Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jul. 01, 2022 | Aug. 02, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jul. 01, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
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 | 35,642,770 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-35083 | |
Entity Tax Identification Number | 98-0110412 | |
Entity Address, Address Line One | 125 Middlesex Turnpike | |
Entity Address, City or Town | Bedford | |
Entity Address, State or Province | MA | |
Entity Address, Country | US | |
Entity Address, Postal Zip Code | 01730 | |
City Area Code | 781 | |
Local Phone Number | 266-5700 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Incorporation, State or Country Code | A3 | |
Entity Interactive Data Current | Yes | |
Security Exchange Name | NASDAQ | |
Title of 12(b) Security | Common shares, no par value |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 01, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 100,489 | $ 117,393 |
Accounts receivable, net of allowance of $671 and $556, respectively | 129,808 | 115,617 |
Inventories | 153,887 | 125,657 |
Prepaid income taxes and income taxes receivable | 1,081 | 1,997 |
Prepaid expenses and other current assets | 14,102 | 13,161 |
Total current assets | 399,367 | 373,825 |
Property, plant and equipment, net | 87,924 | 87,439 |
Operating lease assets | 45,575 | 48,338 |
Deferred tax assets | 7,379 | 12,206 |
Other assets | 5,688 | 5,586 |
Intangible assets, net | 193,499 | 220,989 |
Goodwill | 466,411 | 479,500 |
Total assets | 1,205,843 | 1,227,883 |
Current liabilities | ||
Current portion of long-term debt | 4,678 | 5,097 |
Accounts payable | 77,351 | 68,514 |
Income taxes payable | 6,825 | 4,514 |
Current portion of operating lease liabilities | 7,561 | 7,334 |
Accrued expenses and other current liabilities | 101,985 | 98,479 |
Total current liabilities | 198,400 | 183,938 |
Long-term debt | 402,679 | 429,361 |
Operating lease liabilities | 42,580 | 45,700 |
Deferred tax liabilities | 17,688 | 33,738 |
Income taxes payable | 5,320 | 4,217 |
Other liabilities | 7,007 | 9,638 |
Total liabilities | 673,674 | 706,592 |
Commitments and contingencies (Note 14) | ||
Stockholders’ equity: | ||
Preferred shares, no par value; Authorized shares: 7,000; No shares issued and outstanding | ||
Common shares, no par value; Authorized shares: unlimited; Issued and outstanding: 35,623 and 35,601, respectively | 423,856 | 423,856 |
Additional paid-in capital | 46,146 | 53,768 |
Retained earnings | 92,832 | 56,533 |
Accumulated other comprehensive loss | (30,665) | (12,866) |
Total stockholders' equity | 532,169 | 521,291 |
Total liabilities and stockholders’ equity | $ 1,205,843 | $ 1,227,883 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jul. 01, 2022 | Dec. 31, 2021 | |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 671 | $ 556 |
Preferred shares, no par value | $ 0 | $ 0 |
Preferred shares, Authorized | 7,000,000 | 7,000,000 |
Preferred shares, Issued | 0 | 0 |
Preferred shares, outstanding | 0 | 0 |
Common shares, Authorized | Unlimited | Unlimited |
Common shares, no par value | $ 0 | $ 0 |
Common shares, Issued | 35,623,000 | 35,601,000 |
Common shares, outstanding | 35,623,000 | 35,601,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Income Statement [Abstract] | ||||
Revenue | $ 215,356 | $ 167,523 | $ 419,572 | $ 330,107 |
Cost of revenue | 120,111 | 95,117 | 234,051 | 188,961 |
Gross profit | 95,245 | 72,406 | 185,521 | 141,146 |
Operating expenses: | ||||
Research and development and engineering | 21,588 | 16,954 | 42,517 | 35,636 |
Selling, general and administrative | 40,538 | 31,240 | 79,890 | 62,893 |
Amortization of purchased intangible assets | 7,173 | 3,586 | 14,515 | 7,161 |
Restructuring, acquisition, and related costs | 2,655 | 4,634 | 1,025 | 8,365 |
Total operating expenses | 71,954 | 56,414 | 137,947 | 114,055 |
Operating income | 23,291 | 15,992 | 47,574 | 27,091 |
Interest income (expense), net | (2,757) | (1,378) | (5,866) | (2,786) |
Foreign exchange transaction gains (losses), net | 152 | (76) | 221 | (333) |
Other income (expense), net | 68 | (97) | (477) | (167) |
Income before income taxes | 20,754 | 14,441 | 41,452 | 23,805 |
Income tax provision (benefit) | 3,275 | 2,777 | 5,153 | 831 |
Consolidated net income | $ 17,479 | $ 11,664 | $ 36,299 | $ 22,974 |
Earnings per common share (Note 4): | ||||
Basic | $ 0.49 | $ 0.33 | $ 1.02 | $ 0.65 |
Diluted | $ 0.49 | $ 0.33 | $ 1.01 | $ 0.64 |
Weighted average common shares outstanding—basic | 35,609 | 35,374 | 35,573 | 35,326 |
Weighted average common shares outstanding—diluted | 35,933 | 35,763 | 35,857 | 35,775 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | ||
Statement Of Income And Comprehensive Income [Abstract] | |||||
Consolidated net income | $ 17,479 | $ 11,664 | $ 36,299 | $ 22,974 | |
Other comprehensive income (loss): | |||||
Foreign currency translation adjustments, net of tax | [1] | (13,927) | 136 | (18,699) | (353) |
Pension liability adjustments, net of tax | [2] | 587 | 262 | 900 | 383 |
Total other comprehensive income (loss) | (13,340) | 398 | (17,799) | 30 | |
Total consolidated comprehensive income | $ 4,139 | $ 12,062 | $ 18,500 | $ 23,004 | |
[1]The tax effect on this component of comprehensive income (loss) was nominal for all periods presented.[2]The tax effect on this component of comprehensive income (loss) was nominal for all periods presented. See Note 3 to the Consolidated Financial Statements 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 Stock | Additional Paid-In Capital | Retained Earnings (Deficit) | Accumulated Other Comprehensive Loss |
Balance at Dec. 31, 2020 | $ 476,809 | $ 423,856 | $ 58,992 | $ 6,202 | $ (12,241) |
Balance (in shares) at Dec. 31, 2020 | 35,163 | ||||
Consolidated net income | 22,974 | 22,974 | |||
Common shares issued under stock plans (in shares) | 460 | ||||
Common shares withheld for taxes on vested stock awards | (18,428) | (18,428) | |||
Common shares withheld for taxes on vested stock awards (in shares) | (134) | ||||
Share-based compensation | 11,679 | 11,679 | |||
Other comprehensive income (loss), net of tax | 30 | 30 | |||
Balance at Jul. 02, 2021 | 493,064 | $ 423,856 | 52,243 | 29,176 | (12,211) |
Balance (in shares) at Jul. 02, 2021 | 35,489 | ||||
Balance at Apr. 02, 2021 | 476,123 | $ 423,856 | 47,364 | 17,512 | (12,609) |
Balance (in shares) at Apr. 02, 2021 | 35,384 | ||||
Consolidated net income | 11,664 | 11,664 | |||
Common shares issued under stock plans (in shares) | 106 | ||||
Common shares withheld for taxes on vested stock awards | (156) | (156) | |||
Common shares withheld for taxes on vested stock awards (in shares) | (1) | ||||
Share-based compensation | 5,035 | 5,035 | |||
Other comprehensive income (loss), net of tax | 398 | 398 | |||
Balance at Jul. 02, 2021 | 493,064 | $ 423,856 | 52,243 | 29,176 | (12,211) |
Balance (in shares) at Jul. 02, 2021 | 35,489 | ||||
Balance at Dec. 31, 2021 | 521,291 | $ 423,856 | 53,768 | 56,533 | (12,866) |
Balance (in shares) at Dec. 31, 2021 | 35,601 | ||||
Consolidated net income | 36,299 | 36,299 | |||
Common shares issued under stock plans (in shares) | 171 | ||||
Common shares withheld for taxes on vested stock awards | (9,477) | (9,477) | |||
Common shares withheld for taxes on vested stock awards (in shares) | (65) | ||||
Repurchases of common shares | (10,000) | (10,000) | |||
Repurchases of common shares (in shares) | (84) | ||||
Share-based compensation | 11,855 | 11,855 | |||
Other comprehensive income (loss), net of tax | (17,799) | (17,799) | |||
Balance at Jul. 01, 2022 | 532,169 | $ 423,856 | 46,146 | 92,832 | (30,665) |
Balance (in shares) at Jul. 01, 2022 | 35,623 | ||||
Balance at Apr. 01, 2022 | 534,693 | $ 423,856 | 52,809 | 75,353 | (17,325) |
Balance (in shares) at Apr. 01, 2022 | 35,684 | ||||
Consolidated net income | 17,479 | 17,479 | |||
Common shares issued under stock plans (in shares) | 37 | ||||
Common shares withheld for taxes on vested stock awards | (1,744) | (1,744) | |||
Common shares withheld for taxes on vested stock awards (in shares) | (14) | ||||
Repurchases of common shares | (10,000) | (10,000) | |||
Repurchases of common shares (in shares) | (84) | ||||
Share-based compensation | 5,081 | 5,081 | |||
Other comprehensive income (loss), net of tax | (13,340) | (13,340) | |||
Balance at Jul. 01, 2022 | $ 532,169 | $ 423,856 | $ 46,146 | $ 92,832 | $ (30,665) |
Balance (in shares) at Jul. 01, 2022 | 35,623 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 01, 2022 | Jul. 02, 2021 | |
Cash flows from operating activities: | ||
Consolidated net income | $ 36,299 | $ 22,974 |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | ||
Depreciation and amortization | 27,855 | 19,724 |
Provision for inventory excess and obsolescence | 1,004 | 2,505 |
Share-based compensation | 11,855 | 11,679 |
Deferred income taxes | (9,504) | (699) |
Write-off of unamortized deferred financing costs | 624 | |
Other | 375 | 682 |
Changes in assets and liabilities which (used)/provided cash, excluding effects from business acquisitions: | ||
Accounts receivable | (17,627) | (15,580) |
Inventories | (33,509) | (5,645) |
Prepaid income taxes, income taxes receivable, prepaid expenses and other current assets | (1,107) | (4,750) |
Accounts payable, income taxes payable, accrued expenses and other current liabilities | 20,365 | 22,059 |
Other non-current assets and liabilities | (1,222) | (935) |
Net cash provided by operating activities | 35,408 | 52,014 |
Cash flows from investing activities: | ||
Working capital adjustments from business acquisition | 820 | |
Purchases of property, plant and equipment | (12,103) | (8,643) |
Payment of contingent consideration related to acquisition of technology assets | (1,470) | (2,200) |
Other investing activities | 137 | |
Net cash used in investing activities | (12,616) | (10,843) |
Cash flows from financing activities: | ||
Repayments under term loan and revolving credit facilities | (12,833) | (2,706) |
Payments of debt issuance costs | (2,492) | |
Payments of withholding taxes from share-based awards | (9,477) | (18,428) |
Repurchases of common shares | (10,000) | |
Payment of contingent consideration related to acquisitions | (375) | (1,836) |
Purchase of a building under finance lease | (8,743) | |
Other financing activities | (296) | (281) |
Net cash used in financing activities | (35,473) | (31,994) |
Effect of exchange rates on cash and cash equivalents | (4,223) | (378) |
Increase (decrease) in cash and cash equivalents | (16,904) | 8,799 |
Cash and cash equivalents, beginning of the period | 117,393 | 125,054 |
Cash and cash equivalents, end of the period | 100,489 | 133,853 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 5,244 | 2,240 |
Cash paid for income taxes | 9,698 | 6,734 |
Income tax refunds received | $ 164 | $ 1,199 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jul. 01, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 1. Basis of Presentation Novanta Inc. (together with its subsidiaries, “Novanta” or the “Company”) 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 consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. 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 consolidated 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 as of 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 such revisions 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 these estimates. Recent Accounting Pronouncements The following table provides a brief description of recent Accounting Standards Updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”): Standard Description Effective Date Effect on the Financial Statements or Other Significant Matters In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. Upon issuance. Adoption of ASU 2020-04 is elective. In March 2022, the Company amended the Third Amended and Restated Credit Agreement and replaced LIBOR with SOFR as the new reference rate for U.S. dollar borrowings. The ASU did not have any impact on the Company’s consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” ASU 2021-08 requires that entities recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASC 606, “Revenue from Contracts with Customers”. ASU 2021-08 also applies to contract assets or liabilities from other contracts to which the provisions of ASC 606 apply. The amendments in ASU 2021-08 do not affect the accounting for other assets or liabilities that may arise from revenue contracts with customers in accordance with ASC 606, such as refund liabilities, or in a business combination, such as customer-related intangible assets and contract-based intangible assets. January 1, 2023. Early adoption is permitted. The Company early adopted ASU 2021-08 as of January 1, 2022. The adoption of ASU 2021-08 did not have any material impact on the Company’s consolidated financial statements. |
Revenue
Revenue | 6 Months Ended |
Jul. 01, 2022 | |
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 for the maintenance and repair of products are typically short in duration, mostly less than one month, and generally involve a single distinct performance obligation. The related revenue is recognized at a point in time when control transfers to the customer upon completion of professional services. The consideration expected to be received in exchange for such services is typically the contractually stated amount. Certain engineering services are longer in duration and the related revenue is recognized over time. As the Company’s right to payment from a customer is based on the value of engineering services performed, the Company recognizes revenue based on the corresponding value to the customer from the Company’s performance completed to date. Revenue from engineering services aggregated to less than 3% of the Company’s consolidated revenue during the six months ended July 1, 2022 and July 2, 2021. 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. 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 standard warranty periods for the Company’s products are typically 12 months to 36 months. The Company recognizes estimated liabilities associated with standard warranty periods for its products in accordance with the provisions of ASC 450, “Contingencies,” as the Company has the ability to ascertain the likelihood of the liabilities and can reasonably estimate the amount of the liabilities. A provision for the estimated cost related to standard warranties is recorded as cost of revenue at the time revenue is recognized. The Company’s estimate of the costs to service the warranty obligations is based on historical experience and expectations of future conditions. To the extent that the Company’s experience in warranty claims or costs associated with servicing those claims differ from the original estimates, revisions to the estimated warranty liabilities are recorded at that time, with offsetting adjustments to cost of revenue. Practical Expedients and Exemptions The Company expenses incremental direct costs of obtaining a contract when incurred because 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 the related revenue. As of July 1, 2022 and December 31, 2021, contract liabilities were $7.9 million and $7.3 million, respectively, and are included in accrued expenses and other current liabilities and other liabilities in the accompanying consolidated balance sheets. The increase in the contract liability balance during the six months ended July 1, 2022 is primarily due to cash payments received in advance of satisfying performance obligations, partially offset by $3.6 million of revenue recognized during the period that was included in the contract liability balance as of December 31, 2021. Disaggregated Revenue See Note 15 for the Company’s disaggregation of revenue by segment, geography and end market. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jul. 01, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | 3. Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss was as follows (in thousands): Total Accumulated Other Cumulative Pension Comprehensive Translation Liability Loss Adjustments Adjustments Balance at December 31, 2021 $ (12,866 ) $ (5,753 ) $ (7,113 ) Other comprehensive income (loss) (18,009 ) (18,699 ) 690 Amounts reclassified from accumulated other comprehensive loss 210 — 210 Balance at July 1, 2022 $ (30,665 ) $ (24,452 ) $ (6,213 ) The amounts reclassified from accumulated other comprehensive loss were included in other income (expense) in the consolidated statements of operations. |
