncontrolling Int_4
Redeemable Noncontrolling Interest- Summary of Changes in Noncontrolling Interest (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Noncontrolling Interest [Abstract] | ||
Balance as of December 31, 2017 | $ 46,923 | |
Net income attributable to noncontrolling interest | 1,986 | $ 2,256 |
Redeemable noncontrolling interest redemption value adjustment | (1,781) | 20,244 |
Foreign currency translation | (1,926) | |
Acquisition of noncontrolling interest | $ (45,202) | |
Balance as of December 31, 2018 | $ 46,923 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | $ 311,545 | |||
Other comprehensive income (loss) | (5,473) | $ 8,790 | $ (9,611) | |
Amounts reclassified from accumulated other comprehensive income (loss) | [1] | 826 | 1,045 | 726 |
Ending Balance | 368,255 | 311,545 | ||
Total Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | (17,880) | (27,715) | (18,830) | |
Ending Balance | (22,527) | (17,880) | (27,715) | |
Cumulative Translation Adjustments | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | (8,313) | (17,222) | (9,698) | |
Other comprehensive income (loss) | (4,172) | 8,909 | (7,524) | |
Ending Balance | (12,485) | (8,313) | (17,222) | |
Pension Liability Adjustments | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | (9,567) | (10,493) | (9,132) | |
Other comprehensive income (loss) | (1,301) | (119) | (2,087) | |
Amounts reclassified from accumulated other comprehensive income (loss) | [1] | 826 | 1,045 | 726 |
Ending Balance | $ (10,042) | $ (9,567) | $ (10,493) | |
[1] | The amounts reclassified from accumulated other comprehensive income (loss) were included in other income (expense) in the consolidated statements of operations. |
Summary of Changes in Goodwill
Summary of Changes in Goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Balance at beginning of year | $ 210,988 |
Goodwill acquired from acquisitions | 12,011 |
Effect of foreign exchange rate changes | (5,337) |
Balance at end of year | $ 217,662 |
Goodwill By Reportable Segment
Goodwill By Reportable Segment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill [Line Items] | ||
Goodwill | $ 368,891 | $ 362,217 |
Accumulated impairment of goodwill | (151,229) | (151,229) |
Total | 217,662 | 210,988 |
Photonics | ||
Goodwill [Line Items] | ||
Goodwill | 168,955 | 170,818 |
Accumulated impairment of goodwill | (102,461) | (102,461) |
Total | 66,494 | 68,357 |
Vision | ||
Goodwill [Line Items] | ||
Goodwill | 155,017 | 157,436 |
Accumulated impairment of goodwill | (31,722) | (31,722) |
Total | 123,295 | 125,714 |
Precision Motion | ||
Goodwill [Line Items] | ||
Goodwill | 44,919 | 33,963 |
Accumulated impairment of goodwill | (17,046) | (17,046) |
Total | $ 27,873 | $ 16,917 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Intangible Assets Disclosure [Line Items] | ||
Amortizable intangible assets, gross carrying amount | $ 293,298 | $ 283,445 |
Amortizable intangible assets, accumulated amortization | (163,405) | (141,424) |
Amortizable intangible assets, net carrying amount | $ 129,893 | $ 142,021 |
Amortizable intangible assets, weighted average remaining life (Years) | 10 years 6 months | 11 years 3 months 18 days |
Non-amortizable intangible assets | $ 13,027 | $ 13,027 |
Gross carrying amount | 306,325 | 296,472 |
Net carrying amount | 142,920 | 155,048 |
Patents and Developed Technologies | ||
Schedule of Intangible Assets Disclosure [Line Items] | ||
Amortizable intangible assets, gross carrying amount | 134,034 | 130,890 |
Amortizable intangible assets, accumulated amortization | (86,623) | (77,295) |
Amortizable intangible assets, net carrying amount | $ 47,411 | $ 53,595 |
Amortizable intangible assets, weighted average remaining life (Years) | 9 years | 10 years 2 months 12 days |
Customer Relationships | ||
Schedule of Intangible Assets Disclosure [Line Items] | ||
Amortizable intangible assets, gross carrying amount | $ 139,097 | $ 131,809 |
Amortizable intangible assets, accumulated amortization | (64,174) | (52,015) |
Amortizable intangible assets, net carrying amount | $ 74,923 | $ 79,794 |
Amortizable intangible assets, weighted average remaining life (Years) | 11 years 8 months 12 days | 12 years 3 months 18 days |
Customer Backlog | ||
Schedule of Intangible Assets Disclosure [Line Items] | ||
Amortizable intangible assets, gross carrying amount | $ 1,738 | $ 2,524 |
Amortizable intangible assets, accumulated amortization | (1,191) | (2,284) |
Amortizable intangible assets, net carrying amount | $ 547 | $ 240 |
Amortizable intangible assets, weighted average remaining life (Years) | 4 months 24 days | 9 months 18 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 | (2,493) | (1,956) |
Amortizable intangible assets, net carrying amount | $ 21 | $ 558 |
Amortizable intangible assets, weighted average remaining life (Years) | 1 month 6 days | 10 months 24 days |
Trademarks and Trade Names | ||
Schedule of Intangible Assets Disclosure [Line Items] | ||
Amortizable intangible assets, gross carrying amount | $ 15,915 | $ 15,708 |
Amortizable intangible assets, accumulated amortization | (8,924) | (7,874) |
Amortizable intangible assets, net carrying amount | $ 6,991 | $ 7,834 |
Amortizable intangible assets, weighted average remaining life (Years) | 9 years 1 month 6 days | 9 years 8 months 12 days |
Goodwill, Intangible Assets a_3
Goodwill, Intangible Assets and Impairment Charges - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill And Intangible Assets [Line Items] | ||||
Impairment of goodwill and intangible assets | $ 0 | $ 0 | $ 0 | |
Customer Relationships | ||||
Goodwill And Intangible Assets [Line Items] | ||||
Intangible assets recognized in conjunction with acquisition | $ 1,200,000 |
Amortization Expense of Intangi
Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Amortization expense – cost of revenue | $ 10,060 | $ 8,824 | $ 4,164 |
Amortization expense – operating expenses | 15,550 | 12,096 | 8,251 |
Total amortization expense | $ 25,610 | $ 20,920 | $ 12,415 |
Estimated Future Amortization E
Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Finite Lived Intangible Assets [Line Items] | ||
2,019 | $ 23,955 | |
2,020 | 20,716 | |
2,021 | 18,895 | |
2,022 | 15,974 | |
2,023 | 13,562 | |
Thereafter | 36,791 | |
Amortizable intangible assets, net carrying amount | 129,893 | $ 142,021 |
Cost of Revenue | ||
Finite Lived Intangible Assets [Line Items] | ||
2,019 | 9,222 | |
2,020 | 8,321 | |
2,021 | 7,406 | |
2,022 | 6,308 | |
2,023 | 5,409 | |
Thereafter | 10,745 | |
Amortizable intangible assets, net carrying amount | 47,411 | |
Operating Expenses | ||
Finite Lived Intangible Assets [Line Items] | ||
2,019 | 14,733 | |
2,020 | 12,395 | |
2,021 | 11,489 | |
2,022 | 9,666 | |
2,023 | 8,153 | |
Thereafter | 26,046 | |
Amortizable intangible assets, net carrying amount | $ 82,482 |
Fair Value Measurements - Asset
Fair Value Measurements - Asset Acquisition Contingent Consideration - Additional Information (Details) - Video Signal Processing and Management Technologies $ in Thousands, € in Millions | 12 Months Ended | |||
Dec. 31, 2018USD ($)Installment | Dec. 31, 2017USD ($) | Dec. 14, 2016USD ($) | Dec. 14, 2016EUR (€) | |
Asset Acquisition Contingent Consideration [Line Items] | ||||
Date of acquisition agreement | Dec. 14, 2016 | |||
Number of contingent consideration | Installment | 4 | |||
Undiscounted range of outcomes, minimum | $ 0 | |||
