Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 29, 2019 | May 03, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 29, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | NOVT | |
Entity Registrant Name | NOVANTA INC | |
Entity Central Index Key | 0001076930 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 34,994,476 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 29, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 74,074 | $ 82,043 |
Accounts receivable, net of allowance of $272 and $321, respectively | 89,437 | 83,955 |
Inventories | 106,784 | 104,764 |
Prepaid income taxes and income taxes receivable | 4,269 | 1,852 |
Prepaid expenses and other current assets | 11,996 | 9,155 |
Total current assets | 286,560 | 281,769 |
Property, plant and equipment, net | 64,754 | 65,464 |
Operating lease assets | 35,374 | |
Deferred tax assets | 9,544 | 9,492 |
Other assets | 2,174 | 2,269 |
Intangible assets, net | 136,629 | 142,920 |
Goodwill | 217,625 | 217,662 |
Total assets | 752,660 | 719,576 |
Current liabilities | ||
Current portion of long-term debt | 2,240 | 4,535 |
Accounts payable | 50,554 | 50,733 |
Income taxes payable | 1,923 | 2,633 |
Current portion of operating lease liabilities | 5,198 | |
Accrued expenses and other current liabilities | 41,174 | 46,295 |
Total current liabilities | 101,089 | 104,196 |
Long-term debt | 198,203 | 202,843 |
Operating lease liabilities | 31,808 | |
Deferred tax liabilities | 22,534 | 22,632 |
Income taxes payable | 4,647 | 4,463 |
Other liabilities | 14,678 | 17,187 |
Total liabilities | 372,959 | 351,321 |
Commitments and contingencies (Note 14) | ||
Stockholders’ equity: | ||
Common shares, no par value; Authorized shares: unlimited; Issued and outstanding: 34,998 and 34,886, respectively | 423,856 | 423,856 |
Additional paid-in capital | 42,855 | 46,018 |
Accumulated deficit | (66,839) | (79,092) |
Accumulated other comprehensive loss | (20,171) | (22,527) |
Total stockholders' equity | 379,701 | 368,255 |
Total liabilities and stockholders’ equity | $ 752,660 | $ 719,576 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 29, 2019 | Dec. 31, 2018 | |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 272 | $ 321 |
Common shares, Authorized | Unlimited | Unlimited |
Common shares, no par value | $ 0 | $ 0 |
Common shares, Issued | 34,998 | 34,886 |
Common shares, outstanding | 34,998 | 34,886 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||||
Mar. 29, 2019 | Mar. 30, 2018 | ||||
Income Statement [Abstract] | |||||
Revenue | $ 157,186 | $ 146,965 | |||
Cost of revenue | 90,897 | 84,806 | |||
Gross profit | 66,289 | 62,159 | |||
Operating expenses: | |||||
Research and development and engineering | 13,997 | 11,989 | |||
Selling, general and administrative | 31,847 | 29,220 | |||
Amortization of purchased intangible assets | 3,998 | 3,698 | |||
Restructuring and acquisition related costs | 2,054 | 25 | |||
Total operating expenses | 51,896 | 44,932 | |||
Operating income | 14,393 | 17,227 | |||
Interest income (expense), net | (2,044) | (2,358) | |||
Foreign exchange transaction gains (losses), net | 41 | (407) | |||
Other income (expense), net | (68) | (41) | |||
Income before income taxes | 12,322 | 14,421 | |||
Income tax provision | 69 | 1,584 | |||
Consolidated net income | 12,253 | [1] | 12,837 | [2] | |
Less: Net income attributable to noncontrolling interest | [2] | (926) | |||
Net income attributable to Novanta Inc. | $ 12,253 | [1] | $ 11,911 | [2] | |
Earnings per common share attributable to Novanta Inc. (Note 4): | |||||
Basic | $ 0.35 | [1] | $ 0.19 | [2] | |
Diluted | $ 0.35 | [1] | $ 0.18 | [2] | |
Weighted average common shares outstanding—basic | 34,958 | [1] | 34,887 | [2] | |
Weighted average common shares outstanding—diluted | 35,474 | [1] | 35,428 | [2] | |
[1] | 45,252 non-GAAP EPS performance restricted stock units granted to certain members of the executive management team and 213,219 shares of restricted stock issued to Laser Quantum former non-controlling interest holders are considered contingently issuable shares and are excluded from the calculation of the denominator as the contingent conditions had not been met as of March 29, 2019. | ||||
[2] | 53,968 non-GAAP EPS performance restricted stock units granted to certain members of the executive management team were considered contingently issuable shares and were excluded from the calculation of the denominator as the contingent conditions had not been met as of March 30, 2018. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 29, 2019 | Mar. 30, 2018 | ||||
Statement Of Income And Comprehensive Income [Abstract] | |||||
Consolidated net income | $ 12,253 | [1] | $ 12,837 | [2] | |
Other comprehensive income (loss): | |||||
Foreign currency translation adjustments, net of tax | [3] | 2,339 | 3,671 | ||
Pension liability adjustments, net of tax | [4] | 17 | (116) | ||
Total other comprehensive income | 2,356 | 3,555 | |||
Total consolidated comprehensive income | 14,609 | 16,392 | |||
Less: Comprehensive income attributable to noncontrolling interest | (926) | ||||
Comprehensive income attributable to Novanta Inc. | $ 14,609 | $ 15,466 | |||
[1] | 45,252 non-GAAP EPS performance restricted stock units granted to certain members of the executive management team and 213,219 shares of restricted stock issued to Laser Quantum former non-controlling interest holders are considered contingently issuable shares and are excluded from the calculation of the denominator as the contingent conditions had not been met as of March 29, 2019. | ||||
[2] | 53,968 non-GAAP EPS performance restricted stock units granted to certain members of the executive management team were considered contingently issuable shares and were excluded from the calculation of the denominator as the contingent conditions had not been met as of March 30, 2018. | ||||
[3] | The tax effect on this component of comprehensive income was nominal for all periods presented. | ||||
[4] | The tax effect on this component of comprehensive income was nominal for all periods presented. See Note 3 for the total amount of pension liability adjustments reclassified out of accumulated other comprehensive income (loss). |
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, 2017 | $ 311,545 | $ 423,856 | $ 33,309 | $ (17,880) | $ (127,740) | |
Balance (in shares) at Dec. 31, 2017 | 34,595 | |||||
Net income | 11,911 | [1] | 11,911 | |||
Redeemable noncontrolling interest redemption value adjustment | (5,399) | [1] | (5,399) | |||
Common stock issued under stock plans (in shares) | 141 | |||||
Shares withheld for taxes on vested stock awards | (2,804) | (2,804) | ||||
Shares withheld for taxes on vested stock awards (in shares) | (51) | |||||
Share-based compensation | 2,044 | 2,044 | ||||
Adoption of ASU 2016-16 | ASU 2016-16 | (2,242) | (2,242) | ||||
Other comprehensive income (loss), net of tax | 3,555 | 3,555 | ||||
Balance at Mar. 30, 2018 | 318,610 | $ 423,856 | 32,549 | (14,325) | (123,470) | |
Balance (in shares) at Mar. 30, 2018 | 34,685 | |||||
Balance at Dec. 31, 2018 | 368,255 | $ 423,856 | 46,018 | (22,527) | (79,092) | |
Balance (in shares) at Dec. 31, 2018 | 34,886 | |||||
Net income | 12,253 | [2] | 12,253 | |||
Common stock issued under stock plans (in shares) | 186 | |||||
Shares withheld for taxes on vested stock awards | (5,890) | (5,890) | ||||
Shares withheld for taxes on vested stock awards (in shares) | (74) | |||||
Share-based compensation | 2,727 | 2,727 | ||||
Other comprehensive income (loss), net of tax | 2,356 | 2,356 | ||||
Balance at Mar. 29, 2019 | $ 379,701 | $ 423,856 | $ 42,855 | $ (20,171) | $ (66,839) | |
Balance (in shares) at Mar. 29, 2019 | 34,998 | |||||
[1] | 53,968 non-GAAP EPS performance restricted stock units granted to certain members of the executive management team were considered contingently issuable shares and were excluded from the calculation of the denominator as the contingent conditions had not been met as of March 30, 2018. | |||||
[2] | 45,252 non-GAAP EPS performance restricted stock units granted to certain members of the executive management team and 213,219 shares of restricted stock issued to Laser Quantum former non-controlling interest holders are considered contingently issuable shares and are excluded from the calculation of the denominator as the contingent conditions had not been met as of March 29, 2019. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 29, 2019 | Mar. 30, 2018 | |||
Cash flows from operating activities: | ||||
Consolidated net income | $ 12,253 | [1] | $ 12,837 | [2] |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 9,074 | 9,067 | ||
Provision for inventory excess and obsolescence | 491 | 810 | ||
Share-based compensation | 2,727 | 2,044 | ||
Deferred income taxes | (24) | 235 | ||
Other | 29 | 94 | ||
Changes in assets and liabilities which (used)/provided cash, excluding effects from business acquisitions: | ||||
Accounts receivable | (5,403) | 5,421 | ||
Inventories | (2,571) | (7,423) | ||
Prepaid income taxes, income taxes receivable, prepaid expenses and other current assets | (5,174) | 3,918 | ||
Accounts payable, income taxes payable, accrued expenses and other current liabilities | (6,526) | (6,357) | ||
Other non-current assets and liabilities | 581 | (237) | ||
Cash provided by operating activities | 5,457 | 20,409 | ||
Cash flows from investing activities: | ||||
Purchases of property, plant and equipment | (2,429) | (2,933) | ||
Other investing activities | 24 | 52 | ||
Cash used in investing activities | (2,405) | (2,881) | ||
Cash flows from financing activities: | ||||
Repayments of term loan and revolving credit facility | (4,600) | (5,300) | ||
Payments of withholding taxes from stock-based awards | (5,890) | (2,804) | ||
Finance lease payments | (140) | (142) | ||
Acquisition of noncontrolling interest | (74) | |||
Cash used in financing activities | (10,630) | (8,320) | ||
Effect of exchange rates on cash and cash equivalents | (391) | 1,862 | ||
Increase (decrease) in cash and cash equivalents | (7,969) | 11,070 | ||
Cash and cash equivalents, beginning of the period | 82,043 | 100,057 | ||
Cash and cash equivalents, end of the period | 74,074 | 111,127 | ||
Supplemental disclosure of cash flow information: | ||||
Cash paid for interest | 1,894 | 2,142 | ||
Cash paid for income taxes | 3,262 | 3,896 | ||
Income tax refunds received | $ 262 | $ 507 | ||
[1] | 45,252 non-GAAP EPS performance restricted stock units granted to certain members of the executive management team and 213,219 shares of restricted stock issued to Laser Quantum former non-controlling interest holders are considered contingently issuable shares and are excluded from the calculation of the denominator as the contingent conditions had not been met as of March 29, 2019. | |||