Earnings per Common Share
Earnings per Common Share | 6 Months Ended |
Jul. 01, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per Common Share | 4. Earnings per Common Share Basic earnings per common share is computed by dividing consolidated net income by the weighted average number of common shares outstanding during the period. For diluted earnings per common share, the denominator includes the dilutive effect of outstanding common share equivalents. For the three and six months ended July 1, 2022 and July 2, 2021, weighted average shares outstanding for the diluted earnings per common share included the dilutive effect of outstanding restricted stock units, stock options, relative total shareholder return performance-based restricted stock units (“TSR-PSUs”) and certain other performance-based restricted stock units (“PSUs”), determined using the treasury stock method. The dilutive effects of market-based contingently issuable shares from the TSR-PSUs are included in the weighted average common share calculation based on the number of shares, if any, that would be issuable as of the end of the reporting period, assuming the end of the reporting period is also the end of the performance period. The dilutive effects of attainment-based contingently issuable shares from other PSUs are included in the weighted average common share calculation only when the performance targets have been achieved based on the cumulative achievement against the performance targets 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 Six Months Ended July 1, July 2, July 1, July 2, 2022 2021 2022 2021 Numerators: Consolidated net income $ 17,479 $ 11,664 $ 36,299 $ 22,974 Denominators: Weighted average common shares outstanding— basic 35,609 35,374 35,573 35,326 Dilutive potential common shares 324 389 284 449 Weighted average common shares outstanding— diluted 35,933 35,763 35,857 35,775 Antidilutive potential common shares excluded from above 146 25 120 23 Earnings per Common Share: Basic $ 0.49 $ 0.33 $ 1.02 $ 0.65 Diluted $ 0.49 $ 0.33 $ 1.01 $ 0.64 For both the three and six months ended July 1, 2022, 35 thousand non-GAAP EPS performance-based restricted stock units (“EPS-PSUs”) and 37 thousand operating cash flow performance-based restricted stock units (“OCF-PSUs”) granted to certain members of the executive management team, and 53 thousand performance-based restricted stock units granted to ATI Industrial Automation employees (“ ATI-PSUs ”) are considered attainment-based contingently issuable shares and were excluded from the calculation of the denominator as the contingent conditions had not been met as of July 1 , 202 2 . For both the three and six months ended July 2, 2021, 46 thousand EPS-PSUs and 37 thousand OCF-PSUs granted to certain members of the executive management team, and 213 thousand shares of restricted stock issued to the former Laser Quantum non-controlling interest shareholders were considered attainment-based contingently issuable shares and were excluded from the calculation of the denominator as the contingent conditions had not been met as of July 2, 2021. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jul. 01, 2022 | |
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 Current Assets and Liabilities 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. The fair value of these foreign currency forward contracts is reported either in other current assets or in other current liabilities as of the end of the period. Contingent Considerations On August 30, 2021, the Company acquired ATI Industrial Automation Inc. (“ATI”). Under the purchase and sale agreement for the ATI acquisition, the former shareholders of ATI (the “Sellers”) are eligible to receive contingent consideration based on ATI’s fiscal year 2021 Adjusted EBITDA, as defined in the purchase and sale agreement. The contingent consideration will be payable in the third quarter of 2022. The estimated fair value of the contingent consideration was determined based on the Monte Carlo valuation method and was recorded as part of the purchase price as of the acquisition date. Subsequent changes in the estimated fair value are recorded in the consolidated statement of operations in restructuring, acquisition, and related costs until the liability is fully settled. The fair value of the contingent consideration was $44.0 million as of December 31, 2021. During the three months ended July 1, 2022, the fair value of the contingent consideration was adjusted to $45.0 million based on the final determination of ATI’s 2021 Adjusted EBITDA between the Company and the Sellers. On July 31, 2019, the Company acquired ARGES GmbH (“ARGES”). Under the purchase and sale agreement for the ARGES acquisition, the former owner of ARGES is eligible to receive contingent consideration based on the achievement of certain revenue targets by the Company from August 2019 through December 2026. The undiscounted range of possible contingent consideration is zero to €10.0 million ($11.1 million). If the revenue targets are achieved, the contingent consideration would be payable annually with the first payment due in the first quarter of 2021. The estimated fair value of the contingent consideration of €7.1 million ($7.9 million) was determined based on the Monte Carlo valuation method and was recorded as part of the purchase price as of the acquisition date. Subsequent changes in the estimated fair value of the contingent consideration liability are recorded in the consolidated statement of operations in restructuring, acquisition, and related costs until the liability is fully settled. During 2020, the fair value of the contingent consideration was adjusted to €4.1 million ($5.1 million). During 2021, the Company made the first installment payment of € 0.4 million ($ 0.4 million) in March 2021 and adjusted the fair value of the contingent consideration to € million ($ million) as of December 31, 2021 . During 2022, the Company made the second installment payment of € 0.3 million ($ 0.4 million) in March 2022 . The installment payments are reported as cash outflows from financing activities in the consolidated statement of cash flows for the respective periods. Based on the revenue performance and revenue projection as of April 1, 2022 , the fair value of the remaining contingent consideration was adjusted to € 1.4 million ($ million). There were no other changes in the fair value of the contingent consideration during the three and six months ended July 1 , 202 2 . On April 16, 2019, the Company acquired Ingenia CAT, S.L. (“Ingenia”). Under the purchase and sale agreement for the Ingenia acquisition, the shareholders of Ingenia are eligible to receive contingent consideration based on the achievement of certain revenue targets by the Company from April 2019 through March 2022. The undiscounted range of possible contingent consideration is zero to €8.0 million ($9.0 million). If the revenue targets are achieved, the contingent consideration would be payable in cash in three annual installments from 2020 to 2022. The estimated fair value of the contingent consideration of €5.8 million ($6.6 million) was determined based on the Monte Carlo valuation method and was recorded as part of the purchase price as of the acquisition date. Subsequent changes in the estimated fair value of the contingent consideration liability are recorded in the consolidated statement of operations in restructuring, acquisition, and related costs until the liability is fully settled. During 2020, the Company made the first installment payment of €1.0 million ($1.1 million) in May 2020 and adjusted the fair value of the contingent consideration to €2.3 million ($2.9 million) as of the end of the year. During 2021, the Company made the second installment payment of €1.2 million ($1.4 million) in May 2021 and adjusted the fair value of the contingent consideration to €1.5 million ($1.7 million) as of the end of the year. The installment payments are reported as cash outflows from financing activities in the consolidated statement of cash flows for the respective periods. During the six months ended July 1, 2022, the fair value of the remaining contingent consideration was adjusted to 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 by the Company from 2018 to 2021 from products utilizing the acquired technologies. The undiscounted range of possible contingent consideration is zero to €5.5 million ($6.6 million). If the revenue 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 assets acquired and are amortized over the remaining useful life of the underlying assets. Based on revenue achievements against the target, the Company had recognized an aggregate fair value of €5.5 million ($6.3 million) of the acquired intangible assets as of July 1, 2022. The Company made the first installment payment of €2.4 million ($2.6 million) in February 2020, the second installment payment of €1.8 million ($2.2 million) in February 2021, and the final installment payment of €1.3 million ($1.5 million) in March 2022. The installment payments have been reported as cash outflows from investing activities in the consolidated statements of cash flows. There were no other changes in the fair value of the contingent consideration during the three and six month ended July 1, 2022. 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 July 1, 2022 (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 $ 1,045 $ 1,045 $ — $ — Prepaid expenses and other current assets: Foreign currency forward contracts 298 — 298 — $ 1,343 $ 1,045 $ 298 $ — Liabilities Accrued expenses and other current liabilities: Contingent considerations - Current $ 47,170 $ — $ — $ 47,170 Foreign currency forward contracts 268 — 268 — Other liabilities: Contingent considerations - Long-term 1,183 — — 1,183 $ 48,621 $ — $ 268 $ 48,353 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, 2021 (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 $ 1,711 $ 1,711 $ — $ — Prepaid expenses and other current assets: Foreign currency forward contracts 137 — 137 — $ 1,848 $ 1,711 $ 137 $ — Liabilities Accrued expenses and other current liabilities: Contingent considerations - Current $ 47,522 $ — $ — $ 47,522 Foreign currency forward contracts 160 — 160 — Other liabilities: Contingent considerations - Long-term 3,402 — — 3,402 $ 51,084 $ — $ 160 $ 50,924 Changes in the fair value of Level 3 contingent considerations during the six months ended July 1, 2022 were as follows (in thousands): Amount Balance at December 31, 2021 $ 50,924 Payments (1,845 ) Fair value adjustments (419 ) Effect of foreign exchange rates (307 ) Balance at July 1, 2022 $ 48,353 The following table provides qualitative information associated with the fair value measurement of the Company’s Level 3 liabilities as of July 1, 2022: Liability Fair Value (in thousands) Valuation Technique Unobservable Inputs Percentage Applied Contingent consideration - ATI $45,000 N/A Adjusted EBITDA for fiscal year 2021 N/A Contingent consideration - ARGES $1,428 Monte Carlo method Historical and projected revenues from August 2019 through December 2026 N/A Revenue volatility 14.0% Cost of debt 3.9% Discount rate 2.6% Contingent consideration - Ingenia $1,925 N/A Historical revenues from April 2019 through March 2022 N/A Increases or decreases in the unobservable inputs noted above 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 | 6 Months Ended |
Jul. 01, 2022 | |
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. As of July 1, 2022, the aggregate notional amount and fair value of the Company’s foreign currency forward contracts was $58.7 million and a net gain of less than $0.1 million, respectively. As of December 31, 2021, the aggregate notional amount and fair value of the Company’s foreign currency forward contracts was $50.0 million and a net loss of less than $0.1 million, respectively. The Company recognized an aggregate net loss of $1.4 million and $1.5 million for the three and six months ended July 1, 2022, respectively. The Company recognized an aggregate net loss of $0.1 million and an aggregate net gain of $0.6 million for the three and six months ended July 2, 2021, respectively. These amounts were included in foreign exchange transaction gains (losses) in the consolidated statements of operations. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jul. 01, 2022 | |
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 for impairment annually as of the beginning of the second quarter or more frequently if indicators are present or changes in circumstances suggest that an impairment may exist. The Company performed the most recent annual goodwill and indefinite-lived intangible asset impairment test as of the beginning of the second quarter of 2022 and noted no impairment. The following table summarizes changes in goodwill during the six months ended July 1, 2022 (in thousands): Balance at beginning of the period $ 479,500 Effect of foreign exchange rate changes (13,089 ) Balance at end of the period $ 466,411 Goodwill by reportable segment as of July 1, 2022 was as follows (in thousands): Reportable Segment Photonics Vision Precision Motion Total Goodwill $ 207,646 $ 156,223 $ 253,771 $ 617,640 Accumulated impairment of goodwill (102,461 ) (31,722 ) (17,046 ) (151,229 ) Total $ 105,185 $ 124,501 $ 236,725 $ 466,411 Goodwill by reportable segment as of December 31, 2021 was as follows (in thousands): Reportable Segment Photonics Vision Precision Motion Total Goodwill $ 214,564 $ 160,675 $ 255,490 $ 630,729 Accumulated impairment of goodwill (102,461 ) (31,722 ) (17,046 ) (151,229 ) Total $ 112,103 $ 128,953 $ 238,444 $ 479,500 Intangible Assets Intangible assets as of July 1, 2022 and December 31, 2021, respectively, are summarized as follows (in thousands): July 1, 2022 December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Amortizable intangible assets: Patents and developed technologies $ 183,807 $ (125,291 ) $ 58,516 $ 189,609 $ (122,130 ) $ 67,479 Customer relationships 221,306 (111,021 ) 110,285 228,656 (104,386 ) 124,270 Customer backlog 6,831 (5,693 ) 1,138 6,862 (2,254 ) 4,608 Trademarks and trade names 23,255 (12,722 ) 10,533 23,976 (12,371 ) 11,605 Amortizable intangible assets 435,199 (254,727 ) 180,472 449,103 (241,141 ) 207,962 Non-amortizable intangible assets: Trade names 13,027 — 13,027 13,027 — 13,027 Totals $ 448,226 $ (254,727 ) $ 193,499 $ 462,130 $ (241,141 ) $ 220,989 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 Six Months Ended July 1, July 2, July 1, July 2, 2022 2021 2022 2021 Amortization expense – cost of revenue $ 3,336 $ 2,982 $ 6,757 $ 5,959 Amortization expense – operating expenses 7,173 3,586 14,515 7,161 Total amortization expense $ 10,509 $ 6,568 $ 21,272 $ 13,120 Estimated amortization expense for each of the five succeeding years and thereafter as of July 1, 2022 was as follows (in thousands): Year Ending December 31, Cost of Revenue Operating Expenses Total 2022 (remainder of year) $ 6,599 $ 11,957 $ 18,556 2023 11,976 20,215 32,191 2024 9,737 16,961 26,698 2025 8,265 14,348 22,613 2026 6,916 12,200 19,116 Thereafter 15,023 46,275 61,298 Total $ 58,516 $ 121,956 $ 180,472 |