Undiscounted range of outcomes, maximum | $ 6,600 | € 5.5 | ||
Long-term Liability in Other Liabilities | ||||
Asset Acquisition Contingent Consideration [Line Items] | ||||
Estimated fair value of contingent consideration | $ 3,400 | $ 1,300 |
Fair Value Measurements - Busin
Fair Value Measurements - Business Acquisition Contingent Consideration - Additional Information (Details) - Applimotion Inc. $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jan. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018Installment | Dec. 31, 2017USD ($) | Feb. 19, 2015USD ($) | |
Business Acquisition Contingent Consideration [Line Items] | |||||
Business combination, date of agreement | Feb. 19, 2015 | ||||
Name of acquired entity | Applimotion Inc. | ||||
Number of contingent consideration | Installment | 2 | ||||
Estimated fair value of contingent consideration | $ 2.8 | $ 1 | |||
Payments of contingent consideration | $ 2.8 | $ 1.2 |
Fair Values of Assets and Liabi
Fair Values of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value Measurements Recurring - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash equivalents | $ 4,288 | $ 2,665 |
Assets, fair value | 4,303 | 2,815 |
Liabilities | ||
Liabilities, fair value | 3,558 | 4,104 |
Prepaid Expenses and Other Current Assets | ||
Assets | ||
Foreign currency forward contracts | 15 | 150 |
Other Liabilities | ||
Liabilities | ||
Contingent consideration - Long-term | 3,376 | 1,304 |
Accrued Expenses and Other Current Liabilities | ||
Liabilities | ||
Foreign currency forward contracts | 182 | |
Contingent consideration - Current | 2,800 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Cash equivalents | 4,288 | 2,665 |
Assets, fair value | 4,288 | 2,665 |
Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Assets, fair value | 15 | 150 |
Liabilities | ||
Liabilities, fair value | 182 | |
Significant Other Observable Inputs (Level 2) | Prepaid Expenses and Other Current Assets | ||
Assets | ||
Foreign currency forward contracts | 15 | 150 |
Significant Other Observable Inputs (Level 2) | Accrued Expenses and Other Current Liabilities | ||
Liabilities | ||
Foreign currency forward contracts | 182 | |
Significant Other Unobservable Inputs (Level 3) | ||
Liabilities | ||
Liabilities, fair value | 3,376 | 4,104 |
Significant Other Unobservable Inputs (Level 3) | Other Liabilities | ||
Liabilities | ||
Contingent consideration - Long-term | $ 3,376 | 1,304 |
Significant Other Unobservable Inputs (Level 3) | Accrued Expenses and Other Current Liabilities | ||
Liabilities | ||
Contingent consideration - Current | $ 2,800 |
Summary of Changes in the Fair
Summary of Changes in the Fair Value of Level 3 Contingent Consideration (Details) - Significant Other Unobservable Inputs (Level 3) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Beginning balance | $ 4,104 |
Payments | (2,800) |
Fair value adjustments | 2,072 |
Ending balance | $ 3,376 |
Foreign Currency Contracts - Ad
Foreign Currency Contracts - Additional Information (Details) - Foreign Currency Forward Contracts - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative [Line Items] | ||
Notional amount of foreign currency forward contracts | $ 31.2 | $ 17.9 |
Net gain (loss) on foreign currency forward contracts | (0.2) | 0.2 |
Foreign Exchange Transaction Gains (Losses) | ||
Derivative [Line Items] | ||
Aggregate net gain recognized | $ 1.5 | $ 0.2 |
Computation of Basic and Dilute
Computation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerators: | |||
Consolidated net income | $ 51,095 | $ 62,307 | $ 22,003 |
Less: Net income attributable to noncontrolling interest | (1,986) | (2,256) | |
Net income attributable to Novanta Inc. | 49,109 | 60,051 | 22,003 |
Redeemable noncontrolling interest redemption value adjustment (Note 5) | 1,781 | (20,244) | |
Net income attributable to Novanta Inc. after adjustment for redeemable noncontrolling interest redemption value | $ 50,890 | $ 39,807 | $ 22,003 |
Denominators: | |||
Weighted average common shares outstanding—basic | 34,913 | 34,817 | 34,694 |
Dilutive potential common shares | 560 | 463 | 220 |
Weighted average common shares outstanding— diluted | 35,473 | 35,280 | 34,914 |
Antidilutive common shares excluded from above | 4 | 85 | |
Earnings per Common Share Attributable to Novanta Inc.: | |||
Basic | $ 1.46 | $ 1.14 | $ 0.63 |
Diluted | $ 1.43 | $ 1.13 | $ 0.63 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 69,008 | $ 57,277 |
Work-in-process | 15,982 | 14,847 |
Finished goods | 17,337 | 16,443 |
Demo and consigned inventory | 2,437 | 2,711 |
Total inventories | $ 104,764 | $ 91,278 |
Property Plant and Equipment, N
Property Plant and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 133,986 | $ 127,177 |
Accumulated depreciation | (68,522) | (65,459) |
Property, plant and equipment, net | 65,464 | 61,718 |
Land, Buildings and Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 56,068 | 53,055 |
Machinery and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 77,918 | $ 74,122 |
Supplementary Balance Sheet I_3
Supplementary Balance Sheet Information - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||
Asset capitalized under capital lease | $ 13,537 | $ 13,562 | |
Capitalized software development costs | $ 1,100 | $ 2,000 | $ 2,300 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||
Depreciation expense | $ 11,442 | $ 9,838 | $ 8,558 |
Summary of Total Accumulated De
Summary of Total Accumulated Depreciation on Assets under Capital Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Accumulated depreciation on assets under capital leases | $ 6,901 | $ 6,097 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Other Liabilities Disclosure [Abstract] | ||||
Accrued compensation and benefits | $ 24,545 | $ 17,348 | ||
Accrued warranty | 4,510 | 4,835 | $ 3,142 | $ 3,335 |
Contract liabilities, current portion | 4,165 | 4,790 | ||
Other | 13,075 | 16,341 | ||
Total | $ 46,295 | $ 43,314 |
Accrued Warranty (Details)
Accrued Warranty (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Product Warranties Disclosures [Abstract] | |||
Balance at beginning of year | $ 4,835 | $ 3,142 | $ 3,335 |
Provision charged to cost of revenue | 3,111 | 3,169 | 1,673 |
Warranty liabilities acquired from acquisitions | 1,307 | 23 | |
Use of provision | (3,341) | (2,857) | (1,849) |
Foreign currency exchange rate changes | (95) | 74 | (40) |
Balance at end of year | $ 4,510 | $ 4,835 | $ 3,142 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Total current portion of long-term debt | $ 4,535 | $ 9,119 |
Total long-term debt | 202,843 | 225,500 |
Total Senior Credit Facilities | 207,378 | 234,619 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Current portion of long-term debt, Gross | 4,600 | 9,200 |
Long-term debt, Gross | 69,925 | 79,125 |
Total Senior Credit Facilities | 74,525 | |
Term Loan And Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Less: unamortized debt issuance costs | (65) | (81) |
Less: unamortized debt issuance costs | (2,140) | (3,078) |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, Gross | $ 135,058 | $ 149,453 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | Dec. 31, 2018 | Feb. 26, 2018 | Aug. 01, 2017 | May 19, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | 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 | |||||||
Unused commitment fees percentage | 0.40% | |||||||
Maximum consolidated leverage ratio | 300.00% | |||||||