[2] | 53,968 non-GAAP EPS performance restricted stock units granted to certain members of the executive management team were considered contingently issuable shares and were excluded from the calculation of the denominator as the contingent conditions had not been met as of March 30, 2018. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 29, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 1. Basis of 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. The accompanying unaudited interim consolidated financial statements have been prepared by the Company in United States (“U.S.”) dollars and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”), the instructions to Form 10-Q and the provisions of Regulation S-X pertaining to interim financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted. The interim consolidated financial statements and notes included in this report should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. In the opinion of management, these interim consolidated financial statements include all adjustments and accruals of a normal and recurring nature necessary to fairly state the results of the interim periods presented. The results for interim periods are not necessarily indicative of results to be expected for the full year or for any future periods. The Company’s unaudited interim financial statements are prepared for each quarterly period ending on the Friday closest to the end of the calendar quarter, with the exception of the fourth quarter which always ends on December 31. 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. Recent Accounting Pronouncements The following table provides a brief description of recent Accounting Standard Updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”): Standard Description Effective Date Effect on the Financial Statements or Other Significant Matters In August 2018, the FASB issued ASU 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 should be applied either retrospectively or prospectively. January 1, 2020. Early adoption is permitted. The Company adopted ASU 2018-15 on a prospective basis during the first quarter of 2019. The adoption of ASU 2018-15 did not have a material impact on the Company’s consolidated financial statements. 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 under the Tax Reform Act is recognized. January 1, 2019. The Company adopted ASU 2018-02 during the first quarter of 2019. The adoption of ASU 2018-02 did not have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” 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. January 1, 2019. The Company adopted ASU 2016-02 during the first quarter of 2019 using the modified retrospective approach. In addition, the Company elected the package of practical expedients permitted under the transition guidance. The adoption of ASU 2016-02 resulted in the recording of additional net operating lease right-of-use (“ROU”) assets and operating lease liabilities of approximately $35.3 million and $36.5 million, respectively, as of January 1, 2019. The adoption of ASU 2016-02 did not have an impact on the Company’s Accumulated deficit, consolidated statement of operations, or consolidated statement of cash flows. |
Revenue
Revenue | 3 Months Ended |
Mar. 29, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | 2. 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 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. The Company does not disclose the value of the remaining performance obligation for contracts with an original expected length of 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 revenue. As of March 29, 2019 and December 31, 2018, contract liabilities were $3.7 million and $4.7 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 three months ended March 29, 2019 is primarily due to $1.9 million of revenue recognized during the period that was included in the contract liability balance at December 31, 2018, partially offset by cash payments received in advance of satisfying performance obligations. Disaggregated Revenue See Note 16 for the Company’s disaggregation of revenue by segment, geography and end market. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 29, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 3. Accumulated Other Comprehensive Income (Loss) Changes in accumulated other comprehensive income (loss) was as follows (in thousands): Total Accumulated Other Cumulative Pension Comprehensive Translation Liability Income (Loss) Adjustments Adjustments Balance at December 31, 2018 $ (22,527 ) $ (12,485 ) $ (10,042 ) Other comprehensive income (loss) 2,105 2,339 (234 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) 251 — 251 Balance at March 29, 2019 $ (20,171 ) $ (10,146 ) $ (10,025 ) (1) The amounts reclassified from other comprehensive income (loss) were included in other income (expense) in the consolidated statements of operations. |
Earnings per Common Share
Earnings per Common Share | 3 Months Ended |
Mar. 29, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Common Share | 4. 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 period. The Company recognized changes in the redeemable noncontrolling interest redemption value by adjusting the carrying amount of the redeemable noncontrolling interest as of the end of the applicable period to the higher of: (i) the estimated redemption value assuming the end of the period was also the redemption date or (ii) the carrying value without any redemption value adjustments. Such adjustments were 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 were 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, 2017 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, as well as 2018 and 2019 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. The following table sets forth the computation of basic and diluted earnings per common share (amounts in thousands, except per share data): Three March 29, March 30, 2019 (1) 2018 (2) Numerators: Consolidated net income $ 12,253 $ 12,837 Less: Net income attributable to noncontrolling interest — (926 ) Net income attributable to Novanta Inc. 12,253 11,911 Redeemable noncontrolling interest redemption value adjustment — (5,399 ) Net income attributable to Novanta Inc. after adjustment for redeemable noncontrolling interest redemption value $ 12,253 $ 6,512 Denominators: Weighted average common shares outstanding— basic 34,958 34,887 Dilutive potential common shares 516 541 Weighted average common shares outstanding— diluted 35,474 35,428 Antidilutive common shares excluded from above 58 12 Earnings per Common Share Attributable to Novanta Inc.: Basic $ 0.35 $ 0.19 Diluted $ 0.35 $ 0.18 (1) 45,252 non-GAAP EPS performance restricted stock units granted to certain members of the executive management team and 213,219 shares of restricted stock issued to Laser Quantum former non-controlling interest holders are considered contingently issuable shares and are excluded from the calculation of the denominator as the contingent conditions had not been met as of March 29, 2019. (2) 53,968 non-GAAP EPS performance restricted stock units granted to certain members of the executive management team were considered contingently issuable shares and were excluded from the calculation of the denominator as the contingent conditions had not been met as of March 30, 2018. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 29, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 5. Fair Value Measurements ASC 820, “Fair Value Measurements,” 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 former owners are eligible to receive contingent consideration based on the achievement of certain revenue targets from 2018 to 2021 by the Company from products using such technologies. 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. There were no changes to the fair value of the contingent consideration during the three months ended March 29, 2019. Summary by Fair Value Hierarchy The following table summarizes the fair values of the Company’s assets and liabilities measured at fair value on a recurring basis as of March 29, 2019 (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 $ 3,252 $ 3,252 $ — $ — Prepaid expenses and other current assets: Foreign currency forward contracts 296 — 296 — $ 3,548 $ 3,252 $ 296 $ — Liabilities Accrued expenses and other current liabilities: Contingent consideration - Current $ 1,248 $ — $ — $ 1,248 Foreign currency forward contracts 6 — 6 — Other liabilities: Contingent consideration - Long-term 2,128 — — 2,128 $ 3,382 $ — $ 6 $ 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, 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 As of March 29, 2019, the significant unobservable inputs used in the fair value measurement of the Company’s contingent consideration were 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 9 to Consolidated Financial Statements for a discussion of the estimated fair value of the Company’s outstanding debt. |
Foreign Currency Contracts
Foreign Currency Contracts | 3 Months Ended |
Mar. 29, 2019 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Foreign Currency Contracts | 6. 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 exposures to counterparty risks on derivative instruments by entering into contracts with a diversified group of major financial institutions and by actively monitoring outstanding positions. The Company uses 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 currencies 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 March 29, 2019, the aggregate notional amount and fair value of the Company’s foreign currency forward contracts was $25.5 million and a net gain of $0.3 million, respectively. As of December 31, 2018, the aggregate 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. The Company recognized an aggregate net loss of $0.5 million for the three months ended March 29, 2019, and an aggregate net gain of $0.7 million for the three months ended March 30, 2018. These amounts were included in foreign exchange transaction gains (losses) in the consolidated statement of operations for all periods presented. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 29, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets Goodwill Goodwill is recorded when the consideration for a business combination exceeds the fair value of net tangible and identifiable intangible assets acquired. The Company tests its goodwill balances annually for impairment 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 performed the most recent annual goodwill and indefinite-lived intangible asset impairment test as of the beginning of the second quarter of 2018 and noted no impairment of goodwill. The following table summarizes changes in goodwill during the three months ended March 29, 2019 (in thousands): Balance at beginning of the period $ 217,662 Effect of foreign exchange rate changes (37 ) Balance at end of the period $ 217,625 Goodwill by reportable segment as of March 29, 2019 was as follows (in thousands): Reportable Segment Photonics Vision Precision Motion Total Goodwill $ 169,724 $ 153,953 $ 45,177 $ 368,854 Accumulated impairment of goodwill (102,461 ) (31,722 ) (17,046 ) (151,229 ) Total $ 67,263 $ 122,231 $ 28,131 $ 217,625 Goodwill by reportable segment as of December 31, 2018 was 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 Intangible Assets Intangible assets as of March 29, 2019 and December 31, 2018, respectively, are summarized as follows (in thousands): March 29, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable intangible assets: Patents and developed technologies $ 134,179 $ (89,045 ) $ 45,134 $ 134,034 $ (86,623 ) $ 47,411 Customer relationships 139,157 (67,591 ) 71,566 139,097 (64,174 ) 74,923 Customer backlog 1,766 (1,606 ) 160 1,738 (1,191 ) 547 Non-compete covenant 2,514 (2,514 ) — 2,514 (2,493 ) 21 Trademarks and trade names 15,965 (9,223 ) 6,742 15,915 (8,924 ) 6,991 Amortizable intangible assets 293,581 (169,979 ) 123,602 293,298 (163,405 ) 129,893 Non-amortizable intangible assets: Trade names 13,027 — 13,027 13,027 — 13,027 Totals $ 306,608 $ (169,979 ) $ 136,629 $ 306,325 $ (163,405 ) $ 142,920 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 was as follows (in thousands): Three March 29, March 30, 2019 2018 Amortization expense – cost of revenue $ 2,311 $ 2,480 Amortization expense – operating expenses 3,998 3,698 Total amortization expense $ 6,309 $ 6,178 Estimated amortization expense for each of the five succeeding years and thereafter as of March 29, 2019 was as follows (in thousands): Year Ending December 31, Cost of Revenue Operating Expenses Total 2019 (remainder of year) $ 6,912 $ 10,748 $ 17,660 2020 8,313 12,395 20,708 2021 7,397 11,475 18,872 2022 6,304 9,653 15,957 2023 5,408 8,118 13,526 Thereafter 10,800 26,079 36,879 Total $ 45,134 $ 78,468 $ 123,602 |
Supplementary Balance Sheet Inf
Supplementary Balance Sheet Information | 3 Months Ended |
Mar. 29, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Supplementary Balance Sheet Information | 8. Supplementary Balance Sheet Information The following tables provide the details of selected balance sheet items as of the periods indicated (in thousands): Inventories March 29, December 31, 2019 2018 Raw materials $ 69,305 $ 69,008 Work-in-process 16,071 15,982 Finished goods 19,666 17,337 Demo and consigned inventory 1,742 2,437 Total inventories $ 106,784 $ 104,764 Accrued Expenses and Other Current Liabilities March 29, December 31, 2019 2018 Accrued compensation and benefits $ 16,503 $ 24,545 Accrued warranty 4,884 4,510 Contract liabilities, current portion 3,338 4,165 Other 16,449 13,075 Total $ 41,174 $ 46,295 Accrued Warranty Three Months Ended March 29, 2019 March 30, 2018 Balance at beginning of the period $ 4,510 $ 4,835 Provision charged to cost of revenue 1,011 722 Use of provision (657 ) (560 ) Foreign currency exchange rate changes 20 57 Balance at end of the period $ 4,884 $ 5,054 |