Supplementary Balance Sheet Inf
Supplementary Balance Sheet Information | 6 Months Ended |
Jul. 01, 2022 | |
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 July 1, December 31, 2022 2021 Raw materials $ 104,106 $ 84,038 Work-in-process 26,106 20,600 Finished goods 22,289 19,486 Demo and consigned inventory 1,386 1,533 Total inventories $ 153,887 $ 125,657 Accrued Expenses and Other Current Liabilities July 1, December 31, 2022 2021 Accrued compensation and benefits $ 26,570 $ 24,725 Accrued warranty 4,741 4,783 Contract liabilities, current portion 7,674 6,995 Finance lease obligations 634 599 Accrued contingent considerations and earn-outs 47,170 47,522 Other 15,196 13,855 Total $ 101,985 $ 98,479 Accrued Warranty Six Months Ended July 1, July 2, 2022 2021 Balance at beginning of the period $ 4,783 $ 4,919 Provision charged to cost of revenue 1,462 929 Use of provision (1,398 ) (1,254 ) Foreign currency exchange rate changes (106 ) (29 ) Balance at end of the period $ 4,741 $ 4,565 Other Long-Term Liabilities July 1, December 31, 2022 2021 Finance lease obligations $ 4,996 $ 5,309 Accrued contingent considerations and earn-outs 1,183 3,402 Other 828 927 Total $ 7,007 $ 9,638 |
Debt
Debt | 6 Months Ended |
Jul. 01, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 9. Debt Debt consisted of the following (in thousands): July 1, December 31, 2022 2021 Senior Credit Facilities – term loan $ 4,713 $ 5,126 Less: unamortized debt issuance costs (35 ) (29 ) Total current portion of long-term debt $ 4,678 $ 5,097 Senior Credit Facilities – term loan $ 77,521 $ 86,879 Senior Credit Facilities – revolving credit facility 330,559 346,579 Less: unamortized debt issuance costs (5,401 ) (4,097 ) Total long-term debt $ 402,679 $ 429,361 Total Senior Credit Facilities $ 407,357 $ 434,458 Senior Credit Facilities On December 31, 2019, the Company entered into an amended and restated credit agreement (the “Third Amended and Restated Credit Agreement”) with existing lenders for an aggregate credit facility of $450.0 million, consisting of a $100.0 million U.S. dollar equivalent euro-denominated (approximately €90.2 million) 5-year term loan facility and a $350.0 million 5-year revolving credit facility (collectively, the “Senior Credit Facilities”). The Senior Credit Facilities mature in December 2024 and includes an uncommitted accordion option pursuant to which the commitments under the revolving credit facility may be increased by an additional $200.0 million in aggregate, subject to certain customary conditions. The outstanding principal balance under the term loan facility is payable in quarterly installments of €1.1 million beginning in March 2020, with the remaining balance due upon maturity. The Company may make additional principal payments at any time, which will reduce the next quarterly installment payment due. Borrowings under the revolving credit facility may be repaid at any time through March 2027. The Company made principal payments of €2.3 million ($2.4 million) towards its term loan and $10.4 million towards its revolving credit facility during the six months ended July 1, 2022. On March 27, 2020, the Company entered into an amendment (the “First Amendment”) to the Third Amended and Restated Credit Agreement On October 5, 2021, the Company entered into an amendment (the “Fourth Amendment”) to the Third Amended and Restated Credit Agreement to exercise the accordion option. The Fourth Amendment increased the revolving credit facility commitment under the Third Amended and Restated Credit Agreement by $200.0 million, from $495.0 million to $695.0 million, and reset the uncommitted accordion option to $200.0 million for potential future expansion. On March 10, 2022, the Company entered into an amendment (the “Fifth Amendment”) to the Third Amended and Restated Credit Agreement to extend the maturity date from December 31, 2024 to March 10, 2027, update the pricing grid, replace LIBOR with SOFR as the reference rate for U . S . dollar borrowings, and increase the uncommitted accordion option from $ 200 million to $ 350 million. In connection with the Fifth Amendment, t he Company capitalized $ 2.5 million deferred financing costs and recorded a $ 0.6 million loss from the write-off of a portion of the unamortized deferred financing costs . The Company is required to satisfy certain financial and non-financial covenants under the Third Amended and Restated Credit Agreement. The Third Amended and Restated Credit Agreement also contains customary events of default. The Company was in compliance with these covenants as of July 1, 2022. 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. Fair Value of Debt As of July 1, 2022 and December 31, 2021, 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 | 6 Months Ended |
Jul. 01, 2022 | |
Leases [Abstract] | |
Leases | 10. Leases Most leases held by the Company expire between 2022 and 2036. 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 options to terminate the leases within one year. The exercise of lease renewal or termination options is at the Company’s sole discretion; therefore, the majority of renewal options 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 lives of the right-of-use assets and leasehold improvements are limited to the expected lease terms. The following table summarizes the components of lease costs (in thousands): Three Six Months Ended July 1, July 2, July 1, July 2, 2022 2021 2022 2021 Operating lease cost $ 2,648 $ 1,964 $ 5,392 $ 3,795 Finance lease cost Amortization of right-of-use assets 150 151 301 302 Interest on lease liabilities 78 86 157 173 Variable lease cost 353 324 618 559 Total lease cost $ 3,229 $ 2,525 $ 6,468 $ 4,829 The following table provides additional details of balance sheet information related to the Company’s leases (in thousands, except lease term and discount rate): July 1, December 31, 2022 2021 Operating leases Operating lease right-of-use assets $ 45,575 $ 48,338 Current portion of operating lease liabilities $ 7,561 $ 7,334 Operating lease liabilities 42,580 45,700 Total operating lease liabilities $ 50,141 $ 53,034 Finance leases Property, plant and equipment, gross $ 9,582 $ 9,582 Accumulated depreciation (5,369 ) (5,068 ) Finance lease assets included in property, plant and equipment, net $ 4,213 $ 4,514 Accrued expenses and other current liabilities $ 634 $ 599 Other liabilities 4,996 5,309 Total finance lease liabilities $ 5,630 $ 5,908 Weighted-average remaining lease term (in years): Operating leases 8.5 9.0 Finance leases 7.0 7.5 Weighted-average discount rate: Operating leases 4.71 % 4.72 % Finance leases 5.54 % 5.54 % The following table provides additional details of cash flow information related to the Company’s leases (in thousands): Six Months Ended July 1, July 2, 2022 2021 Cash paid for amounts included in lease liabilities: Operating cash flows from finance leases $ 157 $ 173 Operating cash flows from operating leases $ 4,010 $ 3,252 Financing cash flows from finance leases $ 296 $ 9,024 Supplemental non-cash information: Right-of-use assets obtained in exchange for new operating lease liabilities $ 2,931 $ 3,257 During the six months ended July 1, 2021, the Company paid $8.7 million upon the exercise of an option to purchase a building under a finance lease agreement in Germany. The cash payment is presented as a cash outflow from financing activities in the consolidated statement of cash flows. Future minimum lease payments under operating and finance leases expiring subsequent to July 1, 2022, 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 Leases Finance Leases 2022 (remainder of year) $ 4,814 $ 471 2023 8,855 930 2024 8,162 954 2025 7,817 954 2026 6,691 979 Thereafter 26,316 2,509 Total minimum lease payments 62,655 6,797 Less: Interest (12,514 ) (1,167 ) Present value of lease liabilities $ 50,141 $ 5,630 |
Preferred and Common Shares and
Preferred and Common Shares and Share-Based Compensation | 6 Months Ended |
Jul. 01, 2022 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Preferred and Common Shares and Share-Based Compensation | 11. Preferred and Common Shares and Share-Based Compensation Preferred Shares In May 2021, the Company’s shareholders approved a special resolution to amend the Company’s articles to authorize up to 7.0 million preferred shares for future issuance. The Company’s Board of Directors is authorized to designate and issue one or more series of preferred shares, fix the rights, preferences and designation, as deemed necessary or advisable, relating to the preferred shares, provided that no shares of any series may be entitled to more than one vote per share. As of July 1, 2022, no preferred shares had been issued and outstanding. Common Share Repurchases In October 2018, the Company’s Board of Directors approved a share repurchase plan (the “2018 Repurchase Plan”), authorizing the repurchase of $25.0 million worth of the Company’s common shares. During the six months ended July 1, 2022, the Company repurchased 80 thousand shares for an aggregate purchase price of $9.5 million at an average price of $118.97 per share under the 2018 Repurchase Plan. As of July 1, 2022, the Company had repurchased a cumulative total of 264 thousand shares under the 2018 Repurchase Plan for an aggregate purchase price of $25.0 million at an average price of $94.57 per share. As of July 1, 2022, the Company had completed the 2018 Repurchase Plan. In February 2020, the Company’s Board of Directors approved a new share repurchase plan (the “2020 Repurchase Plan”), authorizing the repurchase of an additional $50.0 million worth of the Company’s common shares. During the six months ended July 1, 2022, the Company repurchase 4 thousand shares for an aggregate purchase price of $0.5 million at an average price of $116.95 per share under the 2020 Repurchase Plan. As of July 1, 2022, the Company had $49.5 million available for future share repurchases under the 2020 Repurchase Plan. Share-Based Compensation Expense The table below summarizes share-based compensation expense recorded in the consolidated statements of operations (in thousands): Three Six Months Ended July 1, July 2, July 1, July 2, 2022 2021 2022 2021 Selling, general and administrative $ 4,056 $ 3,834 $ 9,257 $ 8,763 Research and development and engineering 494 515 1,194 1,242 Cost of revenue 531 686 1,404 1,674 Restructuring, acquisition, and related costs — — — — Total share-based compensation expense $ 5,081 $ 5,035 $ 11,855 $ 11,679 Share-based compensation expense reported in selling, general and administrative expenses included expenses related to restricted stock units and deferred stock units granted to the members of the Company’s Board of Directors of $1.1 million and $1.1 million during the six months ended July 1, 2022 and July 2, 2021, respectively. 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. Compensation expense associated with the DSUs is recognized in full on the date of grant, as the DSUs are fully vested and non-forfeitable upon grant. There were 88 thousand and 91 thousand DSUs outstanding as of July 1, 2022 and December 31, 2021, respectively. Outstanding DSUs are included in the calculation of weighted average basic shares outstanding for the respective periods. 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 six months ended July 1, 2022: Shares (In thousands) Weighted Average Grant Date Fair Value Unvested at December 31, 2021 292 $ 115.42 Granted 101 $ 136.54 Vested (130 ) $ 115.17 Forfeited (10 ) $ 127.12 Unvested at July 1, 2022 253 $ 123.71 Expected to vest as of July 1, 2022 231 The total fair value of RSUs and DSUs that vested during the six months ended July 1, 2022 was $17.4 million based on the market price of the underlying shares on the date of vesting. Performance Stock Units The Company typically grants two types of performance-based stock awards, EPS-PSUs and TSR-PSUs, to certain members of the executive management team on an annual basis. Both types of performance-based restricted stock units generally cliff vest on the first day following the end of the three-year The number of common shares to be issued upon settlement following the vesting of EPS-PSUs is determined based on the Company’s cumulative non-GAAP EPS over a three-year performance period against the performance targets established by the Company’s Board of Directors at the time of grant and will be in the range of zero to 200% of the target number of shares. The Company recognizes compensation expense ratably over the performance period based on the number of shares that are deemed probable of vesting at the end of the three-year performance cycle. This probability assessment is performed quarterly and the cumulative effect of a change in the estimated compensation expense, if any, is recognized in the consolidated statement of operations in the period in which such determination is made. The number of common shares to be issued upon settlement following the vesting of TSR-PSUs is determined based on the relative market performance of the Company’s common shares compared to the Russell 2000 Index over a three-year In January 2022, the Company granted ATI-PSU s to ATI employees. The number of common shares to be issued upon settlement following vesting is determined based on a performance matrix for a four-year performance period against certain performance targets and will be in the range of zero to 100 % 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 four-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 s of operations in the period in which such determination is made. 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 six months ended July 1, 2022: Shares (In thousands) Weighted Average Grant Date Fair Value Unvested at December 31, 2021 162 $ 122.26 Granted 102 $ 158.55 Vested (41 ) $ 108.58 Forfeited (8 ) $ 153.47 Unvested at July 1, 2022 215 $ 144.12 Expected to vest as of July 1, 2022 210 The unvested PSUs are shown at target in the table above. As of July 1, 2022, the maximum number of common shares to be earned under these PSU grants was approximately 337 thousand shares. The total fair value of PSUs that vested during the six months ended July 1, 2022 was $7.2 million based on the market price of the underlying common 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 method with the following assumptions: Six Months Ended July 1, 2022 Grant-date stock price $ 135.86 Expected volatility 40.70 % Risk-free interest rate 1.69 % Expected annual dividend yield — Fair value $ 141.52 Stock Options In February 2022, the Company granted 40 thousand stock options to certain members of the executive management team to purchase common shares of the Company at a strike price equal to the closing market price of the Company’s common shares on the date of grant. The stock options vest ratably over a three-year The table below summarizes activities relating to stock options issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during the six months ended July 1, 2022: Shares (In thousands) Weighted Average Exercise Price Outstanding as of December 31, 2021 60 $ 14.13 Granted 40 $ 135.86 Exercised — $ — Forfeited or expired — $ — Outstanding as of July 1, 2022 100 $ 62.77 Exercisable as of July 1, 2022 60 Expected to vest as of July 1, 2022 40 The aggregate Black-Scholes fair value of $1.9 million for the stock options granted during the six months ended July 1, 2022 was estimated using the following assumptions as of the grant date: Six Months Ended July 1, 2022 Expected option term in year 4.5 Expected volatility 39.3 % Risk-free interest rate 1.83 % Expected annual dividend yield — The expected option term was calculated using the simplified method permitted under Codification of Staff Accounting Bulletins Topic 14, “Share-Based Payment”. |