Second amended and restated credit agreement, fourth amendment, 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 | $ 207,378,000 | $ 207,378,000 | $ 234,619,000 | |||||
Debt weighted average interest rate | 3.37% | 3.37% | ||||||
Non-cash interest expense related to amortization of deferred financing costs | $ 1,000,000 | $ 800,000 | $ 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% | |||||||
Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt including current maturities | $ 74,525,000 | $ 74,525,000 | ||||||
Second Amended and Restated Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum consolidated leverage ratio | 300.00% | |||||||
Second Amended and Restated Credit Agreement | Permitted Acquisitions and Stock Repurchases | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum consolidated leverage ratio | 250.00% | |||||||
Second Amended and Restated Credit Agreement | Designated Acquisition | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum consolidated leverage ratio | 300.00% | |||||||
Second Amended and Restated Credit Agreement | 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 Agreement | Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | 75,000,000 | |||||||
Long-term debt including current maturities | $ 65,600,000 | |||||||
Second Amended and Restated Credit Agreement | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 225,000,000 | |||||||
Second Amended and Restated Credit Agreement | Revolving Credit Facility | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Unused commitment fees percentage | 0.25% | |||||||
Second Amended and Restated Credit Agreement | Revolving Credit Facility | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Unused commitment fees percentage | 0.45% | |||||||
Second Amended and Restated Credit Facility | Dividend Payments and Stock Repurchases | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum consolidated leverage ratio | 250.00% | |||||||
Third Amendment to Second Amended and Restated Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior credit facilities maturity year | 2021-05 | |||||||
Debt instrument, frequency of periodic payment | quarterly | |||||||
Third Amendment to Second Amended and Restated Credit Agreement | Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt including current maturities | $ 90,600,000 | |||||||
Quarterly installments payable on term loan | 2,300,000 | |||||||
Debt instrument, final installment amount | 56,100,000 | |||||||
Third Amendment to Second Amended and Restated Credit Agreement | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | 325,000,000 | |||||||
Line of credit facility accordion feature | $ 125,000,000 | |||||||
Available for borrowings capacity | $ 189,900,000 | $ 189,900,000 | ||||||
Fourth Amendment to Second Amended and Restated Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum consolidated leverage ratio | 350.00% | |||||||
Second amended and restated credit agreement, fourth amendment, covenants | The Fourth Amendment increased the maximum permitted consolidated leverage ratio from 3.00 to 3.50, increased the maximum consolidated leverage ratio for permitted acquisitions and stock repurchases from 2.50 to 3.00, increased the maximum permitted consolidated leverage ratio for a designated acquisition from 3.00 to 3.50, and increased the maximum permitted leverage ratio for four consecutive quarters following a designated acquisition from 3.50 to 4.00. | |||||||
Fourth Amendment to Second Amended and Restated Credit Agreement | Permitted Acquisitions and Stock Repurchases | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum consolidated leverage ratio | 300.00% | |||||||
Fourth Amendment to Second Amended and Restated Credit Agreement | Designated Acquisition | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum consolidated leverage ratio | 350.00% | |||||||
Fourth Amendment to Second Amended and Restated Credit Agreement | Four Consecutive Quarters Following Designated Acquisition | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum consolidated leverage ratio | 400.00% |
Repayments of Outstanding Princ
Repayments of Outstanding Principal under Term Loan Facility (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Long Term Debt Maturities Repayments Of Principal [Line Items] | ||
Total Senior Credit Facilities | $ 207,378 | $ 234,619 |
Term Loan | ||
Long Term Debt Maturities Repayments Of Principal [Line Items] | ||
2,019 | 4,600 | |
2,020 | 9,200 | |
2,021 | 60,725 | |
Total Senior Credit Facilities | $ 74,525 |
Capital Stock and Share-Based_3
Capital Stock and Share-Based Compensation - Additional Information (Details) - USD ($) | Dec. 31, 2018 | Mar. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Oct. 31, 2018 | May 31, 2014 | Oct. 31, 2013 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Repurchase of common stock | $ 5,850,000 | $ 370,000 | $ 1,634,000 | ||||||
Share-based compensation expense recognized | 7,714,000 | 5,493,000 | 4,293,000 | ||||||
Unrecognized stock-based compensation expense | $ 13,100,000 | 13,100,000 | $ 13,100,000 | ||||||
Unrecognized stock-based compensation expense, weighted-average recognition period | 2 years 2 months 26 days | ||||||||
Deferred Stock Units | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Share-based compensation expense recognized | $ 500,000 | $ 500,000 | $ 500,000 | ||||||
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 | 950,865 | 950,865 | 950,865 | ||||||
2010 Incentive Award Plan | Restricted Stock Units and Deferred Stock Units | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Total value of restricted stock and deferred stock units vested | $ 10,500,000 | ||||||||
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 | 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 | 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 | ||||||||
Minimum | 2010 Incentive Award Plan | Restricted Stock Units (RSUs) | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Vesting period | 3 years | ||||||||
Minimum | 2010 Incentive Award Plan | EPS Performance-based Restricted Stock Units | |||||||||
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% | ||||||||
Minimum | 2010 Incentive Award Plan | TSR Performance-based Restricted Stock Units | |||||||||
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% | ||||||||
Maximum | 2010 Incentive Award Plan | Restricted Stock Units (RSUs) | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Vesting period | 5 years | ||||||||
Maximum | 2010 Incentive Award Plan | EPS Performance-based Restricted Stock Units | |||||||||
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% | ||||||||
Maximum | 2010 Incentive Award Plan | TSR Performance-based Restricted Stock Units | |||||||||
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% | ||||||||
2013 Repurchase Plan | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Shares repurchased | 89,000 | 385,000 | |||||||
Repurchase of common stock | $ 5,900,000 | $ 10,000,000 | |||||||
Shares repurchased, average cost per share | $ 65.43 | $ 25.97 | |||||||
2013 Repurchase Plan | Maximum | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Common stock repurchase program authorized amount | $ 10,000,000 | ||||||||
2018 Repurchase Plan | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Common stock repurchase program authorized amount | $ 25,000,000 | ||||||||