Debt
Debt | 3 Months Ended |
Mar. 29, 2019 | |
Debt Disclosure [Abstract] | |
Debt | 9. Debt Debt consisted of the following (in thousands): March 29, December 31, 2019 2018 Senior Credit Facilities – term loan $ 2,300 $ 4,600 Less: unamortized debt issuance costs (60 ) (65 ) Total current portion of long-term debt $ 2,240 $ 4,535 Senior Credit Facilities – term loan $ 67,625 $ 69,925 Senior Credit Facilities – revolving credit facility 132,480 135,058 Less: unamortized debt issuance costs (1,902 ) (2,140 ) Total long-term debt $ 198,203 $ 202,843 Total Senior Credit Facilities $ 200,443 $ 207,378 Senior Credit Facilities In August 2017, the Company entered into an amendment (the “Third Amendment”) to the second amended and restated credit agreement, dated as of May 19, 2016 (the “Second Amended and Restated Credit Agreement”). The Third Amendment increased the revolving credit facility under the Second Amended and Restated Credit Agreement by $100 million, 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. In February 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 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 consolidated leverage ratio for a designated acquisition from 3.00 to 3.50, and increased the maximum consolidated leverage The Company is required to satisfy certain financial and non-financial covenants under the Second Amended and Restated Credit Agreement. The Second Amended and Restated Credit Agreement also contains customary events of default. The Company was in compliance with these covenants as of March 29, 2019. 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. Fair Value of Debt As of March 29, 2019 and December 31, 2018, the outstanding balance of the Company’s debt approximated its fair value based on current rates available to the Company for debt of similar maturities. The fair value of the Company’s debt is classified as Level 2 under the fair value hierarchy. |
Leases
Leases | 3 Months Ended |
Mar. 29, 2019 | |
Leases [Abstract] | |
Leases | 10. Leases The Company leases certain equipment and facilities. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. Many of these leases include both lease (e.g., fixed payments including rent) and non-lease components (e.g., common-area maintenance or other property management costs). The Company accounts for lease and non-lease components separately. Leases with an initial term of 12 months or less are not recognized on the balance sheet. Most leases held by the Company 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. Certain leases include one or more options to renew, with renewal terms that can extend the lease term from one to 10 years, and some include options to terminate the leases within one year. The exercise of lease renewal or termination option is at the Company’s sole discretion; therefore, the majority of renewals to extend the lease terms are not included in the Company’s right-of-use assets and operating lease liabilities as they are not reasonably certain of being exercised. The Company regularly evaluates the renewal options and includes the renewal periods in the lease term when they are reasonably certain of being exercised. The depreciable life of assets and leasehold improvements is limited to the expected lease terms. Most leases held by the Company do not provide an implicit rate. The Company uses its incremental borrowing rate for the same jurisdiction and term as the associated lease based on the information available at the lease commencement date to determine the present value of the lease payments. The Company used the incremental borrowing rate as of January 1, 2019 for operating leases that commenced prior to that date. The Company has a centrally managed treasury function; therefore, the Company applies a portfolio approach for determining the incremental borrowing rate based on the applicable lease terms and the current economic environment. The following table summarizes the components of lease costs (in thousands): Three Months Ended March 29, 2019 Operating lease cost $ 1,823 Finance lease cost Amortization of right-of-use assets 178 Interest on lease liabilities 105 Variable lease cost 138 Total lease cost $ 2,244 The following table provides the details of balance sheet information related to leases (in thousands, except lease term and discount rate): March 29, 2019 Operating leases Operating lease right-of-use assets $ 35,374 Current portion of operating lease liabilities $ 5,198 Operating lease liabilities 31,808 Total operating lease liabilities $ 37,006 Finance leases Property, plant and equipment, gross $ 13,523 Accumulated depreciation (7,086 ) Property, plant and equipment, net $ 6,437 Accrued expenses and other current liabilities $ 599 Other liabilities 6,925 Total finance lease liabilities $ 7,524 Weighted-average remaining lease term (in years) Operating leases 9.83 Finance leases 10.04 Weighted-average discount rate Operating leases 5.95 % Finance leases 5.47 % The following table provides the details of cash flow information related to leases (in thousands): Three Months Ended March 29, 2019 Cash paid for amounts included in lease liabilities Operating cash flows from finance leases $ 105 Operating cash flows from operating leases $ 1,944 Financing cash flows from finance leases $ 140 Right-of-use assets obtained in exchange for new operating lease liabilities $ 839 Future minimum lease payments under operating and finance leases expiring subsequent to March 29, 2019, 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 Ending December 31, Operating Lease Finance Lease 2019 (remainder of year) $ 5,289 $ 742 2020 5,712 979 2021 5,512 907 2022 4,938 907 2023 4,360 930 Thereafter 25,976 5,395 Total minimum lease payments $ 51,787 $ 9,860 Less: Interest (14,781 ) (2,336 ) Present value of lease liabilities $ 37,006 $ 7,524 Future minimum lease payments under operating and capital leases expiring subsequent to December 31, 2018 under Accounting Standard Codification (“ASC”) Topic 840, Leases (“ASC 840”), 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 Ending December 31, Operating Lease (1) Capital Lease 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) Future minimum lease payments as of December 31, 2018 included common-area maintenance and other property management costs and tax obligations. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 29, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | 11. Share-Based Compensation The table below summarizes share-based compensation expense recorded in the consolidated statements of operations (in thousands): Three March 29, March 30, 2019 2018 Selling, general and administrative $ 2,531 $ 1,924 Research and development and engineering 111 84 Cost of revenue 85 36 Total share-based compensation expense $ 2,727 $ 2,044 Share-based compensation reported in selling, general and administrative expenses during each of the three-month periods ended March 29, 2019 and March 30, 2018, respectively, included $0.8 million and $0.5 million of expense related to restricted stock units and deferred stock units granted to the members of the Company’s Board of Directors. Restricted Stock Units and Deferred Stock Units The Company’s restricted stock units (“RSUs”) have generally been issued with vesting periods ranging from zero 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 historical forfeiture experience. Deferred stock units (“DSUs”) are granted to the members of the Company’s Board of Directors. The compensation expense associated with DSUs is recognized in full on the date of grant, as DSUs are fully vested and non-forfeitable upon grant. The table below summarizes activities relating to RSUs and DSUs issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during the three months ended March 29, 2019: Shares (In thousands) Weighted Average Grant Date Fair Value Unvested at December 31, 2018 529 $ 26.98 Granted 101 $ 75.29 Vested (141 ) $ 28.33 Forfeited (8 ) $ 34.70 Unvested at March 29, 2019 481 $ 36.61 Expected to vest as of March 29, 2019 454 The total fair value of RSUs and DSUs that vested during the three months ended March 29, 2019 was $10.7 million based on the market price of the underlying shares on the date of vesting. 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 Compensation Committee 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 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 the 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 the activities relating to the performance-based awards issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during the three months ended March 29, 2019: Shares (In thousands) Weighted Average Grant Date Fair Value Unvested at December 31, 2018 137 $ 37.28 Granted 44 $ 92.93 Performance adjustment (1) 29 $ 14.13 Vested (59 ) $ 14.13 Forfeited — $ — Unvested at March 29, 2019 151 $ 57.57 (1) Represents adjustment for performance-based awards granted on March 30, 2016. These units vested at 200% during the three months ended March 29, 2019 based on the achievement of cumulative Non-GAAP EPS during the performance period of fiscal years 2016 through 2018. The total fair value of PSUs that vested during the three months ended March 29, 2019 was $5.0 million based on the market price of the underlying shares on the date of vesting. The fair value of the TSR-PSUs at the date of grant was estimated using the Monte-Carlo valuation model with the following assumptions: Three Months Ended March 29, 2019 Grant-date stock price $ 77.23 Expected volatility 32.54 % Risk-free interest rate 2.46 % Expected annual dividend yield — Fair value $ 108.58 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes The Company determines its estimated annual effective tax rate at the end of each interim period based on full-year forecasted pre-tax income and facts known at that time. The estimated annual effective tax rate is applied to the year-to-date pre-tax income at the end of each interim period with the cumulative effect of any changes in the estimated annual effective tax rate being recorded in the fiscal quarter in which the change is determined. The tax effect of significant unusual items is reflected in the period in which they occur. Since the Company is incorporated in Canada, it is required to use Canada’s statutory tax rate of 29.0% in the determination of the estimated annual effective tax rate. The Company’s effective tax rate of 0.6% for the three months ended March 29, 2019 differs from the Canadian statutory tax rate of 29.0% primarily due to the mix of income earned in jurisdictions with varying tax rates, estimated deductions for Foreign Derived Intangible Income, U.K. patent box deductions and other tax credits, and windfall tax benefits upon vesting of certain stock-based compensation awards during the period. The Company’s effective tax rate of 11.0% for the three months ended March 30, 2018 differs from the Canadian statutory tax rate of 29.0% primarily due to the mix of income earned in jurisdictions with varying tax rates, estimated deductions for Foreign Derived Intangible Income, U.K. patent box deductions and other tax credits, and windfall tax benefits upon vesting of certain stock-based compensation awards during the period. The Company maintains a valuation allowance on some of its deferred tax assets in certain jurisdictions. A valuation allowance is required when, based upon an assessment of various factors, including recent operating loss history, anticipated future earnings, and prudent and reasonable tax planning strategies, it is more likely than not that some portion of the deferred tax assets will not be realized. |
Restructuring and Acquisition R
Restructuring and Acquisition Related Costs | 3 Months Ended |
Mar. 29, 2019 | |
Restructuring And Related Activities [Abstract] | |