Income Taxes
Income Taxes | 6 Months Ended |
Jul. 01, 2022 | |
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 period in which the changes are 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 maintains a valuation allowance on balances of certain U.S. state net operating losses and certain non-U.S. tax attributes that the Company has determined are not more likely than not to be realized. 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. In conjunction with the Company’s ongoing review of its actual results and anticipated future earnings, the Company continuously reassesses the possibility of adding a new or additional valuation allowance or releasing the valuation allowance currently in place on its deferred tax assets. The Company’s effective tax rate of 15.8% for the three months ended July 1, 2022 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 R&D tax credits, partially offset by disallowed compensation and uncertain tax position accruals. The Company’s effective tax rate of 12.4 % for the six months ended July 1, 2022 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, R&D tax credits, and windfall tax benefits upon vesting of certain share-based compensation awards during the period, partially offset by disallowed compensation and uncertain tax position accruals . For the six months ended July 1, 2022 , the windfall tax benefits upon vesting of certain share-based compensation awards had a benefit of 1.4 % on the Company’s effective tax rate. Beginning in January 2022, the Tax Cuts and Jobs Act of 2017 (“TCJA”) requires research and development (“R&D”) expenditures be capitalized and amortized for income tax purposes over five years for domestic research and fifteen years for foreign research, rather than being deducted as incurred. This has the effect of increasing the Company’s cash taxes and deferred tax assets. Since January 2022, the Company has recognized deferred tax assets of $6.3 million for the relevant R&D expenditures. This provision also has an indirect benefit of 3% on the Company’s effective tax rate for the six months ended July 1, 2022, as the Company’s estimated Foreign Derived Intangible Income deduction has increased as a result of increased US taxable income. The provision for income taxes for both the three months and the six months ended July 1, 2022 reflects the impact of the TCJA. The Company’s effective tax rate of 19.2% for the three months ended July 2, 2021 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, other tax credits, and a release of uncertain tax position reserves, partially offset by the revaluation of long term deferred tax balances resulting from the U.K. corporate tax rate change. The Company’s effective tax rate of 3.5% for the six months ended July 2, 2021 differs from the Canadian statutory tax rate of 29.0% primarily |
Restructuring, Acquisition, and
Restructuring, Acquisition, and Related Costs | 6 Months Ended |
Jul. 01, 2022 | |
Restructuring And Related Activities [Abstract] | |
Restructuring, Acquisition, and Related Costs | 13. Restructuring, Acquisition, and Related Costs The following table summarizes restructuring, acquisition, and related costs in the accompanying consolidated statements of operations (in thousands): Three Six Months Ended July 1, July 2, July 1, July 2, 2022 2021 2022 2021 2020 restructuring $ 610 $ 1,165 $ 1,232 $ 2,503 2019 restructuring — — — 208 Total restructuring charges 610 1,165 1,232 2,711 Acquisition and related charges 2,045 3,469 (207 ) 5,654 Total restructuring, acquisition, and related costs $ 2,655 $ 4,634 $ 1,025 $ 8,365 2020 Restructuring As a result of the Company’s ongoing evaluations and efforts to reduce its operating costs, while improving efficiency and effectiveness, the Company initiated the 2020 restructuring program in the third quarter of 2020. This program is focused on reducing operating complexity in the Company, including reducing infrastructure costs and streamlining the Company’s operating model to better serve its customers. In addition, the program is focused on cost reduction actions that improve gross margins for the overall company. During the three and six months ended July 1, 2022, the Company recorded $0.6 million and $1.2 million, respectively, in severance and other costs in connection with the 2020 restructuring program. As of July 1, 2022, the Company had incurred cumulative costs related to this restructuring plan totaling $9.3 million. The Company anticipates substantially completing the 2020 restructuring program in the fourth quarter of 2022 and expects to incur additional restructuring charges of $3.0 million to $3.5 million related to the 2020 restructuring program. The following table summarizes restructuring costs associated with the 2020 restructuring program by reportable segment (in thousands): Three Six Months Ended July 1, July 2, July 1, July 2, 2022 2021 2022 2021 Photonics $ 501 $ 195 $ 1,194 $ 490 Vision 65 275 106 697 Precision Motion 44 695 (68 ) 1,316 Unallocated Corporate and Shared Services — — — — Total $ 610 $ 1,165 $ 1,232 $ 2,503 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 (the “2019 restructuring plan”). The Company did not incur any costs related to the 2019 restructuring plan during the three and six months ended July 1, 2022. As of December 31, 2021, the Company incurred cumulative costs related to this restructuring plan totaling $9.0 million. The 2019 restructuring program was completed in 2021. 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 Employee Related Facility Other Balance at December 31, 2021 $ 2,686 $ 2,107 $ 550 $ 29 Restructuring charges 1,232 294 804 134 Cash payments (1,819 ) (959 ) (743 ) (117 ) Non-cash charges and other adjustments (155 ) (74 ) (79 ) (2 ) Balance at July 1, 2022 $ 1,944 $ 1,368 $ 532 $ 44 Acquisition and Related Charges Acquisition costs in connection with business combinations, including finders’ fees, legal, valuation, and other professional or consulting fees, totaled $0.2 million and $0.3 million for the three and six months ended July 1, 2022, respectively, and $1.6 million and $1.8 million for the three months and six months ended July 2, 2021, respectively. The Company incurred zero costs for the three and six months ended July 1, 2022, and $0.8 million and $1.8 million in legal costs for the three and six months ended July 2, 2021 related to a dispute involving a company that was acquired in 2019. During the three and six months ended July 1, 2022, the Company recognized $1.8 million and ($0.5) million, respectively, of earn-out expenses related to prior-year acquisitions. During the three and six months ended July 2, 2021, the Company recognized $0.9 million and $1.9 million, respectively, of earn-out expenses related to prior-year acquisitions. The majority of acquisition and related costs for the three and six months ended July 1, 2022 were included in the Company’s Precision Motion, Photonics, and Unallocated Corporate and Shared Services reportable segments. The majority of acquisition and related costs for the three and six months ended July 2, 2021 were included in the Company’s Precision Motion, Vision, and Unallocated Corporate and Shared Services reportable segments. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jul. 01, 2022 | |
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, 2021. 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. When a material loss contingency is reasonably possible but not probable, the Company does not record a liability, but instead discloses the nature and the amount of the claim, and an estimate of the potential loss or a range of potential losses, if such an estimate can be reasonably made. Legal fees are expensed as incurred. 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 they are 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 or 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 director or officer in connection with any proceeding by reason of their 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. |
Segment Information
Segment Information | 6 Months Ended |
Jul. 01, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | 15. 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 that it operates in three reportable segments: Photonics, Vision, and Precision Motion. The reportable segments and their principal activities are described below. Photonics The Photonics segment designs, manufactures and markets photonics-based solutions, including laser scanning, laser beam delivery, CO2 laser, solid state laser, 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, particularly ophthalmology applications. 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 technologies, video recorder and video integration technologies for operating room integrations; 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 motors, servo drives and motion control solutions, integrated stepper motors, intelligent robotic end-of-arm technology solutions, air bearings, and air bearing spindles 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 Six Months Ended July 1, July 2, July 1, July 2, Revenue 2022 2021 2022 2021 Photonics $ 69,461 $ 62,357 $ 132,243 $ 120,851 Vision 65,516 63,447 127,566 131,083 Precision Motion 80,379 41,719 159,763 78,173 Total $ 215,356 $ 167,523 $ 419,572 $ 330,107 Three Six Months Ended July 1, July 2, July 1, July 2, Gross Profit 2022 2021 2022 2021 Photonics $ 31,182 $ 29,593 $ 59,569 $ 57,702 Vision 26,535 24,443 51,765 51,369 Precision Motion 38,864 20,874 77,014 36,951 Unallocated Corporate and Shared Services (1,336 ) (2,504 ) (2,827 ) (4,876 ) Total $ 95,245 $ 72,406 $ 185,521 $ 141,146 Three Six Months Ended July 1, July 2, July 1, July 2, Gross Profit Margin 2022 2021 2022 2021 Photonics 44.9 % 47.5 % 45.0 % 47.7 % Vision 40.5 % 38.5 % 40.6 % 39.2 % Precision Motion 48.4 % 50.0 % 48.2 % 47.3 % Total 44.2 % 43.2 % 44.2 % 42.8 % Three Six Months Ended July 1, July 2, July 1, July 2, Operating Income (Loss) 2022 2021 2022 2021 Photonics $ 13,996 $ 14,196 $ 27,431 $ 26,591 Vision 7,024 3,206 12,066 6,572 Precision Motion 14,083 12,279 32,421 19,724 Unallocated Corporate and Shared Services (11,812 ) (13,689 ) (24,344 ) (25,796 ) Total $ 23,291 $ 15,992 $ 47,574 $ 27,091 Three Six Months Ended July 1, July 2, July 1, July 2, Depreciation and Amortization Expenses 2022 2021 2022 2021 Photonics $ 2,697 $ 2,905 $ 5,474 $ 5,803 Vision 4,322 5,279 8,749 10,554 Precision Motion 6,678 1,618 13,415 3,225 Unallocated Corporate and Shared Services 114 73 217 142 Total $ 13,811 $ 9,875 $ 27,855 $ 19,724 Revenue by Geography The Company aggregates geographic revenue based on the customer locations where products are shipped to. Revenue by geography was as follows (in thousands): Three Six Months Ended July 1, July 2, July 1, July 2, 2022 2021 2022 2021 United States $ 86,649 $ 59,497 $ 169,355 $ 118,727 Germany 33,123 23,773 64,901 46,135 Rest of Europe 37,918 35,600 71,260 71,175 China 29,871 23,506 56,670 46,057 Rest of Asia-Pacific 23,090 22,762 47,585 43,509 Other 4,705 2,385 9,801 4,504 Total $ 215,356 $ 167,523 $ 419,572 $ 330,107 The majority of revenue from 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 medical market and the advanced industrial market. Revenue by end market was approximately as follows: Three Six Months Ended July 1, July 2, July 1, July 2, 2022 2021 2022 2021 Medical 47 % 52 % 47 % 53 % Advanced Industrial 53 % 48 % 53 % 47 % Total 100 % 100 % 100 % 100 % The majority of revenue from the Photonics and Precision Motion segments is generated from sales to customers in the advanced industrial market. The majority of revenue from the Vision segment is generated from sales to customers in the medical market. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jul. 01, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Novanta Inc. (together with its subsidiaries, “Novanta” or the “Company”) 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 consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. 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 consolidated 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 as of 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 such revisions 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 these estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The following table provides a brief description of recent Accounting Standards Updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”): Standard Description Effective Date Effect on the Financial Statements or Other Significant Matters In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. Upon issuance. Adoption of ASU 2020-04 is elective. In March 2022, the Company amended the Third Amended and Restated Credit Agreement and replaced LIBOR with SOFR as the new reference rate for U.S. dollar borrowings. The ASU did not have any impact on the Company’s consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” ASU 2021-08 requires that entities recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASC 606, “Revenue from Contracts with Customers”. ASU 2021-08 also applies to contract assets or liabilities from other contracts to which the provisions of ASC 606 apply. The amendments in ASU 2021-08 do not affect the accounting for other assets or liabilities that may arise from revenue contracts with customers in accordance with ASC 606, such as refund liabilities, or in a business combination, such as customer-related intangible assets and contract-based intangible assets. January 1, 2023. Early adoption is permitted. The Company early adopted ASU 2021-08 as of January 1, 2022. The adoption of ASU 2021-08 did not have any material impact on the Company’s consolidated financial statements. |