Shares repurchased | 0 |
Capital Stock and Share-Based_4
Capital Stock and Share-Based Compensation - Share-Based Compensation Expense Recorded In Operating Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 7,714 | $ 5,493 | $ 4,293 |
Selling, general and administrative | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 6,997 | 5,065 | 3,920 |
Research and development and engineering | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 438 | 221 | 117 |
Cost of Revenue | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 211 | $ 207 | $ 256 |
Restructuring, acquisition and divestiture related costs | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share-based compensation expense, adjustment | $ 68 |
Capital Stock and Share-Based_5
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, 2018USD ($)$ / sharesshares | ||
Restricted Stock Units | ||
Unvested, Beginning Balance | shares | 614 | |
Granted | shares | 130 | |
Vested | shares | (188) | |
Forfeited | shares | (27) | |
Unvested, Ending Balance | shares | 529 | |
Expected to vest at end of period | shares | 509 | |
Weighted Average Grant Date Fair Value | ||
Unvested, Beginning Balance | $ / shares | $ 18.35 | |
Granted | $ / shares | 55.27 | |
Vested | $ / shares | 18.77 | |
Forfeited | $ / shares | 24.53 | |
Unvested, Ending Balance | $ / shares | 26.98 | |
Expected to vest at end of period | $ / shares | $ 26.31 | |
Weighted Average Remaining Vesting Period (in years) | ||
Unvested at end of period | 1 year 7 months 2 days | |
Expected to vest at end of period | 1 year 7 months 2 days | |
Aggregate Intrinsic Value | ||
Unvested at end of period | $ | $ 33,308 | [1] |
Expected to vest at end of period | $ | $ 32,041 | [1] |
[1] | The aggregate intrinsic value is calculated based on the fair value of $63.00 per share of the Company’s common stock on December 31, 2018 due to the fact that the restricted stock units carry a $0 purchase price. |
Capital Stock and Share-Based_6
Capital Stock and Share-Based Compensation - Restricted Stock Units Issued and Outstanding (Parenthetical) (Details) - 2010 Incentive Award Plan - Restricted Stock Units (RSUs) | Dec. 31, 2018$ / shares |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Common stock fair value per share | $ 63 |
Restricted stock units purchase price per share | $ 0 |
Capital Stock and Share-Based_7
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, 2018USD ($)$ / sharesshares | ||
Performance Stock Units | ||
Unvested, Beginning Balance | shares | 89 | [1] |
Granted | shares | 48 | [1] |
Unvested, Ending Balance | shares | 137 | [1] |
Expected to vest at end of period | shares | 167 | [1] |
Weighted Average Grant Date Fair Value | ||
Unvested, Beginning Balance | $ / shares | $ 24 | |
Granted | $ / shares | 62.17 | |
Unvested, Ending Balance | $ / shares | 37.28 | |
Expected to vest at end of period | $ / shares | $ 33.21 | |
Weighted Average Remaining Vesting Period (in years) | ||
Unvested at end of period | 1 year 1 month 20 days | |
Expected to vest at end of period | 1 year 1 month 20 days | |
Aggregate Intrinsic Value | ||
Unvested at end of period | $ | $ 8,645 | [2] |
Expected to vest at end of period | $ | $ 10,491 | [2] |
[1] | The unvested PSUs are shown in this table at target, except for the number of shares vested, which reflect the shares earned and number of shares expected to vest. As of December 31, 2018, the maximum number of PSUs available to be earned is approximately 274 thousand. | |
[2] | The aggregate intrinsic value is calculated based on the fair value of $63.00 per share of the Company’s common stock on December 31, 2018 due to the fact that the performance stock units carry a $0 purchase price |
Capital Stock and Share-Based_8
Capital Stock and Share-Based Compensation - Performance Stock Units Issued and Outstanding (Parenthetical) (Details) - 2010 Incentive Award Plan - Performance Stock Units | Dec. 31, 2018$ / sharesshares |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Maximum number of PSUs available to be earned | shares | 274,000 |
Common stock fair value per share | $ 63 |
Performance stock units purchase price per share | $ 0 |
Capital Stock and Share-Based_9
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, 2018$ / shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Grant-date stock price | $ 53.85 |
Expected volatility | 30.35% |
Risk-free interest rate | 2.37% |
Expected annual dividend yield | 0.00% |
Weighted average fair value | $ 70.49 |
Capital Stock and Share-Base_10
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, 2018USD ($)$ / sharesshares | |
Number of Shares | |
Stock options outstanding | shares | 103 |
Stock options exercisable | shares | 69 |
Stock options expected to vest | shares | 34 |
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 | 7 years 3 months |
Stock options exercisable | 7 years 3 months |
Stock options expected to vest | 7 years 3 months |
Aggregate Intrinsic Value | |
Stock options outstanding | $ | $ 5,027 |
Stock options exercisable | $ | 3,351 |
Stock options expected to vest | $ | $ 1,676 |
Capital Stock and Share-Base_11
Capital Stock and Share-Based Compensation - Stock Options Outstanding, Exercisable and Expected to Vest (Details) (Parenthetical) (Details) | Dec. 31, 2018$ / shares |
2010 Incentive Award Plan | Stock Options | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Common stock fair value per share | $ 63 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |||
Contribution to defined contribution plan by employer | $ 3.9 | $ 3.1 | $ 2.5 |
Funding valuation period | 3 years | ||
Defined benefit plan estimated employer contributions for 2019 | $ 0.9 | ||
Defined benefit plan estimated employer contributions increasing percentage for 2019 thereafter | 2.90% |
Net Periodic Pension Cost (Deta
Net Periodic Pension Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Components of the net periodic pension cost: | |||
Interest cost | $ 939 | $ 991 | $ 1,232 |
Expected return on plan assets | (1,717) | (1,665) | (1,566) |
Amortization of actuarial losses | 826 | 1,045 | 726 |
Net periodic pension cost | $ 48 | $ 371 | $ 392 |
Actuarial Assumptions used to C
Actuarial Assumptions used to Compute Net Periodic Pension Cost (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |||
Weighted-average discount rate | 2.40% | 2.60% | 3.80% |
Weighted-average long-term rate of return on plan assets | 4.80% | 5.20% | 5.30% |
Actuarial Assumptions used to_2
Actuarial Assumptions used to Compute Benefit Obligations (Details) | Dec. 31, 2018 | Dec. 31, 2017 |
Compensation And Retirement Disclosure [Abstract] | ||
Weighted-average discount rate | 2.70% | 2.40% |
Rate of inflation | 2.80% | 2.90% |
Reconciliation of Benefit Oblig
Reconciliation of Benefit Obligations and Plan Assets of U.K. Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Change in benefit obligation: | ||||
Projected benefit obligation at beginning of year | $ 40,329 | $ 37,261 | ||
Interest cost | 939 | 991 | $ 1,232 | |
Actuarial (gains) losses | (1,718) | (27) | ||
Benefits paid | (1,301) | (1,313) | ||
Prior service cost | [1] | 754 | ||
Foreign currency exchange rate changes | (2,121) | 3,417 | ||
Projected benefit obligation at end of year | 36,882 | 40,329 | 37,261 | |
Accumulated benefit obligation at end of year | 36,882 | 40,329 | ||
Change in plan assets: | ||||
Fair value of plan assets at beginning of year | 36,476 | 31,304 | ||