Restructuring and Acquisition Related Costs | 13. Restructuring and Acquisition Related Costs The following table summarizes restructuring and acquisition related costs in the accompanying consolidated statements of operations (in thousands): Three March 29, March 30, 2019 2018 2019 restructuring $ 967 $ — 2018 restructuring 269 — Total restructuring charges 1,236 — Acquisition and related charges 818 25 Total restructuring and acquisition related costs $ 2,054 $ 25 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. During the three months ended March 29, 2019, the Company recorded $1.0 million in severance and related costs in connection with the 2019 restructuring plan. As of March 29, 2019, the Company incurred cumulative costs related to this restructuring plan totaling $1.3 million. The Company anticipates completing the 2019 restructuring program in 2019 and expects to incur additional restructuring charges of $1.0 million to $2.5 million related to the 2019 restructuring program. The following table summarizes restructuring costs associated with the 2019 restructuring program for each segment and unallocated corporate costs (in thousands): Three March 29, 2019 Photonics $ 193 Vision 350 Precision Motion 47 Unallocated Corporate and Shared Services 377 Total $ 967 2018 Restructuring During the second quarter of 2018, the Company initiated a program to integrate manufacturing operations as a result of recent acquisition activities. During the three months ended March 29, 2019, the Company recorded $0.3 million in severance and related costs in connection with the 2018 restructuring plan. These costs were reported in the Vision reportable segment. As of March 29, 2019, the Company incurred cumulative costs related to this restructuring plan totaling $1.9 million. The Company anticipates completing the 2018 restructuring program during the third quarter of 2019 and expects to incur additional restructuring charges of $0.7 million to $1.0 million related to the 2018 restructuring program in the Vision reportable segment. Rollforward of Accrued Expenses Related to Restructuring The following table summarizes the accrual activities, by component, related to the Company’s restructuring plans recorded in the accompanying consolidated balance sheets (in thousands): Total Severance Facility Other Balance at December 31, 2018 $ 1,276 $ 876 $ 388 $ 12 Restructuring charges 1,236 1,108 89 39 Cash payments (765 ) (744 ) — (21 ) Reclassification of reserves (a) (477 ) — (477 ) — Non-cash write-offs and other adjustments (2 ) 4 — (6 ) Balance at March 29, 2019 $ 1,268 $ 1,244 $ — $ 24 (a) Accrual related to exited facilities was reclassified to operating lease liabilities upon adoption of ASU 2016-02. Acquisition and Related Charges Acquisition related costs in connection with business combinations, including finders’ fees, legal, valuation, and other professional or consulting fees, totaled $0.3 million and $0.1 million for the three months ended March 29, 2019 and March 30, 2018, respectively. Acquisition related costs recognized under earn-out agreements in connection with acquisitions totaled $0.5 million for the three months ended March 29, 2019. The majority of acquisition related costs for the three months ended March 29, 2019 were included in the Company’s Precision Motion reportable segment. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 29, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 14. Commitments and Contingencies Purchase Commitments There have been no material changes to the Company’s purchase commitments since December 31, 2018. Legal Contingencies 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 litigations and may revise its estimates. The Company does not believe that the outcome of these claims will have a material adverse effect on 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 on the 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. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 29, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 15. 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 $11.6 million for the three months ended March 29, 2019. There was $5.1 million and $0.6 million in accounts receivable due from these customers as of March 29, 2019 and December 31, 2018, respectively. There were no material transactions with related parties in the three months ended March 30, 2018. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 29, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | 16. 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, gross profit margin, operating income (loss), and depreciation and amortization expenses by reportable segment were as follows (in thousands, except percentage data): Three March 29, March 30, 2019 2018 Revenue Photonics $ 59,225 $ 61,831 Vision 65,936 56,209 Precision Motion 32,025 28,925 Total $ 157,186 $ 146,965 Three March 29, March 30, 2019 2018 Gross Profit Photonics $ 27,314 $ 29,555 Vision 25,973 19,721 Precision Motion 13,521 13,260 Unallocated Corporate and Shared Services (519 ) (377 ) Total $ 66,289 $ 62,159 Three March 29, March 30, 2019 2018 Gross Profit Margin Photonics 46.1 % 47.8 % Vision 39.4 % 35.1 % Precision Motion 42.2 % 45.8 % Total 42.2 % 42.3 % Three March 29, March 30, 2019 2018 Operating Income (Loss) Photonics $ 12,310 $ 15,323 Vision 4,557 475 Precision Motion 5,635 8,607 Unallocated Corporate and Shared Services (8,109 ) (7,178 ) Total $ 14,393 $ 17,227 Three March 29, March 30, 2019 2018 Depreciation and Amortization Expenses Photonics $ 2,621 $ 3,067 Vision 5,029 5,174 Precision Motion 1,369 503 Unallocated Corporate and Shared Services 55 323 Total $ 9,074 $ 9,067 Revenue by Geography The Company aggregates geographic revenue based on the customer location where products are shipped. Revenue from these customers was as follows (in thousands): Three March 29, March 30, 2019 2018 United States $ 64,760 $ 58,113 Germany 23,477 20,069 Rest of Europe 30,770 27,060 China 15,108 15,603 Rest of Asia-Pacific 20,447 24,720 Other 2,624 1,400 Total $ 157,186 $ 146,965 The majority of revenue from our Photonics, Vision and Precision Motion segments is generated from sales to customers within the United States and Europe. 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: Three March 29, March 30, 2019 2018 Advanced Industrial 50 % 50 % Medical 50 % 50 % Total 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. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 29, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent Events On April 16, 2019, the Company acquired Ingenia-CAT, S.L. (“Ingenia”), a Barcelona, Spain-based provider of high performance servo drives and control software to OEMs in the medical and advanced industrial markets. Ingenia will be included in our Precision Motion reportable segment. Information required by ASC 805-10, “Business Combinations,” is not disclosed herein as the Company is in the process of gathering information for its purchase accounting evaluation, including purchase price allocation and other related disclosures. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 29, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of 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. The accompanying unaudited interim consolidated financial statements have been prepared by the Company in United States (“U.S.”) dollars and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”), the instructions to Form 10-Q and the provisions of Regulation S-X pertaining to interim financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted. The interim consolidated financial statements and notes included in this report should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. In the opinion of management, these interim consolidated financial statements include all adjustments and accruals of a normal and recurring nature necessary to fairly state the results of the interim periods presented. The results for interim periods are not necessarily indicative of results to be expected for the full year or for any future periods. The Company’s unaudited interim financial statements are prepared for each quarterly period ending on the Friday closest to the end of the calendar quarter, with the exception of the fourth quarter which always ends on December 31. |
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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The following table provides a brief description of recent Accounting Standard Updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”): Standard Description Effective Date Effect on the Financial Statements or Other Significant Matters In August 2018, the FASB issued ASU 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 should be applied either retrospectively or prospectively. January 1, 2020. Early adoption is permitted. The Company adopted ASU 2018-15 on a prospective basis during the first quarter of 2019. The adoption of ASU 2018-15 did not have a material impact on the Company’s consolidated financial statements. 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 under the Tax Reform Act is recognized. January 1, 2019. The Company adopted ASU 2018-02 during the first quarter of 2019. The adoption of ASU 2018-02 did not have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” 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. January 1, 2019. The Company adopted ASU 2016-02 during the first quarter of 2019 using the modified retrospective approach. In addition, the Company elected the package of practical expedients permitted under the transition guidance. The adoption of ASU 2016-02 resulted in the recording of additional net operating lease right-of-use (“ROU”) assets and operating lease liabilities of approximately $35.3 million and $36.5 million, respectively, as of January 1, 2019. The adoption of ASU 2016-02 did not have an impact on the Company’s Accumulated deficit, consolidated statement of operations, or consolidated statement of cash flows. |
Revenue Recognition | 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 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. The Company does not disclose the value of the remaining performance obligation for contracts with an original expected length of 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 revenue. As of March 29, 2019 and December 31, 2018, contract liabilities were $3.7 million and $4.7 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 three months ended March 29, 2019 is primarily due to $1.9 million of revenue recognized during the period that was included in the contract liability balance at December 31, 2018, partially offset by cash payments received in advance of satisfying performance obligations. Disaggregated Revenue See Note 16 for the Company’s disaggregation of revenue by segment, geography and end market. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 29, 2019 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive income (loss) was as follows (in thousands): Total Accumulated Other Cumulative Pension Comprehensive Translation Liability Income (Loss) Adjustments Adjustments Balance at December 31, 2018 $ (22,527 ) $ (12,485 ) $ (10,042 ) Other comprehensive income (loss) 2,105 2,339 (234 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) 251 — 251 Balance at March 29, 2019 $ (20,171 ) $ (10,146 ) $ (10,025 ) (1) The amounts reclassified from other comprehensive income (loss) were included in other income (expense) in the consolidated statements of operations. |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 3 Months Ended |