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 for the maintenance and repair of products are typically short in duration, mostly less than one month, and generally involve a single distinct performance obligation. The related revenue is recognized at a point in time when control transfers to the customer upon completion of professional services. The consideration expected to be received in exchange for such services is typically the contractually stated amount. Certain engineering services are longer in duration and the related revenue is recognized over time. As the Company’s right to payment from a customer is based on the value of engineering services performed, the Company recognizes revenue based on the corresponding value to the customer from the Company’s performance completed to date. Revenue from engineering services aggregated to less than 3% of the Company’s consolidated revenue during the six months ended July 1, 2022 and July 2, 2021. 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. 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 standard warranty periods for the Company’s products are typically 12 months to 36 months. The Company recognizes estimated liabilities associated with standard warranty periods for its products in accordance with the provisions of ASC 450, “Contingencies,” as the Company has the ability to ascertain the likelihood of the liabilities and can reasonably estimate the amount of the liabilities. A provision for the estimated cost related to standard warranties is recorded as cost of revenue at the time revenue is recognized. The Company’s estimate of the costs to service the warranty obligations is based on historical experience and expectations of future conditions. To the extent that the Company’s experience in warranty claims or costs associated with servicing those claims differ from the original estimates, revisions to the estimated warranty liabilities are recorded at that time, with offsetting adjustments to cost of revenue. Practical Expedients and Exemptions The Company expenses incremental direct costs of obtaining a contract when incurred because 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 the related revenue. As of July 1, 2022 and December 31, 2021, contract liabilities were $7.9 million and $7.3 million, respectively, and are included in accrued expenses and other current liabilities and other liabilities in the accompanying consolidated balance sheets. The increase in the contract liability balance during the six months ended July 1, 2022 is primarily due to cash payments received in advance of satisfying performance obligations, partially offset by $3.6 million of revenue recognized during the period that was included in the contract liability balance as of December 31, 2021. Disaggregated Revenue See Note 15 for the Company’s disaggregation of revenue by segment, geography and end market. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jul. 01, 2022 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Loss | Changes in accumulated other comprehensive loss was as follows (in thousands): Total Accumulated Other Cumulative Pension Comprehensive Translation Liability Loss Adjustments Adjustments Balance at December 31, 2021 $ (12,866 ) $ (5,753 ) $ (7,113 ) Other comprehensive income (loss) (18,009 ) (18,699 ) 690 Amounts reclassified from accumulated other comprehensive loss 210 — 210 Balance at July 1, 2022 $ (30,665 ) $ (24,452 ) $ (6,213 ) |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 6 Months Ended |
Jul. 01, 2022 | |
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 Six Months Ended July 1, July 2, July 1, July 2, 2022 2021 2022 2021 Numerators: Consolidated net income $ 17,479 $ 11,664 $ 36,299 $ 22,974 Denominators: Weighted average common shares outstanding— basic 35,609 35,374 35,573 35,326 Dilutive potential common shares 324 389 284 449 Weighted average common shares outstanding— diluted 35,933 35,763 35,857 35,775 Antidilutive potential common shares excluded from above 146 25 120 23 Earnings per Common Share: Basic $ 0.49 $ 0.33 $ 1.02 $ 0.65 Diluted $ 0.49 $ 0.33 $ 1.01 $ 0.64 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jul. 01, 2022 | |
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 July 1, 2022 (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 $ 1,045 $ 1,045 $ — $ — Prepaid expenses and other current assets: Foreign currency forward contracts 298 — 298 — $ 1,343 $ 1,045 $ 298 $ — Liabilities Accrued expenses and other current liabilities: Contingent considerations - Current $ 47,170 $ — $ — $ 47,170 Foreign currency forward contracts 268 — 268 — Other liabilities: Contingent considerations - Long-term 1,183 — — 1,183 $ 48,621 $ — $ 268 $ 48,353 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, 2021 (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 $ 1,711 $ 1,711 $ — $ — Prepaid expenses and other current assets: Foreign currency forward contracts 137 — 137 — $ 1,848 $ 1,711 $ 137 $ — Liabilities Accrued expenses and other current liabilities: Contingent considerations - Current $ 47,522 $ — $ — $ 47,522 Foreign currency forward contracts 160 — 160 — Other liabilities: Contingent considerations - Long-term 3,402 — — 3,402 $ 51,084 $ — $ 160 $ 50,924 |
Changes in Fair Value of Level 3 Contingent Considerations | Changes in the fair value of Level 3 contingent considerations during the six months ended July 1, 2022 were as follows (in thousands): Amount Balance at December 31, 2021 $ 50,924 Payments (1,845 ) Fair value adjustments (419 ) Effect of foreign exchange rates (307 ) Balance at July 1, 2022 $ 48,353 |
Schedule of Fair Value Measurement Inputs and Valuation Techniques | The following table provides qualitative information associated with the fair value measurement of the Company’s Level 3 liabilities as of July 1, 2022: Liability Fair Value (in thousands) Valuation Technique Unobservable Inputs Percentage Applied Contingent consideration - ATI $45,000 N/A Adjusted EBITDA for fiscal year 2021 N/A Contingent consideration - ARGES $1,428 Monte Carlo method Historical and projected revenues from August 2019 through December 2026 N/A Revenue volatility 14.0% Cost of debt 3.9% Discount rate 2.6% Contingent consideration - Ingenia $1,925 N/A Historical revenues from April 2019 through March 2022 N/A |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jul. 01, 2022 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Goodwill | The following table summarizes changes in goodwill during the six months ended July 1, 2022 (in thousands): Balance at beginning of the period $ 479,500 Effect of foreign exchange rate changes (13,089 ) Balance at end of the period $ 466,411 |
Goodwill by Reportable Segment | Goodwill by reportable segment as of July 1, 2022 was as follows (in thousands): Reportable Segment Photonics Vision Precision Motion Total Goodwill $ 207,646 $ 156,223 $ 253,771 $ 617,640 Accumulated impairment of goodwill (102,461 ) (31,722 ) (17,046 ) (151,229 ) Total $ 105,185 $ 124,501 $ 236,725 $ 466,411 Goodwill by reportable segment as of December 31, 2021 was as follows (in thousands): Reportable Segment Photonics Vision Precision Motion Total Goodwill $ 214,564 $ 160,675 $ 255,490 $ 630,729 Accumulated impairment of goodwill (102,461 ) (31,722 ) (17,046 ) (151,229 ) Total $ 112,103 $ 128,953 $ 238,444 $ 479,500 |
Intangible Assets | Intangible assets as of July 1, 2022 and December 31, 2021, respectively, are summarized as follows (in thousands): July 1, 2022 December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Amortizable intangible assets: Patents and developed technologies $ 183,807 $ (125,291 ) $ 58,516 $ 189,609 $ (122,130 ) $ 67,479 Customer relationships 221,306 (111,021 ) 110,285 228,656 (104,386 ) 124,270 Customer backlog 6,831 (5,693 ) 1,138 6,862 (2,254 ) 4,608 Trademarks and trade names 23,255 (12,722 ) 10,533 23,976 (12,371 ) 11,605 Amortizable intangible assets 435,199 (254,727 ) 180,472 449,103 (241,141 ) 207,962 Non-amortizable intangible assets: Trade names 13,027 — 13,027 13,027 — 13,027 Totals $ 448,226 $ (254,727 ) $ 193,499 $ 462,130 $ (241,141 ) $ 220,989 |
Amortization Expense of Intangible Assets | Amortization expense was as follows (in thousands): Three Six Months Ended July 1, July 2, July 1, July 2, 2022 2021 2022 2021 Amortization expense – cost of revenue $ 3,336 $ 2,982 $ 6,757 $ 5,959 Amortization expense – operating expenses 7,173 3,586 14,515 7,161 Total amortization expense $ 10,509 $ 6,568 $ 21,272 $ 13,120 |
Estimated Amortization Expense | Estimated amortization expense for each of the five succeeding years and thereafter as of July 1, 2022 was as follows (in thousands): Year Ending December 31, Cost of Revenue Operating Expenses Total 2022 (remainder of year) $ 6,599 $ 11,957 $ 18,556 2023 11,976 20,215 32,191 2024 9,737 16,961 26,698 2025 8,265 14,348 22,613 2026 6,916 12,200 19,116 Thereafter 15,023 46,275 61,298 Total $ 58,516 $ 121,956 $ 180,472 |
Supplementary Balance Sheet I_2
Supplementary Balance Sheet Information (Tables) | 6 Months Ended |
Jul. 01, 2022 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Inventories | Inventories July 1, December 31, 2022 2021 Raw materials $ 104,106 $ 84,038 Work-in-process 26,106 20,600 Finished goods 22,289 19,486 Demo and consigned inventory 1,386 1,533 Total inventories $ 153,887 $ 125,657 |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities July 1, December 31, 2022 2021 Accrued compensation and benefits $ 26,570 $ 24,725 Accrued warranty 4,741 4,783 Contract liabilities, current portion 7,674 6,995 Finance lease obligations 634 599 Accrued contingent considerations and earn-outs 47,170 47,522 Other 15,196 13,855 Total $ 101,985 $ 98,479 |
Accrued Warranty | Accrued Warranty Six Months Ended July 1, July 2, 2022 2021 Balance at beginning of the period $ 4,783 $ 4,919 Provision charged to cost of revenue 1,462 929 Use of provision (1,398 ) (1,254 ) Foreign currency exchange rate changes (106 ) (29 ) Balance at end of the period $ 4,741 $ 4,565 |
Other Long Term Liabilities | Other Long-Term Liabilities July 1, December 31, 2022 2021 Finance lease obligations $ 4,996 $ 5,309 Accrued contingent considerations and earn-outs 1,183 3,402 Other 828 927 Total $ 7,007 $ 9,638 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jul. 01, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt consisted of the following (in thousands): July 1, December 31, 2022 2021 Senior Credit Facilities – term loan $ 4,713 $ 5,126 Less: unamortized debt issuance costs (35 ) (29 ) Total current portion of long-term debt $ 4,678 $ 5,097 Senior Credit Facilities – term loan $ 77,521 $ 86,879 Senior Credit Facilities – revolving credit facility 330,559 346,579 Less: unamortized debt issuance costs (5,401 ) (4,097 ) Total long-term debt $ 402,679 $ 429,361 Total Senior Credit Facilities $ 407,357 $ 434,458 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jul. 01, 2022 | |
Leases [Abstract] | |
Summary of Components of Lease Costs | The following table summarizes the components of lease costs (in thousands): Three Six Months Ended July 1, July 2, July 1, July 2, 2022 2021 2022 2021 Operating lease cost $ 2,648 $ 1,964 $ 5,392 $ 3,795 Finance lease cost Amortization of right-of-use assets 150 151 301 302 Interest on lease liabilities 78 86 157 173 Variable lease cost 353 324 618 559 Total lease cost $ 3,229 $ 2,525 $ 6,468 $ 4,829 |
Summary of Balance Sheet Information Related to Leases | The following table provides additional details of balance sheet information related to the Company’s leases (in thousands, except lease term and discount rate): July 1, December 31, 2022 2021 Operating leases Operating lease right-of-use assets $ 45,575 $ 48,338 Current portion of operating lease liabilities $ 7,561 $ 7,334 Operating lease liabilities 42,580 45,700 Total operating lease liabilities $ 50,141 $ 53,034 Finance leases Property, plant and equipment, gross $ 9,582 $ 9,582 Accumulated depreciation (5,369 ) (5,068 ) Finance lease assets included in property, plant and equipment, net $ 4,213 $ 4,514 Accrued expenses and other current liabilities $ 634 $ 599 Other liabilities 4,996 5,309 Total finance lease liabilities $ 5,630 $ 5,908 Weighted-average remaining lease term (in years): Operating leases 8.5 9.0 Finance leases 7.0 7.5 Weighted-average discount rate: Operating leases 4.71 % 4.72 % Finance leases 5.54 % 5.54 % |
Summary of Cash Flow Information Related to Leases | The following table provides additional details of cash flow information related to the Company’s leases (in thousands): Six Months Ended July 1, July 2, 2022 2021 Cash paid for amounts included in lease liabilities: Operating cash flows from finance leases $ 157 $ 173 Operating cash flows from operating leases $ 4,010 $ 3,252 Financing cash flows from finance leases $ 296 $ 9,024 Supplemental non-cash information: Right-of-use assets obtained in exchange for new operating lease liabilities $ 2,931 $ 3,257 |
Future Minimum Lease Payments Under Operating and Finance Leases | Future minimum lease payments under operating and finance leases expiring subsequent to July 1, 2022, 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 Leases Finance Leases 2022 (remainder of year) $ 4,814 $ 471 2023 8,855 930 2024 8,162 954 2025 7,817 954 2026 6,691 979 Thereafter 26,316 2,509 Total minimum lease payments 62,655 6,797 Less: Interest (12,514 ) (1,167 ) Present value of lease liabilities $ 50,141 $ 5,630 |
Preferred and Common Shares a_2
Preferred and Common Shares and Share-Based Compensation (Tables) | 6 Months Ended |
Jul. 01, 2022 | |
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 Six Months Ended July 1, July 2, July 1, July 2, 2022 2021 2022 2021 Selling, general and administrative $ 4,056 $ 3,834 $ 9,257 $ 8,763 Research and development and engineering 494 515 1,194 1,242 Cost of revenue 531 686 1,404 1,674 Restructuring, acquisition, and related costs — — — — Total share-based compensation expense $ 5,081 $ 5,035 $ 11,855 $ 11,679 |
Schedule of Share Based Payment Award Performance Stock Awards Valuation Assumptions | The fair value of the TSR-PSUs at the date of grant was estimated using the Monte Carlo valuation method with the following assumptions: Six Months Ended July 1, 2022 Grant-date stock price $ 135.86 Expected volatility 40.70 % Risk-free interest rate 1.69 % Expected annual dividend yield — Fair value $ 141.52 |
Schedule of Share Based Payment Award Stock Options Valuation Assumptions | The aggregate Black-Scholes fair value of $1.9 million for the stock options granted during the six months ended July 1, 2022 was estimated using the following assumptions as of the grant date: Six Months Ended July 1, 2022 Expected option term in year 4.5 Expected volatility 39.3 % Risk-free interest rate 1.83 % Expected annual dividend yield — The expected option term was calculated using the simplified method permitted under Codification of Staff Accounting Bulletins Topic 14, “Share-Based Payment”. |
Amended and Restated 2010 Incentive 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 six months ended July 1, 2022: Shares (In thousands) Weighted Average Grant Date Fair Value Unvested at December 31, 2021 292 $ 115.42 Granted 101 $ 136.54 Vested (130 ) $ 115.17 Forfeited (10 ) $ 127.12 Unvested at July 1, 2022 253 $ 123.71 Expected to vest as of July 1, 2022 231 |
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 six months ended July 1, 2022: Shares (In thousands) Weighted Average Grant Date Fair Value Unvested at December 31, 2021 162 $ 122.26 Granted 102 $ 158.55 Vested (41 ) $ 108.58 Forfeited (8 ) $ 153.47 Unvested at July 1, 2022 215 $ 144.12 Expected to vest as of July 1, 2022 210 |
Stock Options Issued and Outstanding | The table below summarizes activities relating to stock options issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during the six months ended July 1, 2022: Shares (In thousands) Weighted Average Exercise Price Outstanding as of December 31, 2021 60 $ 14.13 Granted 40 $ 135.86 Exercised — $ — Forfeited or expired — $ — Outstanding as of July 1, 2022 100 $ 62.77 Exercisable as of July 1, 2022 60 Expected to vest as of July 1, 2022 40 |
Restructuring, Acquisition, a_2
Restructuring, Acquisition, and Related Costs (Tables) | 6 Months Ended |
Jul. 01, 2022 | |
Restructuring And Related Activities [Abstract] | |
Schedule of Restructuring, Acquisition and Related Costs | The following table summarizes restructuring, acquisition, and related costs in the accompanying consolidated statements of operations (in thousands): Three Six Months Ended July 1, July 2, July 1, July 2, 2022 2021 2022 2021 2020 restructuring $ 610 $ 1,165 $ 1,232 $ 2,503 2019 restructuring — — — 208 Total restructuring charges 610 1,165 1,232 2,711 Acquisition and related charges 2,045 3,469 (207 ) 5,654 Total restructuring, acquisition, and related costs $ 2,655 $ 4,634 $ 1,025 $ 8,365 |
Summary of Restructuring Charges by Reportable Segment | The following table summarizes restructuring costs associated with the 2020 restructuring program by reportable segment (in thousands): Three Six Months Ended July 1, July 2, July 1, July 2, 2022 2021 2022 2021 Photonics $ 501 $ 195 $ 1,194 $ 490 Vision 65 275 106 697 Precision Motion 44 695 (68 ) 1,316 Unallocated Corporate and Shared Services — — — — Total $ 610 $ 1,165 $ 1,232 $ 2,503 |