Actual return on plan assets | (1,083) | 2,605 | ||
Employer contributions | 941 | 887 | ||
Benefits paid | (1,301) | (1,313) | ||
Foreign currency exchange rate changes | (1,909) | 2,993 | ||
Fair value of plan assets at end of year | 33,124 | 36,476 | 31,304 | |
Funded status at end of year | (3,758) | (3,853) | ||
Amounts included in accumulated other comprehensive loss not yet recognized in net periodic pension cost: | ||||
Net actuarial losses at beginning of year | (10,493) | (11,697) | ||
Net actuarial gains (losses) during the year | (1,082) | 967 | ||
Prior service cost arising during the year | [1] | (754) | ||
Amounts reclassified from accumulated other comprehensive income to income before income taxes | 826 | 1,045 | ||
Foreign currency exchange rate changes | 383 | (808) | ||
Net actuarial loss | (11,120) | (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 | 959 | $ 957 | ||
Prior service cost | $ 29 | |||
[1] | On October 26, 2018, the High Court of Justice in the U.K. ruled that the Guaranteed Minimum Pensions (“GMPs”) provided by pension schemes need to equalize lifetime GMP benefits between genders. In order to meet the requirements set out by the High Court, the Company recorded an estimate of $0.8 million additional benefit obligations based on the existing plan participants, the date the U.K. Plan was allowed to stop accruing additional benefits, the pension plan rules and the approach taken to equalize the benefits. The additional benefit obligation will be amortized and recognized as part of net periodic pension cost in the consolidated statement of operations over the average remaining life expectancy of the plan participants. |
Reconciliation of Benefit Obl_2
Reconciliation of Benefit Obligations and Plan Assets of U.K. Plan (Parenthetical) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($) | ||
Compensation And Retirement Disclosure [Abstract] | ||
Additional benefit obligations | $ 754 | [1] |
[1] | On October 26, 2018, the High Court of Justice in the U.K. ruled that the Guaranteed Minimum Pensions (“GMPs”) provided by pension schemes need to equalize lifetime GMP benefits between genders. In order to meet the requirements set out by the High Court, the Company recorded an estimate of $0.8 million additional benefit obligations based on the existing plan participants, the date the U.K. Plan was allowed to stop accruing additional benefits, the pension plan rules and the approach taken to equalize the benefits. The additional benefit obligation will be amortized and recognized as part of net periodic pension cost in the consolidated statement of operations over the average remaining life expectancy of the plan participants. |
Expected Future Benefit Payment
Expected Future Benefit Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Compensation And Retirement Disclosure [Abstract] | |
2,019 | $ 859 |
2,020 | 1,133 |
2,021 | 1,197 |
2,022 | 1,038 |
2,023 | 1,137 |
2024-2026 | 8,370 |
Total | $ 13,734 |
Summary of Fair Value of Plan A
Summary of Fair Value of Plan Assets by Asset Category (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Fair Value of Plan Assets | $ 33,124 | $ 36,476 | $ 31,304 | ||
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 | 109 | 136 | |||
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 | 33,015 | 36,340 | |||
Balanced Fund | |||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Fair Value of Plan Assets | 24,564 | [1] | 26,816 | [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 | 24,564 | [1] | 26,816 | [2] | |
Fixed Income | |||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Fair Value of Plan Assets | 8,451 | [3] | 9,524 | [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 | 8,451 | [3] | 9,524 | [4] | |
Cash | |||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Fair Value of Plan Assets | 109 | 136 | |||
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 | $ 109 | $ 136 | |||
[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 (42%), bonds (19%), other assets (38%) and cash (1%). | ||||
[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 (38%), bonds (27%), other assets (31%) and cash (4%). | ||||
[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 (86%) and cash (14%). | ||||
[4] | 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: bonds (92%) and cash (8%). |
Summary of Fair Value of Plan_2
Summary of Fair Value of Plan Assets by Asset Category (Parenthetical) (Details) | Dec. 31, 2018 | Dec. 31, 2017 |
Bonds | Balanced Fund | ||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, target plan asset allocations | 19.00% | 27.00% |
Bonds | Fixed Income | ||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, target plan asset allocations | 86.00% | 92.00% |
Equity Securities | Balanced Fund | ||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, target plan asset allocations | 42.00% | 38.00% |
Other Asset | Balanced Fund | ||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, target plan asset allocations | 38.00% | 31.00% |
Cash | Balanced Fund | ||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, target plan asset allocations | 1.00% | 4.00% |
Cash | Fixed Income | ||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Defined benefit plan, target plan asset allocations | 14.00% | 8.00% |
Components of Income (Loss) Bef
Components of Income (Loss) Before Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income (loss) before income taxes: | |||
Income before income taxes | $ 61,302 | $ 76,134 | $ 32,522 |
CANADA | |||
Income (loss) before income taxes: | |||
Foreign | (796) | (2,036) | (1,872) |
UNITED STATES | |||
Income (loss) before income taxes: | |||
U.S. | 39,356 | 37,327 | 20,422 |
Other Countries | |||
Income (loss) before income taxes: | |||
Foreign | $ 22,742 | $ 40,843 | $ 13,972 |
Components of Income Tax Provis
Components of Income Tax Provision (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Components Of Income Tax Expense Benefit [Line Items] | |||
Current income tax provision (benefit) | $ 16,283 | $ 16,387 | $ 12,285 |
Deferred income tax provision (benefit) | (6,076) | (2,560) | (1,766) |
Income Tax Provision (benefit) | 10,207 | 13,827 | 10,519 |
CANADA | |||
Components Of Income Tax Expense Benefit [Line Items] | |||
Current income tax provision (benefit) | 75 | 146 | 43 |
Deferred income tax provision (benefit) | 0 | ||
UNITED STATES | |||
Components Of Income Tax Expense Benefit [Line Items] | |||
Current income tax provision (benefit) | 8,095 | 9,434 | 9,678 |
Deferred income tax provision (benefit) | (2,272) | 2,396 | (2,378) |
Other Countries | |||
Components Of Income Tax Expense Benefit [Line Items] | |||
Current income tax provision (benefit) | 8,113 | 6,807 | 2,564 |
Deferred income tax provision (benefit) | $ (3,804) | $ (4,956) | $ 612 |
Reconciliation of Statutory Can
Reconciliation of Statutory Canadian Tax rate to Effective Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule Of Effective Tax Rate Reconciliation [Line Items] | |||
Statutory Canadian tax rate | 21.00% | 35.00% | |
Income Tax Provision (benefit) | $ 10,207 | $ 13,827 | $ 10,519 |
Canada Revenue Agency | |||
Schedule Of Effective Tax Rate Reconciliation [Line Items] | |||
Statutory Canadian tax rate | 29.00% | 29.00% | 28.50% |
Expected income tax provision at Canadian statutory tax rate | $ 17,778 | $ 22,079 | $ 9,269 |
International tax rate differences | (4,474) | (2,038) | 891 |