Mar. 29, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings per Common Share | The following table sets forth the computation of basic and diluted earnings per common share (amounts in thousands, except per share data): Three March 29, March 30, 2019 (1) 2018 (2) Numerators: Consolidated net income $ 12,253 $ 12,837 Less: Net income attributable to noncontrolling interest — (926 ) Net income attributable to Novanta Inc. 12,253 11,911 Redeemable noncontrolling interest redemption value adjustment — (5,399 ) Net income attributable to Novanta Inc. after adjustment for redeemable noncontrolling interest redemption value $ 12,253 $ 6,512 Denominators: Weighted average common shares outstanding— basic 34,958 34,887 Dilutive potential common shares 516 541 Weighted average common shares outstanding— diluted 35,474 35,428 Antidilutive common shares excluded from above 58 12 Earnings per Common Share Attributable to Novanta Inc.: Basic $ 0.35 $ 0.19 Diluted $ 0.35 $ 0.18 (1) 45,252 non-GAAP EPS performance restricted stock units granted to certain members of the executive management team and 213,219 shares of restricted stock issued to Laser Quantum former non-controlling interest holders are considered contingently issuable shares and are excluded from the calculation of the denominator as the contingent conditions had not been met as of March 29, 2019. (2) 53,968 non-GAAP EPS performance restricted stock units granted to certain members of the executive management team were considered contingently issuable shares and were excluded from the calculation of the denominator as the contingent conditions had not been met as of March 30, 2018. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 29, 2019 | |
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 March 29, 2019 (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 $ 3,252 $ 3,252 $ — $ — Prepaid expenses and other current assets: Foreign currency forward contracts 296 — 296 — $ 3,548 $ 3,252 $ 296 $ — Liabilities Accrued expenses and other current liabilities: Contingent consideration - Current $ 1,248 $ — $ — $ 1,248 Foreign currency forward contracts 6 — 6 — Other liabilities: Contingent consideration - Long-term 2,128 — — 2,128 $ 3,382 $ — $ 6 $ 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, 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 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 29, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Goodwill | The following table summarizes changes in goodwill during the three months ended March 29, 2019 (in thousands): Balance at beginning of the period $ 217,662 Effect of foreign exchange rate changes (37 ) Balance at end of the period $ 217,625 |
Goodwill by Reportable Segment | Goodwill by reportable segment as of March 29, 2019 was as follows (in thousands): Reportable Segment Photonics Vision Precision Motion Total Goodwill $ 169,724 $ 153,953 $ 45,177 $ 368,854 Accumulated impairment of goodwill (102,461 ) (31,722 ) (17,046 ) (151,229 ) Total $ 67,263 $ 122,231 $ 28,131 $ 217,625 Goodwill by reportable segment as of December 31, 2018 was 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 |
Intangible Assets | Intangible assets as of March 29, 2019 and December 31, 2018, respectively, are summarized as follows (in thousands): March 29, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable intangible assets: Patents and developed technologies $ 134,179 $ (89,045 ) $ 45,134 $ 134,034 $ (86,623 ) $ 47,411 Customer relationships 139,157 (67,591 ) 71,566 139,097 (64,174 ) 74,923 Customer backlog 1,766 (1,606 ) 160 1,738 (1,191 ) 547 Non-compete covenant 2,514 (2,514 ) — 2,514 (2,493 ) 21 Trademarks and trade names 15,965 (9,223 ) 6,742 15,915 (8,924 ) 6,991 Amortizable intangible assets 293,581 (169,979 ) 123,602 293,298 (163,405 ) 129,893 Non-amortizable intangible assets: Trade names 13,027 — 13,027 13,027 — 13,027 Totals $ 306,608 $ (169,979 ) $ 136,629 $ 306,325 $ (163,405 ) $ 142,920 |
Amortization Expense of Intangible Assets | Amortization expense was as follows (in thousands): Three March 29, March 30, 2019 2018 Amortization expense – cost of revenue $ 2,311 $ 2,480 Amortization expense – operating expenses 3,998 3,698 Total amortization expense $ 6,309 $ 6,178 |
Estimated Amortization Expense | Estimated amortization expense for each of the five succeeding years and thereafter as of March 29, 2019 was as follows (in thousands): Year Ending December 31, Cost of Revenue Operating Expenses Total 2019 (remainder of year) $ 6,912 $ 10,748 $ 17,660 2020 8,313 12,395 20,708 2021 7,397 11,475 18,872 2022 6,304 9,653 15,957 2023 5,408 8,118 13,526 Thereafter 10,800 26,079 36,879 Total $ 45,134 $ 78,468 $ 123,602 |
Supplementary Balance Sheet I_2
Supplementary Balance Sheet Information (Tables) | 3 Months Ended |
Mar. 29, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Inventories | Inventories March 29, December 31, 2019 2018 Raw materials $ 69,305 $ 69,008 Work-in-process 16,071 15,982 Finished goods 19,666 17,337 Demo and consigned inventory 1,742 2,437 Total inventories $ 106,784 $ 104,764 |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities March 29, December 31, 2019 2018 Accrued compensation and benefits $ 16,503 $ 24,545 Accrued warranty 4,884 4,510 Contract liabilities, current portion 3,338 4,165 Other 16,449 13,075 Total $ 41,174 $ 46,295 |
Accrued Warranty | Accrued Warranty Three Months Ended March 29, 2019 March 30, 2018 Balance at beginning of the period $ 4,510 $ 4,835 Provision charged to cost of revenue 1,011 722 Use of provision (657 ) (560 ) Foreign currency exchange rate changes 20 57 Balance at end of the period $ 4,884 $ 5,054 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 29, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt consisted of the following (in thousands): March 29, December 31, 2019 2018 Senior Credit Facilities – term loan $ 2,300 $ 4,600 Less: unamortized debt issuance costs (60 ) (65 ) Total current portion of long-term debt $ 2,240 $ 4,535 Senior Credit Facilities – term loan $ 67,625 $ 69,925 Senior Credit Facilities – revolving credit facility 132,480 135,058 Less: unamortized debt issuance costs (1,902 ) (2,140 ) Total long-term debt $ 198,203 $ 202,843 Total Senior Credit Facilities $ 200,443 $ 207,378 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 29, 2019 | |
Leases [Abstract] | |
Summary of Components of Lease Costs | The following table summarizes the components of lease costs (in thousands): Three Months Ended March 29, 2019 Operating lease cost $ 1,823 Finance lease cost Amortization of right-of-use assets 178 Interest on lease liabilities 105 Variable lease cost 138 Total lease cost $ 2,244 |
Summary of Balance Sheet Information Related to Leases | The following table provides the details of balance sheet information related to leases (in thousands, except lease term and discount rate): March 29, 2019 Operating leases Operating lease right-of-use assets $ 35,374 Current portion of operating lease liabilities $ 5,198 Operating lease liabilities 31,808 Total operating lease liabilities $ 37,006 Finance leases Property, plant and equipment, gross $ 13,523 Accumulated depreciation (7,086 ) Property, plant and equipment, net $ 6,437 Accrued expenses and other current liabilities $ 599 Other liabilities 6,925 Total finance lease liabilities $ 7,524 Weighted-average remaining lease term (in years) Operating leases 9.83 Finance leases 10.04 Weighted-average discount rate Operating leases 5.95 % Finance leases 5.47 % |
Summary of Cash Flow Information Related to Leases | The following table provides the details of cash flow information related to leases (in thousands): Three Months Ended March 29, 2019 Cash paid for amounts included in lease liabilities Operating cash flows from finance leases $ 105 Operating cash flows from operating leases $ 1,944 Financing cash flows from finance leases $ 140 Right-of-use assets obtained in exchange for new operating lease liabilities $ 839 |
Future Minimum Lease Payments Under Operating and Finance Leases | Future minimum lease payments under operating and finance leases expiring subsequent to March 29, 2019, 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 Ending December 31, Operating Lease Finance Lease 2019 (remainder of year) $ 5,289 $ 742 2020 5,712 979 2021 5,512 907 2022 4,938 907 2023 4,360 930 Thereafter 25,976 5,395 Total minimum lease payments $ 51,787 $ 9,860 Less: Interest (14,781 ) (2,336 ) Present value of lease liabilities $ 37,006 $ 7,524 |
Future Minimum Lease Payments Under Operating and Capital Leases | Future minimum lease payments under operating and capital leases expiring subsequent to December 31, 2018 under Accounting Standard Codification (“ASC”) Topic 840, Leases (“ASC 840”), 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 Ending December 31, Operating Lease (1) Capital Lease 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) Future minimum lease payments as of December 31, 2018 included common-area maintenance and other property management costs and tax obligations. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 29, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Share-Based Compensation Expense Recorded in the Consolidated Statements of Operations | The table below summarizes share-based compensation expense recorded in the consolidated statements of operations (in thousands): Three March 29, March 30, 2019 2018 Selling, general and administrative $ 2,531 $ 1,924 Research and development and engineering 111 84 Cost of revenue 85 36 Total share-based compensation expense $ 2,727 $ 2,044 |
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: Three Months Ended March 29, 2019 Grant-date stock price $ 77.23 Expected volatility 32.54 % Risk-free interest rate 2.46 % Expected annual dividend yield — Fair value $ 108.58 |
2010 Incentive Award Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Restricted Stock Units and Deferred Stock Units Issued and Outstanding | The table below summarizes activities relating to RSUs and DSUs issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during the three months ended March 29, 2019: Shares (In thousands) Weighted Average Grant Date Fair Value Unvested at December 31, 2018 529 $ 26.98 Granted 101 $ 75.29 Vested (141 ) $ 28.33 Forfeited (8 ) $ 34.70 Unvested at March 29, 2019 481 $ 36.61 Expected to vest as of March 29, 2019 454 |
Performance-Based Awards Issued and Outstanding | The table below summarizes the activities relating to the performance-based awards issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during the three months ended March 29, 2019: Shares (In thousands) Weighted Average Grant Date Fair Value Unvested at December 31, 2018 137 $ 37.28 Granted 44 $ 92.93 Performance adjustment (1) 29 $ 14.13 Vested (59 ) $ 14.13 Forfeited — $ — Unvested at March 29, 2019 151 $ 57.57 (1) Represents adjustment for performance-based awards granted on March 30, 2016. These units vested at 200% during the three months ended March 29, 2019 based on the achievement of cumulative Non-GAAP EPS during the performance period of fiscal years 2016 through 2018. |
Restructuring and Acquisition_2
Restructuring and Acquisition Related Costs (Tables) | 3 Months Ended |
Mar. 29, 2019 | |
Restructuring And Related Activities [Abstract] | |
Schedule of Restructuring and Acquisition Related Costs | The following table summarizes restructuring and acquisition related costs in the accompanying consolidated statements of operations (in thousands): Three March 29, March 30, 2019 2018 2019 restructuring $ 967 $ — 2018 restructuring 269 — Total restructuring charges 1,236 — Acquisition and related charges 818 25 Total restructuring and acquisition related costs $ 2,054 $ 25 |
Summary of Restructuring Costs for Each Segment and Unallocated Corporate Costs | The following table summarizes restructuring costs associated with the 2019 restructuring program for each segment and unallocated corporate costs (in thousands): Three March 29, 2019 Photonics $ 193 Vision 350 Precision Motion 47 Unallocated Corporate and Shared Services 377 Total $ 967 |
Summary of Accrual Activities by Components Related to Company's Restructuring Plans | The following table summarizes the accrual activities, by component, related to the Company’s restructuring plans recorded in the accompanying consolidated balance sheets (in thousands): Total Severance Facility Other Balance at December 31, 2018 $ 1,276 $ 876 $ 388 $ 12 Restructuring charges 1,236 1,108 89 39 Cash payments (765 ) (744 ) — (21 ) Reclassification of reserves (a) (477 ) — (477 ) — Non-cash write-offs and other adjustments (2 ) 4 — (6 ) Balance at March 29, 2019 $ 1,268 $ 1,244 $ — $ 24 (a) Accrual related to exited facilities was reclassified to operating lease liabilities upon adoption of ASU 2016-02. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 29, 2019 | |