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 Employee Related Facility Other Balance at December 31, 2021 $ 2,686 $ 2,107 $ 550 $ 29 Restructuring charges 1,232 294 804 134 Cash payments (1,819 ) (959 ) (743 ) (117 ) Non-cash charges and other adjustments (155 ) (74 ) (79 ) (2 ) Balance at July 1, 2022 $ 1,944 $ 1,368 $ 532 $ 44 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jul. 01, 2022 | |
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 Six Months Ended July 1, July 2, July 1, July 2, Revenue 2022 2021 2022 2021 Photonics $ 69,461 $ 62,357 $ 132,243 $ 120,851 Vision 65,516 63,447 127,566 131,083 Precision Motion 80,379 41,719 159,763 78,173 Total $ 215,356 $ 167,523 $ 419,572 $ 330,107 Three Six Months Ended July 1, July 2, July 1, July 2, Gross Profit 2022 2021 2022 2021 Photonics $ 31,182 $ 29,593 $ 59,569 $ 57,702 Vision 26,535 24,443 51,765 51,369 Precision Motion 38,864 20,874 77,014 36,951 Unallocated Corporate and Shared Services (1,336 ) (2,504 ) (2,827 ) (4,876 ) Total $ 95,245 $ 72,406 $ 185,521 $ 141,146 Three Six Months Ended July 1, July 2, July 1, July 2, Gross Profit Margin 2022 2021 2022 2021 Photonics 44.9 % 47.5 % 45.0 % 47.7 % Vision 40.5 % 38.5 % 40.6 % 39.2 % Precision Motion 48.4 % 50.0 % 48.2 % 47.3 % Total 44.2 % 43.2 % 44.2 % 42.8 % Three Six Months Ended July 1, July 2, July 1, July 2, Operating Income (Loss) 2022 2021 2022 2021 Photonics $ 13,996 $ 14,196 $ 27,431 $ 26,591 Vision 7,024 3,206 12,066 6,572 Precision Motion 14,083 12,279 32,421 19,724 Unallocated Corporate and Shared Services (11,812 ) (13,689 ) (24,344 ) (25,796 ) Total $ 23,291 $ 15,992 $ 47,574 $ 27,091 Three Six Months Ended July 1, July 2, July 1, July 2, Depreciation and Amortization Expenses 2022 2021 2022 2021 Photonics $ 2,697 $ 2,905 $ 5,474 $ 5,803 Vision 4,322 5,279 8,749 10,554 Precision Motion 6,678 1,618 13,415 3,225 Unallocated Corporate and Shared Services 114 73 217 142 Total $ 13,811 $ 9,875 $ 27,855 $ 19,724 |
Schedule of Geographic Revenue | The Company aggregates geographic revenue based on the customer locations where products are shipped to. Revenue by geography was as follows (in thousands): Three Six Months Ended July 1, July 2, July 1, July 2, 2022 2021 2022 2021 United States $ 86,649 $ 59,497 $ 169,355 $ 118,727 Germany 33,123 23,773 64,901 46,135 Rest of Europe 37,918 35,600 71,260 71,175 China 29,871 23,506 56,670 46,057 Rest of Asia-Pacific 23,090 22,762 47,585 43,509 Other 4,705 2,385 9,801 4,504 Total $ 215,356 $ 167,523 $ 419,572 $ 330,107 |
Revenue By End Market | The Company primarily operates in two end markets: the medical market and the advanced industrial market. Revenue by end market was approximately as follows: Three Six Months Ended July 1, July 2, July 1, July 2, 2022 2021 2022 2021 Medical 47 % 52 % 47 % 53 % Advanced Industrial 53 % 48 % 53 % 47 % Total 100 % 100 % 100 % 100 % |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Jul. 01, 2022 | Jul. 02, 2021 | Dec. 31, 2021 | |
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 | $ 7.9 | $ 7.3 | |
Revenue recognized | $ 3.6 | ||
Warranties | |||
Revenue [Line Items] | |||
Standard product warranty description | The standard warranty periods for the Company’s products are typically 12 months to 36 months. The Company recognizes estimated liabilities associated with standard warranty periods for its products in accordance with the provisions of ASC 450, “Contingencies,” as the Company has the ability to ascertain the likelihood of the liabilities and can reasonably estimate the amount of the liabilities. | ||
Maximum | Warranties | |||
Revenue [Line Items] | |||
Standard warranty period on products | 36 months | ||
Maximum | Maintenance and Repair of Products | |||
Revenue [Line Items] | |||
Percentage of revenue for professional services | 3% | 3% | |
Duration of engineering services performed under customer contract | 1 month | ||
Minimum [Member] | Warranties | |||
Revenue [Line Items] | |||
Standard warranty period on products | 12 months |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) $ in Thousands | 6 Months Ended |
Jul. 01, 2022 USD ($) | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Beginning Balance | $ 521,291 |
Other comprehensive income (loss) | (18,009) |
Amounts reclassified from accumulated other comprehensive loss | 210 |
Ending Balance | 532,169 |
Total Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Beginning Balance | (12,866) |
Ending Balance | (30,665) |
Cumulative Translation Adjustments | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Beginning Balance | (5,753) |
Other comprehensive income (loss) | (18,699) |
Ending Balance | (24,452) |
Pension Liability Adjustments | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Beginning Balance | (7,113) |
Other comprehensive income (loss) | 690 |
Amounts reclassified from accumulated other comprehensive loss | 210 |
Ending Balance | $ (6,213) |
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 | 6 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Numerators: | ||||
Consolidated net income | $ 17,479 | $ 11,664 | $ 36,299 | $ 22,974 |
Denominators: | ||||
Weighted average common shares outstanding—basic | 35,609 | 35,374 | 35,573 | 35,326 |
Dilutive potential common shares | 324 | 389 | 284 | 449 |
Weighted average common shares outstanding— diluted | 35,933 | 35,763 | 35,857 | 35,775 |
Antidilutive potential common shares excluded from above | 146 | 25 | 120 | 23 |
Earnings per common share (Note 4): | ||||
Basic | $ 0.49 | $ 0.33 | $ 1.02 | $ 0.65 |
Diluted | $ 0.49 | $ 0.33 | $ 1.01 | $ 0.64 |
Earnings per Common Share - Add
Earnings per Common Share - Additional Information (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | |
Jul. 02, 2021 | Jul. 02, 2021 | Jul. 01, 2022 | |
EPS Performance-based Restricted Stock Units | |||
Computation Of Earnings Per Share [Line Items] | |||
Contingently issuable shares excluded from calculation of weighted average common shares outstanding | 46 | 46 | 35 |
Operating Cash Flow Performance-based Restricted Stock Units | |||
Computation Of Earnings Per Share [Line Items] | |||
Contingently issuable shares excluded from calculation of weighted average common shares outstanding | 37 | 37 | 37 |
ATI Industrial Automation, Inc. | Performance-based Restricted Stock Units | |||
Computation Of Earnings Per Share [Line Items] | |||
Contingently issuable shares excluded from calculation of weighted average common shares outstanding | 53 | ||
Laser Quantum | Restricted Stock | |||
Computation Of Earnings Per Share [Line Items] | |||
Contingently issuable shares excluded from calculation of weighted average common shares outstanding | 213 | 213 |
Fair Value Measurements - Busin
Fair Value Measurements - Business Combination Contingent Consideration - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||||||||||||
Mar. 31, 2022 USD ($) | Mar. 31, 2022 EUR (€) | May 31, 2021 USD ($) | May 31, 2021 EUR (€) | Mar. 31, 2021 USD ($) | Mar. 31, 2021 EUR (€) | May 31, 2020 USD ($) | May 31, 2020 EUR (€) | Jul. 01, 2022 USD ($) | Jul. 01, 2022 USD ($) | Jul. 02, 2021 USD ($) | Jul. 01, 2022 EUR (€) | Apr. 01, 2022 USD ($) | Apr. 01, 2022 EUR (€) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 EUR (€) | Dec. 31, 2020 USD ($) | Dec. 31, 2020 EUR (€) | Jul. 31, 2019 USD ($) | Jul. 31, 2019 EUR (€) | Apr. 16, 2019 USD ($) | Apr. 16, 2019 EUR (€) | |
Business Acquisition [Line Items] | ||||||||||||||||||||||
Payment for contingent consideration | $ 375,000 | $ 1,836,000 | ||||||||||||||||||||
ATI Industrial Automation, Inc. | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Fair value of contingent consideration | $ 45,000,000 | 45,000,000 | $ 44,000,000 | |||||||||||||||||||
ARGES GmbH | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Fair value of contingent consideration | $ 1,400,000 | € 1,400,000 | 3,800,000 | € 3,300,000 | $ 5,100,000 | € 4,100,000 | $ 7,900,000 | € 7,100,000 | ||||||||||||||
Undiscounted low range of contingent consideration | € | 0 | |||||||||||||||||||||
Undiscounted high range of contingent consideration | $ 11,100,000 | € 10,000,000 | ||||||||||||||||||||
Payment for contingent consideration | $ 400,000 | € 300,000 | $ 400,000 | € 400,000 | ||||||||||||||||||
Changes in fair value of contingent consideration | 0 | 0 | ||||||||||||||||||||
Ingenia-CAT, S.L. | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Fair value of contingent consideration | $ 1,900,000 | $ 1,900,000 | € 1,800,000 | $ 1,700,000 | € 1,500,000 | $ 2,900,000 | € 2,300,000 | $ 6,600,000 | € 5,800,000 | |||||||||||||
Undiscounted low range of contingent consideration | € | 0 | |||||||||||||||||||||
Undiscounted high range of contingent consideration | $ 9,000,000 | € 8,000,000 | ||||||||||||||||||||
Payment for contingent consideration | $ 1,400,000 | € 1,200,000 | $ 1,100,000 | € 1,000,000 |
Fair Value Measurements - Asset
Fair Value Measurements - Asset Acquisition Contingent Consideration - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
Mar. 31, 2022 USD ($) | Mar. 31, 2022 EUR (€) | Feb. 28, 2021 USD ($) | Feb. 28, 2021 EUR (€) | Feb. 29, 2020 USD ($) | Feb. 29, 2020 EUR (€) | Jul. 01, 2022 USD ($) | Jul. 01, 2022 USD ($) Installment | Jul. 01, 2022 EUR (€) | Dec. 14, 2016 USD ($) | Dec. 14, 2016 EUR (€) | |
Asset Acquisition Contingent Consideration [Line Items] | |||||||||||
Payment for contingent consideration | $ 1,500,000 | € 1,300,000 | $ 2,200,000 | € 1,800,000 | $ 2,600,000 | € 2,400,000 | |||||
Video Signal Processing and Management Technologies | |||||||||||
Asset Acquisition Contingent Consideration [Line Items] | |||||||||||
Date of Acquisition Agreement | Dec. 14, 2016 | ||||||||||
Number of contingent consideration annual installments | Installment | 4 | ||||||||||
Undiscounted range of outcomes, minimum | € | € 0 | ||||||||||
Undiscounted range of outcomes, maximum | $ 6,600,000 | € 5,500,000 | |||||||||
Aggregate fair value of acquired assets | $ 6,300,000 | $ 6,300,000 | € 5,500,000 | ||||||||
Changes in fair value of contingent consideration | $ | $ 0 | $ 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 | Jul. 01, 2022 | Dec. 31, 2021 |
Assets | ||
Cash equivalents | $ 1,045 | $ 1,711 |
Assets, fair value | 1,343 | 1,848 |
Liabilities | ||
Liabilities, fair value | 48,621 | 51,084 |
Prepaid Expenses and Other Current Assets | ||
Assets | ||
Foreign currency forward contracts | 298 | 137 |
Accrued Expenses and Other Current Liabilities | ||
Liabilities | ||
Contingent considerations - Current | 47,170 | 47,522 |
Foreign currency forward contracts | 268 | 160 |
Other Liabilities | ||
Liabilities | ||
Contingent considerations - Long-term | 1,183 | 3,402 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Cash equivalents | 1,045 | 1,711 |
Assets, fair value | 1,045 | 1,711 |
Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Assets, fair value | 298 | 137 |
Liabilities | ||
Liabilities, fair value | 268 | 160 |
Significant Other Observable Inputs (Level 2) | Prepaid Expenses and Other Current Assets | ||
Assets | ||
Foreign currency forward contracts | 298 | 137 |
Significant Other Observable Inputs (Level 2) | Accrued Expenses and Other Current Liabilities | ||
Liabilities | ||
Foreign currency forward contracts | 268 | 160 |
Significant Other Unobservable Inputs (Level 3) | ||
Liabilities | ||
Liabilities, fair value | 48,353 | 50,924 |
Significant Other Unobservable Inputs (Level 3) | Accrued Expenses and Other Current Liabilities | ||
Liabilities | ||
Contingent considerations - Current | 47,170 | 47,522 |
Significant Other Unobservable Inputs (Level 3) | Other Liabilities | ||
Liabilities | ||
Contingent considerations - Long-term | $ 1,183 | $ 3,402 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Fair Value of Level 3 Contingent Considerations (Details) - Significant Other Unobservable Inputs (Level 3) $ in Thousands | 6 Months Ended |
Jul. 01, 2022 USD ($) | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Beginning balance | $ 50,924 |
Payments | (1,845) |
Fair value adjustments | (419) |
Effect of foreign exchange rates | (307) |
Ending balance | $ 48,353 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measurement Inputs and Valuation Techniques (Details) $ in Thousands, € in Millions | 6 Months Ended | |||||||||||
Jul. 01, 2022 USD ($) | Jul. 01, 2022 EUR (€) | Apr. 01, 2022 USD ($) | Apr. 01, 2022 EUR (€) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 EUR (€) | Dec. 31, 2020 USD ($) | Dec. 31, 2020 EUR (€) | Jul. 31, 2019 USD ($) | Jul. 31, 2019 EUR (€) | Apr. 16, 2019 USD ($) | Apr. 16, 2019 EUR (€) | |
ARGES GmbH | ||||||||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||||||||
Contingent consideration | $ 1,400 | € 1.4 | $ 3,800 | € 3.3 | $ 5,100 | € 4.1 | $ 7,900 | € 7.1 | ||||
Ingenia-CAT, S.L. | ||||||||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||||||||
Contingent consideration | $ 1,900 | € 1.8 | 1,700 | € 1.5 | $ 2,900 | € 2.3 | $ 6,600 | € 5.8 | ||||
ATI Industrial Automation, Inc. | ||||||||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||||||||
Contingent consideration | $ 45,000 | $ 44,000 | ||||||||||
Significant Other Unobservable Inputs (Level 3) | ARGES GmbH | ||||||||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||||||||
Valuation Technique | novt:ValuationTechniqueMonteCarloMethodMember | |||||||||||
Contingent consideration | $ 1,428 | |||||||||||
Significant Other Unobservable Inputs (Level 3) | ARGES GmbH | Revenue volatility | ||||||||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||||||||
Business acquisition, Percentage Applied | 14 | 14 | ||||||||||
Significant Other Unobservable Inputs (Level 3) | ARGES GmbH | Cost of debt | ||||||||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||||||||
Business acquisition, Percentage Applied | 3.9 | 3.9 | ||||||||||
Significant Other Unobservable Inputs (Level 3) | ARGES GmbH | Discount rate | ||||||||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||||||||
Business acquisition, Percentage Applied | 2.6 | 2.6 | ||||||||||
Significant Other Unobservable Inputs (Level 3) | Ingenia-CAT, S.L. | ||||||||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||||||||
Valuation Technique | novt:ValuationTechniqueMonteCarloMethodMember | |||||||||||
Contingent consideration | $ 1,925 | |||||||||||
Significant Other Unobservable Inputs (Level 3) | ATI Industrial Automation, Inc. | ||||||||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||||||||
Contingent consideration | $ 45,000 |
Foreign Currency Contracts - Ad
Foreign Currency Contracts - Additional Information (Details) - Foreign Currency Forward Contracts - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | Dec. 31, 2021 | |
Derivative [Line Items] | |||||
Notional amount of foreign currency forward contracts | $ 58,700,000 | $ 58,700,000 | $ 50,000,000 | ||
Foreign Exchange Transaction Gains (Losses) | |||||
Derivative [Line Items] | |||||
Net gain (loss) on foreign currency forward contracts | $ (1,400,000) | $ (100,000) | (1,500,000) | $ 600,000 | |
Maximum | |||||
Derivative [Line Items] | |||||
Net gain (loss) on foreign currency forward contracts | $ 100,000 | $ (100,000) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) | 3 Months Ended |
Jul. 01, 2022 USD ($) | |
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 | 6 Months Ended |
Jul. 01, 2022 USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Balance at beginning of the period | $ 479,500 |
Effect of foreign exchange rate changes | (13,089) |
Balance at end of the period | $ 466,411 |
Goodwill By Reportable Segment
Goodwill By Reportable Segment (Details) - USD ($) $ in Thousands | Jul. 01, 2022 | Dec. 31, 2021 |
Goodwill [Line Items] | ||
Goodwill | $ 617,640 | $ 630,729 |