U.S. state income taxes, net | 831 | 674 | 503 |
Withholding and other taxes | 550 | 484 | 441 |
Permanent differences and other | 1,015 | 1,582 | 84 |
Section 199 deduction | (1,148) | (1,063) | |
Foreign-derived intangible income | (1,628) | ||
Tax credits | (1,250) | (984) | (1,095) |
Statutory tax rate changes | (285) | 2,823 | (856) |
Uncertain tax positions | 190 | (1,607) | (103) |
Change in valuation allowance | (262) | (354) | 1,202 |
Acquisition contingent consideration adjustments | 833 | 149 | 762 |
Transaction costs | 172 | 1,011 | 649 |
Provision to return differences | (385) | 225 | (93) |
Benefit from share-based compensation | (931) | (837) | (72) |
Gain on Laser Quantum acquisition | (6,586) | ||
UK patent box | (1,947) | (1,646) | |
Income Tax Provision (benefit) | $ 10,207 | $ 13,827 | $ 10,519 |
Effective tax rate | 16.70% | 18.20% | 32.30% |
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 | |
Income Taxes [Line Items] | ||||
Statutory Canadian tax rate | 21.00% | 35.00% | ||
Deferred tax assets, valuation allowances | $ 12,884 | $ 12,811 | ||
Valuation allowances recorded on operating losses in certain tax jurisdictions | 300 | 400 | ||
Loss carryforwards | 3,700 | 3,700 | ||
Capital loss carryforward | 5,700 | 5,700 | ||
Tax credits | 2,800 | 2,600 | ||
Undistributed earnings of foreign subsidiaries | 135,600 | |||
Estimated unrecognized income tax and foreign tax liabilities related to undistributed earnings of foreign subsidiaries | 300 | |||
Unrecognized tax benefits | 4,725 | 4,089 | $ 4,962 | $ 5,490 |
Unrecognized tax benefits that will impact tax rate if recognized | 3,600 | 3,400 | ||
Unrecognized tax benefit income tax interest and penalties accrued | 500 | 400 | ||
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 | 500 | 200 | ||
CANADA | ||||
Income Taxes [Line Items] | ||||
Deferred tax assets, valuation allowances | 400 | |||
Loss carryforwards | $ 3,000 | $ 2,700 | ||
Operating loss carryforwards expiration year | 2,033 | 2,032 | ||
Capital loss carryforward | $ 5,200 | $ 5,200 | ||
Tax credits | 1,900 | 1,900 | ||
CANADA | Tax Credit That Will Expire In Certain Period | ||||
Income Taxes [Line Items] | ||||
Tax credits | $ 1,200 | $ 1,200 | ||
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 | $ 700 | $ 1,000 | ||
Operating loss carryforwards expiration year | 2,037 | 2,036 | ||
Tax credits | $ 900 | $ 700 | ||
UNITED STATES | Tax Credit That Will Expire In Certain Period | ||||
Income Taxes [Line Items] | ||||
Tax credits | $ 800 | $ 600 | ||
Tax credits, expiration Year | 2,033 | 2,032 | ||
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 |
Significant Components of Defer
Significant Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Losses | $ 9,385 | $ 9,407 |
Compensation related deductions | 4,780 | 3,687 |
Inventories | 4,170 | 3,400 |
Tax credits | 2,785 | 2,594 |
Unrealized currency gains/losses | 183 | |
Restructuring related liabilities | 202 | 172 |
Warranty | 35 | 768 |
Other | 885 | |
Total deferred tax assets | 22,242 | 20,211 |
Valuation allowance on deferred tax assets | (12,884) | (12,811) |
Net deferred tax assets | 9,358 | 7,400 |
Deferred tax liabilities: | ||
Depreciation | (1,867) | (1,353) |
Amortization | (20,258) | (23,496) |
Unrealized currency gains/losses | (373) | |
Other | (1,171) | |
Total deferred tax liabilities | (22,498) | (26,020) |
Net deferred income tax (liabilities) | $ (13,140) | $ (18,620) |
Reconciliation of Total Amounts
Reconciliation of Total Amounts of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Beginning balance of unrecognized tax benefits | $ 4,089 | $ 4,962 | $ 5,490 |
Additions based on tax positions related to the current year | 394 | 991 | 561 |
Additions for tax positions of prior years | 655 | 496 | 88 |
Reductions to tax positions of prior years | (69) | (28) | (45) |
Reductions to tax positions resulting from a lapse of the applicable statute of limitations | (239) | (1,577) | (842) |
Settlements with tax authorities | (105) | (755) | (290) |
Ending balance of unrecognized tax benefits | $ 4,725 | $ 4,089 | $ 4,962 |
Income Tax Returns to be Review
Income Tax Returns to be Reviewed (Details) | 12 Months Ended |
Dec. 31, 2018 | |
UNITED STATES | |
Income Tax Examination [Line Items] | |
Income tax returns to be reviewed | 2,015 |
CANADA | |
Income Tax Examination [Line Items] | |
Income tax returns to be reviewed | 2,015 |
UNITED KINGDOM | |
Income Tax Examination [Line Items] | |
Income tax returns to be reviewed | 2,017 |
GERMANY | |
Income Tax Examination [Line Items] | |
Income tax returns to be reviewed | 2,014 |
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 | 2,009 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring Cost And Reserve [Line Items] | |||
Total restructuring and divestiture related charges | $ 2,025 | $ 346 | $ 2,970 |
Acquisition and related charges | 6,016 | 7,196 | 4,975 |
Total restructuring, acquisition and divestiture related costs | 8,041 | 7,542 | 7,945 |
2019 Restructuring | |||
Restructuring Cost And Reserve [Line Items] | |||
Total restructuring and divestiture related charges | 378 | ||
2018 Restructuring | |||
Restructuring Cost And Reserve [Line Items] | |||
Total restructuring and divestiture related charges | $ 1,647 | ||
2016 Restructuring | |||
Restructuring Cost And Reserve [Line Items] | |||
Total restructuring and divestiture related charges | 332 | 3,049 | |
2011 Restructuring | |||
Restructuring Cost And Reserve [Line Items] | |||
Total restructuring and divestiture related charges | $ 14 | $ (79) |
Restructuring, Acquisition an_3
Restructuring, Acquisition and Divestiture Related Costs - Additional Information (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | 86 Months Ended | ||||
Dec. 31, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018Facility | |
Restructuring and Acquisition Related Costs [Line Items] | |||||||
Restructuring Costs | $ 2,025 | $ 346 | $ 2,970 | ||||
Proceeds from the sale of property, plant and equipment | 267 | 46 | 7,037 | ||||
Cash payments | 1,490 | 1,212 | |||||
Acquisition and related charges | 6,016 | 7,196 | 4,975 | ||||
Finders' Fees, Legal, Valuation And Other Professional Or Consulting Fees | |||||||
Restructuring and Acquisition Related Costs [Line Items] | |||||||
Acquisition and related charges | 1,400 | 6,800 | 2,500 | ||||
Earn-out Agreement | |||||||
Restructuring and Acquisition Related Costs [Line Items] | |||||||
Acquisition and related charges | 4,600 | 400 | 2,500 | ||||
Scenario, Forecast | |||||||
Restructuring and Acquisition Related Costs [Line Items] | |||||||
Cash payments | $ 1,100 | ||||||
Severance Costs | |||||||
Restructuring and Acquisition Related Costs [Line Items] | |||||||
Cash payments | $ 962 | 692 | |||||
2019 Restructuring | |||||||
Restructuring and Acquisition Related Costs [Line Items] | |||||||
Restructuring plan | During the fourth quarter of 2018, the Company implemented a restructuring plan intended to realign operations, reduce costs, achieve operational efficiencies and focus resources on growth initiatives. In 2018, the Company recorded $0.4 million in severance and related costs in connection with the 2019 restructuring plan. These costs were primarily reported in the Vision reportable segment. The Company anticipates completing the 2019 restructuring program in 2019 and expects to incur restructuring charges of $2.0 million to $3.5 million related to the 2019 restructuring program in the next twelve months. | ||||||