Segment Reporting [Abstract] | |
Revenue, Gross Profit, Gross Profit Margin, Operating Income (Loss), and Depreciation and Amortization Expenses by Reportable Segment | Revenue, gross profit, gross profit margin, operating income (loss), and depreciation and amortization expenses by reportable segment were as follows (in thousands, except percentage data): Three March 29, March 30, 2019 2018 Revenue Photonics $ 59,225 $ 61,831 Vision 65,936 56,209 Precision Motion 32,025 28,925 Total $ 157,186 $ 146,965 Three March 29, March 30, 2019 2018 Gross Profit Photonics $ 27,314 $ 29,555 Vision 25,973 19,721 Precision Motion 13,521 13,260 Unallocated Corporate and Shared Services (519 ) (377 ) Total $ 66,289 $ 62,159 Three March 29, March 30, 2019 2018 Gross Profit Margin Photonics 46.1 % 47.8 % Vision 39.4 % 35.1 % Precision Motion 42.2 % 45.8 % Total 42.2 % 42.3 % Three March 29, March 30, 2019 2018 Operating Income (Loss) Photonics $ 12,310 $ 15,323 Vision 4,557 475 Precision Motion 5,635 8,607 Unallocated Corporate and Shared Services (8,109 ) (7,178 ) Total $ 14,393 $ 17,227 Three March 29, March 30, 2019 2018 Depreciation and Amortization Expenses Photonics $ 2,621 $ 3,067 Vision 5,029 5,174 Precision Motion 1,369 503 Unallocated Corporate and Shared Services 55 323 Total $ 9,074 $ 9,067 |
Schedule of Geographic Revenue | The Company aggregates geographic revenue based on the customer location where products are shipped. Revenue from these customers was as follows (in thousands): Three March 29, March 30, 2019 2018 United States $ 64,760 $ 58,113 Germany 23,477 20,069 Rest of Europe 30,770 27,060 China 15,108 15,603 Rest of Asia-Pacific 20,447 24,720 Other 2,624 1,400 Total $ 157,186 $ 146,965 |
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: Three March 29, March 30, 2019 2018 Advanced Industrial 50 % 50 % Medical 50 % 50 % Total 100 % 100 % |
Basis of Presentation - Additio
Basis of Presentation - Additional information (Details) - USD ($) $ in Thousands | Mar. 29, 2019 | Jan. 01, 2019 |
Basis Of Presentation [Line Items] | ||
Operating lease, right-of-use asset | $ 35,374 | |
Operating lease liabilities | $ 37,006 | |
ASU 2016-02 | ||
Basis Of Presentation [Line Items] | ||
Operating lease, right-of-use asset | $ 35,300 | |
Operating lease liabilities | $ 36,500 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2019 | Dec. 31, 2018 | |
Revenue [Line Items] | ||
Incremental direct costs of obtaining a contract, practical expedient | true | |
Effects of a financing component, practical expedient | true | |
Remaining performance obligation for contracts, optional exemption | true | |
Adoption of Topic 606 | ||
Revenue [Line Items] | ||
Contract liabilities | $ 3.7 | $ 4.7 |
Revenue recognized | $ 1.9 | |
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 | |
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 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) $ in Thousands | 3 Months Ended | |
Mar. 29, 2019USD ($) | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | $ 368,255 | |
Other comprehensive income (loss) | 2,105 | |
Amounts reclassified from accumulated other comprehensive income (loss) | 251 | [1] |
Ending Balance | 379,701 | |
Total Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (22,527) | |
Ending Balance | (20,171) | |
Cumulative Translation Adjustments | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (12,485) | |
Other comprehensive income (loss) | 2,339 | |
Ending Balance | (10,146) | |
Pension Liability Adjustments | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (10,042) | |
Other comprehensive income (loss) | (234) | |
Amounts reclassified from accumulated other comprehensive income (loss) | 251 | [1] |
Ending Balance | $ (10,025) | |
[1] | The amounts reclassified from other comprehensive income (loss) were included in other income (expense) in the consolidated statements of operations. |
Computation of Basic and Dilute
Computation of Basic and Diluted Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||||
Mar. 29, 2019 | [1] | Mar. 30, 2018 | |||
Numerators: | |||||
Consolidated net income | $ 12,253 | $ 12,837 | [2] | ||
Less: Net income attributable to noncontrolling interest | [2] | (926) | |||
Net income attributable to Novanta Inc. | 12,253 | 11,911 | [2] | ||
Redeemable noncontrolling interest redemption value adjustment | [2] | (5,399) | |||
Net income attributable to Novanta Inc. after adjustment for redeemable noncontrolling interest redemption value | $ 12,253 | $ 6,512 | [2] | ||
Denominators: | |||||
Weighted average common shares outstanding—basic | 34,958 | 34,887 | [2] | ||
Dilutive potential common shares | 516 | 541 | [2] | ||
Weighted average common shares outstanding— diluted | 35,474 | 35,428 | [2] | ||
Antidilutive common shares excluded from above | 58 | 12 | [2] | ||
Earnings per Common Share Attributable to Novanta Inc.: | |||||
Basic | $ 0.35 | $ 0.19 | [2] | ||
Diluted | $ 0.35 | $ 0.18 | [2] | ||
[1] | 45,252 non-GAAP EPS performance restricted stock units granted to certain members of the executive management team and 213,219 shares of restricted stock issued to Laser Quantum former non-controlling interest holders are considered contingently issuable shares and are excluded from the calculation of the denominator as the contingent conditions had not been met as of March 29, 2019. | ||||
[2] | 53,968 non-GAAP EPS performance restricted stock units granted to certain members of the executive management team were considered contingently issuable shares and were excluded from the calculation of the denominator as the contingent conditions had not been met as of March 30, 2018. |
Computation of Basic and Dilu_2
Computation of Basic and Diluted Earnings per Common Share (Parenthetical) (Details) - shares | 3 Months Ended | |
Mar. 29, 2019 | Mar. 30, 2018 | |
EPS Performance-based Restricted Stock Units | ||
Computation Of Earnings Per Share [Line Items] | ||
Contingently issuable shares excluded from calculation of denominator | 45,252 | 53,968 |
Laser Quantum | Restricted Stock | ||
Computation Of Earnings Per Share [Line Items] | ||
Contingently issuable shares excluded from calculation of denominator | 213,219 |
Fair Value Measurements - Asset
Fair Value Measurements - Asset Acquisition Contingent Consideration - Additional Information (Details) - Video Signal Processing and Management Technologies $ in Thousands, € in Millions | 3 Months Ended | ||
Mar. 29, 2019USD ($)Installment | Dec. 14, 2016USD ($) | Dec. 14, 2016EUR (€) | |
Asset Acquisition Contingent Consideration [Line Items] | |||
Date of Acquisition Agreement | Dec. 14, 2016 | ||
Number of contingent consideration installments | Installment | 4 | ||
Undiscounted range of outcomes, minimum | $ 0 | ||
Undiscounted range of outcomes, maximum | $ 6,600 | € 5.5 | |
Changes in fair value of contingent consideration | $ 0 |
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 | Mar. 29, 2019 | Dec. 31, 2018 |
Assets | ||
Cash equivalents | $ 3,252 | $ 4,288 |
Assets, fair value | 3,548 | 4,303 |
Liabilities | ||
Liabilities, fair value | 3,382 | 3,558 |
Prepaid Expenses and Other Current Assets | ||
Assets | ||
Foreign currency forward contracts | 296 | 15 |
Accrued Expenses and Other Current Liabilities | ||
Liabilities | ||
Contingent consideration - Current | 1,248 | |
Foreign currency forward contracts | 6 | 182 |
Other Liabilities | ||
Liabilities | ||
Contingent consideration - Long-term | 2,128 | 3,376 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Cash equivalents | 3,252 | 4,288 |
Assets, fair value | 3,252 | 4,288 |
Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Assets, fair value | 296 | 15 |
Liabilities | ||
Liabilities, fair value | 6 | 182 |
Significant Other Observable Inputs (Level 2) | Prepaid Expenses and Other Current Assets | ||
Assets | ||
Foreign currency forward contracts | 296 | 15 |
Significant Other Observable Inputs (Level 2) | Accrued Expenses and Other Current Liabilities | ||
Liabilities | ||
Foreign currency forward contracts | 6 | 182 |
Significant Other Unobservable Inputs (Level 3) | ||
Liabilities | ||
Liabilities, fair value | 3,376 | 3,376 |
Significant Other Unobservable Inputs (Level 3) | Accrued Expenses and Other Current Liabilities | ||
Liabilities | ||
Contingent consideration - Current | 1,248 | |
Significant Other Unobservable Inputs (Level 3) | Other Liabilities | ||
Liabilities | ||
Contingent consideration - Long-term | $ 2,128 | $ 3,376 |
Foreign Currency Contracts - Ad
Foreign Currency Contracts - Additional Information (Details) - Foreign Currency Forward Contracts - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 29, 2019 | Mar. 30, 2018 | Dec. 31, 2018 | |
Derivative [Line Items] | |||
Notional amount of foreign currency forward contracts | $ 25.5 | $ 31.2 | |
Net gain (loss) on foreign currency forward contracts | 0.3 | $ (0.2) | |
Foreign Exchange Transaction Gains (Losses) | |||
Derivative [Line Items] | |||
Aggregate net gain (loss) recognized | $ (0.5) | $ 0.7 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) | 3 Months Ended |
Jun. 29, 2018USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Impairment of goodwill and intangible assets | $ 0 |
Summary of Changes in Goodwill
Summary of Changes in Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 29, 2019USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Balance at beginning of the period | $ 217,662 |
Effect of foreign exchange rate changes | (37) |
Balance at end of the period | $ 217,625 |
Goodwill By Reportable Segment
Goodwill By Reportable Segment (Details) - USD ($) $ in Thousands | Mar. 29, 2019 | Dec. 31, 2018 |
Goodwill [Line Items] | ||
Goodwill | $ 368,854 | $ 368,891 |
Accumulated impairment of goodwill | (151,229) | (151,229) |
Total | 217,625 | 217,662 |
Photonics | ||
Goodwill [Line Items] | ||
Goodwill | 169,724 | 168,955 |
Accumulated impairment of goodwill | (102,461) | (102,461) |
Total | 67,263 | 66,494 |
Vision | ||
Goodwill [Line Items] | ||
Goodwill | 153,953 | 155,017 |
Accumulated impairment of goodwill | (31,722) | (31,722) |
Total | 122,231 | 123,295 |
Precision Motion | ||
Goodwill [Line Items] | ||
Goodwill | 45,177 | 44,919 |
Accumulated impairment of goodwill | (17,046) | (17,046) |
Total | $ 28,131 | $ 27,873 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 29, 2019 | Dec. 31, 2018 |
Schedule of Intangible Assets Disclosure [Line Items] | ||
Amortizable intangible assets, gross carrying amount | $ 293,581 | $ 293,298 |
Amortizable intangible assets, accumulated amortization | (169,979) | (163,405) |
Amortizable intangible assets, net carrying amount | 123,602 | 129,893 |
Non-amortizable intangible assets | 13,027 | 13,027 |
Gross carrying amount | 306,608 | 306,325 |
Net carrying amount | 136,629 | 142,920 |
Patents and Developed Technologies | ||
Schedule of Intangible Assets Disclosure [Line Items] | ||
Amortizable intangible assets, gross carrying amount | 134,179 | 134,034 |
Amortizable intangible assets, accumulated amortization | (89,045) | (86,623) |
Amortizable intangible assets, net carrying amount | 45,134 | 47,411 |
Customer Relationships | ||
Schedule of Intangible Assets Disclosure [Line Items] | ||
Amortizable intangible assets, gross carrying amount | 139,157 | 139,097 |
Amortizable intangible assets, accumulated amortization | (67,591) | (64,174) |
Amortizable intangible assets, net carrying amount | 71,566 | 74,923 |
Customer Backlog | ||
Schedule of Intangible Assets Disclosure [Line Items] | ||
Amortizable intangible assets, gross carrying amount | 1,766 | 1,738 |
Amortizable intangible assets, accumulated amortization | (1,606) | (1,191) |
Amortizable intangible assets, net carrying amount | 160 | 547 |
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 | (2,514) | (2,493) |
Amortizable intangible assets, net carrying amount | 21 | |
Trademarks and Trade Names | ||
Schedule of Intangible Assets Disclosure [Line Items] | ||
Amortizable intangible assets, gross carrying amount | 15,965 | 15,915 |
Amortizable intangible assets, accumulated amortization | (9,223) | (8,924) |
Amortizable intangible assets, net carrying amount | $ 6,742 | $ 6,991 |
Amortization Expense of Intangi
Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2019 | Mar. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Amortization expense – cost of revenue | $ 2,311 | $ 2,480 |
Amortization expense – operating expenses | 3,998 | 3,698 |
Total amortization expense | $ 6,309 | $ 6,178 |
Estimated Amortization Expense
Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 29, 2019 | Dec. 31, 2018 |
Finite Lived Intangible Assets [Line Items] | ||
2019 (remainder of year) | $ 17,660 | |
2020 | 20,708 | |
2021 | 18,872 | |
2022 | 15,957 | |
2023 | 13,526 | |
Thereafter | 36,879 | |
Amortizable intangible assets, net carrying amount | 123,602 | $ 129,893 |
Cost of Revenue | ||
Finite Lived Intangible Assets [Line Items] | ||
2019 (remainder of year) | 6,912 | |
2020 | 8,313 | |
2021 | 7,397 | |
2022 | 6,304 | |
2023 | 5,408 | |
Thereafter | 10,800 | |
Amortizable intangible assets, net carrying amount | 45,134 | |
Operating Expenses | ||
Finite Lived Intangible Assets [Line Items] | ||
2019 (remainder of year) | 10,748 | |
2020 | 12,395 | |
2021 | 11,475 | |
2022 | 9,653 | |
2023 | 8,118 | |
Thereafter | 26,079 | |
Amortizable intangible assets, net carrying amount | $ 78,468 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 29, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 69,305 | $ 69,008 |
Work-in-process | 16,071 | 15,982 |
Finished goods | 19,666 | 17,337 |
Demo and consigned inventory | 1,742 | 2,437 |
Total inventories | $ 106,784 | $ 104,764 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 29, 2019 | Dec. 31, 2018 | Mar. 30, 2018 | Dec. 31, 2017 |
Other Liabilities Disclosure [Abstract] | ||||
Accrued compensation and benefits | $ 16,503 | $ 24,545 | ||
Accrued warranty | 4,884 | 4,510 | $ 5,054 | $ 4,835 |
Contract liabilities, current portion | 3,338 | 4,165 | ||
Other | 16,449 | 13,075 | ||
Total | $ 41,174 | $ 46,295 |
Accrued Warranty (Details)
Accrued Warranty (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2019 | Mar. 30, 2018 | |
Product Warranties Disclosures [Abstract] | ||
Balance at beginning of the period | $ 4,510 | $ 4,835 |
Provision charged to cost of revenue | 1,011 | 722 |
Use of provision | (657) | (560) |
Foreign currency exchange rate changes | 20 | 57 |
Balance at end of the period | $ 4,884 | $ 5,054 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Mar. 29, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Total current portion of long-term debt | $ 2,240 | $ 4,535 |
Total long-term debt | 198,203 | 202,843 |
Total Senior Credit Facilities | 200,443 | 207,378 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Current portion of long-term debt, Gross | 2,300 | 4,600 |
Long-term debt, Gross | 67,625 | 69,925 |
Term Loan And Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Less: unamortized debt issuance costs | (60) | (65) |
Less: unamortized debt issuance costs | (1,902) | (2,140) |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, Gross | $ 132,480 | $ 135,058 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | Aug. 01, 2018 | Aug. 01, 2017 | May 19, 2016 | Feb. 28, 2018 | Mar. 29, 2019 | Dec. 31, 2018 | Jul. 28, 2017 |
Debt Instrument [Line Items] | |||||||
Long-term debt including current maturities | $ 200,443,000 | $ 207,378,000 | |||||
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 | Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
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 | ||||||
Third Amendment to Second Amended and Restated Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, frequency of periodic payment | quarterly | ||||||
Senior credit facilities maturity year | 2021-05 | ||||||
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] | |||||||
Increases the revolving credit facility | 100,000,000 | ||||||
Maximum borrowing capacity | 325,000,000 | ||||||
Line of credit facility accordion feature | $ 125,000,000 | ||||||
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 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 consolidated leverage ratio for a designated acquisition from 3.00 to 3.50, and increased the maximum consolidated 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% |
Leases - Additional Information
Leases - Additional Information (Details) | 3 Months Ended |
Mar. 29, 2019 | |
Lessee Lease Description [Line Items] | |
Lease renewal terms and termination description | Certain leases include one or more options to renew, with renewal terms that can extend the lease term from one to 10 years, and some include options to terminate the leases within one year. |
Minimum | |
Lessee Lease Description [Line Items] | |
Lease agreement expiration year | 2019 |
Lease renewal terms | 1 year |
Maximum | |
Lessee Lease Description [Line Items] | |
Lease agreement expiration year | 2031 |
Lease renewal terms | 10 years |
Lease termination period | 1 year |
Land | Maximum | |
Lessee Lease Description [Line Items] | |
Lease agreement expiration year | 2078 |
Summary of Components of Lease
Summary of Components of Lease Costs (Details) $ in Thousands | 3 Months Ended |
Mar. 29, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 1,823 |
Finance lease cost | |
Amortization of right-of-use assets | 178 |
Interest on lease liabilities | 105 |
Variable lease cost | 138 |
Total lease cost | $ 2,244 |
Summary of Balance Sheet Inform
Summary of Balance Sheet Information Related to Leases (Details) $ in Thousands | Mar. 29, 2019USD ($) |
Operating leases | |
Operating lease right-of-use assets | $ 35,374 |
Current portion of operating lease liabilities | 5,198 |
Operating lease liabilities | 31,808 |
Total operating lease liabilities | 37,006 |
Finance leases | |
Finance lease right-of-use assets gross | 13,523 |
Finance lease right-of-use assets accumulated depreciation | (7,086) |
Finance lease right-of-use assets | $ 6,437 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentNet |
Current portion of finance lease liabilities | $ 599 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OtherAccruedLiabilitiesCurrent |
Noncurrent portion of finance lease liabilities | $ 6,925 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent |
Total finance lease liabilities | $ 7,524 |
Weighted-average remaining lease term (in years) | |
Operating leases | 9 years 9 months 29 days |
Finance leases | 10 years 14 days |
Weighted-average discount rate | |
Operating leases | 5.95% |
Finance leases | 5.47% |
Summary of Cash Flow Informatio
Summary of Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 29, 2019 | Mar. 29, 2019 | Mar. 30, 2018 | |
Cash paid for amounts included in lease liabilities | |||
Operating cash flows from finance leases | $ 105 | ||
Operating cash flows from operating leases | 1,944 | ||
Financing cash flows from finance leases | $ 140 | 140 | $ 142 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 839 |
Future Minimum Lease Payments U
Future Minimum Lease Payments Under Operating and Finance Leases (Details) $ in Thousands | Mar. 29, 2019USD ($) |
Operating Lease | |
2019 (remainder of year) | $ 5,289 |
2020 | 5,712 |
2021 | 5,512 |
2022 | 4,938 |
2023 | 4,360 |
Thereafter | 25,976 |
Total minimum lease payments | 51,787 |
Less: Interest | (14,781) |
Present value of lease liabilities | 37,006 |
Finance Lease | |
2019 (remainder of year) | 742 |
2020 | 979 |
2021 | 907 |
2022 | 907 |
2023 | 930 |
Thereafter | 5,395 |
Total minimum lease payments | 9,860 |
Less: Interest | (2,336) |
Present value of lease liabilities | $ 7,524 |
Future Minimum Lease Payments_2
Future Minimum Lease Payments Under Operating and Capital Leases (Details) $ in Thousands | Dec. 31, 2018USD ($) | |
Operating Lease | ||
2019 | $ 7,797 | [1] |
2020 | 6,263 | [1] |
2021 | 5,757 | [1] |
2022 | 5,264 | [1] |
2023 | 4,719 | [1] |
Thereafter | 26,149 | [1] |
Total minimum lease payments | 55,949 | [1] |
Capital Lease | ||
2019 | 990 | |
2020 | 980 | |
2021 | 907 | |
2022 | 907 | |
2023 | 930 | |
Thereafter | 5,394 | |
Total minimum lease payments | $ 10,108 | |
[1] | Future minimum lease payments as of December 31, 2018 included common-area maintenance and other property management costs and tax obligations |
Share-Based Compensation Expens
Share-Based Compensation Expense Recorded in the Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2019 | Mar. 30, 2018 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | $ 2,727 | $ 2,044 |
Selling, general and administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 2,531 | 1,924 |
Research and development and engineering | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 111 | 84 |
Cost of Revenue | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | $ 85 | $ 36 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2019 | Mar. 30, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation expense recognized | $ 2,727 | $ 2,044 |
Selling, General and Administrative Expenses | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation expense recognized | 2,531 | 1,924 |
Restricted Stock Units and Deferred Stock Units | 2010 Incentive Award Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total fair value of RSUs, DSUs and PSUs vested | 10,700 | |
Restricted Stock Units and Deferred Stock Units | Selling, General and Administrative Expenses | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation expense recognized | $ 800 | $ 500 |
Restricted Stock Units (RSUs) | 2010 Incentive Award Plan | Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 0 days | |
Restricted Stock Units (RSUs) | 2010 Incentive Award Plan | Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 5 years | |
EPS Performance-based Restricted Stock Units | 2010 Incentive Award Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 3 years | |
EPS Performance-based Restricted Stock Units | 2010 Incentive Award Plan | Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Range of percentage of shares to be issued upon settlement following vesting of target number of shares | 0.00% | |
EPS Performance-based Restricted Stock Units | 2010 Incentive Award Plan | Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Range of percentage of shares to be issued upon settlement following vesting of target number of shares | 200.00% | |
TSR Performance-based Restricted Stock Units | 2010 Incentive Award Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 3 years | |
TSR Performance-based Restricted Stock Units | 2010 Incentive Award Plan | Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Range of percentage of shares to be issued upon settlement following vesting of target number of shares | 0.00% | |
TSR Performance-based Restricted Stock Units | 2010 Incentive Award Plan | Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Range of percentage of shares to be issued upon settlement following vesting of target number of shares | 200.00% | |
Performance Stock Units | 2010 Incentive Award Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total fair value of RSUs, DSUs and PSUs vested | $ 5,000 |
Restricted Stock Units and Defe
Restricted Stock Units and Deferred Stock Units Issued and Outstanding (Details) - 2010 Incentive Award Plan - Restricted Stock Units and Deferred Stock Units shares in Thousands | 3 Months Ended |
Mar. 29, 2019$ / sharesshares | |
Restricted Stock Units | |
Unvested, Beginning Balance | 529 |
Granted | 101 |
Vested | (141) |
Forfeited | (8) |
Unvested, Ending Balance | 481 |
Expected to vest at end of period | 454 |
Weighted Average Grant Date Fair Value | |
Unvested, Beginning Balance | $ / shares | $ 26.98 |
Granted | $ / shares | 75.29 |
Vested | $ / shares | 28.33 |
Forfeited | $ / shares | 34.70 |
Unvested, Ending Balance | $ / shares | $ 36.61 |
Performance-Based Awards Issued
Performance-Based Awards Issued and Outstanding (Details) - 2010 Incentive Award Plan - Performance Stock Units shares in Thousands | 3 Months Ended | |
Mar. 29, 2019$ / sharesshares | ||
Performance-based Awards | ||
Unvested, Beginning Balance | shares | 137 | |
Granted | shares | 44 | |
Performance adjustment | shares | 29 | [1] |
Vested | shares | (59) | |
Unvested, Ending Balance | shares | 151 | |
Weighted Average Grant Date Fair Value | ||
Unvested, Beginning Balance | $ / shares | $ 37.28 | |
Granted | $ / shares | 92.93 | |
Performance adjustment | $ / shares | 14.13 | [1] |