Accumulated impairment of goodwill | (151,229) | (151,229) |
Total | 466,411 | 479,500 |
Photonics | ||
Goodwill [Line Items] | ||
Goodwill | 207,646 | 214,564 |
Accumulated impairment of goodwill | (102,461) | (102,461) |
Total | 105,185 | 112,103 |
Vision | ||
Goodwill [Line Items] | ||
Goodwill | 156,223 | 160,675 |
Accumulated impairment of goodwill | (31,722) | (31,722) |
Total | 124,501 | 128,953 |
Precision Motion | ||
Goodwill [Line Items] | ||
Goodwill | 253,771 | 255,490 |
Accumulated impairment of goodwill | (17,046) | (17,046) |
Total | $ 236,725 | $ 238,444 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | Jul. 01, 2022 | Dec. 31, 2021 |
Schedule of Intangible Assets Disclosure [Line Items] | ||
Amortizable intangible assets, gross carrying amount | $ 435,199 | $ 449,103 |
Amortizable intangible assets, accumulated amortization | (254,727) | (241,141) |
Amortizable intangible assets, net carrying amount | 180,472 | 207,962 |
Non-amortizable intangible assets | 13,027 | 13,027 |
Gross carrying amount | 448,226 | 462,130 |
Net carrying amount | 193,499 | 220,989 |
Patents and Developed Technologies | ||
Schedule of Intangible Assets Disclosure [Line Items] | ||
Amortizable intangible assets, gross carrying amount | 183,807 | 189,609 |
Amortizable intangible assets, accumulated amortization | (125,291) | (122,130) |
Amortizable intangible assets, net carrying amount | 58,516 | 67,479 |
Customer Relationships | ||
Schedule of Intangible Assets Disclosure [Line Items] | ||
Amortizable intangible assets, gross carrying amount | 221,306 | 228,656 |
Amortizable intangible assets, accumulated amortization | (111,021) | (104,386) |
Amortizable intangible assets, net carrying amount | 110,285 | 124,270 |
Customer Backlog | ||
Schedule of Intangible Assets Disclosure [Line Items] | ||
Amortizable intangible assets, gross carrying amount | 6,831 | 6,862 |
Amortizable intangible assets, accumulated amortization | (5,693) | (2,254) |
Amortizable intangible assets, net carrying amount | 1,138 | 4,608 |
Trademarks and Trade Names | ||
Schedule of Intangible Assets Disclosure [Line Items] | ||
Amortizable intangible assets, gross carrying amount | 23,255 | 23,976 |
Amortizable intangible assets, accumulated amortization | (12,722) | (12,371) |
Amortizable intangible assets, net carrying amount | $ 10,533 | $ 11,605 |
Amortization Expense of Intangi
Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Amortization expense – cost of revenue | $ 3,336 | $ 2,982 | $ 6,757 | $ 5,959 |
Amortization expense – operating expenses | 7,173 | 3,586 | 14,515 | 7,161 |
Total amortization expense | $ 10,509 | $ 6,568 | $ 21,272 | $ 13,120 |
Estimated Amortization Expense
Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Jul. 01, 2022 | Dec. 31, 2021 |
Finite Lived Intangible Assets [Line Items] | ||
2022 (remainder of year) | $ 18,556 | |
2023 | 32,191 | |
2024 | 26,698 | |
2025 | 22,613 | |
2026 | 19,116 | |
Thereafter | 61,298 | |
Amortizable intangible assets, net carrying amount | 180,472 | $ 207,962 |
Cost of Revenue | ||
Finite Lived Intangible Assets [Line Items] | ||
2022 (remainder of year) | 6,599 | |
2023 | 11,976 | |
2024 | 9,737 | |
2025 | 8,265 | |
2026 | 6,916 | |
Thereafter | 15,023 | |
Amortizable intangible assets, net carrying amount | 58,516 | |
Operating Expenses | ||
Finite Lived Intangible Assets [Line Items] | ||
2022 (remainder of year) | 11,957 | |
2023 | 20,215 | |
2024 | 16,961 | |
2025 | 14,348 | |
2026 | 12,200 | |
Thereafter | 46,275 | |
Amortizable intangible assets, net carrying amount | $ 121,956 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jul. 01, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 104,106 | $ 84,038 |
Work-in-process | 26,106 | 20,600 |
Finished goods | 22,289 | 19,486 |
Demo and consigned inventory | 1,386 | 1,533 |
Total inventories | $ 153,887 | $ 125,657 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jul. 01, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | Jul. 02, 2021 | Jan. 02, 2021 |
Other Liabilities Disclosure [Abstract] | |||||
Accrued compensation and benefits | $ 26,570 | $ 24,725 | |||
Accrued warranty | 4,741 | $ 4,783 | 4,783 | $ 4,565 | $ 4,919 |
Contract liabilities, current portion | 7,674 | 6,995 | |||
Finance lease obligations | 634 | 599 | |||
Accrued contingent considerations and earn-outs | 47,170 | 47,522 | |||
Other | 15,196 | 13,855 | |||
Total | $ 101,985 | $ 98,479 |
Accrued Warranty (Details)
Accrued Warranty (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 01, 2022 | Jul. 02, 2021 | |
Product Warranties Disclosures [Abstract] | ||
Balance at beginning of the period | $ 4,783 | $ 4,919 |
Provision charged to cost of revenue | 1,462 | 929 |
Use of provision | (1,398) | (1,254) |
Foreign currency exchange rate changes | (106) | (29) |
Balance at end of the period | $ 4,741 | $ 4,565 |
Other Long Term Liabilities (De
Other Long Term Liabilities (Details) - USD ($) $ in Thousands | Jul. 01, 2022 | Dec. 31, 2021 |
Other Liabilities Disclosure [Abstract] | ||
Finance lease obligations | $ 4,996 | $ 5,309 |
Accrued contingent considerations and earn-outs | 1,183 | 3,402 |
Other | 828 | 927 |
Total | $ 7,007 | $ 9,638 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Jul. 01, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total current portion of long-term debt | $ 4,678 | $ 5,097 |
Total long-term debt | 402,679 | 429,361 |
Total Senior Credit Facilities | 407,357 | 434,458 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Current portion of long-term debt, Gross | 4,713 | 5,126 |
Long-term debt, Gross | 77,521 | 86,879 |
Term Loan And Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Less: unamortized debt issuance costs | (35) | (29) |
Less: unamortized debt issuance costs | (5,401) | (4,097) |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, Gross | $ 330,559 | $ 346,579 |
Debt - Additional Information (
Debt - Additional Information (Details) | 1 Months Ended | 6 Months Ended | |||||||
Mar. 10, 2022 USD ($) | Dec. 31, 2019 USD ($) | Mar. 31, 2020 EUR (€) | Jul. 01, 2022 USD ($) | Jul. 01, 2022 EUR (€) | Jul. 02, 2021 USD ($) | Oct. 05, 2021 USD ($) | Mar. 27, 2020 USD ($) | Dec. 31, 2019 EUR (€) | |
Debt Instrument [Line Items] | |||||||||
Repayment of debt | $ 12,833,000 | $ 2,706,000 | |||||||
Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayment of debt | 2,400,000 | € 2,300,000 | |||||||
Third Amended and Restated Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 450,000,000 | ||||||||
Third Amended and Restated Credit Agreement | First Amendment Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 495,000,000 | ||||||||
Increased in line of credit facility | 145,000,000 | ||||||||
Line of credit facility accordion potential feature | $ 200,000,000 | ||||||||
Third Amended and Restated Credit Agreement | Term Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 100,000,000 | € 90,200,000 | |||||||
Senior credit facilities maturity period | 5 years | ||||||||
Senior credit facilities, maturity month and year | 2024-12 | ||||||||
Debt instrument, frequency of periodic payment | quarterly | ||||||||
Quarterly installments payable on term loan | € | € 1,100,000 | ||||||||
Third Amended and Restated Credit Agreement | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 350,000,000 | ||||||||
Senior credit facilities maturity period | 5 years | ||||||||
Senior credit facilities, maturity month and year | 2024-12 | ||||||||
Line of credit facility accordion potential feature | $ 200,000,000 | ||||||||
Repayment of debt | $ 10,400,000 | ||||||||
Third Amended and Restated Credit Agreement | Fourth Amendment Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 695,000,000 | ||||||||
Increased in line of credit facility | 200,000,000 | ||||||||
Line of credit facility accordion potential feature | $ 200,000,000 | ||||||||
Third Amended and Restated Credit Agreement | Fifth Amendment Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility accordion potential feature | $ 350,000,000 | ||||||||
Deferred financing costs capitalized | 2,500,000 | ||||||||
Loss from write-off of portion of unamortized deferred financing costs | $ 600,000 | ||||||||
Fifth Amendment Revolving Credit Facility | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Senior credit facilities, maturity month and year | 2027-03 | 2027-03 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 01, 2022 | Jul. 02, 2021 | |
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 options to terminate the leases within one year. | |
Purchase of building under finance lease | $ 8,743 | |
Minimum | ||
Lessee Lease Description [Line Items] | ||
Lease agreement expiration year | 2022 | |
Lease renewal terms | 1 year | |
Maximum | ||
Lessee Lease Description [Line Items] | ||
Lease agreement expiration year | 2036 | |
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) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Leases [Abstract] | ||||
Operating lease cost | $ 2,648 | $ 1,964 | $ 5,392 | $ 3,795 |
Finance lease cost | ||||
Amortization of right-of-use assets | 150 | 151 | 301 | 302 |
Interest on lease liabilities | 78 | 86 | 157 | 173 |
Variable lease cost | 353 | 324 | 618 | 559 |
Total lease cost | $ 3,229 | $ 2,525 | $ 6,468 | $ 4,829 |
Summary of Balance Sheet Inform
Summary of Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Jul. 01, 2022 | Dec. 31, 2021 |
Operating leases | ||
Operating lease right-of-use assets | $ 45,575 | $ 48,338 |
Current portion of operating lease liabilities | 7,561 | 7,334 |
Operating lease liabilities | 42,580 | 45,700 |
Total operating lease liabilities | 50,141 | 53,034 |
Finance leases | ||
Finance lease right-of-use assets gross | 9,582 | 9,582 |
Finance lease right-of-use assets accumulated depreciation | (5,369) | (5,068) |
Finance lease assets included in property, plant and equipment, net | $ 4,213 | $ 4,514 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | http://fasb.org/us-gaap/2021-01-31#PropertyPlantAndEquipmentNet | http://fasb.org/us-gaap/2021-01-31#PropertyPlantAndEquipmentNet |
Current portion of finance lease liabilities | $ 634 | $ 599 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | http://fasb.org/us-gaap/2021-01-31#OtherAccruedLiabilitiesCurrent | http://fasb.org/us-gaap/2021-01-31#OtherAccruedLiabilitiesCurrent |
Noncurrent portion of finance lease liabilities | $ 4,996 | $ 5,309 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | http://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesNoncurrent | http://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesNoncurrent |
Total finance lease liabilities | $ 5,630 | $ 5,908 |
Weighted-average remaining lease term (in years): | ||
Operating leases | 8 years 6 months | 9 years |
Finance leases | 7 years | 7 years 6 months |
Weighted-average discount rate: | ||
Operating leases | 4.71% | 4.72% |
Finance leases | 5.54% | 5.54% |
Summary of Cash Flow Informatio
Summary of Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 01, 2022 | Jul. 02, 2021 | |
Cash paid for amounts included in lease liabilities: | ||
Operating cash flows from finance leases | $ 157 | $ 173 |
Operating cash flows from operating leases | 4,010 | 3,252 |
Financing cash flows from finance leases | 296 | 9,024 |
Supplemental non-cash information: | ||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 2,931 | $ 3,257 |
Future Minimum Lease Payments U
Future Minimum Lease Payments Under Operating and Finance Leases (Details) - USD ($) $ in Thousands | Jul. 01, 2022 | Dec. 31, 2021 |
Operating Lease | ||
2022 (remainder of year) | $ 4,814 | |
2023 | 8,855 | |
2024 | 8,162 | |
2025 | 7,817 | |
2026 | 6,691 | |
Thereafter | 26,316 | |
Total minimum lease payments | 62,655 | |
Less: Interest | (12,514) | |
Present value of lease liabilities | 50,141 | $ 53,034 |
Finance Lease | ||
2022 (remainder of year) | 471 | |
2023 | 930 | |
2024 | 954 | |
2025 | 954 | |
2026 | 979 | |
Thereafter | 2,509 | |
Total minimum lease payments | 6,797 | |
Less: Interest | (1,167) | |
Present value of lease liabilities | $ 5,630 | $ 5,908 |
Preferred and Common Shares a_3
Preferred and Common Shares and Share-based Compensation - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 44 Months Ended | |||||||
Feb. 28, 2022 | Jan. 31, 2022 | May 31, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Dec. 31, 2021 | Feb. 29, 2020 | Oct. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Preferred shares, Authorized | 7,000,000 | 7,000,000 | 7,000,000 | 7,000,000 | 7,000,000 | ||||||
Preferred shares, voting rights | one vote per share | ||||||||||
Preferred shares, Issued | 0 | 0 | 0 | 0 | |||||||
Preferred shares, outstanding | 0 | 0 | 0 | 0 | |||||||
Repurchase of common stock | $ 10,000,000 | ||||||||||
Share-based compensation expense recognized | $ 5,081,000 | $ 5,035,000 | 11,855,000 | $ 11,679,000 | |||||||
Selling, General and Administrative Expenses | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Share-based compensation expense recognized | $ 4,056,000 | $ 3,834,000 | 9,257,000 | 8,763,000 | |||||||
Share-Based Payment Arrangement, Option | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Fair value of stock options granted | $ 1,900,000 | ||||||||||
Expected annual dividend yield | 0% | ||||||||||
TSR Performance-based Restricted Stock Units | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Expected annual dividend yield | 0% | ||||||||||
Amended and Restated 2010 Incentive Plan | Deferred Stock Units | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Number of outstanding shares | 88,000 | 88,000 | 88,000 | 91,000 | |||||||
Amended and Restated 2010 Incentive Plan | Share-Based Payment Arrangement, Option | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Vesting/Performance period | 3 years | ||||||||||
Stock options, Granted | 40,000 | 40,000 | |||||||||
Stock options, Expiration Period | 7 years | ||||||||||
Amended and Restated 2010 Incentive Plan | Restricted Stock Units and Deferred Stock Units | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Total fair value of stock units vested | $ 17,400,000 | ||||||||||
Amended and Restated 2010 Incentive Plan | Restricted Stock Units and Deferred Stock Units | Board of Directors | Selling, General and Administrative Expenses | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Share-based compensation expense recognized | $ 1,100,000 | $ 1,100,000 | |||||||||
Amended and Restated 2010 Incentive Plan | Restricted Stock Units (RSUs) | Maximum | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Vesting/Performance period | 5 years | ||||||||||
Amended and Restated 2010 Incentive Plan | Restricted Stock Units (RSUs) | Minimum [Member] | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Vesting/Performance period | 0 years | ||||||||||
Amended and Restated 2010 Incentive Plan | EPS Performance-based Restricted Stock Units | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Vesting/Performance period | 3 years | ||||||||||
Amended and Restated 2010 Incentive Plan | EPS Performance-based Restricted Stock Units | Maximum | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Range of percentage of shares to be issued upon settlement following vesting of target number of shares | 200% | ||||||||||
Amended and Restated 2010 Incentive Plan | EPS Performance-based Restricted Stock Units | Minimum [Member] | |||||||||||
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% | ||||||||||
Amended and Restated 2010 Incentive Plan | TSR Performance-based Restricted Stock Units | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Vesting/Performance period | 3 years | ||||||||||
Amended and Restated 2010 Incentive Plan | TSR Performance-based Restricted Stock Units | Maximum | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Range of percentage of shares to be issued upon settlement following vesting of target number of shares | 200% | ||||||||||