Restructuring Costs | $ 378 | ||||||
2019 Restructuring | Additional Restructuring Costs | Minimum | Scenario, Forecast | |||||||
Restructuring and Acquisition Related Costs [Line Items] | |||||||
Restructuring Costs | 2,000 | ||||||
2019 Restructuring | Additional Restructuring Costs | Maximum | Scenario, Forecast | |||||||
Restructuring and Acquisition Related Costs [Line Items] | |||||||
Restructuring Costs | $ 3,500 | ||||||
2019 Restructuring | Vision | Severance Costs | |||||||
Restructuring and Acquisition Related Costs [Line Items] | |||||||
Restructuring Costs | $ 400 | ||||||
2018 Restructuring | |||||||
Restructuring and Acquisition Related Costs [Line Items] | |||||||
Restructuring plan | During the second quarter of 2018, the Company initiated a program to integrate manufacturing operations as a result of recent acquisition activities. In 2018, the Company recorded $1.6 million in severance and related costs in connection with the 2018 restructuring plan. The Company anticipates completing the 2018 restructuring program during the third quarter of 2019. | ||||||
Restructuring Costs | $ 1,647 | ||||||
2018 Restructuring | Severance Costs | |||||||
Restructuring and Acquisition Related Costs [Line Items] | |||||||
Restructuring Costs | 1,600 | ||||||
2018 Restructuring | Vision | |||||||
Restructuring and Acquisition Related Costs [Line Items] | |||||||
Restructuring Costs | $ 1,579 | ||||||
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. 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 | |||||
Cumulative restructuring costs | 6,500 | ||||||
2016 Restructuring | Vision | |||||||
Restructuring and Acquisition Related Costs [Line Items] | |||||||
Restructuring Costs | 331 | 1,862 | |||||
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. 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) | |||||
Number of facilities exited | Facility | 11 | ||||||
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 termination of lease | $ 200 |
Summary of Restructuring Costs
Summary of Restructuring Costs for Each Segment and Unallocated Corporate Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | 18 Months Ended | 73 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2017 | |
Restructuring Cost And Reserve [Line Items] | |||||
Restructuring Costs | $ 2,025 | $ 346 | $ 2,970 | ||
2018 Restructuring | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Restructuring Costs | 1,647 | ||||
2018 Restructuring | Minimum | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Expected Cumulative Costs | 2,400 | ||||
2018 Restructuring | Maximum | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Expected Cumulative Costs | 2,700 | ||||
2018 Restructuring | Vision | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Restructuring Costs | 1,579 | ||||
2018 Restructuring | Vision | Minimum | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Expected Cumulative Costs | 2,300 | ||||
2018 Restructuring | Vision | Maximum | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Expected Cumulative Costs | 2,600 | ||||
2018 Restructuring | Unallocated Corporate and Shared Services | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Restructuring Costs | 68 | ||||
2018 Restructuring | Unallocated Corporate and Shared Services | Minimum | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Expected Cumulative Costs | $ 100 | ||||
2016 Restructuring | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Restructuring Costs | 332 | 3,049 | |||
Cumulative Costs | $ 6,529 | ||||
2016 Restructuring | Photonics | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Restructuring Costs | 813 | ||||
Cumulative Costs | 868 | ||||
2016 Restructuring | Vision | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Restructuring Costs | 331 | 1,862 | |||
Cumulative Costs | 4,393 | ||||
2016 Restructuring | Precision Motion | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Restructuring Costs | 106 | ||||
Cumulative Costs | 939 | ||||
2016 Restructuring | Unallocated Corporate and Shared Services | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Restructuring Costs | 1 | 268 | |||
Cumulative Costs | $ 329 | ||||
2011 Restructuring | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Restructuring Costs | 14 | (79) | |||
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 | |||
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, 2018 | Dec. 31, 2017 | ||
Restructuring Cost And Reserve [Line Items] | |||
Accrued expense beginning balance | $ 806 | $ 1,736 | |
Restructuring charges | 2,025 | 346 | |
Cash payments | (1,490) | (1,212) | |
Non-cash write-offs and other adjustments | (65) | (64) | |
Accrued expense ending balance | 1,276 | 806 | |
Severance | |||
Restructuring Cost And Reserve [Line Items] | |||
Accrued expense beginning balance | 39 | 611 | |
Restructuring charges | 1,862 | 185 | |
Cash payments | (962) | (692) | |
Non-cash write-offs and other adjustments | (63) | (65) | |
Accrued expense ending balance | 876 | 39 | |
Facility | |||
Restructuring Cost And Reserve [Line Items] | |||
Accrued expense beginning balance | 763 | 1,111 | |
Restructuring charges | 146 | ||
Cash payments | (373) | (503) | |
Non-cash write-offs and other adjustments | (2) | 9 | |
Accrued expense ending balance | 388 | 763 | |
Other Restructuring Charges | |||
Restructuring Cost And Reserve [Line Items] | |||
Accrued expense beginning balance | [1] | 4 | 14 |
Restructuring charges | [1] | 163 | 15 |
Cash payments | [1] | (155) | (17) |
Non-cash write-offs and other adjustments | [1] | (8) | |
Accrued expense ending balance | [1] | $ 12 | $ 4 |
[1] | Other restructuring charges mainly related to consulting fees and relocation costs. |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)Customer | Dec. 31, 2017USD ($)Customer | Dec. 31, 2016USD ($) | |
Commitments and Contingencies Disclosure [Line Items] | |||
Lease expense | $ 7.4 | $ 5.5 | $ 4.2 |
Purchase commitments | 99 | ||
Purchase commitments, 2019 | 93.9 | ||
Purchase commitments, 2020 | $ 5.1 | ||
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 | 2,019 | ||
Maximum | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Lease agreement expiration year | 2,031 | ||
Land | Maximum | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Lease agreement expiration year | 2,078 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Gross Assets under Capital Lease (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Capital Leased Assets [Line Items] | ||
Total gross assets under capital lease | $ 13,537 | $ 13,562 |
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 | $ 4,404 | $ 4,429 |
Future Minimum Lease Payments u
Future Minimum Lease Payments under Operating and Capital Leases (Details) $ in Thousands | Dec. 31, 2018USD ($) | |
Operating Leases | ||
2,019 | $ 7,797 | |
2,020 | 6,263 | |
2,021 | 5,757 | |
2,022 | 5,264 | |
2,023 | 4,719 | |
Thereafter | 26,149 | |
Total minimum lease payments | 55,949 | |
Capital Leases | ||
2,019 | 990 | [1] |
2,020 | 980 | [1] |
2,021 | 907 | [1] |
2,022 | 907 | [1] |
2,023 | 930 | [1] |
Thereafter | 5,394 | [1] |
Total minimum lease payments | $ 10,108 | [1] |
[1] | Capital lease payments include interest payments of $2.3 million |
Future Minimum Lease Payments_2