Vested | $ / shares | 14.13 | |
Unvested, Ending Balance | $ / shares | $ 57.57 | |
[1] | Represents adjustment for performance-based awards granted on March 30, 2016. These units vested at 200% during the three months ended March 29, 2019 based on the achievement of cumulative Non-GAAP EPS during the performance period of fiscal years 2016 through 2018. |
Performance-Based Awards Issu_2
Performance-Based Awards Issued and Outstanding (Parenthetical) (Details) | 3 Months Ended |
Mar. 29, 2019 | |
2010 Incentive Award Plan | Performance Stock Units | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Vesting percentage | 200.00% |
Fair Value of TSR Performance-B
Fair Value of TSR Performance-Based Restricted Stock Units Estimated Using Monte-Carol Valuation Model (Details) - TSR Performance-based Restricted Stock Units | 3 Months Ended |
Mar. 29, 2019$ / shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Grant-date stock price | $ 77.23 |
Expected volatility | 32.54% |
Risk-free interest rate | 2.46% |
Expected annual dividend yield | 0.00% |
Fair value | $ 108.58 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 3 Months Ended | |
Mar. 29, 2019 | Mar. 30, 2018 | |
Income Taxes [Line Items] | ||
Effective tax rate on income from operations | 0.60% | 11.00% |
Canada Revenue Agency | CANADA | ||
Income Taxes [Line Items] | ||
Statutory tax rate | 29.00% | 29.00% |
Schedule of Restructuring and A
Schedule of Restructuring and Acquisition Related Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2019 | Mar. 30, 2018 | |
Restructuring Cost And Reserve [Line Items] | ||
Total restructuring charges | $ 1,236 | |
Acquisition and related charges | 818 | $ 25 |
Total restructuring and acquisition related costs | 2,054 | $ 25 |
2019 Restructuring | ||
Restructuring Cost And Reserve [Line Items] | ||
Total restructuring charges | 967 | |
2018 Restructuring | ||
Restructuring Cost And Reserve [Line Items] | ||
Total restructuring charges | $ 269 |
Restructuring and Acquisition_3
Restructuring and Acquisition Related Costs - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 27, 2019 | Mar. 29, 2019 | Mar. 30, 2018 | Dec. 31, 2019 | |
Restructuring and Acquisition Related Costs [Line Items] | ||||
Restructuring costs | $ 1,236 | |||
Acquisition and related charges | 818 | $ 25 | ||
Precision Motion | Finders' Fees, Legal, Valuation And Other Professional Or Consulting Fees | ||||
Restructuring and Acquisition Related Costs [Line Items] | ||||
Acquisition and related charges | 300 | $ 100 | ||
Precision Motion | Earn-out Agreement | ||||
Restructuring and Acquisition Related Costs [Line Items] | ||||
Acquisition and related charges | $ 500 | |||
2019 Restructuring | ||||
Restructuring and Acquisition Related Costs [Line Items] | ||||
Restructuring and related cost description | 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. During the three months ended March 29, 2019, the Company recorded $1.0 million in severance and related costs in connection with the 2019 restructuring plan. As of March 29, 2019, the Company incurred cumulative costs related to this restructuring plan totaling $1.3 million. The Company anticipates completing the 2019 restructuring program in 2019 and expects to incur additional restructuring charges of $1.0 million to $2.5 million related to the 2019 restructuring program | |||
Restructuring costs | $ 967 | |||
Restructuring cumulative costs incurred | 1,300 | |||
2019 Restructuring | Vision | ||||
Restructuring and Acquisition Related Costs [Line Items] | ||||
Restructuring costs | 350 | |||
2019 Restructuring | Precision Motion | ||||
Restructuring and Acquisition Related Costs [Line Items] | ||||
Restructuring costs | 47 | |||
2019 Restructuring | Severance Costs | ||||
Restructuring and Acquisition Related Costs [Line Items] | ||||
Restructuring costs | 1,000 | |||
2019 Restructuring | Additional Restructuring Costs | Minimum | Scenario, Forecast | ||||
Restructuring and Acquisition Related Costs [Line Items] | ||||
Restructuring costs | $ 1,000 | |||
2019 Restructuring | Additional Restructuring Costs | Maximum | Scenario, Forecast | ||||
Restructuring and Acquisition Related Costs [Line Items] | ||||
Restructuring costs | $ 2,500 | |||
2018 Restructuring | ||||
Restructuring and Acquisition Related Costs [Line Items] | ||||
Restructuring costs | 269 | |||
Restructuring cumulative costs incurred | $ 1,900 | |||
2018 Restructuring | Vision | ||||
Restructuring and Acquisition Related Costs [Line Items] | ||||
Restructuring and related cost description | During the second quarter of 2018, the Company initiated a program to integrate manufacturing operations as a result of recent acquisition activities. During the three months ended March 29, 2019, the Company recorded $0.3 million in severance and related costs in connection with the 2018 restructuring plan. These costs were reported in the Vision reportable segment. As of March 29, 2019, the Company incurred cumulative costs related to this restructuring plan totaling $1.9 million. The Company anticipates completing the 2018 restructuring program during the third quarter of 2019 and expects to incur additional restructuring charges of $0.7 million to $1.0 million related to the 2018 restructuring program in the Vision reportable segment. | |||
2018 Restructuring | Severance Costs | Vision | ||||
Restructuring and Acquisition Related Costs [Line Items] | ||||
Restructuring costs | $ 300 | |||
2018 Restructuring | Additional Restructuring Costs | Minimum | Scenario, Forecast | Vision | ||||
Restructuring and Acquisition Related Costs [Line Items] | ||||
Restructuring costs | $ 700 | |||
2018 Restructuring | Additional Restructuring Costs | Maximum | Scenario, Forecast | Vision | ||||
Restructuring and Acquisition Related Costs [Line Items] | ||||
Restructuring costs | $ 1,000 |
Summary of Restructuring Costs
Summary of Restructuring Costs for Each Segment and Unallocated Corporate Costs (Details) $ in Thousands | 3 Months Ended |
Mar. 29, 2019USD ($) | |
Restructuring Cost And Reserve [Line Items] | |
Restructuring costs | $ 1,236 |
2019 Restructuring | |
Restructuring Cost And Reserve [Line Items] | |
Restructuring costs | 967 |
Photonics | 2019 Restructuring | |
Restructuring Cost And Reserve [Line Items] | |
Restructuring costs | 193 |
Vision | 2019 Restructuring | |
Restructuring Cost And Reserve [Line Items] | |
Restructuring costs | 350 |
Precision Motion | 2019 Restructuring | |
Restructuring Cost And Reserve [Line Items] | |
Restructuring costs | 47 |
Unallocated Corporate and Shared Services | 2019 Restructuring | |
Restructuring Cost And Reserve [Line Items] | |
Restructuring costs | $ 377 |
Summary of Accrual Activities b
Summary of Accrual Activities by Components Related to Company's Restructuring Charges (Details) $ in Thousands | 3 Months Ended | |
Mar. 29, 2019USD ($) | ||
Restructuring Cost And Reserve [Line Items] | ||
Accrued expense beginning balance | $ 1,276 | |
Restructuring charges | 1,236 | |
Cash payments | (765) | |
Reclassification of reserves | (477) | [1] |
Non-cash write-offs and other adjustments | (2) | |
Accrued expense ending balance | 1,268 | |
Severance | ||
Restructuring Cost And Reserve [Line Items] | ||
Accrued expense beginning balance | 876 | |
Restructuring charges | 1,108 | |
Cash payments | (744) | |
Non-cash write-offs and other adjustments | 4 | |
Accrued expense ending balance | 1,244 | |
Facility | ||
Restructuring Cost And Reserve [Line Items] | ||
Accrued expense beginning balance | 388 | |
Restructuring charges | 89 | |
Reclassification of reserves | (477) | [1] |
Other Restructuring Charges | ||
Restructuring Cost And Reserve [Line Items] | ||
Accrued expense beginning balance | 12 | |
Restructuring charges | 39 | |
Cash payments | (21) | |
Non-cash write-offs and other adjustments | (6) | |
Accrued expense ending balance | $ 24 | |
[1] | Accrual related to exited facilities was reclassified to operating lease liabilities upon adoption of ASU 2016-02. |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 29, 2019 | Mar. 30, 2018 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||
Revenue | $ 157,186 | $ 146,965 | |
Board of Directors | |||
Related Party Transaction [Line Items] | |||
Revenue | 11,600 | ||
Receivables from customers | $ 5,100 | $ 600 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 3 Months Ended |
Mar. 29, 2019SegmentEndMarket | |
Segment Reporting [Abstract] | |
Number of reportable segments | Segment | 3 |
Number of primary end market segments | EndMarket | 2 |
Revenue, Gross Profit, Gross Pr
Revenue, Gross Profit, Gross Profit Margin and Operating Income (Loss) from Continuing Operations by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2019 | Mar. 30, 2018 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 157,186 | $ 146,965 |
Gross Profit | $ 66,289 | $ 62,159 |
Gross profit margin percentage | 42.20% | 42.30% |
Operating Income (Loss) | $ 14,393 | $ 17,227 |
Unallocated Corporate and Shared Services | ||
Segment Reporting Information [Line Items] | ||
Gross Profit | (519) | (377) |
Operating Income (Loss) | (8,109) | (7,178) |
Photonics | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 59,225 | $ 61,831 |
Gross profit margin percentage | 46.10% | 47.80% |
Photonics | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Gross Profit | $ 27,314 | $ 29,555 |
Operating Income (Loss) | 12,310 | 15,323 |
Vision | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 65,936 | $ 56,209 |
Gross profit margin percentage | 39.40% | 35.10% |
Vision | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Gross Profit | $ 25,973 | $ 19,721 |
Operating Income (Loss) | 4,557 | 475 |
Precision Motion | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 32,025 | $ 28,925 |
Gross profit margin percentage | 42.20% | 45.80% |
Precision Motion | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Gross Profit | $ 13,521 | $ 13,260 |
Operating Income (Loss) | $ 5,635 | $ 8,607 |
Depreciation and Amortization E
Depreciation and Amortization Expenses by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2019 | Mar. 30, 2018 | |
Depreciation and Amortization Expenses | ||
Depreciation and amortization expenses | $ 9,074 | $ 9,067 |
Unallocated Corporate and Shared Services | ||
Depreciation and Amortization Expenses | ||
Depreciation and amortization expenses | 55 | 323 |
Photonics | Operating Segments | ||
Depreciation and Amortization Expenses | ||
Depreciation and amortization expenses | 2,621 | 3,067 |
Vision | Operating Segments | ||
Depreciation and Amortization Expenses | ||
Depreciation and amortization expenses | 5,029 | 5,174 |
Precision Motion | Operating Segments | ||
Depreciation and Amortization Expenses | ||
Depreciation and amortization expenses | $ 1,369 | $ 503 |
Schedule of Geographic Revenue
Schedule of Geographic Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2019 | Mar. 30, 2018 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 157,186 | $ 146,965 |
United States | ||
Segment Reporting Information [Line Items] | ||
Revenue | 64,760 | 58,113 |
Germany | ||
Segment Reporting Information [Line Items] | ||
Revenue | 23,477 | 20,069 |
Rest of Europe | ||
Segment Reporting Information [Line Items] | ||
Revenue | 30,770 | 27,060 |
China | ||
Segment Reporting Information [Line Items] | ||
Revenue | 15,108 | 15,603 |
Rest of Asia-Pacific | ||
Segment Reporting Information [Line Items] | ||
Revenue | 20,447 | 24,720 |
Other Countries | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 2,624 | $ 1,400 |
Schedule of Revenue by End Mark
Schedule of Revenue by End Market (Details) | 3 Months Ended | |
Mar. 29, 2019 | Mar. 30, 2018 | |
Segment Reporting Information [Line Items] | ||
Total revenue by end market | 100.00% | 100.00% |
Advanced Industrial | ||
Segment Reporting Information [Line Items] | ||
Total revenue by end market | 50.00% | 50.00% |
Medical | ||
Segment Reporting Information [Line Items] | ||
Total revenue by end market | 50.00% | 50.00% |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) | Apr. 16, 2019 |
Ingenia-CAT, S.L | Subsequent Event | |
Subsequent Event [Line Items] | |
Business acquisition, date of acquisition | Apr. 16, 2019 |