Amended and Restated 2010 Incentive Plan | TSR Performance-based Restricted Stock Units | Minimum [Member] | |||||||||||
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% | ||||||||||
Amended and Restated 2010 Incentive Plan | ATI Performance-based Restricted Stock Units | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Vesting/Performance period | 4 years | ||||||||||
Amended and Restated 2010 Incentive Plan | ATI Performance-based Restricted Stock Units | Maximum | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Range of percentage of shares to be issued upon settlement following vesting of target number of shares | 100% | ||||||||||
Amended and Restated 2010 Incentive Plan | ATI Performance-based Restricted Stock Units | Minimum [Member] | |||||||||||
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% | ||||||||||
Amended and Restated 2010 Incentive Plan | Performance Stock Units | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Total fair value of stock units vested | $ 7,200,000 | ||||||||||
Maximum number of common shares to be earned under these PSU grants | 337,000 | 337,000 | 337,000 | ||||||||
2018 Repurchase Plan | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Common stock repurchase program authorized amount | $ 25,000,000 | ||||||||||
Shares repurchased | 80,000 | 264,000 | |||||||||
Repurchase of common stock | $ 9,500,000 | $ 25,000,000 | |||||||||
Shares repurchased, average cost per share | $ 118.97 | $ 94.57 | |||||||||
2020 Repurchase Plan | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Common stock repurchase program authorized amount | $ 50,000,000 | ||||||||||
Shares repurchased | 4,000 | ||||||||||
Repurchase of common stock | $ 500,000 | ||||||||||
Shares repurchased, average cost per share | $ 116.95 | ||||||||||
Available for share repurchases | $ 49,500,000 | $ 49,500,000 | $ 49,500,000 |
Share-Based Compensation Expens
Share-Based Compensation Expense Recorded in the Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 5,081 | $ 5,035 | $ 11,855 | $ 11,679 |
Selling, general and administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 4,056 | 3,834 | 9,257 | 8,763 |
Research and development and engineering | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 494 | 515 | 1,194 | 1,242 |
Cost of Revenue | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 531 | $ 686 | $ 1,404 | $ 1,674 |
Restricted Stock Units and Defe
Restricted Stock Units and Deferred Stock Units Issued and Outstanding (Details) - Amended and Restated 2010 Incentive Plan - Restricted Stock Units and Deferred Stock Units shares in Thousands | 6 Months Ended |
Jul. 01, 2022 $ / shares shares | |
Restricted Stock Units | |
Unvested, Beginning Balance | 292 |
Granted | 101 |
Vested | (130) |
Forfeited | (10) |
Unvested, Ending Balance | 253 |
Expected to vest at end of period | 231 |
Weighted Average Grant Date Fair Value | |
Unvested, Beginning Balance | $ / shares | $ 115.42 |
Granted | $ / shares | 136.54 |
Vested | $ / shares | 115.17 |
Forfeited | $ / shares | 127.12 |
Unvested, Ending Balance | $ / shares | $ 123.71 |
Performance-Based Awards Issued
Performance-Based Awards Issued and Outstanding (Details) - Amended and Restated 2010 Incentive Plan - Performance Stock Units shares in Thousands | 6 Months Ended |
Jul. 01, 2022 $ / shares shares | |
Performance-based Awards | |
Unvested, Beginning Balance | 162 |
Granted | 102 |
Vested | (41) |
Forfeited | (8) |
Unvested, Ending Balance | 215 |
Expected to vest at end of period | 210 |
Weighted Average Grant Date Fair Value | |
Unvested, Beginning Balance | $ / shares | $ 122.26 |
Granted | $ / shares | 158.55 |
Vested | $ / shares | 108.58 |
Forfeited | $ / shares | 153.47 |
Unvested, Ending Balance | $ / shares | $ 144.12 |
Fair Value of TSR Performance-B
Fair Value of TSR Performance-Based Restricted Stock Units Estimated Using Monte-Carol Valuation Method (Details) - TSR Performance-based Restricted Stock Units | 6 Months Ended |
Jul. 01, 2022 $ / shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Grant-date stock price | $ 135.86 |
Expected volatility | 40.70% |
Risk-free interest rate | 1.69% |
Expected annual dividend yield | 0% |
Fair value | $ 141.52 |
Stock Options Issued and Outsta
Stock Options Issued and Outstanding (Details) - Amended and Restated 2010 Incentive Plan - Share-Based Payment Arrangement, Option - $ / shares shares in Thousands | 1 Months Ended | 6 Months Ended |
Feb. 28, 2022 | Jul. 01, 2022 | |
Stock options | ||
Outstanding as of December 31, 2021 | 60 | |
Stock options, Granted | 40 | 40 |
Outstanding as of July 1, 2022 | 100 | |
Exercisable as of July 1, 2022 | 60 | |
Expected to vest as of July 1, 2022 | 40 | |
Weighted Average Exercise Price | ||
Outstanding as of December 31, 2021 | $ 14.13 | |
Granted | 135.86 | |
Outstanding as of July 1, 2022 | $ 62.77 |
Fair Value of Stock Options Gra
Fair Value of Stock Options Granted Estimated Using Black-Scholes Valuation Model (Details) - Share-Based Payment Arrangement, Option | 6 Months Ended |
Jul. 01, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Expected option term in year | 4 years 6 months |
Expected volatility | 39.30% |
Risk-free interest rate | 1.83% |
Expected annual dividend yield | 0% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Income Taxes [Line Items] | ||||
Effective tax rate on income from operations | 15.80% | 19.20% | 12.40% | 3.50% |
Effective tax rate upon vesting of certain share based compensation awards | 1.40% | 14.70% | ||
Research and Development Expense | ||||
Income Taxes [Line Items] | ||||
Effective tax rate on income from operations | 3% | |||
Deferred tax assets recognized | $ 6.3 | $ 6.3 | ||
UNITED STATES | Research and Development Expense | ||||
Income Taxes [Line Items] | ||||
Deferred tax assets amortization period | 5 years | |||
Non-US | Research and Development Expense | ||||
Income Taxes [Line Items] | ||||
Deferred tax assets amortization period | 15 years | |||
Canada Revenue Agency | CANADA | ||||
Income Taxes [Line Items] | ||||
Statutory tax rate | 29% | 29% | 29% | 29% |
Schedule of Restructuring, Acqu
Schedule of Restructuring, Acquisition and Related Costs (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Restructuring Cost And Reserve [Line Items] | ||||
Total restructuring charges | $ 610,000 | $ 1,165,000 | $ 1,232,000 | $ 2,711,000 |
Acquisition and related charges | 2,045,000 | 3,469,000 | (207,000) | 5,654,000 |
Total restructuring, acquisition, and related costs | 2,655,000 | 4,634,000 | 1,025,000 | 8,365,000 |
2020 Restructuring | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Total restructuring charges | $ 610,000 | $ 1,165,000 | 1,232,000 | 2,503,000 |
2019 Restructuring | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Total restructuring charges | $ 0 | $ 208,000 |
Restructuring, Acquisition, a_3
Restructuring, Acquisition, and Related Costs - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | Dec. 31, 2021 | |
Restructuring, Acquisition, and Related Costs [Line Items] | |||||
Total restructuring charges | $ 610,000 | $ 1,165,000 | $ 1,232,000 | $ 2,711,000 | |
Acquisition and related charges | 2,045,000 | 3,469,000 | (207,000) | 5,654,000 | |
Earn-out expense recognized | 1,800,000 | 900,000 | (500,000) | 1,900,000 | |
Legal costs | 0 | 800,000 | 0 | 1,800,000 | |
Maximum | Finders' Fees, Legal, Valuation And Other Professional Or Consulting Fees | |||||
Restructuring, Acquisition, and Related Costs [Line Items] | |||||
Acquisition and related charges | 200,000 | 1,600,000 | $ 300,000 | 1,800,000 | |
2020 Restructuring | |||||
Restructuring, Acquisition, and Related Costs [Line Items] | |||||
Restructuring and related cost description | As a result of the Company’s ongoing evaluations and efforts to reduce its operating costs, while improving efficiency and effectiveness, the Company initiated the 2020 restructuring program in the third quarter of 2020. This program is focused on reducing operating complexity in the Company, including reducing infrastructure costs and streamlining the Company’s operating model to better serve its customers. In addition, the program is focused on cost reduction actions that improve gross margins for the overall company. During the three and six months ended July 1, 2022, the Company recorded $0.6 million and $1.2 million, respectively, in severance and other costs in connection with the 2020 restructuring program. As of July 1, 2022, the Company had incurred cumulative costs related to this restructuring plan totaling $9.3 million. The Company anticipates substantially completing the 2020 restructuring program in the fourth quarter of 2022 and expects to incur additional restructuring charges of $3.0 million to $3.5 million related to the 2020 restructuring program. | ||||
Total restructuring charges | 610,000 | $ 1,165,000 | $ 1,232,000 | 2,503,000 | |
Restructuring cumulative costs incurred | 9,300,000 | 9,300,000 | |||
2020 Restructuring | Minimum [Member] | |||||
Restructuring, Acquisition, and Related Costs [Line Items] | |||||
Restructuring costs | 3,000,000 | 3,000,000 | |||
2020 Restructuring | Maximum | |||||
Restructuring, Acquisition, and Related Costs [Line Items] | |||||
Restructuring costs | 3,500,000 | 3,500,000 | |||
2020 Restructuring | Employee Severance and Other Costs | |||||
Restructuring, Acquisition, and Related Costs [Line Items] | |||||
Total restructuring charges | $ 600,000 | $ 1,200,000 | |||
2019 Restructuring | |||||
Restructuring, Acquisition, and 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 (the “2019 restructuring plan”). The Company did not incur any costs related to the 2019 restructuring plan during the three and six months ended July 1, 2022. As of December 31, 2021, the Company incurred cumulative costs related to this restructuring plan totaling $9.0 million. The 2019 restructuring program was completed in 2021. | ||||
Total restructuring charges | $ 0 | $ 208,000 | |||
Restructuring cumulative costs incurred | $ 9,000,000 |
Summary of Restructuring Charge
Summary of Restructuring Charges by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring costs | $ 610 | $ 1,165 | $ 1,232 | $ 2,711 |
2020 Restructuring | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring costs | 610 | 1,165 | 1,232 | 2,503 |
2020 Restructuring | Photonics | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring costs | 501 | 195 | 1,194 | 490 |
2020 Restructuring | Vision | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring costs | 65 | 275 | 106 | 697 |
2020 Restructuring | Precision Motion | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring costs | $ 44 | $ 695 | $ (68) | $ 1,316 |
Summary of Accrual Activities b
Summary of Accrual Activities by Components Related to Company's Restructuring Charges (Details) $ in Thousands | 6 Months Ended |
Jul. 01, 2022 USD ($) | |
Restructuring Cost And Reserve [Line Items] | |
Accrued expense beginning balance | $ 2,686 |
Restructuring charges | 1,232 |
Cash payments | (1,819) |
Non-cash charges and other adjustments | (155) |
Accrued expense ending balance | 1,944 |
Employee Related | |
Restructuring Cost And Reserve [Line Items] | |
Accrued expense beginning balance | 2,107 |
Restructuring charges | 294 |
Cash payments | (959) |
Non-cash charges and other adjustments | (74) |
Accrued expense ending balance | 1,368 |
Facility | |
Restructuring Cost And Reserve [Line Items] | |
Accrued expense beginning balance | 550 |
Restructuring charges | 804 |
Cash payments | (743) |
Non-cash charges and other adjustments | (79) |
Accrued expense ending balance | 532 |
Other Restructuring Charges | |
Restructuring Cost And Reserve [Line Items] | |
Accrued expense beginning balance | 29 |
Restructuring charges | 134 |
Cash payments | (117) |
Non-cash charges and other adjustments | (2) |
Accrued expense ending balance | $ 44 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 6 Months Ended |
Jul. 01, 2022 Segment EndMarket | |
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) by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 215,356 | $ 167,523 | $ 419,572 | $ 330,107 |
Gross Profit | $ 95,245 | $ 72,406 | $ 185,521 | $ 141,146 |
Gross profit margin percentage | 44.20% | 43.20% | 44.20% | 42.80% |
Operating Income (Loss) | $ 23,291 | $ 15,992 | $ 47,574 | $ 27,091 |
Operating Segments | Photonics | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 69,461 | 62,357 | 132,243 | 120,851 |
Gross Profit | $ 31,182 | $ 29,593 | $ 59,569 | $ 57,702 |
Gross profit margin percentage | 44.90% | 47.50% | 45% | 47.70% |
Operating Income (Loss) | $ 13,996 | $ 14,196 | $ 27,431 | $ 26,591 |
Operating Segments | Vision | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 65,516 | 63,447 | 127,566 | 131,083 |
Gross Profit | $ 26,535 | $ 24,443 | $ 51,765 | $ 51,369 |
Gross profit margin percentage | 40.50% | 38.50% | 40.60% | 39.20% |
Operating Income (Loss) | $ 7,024 | $ 3,206 | $ 12,066 | $ 6,572 |
Operating Segments | Precision Motion | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 80,379 | 41,719 | 159,763 | 78,173 |
Gross Profit | $ 38,864 | $ 20,874 | $ 77,014 | $ 36,951 |
Gross profit margin percentage | 48.40% | 50% | 48.20% | 47.30% |
Operating Income (Loss) | $ 14,083 | $ 12,279 | $ 32,421 | $ 19,724 |
Unallocated Corporate and Shared Services | ||||
Segment Reporting Information [Line Items] | ||||
Gross Profit | (1,336) | (2,504) | (2,827) | (4,876) |
Operating Income (Loss) | $ (11,812) | $ (13,689) | $ (24,344) | $ (25,796) |
Depreciation and Amortization E
Depreciation and Amortization Expenses by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Depreciation and Amortization Expenses | ||||
Depreciation and amortization expenses | $ 13,811 | $ 9,875 | $ 27,855 | $ 19,724 |
Unallocated Corporate and Shared Services | ||||
Depreciation and Amortization Expenses | ||||
Depreciation and amortization expenses | 114 | 73 | 217 | 142 |
Photonics | Operating Segments | ||||
Depreciation and Amortization Expenses | ||||
Depreciation and amortization expenses | 2,697 | 2,905 | 5,474 | 5,803 |
Vision | Operating Segments | ||||
Depreciation and Amortization Expenses | ||||
Depreciation and amortization expenses | 4,322 | 5,279 | 8,749 | 10,554 |
Precision Motion | Operating Segments | ||||
Depreciation and Amortization Expenses | ||||
Depreciation and amortization expenses | $ 6,678 | $ 1,618 | $ 13,415 | $ 3,225 |
Schedule of Geographic Revenue
Schedule of Geographic Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 215,356 | $ 167,523 | $ 419,572 | $ 330,107 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 86,649 | 59,497 | 169,355 | 118,727 |
Germany | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 33,123 | 23,773 | 64,901 | 46,135 |
Rest of Europe | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 37,918 | 35,600 | 71,260 | 71,175 |
China | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 29,871 | 23,506 | 56,670 | 46,057 |
Rest of Asia-Pacific | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 23,090 | 22,762 | 47,585 | 43,509 |
Other Countries | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 4,705 | $ 2,385 | $ 9,801 | $ 4,504 |
Schedule of Revenue by End Mark
Schedule of Revenue by End Market (Details) | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Segment Reporting Information [Line Items] | ||||
Total revenue by end market | 100% | 100% | 100% | 100% |
Medical | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue by end market | 47% | 52% | 47% | 53% |
Advanced Industrial | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue by end market | 53% | 48% | 53% | 47% |