Future Minimum Lease Payments under Operating and Capital Leases (Parenthetical) (Details) $ in Millions | Dec. 31, 2018USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Capital lease payments interest included in payment | $ 2.3 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||
Revenue | $ 614,337 | $ 521,290 | $ 384,758 |
Board of Directors | |||
Related Party Transaction [Line Items] | |||
Revenue | 40,000 | ||
Receivables from customers | $ 600 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2018CustomerSegmentEndMarket | Dec. 31, 2017Customer | Dec. 31, 2016Customer | |
Segment Reporting [Abstract] | |||
Number of reportable segments | Segment | 3 | ||
Number of primary end market segments | EndMarket | 2 | ||
Number of customers exceeded ten percentage of revenue | Customer | 0 | 0 | 0 |
Revenue, Gross Profit and Opera
Revenue, Gross Profit and Operating Income (Loss) by Reportable Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 614,337 | $ 521,290 | $ 384,758 |
Gross Profit | 261,528 | 220,531 | 162,452 |
Operating Income (Loss) | 71,013 | 57,566 | 32,955 |
Unallocated Corporate and Shared Services | |||
Segment Reporting Information [Line Items] | |||
Gross Profit | (2,256) | (1,399) | (1,469) |
Operating Income (Loss) | (28,937) | (29,123) | (22,086) |
Photonics | |||
Segment Reporting Information [Line Items] | |||
Revenue | 249,339 | 232,359 | 174,158 |
Photonics | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Gross Profit | 117,109 | 106,117 | 76,696 |
Operating Income (Loss) | 59,285 | 51,660 | 35,217 |
Vision | |||
Segment Reporting Information [Line Items] | |||
Revenue | 232,902 | 183,074 | 122,250 |
Vision | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Gross Profit | 87,198 | 69,249 | 47,181 |
Operating Income (Loss) | 8,991 | 7,883 | (1,277) |
Precision Motion | |||
Segment Reporting Information [Line Items] | |||
Revenue | 132,096 | 105,857 | 88,350 |
Precision Motion | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Gross Profit | 59,477 | 46,564 | 40,044 |
Operating Income (Loss) | $ 31,674 | $ 27,146 | $ 21,101 |
Depreciation and Amortization E
Depreciation and Amortization Expenses by Reportable Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Depreciation and Amortization Expenses | |||
Depreciation and amortization expenses | $ 37,052 | $ 30,758 | $ 20,973 |
Unallocated Corporate and Shared Services | |||
Depreciation and Amortization Expenses | |||
Depreciation and amortization expenses | 726 | 1,054 | 1,394 |
Photonics | Operating Segments | |||
Depreciation and Amortization Expenses | |||
Depreciation and amortization expenses | 12,042 | 13,806 | 6,738 |
Vision | Operating Segments | |||
Depreciation and Amortization Expenses | |||
Depreciation and amortization expenses | 20,657 | 13,590 | 10,402 |
Precision Motion | Operating Segments | |||
Depreciation and Amortization Expenses | |||
Depreciation and amortization expenses | $ 3,627 | $ 2,308 | $ 2,439 |
Accounts Receivable and Invento
Accounts Receivable and Inventory by Reportable Segments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Receivable | ||
Total accounts receivable | $ 83,955 | $ 81,482 |
Inventories | ||
Total inventories | 104,764 | 91,278 |
Total segment assets | 188,719 | 172,760 |
Photonics | ||
Accounts Receivable | ||
Total accounts receivable | 31,536 | 33,490 |
Inventories | ||
Total inventories | 41,623 | 44,451 |
Vision | ||
Accounts Receivable | ||
Total accounts receivable | 34,414 | 36,089 |
Inventories | ||
Total inventories | 42,498 | 33,836 |
Precision Motion | ||
Accounts Receivable | ||
Total accounts receivable | 18,005 | 11,903 |
Inventories | ||
Total inventories | $ 20,643 | $ 12,991 |
Total Assets by Reportable Segm
Total Assets by Reportable Segments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
ASSETS | ||||
Total segment assets | $ 188,719 | $ 172,760 | ||
Cash and cash equivalents | 82,043 | 100,057 | $ 68,108 | $ 59,959 |
Prepaid income taxes and income taxes receivable | 1,852 | 4,387 | ||
Prepaid expenses and other current assets | 9,155 | 10,675 | ||
Property, plant and equipment, net | 65,464 | 61,718 | ||
Deferred tax assets | 9,492 | 7,052 | ||
Other assets | 2,269 | 4,018 | ||
Intangible assets, net | 142,920 | 155,048 | ||
Goodwill | 217,662 | 210,988 | ||
Total assets | $ 719,576 | $ 726,703 |
Schedule of Geographic Revenue
Schedule of Geographic Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 614,337 | $ 521,290 | $ 384,758 |
Geographic Concentration Risk | Revenue from Contract with Customer | |||
Segment Reporting Information [Line Items] | |||
Percentage of Total | 100.00% | 100.00% | 100.00% |
United States | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 242,243 | $ 220,583 | $ 154,756 |
United States | Geographic Concentration Risk | Revenue from Contract with Customer | |||
Segment Reporting Information [Line Items] | |||
Percentage of Total | 39.40% | 42.30% | 40.20% |
Germany | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 88,027 | $ 68,003 | $ 55,940 |
Germany | Geographic Concentration Risk | Revenue from Contract with Customer | |||
Segment Reporting Information [Line Items] | |||
Percentage of Total | 14.30% | 13.00% | 14.50% |
Rest of Europe | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 105,608 | $ 81,001 | $ 51,705 |
Rest of Europe | Geographic Concentration Risk | Revenue from Contract with Customer | |||
Segment Reporting Information [Line Items] | |||
Percentage of Total | 17.20% | 15.50% | 13.40% |
China | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 66,414 | $ 56,128 | $ 44,225 |
China | Geographic Concentration Risk | Revenue from Contract with Customer | |||
Segment Reporting Information [Line Items] | |||
Percentage of Total | 10.80% | 10.80% | 11.50% |
Rest of Asia-Pacific | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 104,300 | $ 84,727 | $ 60,104 |
Rest of Asia-Pacific | Geographic Concentration Risk | Revenue from Contract with Customer | |||
Segment Reporting Information [Line Items] | |||
Percentage of Total | 17.00% | 16.30% | 15.60% |
Other Countries | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 7,745 | $ 10,848 | $ 18,028 |
Other Countries | Geographic Concentration Risk | Revenue from Contract with Customer | |||
Segment Reporting Information [Line Items] | |||
Percentage of Total | 1.30% | 2.10% | 4.80% |
Summary of Long-lived Assets (D
Summary of Long-lived Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Long-Lived Assets by Geographical Areas [Line Items] | ||
Property, plant and equipment, net | $ 65,464 | $ 61,718 |
United States | ||
Long-Lived Assets by Geographical Areas [Line Items] | ||
Property, plant and equipment, net | 32,029 | 29,920 |
Europe | ||
Long-Lived Assets by Geographical Areas [Line Items] | ||
Property, plant and equipment, net | 31,696 | 30,621 |
China | ||
Long-Lived Assets by Geographical Areas [Line Items] | ||
Property, plant and equipment, net | 1,636 | 1,127 |
Rest of Asia-Pacific | ||
Long-Lived Assets by Geographical Areas [Line Items] | ||
Property, plant and equipment, net | $ 103 | $ 50 |
Schedule of Revenue by End Mark
Schedule of Revenue by End Market (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Total revenue by end market | 100.00% | 100.00% | 100.00% |
Advanced Industrial | |||
Segment Reporting Information [Line Items] | |||
Total revenue by end market | 50.00% | 50.00% | 60.00% |
Medical | |||
Segment Reporting Information [Line Items] | |||
Total revenue by end market | 50.00% | 50.00% | 40.00% |